UiPath, Inc.

Greetings. Welcome to the UiPath second 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 will now turn the conference over to your host, Kelsey Turcotte, Senior Vice President of Investor Relations. You may begin.

Good afternoon and thank you for joining us today to review UiPath's second 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 Dinez, UiPath co-founder and co-chief executive officer, Rob Enslin, co-chief executive officer, and Ashim Gupta, chief financial officer. Rob will start the discussion and then turn the call over to Daniel. After that, Ashim We'll review our results and provide guidance. Then we will open the call for questions. 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 plan to discuss non-gap metrics on today's call. This afternoon's call includes forward-looking statements about our ability to drive growth and operational efficiency. and our financial guidance for the third fiscal quarter and fiscal year end 2023. Actual results may differ materially from those expressed in the foreign-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 year ended January 31, 2022, and our other reports filed with the SEC, including our quarterly report on Form 10-Q for the quarterly period ended July 31, 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 Rob, I'd like to inform you we plan to hold an investor day during our Forward Five user conference on Tuesday, September 27th at the Venetian Hotel in Las Vegas starting at 1145 a.m. Pacific time with lunch that will feature roundtables hosted by our executive team. please reach out to ir at uipath.com for registration details. Now, I'd like to hand the call over to Rob.

Thank you, Kelsey, and good afternoon, everyone. Thank you for joining us. Our second quarter results exceeded the high end of our guidance, despite an increasing FX headwind and a choppy macro environment. ARR crossed the $1 billion mark, totaling $1.043 billion. an increase of 44% year-over-year, driven by net new AR of $66 million. We now serve more than 10,500 customers. Automation continues to be a central part of digital transformation for companies of all sizes and across all industries. We see this in the breadth of companies that continue to invest in UiPath, like ADT, iCertis, Mayo Clinic, Smartsheet, and Take-Two Interactive, which are just a few of the organizations that invested in UiPath's platform in the second quarter. Our relationship with iSIMS, a leading global provider of talent acquisition software, is a good example of the power of automation. During the quarter, they expanded the UiPath deployment and looking to the future, they plan to embed UiPath automation cloud robots and integration service into the iSIMS talent cloud. to enable their customers to automate routine tasks and business processes. Success stories like these and dozens of customers and partners I have met since I joined UiPath leave no doubt in my mind that we will be the enterprise automation provider that all organizations will embrace over time. That's because we moved automation beyond RPA to a full suite of end-to-end platform capabilities. Our post-finance AG, Wynne, says it better than we do. Post-finance, a retail financial institution in Switzerland, has been on its automation journey for three years with a competitor in RPA and another in process mining. Driven by a search for a more efficient automation platform with a wider scope, they determined that UiPath platform is the one in the market that can fulfill all their current and future needs. while significantly reducing the total cost of ownership for their automation program and helping them to achieve their strategic goal to become more efficient. Our platform not only allows customers to discover automation opportunities, but also redesign and improve previously disjointed processes, bringing them from the endless cycle of outdated approaches and unlocking the true digital transformation. Digital transformation is one of the most important secular trends, and UiPath's platform is central for companies to reach their goal. Over and over, executives tell me that automation has accelerated their business, improved their customer and employee experience, increased speed to value, and allowed them to redeploy capital. These kinds of outcomes, our customer discussion from the RPA Center of Excellence, which is automating process by process, to the C-suite executives, who have a holistic view of enterprise requirements. A great example of this evolution is a U.S.-based global power technology leader, a customer since 2018. They've automated over 160 processes across finance, supply chain, HR, IT, and shared services, saving over $4 million. Now with the C-Suite sponsorship, they have expanded their program to the full UiPath platform, both on-premise and in the cloud, and are launching a citizen development and a tendered automation program. My takeaway from the last few months is that the market is clearly evolving, and UiPath is driving that evolution. We have a first mover and a technological advantage, and as the automation leader, we continue to expand the value we can deliver for our customers. That being said, while we believe our business has considerable room to grow, our top line metrics have slowed, and we need to evolve how we manage our business. Our go-forward priority will be to balance investing for the long-term growth while managing the business to consistently expand non-gap operating margin, deliver sustainable, positive, adjusted free cash flow, in fiscal year 2024 and beyond. As we said during our IPO, our long-term objective, we expect to achieve a non-GAAP operating margin of greater than 20%, and our commitment to that objective has not changed. Let me be clear. I don't believe we need to sacrifice growth to achieve our profitability targets. This market is large and early stage. Our customers are committed to your path and they love the outcomes we deliver. In the short term, we are strategically repositioning the company to increase velocity, efficiency, and customer centricity. This includes evaluating, elevating customer conversations, selling business outcomes, and helping organizations realize the transformational benefits of automation. We have the opportunity to be the essential automation goal standard for customers delivering technology that is integral to their business strategy. To get there, we are aligning around four strategic objectives. First, investing in our platform to increase our competitive mode and delight our customers with disruptive and innovative capabilities that improve outcomes, accelerate return on investment, and leverage the cloud. Second, increasing velocity and productivity. This is where we are expending the most energy and also expect the greatest return. We need to set ourselves up to take advantage of our incredible new platform releases like 2210, which we plan to unveil at 4.5 in a few weeks. This includes branding and marketing around business outcomes that resonate with the C-suite, simplifying our sales motion to lower cost, building strategic partnerships that elevate our brand and serve as distribution channels, and coalescing around partners that can really move the needle. Third, we are bringing together our diverse team, aligned around driving UiPath to the next level. Every business that grows at our rate requires experienced leadership. We have great bench strength. having already elevated internal leaders to new roles, and a strong brand that is attracting a great pool of new talent, as you saw by today's sales leadership announcements. Finally, and equally critical, we are committed to sustained profitable growth by leveraging our scale and exercising disciplined resource allocation. Profitability is a core pillar of our go-forward strategy. While we are reducing our near-term forecast to account for a significant FX headwind, the macro environment, and our internal repositioning, I am confident in our strategy. And I firmly believe from my experience that we are on the right track to achieve our growth and profitability objectives. And I am confident in our strategy. I'll now turn the call over to Daniel.