Thank you for joining us for the UiPath session at the Growth Stock Conference. I'm Pat McElwee, and I'm an analyst here in the software group at William Blair, as a part of which I cover UiPath. I'm required to inform you that a complete list of disclosures and potential conflicts of interest are available at our website, williamblair.com. We're very happy to have the UiPath team back at our conference this year, including COO and CFO, Ashim Gupta, as well as Elise and, I think Jake as well from the IR team here in the audience. UiPath is one of the leading automation and orchestration software providers for the enterprise, enabling businesses to automate repetitive digital workflows across applications, systems, and business functions. The company just reported their first quarter results last Thursday, and their positioning to benefit from the adoption of AI in the enterprise is increasingly clear, so I think it's a great time to be digging into this story. That's my quick two-liner on the business, and I'll turn it over to Ashim for a better overview of the company. Awesome. Thank you, everybody. I'll put the safe harbor up for a second. It's actually really great to be a part of this team and to see everybody here today. I would say we came off of, to me, one of the most foundational quarters that we've had. The reason why I look at it as there's two parts of a quarter. It's what you delivered and the foundation that you're building to deliver the next stage of growth for the company. For UiPath right now, if you look at where we are, go back to founding of UiPath. five years, we took RPA and made it a billion-dollar revenue business. In 2019, we branched out from RPA. If there's a couple of bullets I would impress is we are not an RPA company. RPA is one part of our platform. In 2019, we began adding to our AI portfolio, both IDP, in terms of intelligent document processing for structured and unstructured data, Process Intelligence, Communications Mining. When you look at where we are today with 18 months ago launching our business process orchestration, which is Maestro, that orchestrates humans, robots, and agents. Our AI ARR now is $200 million. That is not switching a metric, changing a definition. That is solid ARR that is coming from real value that we are providing customers with our AI platform, and I look forward to talking more about it in our breakout sessions and within our Q&A. You look at fundamentally where we are, $418 million of revenue, that grew 17%. Our ARR growth rate at $1.9 billion is 12%, and when you look at that has now stabilized. I think one of the big questions for UiPath was the trajectory. When you look at the last two years, we had decelerating ARR and revenue, really some execution missteps, but also some of the change in macroeconomic conditions, et cetera. Right now, if you look at our last couple of quarters, especially solidified in this quarter, we have stabilized the business and the growth rate at greater than 10% as a company, that is on the backdrop of what continues to be a pretty macroeconomic variable environment. The other big important thing is we're not spending money to get growth, we're not buying growth necessarily, so we are GAAP profitable now. That is our first quarter of GAAP profitability. You look at trajectories. Two years, we had fourth quarter where we were GAAP profitable. This is the first quarter that we are profitable for our first quarter, and you can just start tracing the trajectory of our stock-based compensation going from greater than 23% down below 13%, or at or below 13%. When you look at that together, foundationally, we have a strong AI platform, solid growth at scale, but which we're not fully satisfied with, and we'll talk about it further, and a really good profitability equation, both on a GAAP and non-GAAP basis. Here's our platform. When I say we're not an RPA company, you can see RPA as one box there. I don't want to discount RPA. If I called RPA tokenless automation, or if I call it deterministic automation, that really resonates in terms of the applicability that it is with the customer. This isn't basic screen scraping. The deterministic parts of our platform are powering significant enterprise-grade automations in highly regulated industries. Look what's now built around it. We are one of the few platforms that can have human in the loop, build deterministic automations, and deploy them on our platform, build and deploy AI-based automations or agentic automations on our platform. We are not vendor locked in, so people can bring their own models, their own agents to our platform. Our goal is to orchestrate the workflows for regulated industries and complex enterprise processes globally that ties robots, agents, and humans together. One other misnomer that you may hear, agentic orchestration is different than business process orchestration. Agentic orchestration is orchestrating agents. Agents are one piece of the equation if you want to drive enterprise automation at scale. These are our advantages, and we'll touch base on them more, but we are a truly unified platform for what I just talked about. What is exciting is we are an incumbent. If you think about the hundreds and thousands of automations that are there on a deterministic side, one of the ways we are able to grow our ARR base is by looking to the left and to the right and being able to get agentic processes or agentic steps that were not previously automatable, and then wrapping that around orchestration. Besides governance, which is something really critical we'll talk about in Q&A, we have deep vertical expertise: Healthcare, financial services. It's not enough to have software and code. You have to understand the processes, and that is an expertise we've been building over the last five to six years. These are our customer metrics. You can see our largest customers are growing. We are super proud. If there is a metric that is there to look at, it is our customers greater than $100,000 and our customers greater than $1 million. You can see that customers who know us, these are Global 2000 customers as the majority of them, they are growing fast with our platform. That should show you that our platform is not just relevant today, it is value added. Last is the partner ecosystem. We'll talk about it, but we value this, not just because it's a page that is important to all software providers, but it really speaks to the openness of our architecture and how we can partner across every different cloud base that is out there. Every different technology company that is there. We're not married to anyone. With that, I'm really excited to answer questions. I thank you for everybody, and I look forward to your questions as well. Awesome. Thank you, Ashim, for providing that perspective on the UiPath business and the toolkit that you provide to these businesses. With that context, can you just set the table by kind of in simplistic terms, talking about the distinction between deterministic automation and then more probabilistic automation? Yeah. Deterministic automation is rules-based automation. Where you need the same answer every single time. Probabilistic or agentic orchestration has given software the agency to make decisions. As it does that, it will make a different decision every time. I'll give two quick examples, and for time I'll try to be brief. Daniel, our founder, actually gave me this challenge when we were talking about it. Go into Claude or OpenAI and ask it to calculate two large numbers. It will rely back on a calculator because that is deterministic. If you say, "Do not use a calculator," will you be able to produce the same answer every time? Its answer actually response is no, because LLMs or the models that are there, they're probabilistic. They interpret data each time differently. When you look at processes like claims, mortgage, accounts, I shouldn't, my Chief Accounting Officer and Deputy CFOs in the audience, we don't want to have two different calculations for revenue depending on the mood of a model. Right? You need deterministic automation. If you have a healthcare claim, you need to be able to look at it. Deterministic automation is super important for enterprise-grade processes because it is low cost, low complexity, and the highest level of dependability. Agentic has its place. There are things that deterministic automation can't do. When you put the two together and then you wrap it with the ability to orchestrate it, you have the chance finally to get to a fully automated enterprise, which we are super excited to be a part of. That's great. Thank you. You guys obviously provide a platform that encompasses both of those capabilities, deterministic and probabilistic, and there's some harmony between the two, right? Historically, you've been kind of the undisputed leader in the RPA market using bots to automate repetitive tasks. As AI continues to make its way into the enterprise, how do you see those RPA workflows evolving alongside this technology? They're very synergistic. When you look at our customer base, no one has come to us to say, "We are going to take a process that is working, that is low cost, that is highly dependable, and we're deciding to move it to a higher cost, lower dependability solution." Right? The only area where we have seen that piece of it ever come in is personal productivity. I think one of the misnomers for UiPath. In 2019, we launched something called A Robot For Everyone. Right? That is a very low part of our base. That means if I want to go and download an email or summarize a document. Right? Those are things our platform can do today, and it was part of a strategy back in 2019. Well, 2018 and 2019 in terms of where we are. When you look at our business today, it is regulated industries, and it is high complex enterprise-grade automation. That is the majority of our revenue. When you look at that from where we stand today, you need deterministic and agentic to really drive that in that tier of relationships. Got it. Before we move on, given we have a lot of generals here, can you just talk about your pricing model? How the digital bots are priced, how your orchestration solution Maestro is priced, and how you present the ROI to your customers and your sales motion? Yeah. One thing is like a great advantage of UiPath is we're not really seat-based pricing is not a major component of our pricing. Let me tell you what it's not to start with. The second piece is we don't have tokenization at this moment, so there's no large-scale token consumption that is driving a short-term revenue boost in any which way. The way that we price is server-based pricing for our key deterministic parts of our platform, like unattended robots. We have what I would call kind of subscription consumption-based pricing, which is you buy a certain amount of units, right? You buy $1 million worth of units, and for every page you deduct X cents, right? As an example, that you process. For every execution that you do on our orchestration, you can retire X units that are there. Those are the two primary methods of our pricing. Got it. Okay. I think it's clear, we'd kind of be beating around the bush if we didn't acknowledge there's some fear of disruption associated with some of this technology. When speaking to your customers and customers of your peers alike, it seems like they're leaning more into your trusted platforms than they are trying to move away from them in this environment and as they execute on their AI strategies. Can you just talk about that dynamic and what your customer conversations look like at this point? Yeah. I mean, look, put yourself in the seat of any kind of company executive. You have this wave of AI that is going with these really loud and important voices. OpenAI, Anthropic, Google, et cetera. I think there's a mind share that is being taken up right now that we have to acknowledge at the corporate levels, trying to explore what's possible in AI. That creates some level of disruption, that creates some level of fear, that creates some level of uncertainty of what is there. The way our customers have responded is, usually what's happened is as they process, where do they really want to deploy these models? What's the real impact of it? There is a place for those companies, and there is a place for UiPath. UiPath's actually a great channel for a lot of the models that come in. In terms of pure play competitors, we don't really see. If you go and say which companies have RPA, unstructured document capabilities, processing capabilities, agentic capabilities, and business process orchestration, not agentic orchestration, there are very few companies that do it. Really the discussion with our companies is really targeted, we're selling more and more into lines of businesses with specific outcomes in mind, and that is really helping us. The second piece is we've verticalized. I think one of the things that people have not seen, and I think we can do a better job showing it, is we used to be purely a horizontal platform. Now we have products and capabilities for revenue cycle management and healthcare. We have processes for procure to pay, software for procure to pay in the office of the CFO, and I think that is also driving further differentiation for us. Okay. Yep, that's great, and very clear. I think it's a good segue into my next question. Maestro is your control plane, your orchestration plane for agentic processes, which makes a ton of sense given how embedded you already are in these workflows. How do you see Maestro competing with competing solutions from other platform players, other AI management solutions, and do you ever or at all see frontier model providers as competition or more so as partners? We see it more as partners. LangChain as an example, we have actually great integration, great partnership with them, just to give an example of it. From our standpoint, the differentiation is one is trying to manage AI, and we are trying to manage processes, regardless if there's an AI piece of software embedded or an AI automation in there, or a deterministic automation, or a human, or two or three of them. That is really our key main difference. The other piece is observability. What I would ask everybody to do is Google Maestro UiPath. When you do it, click on Images. You don't have to read all of the technical documentation. You can if you wish. Look at the image. You actually will see the process. If you click on Video, you'll actually go and be able to see the process moving. Transactions moving through the process. Imagine a world where you have digital workers that you can now see as though it is a factory floor. That is for us, that is kind of how we think about Maestro. No, we do not think about the frontier models as competition. We think about them as integration points that we have to continue to drive with our customers and within our partner ecosystem. Okay, great. Thank you. On pricing, as you embed AI into these RPA workflows, into your broader platform, you win the orchestration layer, it becomes capable of executing more complicated multi-step processes, right? What is the typical pricing uplift that you see when you sell those solutions, and is there a point in the future when those kind of become table stakes? Two ways I can answer it. One is our pricing scheme, I think, is similar to what we talked about. We are experimenting with outcome-based pricing that provides significant uplift, but we take some upfront risk as a part of that. There are several customers that we're exploring that with. If you put that aside, if you look at first quarter, 16 of 20 deals had AI components as a significant component as a part of the platform. They were six times larger than all of our other deals. When you look at our million-dollar-plus customers, the majority of them have large attach rates for AI. From our standpoint, the more value we generate, the more software gets pulled through, the less discount that comes in. Those all go to higher and higher ticket sizes. Where you see it show up is our million-dollar-plus customer counts and our $100,000+ customer counts, which are up 11 and 16% respectively. Okay. Kind of to shift gears, you've also talked about how these Coded Agents can lower the time to value, the implementation time for these workflows, ultimately allowing you to go after more of the long tail of these automation opportunities in the enterprise. Can you talk us through that dynamic and how significant that reduction in time to value can be? Yeah. You're talking from months to weeks or from weeks to days. It is really significant. From our standpoint, the best metaphor our CPTO Raghavendra Malpani gave is our goal is that you can 3D print processes, 3D print workflows. Why I think that matters is if you thought about today, the experience of building an app on Lovable, on Replit, on some of these platforms, which are incredible, imagine being able to print a process in the same way. As you do that, the question I get is, "Hey, why don't you do that on those other platforms?" Well, think about it this way. If you've made an app on one of these platforms, you know the difference between an app and a process, what it can do. From our standpoint, from months to weeks, from weeks to days, that's the goal. We've already launched our first set of Coded Agents. This isn't hyperbole. The results are actually super promising in terms of what we're seeing with our early customers. Okay, great. I think six months ago, you launched a forward deployed engineering team. Can you talk about how that ties into that strategy? The piece we didn't talk about for time to value is I think there's two time to value equations. One is how do you make development on your horizontal platform faster? The second is when you go across an industry like healthcare, most every healthcare provider that we see is looking for certain solutions that they have been automating. Prior authorization, claims denials, revenue cycle management. When you go across the financial services industries, mortgage processing, HELOC filings, et cetera. Right. Our verticalization, our FDEs have twofold areas. One is to be working with our customers so we can enhance our product to get greater verticalization into our product as we launch our vertical solutions to be there to perfect them, to add features and functionality that's there. The second is we use our FDEs as we deploy the first wave of agents. Many of our POCs were bolstered by FDEs for two purposes, ensuring success, and the second piece is getting the feedback back to our product. That's kind of in the early wave of where we are. As we go forward, we really think FDEs are going to become more and more a tip-of-the-spear type area for our key customers because this place is going to be very fast-moving. The demands are going to be higher, the complexity is going to be higher, and they really serve as that connective tissue between what was a services organization and the product organization. Got it. Okay. Does that have any margin implications? I know it's early on. No. No. Investing in FDEs alone, of course, as we add headcount. However, the way our approach has been, we are investing in four deployed engineers, key R&D areas like Coded Agents and vertical solutions, and sales capacity. These are our three key areas that we're investing in. We are divesting in every process that we can agentify ourselves. When you look at our margin, I feel like this is the area that's there. We're not in cost-cutting mode. We are in really strategic capital allocation mode. When you look at whether it's geographic territory, whether you look at management layers, whether you look at its centralized organizations, we are constantly driving efficiency into those areas, and we are increasing our capacity and our capability into the areas I just said. Okay. Got it. I'm going to jump to one of my last questions, actually, because it's on the same topic. You've made some really solid progress on your margins on the bottom line over the last few years. Given that progress, you raised your long-term operating margin target to 30%. Can you walk us through what levers you have in mind as you think about making it to those targets? Or if it's more of a North Star over time. No. Look, I think every quarter, every year, I feel for the last two years, we've significantly improved our margin. I personally think free cash flow margin and GAAP profitability are the two most important things. The two most important things that I look at. If you look at our free cash flow, last year, we were at $370 million. The year before that, it was significantly lower. This year, we've given a modeling point around $425 million in terms of our free cash flow. Right? First thing is it is a North Star, but it's a North Star that is reachable. It's not something that we're just directionally going after. The levers we have are three. One is, frankly, cut nonsense out. Be highly efficient, be highly focused, and prioritize its basic capital allocation. Prioritize both your human and your expenditures where you have the highest return. That's the first principle. The second area is as we do that, as we agentify processes internally while investing, if we can keep our cost base relatively flattish while growing the top line, you naturally get there very quickly. We are not afraid to invest to be able to grow. We actually feel like right now, we're in act three of where we are as a company, act two, act three. We are going to invest to make sure that we can take a large part of the market that we have in front of us. I would say, long-term goal, 30%, we're I think 23, 24% already. Six points of operating margin between leverage and discipline, completely within our grasp. The only question is, if we see market opportunity, we'll pace that accordingly. Mm-hmm. Okay. Is there a portion of that where you're leveraging AI to drive operational efficiencies as well? Huge. To use a term I heard recently, eating your own cooking. Yeah. Drinking your own champagne. That's right. Yeah. Eating your own cooking, whatever it could be. Eating your own dog food put away. Hitesh Ramani, who is our Deputy CFO, he is actually in the audience. He is leading that effort across a lot of our back office functions. We have 70+ agents, I think, in production already. We still feel like we are just at the starting point. Right? We are able to significantly drive transactional efficiency. We are able to transform functions like marketing. We are able to transform and get productivity out of engineering. In the past, if you looked at our product roadmap, I would say our product roadmap is probably three times the surface area, but it is with the same number of people. That is coming from Coded Agents and using the tools even in the engineering shop in terms of the productivity they are getting. We're doing that, within our own platform, we continue to drive automations, we continue to drive agents, the orchestration is a differentiator in terms of doing it now larger at scale, but still being able to have the right controls in place, being a public company. Got it. Yep, that's very interesting. Thank you for the color on that. Something that you and Daniel have talked more about recently that I think is very interesting is the Test Cloud opportunity as these agentic workflows proliferate. Can you just talk through exactly what that product is for the audience and how large that? Yeah. Test Cloud it's a dark horse for us. I think, I purposefully also let it be a dark horse for a bit, but you're going to see us more and more emphasize it. If you just take what application testing is, everybody I think should be pretty familiar with it, right? You have upgrades into your software, and then you have to have scripts to make sure before you put that software into production, the key transactions are flowing. About four years ago, it was a very logical thing is that if you're automating the actual process, why are we not automating the scripts that have to be written to ensure that the applications are in good standing as they get updated and moving? If you take every S/4HANA implementation that's happening, you have a massive amount of transactional testing that has to be done. A lot of that is manual or a lot of the software in the space is archaic. We actually have the most modern platform now. It has been recognized as a leader by Gartner in terms of the category in which it's in. What's exciting is it opens up a different buyer base within our company. We're now selling into true CIO organizations in terms of QA, QC, et cetera. We haven't disclosed it at this time, but the ARR growth on that has been super exciting. It's kind of operating like a startup within a startup, and is a really second throttle of growth for us as a company. Got it. Okay. Yeah, very interesting. We'll leave it at dark horse for now. We have a few minutes left. Did anyone in the audience want to jump in with a question? Otherwise, I can ask a couple more to finish this up. There'll be plenty of time in the breakout for questions as well. Okay. Ashim, you've continued to maintain best-in-class gross retention rates, high 90% range. Your net retention over the last couple of years has dipped a little bit until the most recent quarter, right? When we saw it step up two points to 109%. As we think about everything we've just discussed, can you talk about what's driving that inflection? How you all are driving customer expansions, and just walk through the mechanics of those expansions a little bit. I think, I would say 50%-60% of it is just better execution, which Daniel has really driven over the last two years with the getting the field flatter, getting management closer to the field, driving more disciplined motions. We had lost touch, I think, two years ago with our customer base, and we openly talked about that. I think what you're starting to see now is the rebuilding of both trust and relationships and that intimacy with the customer base. That is, I would say, a foundational ingredient of driving more and more software and more and more processes through our platform. The second piece is we have more products to cross-sell. When you look at Maestro, when you look at IXP, which is advanced unstructured document processing. When you look at WorkFusion, which we acquired, Peak, that we acquired, you have more and more parts of our platform that you can sell across our install base. Our install base is super powerful, and as we get more products, as we're closer to the customer, that gives us a real chance to drive that leverage. What we're cross-selling in is both deterministic as well as AI. If you look at leading segments, healthcare. Healthcare, it is all AI all the time, and it pulls through deterministic automation that is needed. If you look at the public sector within Europe, RPA is the hottest topic. Depending on the market, we're able to continue to drive upsell across our platform. What's exciting is I think U.S. healthcare is actually a pretty bleeding edge type of industry when it comes to technology, and it's led. Now I have a lot of confidence that says in the European market, that same dynamic can start coming. Okay, great. Okay, we got one more minute, so I'll sneak one more in. You talked about the kind of credit base, retire the credits over time as you execute on these workflows. Is there any way you expect that to change over time as you continue to iterate the platform? The answer is, I don't know. Okay. In all candor, I think we have a monthly pricing council. I think the world is evolving very fast. What we don't want to do is knee-jerk react to change a pricing model, to jump on a bandwagon, so to speak. Our best and most reliable source is our customers themselves. What customers are really nervous about today is just unguarded token consumption, token burn. You've seen public companies come out about it. You've seen different posts and different narratives being there. Our vantage point is we want to give predictability of cost to our customers. I think if you have unpredictability of cost, it hampers long-term adoption. It may feel short-term, but it really hampers long-term adoption. From our standpoint, predictability is going to be a key pillar, and then we'll see how the industry evolves. Okay. That's great. Thank you so much, Ashim, for being here. Thank you all for attending the UiPath presentation, and I believe our breakout is in Adler upstairs. We'll see you there in 10 minutes. Thank you.