UiPath Inc (NYSE: PATH) free cashflow turned negative in Q2 2022

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UiPath Inc (NYSE: PATH) stock fell 10.61% (As on Sep 8, 11:16:35 AM UTC-4, Source: Google Finance) though the company has reported 60% year over year rise in the ARR to $726.5 million, driven by record net new ARR of $73.9 million, growing 33% driven by increased adoption of our core product portfolio, Automation Cloud, as well as new product offerings. PATH have 1,247 customers that accounted for at least $100,000 in ARR, up 59% from 785 in the second quarter of last year. This includes 118 customers at $1 million-plus in ARR, up 100% from 59. The remaining performance obligations, or RPO, were $519.9 million in the second quarter, which represents an increase of 80% year over year. Gross profit margin in the second quarter was 86%, compared to 90% in the prior-year period. Software gross margin of 94% was offset by services gross margin of negative 65%.

The company had reported the adjusted revenue growth of 40 percent to $195.5 million in the second quarter of FY 22, beating the analysts’ estimates for revenue of $184.3 million, according to Refinitiv Ibes Estimate. Operating expenses for the second quarter totaled $161 million. Non-GAAP operating income has improved to $6.7 million compared to a loss of $7.6 million in the prior-year period. Adjusted free cash flow in the quarter was negative $3.5 million compared to a positive $28.1 million in the prior-year period. The company ended the second quarter with $1.9 billion in cash, cash equivalents and marketable securities and no debt.

For the third-quarter fiscal 2022, the company expects ARR to be in the range of $796 million to $798 million. The company expects revenues to be in the range of $207 million to $209 million, while as per Refinitiv Ibes Data (analyst estimates) Q3 Revenue is projected to be $206.2 Million. The non-GAAP operating loss is expected to be in the range of negative $30 million to negative $15 million.

For fiscal 2022, the company expects ARR to be in the range of $876 million to $881 million, which represents an increase from prior guidance of $850 million to $855 million provided on the fiscal first-quarter 2022 earnings.

On the other hand, the company has joined TSANet (Technical Support Alliance Network), the industry’s largest vendor neutral support alliance, to fast track interactions with other vendors in resolving multi-party integration issues.

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