5 Interesting Learnings from UiPath at $1.7 Billion in ARR
"UiPath is right in the crosshairs of AI. And so that hypergrowth … has slowed."
So before we had AI, we had automation 😉
Of course, we still have plenty of automation. So much of business software in the end is about automation. But AI has begun to change everything here. And before AI, RPA was revolutionary. Robotic Process Automation. Call it fancy scripts if you want, but UiPath is the clear leader here and after struggling for 10 years to get to the first $1m in ARR, then exploding to $1B (!) in ARR in less than 8 years after. Wow.
If you needed to automate data entry, data extraction, and so much more from older software especially, UiPath was the answer. And it was and is magical.
But it’s also right in the crosshairs of AI. And so that hypergrowth … has slowed. Dramatically. At $1.5B ARR, it was still growing 31%. At $1.7B ARR? Just … 5%.
Today, UiPath is at:
$1.7B ARR
Growing 5%
32% non-GAAP margins, so very profitable
But will UiPath have an answer to the AI Age? We’ll see. It’s been so much change, so quickly. For all of us. But especially — for UiPath. Man.
5 Interesting Learnings:
#1. NRR Holding at 110%. And a Stunning 98% GRR.
A reminder that enterprise software is very sticky. Even with so much change, NRR remains 110%. And no one leaves, not really. GRR is a stunning 98%. But that NRR is down from 145% at $600m ARR and 123% at $1.2B in ARR.
#2. Still Growing Its $1m and $100k+ Customers Materially
I can’t quite get this math to tie to the 110% NRR (which isn’t a GAAP metric), but in any event, UiPath is still growing its customer count. It’s grown its $100k+ customers +10% to 2,292 over the past 12 months, and now had 317 $1m+ customers, also up +10%. Pretty impressive.
#3. Dramatically Cut Sales & Marketing — But Investing Much More in Engineering and Product
If growth slows, one option is to invest even more in sales — what Salesforce is doing. Another is to cut sales & marketing to focus on existing customers and select logos, and potentially, to put that money into product. UiPath is doing the latter path, materially cutting sales & marketing expense, but boosting engineering and product materially. Going long here. It’s probably not a coincidence this is happening after founder Daniel Dines returned as CEO.
#4. 2%-3% Dilution Target Per Year
UiPath is still investing in engineering and with that, equity. This is a relatively standard amount of dilution for a public tech company, but perhaps more than one might expect for one growing 5% that could buy back stock to offset it. UiPath is still investing in the future, not just the present.
#5. Leaning Deep Into Agents
As they should be. But will UiPath be where more enterprises want to get them from? We will see!
