UiPath Inc. (NYSE:PATH) Q4 2023 Earnings Call Transcript

Ashim Gupta: Our cohorts have actually behaved pretty relatively similar, Kirk. Remember our — the general customer journey is a land size of around 25 — Chirag, sorry, is around $25,000 and from there we see customers expand their use cases similarly and kind of move up that curve very well. Our — the older the customers, that’s where you see the seven-digit and $1 million-plus deals kind of move as they have more confidence internally about their ability to scale automation and the culture moves in that direction. Our platform also continues to help that. I think the addition — the continued maturation of process mining, task mining, broadening with the Re:infer acquisition, our platform adds more value and so we do see more customers interested in more parts of our platform, that is helping at every stage.

Rob Enslin: Yeah. And I would just add to that, we talk about growth products, but if you look at Document Understanding and the Re:infer Product Communications Mining, we are seeing really good results with customers as they expand into those products. Test Suite has had a big impact. And I would also just say that, in an environment we are operating in right now, many of the larger customers are into, what I call, a stack consolidation. And our platform fits nicely into that process, as customers continue to figure — find ways to innovate from the existing environment. So this is all good for our platform.

Chirag Ved: Got it. And maybe if I could just sneak one more in here. Ashim, can you talk to the factors that are driving operating leverage expansion within your business and the stronger than expected margin guide

Ashim Gupta: Yeah.

Chirag Ved: that give you confident in looking ahead?

Ashim Gupta: I think the team has done an incredible job execution. Like I think every UiPath employee understands that operating leverage from — goes from delivering value to our customers and starts with the topline, while managing expenses and finding more ways to be efficient. What I think we are really proud about in 2023 — in fiscal 2023 is our ability to execute and streamline the organization in tough environments. I think we have done that. We continue to show that as we have — as Daniel talked about in terms of streamlining the organization. Across the Board, I think, the magic formula is you stay consistent on growth and you manage your cost. Operating leverage actually is kind of — is just a natural result from that.

When you look at fourth quarter, it speaks to that in the numbers and that’s why you see our operating margin really strong. I do want to make a note, you also see it supported by strong free cash flow generation and I think that we look at both of those items. And we have also noted in our guidance this year that we look at every quarter to be positive from a cash flow standpoint and that’s just from working both of those muscles simultaneously.

Operator: Thank you. And our next question comes from Matthew Hedberg with RBC. Please state your question.

Matthew Hedberg: Great. Thanks for taking my questions and congrats on the results. Yeah. I wanted to look outside of U.S., could you give us a sense for the opportunities in sort of like broader EMEA and APJ, just in terms of both the land and the expand opportunity?

Rob Enslin: Yeah. We are very pleased. Actually, Daniel and myself, we are in the Middle East, where we opened up our by office with his excellency, the Head of Digital Transformation in UAE. And we are very pleased with the team had their sales kick off. We are very pleased with where we are going, the talent we have in the team. We are also starting to see, as I mentioned earlier on, significant discussions around platform with larger companies wanting to actually go all in with the UiPath from an RPA and expand into the other areas of our solution. We have also seen significant interest in attended automation, strangely enough in markets like Denmark and Sweden, we have seen where companies want to drive employee empowerment, because they are actually having constraints in terms of resources and finding the resources we are finding significant benefits in that space.