June 2, 2023 - 10-Q: Quarterly report pursuant to Section 13 or 15(d)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

___________________________________________

FORM 10-Q

___________________________________________

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended April 30, 2023


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to ________

Commission File Number: 001-40348

___________________________________________

UiPath, Inc.

(Exact Name of Registrant as Specified in its Charter)

___________________________________________


Delaware			47-4333187
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)
One Vanderbilt Avenue, 60th Floor New York, New York			10017
(Address of principal executive offices)			(Zip Code)
Registrant’s telephone number, including area code: (844) 432-0455

___________________________________________

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading
Symbol(s)

Name of each exchange on which registered

Class A common stock, par value
$0.00001 per share

PATH

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of May 30, 2023, the registrant had 478,709,485 shares of Class A common stock and 82,452,748 shares of Class B common stock, each with a par value of $0.00001 per share, outstanding.

Table of Contents


		Page
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	1
	Condensed Consolidated Balance Sheets	1
	Condensed Consolidated Statements of Operations	2
	Condensed Consolidated Statements of Comprehensive Loss	3
	Condensed Consolidated Statements of Stockholders’ Equity	4
	Condensed Consolidated Statements of Cash Flows	5
	Notes to Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	32
Item 4.	Controls and Procedures	33

PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	34
Item 1A.	Risk Factors	34
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	34
Item 3.	Defaults Upon Senior Securities	34
Item 4.	Mine Safety Disclosures	34
Item 5.	Other Information	34
Item 6.	Exhibits	35
Signatures		36

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), about UiPath, Inc. and its consolidated subsidiaries (“UiPath,” the “Company,” “we,” “us,” or “our”) and our industry that involve substantial risks and uncertainties. All statements other than statements of historical fact contained in this Quarterly Report on Form 10-Q, including statements regarding our future results of operations or financial condition, business strategy, and plans and objectives of management for future operations, are forward-looking statements. In some cases, forward-looking statements can be identified because they contain words such as “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “target,” “will,” or “would,” or the negative of these words or other similar terms or expressions. These forward-looking statements include, but are not limited to, statements concerning the following:

•our expectations regarding our annualized renewal run-rate ("ARR"), revenue, expenses, and other operating results;

•our ability to acquire new customers and successfully retain existing customers;

•our ability to increase the number of users who access our platform and the number of automations built on our platform;

•our ability to effectively manage our growth and achieve or maintain profitability;

•future investments in our business, our anticipated capital expenditures, and our estimates regarding our capital requirements;

•the costs and success of our marketing efforts and our ability to evolve and enhance our brand;

•our growth strategies;

•the estimated addressable market opportunity for our platform and for automation in general;

•our reliance on key personnel and our ability to attract, integrate, and retain highly-qualified personnel and execute management transitions;

•our ability to obtain, maintain, and enforce our intellectual property rights and any costs associated therewith;

•the effect of global events, such as the Russian military operation in Ukraine, on our business, industry, and the global economy;

•our ability to compete effectively with existing competitors and new market entrants; and

•the size and growth rates of the markets in which we compete.

These forward-looking statements should not be unduly relied upon or regarded as predictions of future events. The forward-looking statements contained in this Quarterly Report on Form 10-Q are based on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, and operating results. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties, and other factors in the section titled "Risk Factors" and elsewhere in our Annual Report on Form 10-K for the fiscal year ended January 31, 2023 filed with the Securities and Exchange Commission ("SEC") on March 24, 2023 (the "2023 Form 10-K"). Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Quarterly Report on Form 10-Q. The results, events, and circumstances reflected in the forward-looking statements may not be achieved or occur, and actual results, events, or circumstances could differ materially from those described in the forward-looking statements.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject, based on information available to us as of the date of this Quarterly Report on Form 10-Q. While we believe such information provides a reasonable basis for these statements, that information may be limited or incomplete. Our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all relevant information. Such statements are inherently uncertain, and investors are cautioned not to unduly rely on these statements.

The forward-looking statements made in this Quarterly Report on Form 10-Q relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this Quarterly Report on Form 10-Q to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q or to reflect new information or the occurrence of unanticipated events, except as required by law. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures, or investments.

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PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

UiPath, Inc.

Condensed Consolidated Balance Sheets

Amounts in thousands except per share data

(unaudited)


	As of
	April 30, 2023		January 31, 2023
ASSETS
Current assets
Cash and cash equivalents	$	1,311,576	$	1,402,119
Marketable securities	469,071		354,774
Accounts receivable, net of allowance for credit losses of $1,017 and $2,698, respectively	233,307		374,217
Contract assets	68,536		69,260
Deferred contract acquisition costs	53,355		49,887
Prepaid expenses and other current assets	121,429		94,150
Total current assets	2,257,274		2,344,407
Marketable securities, non-current	5,710		2,942
Contract assets, non-current	6,930		6,523
Deferred contract acquisition costs, non-current	136,571		137,616
Property and equipment, net	26,911		29,045
Operating lease right-of-use assets	52,275		52,052
Intangible assets, net	21,167		23,010
Goodwill	89,207		88,010
Deferred tax asset	5,915		5,895
Other assets, non-current	40,723		45,706
Total assets	$	2,642,683	$	2,735,206
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable	$	5,734	$	8,891
Accrued expenses and other current liabilities	63,138		76,645
Accrued compensation and employee benefits	48,622		142,582
Deferred revenue	385,895		398,334
Total current liabilities	503,389		626,452
Deferred revenue, non-current	113,222		121,697
Operating lease liabilities, non-current	56,564		56,442
Other liabilities, non-current	13,971		10,457
Total liabilities	687,146		815,048
Commitments and contingencies (Note 11)
Stockholders' equity
Preferred stock, $0.00001 par value per share, 20,000 shares authorized as of April 30, 2023 and January 31, 2023; 0 shares issued and outstanding as of April 30, 2023 and January 31, 2023	—		—
Class A common stock, $0.00001 par value per share, 2,000,000 shares authorized as of April 30, 2023 and January 31, 2023; 478,122 and 474,160 shares issued and outstanding as of April 30, 2023 and January 31, 2023, respectively	5		5
Class B common stock, $0.00001 par value per share, 115,741 shares authorized as of April 30, 2023 and January 31, 2023; 82,453 shares issued and outstanding as of April 30, 2023 and January 31, 2023	1		1
Additional paid-in capital	3,801,656		3,736,838
Accumulated other comprehensive income	10,074		7,612
Accumulated deficit	(1,856,199)		(1,824,298)
Total stockholders’ equity	1,955,537		1,920,158
Total liabilities and stockholders’ equity	$	2,642,683	$	2,735,206

The accompanying notes are an integral part of these condensed consolidated financial statements.

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UiPath, Inc.

Condensed Consolidated Statements of Operations

Amounts in thousands except per share data

(unaudited)


	Three Months Ended April 30,
		2023		2022
Revenue:
Licenses		$	134,039	$	117,004
Subscription services		146,352		115,494
Professional services and other		9,197		12,568
Total revenue		289,588		245,066
Cost of revenue:
Licenses		2,547		2,537
Subscription services		23,078		21,045
Professional services and other		18,042		21,434
Total cost of revenue		43,667		45,016
Gross profit		245,921		200,050
Operating expenses:
Sales and marketing		160,406		189,782
Research and development		75,342		68,690
General and administrative		56,584		57,530
Total operating expenses		292,332		316,002
Operating loss		(46,411)		(115,952)
Interest income		13,848		991
Other income (expense), net		4,294		(2,811)
Loss before income taxes		(28,269)		(117,772)
Provision for income taxes		3,632		4,789
Net loss		$	(31,901)	$	(122,561)


Net loss per share attributable to common stockholders, basic and diluted		$	(0.06)	$	(0.23)
Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted		557,878		541,902

The accompanying notes are an integral part of these condensed consolidated financial statements.

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UiPath, Inc.

Condensed Consolidated Statements of Comprehensive Loss

Amounts in thousands

(unaudited)


	Three Months Ended April 30,
		2023		2022
Net loss		$	(31,901)	$	(122,561)
Other comprehensive income (loss), net of tax:
Unrealized gain (loss) on available-for-sale marketable securities, net		143		(460)
Foreign currency translation adjustments		2,319		2
Other comprehensive income (loss), net		2,462		(458)
Comprehensive loss		$	(29,439)	$	(123,019)

The accompanying notes are an integral part of these condensed consolidated financial statements.

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UiPath, Inc.

Condensed Consolidated Statements of Stockholders’ Equity

Amounts in thousands

(unaudited)


		Common Stock						Additional Paid-in Capital		Accumulated Other Comprehensive Income		Accumulated Deficit		Total Stockholders’ Equity
	Class A			Class B
			Shares		Amount		Shares	Amount		Amount		Amount		Amount		Amount
Balance as of January 31, 2023			474,160		$	5	82,453	$	1	$	3,736,838	$	7,612	$	(1,824,298)	$	1,920,158
Issuance of common stock upon exercise of stock options			898		—		—	—		1,175		—		—		1,175

Issuance of common stock upon settlement of restricted stock units			4,246		—		—	—		—		—		—		—
Tax withholdings on settlement of restricted stock units			(1,463)		—		—	—		(25,697)		—		—		(25,697)
Charitable donation of Class A common stock			281		—		—	—		4,215		—		—		4,215
Stock-based compensation			—		—		—	—		85,125		—		—		85,125
Other comprehensive income, net			—		—		—	—		—		2,462		—		2,462
Net loss			—		—		—	—		—		—		(31,901)		(31,901)
Balance as of April 30, 2023			478,122		$	5	82,453	$	1	$	3,801,656	$	10,074	$	(1,856,199)	$	1,955,537


		Common Stock						Additional Paid-in Capital		Accumulated Other Comprehensive Income (Loss)		Accumulated Deficit		Total Stockholders’ Equity
	Class A			Class B
			Shares		Amount		Shares	Amount		Amount		Amount		Amount		Amount
Balance as of January 31, 2022			458,773		$	4	82,453	$	1	$	3,406,959	$	10,899	$	(1,495,946)	$	1,921,917
Issuance of common stock upon exercise of stock options			1,283		—		—	—		2,683		—		—		2,683
Vesting of early exercised stock options			—		—		—	—		1,355		—		—		1,355
Issuance of common stock upon settlement of restricted stock units			3,499		—		—	—		—		—		—		—
Tax withholdings on settlement of restricted stock units			(1,125)		—		—	—		(24,827)		—		—		(24,827)
Stock-based compensation			—		—		—	—		102,085		—		—		102,085
Other comprehensive loss, net			—		—		—	—		—		(458)		—		(458)
Net loss			—		—		—	—		—		—		(122,561)		(122,561)
Balance as of April 30, 2022			462,430		$	4	82,453	$	1	$	3,488,255	$	10,441	$	(1,618,507)	$	1,880,194

The accompanying notes are an integral part of these condensed consolidated financial statements.

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UiPath, Inc.

Condensed Consolidated Statements of Cash Flows

Amounts in thousands

(unaudited)


	Three Months Ended April 30,
	2023		2022
Cash flows from operating activities
Net loss	$	(31,901)	$	(122,561)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization	5,616		4,039
Amortization of deferred contract acquisition costs	14,072		10,822
Net amortization on marketable securities	(4,097)		473
Stock-based compensation expense	85,048		101,454
Charitable donation of Class A common stock	4,215		—
Amortization of operating lease right-of-use assets	3,071		2,759
Provision for deferred income taxes	(267)		1,594
Other non-cash charges, net	624		2,849
Changes in operating assets and liabilities:
Accounts receivable	141,557		76,864
Contract assets	660		(18,523)
Deferred contract acquisition costs	(15,499)		(20,761)
Prepaid expenses and other assets	(5,860)		(5,231)
Accounts payable	(2,130)		7,554
Accrued expenses and other liabilities	(10,547)		(12,894)
Accrued compensation and employee benefits	(93,390)		(65,083)
Operating lease liabilities, net	(2,946)		(1,950)
Deferred revenue	(20,885)		(14,289)
Net cash provided by (used in) operating activities	67,341		(52,884)
Cash flows from investing activities
Purchases of marketable securities	(215,391)		(21,918)

Maturities of marketable securities	78,955		14,813
Purchases of property and equipment	(1,870)		(9,692)
Other investing, net	2,754		1,100
Net cash used in investing activities	(135,552)		(15,697)
Cash flows from financing activities
Proceeds from exercise of stock options	1,187		2,823
Payments of tax withholdings on net settlement of equity awards	(25,902)		(17,329)
Net payments of tax withholdings on sell-to-cover equity award transactions	(645)		(10,037)
Proceeds from employee stock purchase plan contributions	4,730		6,356
Net cash used in financing activities	(20,630)		(18,187)
Effect of exchange rate changes	(1,702)		(2,738)
Net decrease in cash and cash equivalents	(90,543)		(89,506)
Cash and cash equivalents - beginning of period	1,402,119		1,768,723
Cash and cash equivalents - end of period	$	1,311,576	$	1,679,217
Supplemental disclosure of cash flow information
Cash paid for interest	$	86	$	277
Cash paid for income taxes	6,218		2,782
Supplemental disclosure of non-cash investing and financing activities
Reduction in accrued expenses and other liabilities for vesting of early exercised stock options	—		1,355
Property and equipment purchases included in accounts payable	65		779
Receivable from maturities of marketable securities included in prepaid expense and other current assets	20,315		—

Tax withholdings on net settlement of restricted stock units, accrued but not yet paid	1,996		7,599

The accompanying notes are an integral part of these consolidated financial statements.

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UiPath, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

1. Organization and Description of Business

Description of Business

UiPath, Inc. (the “Company,” “we,” “us,” or “our”) was incorporated in Delaware in June 2015 and is headquartered in New York, New York. Our end-to-end automation platform, the UiPath Business Automation Platform, offers a robust set of capabilities that allows our customers to discover opportunities for automation, automate using a digital workforce that seamlessly collaborates with humans, and operate a mission critical automation program at scale.

2. Summary of Significant Accounting Policies

Our significant accounting policies are discussed in greater scope and detail in Note 2, Summary of Significant Accounting Policies, in the notes to consolidated financial statements included in the 2023 Form 10-K. There have been no significant changes to such policies during the three months ended April 30, 2023.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and applicable regulations of the SEC regarding interim financial reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by U.S. GAAP may be condensed or omitted. The accompanying unaudited condensed consolidated financial statements and related financial information should be read in conjunction with the audited consolidated financial statements and the accompanying notes thereto for the fiscal year ended January 31, 2023, which are included in the 2023 Form 10-K.

The unaudited condensed consolidated financial statements have been prepared on the same basis as our audited consolidated financial statements and, in the opinion of management, reflect all adjustments, consisting only of normal recurring adjustments, that are necessary for the fair presentation of our financial information. The unaudited condensed consolidated financial statements include the financial statements of UiPath, Inc. and its subsidiaries in which we hold a controlling financial interest. Intercompany transactions and accounts have been eliminated in consolidation.

The results of operations for the three months ended April 30, 2023 are not necessarily indicative of the results to be expected for the fiscal year ending January 31, 2024 or for any other future interim or annual period.

Fiscal Year

Our fiscal year ends on January 31. References to fiscal year 2024, for example, refer to the fiscal year ending January 31, 2024.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts of assets and liabilities at the balance sheet date and the amounts of revenue and expenses reported during the period. We evaluate estimates based on historical and anticipated results, trends, and various other assumptions. Such estimates include, but are not limited to, certain aspects of revenue recognition including changes in variable consideration, expected period of benefit for deferred contract acquisition costs, allowance for credit losses, fair value of financial assets and liabilities, fair value of acquired assets and assumed liabilities, useful lives of long-lived assets, capitalized software development costs, carrying value of operating lease right-of-use (“ROU”) assets and operating lease liabilities, incremental borrowing rates for operating leases, amount of stock-based compensation expense, timing and amount of contingencies, costs related to our restructuring actions, uncertain tax positions, and valuation allowance for deferred income taxes. Actual results could differ from these estimates and assumptions.

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UiPath, Inc.

Notes to Condensed Consolidated Financial Statements (Continued)

(unaudited)

Foreign Currency

The functional currency of our non-U.S. subsidiaries is the local currency. Asset and liability balances denominated in non-U.S. dollar currencies are translated into U.S. dollars using period-end exchange rates, while revenue and expenses are translated using average monthly exchange rates. Differences are included in stockholders’ equity as a component of accumulated other comprehensive income. Financial assets and liabilities denominated in currencies other than the functional currency are recorded at the exchange rate at the time of the transaction and subsequent gains and losses related to changes in the foreign currency are included in other income (expense), net in the condensed consolidated statements of operations. For the three months ended April 30, 2023 and 2022, we recognized transaction losses of $0.8 million and $1.4 million, respectively.

Concentration of Risks

Financial instruments that potentially subject us to significant concentrations of credit risk consist principally of cash and cash equivalents, marketable securities, and accounts receivable. We maintain our cash balance at financial institutions that management believes are high-credit, quality financial institutions, where our deposits, at times, exceed Federal Deposit Insurance Corporation (“FDIC”) limits. As of April 30, 2023 and January 31, 2023, 97% and 98%, respectively, of our cash and cash equivalents were concentrated in the United States, European Union (“EU”) countries, and Japan.

We extend differing levels of credit to customers based on creditworthiness, do not require collateral deposits, and when necessary maintain reserves for potential credit losses based upon the expected collectability of accounts receivable. We manage credit risk related to our customers by performing periodic evaluations of creditworthiness and applying other credit risk monitoring procedures.

Significant customers are those that represent 10% or more of our total revenue for the period or accounts receivable at the balance sheet date. For the three months ended April 30, 2023 and 2022, no single customer accounted for 10% or more of our total revenue. As of April 30, 2023 and January 31, 2023, no single customer accounted for 10% or more of our accounts receivable.

3. Revenue Recognition

Disaggregation of Revenue

The following tables summarize revenue by geographical region (dollars in thousands):


	Three Months Ended April 30,
	2023				2022
	Amount		Percentage of Revenue		Amount		Percentage of Revenue
Americas (1)	$	123,452	43	%	$	114,151	47	%
Europe, Middle East, and Africa	96,931		33	%	69,603		28	%
Asia-Pacific (2)	69,205		24	%	61,312		25	%
Total revenue	$	289,588	100	%	$	245,066	100	%

(1)Revenue from the United States represented 38% and 42% of total revenue for the three months ended April 30, 2023 and 2022, respectively.

(2)Revenue from Japan represented 13% and 14% of total revenue for the three months ended April 30, 2023 and 2022, respectively.

Deferred Revenue

During the three months ended April 30, 2023 and 2022, we recognized $150.6 million and $124.9 million of revenue that was included in the deferred revenue balance as of January 31, 2023 and 2022, respectively.

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UiPath, Inc.

Notes to Condensed Consolidated Financial Statements (Continued)

(unaudited)

Remaining Performance Obligations

Our remaining performance obligations are comprised of licenses, subscription services, and professional services and other revenue not yet delivered. As of April 30, 2023, the aggregate amount of the transaction price allocated to remaining performance obligations was $903.9 million, which consists of $499.1 million of billed consideration and $404.8 million of unbilled consideration. We expect to recognize 62% of our remaining performance obligations as revenue over the next 12 months, and the remainder thereafter.

Deferred Contract Acquisition Costs

Our deferred contract acquisition costs are comprised of sales commissions that represent incremental costs to obtain customer contracts, and are determined based on sales compensation plans. Amortization of deferred contract acquisition costs was $14.1 million and $10.8 million for the three months ended April 30, 2023 and 2022, respectively, and is recorded in sales and marketing expense in the condensed consolidated statements of operations.

4. Marketable Securities

The following is a summary of our marketable securities (in thousands):


	As of April 30, 2023
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Commercial paper	$	63,814	$	—	$	—	$	63,814
Treasury bills and U.S. government securities	370,011		—		(379)		369,632
Corporate bonds	24,968		—		(35)		24,933
Municipal bonds	3,767		—		(36)		3,731
Agency bonds	12,697		—		(26)		12,671
Total marketable securities	$	475,257	$	—	$	(476)	$	474,781


	As of January 31, 2023
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Commercial paper	$	62,470	$	—	$	—	$	62,470
Treasury bills and U.S. government securities (1)	234,848		—		(308)		234,540
Corporate bonds	46,684		—		(198)		46,486
Municipal bonds	6,374		—		(66)		6,308
Agency bonds	7,959		—		(47)		7,912
Total marketable securities	$	358,335	$	—	$	(619)	$	357,716
(1) Treasury bills with both amortized cost and estimated fair value of $10.0 million are included in cash and cash equivalents due to their original maturity of three months or less.

As of April 30, 2023 and January 31, 2023, respectively $5.7 million and $2.9 million of our marketable securities had remaining contractual maturities of one year or more, and the remainder had contractual maturities of less than one year.

As of April 30, 2023 and January 31, 2023, $2.8 million and $3.5 million of interest receivable was included in prepaid expenses and other current assets on the condensed consolidated balance sheets. We did not recognize an allowance for credit losses against interest receivable as of April 30, 2023 and January 31, 2023.

Unrealized losses during the periods presented are a result of changes in market conditions. We do not believe that any unrealized losses are attributable to credit-related factors based on our evaluation of available evidence. To determine whether a decline in value is related to credit loss, we evaluate, among other factors, the

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UiPath, Inc.

Notes to Condensed Consolidated Financial Statements (Continued)

(unaudited)

extent to which the fair value is less than the amortized cost basis and any adverse conditions specifically related to an issuer of a security or its industry.

5. Fair Value Measurement

The following tables present the fair value hierarchy of our financial assets measured at fair value on a recurring basis as of April 30, 2023 and January 31, 2023 (in thousands):


	As of April 30, 2023
	Level 1		Level 2		Total
Financial assets:
Money market	$	612,577	$	—	$	612,577
Corporate bonds	—		24,137		24,137
Commercial paper	—		55,690		55,690
Agency bonds	5,667		—		5,667
Total cash equivalents	618,244		79,827		698,071
Commercial paper	—		63,814		63,814
Treasury bills and U.S. government securities	369,632		—		369,632
Corporate bonds	—		24,933		24,933
Municipal bonds	—		3,731		3,731
Agency bonds	12,671		—		12,671
Total marketable securities	382,303		92,478		474,781
Total	$	1,000,547	$	172,305	$	1,172,852


	As of January 31, 2023
	Level 1		Level 2		Total
Financial assets:
Money market	$	319,801	$	—	$	319,801
Treasury bills	9,968		—		9,968
Total cash equivalents	329,769		—		329,769
Commercial paper	—		62,470		62,470
Treasury bills and U.S. government securities	234,540		—		234,540
Corporate bonds	—		46,486		46,486
Municipal bonds	—		6,308		6,308
Agency bonds	7,912		—		7,912
Total marketable securities	242,452		115,264		357,716
Total	$	572,221	$	115,264	$	687,485

Our money market funds, treasury bills and U.S. government securities, and agency bonds are classified within Level 1 of the fair value hierarchy because they are valued based on quoted market prices in active markets. We classify commercial paper, corporate bonds, and municipal bonds as Level 2 because they are valued using inputs other than quoted prices which are directly or indirectly observable in the market, including readily-available pricing sources for the identical underlying security which may not be actively traded. None of our financial instruments were classified in the Level 3 category as of April 30, 2023 or January 31, 2023.

6. Business Acquisitions

Re:infer

On July 29, 2022, we acquired all of the outstanding capital stock of Re:infer LTD. (“Re:infer”), a natural language processing company focused on unstructured documents and communications. Re:infer uses machine learning technology to mine context from communication messages and transform them into actionable data. With this acquisition, we gained technology and an experienced team which we believe will accelerate our technology

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UiPath, Inc.

Notes to Condensed Consolidated Financial Statements (Continued)

(unaudited)

roadmap, expand the breadth of our current AI-powered automation capabilities, and unlock new automation opportunities for our customers. The Re:infer acquisition was accounted for as a business combination.

The total purchase consideration for the acquisition of Re:infer was $44.6 million, consisting of the following (in thousands):


Cash paid at closing	$	30,117
Fair value of Class A common stock issued at closing (0.2 million shares)	2,965
Loan note to be paid on first anniversary of closing (included in accrued expenses and other current liabilities)	5,863
Loan note to be paid on second anniversary of closing (included in other liabilities, non-current)	5,570
Working capital adjustment	66
Total	$	44,581

At closing, we also issued an additional 0.4 million shares of Class A common stock that will be released to sellers in equal installments on the first, second, and third anniversaries of the closing date, subject to certain employment-related clawback provisions. The aggregate fair value of these shares totaled $7.6 million and will be expensed as compensation for post-acquisition services over the three years following the acquisition date.

The following table summarizes the fair values of the assets acquired and liabilities assumed as of the acquisition date (in thousands):


	July 29, 2022
Net tangible assets	$	300
Intangible assets	13,100
Goodwill	34,351
Total assets acquired	47,751
Deferred tax liabilities assumed	(3,170)
Total	$	44,581

The following table sets forth the identifiable intangible assets acquired and their estimated useful lives as of the date of acquisition:


	Fair Value (in thousands)		Estimated Useful Life (in years)
Developed technology	$	10,000	5.0
Customer relationships	3,100		3.0
Total	$	13,100

The acquisition of Re:infer generated goodwill of $34.4 million representing expected synergies and acquired skilled workforce. None of this goodwill is deductible for tax purposes.

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UiPath, Inc.

Notes to Condensed Consolidated Financial Statements (Continued)

(unaudited)

7. Intangible Assets and Goodwill

Intangible Assets, Net

Acquired intangible assets, net consisted of the following as of April 30, 2023 (dollars in thousands):


	Intangible Assets, Gross		Accumulated Amortization		Intangible Assets, Net		Weighted- Average Remaining Useful Life (in years)
Developed technology	$	28,946	$	(12,705)	$	16,241	3.3
Customer relationships	8,249		(4,289)		3,960		1.8
Trade names and trademarks	273		(243)		30		0.9
Other intangibles	1,231		(295)		936		7.5
Total	$	38,699	$	(17,532)	$	21,167

Acquired intangible assets, net consisted of the following as of January 31, 2023 (dollars in thousands):


	Intangible Assets, Gross		Accumulated Amortization		Intangible Assets, Net		Weighted- Average Remaining Useful Life (in years)
Developed technology	$	28,517	$	(11,095)	$	17,422	3.5
Customer relationships	8,174		(3,601)		4,573		2.0
Trade names and trademarks	272		(233)		39		1.2
Other intangibles	1,231		(255)		976		7.7
Total	$	38,194	$	(15,184)	$	23,010

We record amortization expense associated with acquired developed technology in cost of licenses revenue and cost of subscription services revenue, trade names and trademarks in sales and marketing expense, customer relationships in sales and marketing expense, and other intangibles in general and administrative expense in the condensed consolidated statements of operations. Amortization of acquired intangible assets for the three months ended April 30, 2023 and 2022 was $2.1 million and $1.4 million, respectively.

Expected future amortization expense related to intangible assets was as follows as of April 30, 2023 (in thousands):


	Amount
Remainder of year ending January 31, 2024	$	6,502
Year ending January 31,
2025	6,692
2026	4,084
2027	2,432
2028	1,155
Thereafter	302
Total	$	21,167

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UiPath, Inc.

Notes to Condensed Consolidated Financial Statements (Continued)

(unaudited)

Goodwill

Changes in the carrying amount of goodwill during the three months ended April 30, 2023 were as follows (in thousands):


	Carrying Amount
Balance as of January 31, 2023	$	88,010

Effect of foreign currency translation	1,197
Balance as of April 30, 2023	$	89,207

8. Operating Leases

Our operating leases consist of real estate and vehicles and have remaining lease terms of one year to 15 years. For purposes of calculating operating lease liabilities, lease terms may be deemed to include options to extend the lease when it is reasonably certain that we will exercise those options. Our operating lease arrangements do not contain any material restrictive covenants or residual value guarantees.

Lease costs are presented below (in thousands):


	Three Months Ended April 30,
		2023		2022
Operating lease cost		$	3,071	$	2,759
Short-term lease cost		1,300		1,508
Variable lease cost		621		207
Sublease income (1)		(532)		(532)
Total		$	4,460	$	3,942

(1) Included in other income (expense), net in the condensed consolidated statements of operations.

The following table represents the weighted-average remaining lease term and discount rate as of the periods presented:


	As of
	April 30, 2023		January 31, 2023
Weighted-average remaining lease term (years)	11.8		12.1
Weighted-average discount rate	7.1	%	7.0	%

Future undiscounted lease payments for our operating lease liabilities as of April 30, 2023 were as follows (in thousands):


	Amount
Remainder of year ending January 31, 2024	$	10,008
Year ending January 31,
2025	10,215
2026	8,473
2027	7,957
2028	7,759
Thereafter	48,625
Total operating lease payments	93,037
Less: imputed interest	(29,220)
Total operating lease liabilities	$	63,817

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UiPath, Inc.

Notes to Condensed Consolidated Financial Statements (Continued)

(unaudited)

As of April 30, 2023, we had non-cancellable commitments in the amount of $4.9 million related to operating leases of real estate facilities that have not yet commenced.

Current operating lease liabilities of $7.3 million and $7.0 million were included in accrued expenses and other current liabilities on our condensed consolidated balance sheets as of April 30, 2023 and January 31, 2023, respectively.

Supplemental cash flow information related to leases for the three months ended April 30, 2023 and 2022 was as follows (in thousands):


	Three Months Ended April 30,
		2023		2022
Cash paid for amounts included in the measurement of operating lease liabilities		$	2,615	$	2,064
Operating lease ROU assets obtained in exchange for new operating lease liabilities		1,993		770

9. Condensed Consolidated Balance Sheet Components

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following (in thousands):


	As of
	April 30, 2023		January 31, 2023
Prepaid expenses and service credits	$	77,600	$	67,794
Other current assets	43,829		26,356
Prepaid expenses and other current assets	$	121,429	$	94,150

Property and Equipment, Net

Property and equipment, net consisted of the following (in thousands):


	As of
	April 30, 2023		January 31, 2023
Computers and equipment	$	28,847	$	28,450
Leasehold improvements	21,505		19,622
Furniture and fixtures	6,495		6,485
Construction in progress	572		2,419
Property and equipment, gross	57,419		56,976
Less: accumulated depreciation	(30,508)		(27,931)
Property and equipment, net	$	26,911	$	29,045

Depreciation expense for the three months ended April 30, 2023 and 2022 was $3.0 million and $1.9 million, respectively.

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UiPath, Inc.

Notes to Condensed Consolidated Financial Statements (Continued)

(unaudited)

Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following (in thousands):


	As of
	April 30, 2023		January 31, 2023
Accrued expenses	$	14,089	$	19,411
Withholding tax from employee equity transactions	2,132		3,772
Employee stock purchase plan withholdings	8,121		3,365
Payroll taxes and other benefits payable	4,106		7,644
Income tax payable	6,317		8,750
Value-added taxes payable	3,528		6,381
Operating lease liabilities, current	7,253		6,997
Deferred consideration for business acquisition, current	5,863		5,863
Other	11,729		14,462
Accrued expenses and other current liabilities	$	63,138	$	76,645

10. Credit Facility

On October 30, 2020, we entered into a $200.0 million senior secured revolving credit facility (the “Credit Facility”) with HSBC Ventures USA Inc., Silicon Valley Bridge Bank, N.A. (as successor to Silicon Valley Bank), Sumitomo Mitsui Banking Corporation, and Mizuho Bank, LTD, maturing October 30, 2023. The Credit Facility contains certain customary covenants, including, but not limited to, those relating to additional indebtedness, liens, asset divestitures, and affiliate transactions. We may use the proceeds of future borrowings under the Credit Facility for refinancing other indebtedness, working capital, capital expenditures and other general corporate purposes, including permitted business acquisitions. Our obligations under the Credit Facility are secured by substantially all of our assets, except for our intellectual property.

As of April 30, 2023 and January 31, 2023, there were no amounts outstanding under the Credit Facility.

11. Commitments and Contingencies

Letters of Credit

We had a total of $5.6 million and $4.3 million in letters of credit outstanding in favor of certain landlords for office space and for credit line facilities as of April 30, 2023 and January 31, 2023, respectively. These letters of credit renew annually and expire on various dates through fiscal year 2025.

Indemnification

In the ordinary course of business, we may provide indemnification of varying scope and terms to customers, vendors, directors, and officers with respect to certain matters, including, but not limited to, losses arising out of our breach of such agreements, services to be provided by us, or from intellectual property infringement claims made by third parties.

These indemnification provisions may survive termination of the underlying agreement and the potential amount of future payments we could be required to make under these indemnification provisions may not be subject to maximum loss clauses. The maximum potential amount of future payments we could be required to make under these indemnification provisions is indeterminable. As of April 30, 2023 and January 31, 2023, we have not accrued a liability for these indemnification arrangements because the likelihood of incurring a payment obligation, if any, in connection with these indemnification arrangements was remote.

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UiPath, Inc.

Notes to Condensed Consolidated Financial Statements (Continued)

(unaudited)

Restructuring

On June 24, 2022, our board of directors approved restructuring actions to manage our operating expenses by reducing our global workforce by approximately

Form: 10-Q

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