To The Moon

$UiPath(PATH)$ is scheduled to release its fiscal Q2 2026 earnings report on Thursday, September 4, 2025, after the market closes. Here is an analysis of what investors and traders should watch for.

Earnings Per Share (EPS): The Zacks Consensus Estimate for Q2 EPS is a loss of $-0.05. A significant deviation from this could heavily influence the stock price. The company's ability to minimize losses or, even better, achieve a surprise profit, would be a major positive catalyst.

Revenue: Analysts forecast Q2 revenue of approximately $347.8 million, indicating a roughly 10% year-over-year increase. Any outperformance on this number would be viewed favorably.

Summary of UiPath (PATH) Fiscal Q1 2026 Earnings

UiPath reported its fiscal Q1 2026 earnings on May 29, 2025, delivering results that exceeded analyst expectations on both the top and bottom lines. The company's performance was driven by a continued focus on operational discipline and the increasing traction of its new "agentic automation" platform, which integrates AI agents with its core robotic process automation (RPA) capabilities.

Key Financial and Business Highlights:

Revenue and ARR: Revenue increased by 6% year-over-year to $357 million, surpassing the consensus forecast. Annual Recurring Revenue (ARR) grew by a stronger 12% to reach $1.693 billion.

Profitability and Efficiency: The company made significant strides toward profitability, reporting a non-GAAP operating income of $70 million, representing a 20% operating margin. This was a notable improvement from the prior year and reflected a focus on cost management. GAAP operating loss also narrowed considerably.

Product Innovation: A key theme was the successful launch of its agentic automation platform. UiPath highlighted strong early demand for its new products like UiPath Maestro and the integration of AI agents, which are designed to orchestrate complex business processes.

Strategic Partnerships: The company underscored new and expanded partnerships with major tech players like Microsoft (integrating with Copilot Studio) and Google Cloud, which are expected to enhance its platform's capabilities and market reach.

Customer Metrics: The dollar-based net retention rate stood at a healthy 108%, indicating that existing customers are expanding their use of UiPath's platform.

The Lesson Learned from the Guidance

Despite the strong Q1 results, the guidance provided for the rest of the year contained a crucial lesson for investors: growth in the enterprise software market is becoming more challenging, and a shift in strategy is required to drive long-term value.

Focus on Profitability over Pure Growth: The guidance showed that UiPath's leadership is prioritizing a path to sustainable, non-GAAP profitability rather than chasing aggressive top-line growth at all costs. While the company raised its full-year revenue and ARR forecasts, it also provided a clear target for non-GAAP operating income, signaling its commitment to financial discipline.

The AI Pivot is the Long-Term Play: The company's commentary and guidance made it clear that while its new agentic automation platform is gaining traction, it is still in its early stages. The real financial impact and significant revenue contributions from this innovation are not expected until fiscal 2027. This means that near-term results will be a balancing act between investing in this new, high-growth area and maintaining operational efficiency in its core RPA business.

Enterprise Spending Remains Variable: Management's comments about the "variable macroeconomic environment" indicated that the company remains cautious about the pace of enterprise spending. This suggests that while there is strong interest in AI and automation, budget constraints and longer sales cycles remain a factor.

In summary, the Q1 earnings taught investors that UiPath is successfully executing its pivot toward being a broader automation and AI platform, and its commitment to profitability is firm. However, the full financial benefits of this strategic shift will take time to materialize, requiring investors to have patience and a long-term perspective. The market's reaction, with the stock initially surging and then stabilizing, reflected this mix of short-term success and long-term strategic evolution.

Analysis of Q2 2026 Earnings Expectations

The sentiment around UiPath's upcoming earnings is cautious, with analysts and investors looking for signs of sustained growth and a path to profitability amidst a challenging macro environment. The company's recent performance has been mixed, and the stock has been volatile.

Growth Deceleration: While UiPath is a leader in robotic process automation (RPA), it faces headwinds from a competitive landscape and economic slowdowns affecting enterprise spending. The company's growth rate has shown some signs of deceleration.

Focus on AI: UiPath is increasingly integrating generative AI and "agentic automation" into its platform. Investors will be keen to see if this strategy is translating into tangible revenue and customer adoption.

Profitability: Despite positive Q1 results and a raised outlook, the company is still forecast to be unprofitable for the fiscal year. The market will be watching for progress on the path to consistent profitability.

Key Metrics to Watch

Annual Recurring Revenue (ARR): This is arguably the most critical metric for a software-as-a-service (SaaS) company like UiPath. A strong ARR growth figure indicates that the company is successfully signing new customers and expanding its business with existing ones. The previous quarter's ARR growth of 12% will be the benchmark.

Dollar-Based Net Retention Rate (DBNR): This metric measures how much revenue the company is generating from its existing customers. A rate over 100% signifies that customers are spending more over time. A strong DBNR is a key indicator of customer satisfaction and product stickiness.

Forward Guidance: Given the recent volatility and the company's previous guidance cut, the outlook for Q3 and the full fiscal year will be paramount. Any changes to revenue, ARR, or EPS guidance will be the primary driver of post-earnings stock movement.

UiPath (PATH) Price Target

Based on 16 analysts from Tiger Brokers offering 12 month price targets for UiPath in the last 3 months. The average price target is $13.76 with a high forecast of $16.00 and a low forecast of $10.00. The average price target represents a 26.47% change from the last price of $10.90.

Short-Term Trading Opportunities

The upcoming earnings report presents a classic high-risk, high-reward scenario for short-term traders.

Potential for a Downward Move: The stock has a significant short interest, and a Zacks Rank of "Hold" or "Sell" from some analysts, along with no recent positive earnings revisions. If UiPath misses on a key metric like ARR or provides disappointing guidance, the stock could experience a sharp decline. The recent insider selling by the CEO and CFO may also be a point of concern for investors.

Potential for a Rally: UiPath has a history of beating analyst expectations on earnings. If it can deliver strong results, especially with a solid ARR and a better-than-expected outlook, it could trigger a short squeeze and a significant upward movement. The company's strategic partnerships with $Microsoft(MSFT)$ and $Amazon.com(AMZN)$ , and its focus on AI, provide potential long-term catalysts that could support a post-earnings rally.

Technical Analysis - Exponential Moving Average (EMA)

PATH is having negative momentum for quite some time and we are seeing a consolidation below the 12-EMA and 50-EMA level, which could signal a bearish downside move.

PATH ARR growth and the strategic partnership with hyperscalers would be important to watch and if we could see an earnings beat and a strong positive outlook, then we might see a significant upside move post earnings.

Summary

UiPath (PATH) is set to report its fiscal Q2 2026 earnings on September 4, 2025. Investors should closely monitor key metrics, particularly Annual Recurring Revenue (ARR), a core indicator of the company's growth in its software-as-a-service business. Analysts project a Q2 revenue of approximately $347.8 million and a consensus EPS loss of $-0.05.

The upcoming report presents a high-risk, high-reward trading opportunity. A positive surprise in ARR, or an upward revision to full-year guidance, could trigger a significant short-term rally, especially given the company's recent focus on integrating AI.

Conversely, a miss on key metrics or a cautious outlook on enterprise spending could lead to a sharp stock decline. The company's commentary on its new "agentic automation" platform and its progress toward profitability will be a key focus for the market.

Appreciate if you could share your thoughts in the comment section whether you think PATH could provide an earnings surprise of positive EPS instead of a loss.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire @MillionaireTiger appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.