UiPath, Inc.

Greetings and welcome to the UiPath 4th Quarter Fiscal Year 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief 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. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Kelsey Turcotte, Senior Vice President of Investor Relations. Thank you, Kelsey. You may begin.

Great. Thank you. Good afternoon, and thank you for joining us today to review UiPath's fourth quarter and full year fiscal 2024 financial results, which we announced in our earnings press release issued after the close of the market today. On the call with me are Rob Enslin, Chief Executive Officer, and Ashim Gupta, Chief Financial Officer. They will deliver our prepared comments and answer questions. Also on the call is Daniel Dines, UiPath's co-founder and chief innovation officer, who will be available for questions. Rob will start the discussion, then turn the call over to Ashim, who will review our results and provide guidance. Then we will open the call for questions. Our new 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 our ability to drive growth and operational efficiency and to grow our platform, as well as our financial guidance for the first fiscal quarter and full fiscal year 2025. 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 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, 2023, and our subsequent reports filed with the SEC, including our annual report on Form 10-K for the year ended January 31, 2024, 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. In addition, please note that all comparisons are year-over-year and less otherwise indicated. Finally, we invite you to join our annual AI Summit, which will be live-streamed on our website at 11 a.m. Eastern Time on March 19th. You can register at UiPath.com. Now I'd like to hand the call over to Rob.

Thank you, Kelsey. Good afternoon, everyone. Thanks for joining us. I want to start by extending a massive thank you to our team. Your hard work, dedication, and innovative spirit are the driving forces behind our success. and I can't wait to see what we accomplish together in 2025. We reported a strong close to the fiscal year, exceeding our guidance across both top and bottom line metrics, driven by demand for the depth and breadth of our platform and the team's focus on customer success, which is at the core of everything we do. Our momentum also reinforces my confidence in the strategic role we play for our customers and the investments we are making in our future. We delivered fourth quarter net new ARR of $86 million, ending the year with a total ARR of $1.46 billion, an increase of 22% year over year, and record quarterly revenue of $405 million, up 31% year over year. On the bottom line, fourth quarter non-GAAP operating margin was a record 27%. This drove fiscal year non-GAAP operating margin to 18%, an increase of over 1,100 basis points year over year. This was also our first quarter of GAAP profitability as a public company. I am very pleased with the team's ongoing cost management and discipline around capital deployment, which focuses our energy on the right initiatives and sets us up for future success. C-level executives are no longer solely prioritizing digital transformation. They're also prioritizing AI transformation. In a recent UiPath and Bain joint study, The State of AI-Powered Automation, 70% of executives asserted that AI-driven automation is either very important or critical in fulfilling their organization's strategic objectives. Our business automation platform is the foundation to deliver the value across every organization. We make AI actionable, unlocking the promise of this next evolution in technology. And I believe that the combination of AI and automation is the strategic change enabler for our customers. For example, a leading US-based financial services firm and one of our top 25 customers started their automation journey with RPA in 2018, and have since adopted our full platform. This includes process mining, document understanding, and test suite. As the automation program has expanded across business lines, they have over 15,000 robots in production, with automations across several thousand processors. As part of a seven-figure fourth quarter deal, they plan to deploy communications mining in their corporate investment bank, commercial bank, and HR departments. Our platform drives ROI for both large organizations and smaller ones, like innovative toll solutions, a compliance and toll management solution for trucking fleets, which has leveraged automation to drive efficient growth. In the fourth quarter... They invested in additional AI-powered automation, including document understanding to automate complex toll documents for their customers, test suite for QA and application testing, and automation hub to grow and prioritize their automation pipeline. The value of our business automation platform has never been more evident. To regional partners, global SIs, go-to-market partners like SAP, We understand the power of AI combined with automation and the value it provides to our joint customers. Our SAP partnership is progressing well, and we are pleased with the momentum and pipeline generation across geographies. During the quarter, we continue to see combined success in closing deals, including one of Switzerland's largest retail and wholesale companies, a new logo to UiPath. Disappointed with the performance of a competitor's RPA and application performance monitoring solutions, they are migrating both of these to UiPath. They are also in the process of rolling out document understanding to automate invoice processing with the goal of expanding company-wide. Another great example combines the power of UiPath, SAP, and EY. Working with EY, Marks & Spencer selected UiPath based on our ability to both automate and test across all applications. They also plan to utilize UiPath to assist in their migration to SAP S400 Rise and to automate finance processes with the goal of reducing complexity and vendor spend. Partners also help customers build a holistic approach to automation. Together with Deloitte and C-Level Sponsorship, Indosat, a leading Indonesian communications provider and a UiPath customer since 2021, expanded to the full platform this quarter. They are looking to drive further operational efficiencies, increase revenue growth, and improve their customer and employee experience. Using our North Star program, the team crafted a three-year roadmap encompassing hundreds of automations across all business lines within the organization. Beyond Indosat's internal use, we are forming a strategic go-to-market collaboration, expanding our presence in Indonesia to empower local businesses to revolutionize operations, equip workers to focus on higher-value tasks. And in partnership with the GSI, we supported TD Bank through our Northstar program to create a list of top automation opportunities across various lines of business, focusing on on improving customer experience, empowering colleagues, optimizing controls, driving productivity, and cost efficiency. And as a result, they have expanded the UiPath deployment in this quarter as they look to accelerate and scale the automation program across the banks. We also recently announced the first of its kind co-innovation market collaboration between UiPath and Deloitte. Deloitte's smart finance for growth companies leverages automations built by UiPath and customized by Deloitte into value-driven packages tailored for the needs of early-stage innovative companies which require speed and agility. And finally, we continue to deepen our partnership with Microsoft to build best-in-class automation experiences and integrations. This brings AI-powered automation to customers using Microsoft Azure. We see opportunities to expand this collaboration to accelerate our joint customers' move to the cloud with AI-infused industry solutions and enterprise modernization with Microsoft. This quarter, we have some notable joint wins, including an expansion deal on Microsoft Marketplace. This includes a British multinational company, which is in the process of migrating to the cloud while growing the automation program. We plan to continue making strategic investments in our partner ecosystem in 2025, focused on cultivating quality partners with expertise in automation, which can fully enable our customers to realize the benefits of our platform. This updated approach includes a dedicated partner deal desk, as well as new enablement plans and certifications to better align UiPath with our most trusted partners as we work side by side. The momentum we bring into 2025 was evident at our February DEF CON event held in India. Hosted by Daniel and the team, more than 1,000 professionals, including developers, partners, and customer specialists, learned about new features that bring AI-powered productivity to the developer community. They also participated in over 24 breakout sessions featuring growth products like intelligent document processing, or IDP, and test suites. 18 months ago, we drove the evolution of the automation market from RPA to a full AI-powered business automation platform. Our gross products have played a key role in our platform's evolution, setting us apart from the competition and serving as the link that connects AI and automation into actionable results. Our platform also enables us to close larger, more strategic deals. Almost every organization has processed an onslaught of forms, invoices, and documents, which is why document understanding resonates so well with customers, particularly in finance, insurance, healthcare, and public sector. In the fourth quarter, 65 of our top 100 deals included intelligent document processing, a testament to customer engagement and the power of our platform. Our unique approach combines specialized AI and more than 70 pre-trained models and verticalized package solutions to help customers streamline processes, identify continuous process improvements, and rapidly scale their document understanding projects. At CareSource, a customer since 2019, our platform has played a vital role in their digital transformation journey. Leveraging core automation and document understanding, they've been able to efficiently process over 2.5 million transactions in 2023. Given their success to date, they expanded the Document Understanding Initiative across finance and claims processing departments and plan to move into medical records processing. The combination of IDP and automation not only drives efficiency and quality, but allows UiPath customers to change how they interact with their external stakeholders. At our AI summit next week, we are planning to unveil a new UiPath large language model, which combines open source LLMs, our specialized AI, proprietary knowledge of business documents and communication data. This robust LLM combined with our industry-leading IDP solution provides customers access to what we believe is the most powerful documents and communications AI model on the market. and we plan to continue to invest to widen our leadership in the IDP space. TestSuite, which initially emerged as a tool for automation testing, is quickly becoming a disruptor in the application testing market, with TestSuite customers growing more than 75% year over year in the fourth quarter. A recent UiPath and IDC joint study found that customers using our capabilities have experienced, on average, more than 4 million annualized benefits a 529% three-year ROI, and have only six months' payback on investment. A great example of the significant ROI test we deliver to our customers is the Fortune 100 Global Digital Communications Corporation. In just six months, they were able to automate 80% of their 3,000 end-to-end test cases in their global logistics department, improving test coverage from 30% to 93%. This resulted in significantly fewer operational incidents and enabled them to keep their complex ID landscape running smoothly. We expect returns like these to be further accelerated with the introduction of our latest innovation, Autopilot, a newer set of AI-powered experiences that leverage generative AI, specialized AI, and automation across the platform. Autopilot makes it easier for people of all skills to build automations. accelerate time to development, and discover process improvements. Both autopilot for studio, where we have the largest number of preview participants in company history, and autopilot for test are in public preview, while autopilot for process mining and autopilot for communications mining are in private preview. Lastly, On the technology front, our business automation platform is now available on the Google Cloud Marketplace, making it easier for joint customers to deploy and scale the automation initiatives on Google Cloud infrastructure. To help customers and prospects get the most out of our capabilities, we plan to continue our investments in targeted sales areas, weighting our resources towards large enterprise customers where we see the biggest opportunity for expansion. This includes investments in growth specialists, sales engineers to support our customers, and further industry verticalization in areas like financial services, insurance, healthcare, and public sector. This approach has been instrumental in driving momentum in North America, including large strategic deals. And we are investing in other regions where we are seeing early traction. Our team did an excellent job positioning our platform for a strategic customer in the U.K., which resulted in a competitive displacement of Blue Prism. The customer will be migrating their more than 250 processes to UiPath. They're also creating an intelligent automation team to strategically manage the UiPath deployment while working to identify use cases for communication mining and document understanding. This kind of industry focus is also driving growth in our public sector business. This quarter, the Scottish Government doubled the adoption of UiPath on renewal as they continue to automate core areas of finance and HR. They're also expanding their reach to additional departments and agencies that include Social Security Scotland, Student Awards, Scottish Public Pension Agency, and agriculture and rural economy. In addition, they are scaling our AI products particularly document understanding and process discovery. And in our US federal government vertical, UiPath partner, FedResults, was awarded an enterprise software initiative agreement for UiPath products and services by the US Department of Defense for up to $95 million. The five-year base period agreement will streamline the acquisition process and reduce the cost of delivery of UiPath products and services to the DoD Department of Defense, Intelligence Community, and the U.S. Coast Guard. This will enable these federal organizations to significantly accelerate the adoption of UiPath and put AI to work in a safe and secure manner. Before I hand over the call to Hashim, I'd like to personally welcome Jun Yang to our Board of Directors. Jun is a proven strategic and transformational executive who brings extensive experience in AI, and cloud, as well as decades of experience in fostering emerging technologies. I am confident we will benefit from our technical expertise and industry insights and look forward to many years of collaboration. In summary, we delivered a strong close to the year, demonstrating the continued momentum of our AI-powered business automation platform. We're transforming industries and revolutionizing the way businesses operate. And as we look to 2025, I believe our strategic investments in innovation and our go-to-market ecosystem position us well for continued momentum. And with that, I'll hand over to Hashim.