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What changed in UiPath, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of UiPath, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+311 added−314 removedSource: 10-K (2025-03-24) vs 10-K (2024-03-27)

Top changes in UiPath, Inc.'s 2025 10-K

311 paragraphs added · 314 removed · 265 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

68 edited+28 added−23 removed29 unchanged
Biggest changeResults of Operations The following table sets forth selected consolidated statement of operations data for each of the periods indicated (in thousands): Year Ended January 31, 2024 2023 Revenue: Licenses $ 621,392 $ 497,836 Subscription services 649,918 508,823 Professional services and other 36,762 51,922 Total revenue 1,308,072 1,058,581 Cost of revenue: Licenses (1) 10,469 10,421 Subscription services (1)(2)(3)(4) 111,922 87,366 Professional services and other (2)(3)(4) 73,533 82,264 Total cost of revenue 195,924 180,051 Gross profit 1,112,148 878,530 Operating expenses: Sales and marketing (1)(2)(3)(4) 713,130 701,558 Research and development (2)(3)(4) 332,101 285,750 General and administrative (1)(2)(3)(4) 231,637 239,505 Total operating expenses 1,276,868 1,226,813 Operating loss (164,720) (348,283) Interest income 57,130 27,955 Other income, net 31,775 2,767 Loss before income taxes (75,815) (317,561) Provision for income taxes 14,068 10,791 Net loss $ (89,883) $ (328,352) 63 Table of Contents (1) Includes amortization of acquired intangible assets as follows (in thousands): Year Ended January 31, 2024 2023 Cost of licenses revenue $ 3,371 $ 2,754 Cost of subscription services revenue 2,359 1,811 Sales and marketing 2,706 2,153 General and administrative 164 178 Total amortization of acquired intangible assets $ 8,600 $ 6,896 (2) Includes stock-based compensation expense as follows (in thousands): Year Ended January 31, 2024 2023 Cost of subscription services revenue $ 14,750 $ 11,894 Cost of professional services and other revenue 10,958 11,855 Sales and marketing 144,863 154,922 Research and development 117,965 102,546 General and administrative 83,419 88,623 Total stock-based compensation expense $ 371,955 $ 369,840 (3) Includes employer payroll tax expense related to employee equity transactions as follows (in thousands): Year Ended January 31, 2024 2023 Cost of subscription services revenue $ 434 $ 272 Cost of professional services and other revenue 327 263 Sales and marketing 4,176 4,605 Research and development 3,027 1,692 General and administrative 1,924 930 Total employer payroll tax expense related to employee equity transactions $ 9,888 $ 7,762 (4) Includes restructuring expense as follows (in thousands): Year Ended January 31, 2024 2023 Cost of subscription services revenue $ 114 $ 182 Cost of professional services and other revenue — 710 Sales and marketing 1,376 19,491 Research and development 387 494 General and administrative 749 2,569 Total restructuring expense $ 2,626 $ 23,446 64 Table of Contents The following table sets forth our consolidated statement of operations data expressed as a percentage of revenue for the periods indicated: Year Ended January 31, 2024 2023 Revenue: Licenses 47 % 47 % Subscription services 50 % 48 % Professional services and other 3 % 5 % Total revenue 100 % 100 % Cost of revenue: Licenses 1 % 1 % Subscription services 8 % 8 % Professional services and other 6 % 8 % Total cost of revenue 15 % 17 % Gross profit 85 % 83 % Operating expenses: Sales and marketing 55 % 66 % Research and development 25 % 27 % General and administrative 18 % 23 % Total operating expenses 98 % 116 % Operating loss (13) % (33) % Interest income 4 % 3 % Other income, net 3 % — % Loss before income taxes (6) % (30) % Provision for income taxes 1 % 1 % Net loss (7) % (31) % Comparison of Fiscal Year 2024 and Fiscal Year 2023 Revenue Year Ended January 31, 2024 2023 Change % Change (dollars in thousands) Licenses $ 621,392 $ 497,836 $ 123,556 25 % Subscription services 649,918 508,823 141,095 28 % Professional services and other 36,762 51,922 (15,160) (29) % Total revenue $ 1,308,072 $ 1,058,581 $ 249,491 24 % Total revenue increased by $249.5 million, or 24%, for fiscal year 2024 compared to fiscal year 2023, primarily due to a $141.1 million increase in subscription services revenue, related in part to the transition to our Flex Offerings, and a $123.6 million increase in licenses revenue.
Biggest changeOur effective tax rate is affected by tax rates in foreign jurisdictions and the relative amounts of income we earn in those jurisdictions, as well as by non-deductible expenses as permanent differences, and by ch anges in our valuation allowances. 63 Table of Contents Results of Operations The following table sets forth selected consolidated statement of operations data for each of the periods indicated (in thousands): Year Ended January 31, 2025 2024 Revenue: Licenses $ 587,162 $ 621,392 Subscription services 801,947 649,918 Professional services and other 40,555 36,762 Total revenue 1,429,664 1,308,072 Cost of revenue: Licenses (1) 8,565 10,469 Subscription services (1)(2)(3)(4) 167,630 111,922 Professional services and other (2)(3)(4) 70,747 73,533 Total cost of revenue 246,942 195,924 Gross profit 1,182,722 1,112,148 Operating expenses: Sales and marketing (1)(2)(3)(4) 738,493 713,130 Research and development (2)(3)(4) 380,682 332,101 General and administrative (1)(2)(3)(4) 226,116 231,637 Total operating expenses 1,345,291 1,276,868 Operating loss (162,569) (164,720) Interest income 49,422 57,130 Other income, net 35,047 31,775 Loss before income taxes (78,100) (75,815) (Benefit from) provision for income taxes (4,406) 14,068 Net loss $ (73,694) $ (89,883) (1) Includes amortization of acquired intangible assets as follows (in thousands): Year Ended January 31, 2025 2024 Cost of licenses revenue $ 2,747 $ 3,371 Cost of subscription services revenue 2,382 2,359 Sales and marketing 1,428 2,706 General and administrative 154 164 Total amortization of acquired intangible assets $ 6,711 $ 8,600 (2) Includes stock-based compensation expense as follows (in thousands): Year Ended January 31, 2025 2024 Cost of subscription services revenue $ 19,401 $ 14,750 Cost of professional services and other revenue 11,386 10,958 Sales and marketing 134,646 144,863 Research and development 132,757 117,965 General and administrative 59,961 83,419 Total stock-based compensation expense $ 358,151 $ 371,955 64 Table of Contents (3) Includes employer payroll tax expense related to employee equity transactions as follows (in thousands): Year Ended January 31, 2025 2024 Cost of subscription services revenue $ 448 $ 434 Cost of professional services and other revenue 188 327 Sales and marketing 3,069 4,176 Research and development 2,188 3,027 General and administrative 1,106 1,924 Total employer payroll tax expense related to employee equity transactions $ 6,999 $ 9,888 (4) Includes restructuring expense as follows (in thousands): Year Ended January 31, 2025 2024 Cost of subscription services revenue $ 2,745 $ 114 Cost of professional services and other revenue 105 — Sales and marketing 15,452 1,376 Research and development 3,058 387 General and administrative 3,366 749 Total restructuring expense $ 24,726 $ 2,626 The following table sets forth our consolidated statement of operations data expressed as a percentage of revenue for the periods indicated: Year Ended January 31, 2025 2024 Revenue: Licenses 41 % 47 % Subscription services 56 % 50 % Professional services and other 3 % 3 % Total revenue 100 % 100 % Cost of revenue: Licenses — % 1 % Subscription services 12 % 8 % Professional services and other 5 % 6 % Total cost of revenue 17 % 15 % Gross profit 83 % 85 % Operating expenses: Sales and marketing 52 % 55 % Research and development 27 % 25 % General and administrative 15 % 18 % Total operating expenses 94 % 98 % Operating loss (11) % (13) % Interest income 3 % 4 % Other income, net 3 % 3 % Loss before income taxes (5) % (6) % (Benefit from) provision for income taxes — % 1 % Net loss (5) % (7) % 65 Table of Contents Comparison of Fiscal Year 2025 and Fiscal Year 2024 Revenue Year Ended January 31, 2025 2024 Change % Change (dollars in thousands) Licenses $ 587,162 $ 621,392 $ (34,230) (6) % Subscription services 801,947 649,918 152,029 23 % Professional services and other 40,555 36,762 3,793 10 % Total revenue $ 1,429,664 $ 1,308,072 $ 121,592 9 % Total revenue increased by $121.6 million, or 9%, for fiscal year 2025 compared to fiscal year 2024, primarily due to a $152.0 million increase in subscription services revenue partially offset by a $34.2 million decrease in licenses revenue, related in part to the transition to our Flex Offerings.
We expect that over the longer term our general and administrative expenses will decrease as a percentage of revenue, although this percentage may fluctuate from period to period due to timing and extent of expenses. Interest Income Interest income consists of interest income earned on our cash and cash equivalents and marketable securities.
We expect that over the longer term our general and administrative expenses will decrease as a percentage of revenue, although this percentage may fluctuate from period to period due to timing and extent of expenses. Interest Income Interest income consists of interest earned on our cash and cash equivalents and marketable securities.
Subscription Services Cost of subscription services revenue consists of personnel-related expenses of our customer support and technical support teams, including salaries and bonuses, stock-based compensation expense, and employee benefit costs.
Subscription Services Cost of subscription services revenue primarily consists of personnel-related expenses of our customer support and technical support teams, including salaries and bonuses, stock-based compensation expense, and employee benefit costs.
Cost of subscription services revenue also includes third-party consulting services, hosting costs related to our SaaS products, amortization of acquired developed technology and capitalized software development costs related to SaaS products, depreciation, and allocated overhead. Overhead is allocated to cost of subscription services r evenue based on applicable headcount. We recognize these expenses as they are incurred.
Cost of subscription services revenue also includes third-party consulting services, hosting costs related to our SaaS products, amortization of acquired developed technology and capitalized software development costs related to SaaS products, depreciation, and allocated overhead. Overhead is allocated based on applicable headcount. We recognize these expenses as they are incurred.
We have a unified commercial offering for software products with both on-premise and cloud deployment options that allows customers the choice of either deployment option throughout the term of the contract. These Flex Offerings are comprised of three types of performance obligations: term license, maintenance and support, and SaaS.
We have a unified commercial offering for software products with both on-premises and cloud deployment options that allows customers the choice of either deployment option throughout the term of the contract. These Flex Offerings are comprised of three types of performance obligations: term license, maintenance and support, and SaaS.
Our invoiced amounts are not matched to transfer of control of the performance obligations associated with the underlying subscription licenses and maintenance and support obligations. This can result in timing differences between our GAAP revenue and ARR calculations.
Our invoiced amounts are not matched to transfer of control of the performance obligations associated with the underlying subscription licenses and maintenance and support obligations. This can result in timing differences between our U.S. GAAP revenue and ARR calculations.
ARR is not a forecast of future revenue. Unlike ARR, future revenue can be impacted by contract start and end dates and duration. The timing of recognition of ARR is determined by contract billing structure, whereas billing structure will neither accelerate nor delay recognition of future revenue.
ARR is not a forecast of future revenue. Unlike ARR, revenue is impacted by contract start and end dates and duration. The timing of recognition of ARR is determined by contract billing structure, whereas billing structure will neither accelerate nor delay recognition of future revenue.
Our professional services contracts are structured on a time and materials or fixed price basis, and the related revenue is recognized as the services are rendered. 61 Table of Contents Cost of Revenue Licenses Cost of licenses revenue consists of all direct costs to deliver our licenses to customers, amortization of software development costs related to our licenses, and amortization of acquired developed technology.
Our professional services contracts are structured on a time and materials or fixed price basis, and the related revenue is recognized as the services are rendered. Cost of Revenue Licenses Cost of licenses revenue consists of all direct costs to deliver our licenses to customers, amortization of software development costs related to our licenses, and amortization of acquired developed technology.
General and Administrative General and administrative expenses consist primarily of personnel-related expenses, including salaries and bonuses, stock-based compensation expense, and employee benefits costs associated with our finance, legal, 62 Table of Contents human resources, compliance, and other administrative teams, as well as accounting and legal professional services fees, other corporate-related expenses, and allocated overhead.
General and Administrative General and administrative expenses consist primarily of personnel-related expenses, including salaries and bonuses, stock-based compensation expense, and employee benefits costs associated with our finance, legal, human resources, compliance, and other administrative teams, as well as accounting and legal professional services fees, other corporate-related expenses, and allocated overhead.
For further information, s ee the section titled “ Risk Factors—Risks 68 Table of Contents Related to Our Business, Products, Operations, and Industry " included in Part I, Item 1A of this Annual Report on Form 10-K.
For further information, s ee the section titled “ Risk Factors—Risks Related to Our Business, Products, Operations, and Industry " included in Part I, Item 1A of this Annual Report on Form 10-K.
We expect that our research and development expenses will increase in absolute dollars for the foreseeable future as we continue to invest in efforts to develop new technology and enhance the functionality and capabilities of our existing products and platform infrastructure.
We expect that our research and development expenses will increase in absolute dollars for the foreseeable future as we continue to invest in efforts 62 Table of Contents to develop new technology and enhance the functionality and capabilities of our existing products and platform infrastructure.
Maintenance and support and SaaS products represent stand-ready obligations for which revenue is recognized ratably over the term of the arrangements. Professional Services and Other Professional services and other revenue consists of fees associated with professional services for process automation, customer education, and training services.
Maintenance and support and SaaS 61 Table of Contents products represent stand-ready obligations for which revenue is recognized ratably over the term of the arrangements. Professional Services and Other Professional services and other revenue consists of fees associated with professional services for process automation, customer education, and training services.
Material Cash Requirements Our material cash requirements predominantly relate to working capital requirements, including employee compensation and payment of employee tax withholdings on net settlement of equity awards, and material contractual obligations, including leases and purchase commitments. As of January 31, 2024, accrued compensation and benefits of $137.4 million are included in current liabilities on our consolidated balance sheet.
Material Cash Requirements Our material cash requirements predominantly relate to working capital requirements, including employee compensation and payment of employee tax withholdings on net settlement of equity awards, and material contractual obligations, including leases and purchase commitments. As of January 31, 2025, accrued compensation and benefits of $112.4 million are included in current liabilities on our consolidated balance sheet.
We calculate dollar-based net retention rate as of a period end by starting with Prior Period ARR , the ARR from the cohort of all customers as of 12 months prior to such period end. We then calculate Current Period ARR , the ARR from these same customers as of the current period end.
We calculate dollar-based net retention rate as of a period end by starting with Prior Period ARR , the ARR from the 68 Table of Contents cohort of all customers as of 12 months prior to such period end. We then calculate Current Period ARR , the ARR from these same customers as of the current period end.
In contrast, for our revenue calculated in accordance with GAAP, subscription licenses revenue derived from the sale of term-based licenses hosted on-premises is recognized at the point in time when the customer is able to use and benefit from our software, which is generally upon delivery to the customer or upon the commencement of the renewal term, and maintenance, support, an d SaaS re venue is recognized ratably over the term of the arrangement.
GAAP, subscription licenses revenue derived from the sale of term-based licenses hosted on-premises is recognized at the point in time when the customer is able to use and benefit from our software, which is generally upon delivery to the customer or upon the commencement of the renewal term, and maintenance, support, an d SaaS re venue is recognized ratably over the term of the arrangement.
As we continued to expand our sales efforts in the U.S. and internationally, our revenue increased across all regions. Of the growth in total revenue, 12% was attributable to new customers and 88% was attributable to existing customers.
As we continued to expand our sales efforts in the U.S. and internationally, our revenue increased across all regions. Of the growth in total revenue, 24% was attributable to new customers and 76% was attributable to existing customers.
Our dollar-based net retention rate, which represents the net expansion of ARR from existing customers over the preceding 12 months, was 119% and 123% as of January 31, 2024 and 2023, respectively.
Our dollar-based net retention rate, which represents the net expansion of ARR from existing customers over the preceding 12 months, was 110% and 119% as of January 31, 2025 and 2024, respectively.
Macroeconomic Environment As a corporation with a global presence, we are subject to risks and uncertainties caused by significant events with macroeconomic impacts, including, but not limited to, the impact of changes in geopolitical relationships, rising inflation and interest rates, monetary policy changes, and foreign currency fluctuations.
Macroeconomic Environment As a corporation with a global presence, we are subject to risks and uncertainties caused by significant events with macroeconomic impacts, including, but not limited to, the impact of changes in geopolitical relationships, fluctuating inflation and interest rates, monetary and trade policy changes, government efficiency initiatives, and foreign currency fluctuations.
Net cash provided by operating activities for fiscal year 2024 of $299.1 million was driven by by cash collections from our customers, which were approximately 25% higher than in the prior year, and interest income on our marketable securities , partially offset by cash payments for operating expenditures, primarily associated with the compensation of our teams, including bonuses paid in the first quarter of fiscal year 2024 and employer payroll taxes related to employee equity transactions.
Net cash provided by operating activities for fiscal year 2024 of $299.1 million was driven by cash collections from our customers and interest income on our marketable securities, partially offset by cash payments for operating expenditures, primarily associated with the compensation of our teams, including fiscal year 2023 bonuses paid in the first quarter of fiscal year 2024 and employer payroll taxes related to employee equity transactions.
We continuously monitor the direct and indirect impacts of these circumstances on our business and financial results, as well as the overall global economy and geopolitical landscape. Fiscal Year 2023 Restructuring Actions On June 24, 2022, our board of directors approved restructuring actions to manage our operating expenses.
We continuously monitor the direct and indirect impacts of these circumstances on our business and financial results, as well as the overall global economy and geopolitical landscape. Workforce Restructuring On June 24, 2022, our board of directors approved the Fiscal Year 2023 Workforce Restructuring to manage our operating expenses by reducing our global workforce by approximately 5%.
Refer to Note 9, Con solidated Balance Sheet Components—Acc rued Expenses and Other Liabilities for details of additional short-term payroll-related obligations included in accrued expenses and other current liabilities as of January 31, 2024.
Refer to Note 9, Consolidated Balance Sheet Components—Accrued Expenses and Other Current Liabilities for details of additional short-term payroll-related obligations included in accrued expenses and other current liabilities as of January 31, 2025.
Personnel-related expenses are the most significant component of operating expenses and consist of salaries and bonuses, stock-based compensation expense, and employee benefit costs. Operating expenses also include allocated overhead.
Operating Expenses Our operating expenses consist of sales and marketing, research and development, and general and administrative expenses. Personnel-related expenses are the most significant component of operating expenses and consist of salaries and bonuses, stock-based compensation expense, and employee benefit costs. Operating expenses also include allocated overhead.
Stock Repurchase Program On September 1, 2023, our board of directors authorized a stock repurchase program, pursuant to which we may repurchase from time to time up to $500.0 million of our outstanding shares of Class A common stock. Refer to Note 12, Stockholders' Equity—Stock Repurchase Program for further details.
Stock Repurchase Program On September 1, 2023, our board of directors authorized a stock repurchase program, pursuant to which we may repurchase from time to time up to $500.0 million of our outstanding shares of Class A common stock.
At January 31, 2024 and 2023, our ARR was $1,463.7 million and $1,203.8 million, respectively, representing a growth rate of 22%. Approximately 14% of this growth rate was due to new customers and 86% of this growth rate was due to existing customers.
At January 31, 2025 and 2024, our ARR was $1,666.1 million and $1,463.7 million, respectively, representing a growth rate of 14%. Approximately 21% of this growth rate was due to new customers and 79% of this growth rate was due to existing customers.
Cash Flows The following table summarizes our cash flows for the periods presented: Year Ended January 31, 2024 2023 (dollars in thousands) Net cash provided by (used in) operating activities (1) $ 299,082 $ (9,981) Net cash used in investing activities (439,569) (289,143) Net cash used in financing activities (196,895) (60,669) (1) Inclusive of: Cash paid for employer payroll taxes related to employee equity transactions $ (10,483) $ (9,112) Net payments of employee tax withholdings on stock option exercises (980) (5,394) Cash paid for restructuring costs (6,180) (19,339) Operating Activities Our largest source of operating cash is cash generation from sales to our customers.
Cash Flows The following table summarizes our cash flows for the periods presented: Year Ended January 31, 2025 2024 (dollars in thousands) Net cash provided by operating activities (1) $ 320,565 $ 299,082 Net cash used in investing activities (45,503) (439,569) Net cash used in financing activities (450,515) (196,895) (1) Inclusive of: Cash paid for employer payroll taxes related to employee equity transactions $ (6,907) $ (10,483) Net receipts (payments) of employee tax withholdings on stock option exercises 3 (980) Cash paid for restructuring costs (15,283) (6,180) Operating Activities Our largest source of operating cash is cash generation from sales to our customers.
Our estimates are based on historical experience and various other assumptions that we believe to be reasonable under the circumstances, and we evaluate our estimates on an ongoing basis.
Our estimates are based on historical experience and various other assumptions that we believe to be reasonable under the circumstances, and we evaluate our estimates on an ongoing basis. The following are the accounting estimates that we believe have the most significant impact on our consolidated financial statements.
The distinct performance obligations identified in our typical contracts include, but are not limited to, software licenses, SaaS, maintenance and support, and professional services. The pattern and timing of revenue recognition for each of these performance obligations varies.
At the inception of a contract with a customer, we assess the goods or services promised to identify distinct performance obligations. The distinct performance obligations identified in our typical contracts include, but are not limited to, software licenses, SaaS, maintenance and support, and professional services. The pattern and timing of revenue recognition for each of these performance obligations varies.
A summary of ARR-related data at January 31, 2024 and 2023 is as follows: At January 31, 2024 2023 (dollars in thousands) Annualized renewal run-rate (ARR) $ 1,463,698 $ 1,203,845 Incremental ARR (1) $ 259,853 $ 278,569 Customers with ARR ≥ $1 million: Number of customers 288 229 Percent of fiscal year revenue 52 % 43 % Customers with ARR ≥ $100 thousand: Number of customers 2,054 1,785 Percent of fiscal year revenue 86 % 81 % Dollar-based net retention rate 119 % 123 % (1) For the twelve months ended January 31, 2024 and 2023, respectively Liquidity and Capital Resources We have financed operations since our inception primarily through customer payments and net proceeds from sales of equity securities.
A summary of ARR-related data at January 31, 2025 and 2024 is as follows: At January 31, 2025 2024 (dollars in thousands) ARR $ 1,666,136 $ 1,463,698 Incremental ARR (1) $ 202,438 $ 259,853 Customers with ARR ≥ $1 million: Number of customers 317 288 Percent of fiscal year revenue 51 % 52 % Customers with ARR ≥ $100 thousand: Number of customers 2,292 2,054 Percent of fiscal year revenue 87 % 86 % Dollar-based net retention rate 110 % 119 % (1) For the fiscal years ended January 31, 2025 and 2024, respectively Liquidity and Capital Resources We have financed operations since our inception primarily through customer payments and net proceeds from sales of equity securities.
Net cash used in investing activities for fiscal year 2023 of $289.1 million was primarily driven by $237.0 million in net purchases of marketable securities, $29.5 million in cash consideration associated with the acquisition of Re:Infer, which is presented net of cash acquired, and $23.8 million in capital expenditures. 70 Table of Contents Financing Activities Net cash used in financing activities for fiscal year 2024 of $196.9 million was primarily driven by payments of tax withholdings on net settlement of equity awards of $112.1 million, $102.6 million in repurchases of Class A common stock under our stock repurchase program, and $5.9 million loan note payment on the first anniversary of the acquisition of Re:infer, partially offset by proceeds from ESPP contributions of $17.6 million and proceeds from stock option exercises of $6.7 million.
Net cash used in financing activities for fiscal year 2024 of $196.9 million was primarily driven by $112.1 million in payments of tax withholdings on net settlement of equity awards, $102.6 million in repurchases of Class A common stock under our stock repurchase program, and $5.9 million loan note payment on the first anniversary of the acquisition of Re:infer, partially offset by $17.6 million in proceeds from ESPP contributions and $6.7 million in proceeds from stock option exercises.
Fiscal Year 2024 Highlights • Revenue of $1,308.1 million increased 24% year-over-year. • ARR of $1,463.7 million increased 22% year-over-year. • Gross margin was 85% for fiscal year 2024, compared to 83% for fiscal year 2023. • Cash and cash equivalents, restricted cash, and marketable securities were $1,880.3 million as of January 31, 2024, compared to $1,759.8 million as of January 31, 2023.
Fiscal Year 2025 Highlights • Revenue of $1,429.7 million increased 9% year-over-year. • ARR of $1,666.1 million increased 14% year-over-year. • Gross margin was 83% for fiscal year 2025, compared to 85% for fiscal year 2024. • Cash and cash equivalents, restricted cash, and marketable securities were $1,724.1 million as of January 31, 2025, compared to $1,880.3 million as of January 31, 2024.
In October 2020, we entered into the Credit Facility with an available borrowing capacity of $200.0 million. We did not borrow under the Credit Facility at any time, and it was terminated in September 2023, shortly prior to its scheduled maturity date. Refer to Note 10, Credit Facility for further details.
We did not borrow under the Credit Facility at any time, and it was terminated in September 2023, shortly prior to its scheduled maturity date. Refer to Note 10, Credit Facility for further details.
As of January 31, 2024 and 2023, our principal sources of liquidity were cash, cash equivalents, and marketable securities totaling $1,879.8 million and $1,759.8 million, respectively, and we had an accumulated deficit of $1,914.2 million and $1,824.3 million, respectively.
As of January 31, 2025 and 2024, our principal sources of liquidity were cash, cash equivalents, and 69 Table of Contents marketable securities totaling $1,723.6 million and $1,879.8 million, respectively, and we had an accumulated deficit of $1,987.9 million and $1,914.2 million, respectively.
The decrease in cost of professional services and other revenue was primarily driven by a $6.1 million decrease in costs associated with the use of third-party subcontractors to deliver professional services to our customers.
The decrease in cost of professional services and other revenue was primarily driven by a $3.8 million decrease in personnel-related expenses, largely related to lower salary-related and bonus expenses, partially offset by a $1.5 million increase in costs associated with the use of third-party subcontractors to deliver professional services to our customers.
Other cash operating expenditures included payments related to our workforce restructuring, and payments for professional services, software, and office rent. Investing Activities Net cash used in investing activities for fiscal year 2024 of $439.6 million was primarily driven by $435.0 million in net purchases of marketable securities and $7.3 million in capital expenditures.
Net cash used in investing activities for fiscal year 2024 of $439.6 million was primarily driven by $435.0 million in net purchases of marketable securities and $7.3 million in capital expenditures.
This decrease was primarily attributable to a $7.7 million decrease in personnel-related expenses, which included a $5.2 million decrease in stock-based compensation expense, a $1.6 million decrease in salary-related and bonus expense, and a $1.4 million decrease in employee termination benefits as a result of the completion of our fiscal year 2023 restructuring actions in the second quarter of fiscal year 2024, partially offset by a $1.0 million increase in employer payroll tax expense related to employee equity transactions.
This decrease was primarily attributable to a $19.7 million decrease in personnel-related expenses, which included a $23.5 million decrease in stock-based compensation expense and a $0.8 million decrease in employer payroll tax expense related to employee equity transactions, partially offset by a $2.6 million increase in employee termination benefits related to our Fiscal Year 2025 Workforce Restructuring and a $1.9 million increase in employee insurance costs.
General and Administrative Year Ended January 31, 2024 2023 Change % Change (dollars in thousands) General and administrative $ 231,637 $ 239,505 $ (7,868) (3) % Percentage of revenue 18 % 23 % General and administrative expense decreased by $7.9 million, or 3%, for fiscal year 2024 compared to fiscal year 2023.
General and Administrative Year Ended January 31, 2025 2024 Change % Change (dollars in thousands) General and administrative $ 226,116 $ 231,637 $ (5,521) (2) % Percentage of revenue 15 % 18 % General and administrative expense decreased by $5.5 million, or 2%, for fiscal year 2025 compared to fiscal year 2024.
ASC 606 requires recognition of revenue when control of promised goods or services is transferred to customers, in an amount that reflects the consideration we expect to be entitled to receive in exchange for those goods or services. Revenue recognition is inherently judgmental, particularly for complex arrangements that include multiple performance obligations, which are common for us.
Revenue Recognition We recognize revenue in accordance with ASC 606, Revenue from Contracts with Customers. ASC 606 requires recognition of revenue when control of promised goods or services is transferred to customers, in an amount that reflects the consideration we expect to be entitled to receive in exchange for those goods or services.
Our ARR calculation simply takes our invoiced amounts per solution SKU under a subscription license or maintenance agreement and divides that amount by the invoice term and multiplies by 365 days to derive the annualized value.
Generally speaking, our ARR calculation simply takes our invoiced amounts per solution SKU under a subscription license or maintenance agreement as of the end of an invoiced period and divides that amount by the corresponding term and multiplies by 365 days to derive the annualized renewal value. In contrast, for our revenue calculated in accordance with U.S.
Net cash used in operating activities for fiscal year 2023 of $10.0 million was driven by cash payments for operating expenditures, primarily associated with the compensation of our teams, including bonuses paid in the first quarter of fiscal year 2023 and employer payroll taxes related to employee equity transactions.
These cash inflows were partially offset by cash payments for operating expenditures, primarily associated with the compensation of our teams, including fiscal year 2024 bonuses paid in the first quarter 70 Table of Contents of fiscal year 2025 and employer payroll taxes related to employee equity transactions.
Refer to Note 11, Commitments and Contingencies—Fiscal Year 2023 Restructuring Actions included in Part II, Item 8 of this Annual Report on Form 10-K for more information.
The Fiscal Year 2025 Workforce Restructuring is substantially completed, with any remaining actions now expected to be completed by end of the second quarter of fiscal year 2026. Refer to Note 11, Commitments and Contingencies— Workforce Restructuring included in Part II, Item 8 of this Annual Report on Form 10-K for more information.
The increase in cost of subscription services revenue was primarily driven by a $14.3 million increase in personnel-related expenses, which included a $9.7 million increase in salary-related and bonus expenses associated with both increased headcount and merit increases, a $2.9 million increase in stock-based compensation expense, and a $1.4 million increase in employee insurance costs.
The increase in cost of subscription services revenue was primarily driven by a $25.1 million increase in third-party hosting and software services costs as a result of increased usage of our subscription services and a $23.1 million increase in personnel-related expenses, which included a $12.4 million increase in salary-related and bonus expenses associated with both increased average headcount and merit increases, a $4.7 million increase in stock-based compensation expense, a $3.1 million aggregate increase in employee insurance costs and employer payroll tax expense, and a $2.6 million increase in employee termination benefits related to our Fiscal Year 2025 Workforce Restructuring.
Research and development expense was also impacted by an $11.5 million increase in hosting and software services costs and a $2.5 million increase in travel-related expenses, partially offset by a $2.2 million decrease in third-party consulting fees.
Research and development expense was also impacted by an $18.7 million increase in hosting and software services costs, a $1.7 million increase in third-party consulting fees, and a $1.6 million increase in rent expense.
For further information about our revenue recognition, refer to Note 2, Summary of Significant Accounting Policies—Revenue Recognition and Note 3, Revenue Recognition , included in Part II, Item 8 of this Annual Report on Form 10-K. Stock-Based Compensation We recognize stock-based compensation expense in accordance with the provisions of ASC 718, Compensation—Stock Compensation .
For further information about our revenue recognition, refer to Note 2, Summary of Significant Accounting Policies—Revenue Recognition and Note 3, Revenue Recognition , included in Part II, Item 8 of this Annual Report on Form 10-K. 72 Table of Contents Income Taxes We are subject to income taxes in the U.S and in a number of foreign jurisdictions.
If we are unable to raise additional capital or generate cash flows necessary to expand our operations and invest in continued innovation, we may not be able to compete successfully, which would harm our business, operations and financial condition. 69 Table of Contents We believe that our existing cash and cash equivalents, marketable securities, and payments from customers will be sufficient to fund our anticipated cash requirements for the next twelve months and the long term.
If we are unable to raise additional capital or generate cash flows necessary to expand our operations and invest in continued innovation, we may not be able to compete successfully, which would harm our business, operations and financial condition.
Our primary uses of cash from operating activities are for personnel-related expenses, direct costs to deliver licenses and provide subscription and professional services, and marketing expenses. Until recently, our operating cash flows have generally been negative and we have supplemented working capital requirements primarily through net proceeds from the sale of equity securities.
Our primary uses of cash from operating activities are for personnel-related expenses, direct costs to deliver licenses and provide subscription and professional services, and marketing expenses.
DTAs , as we have concluded as of January 31, 2024 that it is more likely than not that these DTAs will not be realized.
We currently maintain a full valuation allowance on our U.S. federal and state and Romania DTAs , as we have concluded as of January 31, 2025 that it is more likely than not that these DTAs will not be realized.
The increase was primarily attributable to a $34.0 million increase in personnel-related costs, which included a $15.4 million increase in stock-based compensation expense, a $14.7 million increase in salary-related and bonus expenses, a $1.8 million increase in employee insurance costs, and a $1.3 million increase in employer payroll tax expense related to employee equity transactions.
This increase was primarily attributable to a $15.0 million increase in personnel-related expenses, which included a $14.1 million increase in employee termination benefits related to our Fiscal Year 2025 Workforce Restructuring, a $9.1 million increase in salary-related and bonus expenses, a $2.5 million aggregate increase in employee insurance costs and employer payroll taxes, and a $0.5 million increase in general employee severance, partially offset by a $10.2 million decrease in stock-based compensation expense and a $1.1 million decrease in employer payroll tax expense related to employee equity transactions.
During the fiscal years ended January 31, 2024 and 2023, we reported net losses of $89.9 million and $328.4 million, respectively, and net cash provided by (used in) operations of $299.1 million and $(10.0) million, respectively.
During the fiscal years ended January 31, 2025 and 2024, we reported net losses of $73.7 million and $89.9 million, respectively, and net cash provided by operations of $320.6 million and $299.1 million, respectively. In October 2020, we entered into the Credit Facility with an available borrowing capacity of $200.0 million.
Net cash used in financing activities for fiscal year 2023 of $60.7 million was primarily driven by payments of tax withholdings on net settlement of equity awards of $73.1 million, net payments of tax withholdings on sell-to-cover equity award transactions of $9.5 million, and $1.5 million in repurchases of unvested early exercised stock options, partially offset by proceeds from ESPP contributions of $15.0 million and proceeds from stock option exercises of $8.4 million.
Financing Activities Net cash used in financing activities for fiscal year 2025 of $450.5 million was primarily driven by $390.8 million in repurchases of Class A common stock under our stock repurchase program, $77.9 million in payments of tax withholdings on net settlement of equity awards, and $5.6 million loan note payment on the second anniversary of the acquisition of Re:infer, partially offset by $15.6 million in proceeds from ESPP contributions and $8.0 million in proceeds from stock option exercises.
Professional Services and Other Cost of professional services and other revenue primarily consists of personnel-related expenses of our professional services team, including salaries and bonuses, stock-based compensation expense, and employee benefit costs. Cost of professional services and other revenue also includes expenses related to subcontracted third-party services, depreciation, and allocated overhead. We recognize these expenses as they are incurred.
Cost of professional services and other revenue also includes expenses related to subcontracted third-party services, depreciation, and allocated overhead. We recognize these expenses as they are incurred. We expect cost of professional services and other revenue to increase in absolute dollars for the foreseeable future.
Our most significant judgment relates to allocation of the transaction price, specifically determining the SSP for each performance obligation, which impacts the pattern and timing of revenue recognition. At the inception of a contract with a customer, we assess the goods or services promised to identify distinct performance obligations.
Revenue recognition is inherently judgmental, particularly for complex arrangements that include multiple performance obligations, which are common for us. Our most significant judgment relates to allocation of the transaction price, specifically determining the SSP for each performance obligation, which impacts the pattern and timing of revenue recognition.
ARR does not include the costs we may incur to obtain such subscription licenses or provide such maintenance and support, and does not reflect any actual or anticipated reductions in invoiced value due to contract non-renewals or service cancellations other than for certain reserves, for example those for credit losses or disputed amounts.
ARR also does not reflect nonrecurring rebates payable to partners (upon establishing sufficient history of their nonrecurring nature), the impact of nonrecurring incentives (such as one-time discounts provided under sales promotional programs), and any actual or anticipated reductions in invoiced value due to contract non-renewals or service cancellations other than for certain reserves (for example those for credit losses or disputed amounts).
Sales and marketing expense was also impacted by a $4.8 million decrease in third-party consulting fees. 66 Table of Contents Research and Development Year Ended January 31, 2024 2023 Change % Change (dollars in thousands) Research and development $ 332,101 $ 285,750 $ 46,351 16 % Percentage of revenue 25 % 27 % Research and development expense increased by $46.4 million, or 16%, for fiscal year 2024 compared to fiscal year 2023.
Research and Development Year Ended January 31, 2025 2024 Change % Change (dollars in thousands) Research and development $ 380,682 $ 332,101 $ 48,581 15 % Percentage of revenue 27 % 25 % Research and development expense increased by $48.6 million, or 15%, for fiscal year 2025 compared to fiscal year 2024.
Other Income, Net Year Ended January 31, 2024 2023 Change % Change (dollars in thousands) Other income, net $ 31,775 $ 2,767 $ 29,008 NM (1) Percentage of revenue 3 % — % (1) Not meaningful Other income, net increased by $29.0 million for fiscal year 2024 compared to fiscal year 2023, primarily due to a $26.5 million increase in amortization of discounts on marketable securities and a $0.8 million increase in gains from foreign currency transactions. 67 Table of Contents Provision For Income Taxes Year Ended January 31, 2024 2023 Change % Change (dollars in thousands) Provision for income taxes $ 14,068 $ 10,791 $ 3,277 30 % Percentage of revenue 1 % 1 % Provision for income taxes increased by $3.3 million, or 30%, for fiscal year 2024 compared to fiscal year 2023.
Other Income, Net Year Ended January 31, 2025 2024 Change % Change (dollars in thousands) Other income, net $ 35,047 $ 31,775 $ 3,272 10 % Percentage of revenue 3 % 3 % Other income, net increased by $3.3 million, or 10%, for fiscal year 2025 compared to fiscal year 2024, primarily due to a $6.6 million increase in foreign currency transaction gains and a $1.9 million increase in accretion of discounts on marketable securities, partially offset by a $3.9 million decrease in legal expense related to shareholder litigation and a $1.6 million decrease in sublease income.
Cost of subscription services revenue was also impacted by a $5.1 million increase in hosting and software services costs as a result of increased usage, a $2.7 million increase in costs associated with the use of third-party vendors, an aggregate $0.8 million increase in depreciation and amortization and other administrative costs, and a $0.5 million increase in travel expenses.
Cost of subscription services revenue was also impacted by a $6.9 million increase in costs associated with the use of third-party vendors.
The following table summarizes the aggregate effect that our material contractual obligations as of January 31, 2024 are expected to have on our cash flows in the periods indicated (in thousands): Payments Due by Period Total Less Than 1 Year 1-3 Years 3-5 Years More Than 5 Years (dollars in thousands) Operating lease commitments (1) $ 126,836 $ 13,463 $ 28,593 $ 22,102 $ 62,678 Purchase commitments 171,115 68,958 93,689 8,468 — Total contractual obligations $ 297,951 $ 82,421 $ 122,282 $ 30,570 $ 62,678 (1) Inclusive of $32.7 million of commitments related to operating leases which have not yet commenced.
The following table summarizes the aggregate effect that our material contractual obligations as of January 31, 2025 are expected to have on our cash flows in the periods indicated (in thousands): Payments Due by Period Total Less Than 1 Year 1-3 Years 3-5 Years More Than 5 Years (dollars in thousands) Operating lease commitments (1) $ 111,886 $ 8,481 $ 27,837 $ 18,688 $ 56,880 Purchase commitments 170,168 78,613 89,181 2,374 — Total contractual obligations $ 282,054 $ 87,094 $ 117,018 $ 21,062 $ 56,880 (1) Inclusive of $0.2 million of commitments related to operating leases which have not yet commenced. 71 Table of Contents The amounts in the table above are associated with agreements that are enforceable and legally binding.
These increases were partially offset by a $32.7 million decrease in personnel-related expenses, which included a $17.6 million decrease in employee termination benefits as a result of the completion of our fiscal year 2023 restructuring actions in the second quarter of fiscal year 2024, a $10.1 million decrease in stock-based compensation expense, and an $8.0 million decrease in salary-related and bonus expenses, partially offset by a $3.1 million increase in employee insurance and other benefit costs.
The increase was primarily attributable to a $26.1 million increase in personnel-related costs, which included a $14.8 million increase in stock-based compensation expense, an $8.5 million increase in salary-related and bonus expenses, and a $2.7 million increase in employee termination benefits related to our Fiscal Year 2025 Workforce Restructuring.
A ten percent change in the Black-Scholes values of these ESPP awards would have impacted our fiscal year 2024 stock-based compensation expense by $0.7 million. Recent Accounting Pronouncements See Note 2, Summary of Significant Accounting Policies— Recently Issued Accounting Pronouncements , included in Part II, Item 8 of this Annual Report on Form 10-K for more information.
Income Taxes , included in Part II, Item 8 of this Annual Report on Form 10-K. Recent Accounting Pronouncements See Note 2, Summary of Significant Accounting Policies—Recently A dopted Accounting Pr onoun cem ents and — Re cently Issued Accounting Pronouncements , included in Part II, Item 8 of this Annual Report on Form 10-K for more information.
Other Income (Expense), Net Other inc ome (expense) , net primarily consists of foreign exchange gains and losses. Other income (expense), net also includes amortization of discounts and premiums on marketable securities, as well as gains and losses associated with foreign currency forward contracts for those periods in which such contracts were outstanding.
Other Income, Net Other inc ome, net primarily consists of foreign exchange gains and losses. Other income, net also includes accretion of discounts and premiums on marketable securities. (Benefit From) Provision For Income Taxes (Benefit from) provision for income taxes consists of U.S. federa l and state income taxes and income taxes in foreign jurisdictions in which we conduct business.
Operating Expenses Sales and Marketing Year Ended January 31, 2024 2023 Change % Change (dollars in thousands) Sales and marketing $ 713,130 $ 701,558 $ 11,572 2 % Percentage of revenue 55 % 66 % Sales and marketing expense increased by $11.6 million, or 2%, for fiscal year 2024 compared to fiscal year 2023.
Our gross margin decreased to 83% for fiscal year 2025 compared to 85% for fiscal year 2024, due to decrease in the proportion of higher-margin license revenue and the aforementioned increase in cost of subscription services revenue driven by increased hosting and personnel costs. 66 Table of Contents Operating Expenses Sales and Marketing Year Ended January 31, 2025 2024 Change % Change (dollars in thousands) Sales and marketing $ 738,493 $ 713,130 $ 25,363 4 % Percentage of revenue 52 % 55 % Sales and marketing expense increased by $25.4 million, or 4%, for fiscal year 2025 compared to fiscal year 2024.
This increase was primarily attributable to a $29.0 million increase in sales commissions expense as a result of higher amortization of capitalized contract acquisition costs, an $11.6 million increase in marketing and travel-related expenses due in part to our Forward VI event, a $5.4 million increase in sales-related software expenses, and an aggregate $1.5 million increase in depreciation and amortization and other administrative costs.
Sales and marketing was also impacted by a $10.7 million increase in sales commissions as a result of higher amortization of capitalized contract acquisition costs and a $4.7 million increase in marketing expenses largely related to our Forward VII user conference.
Subscription services revenue is recognized ratably over the subscription term; therefore, the increase in subscription services revenue is driven both by sales in prior periods for which we continue to provide maintenance and support and SaaS and by new sales in the current period. 65 Table of Contents Cost of Revenue and Gross Margin Year Ended January 31, 2024 2023 Change % Change (dollars in thousands) Licenses $ 10,469 $ 10,421 $ 48 — % Subscription services 111,922 87,366 24,556 28 % Professional services and other 73,533 82,264 (8,731) (11) % Total cost of revenue $ 195,924 $ 180,051 $ 15,873 9 % Gross margin 85 % 83 % Total cost of revenue increased by $15.9 million, or 9%, for fiscal year 2024 compared to fiscal year 2023, primarily due to an increase in cost of subscription services revenue, partially offset by a decrease in cost of professional services and other revenue.
Cost of Revenue and Gross Margin Year Ended January 31, 2025 2024 Change % Change (dollars in thousands) Licenses $ 8,565 $ 10,469 $ (1,904) (18) % Subscription services 167,630 111,922 55,708 50 % Professional services and other 70,747 73,533 (2,786) (4) % Total cost of revenue $ 246,942 $ 195,924 $ 51,018 26 % Gross margin 83 % 85 % Total cost of revenue increased by $51.0 million, or 26%, for fiscal year 2025 compared to fiscal year 2024, primarily due to a $55.7 million increase in cost of subscription services revenue, partially offset by a $2.8 million decrease in cost of professional services and other revenue.
As sales of SaaS products become a larger percentage of our total revenue, we expect our gross margin to be impacted by increased hosting fees and cloud infrastructure costs.
As more of our customer base deploys our products via SaaS, we expect our gross margin to be impacted by increased hosting fees and cloud infrastructure costs. Professional Services and Other Cost of professional services and other revenue primarily consists of personnel-related expenses of our professional services team, including salaries and bonuses, stock-based compensation expense, and employee benefit costs.
As of January 31, 2024, approximately $397.5 million remained of the $500.0 million originally authorized. The authorization expires on March 1, 2025, subject to modification by our board of directors. Refer to Note 12 , Stockholders' E quity —Stock Repurchase Program for further details. Critical Accounting Estimates Our consolidated financial statements are prepared in accordance wi th U.S. GAAP.
The current authorization may be suspended or discontinued at any time and does not have a specified expiration date. Refer to Note 12, Stockholders' Equity—Stock Repurchase Program for further details. Critical Accounting Estimates Our consolidated financial statements are prepared in accordance wi th U.S. GAAP.
The amounts in the table above are associated with agreements that are enforceable and legally binding. Obligations under contracts that we can cancel without a significant penalty are not included in the table above.
Obligations under contracts that we can cancel without a significant penalty are not included in the table above. Refer to Note 8, Operating Leases for more detailed information regarding timing of future lease payments, and to Note 11, Commitments and Contingencies—Non-Cancelable Purchase Commitments for more detailed information regarding timing of purchase commitments.
Interest Income Year Ended January 31, 2024 2023 Change % Change (dollars in thousands) Interest income $ 57,130 $ 27,955 $ 29,175 104 % Percentage of revenue 4 % 3 % Interest income increased by $29.2 million, or 104%, for fiscal year 2024 compared to fiscal year 2023 as a result of a period-over-period increase in our marketable securities balance as well as increased interest rates.
General and administrative expense was also impacted an $11.1 million increase in software service and implementation costs, a $2.7 million increase due to a credit loss recovery recorded in the prior comparable period, a $2.3 million increase in charitable donations mainly driven by the increased fair value of our Class A common shares contributed to a donor-advised fund in the current year, and a $1.9 million increase in third-party consulting fees, partially offset by a $3.9 million decrease in commercial insurance costs. 67 Table of Contents Interest Income Year Ended January 31, 2025 2024 Change % Change (dollars in thousands) Interest income $ 49,422 $ 57,130 $ (7,708) (13) % Percentage of revenue 3 % 4 % Interest income decreased by $7.7 million, or 13%, for fiscal year 2025 compared to fiscal year 2024 as a result of a period-over-period decrease in our aggregate balance of cash and cash equivalents and marketable securities, as well as decreased interest rates.
The effective tax rate was (18.6)% and (3.4)% for fiscal years 2024 and 2023, respectively. The increase in provision for income taxes was primarily driven by higher foreign tax expenses of our cost-plus margin entities in certain foreign jurisdictions. Key Performance Metric We mon itor ARR to help us measure and evaluate the effectiveness of our operations.
DTA, partially offset by tax expenses recognized related to the changing of our intent with respect to permanent reinvestment of foreign earnings. Key Performance Metric We mon itor ARR to help us measure and evaluate the effectiveness of our operations.
Refer to Note 8, Ope rating Leases for more detailed information regarding timing of future lease payments, and to Note 11, Commitments and Contingencies—Non-Cancelable Purchase Commitments for more detailed information regarding timing of purchase commitments. Additionally, our stock repurchase program may represent a material use of cash depending upon the number of shares repurchased, which is ultimately discretionary.
Additionally, our stock repurchase program may represent a material use of cash depending upon the number of shares repurchased, which is ultimately discretionary. As of January 31, 2025, approximately $507.4 million remained of the $1,000.0 million authorized by our board of directors.
Removed
These actions included an overall reduction of approximately 5% of our global workforce, aimed at simplifying our go-to-market approach to improve market segmentation, increase sales productivity, and provide best-in-class customer experience and outcomes.
Added
Item 1. Business of this Annual Report on Form 10-K.
Removed
On November 10, 2022, our board of directors approved further restructuring actions, including an additional 6% workforce reduction to further support our strategic positioning to drive increased execution velocity, operational efficiency, and customer centricity. Restructuring actions were completed during the second quarter of fiscal year 2024.
Added
The workforce reduction aimed to simplify our go-to-market approach and improve sales productivity. In connection with th ese workforce reductions, we also ceased use of our office in Brooklyn, NY. On November 10, 2022, our board of directors approved further restructuring actions to reduce our global workforce across functions by an additional 6%.
Removed
We expect cost of professional services and other revenue to continue to increase in absolute dollars for the foreseeable future. Operating Expenses Our operating expenses consist of sales and marketing, research and development, and general and administrative expenses.
Added
The Fiscal Year 2023 Workforce Restructuring was completed during the second quarter of fiscal year 2024.
Removed
Provision For Income Taxes Provision for income taxes consists of U.S. federa l and state income taxes and income taxes in foreign jurisdictions in which we conduct business. We maintain a full valuation allowance on our U.S. federal and state, Romanian, and U.K.
Added
On July 8, 2024, o ur board of directors approved the Fiscal Year 2025 Workforce Restructuring to reshape the organization by streamlining our structure, particularly in operational and corporate functions, to better prioritize our go-to-market investments and focus our research and development investments on AI and driving innovation across our platform.
Removed
Our effective tax rate is affected by tax rates in foreign jurisdictions and the relative amounts of income we earn in those jurisdictions, as well as by non-deductible expenses as permanent differences, and by ch anges in our valuation allowances.
Added
As licenses revenue is recognized at a point in time, any shift in license start dates or duration will have a direct impact on our licenses revenue.
Removed
Additionally, cost of professional services and other revenue was impacted by a $2.7 million decrease in personnel-related expenses, primarily related to lower bonus expenses and stock-based compensation expenses due to a decrease in headcount driven by our fiscal year 2023 restructuring actions, partially offset by an increase in general employee severance.
Added
Subscription services revenue is recognized ratably over the subscription term; therefore, the increase in subscription services revenue is driven both by sales in prior periods for which we continue to provide maintenance and support and SaaS and by new sales in the current period.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

173 edited+17 added−21 removed408 unchanged
Biggest changeIn addition, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, which generally, subject to certain exceptions, prohibits a Delaware corporation from engaging in any of a broad range of business combinations with any “interested” stockholder for a period of three years following the date on which the stockholder became an “interested” stockholder.
Biggest changeOur amended and restated certificate of incorporation and amended and restated bylaws include provisions that may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our board of directors, which is responsible for appointing the members of our management. 51 Table of Contents In addition, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, which generally, subject to certain exceptions, prohibits a Delaware corporation from engaging in any of a broad range of business combinations with any “interested” stockholder for a period of three years following the date on which the stockholder became an “interested” stockholder.
If we incur debt, the debt holders would have rights senior to holders of Class A common stock to make claims on our assets, and the terms of any future debt could restrict our operations, including our ability to pay dividends on our Class A common stock.
If we incur debt, the debt holders would have rights senior to holders of Class A common stock to make claims on our assets, and the terms of any future debt could restrict our operations, including the ability to pay dividends on our Class A common stock.
In particular, severe ransomware attacks have become increasingly prevalent and can lead to significant interruptions in our operations, ability to provide our products or services, loss of sensitive data and income, reputational harm, and diversion of resources.
In particular, severe ransomware attacks have become increasingly prevalent and can lead to significant interruptions in our operations, ability to provide our products or services, loss of sensitive data, loss of income, reputational harm, and diversion of resources.
Our ability to monitor these third parties’ information security practices is limited, and these third parties may not have adequate information security measures in place. We may share or receive sensitive information with or from third parties. If our third-party service providers experience a security incident or other interruption, we could experience adverse consequences.
Our ability to monitor these third parties’ information security practices is limited, and these third parties may not have adequate information security measures in place. We share and receive sensitive information with and from third parties. If our third-party service providers experience a security incident or other interruption, we could experience adverse consequences.
We cannot predict the outcome of lawsuits and cannot ensure that the results of any such actions will not have an adverse effect on our business, financial condition, or results of 43 Table of Contents operations.
We cannot predict the outcome of lawsuits and cannot ensure that the 43 Table of Contents results of any such actions will not have an adverse effect on our business, financial condition, or results of operations.
However, trade secrets 44 Table of Contents and know-how can be difficult to protect. We seek to protect these trade secrets and other proprietary technology, in part, by entering into non-disclosure and confidentiality agreements with parties who have access to them, such as our employees, consultants, and other third parties, including suppliers and other partners.
However, trade secrets and know-how can be difficult to protect. We seek to protect these trade secrets and other proprietary technology, in 44 Table of Contents part, by entering into non-disclosure and confidentiality agreements with parties who have access to them, such as our employees, consultants, and other third parties, including suppliers and other partners.
Our current and future international business and operations involve a variety of risks, including: • slower than anticipated availability to and adoption of our platform and products by international businesses; • changes in a specific country’s or region’s political, regulatory, or economic conditions; • the need to adapt and localize our products for specific countries; • greater difficulty collecting accounts receivable and longer payment cycles; • potential changes in trade relations, regulations, or laws; • unexpected changes in laws or regulatory requirements, including tax laws and regulations; • more stringent regulations relating to privacy and data security and the unauthorized use of or access to commercial and personal data, particularly in the EU; 46 Table of Contents • differing and potentially more onerous labor regulations, especially in Europe, where labor laws are generally more advantageous to employees as compared to the U.S., including deemed hourly wage and overtime regulations in these locations; • challenges inherent in efficiently managing, and the increased costs associated with, an increased number of employees over large geographic distances, including the need to implement appropriate systems, policies, benefits, and compliance programs that are specific to each jurisdiction; • difficulties in managing a business in new markets with diverse cultures, languages, customs, legal systems, alternative dispute systems, and regulatory systems; • increased travel, real estate, infrastructure, and legal compliance costs associated with international operations; • currency exchange rate fluctuations and the resulting effect on our revenue and expenses, and the cost and risk of entering into hedging transactions if we chose to do so in the future; • limitations on our ability to reinvest earnings from operations in one country to fund the capital needs of our operations in other countries; • laws and business practices favoring local competitors or general market preferences for local vendors; • limited or insufficient intellectual property protection or difficulties obtaining, maintaining, protecting, or enforcing our intellectual property rights, including our trademarks and patents; • the impacts of political instability, military conflicts, or terrorist activities on our employees, our business, and the global economic environment; • an outbreak of a contagious disease, which may cause us or our third-party providers and/or customers to temporarily suspend our or their respective operations in the affected city or country; • exposure to liabilities under anti-corruption and anti-money laundering laws, including the FCPA, U.S. bribery laws, the U.K.
Our current and future international business and operations involve a variety of risks, including: • slower than anticipated availability to and adoption of our platform and products by international businesses; • changes in a specific country’s or region’s political, regulatory, or economic conditions; • the need to adapt and localize our products for specific countries; • greater difficulty collecting accounts receivable and longer payment cycles; • potential changes in trade relations, regulations, laws, or tariffs; • unexpected changes in laws or regulatory requirements, including tax laws and regulations; • more stringent regulations relating to privacy and data security and the unauthorized use of or access to commercial and personal data, particularly in the EU; • differing and potentially more onerous labor regulations, especially in Europe, where labor laws are generally more advantageous to employees as compared to the U.S., including deemed hourly wage and overtime regulations in these locations; 46 Table of Contents • challenges inherent in efficiently managing, and the increased costs associated with, an increased number of employees over large geographic distances, including the need to implement appropriate systems, policies, benefits, and compliance programs that are specific to each jurisdiction; • difficulties in managing a business in new markets with diverse cultures, languages, customs, legal systems, alternative dispute systems, and regulatory systems; • increased travel, real estate, infrastructure, and legal compliance costs associated with international operations; • currency exchange rate fluctuations and the resulting effect on our revenue and expenses, and the cost and risk of entering into hedging transactions if we chose to do so in the future; • limitations on our ability to reinvest earnings from operations in one country to fund the capital needs of our operations in other countries; • laws and business practices favoring local competitors or general market preferences for local vendors; • limited or insufficient intellectual property protection or difficulties obtaining, maintaining, protecting, or enforcing our intellectual property rights, including our trademarks and patents; • the impacts of political instability, military conflicts, or terrorist activities on our employees, our business, and the global economic environment; • an outbreak of a contagious disease, which may cause us or our third-party providers and/or customers to temporarily suspend our or their respective operations in the affected city or country; • exposure to liabilities under anti-corruption and anti-money laundering laws, including the FCPA, U.S. bribery laws, the U.K.
In addition to the other risks described herein, factors that may affect our results of operations include the following: • fluctuations in demand for or usage of our platform and products; • fluctuations in our mix of revenue from licenses and service arrangements; • our ability to attract new customers and retain our existing customers; 20 Table of Contents • customer expansion rates and the pricing and quantity of licenses renewed; • fluctuations in mix of revenue, cost of revenue, and gross margin from sales directly to end-customers and/or through channel partners including our strategic alliances; • timing and amount of our investments to expand the capacity of our third-party cloud infrastructure providers; • seasonality; • the investment in new products and features relative to investments in our existing infrastructure and products; • the timing of customer purchases; • fluctuations or delays in purchasing decisions in anticipation of new products or enhancements by us or our competitors; • changes in customers’ budgets and in the timing of their budget cycles and purchasing decisions; • our ability to control costs, including our operating expenses; • the amount and timing of payment for operating expenses, particularly sales and marketing expenses, including commissions, and research and development expenses; • the amount and timing of non-cash expenses, including stock-based compensation, impairments of goodwill or other assets, and other non-cash charges; • the amount and timing of costs associated with recruiting, training, and integrating new employees and retaining and motivating existing employees; • the effects of acquisitions and their integration; • general economic conditions, both domestically and internationally, as well as economic conditions specifically affecting industries in which our customers participate; • the impact of new accounting pronouncements; • changes in regulatory or legal environments that may impact us, including by causing us to incur additional compliance obligations and expenses; • changes in the competitive dynamics of our market, including consolidation among competitors or customers; and • significant security breaches of, technical difficulties with, or interruptions to the delivery and use of our products and platform.
In addition to the other risks described herein, factors that may affect our results of operations include the following: • fluctuations in demand for or usage of our platform and products; • fluctuations in our mix of revenue from licenses and service arrangements; • our ability to attract new customers and retain our existing customers; • customer expansion rates and the pricing and quantity of licenses renewed; • fluctuations in mix of revenue, cost of revenue, and gross margin from sales directly to end-customers and/or through channel partners including our strategic alliances; • timing and amount of our investments to expand the capacity of our third-party cloud infrastructure providers; • seasonality; • investment in new products and features relative to investments in our existing infrastructure and products; • the timing of customer purchases; • fluctuations or delays in purchasing decisions in anticipation of new products or enhancements by us or our competitors; • changes in customers’ budgets and in the timing of their budget cycles and purchasing decisions; • our ability to control costs, including our operating expenses; • the amount and timing of payment for operating expenses, particularly sales and marketing expenses, including commissions, and research and development expenses; • the amount and timing of non-cash expenses, including stock-based compensation, impairments of goodwill or other assets, and other non-cash charges; 21 Table of Contents • the amount and timing of costs associated with recruiting, training, and integrating new employees and retaining and motivating existing employees; • the effects of acquisitions and their integration; • general economic conditions, both domestically and internationally, as well as economic conditions specifically affecting industries in which our customers participate; • the impact of new accounting pronouncements; • changes in regulatory or legal environments that may impact us, including by causing us to incur additional compliance obligations and expenses; • changes in the competitive dynamics of our market, including consolidation among competitors or customers; and • significant security breaches of, technical difficulties with, or interruptions to the delivery and use of our products and platform.
For example, some of our data processing practices may be challenged under wiretapping laws, if we obtain consumer information from third parties through various methods, including chatbot and session replay providers, or via third-party marketing pixels. These practices may be subject to increased challenges by class action plaintiffs.
For example, some of our data processing practices may be challenged under wiretapping laws, if we obtain consumer information from third parties through various methods, including chatbot and session replay providers, or via third-party marketing pixels. These practices are subject to increased challenges by class action plaintiffs.
However, if we and our channel partners are unable to provide sufficient high-quality consulting, training, integration, and maintenance resources, our customers may not effectively integrate our automation platform into their business or realize sufficient business value from our products to justify follow-on sales, which could impact our future financial performance.
However, if we and our channel partners are unable to provide sufficient high-quality consulting, training, integration, and maintenance resources, our customers may not effectively integrate our automation platform into their businesses or realize sufficient business value from our products to justify follow-on sales, which could impact our future financial performance.
Our competitors may be able to respond more quickly to new or expanding technology, such as newly emerging generative AI technologies, and devote more resources to product development than we can. The speed of technological development may prove disruptive to some of our markets if we are unable to maintain the pace of innovation.
Our competitors may be able to respond more quickly to new or expanding technology, such as newly emerging generative and agentic AI technologies, and devote more resources to product development than we can. The speed of technological development may prove disruptive to some of our markets if we are unable to maintain the pace of innovation.
The market price of our Class A common stock may be highly volatile and may fluctuate or decline substantially as a result of a variety of factors, some of which are beyond our control, including: • actual or anticipated fluctuations in our financial condition or results of operations; • variance in our financial performance from expectations of securities analysts; • changes in the pricing of our products and services; • changes in our projected operating and financial results; • changes in laws or regulations applicable to our platform and products; • announcements by us or our competitors of significant business developments, acquisitions, or new products; • significant data breaches, disruptions to, or other incidents involving our software; • our involvement in litigation or governmental investigations; • future sales of our Class A common stock by us or our stockholders; • changes in senior management or key personnel; • the issuance of new or changed securities analysts’ reports or recommendations; • the trading volume of our Class A common stock; • changes in the anticipated future size and growth rate of our market; • economic and market conditions in general, or in our industry in particular; and • technical factors in the public trading market for our Class A common stock that may produce price movements that may or may not comport with macro, industry, or company-specific fundamentals, including, without limitation, the sentiment of retail investors, the amount and status of short interest in our securities, access to margin debt, trading in options and other derivatives on our common stock, and other technical trading factors.
The market price of our Class A common stock may be highly volatile and may fluctuate or decline substantially as a result of a variety of factors, some of which are beyond our control, including: • actual or anticipated fluctuations in our financial condition or results of operations; • variance in our financial performance from expectations of securities analysts; 52 Table of Contents • changes in the pricing of our products and services; • changes in our projected operating and financial results; • changes in laws or regulations applicable to our platform and products; • announcements by us or our competitors of significant business developments, acquisitions, or new products; • significant data breaches, disruptions to, or other incidents involving our software; • our involvement in litigation or governmental investigations; • future sales of our Class A common stock by us or our stockholders; • changes in senior management or key personnel; • the issuance of new or changed securities analysts’ reports or recommendations; • the trading volume of our Class A common stock; • changes in the anticipated future size and growth rate of our market; • economic and market conditions in general, or in our industry in particular; and • technical factors in the public trading market for our Class A common stock that may produce price movements that may or may not comport with macro, industry, or company-specific fundamentals, including, without limitation, the sentiment of retail investors, the amount and status of short interest in our securities, access to margin debt, trading in options and other derivatives on our common stock, and other technical trading factors.
Some of these channel partners may be unable to withstand adverse changes in economic conditions, which could result in insolvency and/or the inability of such distributors to obtain credit to finance purchases of our products and services, which could negatively impact our future financial performance.
Some of these channel partners may be unable to withstand adverse changes in economic conditions, which could result in insolvency and/or the inability of such partners to obtain credit to finance purchases of our products and services, which could negatively impact our future financial performance.
Under ASC 606, Revenue from Contracts with Customers , we recognize revenue when a customer obtains control of promised goods or when services are rendered. The amount of revenue recognized reflects the consideration that we expect to receive in exchange for these goods or services.
Under ASC 606, Revenue from Contracts with Customers , we recognize revenue when a customer obtains control of promised goods or as services are rendered. The amount of revenue recognized reflects the consideration that we expect to receive in exchange for these goods or services.
If the recommendations, forecasts, or analyses that AI applications assist in producing are deficient or inaccurate, we could be subject to competitive harm, potential legal liability, including under existing and future legislation or regulations, including in the U.S. and the EU.
If the recommendations, forecasts, or analyses that AI applications, including AI agents, assist in producing are deficient or inaccurate, we could be subject to competitive harm or potential legal liability, including under existing and future legislation or regulations, including in the U.S. and the EU.
Additionally, we face unique threats and vulnerabilities as a SaaS company, including, but not limited to, adverse consequences resulting from any vulnerabilities in our platform and products and customer misuse of our platform and products. The reliability and continuous availability of our platform and products is critical to our success.
We face unique threats and vulnerabilities as a SaaS company, including, but not limited to, adverse consequences resulting from any vulnerabilities in our platform and products and customer misuse of our platform and products. The reliability and continuous availability of our platform and products is critical to our success.
Our employees and personnel may use generative AI technologies to perform their work, and the disclosure and use of personal data in generative AI technologies is subject to various privacy laws and other privacy obligations. Governments have passed and are likely to pass additional laws regulating generative AI.
Our employees and personnel use generative AI technologies to perform their work, and the disclosure and use of personal data in generative AI technologies is subject to various privacy laws and other privacy obligations. Governments have passed laws and are likely to pass additional laws regulating generative AI.
We may not be able to protect all of our registered or unregistered trademarks or trade names relevant to our brand, and our rights may be challenged, infringed, circumvented, declared generic, lapsed, or determined to be infringing on or dilutive of other marks.
Additionally, we may not be able to protect all of our registered or unregistered trademarks or trade names relevant to our brand, and our rights may be challenged, infringed, circumvented, declared generic, lapsed, or determined to be infringing on or dilutive of other marks.
Because we derive substantially all of our revenue from our UiPath Business Automation Platform, failure of this platform to satisfy customer demands could adversely affect our business, financial condition, results of operations, and growth prospects. We derive and expect to continue to derive substantially all of our revenue from our UiPath Business Automation Platform.
Because we derive substantially all of our revenue from our UiPath Platform™, failure of this platform to satisfy customer demands could adversely affect our business, financial condition, results of operations, and growth prospects. We derive and expect to continue to derive substantially all of our revenue from our UiPath Platform™.
Overall growth of our business depends on a number of additional factors, including our ability to: • price our products that we offer on our platform effectively so that we are able to attract new customers and expand sales to our existing customers; • expand the functionality and use cases for the products we offer on our platform; • maintain and expand the rates at which customers purchase and renew licenses to our platform; • provide our customers with support that meets their needs; • continue to introduce and sell our products to new markets; • continue to develop new products and new functionality for our platform and successfully further optimize our existing products and infrastructure; • successfully identify and acquire or invest in businesses, products, or technologies that we believe could complement or expand our platform; and • increase awareness of our brand on a global basis and successfully compete with other companies.
Overall growth of our business depends on a number of additional factors, including our ability to: • price our products that we offer on our platform effectively so that we are able to attract new customers and expand sales to our existing customers; • expand the functionality and use cases for the products we offer on our platform; • maintain and expand the rates at which customers purchase and renew licenses to our platform; • provide our customers with support that meets their needs; 19 Table of Contents • continue to introduce and sell our products to new markets; • continue to develop new products and new functionality for our platform and successfully further optimize our existing products and infrastructure; • successfully identify and acquire or invest in businesses, products, or technologies that we believe could complement or expand our platform; and • increase awareness of our brand on a global basis and successfully compete with other companies.
For example, we anticipate that we will need to establish relationships with new partners in order to expand into certain countries, and if we fail to identify, establish, and maintain such relationships, we may be unable to execute on our expansion plans. As of January 31, 2024, the majority of our full-time employees were located outside of the U.S.
For example, we anticipate that we will need to establish relationships with new partners in order to expand into certain countries, and if we fail to identify, establish, and maintain such relationships, we may be unable to execute on our expansion plans. As of January 31, 2025, the majority of our full-time employees were located outside of the U.S.
These initiatives include increasing our overall customer base and expanding sales within our current customer base, continuing to penetrate international markets, investing in research and development to improve the capabilities of our platform (including AI capabilities), acquiring businesses, technology, talent, and related integration efforts, growing our distribution channels and channel partner ecosystem, deepening our user community, hiring additional employees and investing in our existing workforce, expanding our operations and infrastructures both domestically and internationally, and incurring expenses related to legal, accounting, and other administrative expenses aspects of operating as a public company.
These initiatives include increasing our overall customer base and expanding sales within our current customer base, continuing to penetrate international markets, investing in research and development to improve the capabilities of our platform (including AI capabilities), acquiring businesses, technology, talent, and related integration efforts, growing our distribution channels and channel partner ecosystem, deepening our user community, hiring additional employees and investing in our existing workforce, expanding our operations and 18 Table of Contents infrastructures both domestically and internationally, and incurring expenses related to legal, accounting, and other administrative expenses aspects of operating as a public company.
An acquisition may also negatively affect our financial results because it may: • require us to incur charges or assume substantial debt; • cause adverse tax consequences or unfavorable accounting treatment; • expose us to claims and disputes by third parties, including intellectual property and privacy claims and disputes; • not generate sufficient financial return to offset additional costs and expenses related to the acquisition; • cause us to incur liabilities for activities of the acquired company before the acquisition; • cause us to record impairment charges associated with goodwill or acquired intangible assets; and • cause other unforeseen operating difficulties and expenditures.
An acquisition may also negatively affect our financial results because it may: • require us to incur charges or assume substantial debt; • cause adverse tax consequences or unfavorable accounting treatment; • expose us to claims and disputes by third parties, including intellectual property and privacy claims and disputes; • not generate sufficient financial return to offset additional costs and expenses related to the acquisition; 33 Table of Contents • cause us to incur liabilities for activities of the acquired company before the acquisition; • cause us to record impairment charges associated with goodwill or acquired intangible assets; and • cause other unforeseen operating difficulties and expenditures.
Furthermore, we may discover security issues that were not found during due diligence of such acquired, or integrated entities, and it may be difficult to integrate companies into our information technology environment and security program, We rely on third-party service providers, sub-processors, and technologies to operate critical business systems to process sensitive information in a variety of contexts, including without limitation, third-party providers of cloud-based infrastructure, encryption and authentication technology, employee email, content delivery to customers, and other functions.
Furthermore, we may discover security issues that were not found during due diligence of such acquired, or integrated entities, and it may be difficult to integrate companies into our information technology environment and security program, We rely on third-party service providers, sub-processors, and technologies to operate critical business systems to process sensitive information in a variety of contexts, including without limitation, third-party providers of 38 Table of Contents cloud-based infrastructure, encryption and authentication technology, employee email, content delivery to customers, and other functions.
Certain of our NOLs could expire unused and be unavailable to offset future income tax liabilities because of their limited duration or because of restrictions under U.S. or foreign tax law. NOLs generated in taxable years beginning before January 1, 2018 are permitted to be carried forward for only 20 taxable years under applicable U.S. federal income tax law.
Certain of our NOLs could expire unused and be unavailable to reduce future income tax liabilities because of their limited duration or because of restrictions under U.S. or foreign tax law. NOLs generated in taxable years beginning before January 1, 2018 are permitted to be carried forward for only 20 taxable years under applicable U.S. federal income tax law.
If we or the third parties upon whom we rely fail, or are perceived to have failed, to address or comply with data privacy and security obligations, we could face significant consequences, including, but not limited to: government enforcement actions (e.g., investigations, fines, penalties, audits, inspections, and similar); litigation (including class action claims) and mass arbitration demands; additional reporting requirements and/or oversight; temporary or permanent bans on processing personal data; orders to destroy or not use personal data; and imprisonment of company officials.
If we or the third parties upon whom we do business fail, or are perceived to have failed, to address or comply with data privacy and security obligations, we could face significant consequences, including, but not limited to: government enforcement actions (e.g., investigations, fines, penalties, audits, inspections, and similar); litigation (including class action claims) and mass arbitration demands; additional reporting requirements and/or oversight; temporary or permanent bans on processing personal data; orders to destroy or not use personal data; and imprisonment of company officials.
These include but are not limited to; social-engineering attacks (including through deepfakes, which may be increasingly difficult to identify as fake, and phishing attacks), malicious code (such as viruses and worms), malware (including as a result of advanced persistent threat intrusions), denial-of-service attacks, credential stuffing attacks, credential harvesting, personnel misconduct or error, ransomware attacks, supply chain attacks, software bugs, server malfunctions, software or hardware failures, loss of data or other information technology assets, adware, telecommunications failures, attacks enhanced or facilitated by AI, and other similar threats.
These include but are not limited to; social-engineering attacks (including through deepfakes, which are difficult to identify as fake, and phishing attacks), malicious code (such as viruses and worms), malware (including as a result of advanced persistent threat intrusions), denial-of-service attacks, credential stuffing attacks, credential harvesting, personnel misconduct or error, ransomware attacks, supply chain attacks, software bugs, server malfunctions, software or hardware failures, loss of data or other information technology assets, adware, telecommunications failures, attacks enhanced or facilitated by AI, and other similar threats.
Adverse changes in global or regional economic conditions periodically occur, including recession or slowing growth; changes or uncertainty in fiscal, monetary, or trade policy; higher interest rates; volatility in foreign exchange markets; tighter credit; inflation; lower capital expenditures by businesses, including on IT infrastructure; increases in unemployment; and lower consumer confidence and spending.
Adverse changes in global or regional economic conditions periodically occur, including recession or slowing growth; changes or uncertainty in fiscal, monetary, or trade policy; volatility in foreign exchange markets; tighter credit; fluctuating inflation and interest rates; lower capital expenditures by businesses, including on IT infrastructure; increases in unemployment; and lower consumer confidence and spending.
Some AI scenarios may present ethical issues, and the enablement or integration of AI into our platform may subject us to new or heightened legal, regulatory, ethical, or other challenges, as this is an area of rapid development. We take into consideration these challenges when designing our technologies and implementing our business practices.
Some AI scenarios may present ethical issues, and the enablement or integration of AI into our platform or internal processes may subject us to new or heightened legal, regulatory, ethical, or other challenges, as this is an area of rapid development. We take into consideration these challenges when designing our technologies and implementing our business practices.
If we cannot introduce new services or enhance our existing services to keep pace with changes in our customers’ deployment strategies, we may not be able to attract new customers, retain existing customers, and expand their use of our software or secure renewal contracts, which are important for the future of our business.
If we cannot introduce new services or enhance our existing services to keep pace with changes in our customers’ deployment strategies, we may not be able to attract new customers, retain existing customers, or expand customers' use of our software or secure renewal contracts, which are important for the future of our business.
For instance, media stories regarding the potential effects on employment of automation and technologies that replace traditional, human-driven systems are commonplace. Unfavorable publicity regarding the impact automation may have on unemployment could harm our brand and reputation, even if unrelated to our products.
For instance, media stories regarding the potential effects on employment of automation and AI technologies that replace traditional, human-driven systems are commonplace. Unfavorable publicity regarding the impact automation may have on unemployment levels could harm our brand and reputation, even if unrelated to our products.
Any failure to develop or maintain effective controls, or any difficulties encountered in their implementation or improvement, could harm our results of operations, may result in a restatement of our financial statements for prior periods, may cause us to fail to meet our reporting obligations, could result in an adverse opinion regarding our internal control over financial reporting from our independent registered public accounting firm, and could lead to investigations or sanctions by regulatory authorities.
Any failure to develop or maintain effective controls, or any difficulties encountered in their implementation or improvement, could harm our results of operations, may result in 47 Table of Contents a restatement of our financial statements for prior periods, may cause us to fail to meet our reporting obligations, could result in an adverse opinion regarding our internal control over financial reporting from our independent registered public accounting firm, and could lead to investigations or sanctions by regulatory authorities.
Accordingly, we compete with RPA software providers and adjacent automation and integration platform companies in markets such as low-code, BPM, iPaaS, process mining, IDP, and test automation vendors, and with enterprise platform vendors that are acquiring, building, or investing in automation and AI functionality or partnering with automation and AI providers.
Accordingly, we compete with enterprise platform vendors that are acquiring, building, or investing in automation and AI functionality or partnering with automation and AI providers, RPA software providers and adjacent automation and integration platform companies in markets such as low-code, BPM, iPaaS, process mining, IDP, and test automation vendors, among others.
If our estimates or judgments relating to our critical accounting estimates prove to be incorrect, our results of operations could be adversely affected. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in our consolidated financial statements.
If our estimates or judgments relating to our critical accounting estimates prove to be incorrect, our results of operations could be adversely affected. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in our consolidated financial statements.
If we cannot address such uncertainties and successfully develop new features, enhance our software, or otherwise overcome technological challenges and competing technologies, our business and results of operations could be adversely affected. 27 Table of Contents We also offer professional services including consulting and training and must continually adapt to assist our customers in deploying our platform in accordance with their specific automation strategies.
If we cannot address such uncertainties and successfully develop new features, enhance our software, or otherwise overcome technological challenges and competing technologies, our business and results of operations could be adversely affected. We also offer professional services including consulting and training and must continually adapt to assist our customers in deploying our platform in accordance with their specific automation strategies.
In addition, remote work has become more common, and has increased risks to our information technology systems and data, as more of our employees utilize network connections, computers, and devices outside of our premises or network, including working at home, while in transit, and in public locations.
In addition, remote work has increased risks to our information technology systems and data, as more of our employees utilize network connections, computers, and devices outside of our premises or network, including working at home, while in transit, and in public locations.
As some of our employees' perception of our equity awards has declined, and may decline from time to time due to the lower price of our Class A common stock, if the Class A common stock continues to experience significant volatility, or volatility increases such that prospective employees believe there is limited upside to the value of our equity awards, it may adversely affect our ability to recruit and retain key employees.
As some of our employees' perception of our equity awards has declined, and may decline from time to time due to the lower price of our Class A common stock, if the Class A common stock continues to experience significant volatility, or volatility increases such that prospective employees believe there is limited upside to the value of our equity awards, it may adversely affect our ability to 25 Table of Contents recruit and retain key employees.
For the avoidance of doubt, this provision is intended to benefit and may be enforced by us, our officers and directors, the underwriters to any offering giving rise to such complaint, and any other professional entity whose 52 Table of Contents profession gives authority to a statement made by that person or entity and who has prepared or certified any part of the documents underlying the offering.
For the avoidance of doubt, this provision is intended to benefit and may be enforced by us, our officers and directors, the underwriters to any offering giving rise to such complaint, and any other professional entity whose profession gives authority to a statement made by that person or entity and who has prepared or certified any part of the documents underlying the offering.
Real or perceived errors, failures, or 29 Table of Contents bugs in our platform and products could result in negative publicity, loss of or delay in market acceptance of our platform and products, regulatory investigations and enforcement actions, harm to our brand, weakening of our competitive position, claims by customers for losses sustained by them, or failure to meet the stated service level commitments in our customer agreements.
Real or perceived errors, failures, or bugs in our platform and products could result in negative publicity, loss of or delay in market acceptance of our platform and products, regulatory investigations and enforcement actions, harm to our brand, weakening of our competitive position, claims by customers for losses sustained by them, or failure to meet the stated service level commitments in our customer agreements.
As a result, our stockholders bear the risk of future issuances of debt or equity securities reducing the value of our Class A common stock and diluting their interests. 31 Table of Contents If we fail to maintain and enhance our brand, our ability to expand our customer base will be impaired and our business, financial condition, and results of operations may suffer.
As a result, our stockholders bear the risk of future issuances of debt or equity securities reducing the value of our Class A common stock and diluting their interests. If we fail to maintain and enhance our brand, our ability to expand our customer base will be impaired and our business, financial condition, and results of operations may suffer.
In addition, although we carry general liability and cybersecurity insurance, our insurance may not be adequate to indemnify us for all liability that may be imposed or otherwise 32 Table of Contents protect us from liabilities or damages with respect to claims alleging compromises of customer data, and any such coverage may not continue to be available to us on acceptable terms or at all.
In addition, although we carry general liability and cybersecurity insurance, our insurance may not be adequate to indemnify us for all liability that may be imposed or otherwise protect us from liabilities or damages with respect to claims alleging compromises of customer data, and any such coverage may not continue to be available to us on acceptable terms or at all.
Our business model materially depends on our ability to process personal data, so we are particularly exposed to the risks associated with the rapidly changing legal landscape. For example, we may be at heightened 36 Table of Contents risk of regulatory scrutiny, and any changes in the regulatory framework could require us to fundamentally change our business model.
Our business model materially depends on our ability to process personal data, so we are particularly exposed to the risks associated with the rapidly changing legal landscape. For example, we may be at heightened risk of regulatory scrutiny, and any changes in the regulatory framework could require us to fundamentally change our business model.
Any such termination may adversely affect our ability to contract with other government customers as well as our reputation, business, financial condition, and results of operations. We are subject to governmental export and import controls that could impair our ability to compete in international markets or subject us to liability if we violate the controls.
Any such termination may adversely affect our ability to contract with other government customers as well as our reputation, business, financial condition, and results of operations. 41 Table of Contents We are subject to governmental export and import controls that could impair our ability to compete in international markets or subject us to liability if we violate the controls.
Furthermore, legal standards relating to the validity, enforceability, and scope of protection of intellectual property rights are uncertain. Despite our precautions, it may be possible for unauthorized third parties to copy our brands, products, and platform capabilities, and use information that we regard as proprietary to create brands and products that compete with ours.
Furthermore, legal standards relating to the validity, enforceability, and scope of protection of intellectual property rights are uncertain. Despite our precautions, it may be possible for unauthorized third parties to copy our 42 Table of Contents brands, products, and platform capabilities, and use information that we regard as proprietary to create brands and products that compete with ours.
The amount of taxes we pay in different jurisdictions may depend on the application of the tax laws of the various jurisdictions, including the U.S., to our international business activities, changes in tax rates, new or revised 48 Table of Contents tax laws or interpretations of existing tax laws and policies, and our ability to operate our business in a manner consistent with our corporate structure and intercompany arrangements.
The amount of taxes we pay in different jurisdictions may depend on the application of the tax laws of the various jurisdictions, including the U.S., to our international business activities, changes in tax rates, new or revised tax laws or interpretations of existing tax laws and policies, and our ability to operate our business in a manner consistent with our corporate structure and intercompany arrangements.
Mr. Dines’ control may adversely affect the market price of our Class A common stock. Further, future transfers by holders of our Class B common stock will generally result in those shares converting into shares of our Class A common stock, subject to limited exceptions, such as certain transfers effected for tax or estate planning purposes.
Mr. Dines’ control may adversely affect the market price of our Class A common stock. 50 Table of Contents Further, future transfers by holders of our Class B common stock will generally result in those shares converting into shares of our Class A common stock, subject to limited exceptions, such as certain transfers effected for tax or estate planning purposes.
If we are unable to continue to meet the demands of our customers and the developer community, our business operations, financial results, and growth prospects will be materially and adversely affected. In addition, as we expand our business, it is important that we continue to maintain a high level of customer service and satisfaction.
If we are unable to continue to meet the demands of our customers and the developer community, our business operations, financial results, and growth prospects will be materially and adversely affected. 22 Table of Contents In addition, as we expand our business, it is important that we continue to maintain a high level of customer service and satisfaction.
If we are not able to continue to provide high levels of customer service, our reputation, as well as our business, financial condition, and results of operations could be harmed. As usage of our platform capabilities grow, we will need to continue to devote additional resources to improving and maintaining our infrastructure and integrating with third-party applications.
If we are not able to continue to provide high levels of customer service, our reputation, as well as our business, financial condition, and results of operations could be harmed. As usage of our platform grows, we will need to continue to devote additional resources to improving and maintaining our infrastructure and integrating with third-party applications.
If any internal restructuring activities we have undertaken or undertake in the future fail to achieve some or all of the expected benefits, our business, financial condition, and results of operations could be materially and adversely affected. Any future litigation against us could be costly and time-consuming to defend.
If any internal restructuring activities we have undertaken or undertake in the future fail to achieve some or all of the expected benefits, our business, financial condition, and results of operations could be materially and adversely affected. 34 Table of Contents Any future litigation against us could be costly and time-consuming to defend.
If 18 Table of Contents our revenue or ARR growth does not meet our expectations in future periods, our business, financial condition, and results of operations may be harmed, and we may not achieve or maintain profitability in the future. If we are unable to sustain profitability, the value of our business and Class A common stock may significantly decrease.
If our revenue or ARR growth does not meet our expectations in future periods, our business, financial condition, and results of operations may be harmed, and we may not achieve or maintain profitability in the future. If we are unable to sustain profitability, the value of our business and Class A common stock may significantly decrease.
Accordingly, our future success 22 Table of Contents depends in part on our ability to exhibit this value and sell additional licenses and products to our existing customers, and our customers renewing their licenses with us and our channel partners when contract terms expire. Our license agreements primarily have annual terms, and some of our license agreements have multi-year terms.
Accordingly, our future success depends in part on our ability to exhibit this value and sell additional licenses and products to our existing customers, and our customers renewing their licenses with us and our channel partners when contract terms expire. Our license agreements primarily have annual terms, and some of our license agreements have multi-year terms.
For fiscal years 2024, 2023, and 2022, we derived a substantial amount of our revenue from sales through channel partners, and we expect to continue to derive a substantial amount of our revenue from channel partners in future periods.
For fiscal years 2025, 2024, and 2023, we derived a substantial amount of our revenue from sales through channel partners, and we expect to continue to derive a substantial amount of our revenue from channel partners in future periods.
The success of new products, enhancements, and developments depends on several factors including, but not limited to: our anticipation of market changes and demands for product features, successful product design and timely release of new functionality, sufficient customer demand, and cost effectiveness of our product development efforts.
The success of new products, enhancements, and developments depends on several factors including, but not limited to: our anticipation of market changes and demands for product features, successful product design and timely release of new functionality, sufficient customer 27 Table of Contents demand, and cost effectiveness of our product development efforts.
Such failures or bugs can cause reputational damage, and in some cases can affect our revenue due to the impact of service level commitments that we offer to our customers, as described below. Our platform and products also empower our customers to develop their own use cases for our automation platform and products.
Such failures or bugs can cause reputational damage, and in some cases can affect our revenue due to the impact of service level commitments that we offer to our customers. Our platform and products also empower our customers to develop their own use cases for our automation platform and products.
We may at times fail (or be perceived to have failed) in our efforts to comply with our data privacy and security obligations. Moreover, despite our efforts, our personnel or the third parties upon whom we rely may fail to comply with such obligations, which could negatively impact our business operations and compliance posture.
We may at times fail (or be perceived to have failed) in our efforts to comply with our data privacy and security obligations. Moreover, despite our efforts, our personnel or the third parties with whom we do business may fail to comply with such obligations, which could negatively impact our business operations and compliance posture.
Additionally, even if we are able to develop a patch or other fix to address such vulnerabilities, such fix may be difficult to push out to our customers, or otherwise be delayed. 39 Table of Contents Additionally, our business depends upon the appropriate and successful implementation of our platform and products by our customers.
Additionally, even if we are able to develop a patch or other fix to address such vulnerabilities, such fix may be difficult to push out to our customers, or otherwise be delayed. Additionally, our business depends upon the appropriate and successful implementation of our platform and products by our customers.
Because our Chief Innovation Officer, co-founder, and Chairman, Daniel Dines, who, collectively with his controlled entities, holds all our outstanding shares of Class B common stock, and beneficially owns shares representing in excess of 50% of the voting power of our outstanding capital stock, we are eligible to elect the “controlled company” exemption to the corporate governance rules for publicly-listed companies.
Because our CEO, co-founder, and Chairman, Daniel Dines, who, collectively with his controlled entities, holds all our outstanding shares of Class B common stock, and beneficially owns shares representing in excess of 50% of the voting power of our outstanding capital stock, we are eligible to elect the “controlled company” exemption to the corporate governance rules for publicly-listed companies.
If we are unable to protect our rights in these trademarks and trade names, third parties may file for registration of trademarks similar or identical to our trademarks, thereby impeding our ability to build brand identity and possibly leading to market confusion.
If we are unable to protect our rights in these trademarks and trade names, third parties may file for registration of trademarks similar or identical to our trademarks, thereby 32 Table of Contents impeding our ability to build brand identity and possibly leading to market confusion.
In addition, responding to any action will likely result in a materially significant diversion of management’s attention and resources and significant defense costs and other professional fees. 40 Table of Contents Sales to government entities and highly regulated organizations are subject to a number of challenges and risks.
In addition, responding to any action will likely result in a materially significant diversion of management’s attention and resources and significant defense costs and other professional fees. Sales to government entities and highly regulated organizations are subject to a number of challenges and risks.
The value of our intellectual property could diminish if 42 Table of Contents others assert rights in or ownership of our trademarks, patents, and other intellectual property rights, or adopt trademarks that are similar to our trademarks. We may be unable to successfully resolve these types of conflicts to our satisfaction.
The value of our intellectual property could diminish if others assert rights in or ownership of our trademarks, patents, and other intellectual property rights, or adopt trademarks that are similar to our trademarks. We may be unable to successfully resolve these types of conflicts to our satisfaction.
From time to time, there have been claims challenging the ownership rights in open source software against companies that incorporate it into their products and the licensors of such open source software provide no 45 Table of Contents warranties or indemnities with respect to such claims.
From time to time, there have been claims challenging the ownership rights in open source software against companies that incorporate it into their products and the licensors of such open source software provide no warranties or indemnities with respect to such claims.
Our success and future growth depend largely upon the continued services of our executive officers, particularly Daniel Dines, Chief Innovation Officer, co-founder, and Chairman, as well as our other key employees in the areas of research and development, and sales and marketing. Additionally, many members of our management team have been with us for a short period of time.
Our success and future growth depend largely upon the continued services of our executive officers, particularly Daniel Dines, our CEO , co-founder, and Chairman, as well as our other key employees in the areas of research and development, and sales and marketing. Additionally, many members of our management team have been with us for a short period of time.
Our use of 35 Table of Contents this technology could result in additional compliance costs, regulatory investigations and actions, and lawsuits. We also use AI/ML to assist us in making certain decisions, which is regulated by certain privacy laws.
Our use of this technology could result in additional compliance costs, regulatory investigations and actions, and lawsuits. We also use AI/ML to assist us in making certain decisions, which is regulated by certain privacy laws.
We cannot predict whether our dual class structure, combined with the concentrated control of our Chief Innovation Officer, co-founder, and Chairman, Daniel Dines, who holds all of the outstanding shares of our Class B common stock, will result in a lower or more volatile market price of our Class A common stock or in adverse publicity or other adverse consequences.
We cannot predict whether our dual class structure, combined with the concentrated control of our CEO, co-founder, and Chairman, Daniel Dines, who holds all of the outstanding shares of our Class B common stock, will result in a lower or more volatile market price of our Class A common stock or in adverse publicity or other adverse consequences.
Actions we may decide to take in the future in our attempt to achieve or maintain profitability may not be successful in yielding our intended results and may not appropriately address either or both of the short-term and long-term strategy of our business.
Further, actions we may decide to take in the future in our attempt to achieve or sustain profitability may not be successful in yielding our intended results and may not appropriately address either or both of the short-term and long-term strategy of our business.
If these policies, material, or statements are found to be deficient, lacking in transparency, deceptive, unfair, or misrepresentative of our practices, we may be subject to investigation, enforcement actions by regulators, or other adverse consequences.
Regulators are increasingly scrutinizing these statements, and if these policies, material, or statements are found to be deficient, lacking in transparency, deceptive, unfair, or misrepresentative of our practices, we may be subject to investigation, enforcement actions by regulators, or other adverse consequences.
To the extent that fire, floods, unusual weather conditions, power loss, telecommunications failures, military actions, terrorist attacks, and other events beyond our control materially impacts our ability to operate those offices, it may have a material impact on our business operations as a whole.
To the extent that fire, floods, unusual weather conditions, power loss, telecommunications failures, military actions, 53 Table of Contents terrorist attacks, and other events beyond our control materially impacts our ability to operate those offices, it may have a material impact on our business operations as a whole.
The regulatory environment surrounding the impact of the implementation 28 Table of Contents of AI on our products and services may adversely affect our ability to produce and export products, and as a result, may cause harm to our reputation and result in financial liability.
The regulatory environment surrounding the impact of the implementation of AI on our products and services may adversely affect our ability to produce and export products, and as a result, may cause harm to our reputation and result in financial liability.
Leadership transitions may also impact our relationships with our customers and other market participants, creating uncertainty among investors, employees, and others concerning our future direction and performance. Any significant disruption, uncertainty, or change in 25 Table of Contents business strategy could adversely affect our business, financial condition, and operating results.
Leadership transitions may also impact our relationships with our customers and other market participants, creating uncertainty among investors, employees, and others concerning our future direction and performance. Any significant disruption, uncertainty, or change in business strategy could adversely affect our business, financial condition, and operating results.
We cannot be certain when or if our operations will generate sufficient cash to fully fund our ongoing operations, our planned investments, or the growth of our business. Following our IPO, we focused on growing our business to take advantage of our market opportunities. While growth remains important, we are also focused on the path to profitability.
We cannot be certain whether our operations will consistently generate sufficient cash to fully fund our ongoing operations, our planned investments, or the growth of our business. Following our IPO, we focused on growing our business to take advantage of our market opportunities. While growth remains important, we are also focused on the path to profitability.
We can be adversely affected by other global and regional factors that periodically occur, including: • inefficient infrastructure and other disruptions, such as supply chain interruptions, and large-scale outages, or unreliable provision of services from utilities, transportation, data hosting, or telecommunications providers; • government restrictions on, or nationalization of, our operations in any country, or restrictions on our ability to repatriate earnings from or distribute compensations or other funds in a particular country; • adverse changes relating to government grants, tax credits, or other government incentives, including more favorable incentives provided to competitors; • differing employment practices and labor issues, including restricted access to talent; • local business and cultural factors that differ from our current standards and practices; • continuing uncertainty regarding social, political, immigration, tax, and trade policies in the U.S. and abroad; • global tensions and conflict in areas where we have customers or employees , and in surrounding areas, such as the Russian military operation in Ukraine, Israel-Hamas conflict, past conflicts in Lebanon and the current conflict in the Red Sea, and rising tensions between China and Taiwan.
We can be adversely affected by other global and regional factors that periodically occur, including: • inefficient infrastructure and other disruptions, such as supply chain interruptions, and large-scale outages, or unreliable provision of services from utilities, transportation, data hosting, or telecommunications providers; • government restrictions on, or nationalization of, our operations in any country, or restrictions on our ability to repatriate earnings from or distribute compensations or other funds in a particular country; 20 Table of Contents • adverse changes relating to government grants, tax credits, or other government incentives, including more favorable incentives provided to competitors; • differing employment practices and labor issues, including restricted access to talent; • local business and cultural factors that differ from our current standards and practices; • continuing uncertainty regarding social, political, immigration, tax, and trade policies in the U.S. and abroad; • global tensions and conflict in areas where we have customers or employees , and in surrounding areas, such as the Russian military operation in Ukraine, conflict in the Middle East, and rising tensions between China and Taiwan.
These proposals include changes to the existing framework to calculate income tax, as well as proposals to change or impose new types of non-income taxes, including taxes based on a percentage of revenue or online sales (e.g. Romanian Alternative Minimum Corporate Tax).
These proposals include changes to the existing framework to calculate income tax, as well as proposals to change or impose new types of non-income taxes, including taxes based on a percentage of revenue or online sales (e.g. Romanian alternative minimum corporate tax, digital service taxes, equalization levies).
If we (or a third-party upon which we rely) experience a security incident, or are perceived to have experienced a security incident, we may experience adverse consequences, such as government enforcement actions (for example, investigations, fines, penalties, audits, and inspections); additional reporting requirements and/or oversight; restrictions on processing sensitive information (including personal data); litigation (including class claims); indemnification obligations; negative publicity; reputational harm; monetary fund diversions; diversion of management attention; interruptions in our operations (including availability of data); financial loss; and other similar harms.
If we (or a third-party with whom we do business) experience a security incident, or are perceived to have experienced a security incident, we may experience material adverse consequences, such as government enforcement actions (for example, investigations, fines, penalties, audits, and inspections); additional reporting requirements and/or oversight; restrictions on processing sensitive information (including personal data); litigation (including class claims); indemnification obligations; negative publicity; reputational harm; monetary fund diversions; diversion of management attention; interruptions in our operations (including availability of data); financial loss; and other similar harms.
Even if we have issued or otherwise made available patches or information to address vulnerabilities in our software applications, products, or services, our customers may be unwilling or unable to deploy such patches and use such 38 Table of Contents information effectively and in a timely manner.
Even if we have issued or otherwise made available patches or information to address vulnerabilities in our software applications, products, or services, our customers may be unwilling or unable to deploy such patches and use such information effectively and in a timely manner.
Any sensitive information (including confidential, competitive, proprietary, or personal data) that we input into a third-party generative AI/ML model could be leaked or disclosed to others, including if sensitive information is used to train the third party's AI/ML model.
Any sensitive information (including confidential, competitive, proprietary, or personal data) that we input into a third-party generative AI/ML 39 Table of Contents model could be leaked or disclosed to others, including if sensitive information is used to train the third party's AI/ML model.
The use of generative AI processes at scale is relatively new, and may lead to challenges, concerns, and risks that are significant, or that we may not be able to predict, especially if our use of these technologies in our products and services were to become more important to us over time.
The use of generative AI processes at scale is relatively new, and may lead to challenges, concerns, and risks that are significant, or that we may not be able to predict, especially if our direct or indirect use of these technologies in our products and internal systems and processes were to become more important to us over time.
Further, as various forms of AI, including generative AI, become more widely adopted 23 Table of Contents and acceptable, if customers were to feel that our technology was not developing apace, our business and growth prospects could be harmed.
Further, as various forms of AI, including generative and agentic AI, become more widely adopted and acceptable, if customers were to feel that our technology was not developing apace, our business and growth prospects could be harmed.
In the E EA , the Collective Redress Directive (effective June 2023) will allow collective actions to be brought by a representative body against businesses if they breach legislation intended to protect EU consumers, including for data protection matters. Outside the U.S., an increasing number of laws, regulations, and industry standards apply to data privacy and security.
In the EEA , the Collective Redress Directive 35 Table of Contents (effective June 2023) will allow collective actions to be brought by a representative body against businesses if they breach legislation intended to protect EU consumers, including for data protection matters. Outside the U.S., an increasing number of laws, regulations, and industry standards apply to data privacy and security.
We may delay or re-evaluate these efforts due to any anticipated or actual adverse impact to our business as a result of, among other things, global economic and geopolitical uncertainties, rising levels of inflation, interest rates, pandemics, government shutdowns, regional conflicts, or other similar events or circumstances.
We may delay or re-evaluate these efforts due to any anticipated or actual adverse impact to our business as a result of, among other things, global economic and geopolitical uncertainties, fluctuating inflation and interest rates, tariffs, government shutdowns, regional conflicts, or other similar events or circumstances.
Our AI-related efforts, particularly those related to generative AI, or the datasets that we use in training our systems, subject us to risks related to harmful or illegal content, accuracy, bias, intellectual property infringement or misappropriation, defamation, data privacy, cybersecurity, sanctions, and export controls, among others.
Our AI-related efforts, particularly those related to generative and agentic AI, or the datasets that we use in training our systems, subject us to risks related to harmful or illegal content, accuracy, bias, intellectual property infringement or misappropriation, 28 Table of Contents defamation, data privacy, cybersecurity, sanctions, and export controls, among others.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur CISO has over 30 years of experience developing and leading IT product security teams across multiple technology domains, and previously held leadership positions at several large technology companies.
Biggest changeGovernance Our information security risk assessment and management processes are implemented and maintained by certain of our management, including our CISO, our Chief Technology Officer, and our Director of Security Operations. Our CISO has over 30 years of experience developing and leading IT product security teams across multiple technology domains, and previously held leadership positions at several large technology companies.
Pursuant to its charter, the audit committee has, as an area of focus, the adequacy and effectiveness of our information security and cybersecurity policies and practices. The board of directors retains overall responsibility for assessing the our major risks and considering ways to address those risks, and addresses our information security risk management as part of its general oversight function.
Pursuant to its charter, the audit committee has, as an area of focus, the adequacy and effectiveness of our information security and cybersecurity policies and practices. The board of directors retains overall responsibility for assessing our major risks and considering ways to address those risks, and addresses our information security risk management as part of its general oversight function.
Our Senior Director of Security Operations has over 12 years of experience in IT security and is a Certified Information Systems Security Professional. Our CISO and information security team are responsible for hiring appropriate information security personnel, helping to integrate information security risk considerations into our overall risk management strategy, and communicating key priorities to relevant personnel.
Our Director of Security Operations has over 13 years of experience in IT security and is a Certified Information Systems Security Professional. Our CISO and information security team are responsible for hiring appropriate information security personnel, helping to integrate information security risk considerations into our overall risk management strategy, and communicating key priorities to relevant personnel.
Our Chief Technology Officer—Cloud holds a Master of Science degree in Computer Engineering and has over 20 years of experience in various IT leadership roles, including most recently as Head of Engineering within a large technology company's Cloud and IT division.
Our Chief Technology Officer has over 20 years of experience in various engineering and product development leadership roles, including most recently as a Corporate Vice President within a large enterprise software company, with strong background in cloud computing, distributed systems, and product development.
Removed
Governance In fiscal year 2024, our information security risk assessment and management processes were implemented and maintained by certain of our management, including our CISO, our Chief Technology Officer—Cloud, and our Senior Director of Security Operations.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeLocation Business Purpose Square Footage Lease Expiration Date New York, NY Global headquarters 26,363 3/31/2038 Bucharest, Romania Corporate office 100,335 3/1/2028 Bellevue, WA (1) Product development center 39,120 11/30/2024 Bangalore, India Corporate office 21,006 2/14/2028 Tokyo, Japan Corporate office 7,868 7/31/2028 (1) In January 2024, we entered into a lease for a new Bellevue, WA product development center, the term of which commences in May 2024 and expires on October 31, 2034; this new space, with an area of 44,735 square feet, will replace our existing Bellevue space upon the expiration of that lease. 56 Table of Contents We also lease other spaces for our sales, services, development, and administrative activities in various locations in the U.S. and around the world.
Biggest changeLocation Business Purpose Square Footage Lease Expiration Date New York, NY Global headquarters 26,363 3/31/2038 Bucharest, Romania Corporate office 100,335 3/1/2028 Bellevue, WA (1) Product development center 39,120 4/30/2025 Bangalore, India Corporate office 21,006 2/14/2028 Tokyo, Japan Corporate office 7,868 7/31/2028 (1) In January 2024, we entered into a lease for a new Bellevue, WA product development center, the term of which commenced in May 2024 and expires on October 31, 2034; this new space, with an area of 44,735 square feet, will replace our existing Bellevue lease once its build-out is completed. 56 Table of Contents We also lease other spaces for our sales, services, development, and administrative activities in various locations in the U.S. and around the world.
Item 2. Properties Our corporate headquarters and other significant leased real property as of January 31, 2024 are shown in the following table.
Item 2. Properties Our corporate headquarters and other significant leased real property as of January 31, 2025 are shown in the following table.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe timing and actual number of shares repurchased will depend on a variety of factors, including price, general business and market conditions, and alternate uses of capital. This authorization expires on March 1, 2025, subject to modification by the board of directors in the future.
Biggest changeThe timing and actual number of shares repurchased will depend on a variety of factors, including price, general business and market conditions, and alternate uses of capital. 58 Table of Contents Recent Sales of Unregistered Securities None.
Stock Performance Graph The following graph compares the cumulative total return of our Class A common stock for the period from April 21, 2021, the date our Class A common stock began trading on the New York Stock Exchange, through January 31, 2024, as compared to the cumulative total return of the S&P 500 Index and S&P 500 Technology Index over the same period .
Stock Performance Graph The following graph compares the cumulative total return of our Class A common stock for the period from April 21, 2021, the date our Class A common stock began trading on the New York Stock Exchange, through January 31, 2025, as compared to the cumulative total return of the S&P 500 Index and S&P 500 Technology Index over the same period .
Issuer Purchase of Equity Securities The following table presents our Class A common stock repurchase activity under our stock repurchase program for the three months ended January 31, 2024 (in thousands, except for per share data): Period Total Number of Shares Purchased Average Price Paid Per Share (1) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2) Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs November 1 – 30 1,650 $ 17.36 $ 1,650 $ 418,774 December 1 – 31 — — $ — $ 418,774 January 1 – 31 951 $ 22.37 $ 951 $ 397,502 Total 2,601 2,601 (1) Excludes brokerage commission.
Issuer Purchase of Equity Securities The following table presents our Class A common stock repurchase activity under our stock repurchase program for the three months ended January 31, 2025 (in thousands, except for per share data): Period Total Number of Shares Purchased Average Price Paid Per Share (1) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2) Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs November 1 – 30 744 $ 12.55 $ 744 $ 507,386 December 1 – 31 — — $ — $ 507,386 January 1 – 31 — $ — $ — $ 507,386 Total 744 744 (1) Excludes brokerage commission.
Number of Holders of Common Stock The number of record holders of our Class A and Class B common stock as of March 21, 2024 was 50 and one, respectively.
Number of Holders of Common Stock The number of record holders of our Class A and Class B common stock as of March 20, 2025 was 45 and one, respectively.
(2) On September 1, 2023, our board of directors authorized a stock repurchase program, pursuant to which we may repurchase from time to time up to $500.0 million of our outstanding shares of Class A common stock.
(2) On September 1, 2023, our board of directors authorized a stock repurchase program which authorized the repurchase from time to time of up to $500.0 million of our outstanding shares of Class A common stock. This authorization was scheduled to expire on March 1, 2025.
Removed
Use of Proceeds from Initial Public Offering of Class A Common Stock In April 2021, we completed our IPO, in w hich we issued and sold 13.0 million shares of our Class A common stock, including 3.6 million shares pursuant to the exercise in full of the underwriters’ option to purchase additional shares, and the selling stockholders sold an additional 14.5 million shares, at a public offering price of $56.00 per share, resulting in net proceeds to us of $687.9 million after deducting underwriting discounts and commissions and offering expenses.
Added
On August 30, 2024, our board of directors authorized an additional $500.0 million of repurchases under the stock repurchase program. The current authorization may be suspended or discontinued at any time and does not have a specified expiration date.
Removed
We did not receive any proceeds from the sale of shares by the selling stockholders. All of the shares issued and sold in the IPO were registered under the Securities Act pursuant to a registration statement on Form S-1 (File No. 333-254738), which was declared effective by the SEC on A pril 20, 2021.
Removed
There has been no material change in the planned uses of proceeds from our IPO from those disclosed in the 2023 Form 10-K.
Removed
As part of this stock repurchase program, UiPath Inc. adopted (a) on October 12, 2023, a non-discretionary stock repurchase agreement intended to satisfy Rule 10b5-1, covering the period between October 16, 2023 and 58 Table of Contents November 29, 2023; (b) on January 12, 2024, a non-discretionary stock repurchase agreement intended to satisfy Rule 10b5-1, covering the period between January 16, 2024 and March 12, 2024.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeA discussion regarding our results of operations for fiscal year 2023 compared to fiscal year 2022 was presented in th e 2023 59 Table of Contents Form 10-K, under the section titled "Management's Discussion and Analysis of Financial Condition and Results of Operations." Overview UiPath is at the forefront of technology innovation and thought leadership in automation, as the provider of an end-to-end platform that can help customers realize the true potential of digital transformation.
Biggest changeFor a discussion regarding our results of operations for fiscal year 2024 compared to fiscal year 2023 see th e 2024 Form 10-K , under the section titled "Management's Discussion and Analysis of Financial Condition and Results of Operations," which is incorporated herein by reference. 59 Table of Contents Overview UiPath is at the forefront of technology innovation and thought leadership in automation, as the provider of an end-to-end platform that can help customers realize the true potential of digital transformation.
The UiPath Business Automation Platform leverages AI, ML, and NLP to empow er automations that emulate human behavior, driving operational efficiencies and meaningful business outcomes without requiring significant changes to the organization's underlying technology infrastructure. Historically, we have grown our revenue and ARR sign ificantly by helping customers adopt automation as a tool, process by process.
The UiPath Platform ™ leverages AI, ML, and NLP to empow er automations that emulate human behavior, driving operational efficiencies and meaningful business outcomes without requiring significant changes to the organization's underlying technology infrastructure. Historically, we have grown our revenue and ARR sign ificantly by helping customers adopt automation as a tool, process by process.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our audited consolidated financial statements and related notes for the fiscal year ended January 31, 2024 included elsewhere in this Annual Report on Form 10-K.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our audited consolidated financial statements and related notes for the fiscal year ended January 31, 2025 included elsewhere in this Annual Report on Form 10-K.
Our fiscal quarters end on April 30, July 31, and October 31, and our fiscal year ends January 31. References to fiscal years 2024, 2023, and 2022 in this Annual Report on Form 10-K refer to our fiscal years ended January 31, 2024, 2023, and 2022, respectively.
Our fiscal quarters end on April 30, July 31, and October 31, and our fiscal year ends January 31. References to fiscal years 2025, 2024, and 2023 in this Annual Report on Form 10-K refer to our fiscal years ended January 31, 2025, 2024, and 2023, respectively.
A discussion regarding our financial condition and our results of operations for fiscal year 2024 compared to fiscal year 2023 is presented below.
A discussion regarding our financial condition and our results of operations for fiscal year 2025 compared to fiscal year 2024 is presented below.
For further discussion of our business , our platform , and our growth strategies , refer to
For further discussion of our business , our platform , and our growth strategies , refer to Part I,

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeWe have from time to time used foreign currency forward contracts to reduce our potential exposure to currency fluctuations. If we are not able to successfully mitigate the risks associated with currency fluctuations, our results of operations could be adversely affected.
Biggest changeWe have from time to time used foreign currency forward contracts to reduce our potential exposure to currency fluctuations, but did not have foreign currency forward contracts during fiscal year 2025, 2024, or 2023. If we are not able to successfully mitigate the risks associated with currency fluctuations, our results of operations could be adversely affected.
Asset and liability balances denominated in non-U.S. dollar currencies are translated into U.S. dollars using period-end exchange rates, while translation of revenue and expenses is based on average monthly rates. Translation adjustments are recorded as a component of accumulated other comprehensive income (loss), and transaction gains and losses are recorded in other income (expense), net on our consolidated financial statements.
Asset and liability balances denominated in non-U.S. dollar currencies are translated into U.S. dollars using period-end exchange rates, while translation of revenue and expenses is based on average monthly rates. Translation adjustments are recorded as a component of accumulated other comprehensive income (loss), and transaction gains and losses are recorded in other income, net on our consolidated financial statements.
We do not enter into investments for trading or speculative purposes. The effect of a hypothetical 10% change in interest rates would not have had a material impact on our consolidated financial statements for fiscal year 2024. 73 Table of Contents Foreign Currency Exchange Risk The functional currency of our non-U.S. subsidiaries is the local currency.
We do not enter into investments for trading or speculative purposes. The effect of a hypothetical 10% change in interest rates would not have had a material impact on our consolidated financial statements for fiscal year 2025. Foreign Currency Exchange Risk The functional currency of our non-U.S. subsidiaries is the local currency.
In addition, we had $818.1 million of marketable securities, consisting of treasury bills and U.S. government securities, agency bonds, and corporate bonds. Such interest-earning instruments carry a degree of interest rate risk. The primary objectives of our investment activities are the preservation of capital, the fulfillment of liquidity needs, and the fiduciary control of cash.
In addition, we had $844.4 million of marketable securities, consisting primarily of treasury bills and U.S. government securities, corporate bonds, and commercial paper. Such interest-earning instruments carry a degree of interest rate risk. The primary objectives of our investment activities are the preservation of capital, the fulfillment of liquidity needs, and the fiduciary control of cash.
The estimated translation impact to our consolidated financial statements of a hypothetical 10% change in foreign currency exchange rates would amount to $11.9 million for fiscal year 2024.
The estimated translation impact to our consolidated financial statements of a hypothetical 10% change in foreign currency exchange rates would amount to $25.2 million for fiscal year 2025.
Our market risk exposure is principally the result of fluctuations in interest rates and foreign currency exchange rates. Interest Rate Risk As of January 31, 2024, we had $1,061.7 million of cash and cash equivalents. Cash and cash equivalents consist of cash in banks, bank deposits, and money market accounts.
Our market risk exposure is principally the result of fluctuations in interest rates and foreign currency exchange rates. 73 Table of Contents Interest Rate Risk As of January 31, 2025, we had $879.2 million of cash and cash equivalents. Cash and cash equivalents consist of cash in banks, bank deposits, and money market accounts.
For fiscal year 2024, approximately 53% of our revenue and approximately 35% of our expenses were denominated in non-U.S. dollar currencies, and we recognized net foreign currency transaction gains of $0.3 million. 74 Table of Contents
For fiscal year 2025, approximately 52% of our revenue and approximately 37% of our expenses were denominated in non-U.S. dollar currencies, and we recognized net foreign currency transaction gains of $6.9 million. 74 Table of Contents

Other PATH 10-K year-over-year comparisons