UiPath Posts Strong Q2 Results but Stock Drops Nearly 10% After Hours

Quick Facts

• UiPath posted Q2 FY2027 revenue of $410.3 million, up 13% year-over-year, topping the $397.8 million analyst consensus.
• ARR grew 12% to $1.938 billion, but net new ARR of $37 million fell from $49 million in the prior quarter.
• Shares dropped nearly 10% in after-hours trading despite the company raising its full-year revenue guidance to between $1.789 billion and $1.794 billion.

UiPath delivered a second-quarter earnings report that beat Wall Street expectations on nearly every line, then watched its stock fall almost 10% after hours anyway. Shares dropped to $16.43 in pre-open trading on September 4, reversing an initial post-earnings pop of more than 10%.

The automation software company reported revenue of $410.3 million for the quarter ended July 31, 2026, a 13% increase year-over-year. The result cleared the $397.8 million analyst target. Non-GAAP earnings per share came in at 15 cents, in line with consensus.

UiPath also reported its fourth consecutive quarter of GAAP profitability. Operating income reached $31.6 million, compared to a loss of $20.2 million in the same quarter a year ago. Net income came in at $36.1 million, up sharply from $1.6 million a year earlier.

Margin Expansion, ARR Deceleration

Non-GAAP gross margin held at 82%, and non-GAAP operating income reached $89 million, representing a 22% margin. The improvement came largely from reduced stock-based compensation and lower research and development spending.

The metric investors scrutinized most closely was net new annualized recurring revenue. UiPath added $37 million in net new ARR during the quarter, down from $49 million in Q1 FY2027. Total ARR reached $1.938 billion, up 12% year-over-year. Dollar-based net retention was 109%.

The sequential ARR slowdown raised questions about whether the company’s artificial intelligence positioning is translating into new bookings. UiPath’s stock had surged roughly 38% in the month before the report, creating a high bar for results.

Guidance Raised

For Q3 FY2027, UiPath guided for revenue between $440 million and $445 million, with non-GAAP operating income of approximately $100 million. The company projected ARR between $1.992 billion and $1.997 billion for the period.

Full-year revenue guidance was raised to between $1.789 billion and $1.794 billion. UiPath held $1.405 billion in cash, cash equivalents, and marketable securities as of July 31. The company also repurchased $268.5 million of its Class A common stock during the first half of fiscal 2027.

Leadership Shuffle

UiPath announced several executive changes alongside the earnings report. Hitesh Ramani was promoted to chief financial officer. Ramani joined the company in 2021 as chief accounting officer, became deputy CFO in 2024, and previously spent two decades as a partner at Deloitte.

Ashim Gupta, who previously held the CFO title while also serving as COO, will now focus exclusively on operations and go-to-market. Brad Brubaker was named chief legal and administrative officer, adding oversight of the people organization to his existing responsibilities. UiPath also appointed Kaiser Permanente executive Yazdi Bagli to its board of directors.

“AI is expanding what enterprises can automate, while increasing the need for the orchestration, governance, and exactness that deterministic automation provides,” said CEO Daniel Dines.

Despite the stock reaction, the company’s financial profile is stronger than it was a year ago. The question investors are pressing is whether AI-driven demand will push ARR growth back into acceleration before the market’s patience runs thin.

Read more: UiPath beats on revenue but its stock tanks after-hours