UiPath Ups FY26 Revenue Guidance on Strong Agentic Automation Gains
UiPath Inc. (NYSE: PATH) delivered an encouraging update for fiscal year 2026, raising its revenue outlook as Agentic Automation initiatives drive growth and expand commercial opportunities. According to the latest Q2 2026 earnings release and management commentary, the company is seeing rapid evolution in its artificial intelligence (AI) and automation solutions—a strategic move that is already impacting both deal pipelines and customer expansions.
Robust Q2 Results Reflect Platform Innovation
Co-Founder and CEO Daniel Dines credited ongoing improvements in operational execution and innovation on UiPath’s platform for its recent financial strength. The company reported a second quarter annualized recurring revenue (ARR) of $1.723 billion, up 11% over the prior year, with net new ARR reaching $31 million. Q2 revenue climbed 14% year-over-year, amounting to $362 million—a testament to increasing demand for UiPath’s offerings.
UiPath’s newfound success is closely tied to the rollout of novel AI and Agentic Automation products. Dines emphasized that these capabilities—combining next-generation AI with deterministic automation—are leading to larger deal sizes and winning high-profile clients. Highlights from the quarter included a seven-figure enterprise agreement with a Fortune 15 technology leader, deeper alliances with Microsoft and Deloitte, and expanded relationships such as with Voya Financial.
Agentic Automation Adoption and Outlook
Agentic solutions, which allow enterprises to create and deploy intelligent agents at scale, have quickly become a meaningful part of UiPath’s commercial landscape. With over 450 customers now building agents for production environments, management reiterated the substantial potential of this new business segment. Still, CFO and COO Ashim Gupta cautioned that while early adoption is promising, a significant revenue impact from agentic products is not expected in fiscal 2026.
UiPath’s leadership is encouraged by the company’s growing footprint in the public sector, where Agentic innovations helped drive record performance in the quarter. The organization also strengthened strategic partnerships, particularly in cloud and SaaS, culminating in over $1.08 billion of cloud ARR this quarter—a 25% jump year-over-year.
Raising Revenue and ARR Guidance for FY26
Building on its momentum, UiPath raised third-quarter revenue guidance to between $390 million and $395 million. For the full fiscal year 2026, the company now expects revenue to reach between $1.571 billion and $1.576 billion. ARR is projected in the range of $1.834 billion to $1.839 billion by year-end.
Management continues to focus on disciplined execution. Non-GAAP operating income is guided at approximately $70 million for Q3 and $340 million for the year. The company remains committed to a prudent outlook given macroeconomic uncertainties, with Ashim Gupta highlighting an emphasis on productivity following the completion of a corporate restructuring.
Financial Health and Customer Metrics
Beyond revenue growth, UiPath posted a non-GAAP operating income margin of 17%, generated a non-GAAP adjusted free cash flow of $45 million, and finished the quarter with $1.5 billion in cash and marketable securities. The company boasts a strong gross margin at 84%, with software-specific gross margins at 90%. Importantly, operating expenses fell 6% compared to last year, reflecting improved operational discipline.
Dollar-based gross retention stood at a solid 98%, while net retention reached 108%. Remaining performance obligations hit $1.209 billion, further underlining the stability and resilience of the business.
Analyst Insights: Focus on Agentic Momentum, Retention, and Public Sector
During the Q&A session, analysts sought more detail about customer uptake of agentic solutions and the impact on contract sizes. Management highlighted not only the volume of enterprise clients now working with Agentic products, but also UiPath’s tightly integrated Maestro platform, which enhances its automation suite and strengthens go-to-market efforts.
The public sector emerged as a significant source of momentum, according to management. Subscription revenue in this segment rebounded, overcoming a one-off impact from the leap year last quarter. Across geographies and industries, analysts probed for assurance on retention rates, pricing structures, and the sustainability of growth in these new business avenues.
Balancing Optimism and Cautious Guidance
While management’s tone was more upbeat than in previous quarters, both Dines and Gupta acknowledged the need to maintain caution amid variable economic conditions and ongoing FX fluctuations. They also reinforced that although Agentic Automation represents a bright spot for UiPath, its financial impact will materialize gradually as large-scale adoption continues.
Outlook: Strategic Partnerships and Agentic Automation Set the Stage
UiPath’s Q2 2026 performance underscores the strength of blending automation with AI, and the Agentic Automation platform is positioning the company as a leader in enterprise process innovation. Elevated revenue prospects, customer wins, and new alliances—especially in the public sector—illustrate progress against strategic priorities.
However, management remains vigilant about macroeconomic risks and the pace of revenue realization from emergent technologies. With a focus on operational efficiency, prudent guidance, and continuous platform development, UiPath enters the remainder of fiscal year 2026 with both optimism and deliberate caution.
As enterprise automation gains traction and new agentic capabilities come online, UiPath is tuned for further growth in an evolving digital landscape.
