PATH 10-K & 10-Q changes, risk factors and insider trading

We have incurred net losses in the past, anticipate continuing to incur significant operating expenses in the future, and may not achieve or sustain consistent profitability.

We have incurred net losses in the past, and may continue to incur net losses in the future. We expect to continue to incur significant operating expenses in the foreseeable future. This includes leveraging the investments made in our organization in prior years and continuing to implement initiatives designed to grow our business in a disciplined manner. These initiatives include increasing our overall customer base and expanding sales within our current customer base, continuing to penetrate international markets, investing in research and development to improve the capabilities of our platform (including AI capabilities), acquiring businesses, technology, talent, and related integration efforts, growing our distribution channels and channel partner ecosystem, deepening our user community, hiring additional employees and investing in our existing workforce, expanding our operations and infrastructures both domestically and internationally, and incurring expenses related to legal, accounting, and other administrative expenses aspects of operating as a public company. In particular, we intend to continue to expend significant funds to further develop our platform. This includes introducing new functionalities and adapting and growing our inside sales team and enterprise sales force. These efforts are aimed at driving new customer adoption and expanding use cases and integrations.

We have entered into non-cancellable multi-year capacity commitments with certain third-party cloud providers for cloud infrastructure services. These commitments require us to pay for such capacity irrespective of actual usage. These efforts may prove more expensive than we currently anticipate, and we may not succeed in increasing our revenue sufficiently, or at all, to offset these higher expenses,expenses and achieve, or once achieved, sustain profitability.

We may delay or re-evaluate these efforts due to any anticipated or actual adverse impact to our business as a result of, among other things, global economic and geopolitical uncertainties, fluctuating inflation and interest rates, tariffs, government shutdowns, regional conflicts, or other similar events or circumstances. In addition, growth of our revenue may slow, or revenue may decline for a number of reasons, including a decrease in our ability to attract and retain customers, a failure to increase our number of channel partners, an increase in competition, a decrease in growth of our overall market, a decrease in the term lengths of our contracts with customers, an inability to timely and cost-effectively introduce new products and services that are favorably received by customers and partners, and as a result of global economic conditions, such as risingfluctuating inflation and interest rates, that could cause our customers to reduce their spending levels with us. A shortfall in revenue could lead to operating results being below expectations because we may not be able to quickly reduce our fixed operating expenses in response to short-term business changes. If we are unable to meet these risks and challenges as we encounter them, our business and operating results may be adversely affected.

TheseThe investments we have made in our organization may not be successful on the timeline we anticipate, or at all, and may not result in revenue or ARR growth. For instance, we anticipate that our customers will continue to increase adoption of our SaaS products in future periods. We cannot predict how increased adoption of our SaaS products will change the buying patterns of our customers or impact our future revenue or ARR. If we are unable to maintain or increase our revenue or ARR at a rate sufficient to offset the expected increase in our costs, our business, financial condition, and results of operations will be harmed, and we may not be able to achieve or maintain profitability over the long-term. Additionally, we have encountered, and may in the future encounter, risks and uncertainties frequently experienced by growing companies in rapidly changing industries, such as unforeseen operating expenses, difficulties, complications, delays, and other known or unknown factors that may result in losses in future periods. If our revenue or ARR growth does not meet our expectations in future periods, our business, financial condition, and results of operations may be harmed, and we may not achieve or maintain profitability in the future. If we are unable to sustain profitability, the value of our business and Class A common stock may significantly decrease.

We may not be able to successfully manage our growth. If we are not able to grow efficiently, we may not be able to reach or sustain consistent profitability, and our business, financial condition, and results of operations could be harmed, which has in the past caused and could in the future cause our stock price to decline.

We have experienced and may continue to experience rapid growth and organizational changes. We generated revenue of $1,429.7$1,610.6 million and $1,308.1$1,429.7 million for fiscal years 20252026 and 2024,2025, respectively, representing a growth rate of 9%.13%. Our ARR was $1,666.1$1,852.6 million and $1,463.7$1,666.1 million at January 31, 20252026 and 2024,2025, respectively, representing a growth rate of 14%.11%. However, the revenue or ARR growth of any prior quarterly or annual fiscal period should not be relied upon as ana indicationpredictor of our future performance. Even if our revenue and ARR continue to increase, our revenue and ARR growth rates may decline in the future as a result of a variety of factors, including the maturation of our business, increased competition, changes to technology, a decrease in the growth of our overall market, or our failure, for any reason, to continue to take advantage of growth opportunities. In addition, our past results may not be indicative of our future performance. Overall growth of our business depends on a number of additional factors, including our ability to:

•price our products that we offer on our platform effectively so that we are able to attract new customers and expand sales to our existing customers;

•expand the functionality and use cases for theour products we offer on our platform;

•continue to develop new products and new functionality for our platform and successfully further optimize our existing products and infrastructure;

We may not successfully accomplish any of these objectives, and as a result, it is difficult for us to forecast our future results of operations.objectives. Further, actions we may decide to take in the future in our attempt to achieve or sustain profitability may not be successful in yielding our intended results and may not appropriately address either or both of the short-term and long-term strategy of our business. If the assumptions that we use to plan our business are incorrect, or change in reaction to changes in our market, or if we are unable to maintain consistent revenue, ARR, or revenue or ARR growth, our stock price could be volatile, and it may be difficult to achieve and sustain profitability.

Adverse changes in global or regional economic conditions periodically occur, including recession or slowing growth; changes or uncertainty in fiscal, monetary, or trade policy; volatility in foreign exchange markets; tighter credit; fluctuating inflation and interest rates; lower capital expenditures by businesses,businesses including on IT infrastructure; increases in unemployment; and lower consumer confidence and spending. Adverse changes in macroeconomic conditions can significantly harm demand for our products and make it more challenging to forecast our operating results and make business decisions, including prioritization of investments in our business. An economic downturn or increased uncertainty may also lead to increased credit and collectability risks, higher borrowing costs or reduced availability of the capital and credit markets, reduced liquidity, asset impairments, adverse impact on our partnerspartners, or failures of counterparties including financial institutions and insurers. Trade policies and disputes have resulted and willmay in the future result in increased tariffs, trade barriers, and other protectionist measures, which can make our products less competitive, reduce demand for our products, limit our ability to sell to certain customers, or impede or slow the movement of our products across borders. Increasing protectionism and economic nationalism may lead to further changes in trade policies and regulations, domestic sourcing initiatives, or other formal and informal measures that could make it more difficult to sell our products in, or restrict our access to, some markets. They can also result in declining consumer confidence and slowing economic growth or recession, and could cause our customers to reduce, cancel, or alter the timing of their purchases with us. Sustained geopolitical tensions could lead to political instability and economic uncertainty globally, long-term changes in global trade and technology supply chains, domestic sourcing initiatives, and the decoupling of global trade networks, which could make it more difficult to sell our products in, or restrict our access to, some markets and have a material adverse effect on our business and growth prospects. For example, these types of unfavorable conditions have in the past disrupted and could in the future,future disrupt the timing and attendance of key industry events, which we rely upon in part to generate sales of our products. If those events are disrupted in the future, our marketing investments, sales pipeline, and the ability to attract new customers and generate sales of our products could be negatively and adversely affected.

Further, these conditions have affected and may continue to affect the rate of IT spending, could adversely affect our customers' ability or willingness to attend our events or to purchase our products and services, couldmay have delayed and may in the future delay customer purchasing decisions, couldmay have reduced and may in the future reduce the value and duration of customer subscription contracts, and may adversely affect our customer attrition rates. All of these risks and conditions could materially adversely affect our future sales and operating results.

OurWe expect fluctuations in our financial results. As a result, we may not be able to accurately predict future results, and our past results may not be indicative of our future performance. We expect fluctuations in our financial results, making it difficult to project future results, and ifIf we fail to meet the expectations of securities analysts or investors with respect to our results of operations, our stock price could decline.

•fluctuations in mix of revenue, cost of revenue, and gross margin from sales directly to end-customers and/or through channel partners including our strategic alliances;

We derive our revenue from the sale of our software licenses for use of our proprietary software, maintenance and support for our licenses, right to access certain products that are hosted by us (i.e., SaaS), and professional services. Under ASC 606, Revenue from Contracts with Customers, we recognize revenue when a customer obtains control of promised goods or as services are rendered. The amount of revenue recognized reflects the consideration that we expect to receive in exchange for these goods or services. Licenses revenue (including the term license portion of Flexflexible Offeringsdeployment offerings) is recognized when we transfer control of the respective license to the customer. Revenue from SaaS and revenue from maintenance and support are recognized ratably over time since control passes to our customers over the arrangement’s contractual period. Professional services revenue is recognized as services are rendered.

We derive and expect to continue to derive substantially all of our revenue from our UiPath Platform™. As such, market adoption of our automation platform is critical to our continued success. Demand for our platform may be affected by a number of factors, many of which are beyond our control, including continued market acceptance and integration of our platform into our customers’ operations; the continued volume, variety, and velocity of automations that are generated through use of our platform; timing of development, and release of new offerings by our competitors; technological change, including in the areas of AI and ML systems,systems; and the rate of growth in our market. Additionally, the utility of our platform and products relies in part on the ability of our customers to use our automation, AI and ML products in connection with other third-party software products that are important to our customers' businesses. If these third-party software providers were to modify the terms of their licensing arrangements with our customers in a manner that would reduce the utility of our products, or increase the cost to use our products in connection with these third-party software products, then our customers may no longer choose to adopt our platform or continue to use our products. If we are unable to continue to meet the demands of our customers and the developer community, our business operations, financial results, and growth prospects will be materially and adversely affected.

Our business depends on our existing customers renewing their licenses and purchasing additional licenses and products from us and our channel partners. Declines or significant delays in renewals or purchases of additional licenses and products by our customers have from time to time harmed and could in the future harm our future operating results.

In order for us to maintain or improve our results of operations, it is important that our customers renew or expand their licenses with us and our channel partners. We cannotmay not be able to accurately predict our renewals and dollar-based net retention rate given the diversity of our customer base in terms of size, industry, and geography. Our renewals and dollar-based net retention rate may decline or fluctuate as a result of a number of factors, many of which are outside our control, including the business strength or weakness of our customerscustomers' businesses; continuing or new delays in renewals due to economic conditions; customer usage, including the ability of our customers to quickly integrate our products into their businesses and continually find new uses for our products within their businesses; cloud automation deployment or adoption issues; customer satisfaction with our products and platform capabilities and customer support; the utilityability of our platform to cost-effectively integrate with third-party software products; our prices; the capabilities and prices of competing products; mergers and acquisitions affecting our customer base; consolidation of affiliates’ multiple paid business accounts into a single paid business account or loss of business accounts in their entirety; the effects of global economic conditions; reductions in our customers’ spending on software solutions or their spending levels generally; perceived security or data privacy risks from the use of our products; changes in regulatory regimes that affect our customers or our ability to sell our products, including changes to sanctions and export control regimes; or changes in the views of the industry and public with regard to our products and automation products generally, including as a result of increased automation, use of AI, and displacement of human workforces. These factors may also be exacerbated if, consistent with our growth strategy, our customer base continues to grow to encompass larger enterprises, which may also require more sophisticated and costly sales efforts. If our customers do not purchase additional licenses and products from us or our customers fail to renew their licenses, our revenue may decline and our business, financial condition, and results of operations may be harmed.

We continually review how best to market our platform to our customers and potential customers and how to organize, train, and deploy our sales teams for efficiency and effectiveness; however, if our efforts and the changes that we are tryingstrive to implement on an ongoing basis are not successful, it could adversely affect our platform adoption and our growth.growth could be adversely affected.

In addition, as our market matures, our products evolve, and competitors introduce lower cost or differentiated products that are perceived to be alternatives to our platform and products, our ability to sell licenses for our products could be impaired. Further, as various forms of AI, including generative and agentic AI, become more widely adopted and acceptable, if customers were to feelbelieve that our technology wasis not developing apace, our business and growth prospects could be harmed. The rapid evolution of AI may require the application of resources to develop, test, and maintain our products and services so that they are ethically designed to minimize unintended, harmful impacts. Similarly, sales of our licenseplatform salesand products could be adversely affected if customers or users within these organizations perceive that features incorporated into competitive products reduce the need for our products, or if they prefer to purchase other products that are bundled with solutions offered by other companies that operate in adjacent markets and compete with our products. As a result of these and other factors, we may be unable to attract new customers, which may have an adverse effect on our business, financial condition, and results of operations.

Our platform and products provide automation solutions that our customers can integrate throughout their businesses. Accordingly, we compete with enterprise platform vendors that are acquiring, building, or investing in automation and AI functionality or partnering with automation and AI providers, RPA software providers and adjacent automation and integration platform companies in markets such as BOAT, low-code, BPM,business iPaaS,process management, integration platform as a service, process mining, IDP,intelligent document processing, and test automation vendors,automation, among others. We also compete with companies that provide and support the traditional systems relying on manual tasks and processes that our platform and products are designed to replace, including companies that facilitate outsourcing of such tasks and processes to lower cost workers. Our customers may also internally develop their own automated solutions to address tasks particular to their business.

The agentic automation market is a fast-growing enterprise software market and is increasingly competitive. With the introduction of new technologies and market entrants, we expect that the competitive environment will remain intense going forward. For instance, as our market becomes increasingly driven by cloud-based solutions, native cloud providers may enter this market and provide competitive offerings at lower prices. Additionally, open source alternatives for automation that are offered at no cost may impact our ability to sell our products to certain customers who may prefer to rely on these tools. Our competitors may be able to respond more quickly to new or expanding technology, such as newly emerging generative and agentic AI technologies, and devote more resources to product development than we can. The speed of technological development may prove disruptive to some of our markets if we are unable to maintain the pace of innovation. Some of our actual and potential competitors have been acquired by other larger enterprises, have made or may make acquisitions, may enter into partnerships or other strategic relationships that may provide more comprehensive products than they individually had offered, or may achieve greater economies of scale than us. In addition, new entrants not currently considered to be competitors may enter the market through acquisitions, partnerships, or strategic relationships. As we look to market and sell our products and platform capabilities to potential customers with existing internal solutions, we must convince their internal stakeholders that our products and platform capabilities are superior to their current solutions. If we fail to do so, our business, financial condition, and results of operations may be harmed.

Our success and future growth depend largely upon the continued services of our executive officers, particularly Daniel Dines, our CEO, co-founder, and Chairman, as well as our other key employees in the areas of research and development, and sales and marketing. Additionally, manysome members of our management team have been with us for a short period of time. From time to time, there have been and may continue to be changes in our executive management team or other key employees resulting from the hiring or the departure of these personnel. Our executive officers and other key employees are employed on an at-will basis, which means that these personnel could terminate their employment with us at any time. The loss of one or more of our executive officers, or the failure by our executive team to effectively work with our employees and lead UiPath, could harm our business. Further, we have in the past taken and may in the future take actions to streamline our senior management structure. Any of these changes may not achieve our desired results. As we experience personnel turnover, we have experienced and may continue to experience some loss of internal knowledge from time to time. The streamlining of our senior management team could introduce additional risks with fewer executives tasked with leading our organization.

Such seniorSenior leadership transitions can be difficult to manage and may cause disruptions to our operations. This or other leadershipSuch transitions may also increase the likelihood of turnover amongst our employees and result in changes in our business strategy, which may create uncertainty, and negatively impact our ability to execute our business strategy quickly and effectively. Leadership transitions may also impact our relationships with our customers and other market participants, creating uncertainty among investors, employees, and others concerning our future direction and performance. Any significant disruption, uncertainty, or change in business strategy could adversely affect our business, financial condition, and operating results. Finally, our organizational structure is becoming more complex as we continue to scale our operational, financial, and management controls as well as our reporting systems and procedures. If we fail to manage our anticipated growth, company personnel transitions, and change in a manner that preserves the key aspects of our corporate culture, our employee retention may suffer, which could negatively affect our products, brand, and reputation.

In addition, the financial health of our channel partners and our continuing relationships with them are important to our success. Some of these channel partners may be unable to withstand adverse changes in economic conditions, which could result in insolvency and/or the inability of such partners to obtain credit to finance purchases of our products and services, which could negatively impact our future financial performance. In addition, weakness in the end-user market could negatively affect the cash flows of our channel partners who could, in turn, delay paying their obligations to us, which would increase our credit risk exposure. Our business could be harmed if the financial condition of some of these channel partners substantially weakened and we were unable to timely secure replacement channel partners.

These strategic alliances may also include non-cancelable commitments we make to these third-party alliance partners whereby we plan to leverage the partner’s products or services in arrangements with third-party customers. Should we be unable to deploy the partner’s products or services in arrangements with third-party customers, it may materially and adversely impact our revenue, gross margin, profitability, and financial results in any given period.period may be materially and adversely impacted. Further, these strategic alliances are a vector for potential growth and expansion for us and these alliances may not be successful and/or as profitable as we project.

Our ability to attract new customers and to retain and increase revenue from existing customers depends in part on our ability to enhance and improve our platform and to introduce new features and services. To grow our business and remain competitive, we must continue to enhance our platform with features that reflect the constantly evolving nature of automation and AI technology and our customers’ evolving needs. For instance, with the development of next-generation solutions that utilize new and advanced features, including AI and ML, we may be required to commit significant resources to developing new products, enhancements and developments. Other companies may incorporate AI into their products more quickly or more successfully than us, or AI technology for code generation or application development could reduce demand for our platform, which could impair our ability to compete effectively and adversely affect our financial results. The success of new products, enhancements, and developments depends on several factors including, but not limited to:to, our anticipation of market changes and demands for product features, successful product design and timely release of new functionality, sufficient customer demand, and cost effectiveness of our product development efforts. In addition, because our platform is designed to operate with a variety of third-party systems, applications, data, and devices, we will need to continuously modify and enhance our platform to keep pace with changes in such systems. We may not be successful in developing these modifications and enhancements. Furthermore, the addition of features and solutions to our platform will increase our research and development expenses. Any new features that we develop may not be introduced in a timely or cost-effective manner or may not achieve the market acceptance necessary to generate sufficient revenue to justify the related expenses. It is difficult to predict customer adoption of new features. Such uncertainty limits our ability to forecast our future results of operations and subjects us to a number of challenges, including our ability to plan for and model future growth. In addition, significant delays between announcement and general availability of new functionality could adversely affect our business. If we cannot address such uncertainties and successfully develop new features, enhance our software, or otherwise overcome technological challenges and competing technologies, our business and results of operations could be adversely affected.

We also offer professional services including consulting and training and must continually adapt to assist our customers in deploying our platform in accordance with their specific automation strategies. If we cannot introduce new services or enhance our existing services to keep pace with changes in our customers’ deployment strategies, we may not be able to attract new customers, retain existing customers, or expand customers' use of our softwaresoftware, or secure renewal contracts, which are important for the future of our business.

The markets and use cases for products with AI capabilities have been rapidly evolving, are difficult to predict, and may impact demand for our products, our sales cycles, our ability to forecast results from sales of these products, and the preferences of our customers and potential customers. The significant investments we have made to develop products and software to address what we believe will be increasing demand for AI capabilities may be insufficient, and we face significant hurdles, including whether demand will materialize, whether third-party software providers will develop functionality that allows their software to utilize the AI capabilities of our products, and whether we will be successful in developing, pricing, and packaging products that can compete with offerings by established competitors.

We have in the past invested and may in the future continue to invest in potentially disruptive technologies, through various vehicles such as acquisitions, equity or debt investments, joint ventures, or strategic partnerships. Such investments may not produce the expected results, may require more financial resources than anticipated, or may otherwise be unsuccessful, and the value of the investments may decline or be impaired, or our business may be adversely impacted.

Additionally, our use of AI technology in general may subject us to reputational, financial, legal, or regulatory risks. As we continue to incorporate AI technology into our products and services, any failures to address concerns relating to the responsible use of the evolving AI technology in our products and services may cause harm to our reputation or result in financial liability, and as such, may increase our costs to address or mitigate such risks and issues. AI technology may create ethical issues, generate defective algorithms, and present other risks that create challenges with respect to its adoption. In addition, evolving rules, regulations, and industry standards governing AI may require us to expend significant resources to modify, maintain, or align our business practices or products to comply with U.S. and non-U.S. rules and regulations, the nature of which cannot be determined at this time. Several jurisdictions around the globe, including the EUEU, South Korea, and certain U.S. states, have already proposed or enactedenacted, or are considering, laws governing the development and use of AI, such as the EU's AI Act.AI. We expect other jurisdictions will adopt similar laws. Further, many countries and states are applying their existing data and consumer protection laws to AI technologies.

Risks associated with theour use of AI (including ML and large language models) in our platforms may result in reputational harm or liability.

AI is enabled by or integrated into parts of our technology platform and may also be used directly or indirectly as part of our internal systems and processes. As such, AI remains a significant and growing element of our business and operations. As with many developing technologies, AI presents risks and challenges that could affect its further development, adoption, and use. AI algorithms and models may be flawed. Our AI-related efforts, particularly those related to generative and agentic AI, or the datasets that we use in training our systems, subject us to risks related to harmful or illegal content, accuracy, bias, intellectual property infringement or misappropriation, defamation, data privacy, cybersecurity, sanctions, and export controls, among others. Third-party AI capabilities that can be integrated with our platform or used in our internal systems and processes, including generative AI, could also produce false or "hallucinatory" inferences about customer data, enterprises, other information, or subject matter. The use of generative AI processes at scale is relatively new, and may lead to challenges, concerns, and risks that are significant,significant or that we may not be able to predict, especially if our direct or indirect use of these technologies in our products and internal systems and processes were to become more important to us over time. If the recommendations, forecasts, or analyses that AI applications, including AI agents, assist in producing are deficient or inaccurate, we could be subject to competitive harm or potential legal liability, including under existing and future legislation or regulations, includingregulations in the U.S.U.S., the EU, and theother EU.jurisdictions. The rapid evolution of AI may also require us to expend additional resources to help ensure that AI is implemented appropriately in order to minimize unintended or harmful impact which may adversely affect our business, financial condition, and results of operations.

Some AI scenarios may present ethical issues, and the enablement or integration of AI into our platform or internal processes may subject us to new or heightened legal, regulatory, ethical, or other challenges, as this is an area of rapid development. We take into consideration these challenges when designing our technologies and implementing our business practices. For example, our platform includes data governance tools and other tools, which are intended to regulate and limit user access. In addition, we have developed internal responsible AI guidelines. However, we have no assurance that these tools or guidelines, nor their implementation, will be sufficient to protect us against evolving AI-related risks. As a result, if we face any claims or litigation relating to our use of AI, including its purported or real impact to,to human rights, data privacy, employment, or other societal issues, we may experience brand or reputational harm, as well as regulatory or legal scrutiny, which could have a material adverse effect on our operations,operations and business outlook.

Our platform and products also empower our customers to develop their own use cases for our automation platform and products. We cannot guarantee that these user-developed automations will be effective or that they do not include errors, failures, or bugs that then may be attributed, correctly or not, to our underlying technologies. For instance, our customers may use our products in a manner in which they were not intended to be used and that could cause our platform or products to be implicated in any resulting errors or failures. Real or perceived errors, failures, or bugs in our platform and products could result in negative publicity, loss of or delay in market acceptance of our platform and products, regulatory investigations and enforcement actions, harm to our brand, weakening of our competitive position, claims by customers for losses sustained by them, or failure to meet the stated service level commitments in our customer agreements. In such an event, we may be required, or may choose, for customer relations or other reasons, to expend significant additional resources in order to help correct the problem. Any errors, failures, or bugs in our platform or products could also impair our ability to attract new customers, retain existing customers, or expand their use of our software, which would adversely affect our business, financial condition, and results of operations.

In the event that our service agreements with our third-party hosting services are terminated, or there is a lapse of service, elimination of services or features that we utilize, interruption of internet service provider connectivity, or damage to such facilities, we could experience interruptions in access to our cloud-based products as well as significant delays and additional expense in arranging or creating new facilities and services,services and/or re-architecting our cloud-based products for deployment on a different cloud infrastructure service provider, which could adversely affect our business, financial condition, and results of operations.

Delays or difficulties associated with the design, implementation, or post-implementation use of ourinformation new enterprise resource planning systemsystems could adversely impact our business, financial condition, and results of operations.

We rely on information systems, particularly ERP technology,systems to manage our business, summarize our operating and financial results, and provide timely information to our management. WeFor areexample, currentlyduring engagedfiscal inyear 2026, we completed a multi-year implementation of a new enterprise resource planning (ERP) system. This implementation issystem, a complex project with broad scope,scope in which we have invested and will continue to invest significant financial and human capital. DespiteWhen ourimplementing efforts,information systems, we may experience delays, unexpected costs, or other difficulties as the implementation process continues.difficulties. Further, although we plan tomay run our existing technology in parallel with the new ERP systemtechnology for a period of time and toalthough we conduct extensive testing to ensure that thea new ERP system is operating as intended, we may encounter post-implementation disruptions toto, or difficulties in use of theof, new ERPinformation systems that could require us to incur additional costs, or could impair, among other things, our ability to record sales, process transactions, collect receivables, and produce timely and accurate historical and forecasted financial information, which could adversely impact our business, financial condition, and results of operations. Additionally, if the new ERP system does not ultimately operate as intended, the effectiveness of our internal control over financial reporting could be harmed.

ARR is based on numerous assumptions and limitations, is calculated using our internal data that has not been independently verified by third parties, and may not provide an accurate indication of our future or expected results. We define ARR as annualized invoiced amounts per solution SKU from subscription licenses and maintenance and support obligations assuming no increases or reductions in customers' subscriptions. ARR does not include the costs we may incur to obtain such subscription licenses or provide such maintenance and support. ARR also does not reflect nonrecurring rebates payable to partners (upon establishing sufficient history of their nonrecurring nature), the impact of nonrecurring incentives (such as one-time discounts provided under sales promotional programs), and any actual or anticipated reductions in invoiced value due to contract non-renewals or service cancellations other than for certain reserves (for example, those for credit losses or disputed amounts). As a result, ARR and our other operational data may not reflect our actual performance, and investors should consider these metrics in light of the assumptions used in calculating such metrics and limitations as a result thereof. In addition, investors should not place undue reliance on these metrics as an indicator of our future or expected results. Moreover, these metrics may differ from similarly titled metrics presented by other companies and may not be comparable to such other metrics. See the sections titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Key Performance Metric” for additional information regarding our ARR.

We have funded our operations since inception primarilyinitially through customer payments and net proceeds from sales of equity securities.securities and more recently primarily through customer collections. We cannot be certain whether our operations will consistently generate sufficient cash to fully fund our ongoing operations, our planned investments, or the growth of our business. Following our IPO, we focused on growing our business to take advantage of our market opportunities. While growth remains important, we are also focused on the path tosustaining profitability. Any future investments we make to drive growth may require us to engage in equity or debt financings to secure additional funds. Financing may not be available on terms favorable to us, if at all. The effects of the disruptions to and volatility inof the credit and financial markets in the U.S. and worldwide from geopolitical and macroeconomic events could limit our access to financing and increase our costs of borrowing.

If adequate funds are not available on acceptable terms, we may be unable to invest in future growth opportunities, which could harm our business, financial condition, and results of operations. If we incur debt, the debt holders would have rights senior to holders of Class A common stock to make claims on our assets, and the terms of any future debt could restrict our operations, including the ability to pay dividends on our Class A common stock. Furthermore, if we issue additional equity securities, stockholders will experience dilution, and the new equity securities could have rights senior to those of our Class A common stock. Because oura decision to issue securities in the future willwould depend on numerous considerations, including factors beyond our control, we cannot predict or estimate the amount, timing, or nature of any future issuances of debt or equity securities. As a result, our stockholders bear the risk of future issuances of debt or equity securities reducing the value of our Class A common stock and diluting their interests.

We believe that maintenance and enhancement of UiPath brand is important to support the marketing and sale of our existing and future products to new customers and expand sales of our platform and products to existing customers. We also believe that the importance of brand recognition will increase as competition in our market increases.continues to increase. Successful maintenance and enhancement of our brand will depend largely on the effectiveness of our marketing efforts, our ability to provide reliable products that continue to meet the needs of our customers at competitive prices, our ability to maintain our customers’ trust, our ability to show that our products improve efficiency for our customers while improving engagement and satisfaction of their employees, our ability to continue to develop new functionality and use cases, our ability to successfully differentiate our products and platform capabilities from competitive products, and our ability to adequately obtain and protect our trademarks and trade names. Our brand promotion activities may not generate customer awareness or yield increased revenue, and even if they do, any increased revenue may not offset the expenses we incur in building our brand.

Historically, we have grown our revenue and ARR significantly by helping customers adopt automation as a tool, process by process.process, to unlock human potential. Today, weour continueautomation toplatform buildbuilds onupon this foundation and drive the evolution of AI-powered automationexperience by inspiringproviding our customers to see automation more holistically, as not justwith a toolfoundation butfor asenterprise-scale aagentic whole new way of operating and innovating.automation.

Our results of operations and financial condition are impacted by the macromacroeconomic factors affecting our industry, including the proliferation of cloud-based applications, the cost of skilled human capital, and the global demand for agentic automation solutions. While our business is influenced by these macromacroeconomic factors, our results of operations are more directly affected by certain company-specific factors, including:

•our ability to attract new customers, which depends on a number of other factors, including our ability to drive awareness of the benefits and power of agentic automation among our existing and prospective customers, the effectiveness and pricing of our products, the offerings of our competitors, and competition among resellers;

•Gross margin was 83% for fiscal year 2025,2026 compared to 85% forand fiscal year 2024.2025.

Internationally, we price our platform in currencies that may not be the functional currency. Accordingly, the heightened volatility of global markets has exposed us and will continue to expose us to foreign currency fluctuations, which may impact demand for our platform, our near-term results, comparisoncomparability of results to prior periods, and our ability to predict future results.

Further, cash, cash equivalents, and marketable securities represent a significant portion of our total assets; as such, liquidity concerns in the financial services industry may have an effect on our business, financial conditions,assets, and results of operations. Additionally, the return on our cash, cash equivalents, and marketable securities is sensitive to changes in interest rates. Volatility in the interest rate environment may impact the amount of interest and other income reported on our consolidated statements of operations, the comparability of these amounts to prior periods, and our ability to predict future profitability.

Workforce RestructuringRestructurings

On July 8, 2024, our board of directors approved the Fiscal Year 2025 Workforce Restructuring to reshape the organization by streamlining our structure, particularly in operational and corporate functions, to better prioritize our go-to-market investments and focus our research and development investments on AI and driving innovation across our platform. The Fiscal Year 2025 Workforce Restructuring is substantially completed, with any remaining actions now expected to bewas completed by end ofduring the second quarter of fiscal year 2026.

Refer to Note 11,10, Commitments and Contingencies—Workforce RestructuringRestructurings included in Part II, Item 8 of this Annual Report on Form 10-K for more information.

We have a unified commercial offering for software products with both on-premises and cloud deployment options that allows customers the choice of either deployment option throughout the term of the contract. These Flex Offeringsofferings are comprised of three types of performance obligations: term license, maintenance and support, and SaaS.

Our term licenses (typically sold as a portionpart of Flexflexible Offeringsdeployment offerings) provide customers the right to use software for a specified period of time. Revenue for licenses is recognized at the point in time at which the customer is able to use and benefit from the software, which is generally upon delivery to the customer or upon commencement of the renewal term. As licenses revenue is recognized at a point in time, any shift in license start dates or duration will have a direct impact on our licenses revenue.

We generate subscription services revenue through the provision of: (1) maintenance and support services, which include technical support and unspecified updates and upgrades on a when-and-if-available basis for our licenses, and (2) SaaS products (typically sold as a portion of Flexflexible Offeringsdeployment offerings). Maintenance and support and SaaS products represent stand-ready obligations for which revenue is recognized ratably over the term of the arrangements.

Professional services and other revenue consists of fees associated with professional servicesservices, forincluding processdeployment of agentic automation, customer education, and training services. Our professional services contracts are structured on a time and materials or fixed price basis, and the related revenue is recognized as the services are rendered.

Cost of subscription services revenue primarily consists of personnel-related expenses of our customer support and technical support teams, including salaries and bonuses, stock-based compensation expense, and employee benefit costs. Cost of subscription services revenue also includes third-party consulting services, hosting costs related to our SaaS products, amortization of acquired developed technology and capitalized software development costs related to SaaS products, depreciation, and allocated overhead. Overhead is allocated based on applicable headcount. We recognize these expenses as they are incurred. We expect cost of subscription services revenue to continue to increase in absolute dollars forin the foreseeablelonger futureterm, particularly with regard to hosting and cloud infrastructure costs as our SaaS business grows. In the future, we expect further expansion of our cloud-based deployments.deployments, Asand as more of our customer base deploys our products via SaaS, we expect our gross margin to be impacted by increased hosting fees and cloud infrastructurethese costs.

Sales and marketing expenses consist primarily of personnel-related expenses associated with our sales and marketing teams and related sales support teams, including salaries and bonuses, stock-based compensation expense, and employee benefit costs. Sales and marketing expenses also include sales and partner commissions, marketing event costs, advertising costs, travel, trade shows, other marketing materials, amortization of acquired customer relationships, and allocated overhead. We expect that over the longer term our sales and marketing expenses will decrease as a percentage of revenue, although this percentage may fluctuate from period to period due to timing and extent of expenses.

Research and development expenses consist primarily of personnel-related expenses, including salaries and bonuses, stock-based compensation expense, and employee benefitsbenefit costscosts, for our research and development employees, hosting and software services costs, and allocated overhead. Research and development costs are expensed as incurred, with the exception of certain software development costs which are eligible for capitalization. We expect that our research and development expenses will increase in absolute dollars for the foreseeable future as we continue to invest in efforts to develop new technology and enhance the functionality and capabilities of our existing products and platform infrastructure. Our research and development expenses may fluctuate as a percentage of revenue from period to period due to the timing and extent of expenses.

General and administrative expenses consist primarily of personnel-related expenses, including salaries and bonuses, stock-based compensation expense, and employee benefitsbenefit costscosts, associated with our finance, legal, human resources, compliance, and other administrative teams, as well as accounting and legal professional services fees, other corporate-related expenses, and allocated overhead. We expect that over the longer term our general and administrative expenses will decrease as a percentage of revenue, although this percentage may fluctuate from period to period due to timing and extent of expenses.

Other (Expense) Income, Net

Other (expense) income, net primarily consists of foreign exchange gains and losses. Other (expense) income, net also includes accretion of discounts and premiums on marketable securities.

Total revenue increased by $121.6$180.9 million, or 9%,13%, for fiscal year 20252026 compared to fiscal year 2024,2025, primarilydriven due toby a $152.0$152.5 million increase in subscription services revenue partially offset byrevenue, a $34.2$19.2 million decreaseincrease in licenses revenue, relatedand a $9.2 million increase in partprofessional toservices theand transitionother to our Flex Offerings.revenue. As we continued to expand our sales efforts in the U.S. and internationally, our revenue increased across all regions. Of the growth in total revenue, 24%15% was attributable to new customers and 76%85% was attributable to existing customers. Subscription services revenue is recognized ratably over the subscription term; therefore, the increase in subscription services revenue is driven both by sales in prior periods for which we continue to provide maintenance and support and SaaSSaaS, and by new sales in the current period.

Sales and marketing expense increaseddecreased by $25.4$55.2 million, or 4%,7%, for fiscal year 20252026 compared to fiscal year 2024.2025. This increasedecrease was primarily attributable to a $15.0$76.0 million increasedecrease in personnel-related expenses, which included a $14.1$46.9 million increasedecrease in stock-based compensation expense, a $15.8 million decrease in salary-related and bonus expenses, a $12.9 million decrease in employee termination benefits relateddue to reduced activity under our Fiscal Year 2025 Workforce Restructuring, awhich $9.1was millioncompleted increaseduring inthe salary-relatedsecond quarter of fiscal year 2026, and bonus expenses, a $2.5$2.1 million aggregate increasedecrease in employee insurance costs and employer payroll taxes, andpartially offset by a $0.5$1.6 million increase in general employee severance,severance. This decrease was partially offset by a $10.2$7.9 million decreaseincrease in stock-basedthird-party compensationconsulting expense andfees, a $1.1 million decrease in employer payroll tax expense related to employee equity transactions. Sales and marketing was also impacted by a $10.7$7.0 million increase in sales commissions asexpense, a result of higher amortization of capitalized contract acquisition costs and a $4.7$3.7 million increase in marketing expensesexpenses, largely related to our Forward VII user conference. These increases were partially offset byand a $2.8$2.7 million decreaseincrease in depreciation and amortization expense and a $1.1 million decrease in sales-related software expenses.expense.

Research and development expense increased by $48.6$4.5 million, or 15%,1%, for fiscal year 20252026 compared to fiscal year 2024.2025. The increase was primarily attributable to a $26.1$15.6 million increase in personnel-related costs, which included a $14.8 million increase in stock-based compensation expense, an $8.5$16.3 million increase in salary-related and bonus expenses,expenses and a $2.7$2.2 million aggregate increase in employee insurance costs and employer payroll taxes associated with higher headcount and merit increases, partially offset by a $3.1 million decrease in employee termination benefits relateddue to reduced activity under our Fiscal Year 2025 Workforce Restructuring.Restructuring, Research and development expensewhich was alsocompleted impactedduring the second quarter of fiscal year 2026. This decrease was partially offset by ana $18.7$10.8 million increasedecrease in hosting and software services costs, a $1.7 million increase in third-party consulting fees, and a $1.6 million increase in rent expense.costs.

General and administrative expense decreased by $5.5$11.8 million, or 2%,5%, for fiscal year 20252026 compared to fiscal year 2024.2025. This decrease was primarily attributable to a $19.7$14.8 million decrease in personnel-related expenses, which included a $23.5$13.1 million decrease in stock-based compensation expense and a $0.8$2.0 million decrease in employer payroll tax expense related to employee equity transactions, partially offset by a $2.6 million increase in employee termination benefits relateddue to reduced activity under our Fiscal Year 2025 Workforce RestructuringRestructuring, andwhich awas $1.9completed millionduring increasethe insecond employeequarter insuranceof costs.fiscal year 2026. General and administrative expense was also impacted anby $11.1a $5.0 million increasedecrease in software service and implementation costs, a $2.7$2.4 million increasedecrease in charitable donation expense due to a credit loss recovery recorded in the prior comparable period, a $2.3 million increase in charitable donations mainly driven by the increased fairreduced value of our Class A common shares contributed to a donor-advised fund in the current year, and a $1.9$1.2 million aggregate decrease in depreciation and amortization and rent expense. These decreases were partially offset by a $9.0 million increase in third-party consultingadvisory and services fees, partially offset byincluding a $3.9$5.5 million decreaseincrease in commerciallegal insuranceadvisory costs.fees related to acquisitions, intellectual property, and other matters, and a $3.8 million increase in credit loss expense associated with specific reserves.

Other (Expense) Income, Net

Other income,expense, net increased by $3.3$39.2 million, or 10%,112%, for fiscal year 20252026 compared to fiscal year 2024,2025, primarily due to a $6.6$21.5 million increase in foreign currency transaction gains and a $1.9 million increasedecrease in accretion of net discounts on marketable securities, partiallya offset$13.9 bymillion increase in losses from foreign currency transactions, and a $3.9$4.1 million decreaseincrease in legal expense related to shareholder litigation and a $1.6 million decrease in sublease income.litigation.

(Benefit From) Provision For Income Taxes

ProvisionBenefit forfrom income taxes decreasedincreased by $18.5$177.3 million for fiscal year 20252026 compared to fiscal year 2024,2025, mainly driven by the tax benefit related to release of valuation allowance associated with our U.K.U.S. DTA,entity, partiallyas offsetwell byas taxperiod-over-period expenseschange recognized related toin the changingproportion of ouroperating intentprofits withrealized respectacross to permanent reinvestment of foreign earnings.jurisdictions.

Our ARR may fluctuate as a result of a number of factors, including customers’ satisfaction or dissatisfaction with our platform, pricing, competitive offerings, economic conditions, overall changes in our customers’ spending levels, acquisitions, and our ability to successfully execute on our strategic goals. ARR should be viewed independently of revenue and deferred revenue as ARR is an operating metric and is not intended to be combined with or to replace these items. For clarity, we use annualized invoiced amounts per solution SKU rather than revenue calculated in accordance with U.S. GAAP to calculate our ARR. Our invoiced amounts are not matched to transfer of control of the performance obligations associated with the underlying subscription licenses and maintenance and support obligations. This can result in timing differences between our U.S. GAAP revenue and ARR calculations. Generally speaking, our ARR calculation simply takes our invoiced amounts per solution SKU under a subscription license or maintenance agreement as of the end of an invoiced period and divides that amount by the corresponding term and multiplies by 365 days to derive the annualized renewal value. In contrast, for our revenue calculated in accordance with U.S. GAAP, subscription licenses revenue derived from the sale of term-based licenses hosted on-premises is recognized at the point in time when the customer is able to use and benefit from our software, which is generally upon delivery to the customer or upon the commencement of the renewal term, and maintenance, support, and SaaS revenue is recognized ratably over the term of the arrangement. ARR is not a forecast of future revenue. Unlike ARR, revenue is impacted by contract start and end dates and duration. The timing of recognition of ARR is determined by contract billing structure, whereas billing structure will neither accelerate nor delay recognition of future revenue. For example, in a multi-year contract invoiced upfront,up front, ARR is the annualized invoiced amount per solution SKU related to the final year of the contract assuming no reserve is applied, whereas revenue is determined by total contract value and timing of satisfaction of the underlying performance obligations. ARR does not include invoiced amounts associated with perpetual licenses or professional services. Investors should not place undue reliance on ARR as an indicator of our future or expected results. Moreover, our presentation of ARR may differ from similarly titled metrics presented by other companies and may not be comparable to such other metrics. For further information, see the section titled “Risk Factors—Risks Related to Our Business, Products, Operations, and Industry" included in Part I, Item 1A of this Annual Report on Form 10-K.

We have financed operations since our inception primarily through customer payments and net proceeds from sales of equity securities. Our principal uses of cash in recent periods have been to fund our operations, invest in capital expenditures, engage in various business acquisitions, and, more recently, repurchase shares of our Class A common stock. As of January 31, 20252026 and 2024,2025, our principal sources of liquidity were cash, cash equivalents, and marketable securities totaling $1,723.6$1,689.5 million and $1,879.8$1,723.6 million, respectively, and we had an accumulated deficit of $1,987.9$1,705.5 million and $1,914.2$1,987.9 million, respectively. During the fiscal years ended January 31, 20252026 and 2024,2025, we reported net lossesincome (loss) of $73.7$282.3 million and $89.9$(73.7) million, respectively, and net cash provided by operations of $320.6$371.2 million and $299.1$320.6 million, respectively. Cash generated by our operations in recent periods has principally been used to fund working capital requirements such as personnel and facilities costs, invest in capital expenditures, engage in various business and asset acquisitions, and repurchase shares of our Class A common stock.

Our future capital requirements will depend on many factors, including our revenue growth rate, sales of our products and services, license renewal activity, the timing and the amount of cash received from customers, the expansion of sales and marketing activities, the timing and extent of spending to support development efforts, the introduction of new and enhanced products, the continuing market adoption of our products, expenses associated with international expansion, the timing and extent of capital expenditures to invest in existing and new office spaces, and the timing and extent of stock repurchases. We may in the future enter into arrangements to acquire or invest in complementary businesses,businesses products,or and technologies.assets. We may be required to seek additional equity or debt financing. In the event that we require additional financing, we may not be able to raise such financing on terms acceptable to us or at all. If we are unable to raise additional capital or generate cash flows necessary to expand our operations and invest in continued innovation, we may not be able to compete successfully, which would harm our business, operations and financial condition.

We believe that our existing cash and cash equivalents, marketable securities, and paymentscash flows from customersoperations will be sufficient to fund our anticipated cash requirements for the next twelve months and the long term.

Stock Repurchase ProgramRepurchases

On September 1, 2023, our board of directors authorized a stock repurchase program, pursuant to which we maycould repurchase from time to time up to $500.0 million of our outstanding shares of Class A common stock. On August 30, 2024, our board of directors authorized the repurchase of an additional $500.0 million of our outstanding shares of Class A common stock. Subsequent to January 31, 2026, we fulfilled the aforementioned authorizations, and in March 2026, our board of directors authorized a new stock repurchase program, pursuant to which we may repurchase from time to time up to $500.0 million of our Class A common stock. Refer to Note 12,11, Stockholders' Equity—Stock Repurchase ProgramRepurchases for further details.

Net cash provided by operating activities for fiscal year 20252026 of $320.6$371.2 million was driven by cash collections from our customers, which were approximately 7%4% higher than in the prior year, and interest income on our marketable securities.year. These cash inflows were partially offset by cash payments for operating expenditures, primarily associated with the compensation of our teams, including fiscal year 20242025 bonuses paid in the first quarter of fiscal year 2025 and employer payroll taxes related to employee equity transactions.2026. Other cash operating expenditures included payments related to our Fiscal Year 2025 Workforce Restructuring, which was completed during the second quarter of fiscal year 2026, and payments for professional service,services, softwaresoftware, and office rent.

Net cash provided by operating activities for fiscal year 20242025 of $299.1$320.6 million was driven by cash collections from our customers and interest income on our marketable securities,securities. These cash inflows were partially offset by cash payments for operating expenditures, primarily associated with the compensation of our teams, including fiscal year 20232024 bonuses paid in the first quarter of fiscal year 20242025 and employer payroll taxes related to employee equity transactions. Other cash operating expenditures included payments related to our Fiscal Year 20232025 Workforce Restructuring, which was concluded during the second quarter of fiscal year 2024,Restructuring and payments for professional services, software, and office rent.

Net cash used in financing activities for fiscal year 20252026 of $450.5$372.4 million was primarily driven by $390.8$329.1 million in repurchases of Class A common stock under our stock repurchase program,program $77.9and $59.1 million in payments of tax withholdings on net settlement of equity awards, and $5.6 million loan note payment on the second anniversary of the acquisition of Re:infer, partially offset by $15.6$14.9 million in proceeds from ESPP contributions and $8.0$1.1 million in proceeds from stock option exercises.

Net cash used in financing activities for fiscal year 20242025 of $196.9$450.5 million was primarily driven by $112.1 million in payments of tax withholdings on net settlement of equity awards, $102.6$390.8 million in repurchases of Class A common stock under our stock repurchase program, $77.9 million in payments of tax withholdings on net settlement of equity awards, and $5.9$5.6 million loan note payment on the firstsecond anniversary of the acquisition of Re:infer,infer LTD, partially offset by $17.6$15.6 million in proceeds from ESPP contributions and $6.7$8.0 million in proceeds from stock option exercises.

Our material cash requirements predominantly relate to working capital requirements, including employee compensation andcompensation, payment of employee tax withholdings on net settlement of equity awards, and material contractual obligations, including leases and purchase commitments.

As of January 31, 2025,2026, accrued compensation and benefits of $112.4$121.0 million are included in current liabilities on our consolidated balance sheet. Refer to Note 9, Consolidated Balance Sheet Components—Accrued Expenses and Other Current Liabilities for details of additional short-term payroll-related obligations included in accrued expenses and other current liabilities as of January 31, 2025.2026.

Refer to Note 8, Operating Leases for more detailed information regarding timing of future lease payments, and to Note 11,10, Commitments and Contingencies—Non-Cancelable Purchase CommitmentsObligations for more detailed information regarding timing of purchase commitments.commitments with terms of twelve months or longer.

Additionally, our stock repurchase programrepurchases may represent a material use of cash depending upon the number of shares repurchased, which is ultimately discretionary. As of January 31, 2025, approximately $507.4 million remained of the $1,000.0 million authorized by our board of directors. The current authorization may be suspended or discontinued at any time and does not have a specified expiration date. Refer to Note 12,11, Stockholders' Equity—Stock Repurchase ProgramRepurchases for further details.

Whenever possible, we allocate the transaction price based on observable SSP, which is the price of the same good or service in standalone sales to similar customers in similar circumstances. If observable SSP is not available, we estimate the SSP using data that may include historical prices, discounting practices, list prices, cost data, and other observable inputs. We may have more than one SSP for individual performance obligations when our data population indicates that pricing practices vary by class of customer (for example, based on the customer’s geographic region). We updatereview our SSPsSSP at least annually.annually and update when necessary to reflect changes in facts and circumstances.

We are subject to income taxes in the U.S and in a number of foreign jurisdictions. We apply significant judgment in determining our provision for (benefit from) provision for income taxes, particularly with regard to assessment of DTAs and evaluation of tax positions.

Pursuant to ASC 740, Income Taxes, we account for income taxes using the asset and liability method, whereby DTAs and DTLs are recognized to represent the expected future tax consequences of temporary differences between the financial reporting and income tax bases of assets and liabilities, and for NOL and tax credit carryforwards. DTAs and DTLs are measured using the currently enacted tax rates and laws that are expected to apply in the years in which we expect to realize or settle them. In the case of DTAs, we regularly assess the realizability of future associated tax benefits by considering both positive and negative evidence, such as the adequacy of expected future taxable income on a jurisdictional basis (including forecasted income and whether a sustained trend of profitability exists historically), any carryforward periods available, and prudent and feasible tax planning strategies. The evaluation of this evidence requires judgment. If we determine that it is more likely than not that all or a portion of a DTA will not be realized in the future, a valuation allowance is provided. If and when sufficient positive evidence becomes available to indicate that it is more likely than not at all or a portion of a DTA will be realized, we may release all or a portion of a valuation allowance accordingly. For example, during fiscal year 2025,2026, based on the available positive and negative evidence including the amount of taxable income in the U.K.U.S. in recent years and our expectations of future profits in the U.K.,U.S., we determined it to be more likely than not that a significant part of our U.K.U.S. DTA is realizable and therefore released the $24.7$186.3 million of the valuation allowance associated with the U.K.U.S. DTA.federal DTA and $18.6 million of the valuation allowance associated with certain state DTAs. However, we continue to maintain full valuation allowances against our U.S.Romania DTA and Romaniasome U.S. state DTAs because we believe that it is more likely than not that these DTAs will not be realized,fully withrealized. ourOur remaining valuation allowances totalingtotal $406.3$150.5 million as of January 31, 2025.2026. We may release some or all of these valuation allowances in future periods if objective negative evidence of cumulative losses is no longer present and if positive evidence of sustained profitability is established to support the realization of the related DTAs. Such release would result in a decrease in the provision for income taxes in the period of the release.

Similarly, significant judgementjudgment is required in evaluating our tax positions. In the ordinary course of business, there exist many transactions and calculations for which the ultimate tax settlement is uncertain. ASC 740 prescribes a two-step approach to recognizing and measuring uncertain tax positions: (1) evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained upon audit, based on the technical merits of the tax position, and including resolution of related appeals or litigation processes, if any; and (2) measure the tax benefit as the largest amount which is more likely than not of being realized and effectively settled. We consider a number of factors when evaluating tax positions and estimating tax benefits, including changes in facts and circumstances, changes in tax law, tax audit status, and communications with tax authorities. Any changes in the recognition or measurement of uncertain tax positions could result in material increases or decreases in our provision for income taxes in the period in which the change is made. In particular, if a tax position is not sustained upon audit and we are required to pay amounts in excess of the associated accrual, or if no accrual has been made, our provision for income taxes will increase.

Business Highlights for the Three and Six Months Ended AprilJuly 30,31, 2026:

•RevenueQuarter-to-date revenue of $418.4$410.3 million increased 17%13% year-over-year.

•ARRYear-to-date at April 30, 2026revenue of $1,901.2$828.6 million increased 12%15% year-over-year.

•CashGross flow from operationsmargin was $131.980% millionand 81% for the three and six months ended AprilJuly 30,31, 2026, respectively, compared to $119.0 million82% for the three and six months ended AprilJuly 30,31, 2025.

•Cash and cash equivalents, restricted cash, and marketable securities were $1,417.2$1,406.5 million as of AprilJuly 30,31, 2026, compared to $1,689.9 million as of January 31, 2026.

ARR is the key performance metric we use in managing our business because it illustrates our ability to acquire new subscription customers and to maintain and expand our relationships with existing subscription customers. We define ARR as annualized invoiced amounts per solution SKU from subscription licenses and maintenance and support obligations assuming no increases or reductions in customers' subscriptions. ARR does not include the costs we may incur to obtain such subscription licenses or provide such maintenance and support. ARR also does not reflect nonrecurring rebates payable to partners (upon establishing sufficient history of their nonrecurring nature), the impact of nonrecurring incentives (such as one-time discounts provided under sales promotional programs), and any actual or anticipated reductions in invoiced value due to contract non-renewals or service cancellations other than for certain reserves (for example those for credit losses or disputed amounts). At AprilJuly 30,31, 2026 and 2025, our ARR was $1,901.2$1,937.7 million and $1,692.7$1,723.4 million, respectively, representing a growth rate of 12%. Approximately 30%28% of this growth rate was due to new customers and 70%72% of this growth rate was due to existing customers. Our dollar-based net retention rate, which represents the net expansion of ARR from existing customers over the preceding 12 months, was 109% and 108% as of AprilJuly 30,31, 2026 and 2025, respectively. We calculate dollar-based net retention rate as of a period end by starting with the ARR from the cohort of all customers as of 12 months prior to such period end ("Prior Period ARR"). We then calculate the ARR from these same customers as of the current period end ("Current Period ARR"). Current Period ARR includes any expansion and is net of contraction or attrition over the last 12 months, but does not include ARR from new customers in the current period. We then divide the total Current Period ARR by the total Prior Period ARR to arrive at the point-in-time dollar-based net retention rate.

A summary of ARR-related data at AprilJuly 30,31, 2026 and 2025 is as follows:

Provision for income taxes consists of U.S. federal and state income taxes and income taxes in foreign jurisdictions in which we conduct business. Our effective tax rate is impacted by tax rates in foreign jurisdictions and the relative amounts of income we earn in those jurisdictions, as well as by non-deductible expenses as permanent differences, and by changes in our valuation allowances. We currently maintain a partial valuation allowance on certain U.S. state DTAs and a full valuation allowance on our Romania DTA, as we have concluded as of AprilJuly 30,31, 2026 that it is more likely than not that these DTAs will not be fully realized. However, given our current earnings and anticipated future earnings, we believe that there is a reasonable possibility that sufficient positive evidence may become available to allow us to conclude that a valuation allowance is no longer needed for these U.S. state DTAs during fiscal year 2027, and for these Romania DTAs, or a portion thereof, during fiscal year 2028,2028 or 2029, which would result in income tax benefit in the period of the respective release.

Comparison of the Three Months Ended AprilJuly 30,31, 2026 and 2025

Total revenue increased by $61.8$48.5 million, or 17%,13%, for the three months ended AprilJuly 30,31, 2026 compared to the three months ended AprilJuly 30,31, 2025, primarily due to a $35.6$27.7 million increase in subscription services revenuerevenue, andan a $21.0$11.7 million increase in licenses revenue, and a $9.1 million increase in professional services and other revenue. Total revenue grew across all geographical regions. Of the growth in total revenue, 20%28% was attributable to new customers and 80%72% was attributable to existing customers. Subscription services revenue is recognized ratably over the subscription term; therefore, the increase in subscription services revenue is driven both by sales in prior periods for which we continue to provide maintenance and support and SaaS, and by new sales in the current period.

Total cost of revenue increased by $13.1$16.2 million, or 20%,25%, for the three months ended AprilJuly 30,31, 2026 compared to the three months ended AprilJuly 30,31, 2025, primarily due to a $7.2$14.5 million increase in cost of professional services and other revenue and a $5.5$1.5 million increase in cost of subscription services revenue. The increase in cost of professional services and other revenue was primarily driven by a $5.3$12.0 million increase in costs associated with the use of third-party subcontractors to deliver professional services to our customers and a $1.7$2.1 million increase in personnel-related expenses, which was driven by a $2.4 million increase in salary-related and bonus expenses associated with higher headcount and merit increases.increases partially offset by a $0.9 million decrease in stock-based compensation expense. The increase in cost of subscription services revenue was primarily driven by a $5.6$3.6 million increase in third-party hosting and software services costs as a result of increased usage of our subscription services and a $1.6 million increase in depreciation and amortization expense. These increases wereservices, partially offset by a $2.6$1.8 million decrease in personnel-related expenses, which includedwas driven by a $1.6$2.0 million decrease in stock-based compensation expense and a $1.3 million decrease in salary-related and bonus expenses.expense.

Our gross margin remaineddecreased constantto at 82%80% for the three months ended AprilJuly 30,31, 2026 compared to 82% for the three months ended AprilJuly 30,31, 2025, reflectingdue increasedto subscriptiona servicesdecrease in the proportion of higher-margin licenses revenue and margin offset by the aforementioned increase in cost of professional services and other revenue primarily driven by increased third-party subcontractor costs.

Research and development expense decreased by $1.9$14.9 million, or 2%,15%, for the three months ended AprilJuly 30,31, 2026 compared to the three months ended AprilJuly 30,31, 2025. TheThis decrease was largelyprimarily attributable to a $1.6$15.0 million decrease in personnel-related expenses, which was driven by $9.9a $15.1 million decrease in stock-based compensation expense partially offset by a $5.3 million increase in salary-related and bonus expenses, a $1.8 million increase in general employee severance, and a $0.7 million aggregate increase in employee insurance costs and employer payroll taxes.expense.

General and administrative expense decreased by $2.0$2.8 million, or 4%,5%, for the three months ended AprilJuly 30,31, 2026 compared to the three months ended AprilJuly 30,31, 2025. TheThis decrease was primarily attributable to a $2.6$5.0 million decrease in personnel-related expenses, which was driven byincluded a $3.8$5.6 million decrease in stock-based compensation expense partially offset byand a $1.5$1.1 million increasedecrease in salary-related and bonus expenses.expenses associated with reduced headcount partially offset by a $1.0 million increase in restructuring costs. General and administrative expense was also impacted by a $1.2$0.7 million decrease in charitabletravel-related donations due to the reduced value of our Class A common shares contributed to a donor-advised fund in the current year and a $0.8 million decrease in software service and implementation costs.expenses. These decreases were partially offset by a $2.4$1.0 million increase in other taxes in non-U.S. jurisdictions, a $0.8 million increase in fair value of contingent consideration liability.liability, and a $0.7 million increase in credit loss expense.

Interest income decreased by $2.2$1.2 million, or 18%,10%, for the three months ended AprilJuly 30,31, 2026 compared to the three months ended AprilJuly 30,31, 2025 as a result of a period-over-period decrease in our aggregate balance of cash and cash equivalents and marketable securities.securities, as well as decreased interest rates.

Other income,income net,(expense), net increased by $18.5$17.5 million, or 116%,million for the threesix months ended AprilJuly 30,31, 2026 compared to the threesix months ended AprilJuly 30,31, 2025, primarily due to a $14.8$16.1 million increase in gains from foreign currency transactions and a $6.5$7.1 million decrease in legal expense related to shareholder litigation, partially offset by a $2.9$6.0 million decrease in accretion of net discounts on marketable securities.

Provision for income taxes increased by $15.6$30.6 million for the threesix months ended AprilJuly 30,31, 2026 compared to the threesix months ended AprilJuly 30,31, 2025, mainly driven by increased U.S. income tax expense following the release of full valuation allowances on our U.S. Federal and certain U.S. state DTAs during fiscal year 2026.

As of AprilJuly 30,31, 2026, our principal sources of liquidity were cash, cash equivalents, and marketable securities totaling $1,415.7$1,405.0 million, and we had an accumulated deficit of $1,683.0$1,646.9 million. For the threesix months ended AprilJuly 30,31, 2026, we reported net income of $22.5$58.6 million and net cash provided by operating activities of $131.9$162.6 million. Cash generated by our operations in recent periods has principally been used to fund working capital requirements such as personnel and facilities costs, invest in capital expenditures, engage in various business and asset acquisitions, and repurchase shares of our Class A common stock.

On September 1, 2023, our board of directors authorized a stock repurchase program, pursuant to which we could repurchase from time to time up to $500.0 million of our outstanding shares of Class A common stock. On August 30, 20242024, our board of directors authorized the repurchase of an additional $500.0 million of our outstanding shares of Class A common stock. During the threefirst monthsquarter endedof Aprilfiscal 30,year 2026,2027, we fulfilled the aforementioned authorizations, and inon March 20265, 2026, our board of directors authorized a new stock repurchase program, pursuant to which we may repurchase from time to time up to $500.0 million of our Class A common stock. Refer to Note 11, Stockholders' Equity—Stock Repurchases for further details.

Net cash provided by operating activities for the threesix months ended AprilJuly 30,31, 2026 of $131.9$162.6 million was driven by cash collections from our customers, with cash collections approximately 14% higher than during the threesix months ended AprilJuly 30,31, 2025. These cash inflows were partially offset by cash payments for operating expenditures, primarily associated with the compensation of our teams, including fiscal year 2026 annual bonuses paid in the first quarter of fiscal year 2027. Other cash operating expenditures included payments for professional services, software, office rent, and office rent.taxes.

Net cash provided by operating activities for the threesix months ended AprilJuly 30,31, 2025 of $119.0$160.6 million was driven by cash collections from our customers, partially offset by cash payments for operating expenditures, primarily associated with the compensation of our teams, including fiscal year 2025 annual bonuses paid in the first quarter of fiscal year 2026. Other cash operating expenditures included payments related to our Fiscal Year 2025 Workforce Restructuring, which was completed during the second quarter of fiscal year 2026, and payments for professional services, software, and office rent.

Net cash used in investing activities for the threesix months ended AprilJuly 30,31, 2026 of $112.8$128.6 million was driven by $155.0$309.4 million in purchases of marketable securities, a net payment of $149.4 million in connection with the acquisition of WorkFusion, and $2.7$4.1 million in capital expenditures primarily related to leasehold improvements, partially offset by $189.6$329.2 million in maturities of marketable securities and $4.6$5.1 million in other investing inflows.

Net cash used in investing activities for the threesix months ended AprilJuly 30,31, 2025 of $79.9$80.6 million was driven by $153.4$300.1 million in purchases of marketable securities, a net payment of $24.8 million in connection with the acquisition of Peak, and $12.8 million in capital expenditures primarily related to leasehold improvements, partially offset by $111.1$257.1 million in maturities of marketable securities.

Net cash used in financing activities for the threesix months ended AprilJuly 30,31, 20252026 of $235.2$287.1 million was primarily driven by $227.5$268.5 million in repurchases of Class A common stock under our stock repurchase programprogram, and $12.2$23.2 million in payments of tax withholdings on settlement of equity awards, and $3.5 million in payments of contingent consideration associated with the acquisition of Peak, partially offset by $4.2$7.4 million in proceeds from ESPP contributions.

Our material cash requirements predominantly relate to working capital requirements, including employee compensation, payment of employee tax withholdings on net settlement of equity awards, and material contractual obligations,obligations including leases and purchase commitments.commitments, and contingent consideration arrangements associated with acquisitions.

As of AprilJuly 30,31, 2026, accrued compensation and benefits of $61.2$89.9 million are included in current liabilities on our condensed consolidated balance sheet. Refer to Note 9, Condensed Consolidated Balance Sheet Components—Accrued Expenses and Other Current Liabilities for details of additional short-term payroll-related obligations included in accrued expenses and other current liabilities.

Refer to Note 8, Operating Leases for more detailed information regarding timing of future lease payments, and Note 10, Commitments and Contingencies—Non-Cancelable Purchase Obligations for more detailed information regarding timing of purchase commitments with terms of 12 months or longer. As of July 31, 2026, short-term contingent consideration associated with the acquisition of WorkFusion has a fair value of $30.4 million and is included in accrued expenses and other current liabilities on our condensed consolidated balance sheet. There were no significant changes during the threesix months ended AprilJuly 30,31, 2026 from the contractual obligations disclosed in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” set forth in the 2026 Form 10-K.

Our stock repurchase program may also represent a material use of cash depending upon the number of shares repurchased, which is ultimately discretionary. Refer to Note 11, Stockholders' Equity—Stock Repurchases for further details. Further, future cash payments under acquisition-related contingent consideration arrangements are based on performance outcomes and may be material. Refer to Note 5, Fair Value Measurements and Note 6, Business Acquisitions for information regarding the value of contingent consideration liabilities.