UiPath, Inc.

Greetings. Welcome to the UiPath first quarter 2023 earnings conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note, this conference is being recorded. I would now like to turn the conference over to your host, Kelsey Turcotte, Senior Vice President of Investor Relations for UiPath. Kelsey, you may begin.

Good afternoon, and thank you for joining us today to review UiPath's first quarter fiscal 2023 financial results, which we announced in our earnings press release issued after the close of the market today. On the call with me are Daniel Dines, UiPath co-founder and co-chief executive officer, Rob Enslin, co-chief executive officer, and Ashim Gupta, chief financial officer. We will open with prepared remarks, followed by a Q&A session. Our earnings press release and financial supplemental materials are posted on the UiPath Investor Relations website, ir.uipath.com. These materials include gap to non-gap reconciliations. We will be discussing non-gap metrics on today's call. This afternoon's call includes forward-looking statements about the impact of FedRAMP authorization, our ability to drive growth and operational efficiency, and our financial guidance for the second fiscal quarter and fiscal year-end 2023. Actual results may differ materially from those expressed in the forward-looking statements due to many factors, and therefore, investors should not place undue reliance on these statements. For a discussion of the material risks and uncertainties that could affect our actual results, please refer to our annual report on Form 10-K for the fiscal year ended January 31, 2022, and our other reports filed with the SEC, including our quarterly report on Form 10-Q and for the quarterly period ended April 30th, 2022, to be filed with the SEC. Forward-looking statements made on this call reflect our views as of today. We undertake no obligation to update them. I would like to highlight that this webcast is being accompanied by slides. We will post the slides and a copy of our prepared comments to our Investor Relations website immediately following the conclusion of this call. Before I turn the call over to Daniel, I'd like to inform you we will be holding our 2022 Investor Day during our Forward5 user conference on Tuesday, September 27th at the Venetian Hotel in Las Vegas, starting at noon Pacific time. Please save the date. Invitations with registration information will be forthcoming. Now I'd like to hand the call over to Daniel.

Thank you, Kelsey, and good afternoon, everyone. Thank you for joining us. I'd like to start by thanking the UiPath team for their hard work and their dedication to our customers during this turbulent time. I am pleased that first quarter results exceeded expectations. We reported ARR of $977 million, which grew 50% year over year. Net new ARR was $52 million, net of $5.5 million due to Russian sanctions. When we provided guidance in late March, we knew it would be a choppy quarter, particularly in Europe, given the ongoing geopolitical situation and macroeconomic environment. At the same time, both prospects and existing accounts tell us that automation is a long-term solution to this kind of volatility, which leaves us very optimistic about the business long-term. This year, We expect to cross the $1 billion mark in both ARR and revenue. And as we look ahead, we have aspirations to be multiples of the size we are today, which is why we have brought together a global team that has scale technology businesses of size, their leadership and experience built upon our current foundation. and will help drive the next chapter of sustained profitable growth at UiPath. Choppy macro environments typically reveal areas that can be improved. To that end, the team is focused on simplifying our go-to-market approach, starting with an alignment that will result in better market segmentation, higher sales productivity, and best-in-class customer experience and outcomes. We will be scaling through our emerging enterprise teams, which are more cost-effective, while at the same time increasing our presence with key accounts, where the expansion opportunities are significant, where we haven't had enough dedicated attention. Chris Weber, our new Chief Business Officer, is already driving teams to reach higher to C-level executives and instilling even better operational rigor on deal execution while reducing bureaucracy and organizational complexity. Our market opportunity continues to be significant as the amount of manual work in organizations and need for agility is only increasing. We continue to win in the market given the measurable return on investment we create for our customers and the breadth and depth of our platform. I have never felt more confident in the leadership team, the direction of the company, and our ability to build operating leverage while continuing to win this large market. Turning back to the quarter, We continue to see broad adoption across industries, ending April with more than 10,330 customers, including New Logos, Bridgestone Americas, Korea Investment Savings Bank, Dato, Udemy, and Virtua. We also had great competitive wins in this quarter with new logos like Zelis and DocuSign, which selected the UiPath platform, including the UiPath test suite to accelerate the time-to-value for new automations and UiPath integration service to combine the power of both UI automation and API integrations in a single workflow. We now have 1,574 customers that accounted for at least $100 in ARR on an annual basis. This includes 168 customers over $1 million in annual ARR. During the quarter, a global financial services and insurance company chose to standardize on our entire platform while phasing out a competitor. They are implementing automation across lines of business and plan to use document understanding, AIML, and test suite, as well as scale up citizen development. They have a corporate initiative to remove $100 million in cost by 2025 and see automation as instrumental in achieving their goals. We consistently hear from customers that our end-to-end platform focused on innovation and vision for the future of automation are important differentiators for UiPath and key to winning in the market. In the recent Forrester RPA Inquiry Spotlight 2022 between February 2020 and December 2021, Forrester analysts received the most inquiries about UiPath, 2.7 times the next vendor, while 72% of total conversations were focused on automation platforms. We continue to deliver on our promise to make platform deployment easier, faster, and simpler with the introduction of 22.4 our most recent platform release. A few highlights include general availability of automation cloud robots with two SaaS offerings. A VM automation cloud robot created on demand in automation cloud providing unattended robots and serverless automation cloud robots a pool of robots that we run selected automation jobs on demand, expanded integration options in our integration service, controls and templates to streamline app development, and new citizen developer access to AI-powered tools like Forms AI, document understanding, and test capture, security and compliance upgrades, that include every UiPath service now in scope for SOC 2 on automation cloud HIPAA attestation and support for MAX expansion in ready-to-go attended automations and support for long-running workflows in Linux. During the quarter, we also announced automation cloud public sector achieved FedRAMP in process status. FedRAMP authorization will increase our addressable market in the federal space where we already have a meaningful presence. All of these points to the considerable momentum that continues to build in our cloud business, which continues to be in hyper growth with cloud ARR more than doubling year over year. And to provide customers even more flexibility We recently introduced a new pricing model that allows for worldwide migration between on-prem and cloud. A great cloud customer case study is Global Healthcare Exchange, which started its automation journey with Automation Cloud. During this past quarter, they expanded with multi-year roadmap to apply automation to address more complex business problems leveraging document understanding for large-scale document conversion, AI computer vision to source images reliably from vendor websites, while rolling out a new citizen development program to accelerate internal adoption. We also continue to expand our partner ecosystem, making automation easier as both go-to-market and technical partners help customers deploy automations quickly and realize fast time to value. On the go-to-market side, partners like NCS are both deploying our platform internally as well as leveraging it to generate revenue and better serve their customers. A leading technology services firm in Asia-Pacific. NCS expects to deploy hundreds of automations within their organization and to create a UiPath automation practice focused on the delivery of the fully automated enterprise to their customers. From a technical perspective, we announced integrations with Adobe's Document Services and Adobe Acrobat Science. to help customers automate end-to-end document processes to drive productivity and scale in a secure manner. MindShift, a leading provider of automated prior authorization and real-time medical benefits check technology to enable better patient care faster by reducing manual operational tasks and introducing significant operational efficiencies. And Airslate, a fast-growing workflow automation company to empower individuals and small businesses to create, innovate, and automate to digitally transform their organizations to run faster, easier, and more efficiently. Before I turn the call over to Ashim, I'd like to welcome our new co-CEO, Rob Enslin. When I met Rob, I knew that he would be the right partner to help me lead UiPath. His roots were in development at SAP, where he went on to a series of increasingly senior executive roles. Based on his ability to build and lead organizations, his operational skills, and commitment to customers, Most recently, as president of Google Cloud, he led a team of several thousand employees that drove considerable growth at scale. While his experience and skills are important, it's Rob's personality and his passion for the power of automation which are a great fit for UiPath. I'll turn the call over to Rob for a few minutes to share his perspective.