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UiPath: UiPath Delivers Strong Q3 with Profitability and Growth Momentum

UiPath's third-quarter fiscal 2026 revenue grew 16% to $411 million, with ARR totaling $1.782 billion, up 11%. The company's disciplined approach to operational efficiency resulted in its first GAAP profitable third quarter, with GAAP operating income of $13 million, and non-GAAP operating income of $88 million, representing a 21% margin. EPS came out at $0.365, significantly beating estimates of $0.14. The strong financial performance was driven by a dollar-based net retention rate of 107% and a strong pipeline of customers, with over 950 companies developing agents and 365,000 processes orchestrated with Maestro.

PATH

USD 18.48

24.36%

A-Score: 3.9/10

Publication date: December 3, 2025

Full Report

Author: Analystock.ai

📋 Highlights
  • Revenue & ARR Growth: Q3 FY2026 revenue rose 16% to $411M; ARR grew 11% to $1.782B, with net new ARR at $59M.
  • Profitability Milestone: First GAAP profitable quarter with $13M operating income; non-GAAP operating income reached $88M (21% margin).
  • Customer Engagement & Pipeline: 107% dollar-based net retention rate, 950+ companies developing agents, and 365,000 processes orchestrated via Maestro.
  • FX Headwinds: Q4 guidance faces $3M revenue impact from yen depreciation, projecting $462–467M revenue and $1.844–1.849B ARR.
  • Strategic Partnerships & Innovation: Expanded integrations with OpenAI, Microsoft, NVIDIA, and Deloitte, driving agentic AI adoption and production deployment growth.

Operational Highlights

The company continues to strengthen partnerships, including expansions with Deloitte and new integrations with Microsoft, OpenAI, NVIDIA, Google, and Snowflake. AgenTi solutions have seen traction, with over 950 clients, and the company is seeing movement from pilots to production, with customers finding tangible ROIs through the full breadth of the platform. The federal business has pockets of strength, with long-term and strategic projects.

Guidance and Outlook

For the fourth fiscal quarter 2026, revenue is expected to be $462 million to $467 million, reflecting a $3 million headwind from FX rate movements. ARR is expected to be $1.844 billion to $1.849 billion, also with a $3 million headwind from FX rate movements. Non-GAAP operating income is expected to be approximately $140 million. The company continues to expect fiscal year 2026 non-GAAP adjusted free cash flow of approximately $370 million and non-GAAP gross margin of approximately 85%.

Valuation and Growth Prospects

With a P/S Ratio of 5.08 and an expected revenue growth rate of 10% next year, UiPath's valuation appears reasonable. The company's ROE of 12.88% and ROIC of 1.75% indicate a strong ability to generate returns for shareholders. Analysts expect the company to continue its growth momentum, driven by its agentic framework and partnerships. The stock's current valuation multiples, including a P/E Ratio of 34.87 and an EV/EBITDA of 278.31, suggest that the market is pricing in a strong growth outlook.

Key Drivers and Challenges

The company has doubled the number of customers developing agents quarter over quarter and has seen an uplift in these customers. It expects this revenue to ramp up and help sustain its net retention rate (NRR) and offset weakness at the low end. However, the Japanese yen's depreciation against the U.S. dollar has created a headwind to fourth-quarter guidance, and the company faces challenges in terms of customer hurdles with agentic consumption pricing.

UiPath's A-Score