Automation software company UiPath (NYSE: PATH) beat Wall Street’s revenue expectations in Q3 CY2025, with sales up 15.9% year on year to $411.1 million. The company expects next quarter’s revenue to be around $464.5 million, close to analysts’ estimates. Its non-GAAP profit of $0.16 per share was 9.6% above analysts’ consensus estimates.
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UiPath (PATH) Q3 CY2025 Highlights:
- Revenue: $411.1 million vs analyst estimates of $392.8 million (15.9% year-on-year growth, 4.7% beat)
- Adjusted EPS: $0.16 vs analyst estimates of $0.15 (9.6% beat)
- Adjusted Operating Income: $87.78 million vs analyst estimates of $69.98 million (21.4% margin, 25.4% beat)
- Revenue Guidance for Q4 CY2025 is $464.5 million at the midpoint, roughly in line with what analysts were expecting
- Operating Margin: 3.2%, up from -12.2% in the same quarter last year
- Annual Recurring Revenue: $1.78 billion vs analyst estimates of $1.77 billion (10.9% year-on-year growth, 0.5% beat)
- Market Capitalization: $7.89 billion
StockStory’s Take
UiPath’s third quarter performance was marked by stronger-than-expected revenue and profitability, with the market responding favorably to both top-line growth and improved margins. Management attributed these results to increased adoption of its automation platform, particularly the integration of deterministic automation with its AgenTiKi AI capabilities. CEO Daniel Dines highlighted the value customers are seeing from agentic automation, noting, “Our automation strategy, combining the reliability of deterministic automation with the intelligence and adaptability of AgenTiKi, continues to align with what customers want most: trusted enterprise-grade automation that delivers tangible ROI fast.”
Looking ahead, management sees continued momentum for UiPath, supported by new product launches, deepening technology partnerships, and a growing base of enterprise customers moving from pilot projects to full-scale automation deployments. CFO Ashim Gupta underscored the company’s focus on operational discipline while investing in innovation, stating, “We are actually hiring in our engineering segment. We are expanding sales capacity…continuing to drive efficiency across our processes, being selective about where we’re investing.” While management remains prudent about the near-term impact of AI solutions on revenue, they believe early customer adoption and expanding use cases lay the groundwork for sustained growth.
Key Insights from Management’s Remarks
Management credited the quarter’s performance to robust adoption of its agentic automation platform, deepening customer engagement, and operational discipline that improved margins.
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Agentic automation adoption: UiPath saw a significant increase in enterprises developing automation agents, now with over 950 companies orchestrating 365,000+ processes through Maestro, its orchestration engine. These customers are moving from pilot phases to production deployments, resulting in measurable ROI and cost savings across sectors.
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Product innovation pipeline: The company launched UiPath Screenplay, blending robotic process automation (RPA) with large language models (LLMs) to create more reliable, intent-driven UI automations. Management emphasized that this technology simplifies automating complex tasks and is highly rated in industry benchmarks.
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Tech partnerships drive platform reach: UiPath announced new integrations with technology leaders, including OpenAI, Microsoft, Google, NVIDIA, and Snowflake. These collaborations aim to embed AI models into enterprise workflows, enhance security, and enable more sophisticated automation use cases.
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Vertical solutions gaining traction: The company is investing in industry-specific automation, especially for healthcare and financial services. Recent acquisitions have expanded its capabilities in pricing, inventory optimization, and intelligent document processing, with clients like Debenhams Group and CoreWell Health citing substantial cost savings.
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Operational execution and margin expansion: UiPath delivered its first GAAP-profitable third quarter, driven by disciplined operational efficiency. Management highlighted improvements in sales execution, customer success, and cost controls as key contributors to the stronger operating margin.
Drivers of Future Performance
Management expects continued progress from expanding customer adoption, deepening partnerships, and investments in AI-powered automation, while remaining cautious on near-term AI monetization.
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Enterprise adoption and upsell: UiPath anticipates that as more enterprises move from proof of concept to production, the increased stickiness and integration of its platform will drive upsell opportunities and support annual recurring revenue (ARR) growth. Management sees industry-specific solutions and prebuilt automation accelerators as shortening deployment times.
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AI partnerships and ecosystem expansion: The company believes that ongoing integrations with leading AI and cloud providers, such as OpenAI and Microsoft, will broaden UiPath’s reach in regulated industries and drive new use cases, although meaningful direct revenue from these efforts is expected to ramp slowly.
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Operational discipline and investment: Management plans to continue disciplined investment in engineering and sales capacity, aiming to balance margin expansion with the need to innovate and scale its product suite. They acknowledge that macroeconomic factors and customer adoption cycles could still impact short-term growth.
Catalysts in Upcoming Quarters
Looking ahead, the StockStory team will be monitoring (1) the pace of customer adoption for agentic automation and the rate at which proof of concepts transition to full production, (2) the impact of recent technology partnerships on both new use cases and expansion into regulated sectors, and (3) progress in vertical solutions for healthcare and financial services. We will also watch for further advances in product innovation and signs that operational investments translate into sustained margin improvement.
UiPath currently trades at $15.85, up from $15.06 just before the earnings. Is the company at an inflection point that warrants a buy or sell? The answer lies in our full research report (it’s free for active Edge members).
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