Cuộc họp công bố kết quả kinh doanh Quý 2 năm tài chính 2027 của UiPath (PATH): Tăng trưởng ARR, Ứng dụng AI và Dự báo triển vọng

Thông tin chính

• UiPath đã báo cáo doanh thu quý 2 năm tài chính 2027 đạt 410 triệu USD, tăng 13% so với cùng kỳ năm ngoái. Nếu không tính đến khoản ảnh hưởng bất lợi từ tỷ giá khoảng 8 triệu USD, mức tăng trưởng đạt 16%.
• Doanh thu định kỳ hàng năm (ARR) đạt 1,938 tỷ USD, tăng 12%. ARR ròng mới tăng lên 37 triệu USD từ mức 31 triệu USD của cùng kỳ năm ngoái.
• Lợi nhuận hoạt động phi GAAP tăng lên 89 triệu USD, tương ứng với biên lợi nhuận 22% và mở rộng hơn 400 điểm cơ bản so với cùng kỳ năm ngoái. Lợi nhuận hoạt động GAAP đạt 32 triệu USD, đánh dấu quý thứ tư liên tiếp có lãi.
• Trí tuệ nhân tạo (AI) góp mặt trong 18 trên 20 thương vụ lớn nhất của UiPath. Ban lãnh đạo cho biết các thương vụ bao gồm AI và nền tảng mở rộng có xu hướng lớn hơn và hỗ trợ mở rộng sang các quy trình phức tạp hơn.
• Tỷ lệ duy trì doanh thu ròng dựa trên đồng USD đã cải thiện lên 109%, hoặc 108% sau khi điều chỉnh theo tỷ giá hối đoái. Số lượng khách hàng tạo ra ít nhất 1 triệu USD ARR tăng 21% lên 387.
• Ban lãnh đạo dự báo doanh thu năm tài chính 2027 sẽ đạt từ 1,789 tỷ USD đến 1,794 tỷ USD, ARR đạt từ 2,065 tỷ USD đến 2,070 tỷ USD và lợi nhuận hoạt động phi GAAP đạt khoảng 445 triệu USD.

Kết quả tài chính cốt lõi

Chi phí thù lao bằng cổ phiếu đã giảm 42% xuống còn 45 triệu USD và chiếm 11% doanh thu, giảm hơn 1.000 điểm cơ bản so với cùng kỳ năm ngoái. UiPath cũng đã mua lại 2,4 triệu cổ phiếu trong quý với giá trung bình là 9,63 USD.

Kết quả kinh doanh và hoạt động

UiPath kết thúc quý với khoảng 10.350 khách hàng. Tỷ lệ rời bỏ khách hàng vẫn tập trung ở nhóm khách hàng nhỏ nhất, trong khi số lượng khách hàng có ARR trên 30.000 USD tăng 6%.

Các nhóm khách hàng lớn hơn tiếp tục mở rộng. Số lượng khách hàng có ARR ít nhất 100.000 USD tăng 10% lên 2.666, trong khi những khách hàng có ít nhất 1 triệu USD tăng 21% lên 387. Tỷ lệ duy trì doanh thu gộp dựa trên đồng USD giữ ở mức 97%.

Ban lãnh đạo định vị UiPath là một nền tảng kết hợp giữa tự động hóa định hình với khả năng lập luận dựa trên AI. Công ty cho biết cấu trúc này cho phép khách hàng sử dụng AI ở những nơi cần đến trí thông minh, đồng thời dựa vào tự động hóa không dùng token cho các bước yêu cầu độ chính xác, độ tin cậy và chi phí thấp hơn. UiPath cũng nhấn mạnh rằng nền tảng của họ không phụ thuộc vào mô hình.

Nhu cầu của khách hàng ngày càng tập trung vào việc hợp nhất các khối lượng công việc tự động hóa, điều phối, kiểm thử và quản trị. Các ví dụ được thảo luận bao gồm giải quyết yêu cầu bồi thường bảo hiểm, kiểm toán và đối soát, chống gian lận và tuân thủ, khoản phải trả, từ chối bồi thường y tế và các quy trình chống tội phạm tài chính.

Kiểm thử tiếp tục là một lĩnh vực mở rộng khác. UiPath đã mở rộng quan hệ đối tác với Cognizant để tích hợp UiPath Test Cloud vào các gói dịch vụ Testing as a Service và dịch vụ quản trị.

Ban lãnh đạo cho biết những công việc ban đầu kết hợp giữa kỹ sư triển khai trực tiếp và các tác tử lập trình đã giảm gần 60% công sức triển khai. Tuy nhiên, công ty mô tả công nghệ này vẫn đang trong giai đoạn thử nghiệm chứng minh. UiPath cũng đã ra mắt bản xem trước công khai của một công cụ tự động hóa quy trình làm việc dành cho nhà phát triển, hỗ trợ các công cụ bao gồm Claude Code, Codex, Cursor và GitHub Copilot.

UiPath thông báo sự thay đổi vị trí lãnh đạo tài chính. Ashim Gupta sẽ tập trung hoàn toàn vào vai trò Giám đốc Vận hành, trong khi Hitesh Ramani kế nhiệm ông ở vị trí Giám đốc Tài chính.

Dự báo của ban lãnh đạo

Dự báo doanh thu quý 3 năm tài chính bao gồm khoản ảnh hưởng bất lợi từ tỷ giá 10 triệu USD so với cùng kỳ năm ngoái, trong khi dự báo ARR bao gồm khoản ảnh hưởng bất lợi tăng thêm từ tỷ giá 1 triệu USD và khoản ảnh hưởng bất lợi 4 triệu USD so với cùng kỳ năm ngoái.

Dự báo doanh thu cả năm đã bao gồm khoản ảnh hưởng bất lợi tăng thêm từ tỷ giá 1 triệu USD và khoản ảnh hưởng bất lợi 20 triệu USD so với cùng kỳ năm ngoái. Dự báo ARR cả năm bao gồm khoản ảnh hưởng bất lợi tăng thêm từ tỷ giá 1 triệu USD và khoản tác động thuận lợi từ tỷ giá 5 triệu USD so với cùng kỳ năm ngoái, phản ánh các lợi ích trong nửa đầu năm dự kiến sẽ bị bù trừ một phần trong nửa cuối năm.

Ban lãnh đạo cho biết dự báo của họ vẫn duy trì sự thận trọng và phản ánh những gì công ty hiện ghi nhận trong một môi trường kinh tế vĩ mô nhiều biến động.

Rủi ro và các yếu tố cần theo dõi

• Biến động tỷ giá hối đoái đang ảnh hưởng đến doanh thu và ARR được báo cáo, đặc biệt là đối với đồng euro, yên Nhật, rupee Ấn Độ và leu Romania.
• Tỷ lệ rời bỏ khách hàng vẫn tập trung ở các tài khoản khách hàng nhỏ nhất của UiPath.
• Kết quả năng suất từ các tác tử lập trình mới chỉ là sơ bộ, và ban lãnh đạo cho biết công nghệ này vẫn đang trong giai đoạn thử nghiệm chứng minh.
• Mô hình định giá cho AI dựa trên tác tử vẫn đang tiếp tục phát triển. UiPath đã giới thiệu mô hình định giá dựa trên giao dịch và cho biết họ có thể tiến xa hơn tới mô hình định giá dựa trên kết quả đầu ra, bao gồm cả chi phí token.
• Ban lãnh đạo lưu ý rằng AI mang tính xác suất và có thể tốn kém khi mở rộng quy mô, điều này làm tăng thêm tầm quan trọng của công tác quản trị và việc thực thi định hình đối với một số quy trình doanh nghiệp.
• Tăng trưởng doanh thu có thể lệch khỏi tăng trưởng ARR do chuẩn mực kế toán ASC 606 và sự thay đổi trong cơ cấu doanh số của bản quyền, dịch vụ đám mây và gói nền tảng kết hợp.

Điểm nhấn phần Hỏi & Đáp với chuyên gia phân tích

Tạo doanh thu từ AI và quy mô thương vụ: Ban lãnh đạo cho biết sự kết hợp giữa AI dựa trên tác tử và tự động hóa định hình đang nhận được phản hồi rất tích cực từ khách hàng. Các thương vụ liên quan đến AI và nền tảng UiPath mở rộng nhìn chung có quy mô lớn hơn, mặc dù công ty không cung cấp con số đóng góp ARR riêng lẻ từ AI.

Quỹ đạo duy trì doanh thu ròng: Tỷ lệ duy trì doanh thu ròng của UiPath đạt 109%, tăng từ mức 106% vào cuối năm tài chính trước. Ban lãnh đạo mô tả quỹ đạo này là tích cực và cho rằng sự cải thiện hơn nữa gắn liền với việc khách hàng áp dụng rộng rãi hơn các sản phẩm, thực thi bán hàng tốt hơn và mức độ sử dụng của khách hàng tăng lên.

Định giá theo tác tử: UiPath đang thử nghiệm các cấu trúc định giá khác nhau. Mô hình dựa trên giao dịch vừa được giới thiệu gần đây bao gồm các lệnh gọi cần thiết để hoàn thành một quy trình, trong khi ban lãnh đạo kỳ vọng việc định giá có thể sẽ ngày càng dựa trên kết quả đầu ra và bao gồm chi phí token bắt buộc.

Thực thi bán hàng: Ban lãnh đạo cho biết sự cải thiện đến từ đội ngũ lãnh đạo đơn vị thị trường có kinh nghiệm, giảm thiểu thủ tục hành chính nội bộ, sự phối hợp chặt chẽ hơn giữa các bộ phận sản phẩm, bán hàng và tiếp thị, cùng các chính sách đãi ngộ có chọn lọc đối với sản phẩm mới.

Vai trò của AI trong quy trình làm việc của doanh nghiệp: Ông Daniel Dines nhận định rằng các doanh nghiệp sẽ tiếp tục cần một “bản đồ công việc” được quản trị riêng. Theo quan điểm của ban lãnh đạo, tự động hóa và điều phối nên xử lý các bước chính xác, có tính lặp lại, trong khi AI cung cấp trí thông minh bên trong khuôn khổ do doanh nghiệp kiểm soát đó.

Trường hợp sử dụng theo ngành dọc: Bên cạnh kiểm thử phần mềm, UiPath nhấn mạnh hoạt động gia tăng trong quản lý chu kỳ doanh thu y tế, tuân thủ chống tội phạm tài chính, quy trình làm việc của Văn phòng Giám đốc Tài chính và khởi tạo khoản vay. Ban lãnh đạo coi việc bán hàng dựa trên giải pháp là điểm khởi đầu để thúc đẩy việc áp dụng nền tảng rộng rãi hơn.

Toàn văn biên bản cuộc họp công bố kết quả kinh doanh

Toàn văn cuộc gọi công bố kết quả kinh doanh

Phần trình bày của ban lãnh đạo

Operator

Good day, everyone. My name is Megan, and I will be your conference operator today. At this time, I would like to welcome you to the UiPath Second Quarter 2027 Earnings Conference Call. [Operator Instructions] At this time, I would like to turn the call over to Allise Furlani, Vice President of Investor Relations.

Allise Furlani

Good afternoon, and thank you for joining us today to review UiPath's second quarter fiscal 2027 financial results, which we announced in our earnings press release issued after the close of the market today. On the call with me are Daniel Dines, Founder and Chief Executive Officer; Ashim Gupta, Chief Operating Officer; and Hitesh Ramani, Chief Financial Officer, to deliver our prepared comments and answer questions. Our earnings press release and financial supplemental materials are posted on the UiPath Investor Relations website. These materials include GAAP to non-GAAP reconciliations. We will be discussing non-GAAP measures on today's call.

This afternoon's call includes forward-looking statements regarding our financial guidance for the third quarter and full fiscal year 2027, and our ability to drive and accelerate future growth and operational efficiency and grow our platform, product offerings and market opportunities. Actual results may differ materially from these expressed in the forward-looking statements due to many factors, and therefore, investors should not place undue reliance on these statements. For a discussion of material risks and uncertainties that could affect our actual results, please refer to our annual report on Form 10-K for the year ended January 31, 2026, and our subsequent reports filed with the SEC. Forward-looking statements made on this call reflect reviews as of today, and we undertake no obligation to update them.

I would like to highlight that this webcast is being accompanied by slides. We will post the slides and I'm happy -- our prepared remarks to our Investor Relations website immediately following the conclusion of this call. In addition, please note all comparisons are year-over-year unless otherwise indicated.

Now I'd like to turn the call over to Daniel.

Daniel Dines

Thank you, Allise, and thank you for joining us. We delivered another strong quarter with continued execution. ARR grew 12%. Non-GAAP operating margin expanded to 22%, and we delivered our fourth consecutive quarter of GAAP profitability. Over the past 2 years, we've been transforming UiPath for the next phase of our growth. We evolved our platform, our own business orchestration, agentic and software testing; significantly improved our go-to-market execution and operating discipline; and reaccelerated the pace of innovation within the company.

We're a stronger company today and increasingly, customers are looking to UiPath not just to automate individual tasks but to orchestrate complex, long running and exception-heavy business processes and being a critical partner in their AI transformation. We've talked a lot about how AI is changing software. The bigger question now is how enterprises turn AI into real business value. Customers aren't choosing between AI and deterministic automation. They are choosing the best way to achieve an outcome. AI is exceptional at reasoning, but it's probabilistic and can be expensive at scale.

Many enterprise processes don't need reasoning at every step. They need exactness, the same result every time securely, reliably and at the lowest possible cost. That's why we give customers the choice of deterministic or tokenless automation alongside AI. Our approach is simple. Use AI where intelligence creates value and deterministic automation where exactness matters that gives customers the benefits of AI without paying for AI reasoning at every step and ultimately better economics and better ROI at scale. And that's where UiPath is differentiated. We deliver business outcomes by orchestrating end-to-end processes across agents, robots, API systems and people, using the right technology for each step to deliver the best combination of intelligence, reliability and cost.

We are also model agnostic, giving customers the freedom to use the AI models and technologies that are best for their work rather than locking them into a single ecosystem. As AI expands what enterprises can automate, we believe that combination of choice, orchestration and governance becomes even more valuable.

So the opportunity now is to scale what we've built, expanding adoption across our customer base, extending our reach into the business and continuing to translate our innovation into durable growth. And as we scale, strong execution and connectivity across the company become even more important. That's why Ashim will now focus exclusively on his role as Chief Operating Officer.

Ashim has been one of my closest partners and one of the leaders most responsible for the financial and operational discipline we've built over the past several years. As COO, he will focus exclusively on the day-to-day operations of the company, driving greater discipline and consistency across our go-to-market organization, strengthening execution across functions and leading key strategic priorities across the business.

With Ashim focusing fully on the operations of the company, we are making a planned leadership transition in finance with Hitesh Ramani succeeding him as Chief Financial Officer. This is a logical next step and reflects the strength and depth of the leadership team we've built.

Hitesh joined us in 2021 as Chief Accounting Officer and has served as Deputy CFO for the past 2 years, working closely alongside Ashim across the finance organization. He has been a critical partner through every major milestone, including our IPO and has helped build the financial rigor and discipline we have today. Given Hitesh's existing responsibilities and deep knowledge of the business, we expect a very smooth transition and significant continuity across the finance organization. And with Ashim remaining as COO, he and Hitesh will continue to work closely together in their respective roles.

Together, these changes give us greater focus across operations and finance with 2 proven leaders in critical roles as we scale. I'm excited to continue working closely with Ashim and Hitesh, and I am confident in the leadership team we have in place and our ability to execute against the opportunity ahead.

Now turning to our quarterly results. We delivered a strong second quarter, once again beating guidance across the top and bottom line. ARR reached $1.938 billion, up 12% year-over-year, driven by $37 million of net new ARR and revenue of $410 million, up 13% year-over-year. We grew second quarter non-GAAP operating income to $89 million, a 22% margin and up over 400 basis points year-over-year, driven by improved operational efficiency and disciplined execution across the business.

Behind these results, we are seeing the strategy I just described play out with customers. 18 of our top 20 deals this quarter included AI, demonstrating how increasingly central AI has become to our largest customer engagements. Customers are expanding from individual automation use cases into broader end-to-end processes, adopting more of the UiPath platform and in a number of cases, consolidating automation and AI workloads onto UiPath.

And we are seeing this result in larger expansions where AI is attached to the deal. A global insurance provider is a strong example. In a 7-figure expansion, they are modernizing beneficiary claims, expanding their use of IXP, Maestro agents and robots. With UiPath forward deployed engineers supporting implementation, Maestro connects document intake, beneficiary analysis, orchestration, exceptions and human-in-the-loop work into one governed end-to-end process. And because UiPath was already embedded in their ecosystem, they could move quickly on this use case and build on the same foundation as they modernize additional processes across the organization.

In the public sector, the Department of War expanded its partnership with UiPath to support its clean audit initiative across the military services. Building on its deterministic foundation, the department is adding Autopilot, our IDP solutions and test automation to automate critical audit and reconciliation work.

We're also seeing governance and reliability become real competitive differentiators. A leading financial institution chose UiPath over other orchestration providers as its single platform for end-to-end processes. Maestro was the only solution able to orchestrate across their homegrown applications while meeting their governance and compliance requirements at scale. It's already in production on a critical revenue channel process, combining deterministic automation with human-in-the-loop safeguards.

And these aren't isolated examples. Across both new logos and expansions, we are seeing customers standardize on UiPath and consolidate point solutions onto our platform. A leading U.S. regional bank is consolidating its entire automation program onto UiPath, using Test Cloud for conversion testing and agentic processes across fraud and compliance to help manage risk through a significant module; and one of Canada's largest financial services companies, working with Ashling Partners to migrate its entire automation footprint to UiPath and plans to use coding agents to power that migration with the goal of lowering maintenance costs and accelerating time to value. And on the expansion side, Fortune 200 financial services firm is moving all their automation needs onto UiPath in a multimillion-dollar CIO-driven initiative, while expanding their use of Test Cloud to test the investment management software they deploy to customers.

The common thread across these wins is consolidation. As customers think about automation and AI together, we're increasingly seeing them look for one platform that can build, orchestrate, test and govern the entire process. I am excited about the results we are seeing from coding agents, pilots and implementation.

Our initial results from our forward deployed engineers and the coding agents reduce effort by nearly 60%. As we build on this, it has transformational impacts on our customers' time to value and overall TCO.

We are seeing the same potential with customers like a leading U.S. energy company. They're using Cursor with UiPath across the entire automation life cycle from architecture and development through testing, code review and production deployment. The coding agent directly creates UiPath workflows where our platform keeps the development process governed and standardized. So this isn't just about AI writing code faster. It's about making the entire automation life cycle fast. And that's an important part of why we believe AI expands the automation market. It doesn't just create new use cases. It lowers the cost and effort required to build that.

Moreover, to speed up the implementation even further, we announced a new developer friendly workflow automation tool in public preview. It lets developers use coding agents, they already worked with like Claude Code, Codex, Cursor and GitHub Copilot to both orchestrate business processes and automate manual tasks via API and agents. Combining the speed of AI native development with the governance enterprises need, our horizontal platform remains a core strength, giving customers one platform to automate and orchestrate processes across functions, systems and technologies. And increasingly, we are pairing that horizontal strength with vertical and outcome-oriented solutions that bring us directly to line of businesses buyers around specific business outcomes while creating a natural entry point for broader platform adoption.

This quarter, we saw strong traction with customers, including a Fortune Global 500 manufacturer where we are modernizing their accounts payable operations with our office of the CFO invoice solution, automating roughly 700,000 invoices annually. What won them over is exactly what our approach is built to deliver, 96% document processing accuracy in the proof of concept, automated supplier communications, rich operational dashboards and an expected 50% reduction in both invoice handling time and support. And in health care, a leading U.S. health system chose our denials resolution solution to automate medical claim denials with their revenue cycle management process. The solution will help automate appeal creation and submission across inpatient and outpatient operations, allowing them to pursue millions of dollars in claims that previously fell below the threshold for manual review and potentially recover meaningful additional revenue.

WorkFusion extends that's approach further into financial services. The integration is progressing in line with plan, and we are encouraged by the customer response and the pipeline that is building. Its purpose-built agents for financial crimes and compliance give customers a more complete outcome-orientated offering out of the box.

Testing is another area where we continue to expand our reach, particularly through our partner ecosystem. We recently expanded our partnership with Cognizant, which will embed UiPath Test Cloud into its Testing as a Service and many services offering, helping customers move from manual script-based testing towards agentic testing. Cognizant will also help scale Test Cloud onboarding and adoption through its global delivery model.

Before I close, I'm also pleased to welcome Yazdi Bagli to our Board of Directors. Yazdi brings deep technology, operations and enterprise transformation experience from Kaiser Permanente, Walmart and Procter & Gamble, and I'm excited for the perspective he'll bring with UiPath.

And finally, we are looking forward to seeing many of you in Las Vegas next month. We'll kick off with our Investor Day on September 22, where we'll share more on our long-term strategy and product road map, followed by FUSION, our annual user conference, from September 23 through 25. We have a lot to share, and I hope to see many of you there. Please reach out to our Investor Relations team for more information on our Investor Day.

With that, I'll turn the call over to Ashim.

Ashim Gupta

Thank you, Daniel, and good afternoon, everyone. I'm incredibly proud of what our finance team has accomplished, and I also want to congratulate Hitesh, who has been an incredible partner and leader in our organization. Hitesh and I have worked side by side for many years, and there is no one better prepared to lead our finance organization. As I fully focus on my role as Chief Operating Officer, I'm excited to work closely across the company to drive consistent execution and help scale the business. A big part of that is continuing to strengthen our go-to-market execution. We're spending a lot of time with our sales leaders and account segmentation, making sure we have the right resources and strategy against the right opportunities while working across the leadership team to bring greater connectivity to how we take the breadth of our platform to market.

The same focus extends to how we drive adoption and utilization across our customer base and how we work with our partners. These have been important priorities for us, and we're continuing to strengthen the connection across our field, partners and customers to drive expansion and make it easier for customers to adopt more of the platform. We have a strong leadership team, tremendous innovation across the platform and a significant market opportunity ahead of us. I'm excited about what we can accomplish together.

In a few minutes, Hitesh will take you through our guidance for the third quarter and the remainder of the year, but first, I'll walk through our results for the second quarter. Turning to the quarter. Unless otherwise indicated, I will be discussing results on a non-GAAP basis and all growth rates are year-over-year. I also want to note that since we price and sell in local currency, fluctuation in FX rates impacts results. As we go forward, we will provide the impact of FX for both the incremental impact since our prior guidance and the year-over-year impact.

Second quarter revenue grew to $410 million, an increase of 13%. Normalizing for the year-over-year FX headwind of approximately $8 million, revenue grew 16%. This included an incremental $1 million FX headwind since the time of guidance and our first quarter earnings call. The year-over-year FX headwind was driven by the Japanese yen, the Romanian leu and the Indian rupee.

ARR totaled $1.93 billion, an increase of 12%. This included a $1 million year-over-year FX tailwind and no incremental impact since we guided our first quarter earnings call. Net new ARR was $37 million, up from $31 million in the prior year quarter. The year-over-year FX tailwind was driven by the euro. We ended the quarter with approximately $1.3 billion in cloud ARR, which includes both hybrid and SaaS, and an increase of more than 19%. We ended the quarter with approximately 10,350 customers with attrition continuing to be concentrated among our smallest customers, while customers with more than $30,000 in ARR increased 6% year-over-year. This quarter, we signed one of our largest new logos in company history, a top Canadian bank looking for a platform that could support their evolution to agentic workflows. We demonstrated that with an agentic proof of concept for their third-party demands process, bringing together agents, robots, people and systems, all orchestrated by Maestro with the governance and compliance required at scale.

This win reflects our customer strategy of adding new enterprise customers with significant expansion potential. And this quarter, we also added logos, including Flexsteel, [ Azul ] and Purdue Federal Credit Union. Our strategy is increasingly focused on winning and expanding within the world's largest enterprises, and we're seeing that strategy work. Customers with $100,000 or more in ARR increased 10% to 2,666, while customers with $1 million or more in ARR increased 21% to 387.

Our retention metrics also remained strong. Our dollar-based gross retention remained best in class at 97%, and our dollar-based net retention rate was 109%, a 2 point increase year-to-date, demonstrating stabilization across the business. Adjusting for FX, dollar-based net retention rate was 108%.

Turning back to the quarter. Remaining performance obligations increased to $1.378 billion, up 14%. Normalizing for the FX headwind, which was approximately $19 million, RPO grew 16%. Current RPO increased to $901 million, up 14%.

Turning to expenses. We delivered second quarter overall gross margin of 82%, and software gross margin was 90%. Second quarter operating expenses were $247 million.

GAAP operating income was $32 million, our fourth consecutive quarter of GAAP profitability, up from the prior year GAAP operating loss of $20 million. GAAP operating income included $45 million of stock-based compensation expense compared to $78 million in the prior year, a decrease of 42%. As a percentage of revenue, stock-based compensation was 11%, down over 1,000 basis points from the prior year. Second quarter non-GAAP operating income was $89 million, representing a 22% margin, up over 400 basis points year-over-year and driven by our continued focus on operational efficiency.

Second quarter non-GAAP adjusted free cash flow was $31 million compared to $45 million in the prior year quarter, driven primarily by the timing of tax-related payments. We ended the quarter with a healthy balance sheet of $1.4 billion in cash, cash equivalents and marketable securities and no debt. During the second quarter, we repurchased 2.4 million shares at an average price of $9.63.

And now I would like to hand it over to Hitesh to go through guidance.

Hitesh Ramani

Thank you, Ashim, for your partnership and mentorship over the years. I'm excited to step into this role and to build on the strong foundation we have put in place.

Turning to guidance. Our philosophy here is unchanged. We guide to what we see in front of us, and we maintain a prudent outlook. And we are pleased with the team's execution in what continues to be a variable macroeconomic environment.

Before I walk through the specifics of guidance, beginning this quarter, we will provide the impact of FX for both the incremental impact since our prior guidance and the year-over-year impact. As Ashim mentioned earlier, our results reflects movements across several currencies, including the euro, yen, Indian rupee and Romanian leu.

Turning to guidance. For the third fiscal quarter 2027, we expect revenue in the range of $440 million to $445 million. This includes no incremental FX impact since the time of our last guide and a $10 million year-over-year FX headwind. ARR in the range of $1.992 billion to $1.997 billion. This includes a $1 million incremental FX headwind since the time of our last guide and a $4 million year-over-year FX headwind. Non-GAAP operating income of approximately $100 million and we expect third quarter basic share count to be approximately 523 million shares.

For the fiscal full year 2027, we expect revenue in the range of $1.789 billion to $1.794 billion. This includes a $1 million incremental FX headwind since the time of our last guide and $20 million year-over-year FX headwind inclusive of $2 million headwind that was realized in the first half of the year and an expected headwind of $18 million in the second half of the year. ARR in the range of $2.065 billion to $2.070 billion. This includes a $1 million incremental FX headwind since the time of our last guide and a $5 million year-over-year FX tailwind inclusive of $10 million tailwind realized in the first half, partially offset by expected headwinds in the second half of the year. Non-GAAP operating income of approximately $445 million. And finally, we continue to expect the fiscal full year 2027 non-GAAP adjusted free cash flow of approximately $425 million and a non-GAAP gross margin of approximately 84%.

Thank you for joining us today, and we look forward to speaking with many of you during the quarter. With that, I will now turn the call over to the operator. Operator, please poll for questions.

Operator

[Operator Instructions] Our first question will come from Sanjit Singh with Morgan Stanley.

Phần hỏi đáp

Sanjit Singh

Can you hear me?

Ashim Gupta

Loud and clear, Sanjit. Now no.

Operator

Sanjit seems to be having some technical difficulties, so we will come back to him and go to our next question. Our next question is going to come from Michael Turrin with Wells Fargo.

Unknown Analyst

This is [ Phil ] on for Michael. I have a quick question on the FTEs. It sounds like with coding agents reducing the FTE implementations quite significantly, how much more deployment capacity are you guys getting per FTE? And does that change any of your hiring plans as customer demand scales?

Daniel Dines

Yes, we are in kind of proving stage at this point to understand how much incremental value we get from coding agents in conjunction with FTEs. Our initial results are very encouraging, and if -- I believe that we are seeing a positive trajectory. And I think this is not so much about how many FTEs we plan to hire, but it's about how much our customers can accelerate their time to value. And this is an equally important technology for our partners as well as many of our customers do the -- use the implementation services provided by our partners.

We will keep you up to date. This is a very important focus for us going forward, and a big focus of the entire P&E organization is to keep improving the performance of coding agents on our platform.

Operator

Next question will come from Bryan Bergin with TD Cowen.

Bryan Bergin

Thanks for the question. And Hitesh, congrats to you on the CFO role. I wanted to just get a sense if you can give us an update on your approach and monetization here on agentic and AI solutions. How is that conversation evolving with clients? And can you also comment on how model costs and tokenomics are influencing kind of the contracting appetite for the broader deals with agentic and deterministic?

Daniel Dines

Yes, we continue to see an increased appetite from our customers to get the platform that combines, I would say, intelligence with exactness. And our platform is best in the world in process orchestration, in task automation, in document processing. And we are quite agnostic in supporting the best agentic frameworks in the world like LangChain, Claude Agent SDK and Codex harness and some others, and we are model agnostic. And this -- I think this combination, it's extremely appealing to our customers. We provide basically the rails for running the business, while they can choose the flavor of intelligence that they have to deliver.

Bryan Bergin

Okay. And my follow-up, just maybe can you speak to the improvement of net new ARR in 2Q? Obviously, trying just distill how much is coming from AI-related products. Any way you can help kind of break that down between contribution from penetration of new agentic AI offering deployments into your existing clients versus perhaps landing kind of newer clients with the full suite here? It's certainly encouraging to hear the stat on the top 20 largest deals you gave us. But then sticking with net new ARR, just any caveats as we look to the implied second half that you've guided to?

Ashim Gupta

Yes. I'll turn it over to Hitesh for -- to answer on guidance. Look, we're right now reporting ARR product like periodically as we talk about, Bryan, but the stats that you talk about, they're encouraging. And I think there is more encouragement when we listen to our customer calls and our sales team, the executive touch points that we're having. The reality is they are making the deals have a higher ROI, which leads to larger deal values. And what is also encouraging is we're really attacking larger, more complex problems. And I think as the world kind of continues to change, that increases our stickiness. And so it really has a two-fold area, giving us more upfront but making us more strategic within the customer. And we're really pleased with the progress just across the platform and our ability to deliver that. Hitesh, if you want to talk about guidance part.

Hitesh Ramani

Yes, sure, Ashim. I mean as I mentioned, our philosophy, as it relates to guidance, has remained unchanged. We guide to what we see in front of us. Also, we take a prudent approach.

With regards to platform, as Ashim mentioned, the platform positioning is resonating extremely well with our customers. I myself met with 3 of our customers this past week, and every single conversation is resonating very well. As we also mentioned, 18 of our top deals -- 20 deals included AI this past quarter. We are making this equation into account as we think about our guidance for not only Q3 but also for Q4.

Operator

Your next question will come from Scott Berg with Needham & Company.

Scott Berg

Daniel, I wanted to start on go to market and some of the sales successes you seem to be having. You've talked a lot the last couple of quarters about improved execution there, but it seems to be meeting an end market that's also seeing some improved demand. Where do you think you are in that cycle? Are you back now on sales execution kind of level that you want to be, kind of 100%? Or do you still feel like you have a little ways to go to hit your stride properly?

Daniel Dines

I think it's -- I think we are working right now on the both ends of the spectrum. I think on the product side, we are making the most innovative steps that I think we ever made in our product. And we are ready to announce at our big FUSION event basically our new doctrine about how we are seeing the adoption of AI and orchestration and automation across -- of an enterprise.

And on the sales side, I think given the market dynamics, I think we have started to understand a bit more how our customers think about the AI adoption. I think in a way, among our existing customers, we are seeing reduced confusion, if I can say, about AI. And they understood -- I think it's a better understanding on when it's best to use AI, when it's best to use automation and how they coexist with each other, which I cannot say so much about customers at large. It's more -- when we go after new logos, it might be a bit of a different conversation.

Overall, we are also seeing an increased appetite in the market for outcome-based deals, which it's an interesting area for us. I think at this point, it's just -- they are just scattered and really across the globe, but it might become a much bigger trend. But we are watching closely to understand how we play on these both ends.

Scott Berg

Understood. Helpful there. And then, Ashim, as I look at your net revenue retention metrics, they've been incredibly stable the last 6 quarters. But -- and maybe you'll cover this in your Analyst Day coming up. But how do we think about net revenue retention over the interim period here? Do you have a lot more to sell? It sounds like the demand environment is certainly improving a little bit for you all. My guess is customer expansions start to come back versus maybe what we've seen a couple of years ago. But could that number be over -- back above 110% for an extended period of time? Or is this high 100% range, 108% 109%, the right way to think about NRR for the near term?

Ashim Gupta

No, I mean, look, that's what we're going for. And I think the progress we've made has actually been really phenomenal. We ended last year at 106%, so we are up 3 points already as we move to that goal. So I would say it's -- the trajectory is upward in a stable way, which I think is really good versus kind of up and down. And so we feel very good about it.

To your point, we have more products that we are scaling into our customers, as Daniel mentioned. As I mentioned, I think the sales execution continues to improve. And frankly, our focus on consumption is also very critical in that discussion [ and the statement ]. So we actually feel very good about that trajectory.

We'll talk about it more. We obviously don't do long-term forecasting around these key metrics, but the trend is positive. And I would also note the movement upwards and stability is happening at higher and higher scales, which speaks to the expansion on a dollar basis expanding so that's kind of the color that I would give here.

Operator

Your next question will come from Sanjit Singh with Morgan Stanley.

Sanjit Singh

Two-parter, maybe one for Ashim. As we look to the federal business in Q3, just their fiscal year is coming up at the end of September, so just thoughts on the federal pipeline opportunity, how that's shaking up.

And then a question for Daniel. I think you and I have been talking about sort of what sort of playbooks and use cases are resonating right now. I think you've called out software testing as something that's particularly resonating. Has there any been other sort of use cases, whether it's sort of industry-specific, cross industry-specific use cases that have started to resonate in Q2?

Ashim Gupta

Yes. So look, I think our federal business is doing a really exceptional job. Joe Perrino is the leader there. I think him and the team has really impressed us and the entire team just with how close they are getting to the customers and the agency is, partnering with incredible partners that are doing transformative work in the Department of War and many of the agencies well beyond it and applying and learning some of the areas that we have in our health care business to some of the health care processes within the government. All of those things are shaping up very nice with the pipeline. And the work that we've done in terms of getting close to understanding and influencing kind of the environment there has been really phenomenal. So we're actually very pleased with the trajectory of the federal business.

Daniel Dines

Yes. And on the use cases, we are very excited here about our use case sellings and our vertical solutions approaches. So besides test, we are seeing increased demand around the revenue cycle management and of course, on financial crimes where we see good pipeline creation. But also office of the CFO is a place where we are traditionally extremely strong. And also we launched recently our solution in financial services for loan originating.

So overall, this is becoming a big area of focus for us as we believe that the vertical selling, solution selling has the capability of pulling our entire platform, and we have -- traditionally, our business model was a lot on land and expand, and this really help us to continue that motion.

Operator

Your next question will come from Jacob Zerbib with William Blair.

Jacob Zerbib

]

This is Jacob on for Pat McIlwee. You spoke a little bit about less confusion around AI in the market, which is great to see. Can you talk a little bit about how your sales team is adapting to this new environment and particularly as it relates to large new customer lands?

Daniel Dines

I think we are doing a lot of education in the market of what is basically the seam between where AI is best and where exact execution is best. And we are -- as I said in the previous answer, we're kind of changing our sales approach to be much more use-case-based selling. We have starting this trend in our U.S. business a couple of years ago, and we perfected it here, and. We plan to roll it more across the -- our entire GTM organization.

Operator

Your next question will come from Raimo Lenschow with Barclays.

Raimo Lenschow

Perfect. Ashim, all the best, first of all, and then 2 questions. Daniel, the one thing that came up -- is coming up here today, and that's probably why you -- to share -- why we have [ to share reaction after our market ] is that it looks like there's a new AI model coming out from one of the big frontier guys that apparently is like so much better in kind of doing jobs, doing kind of workflow. I don't want you to specifically answer that.

But like in your conversations with clients and with customers, like how do you think about that? Obviously, AI is going to get better but you guys are more in the deterministic world. Like how do you think about the workflows you guys are doing versus the workflows you kind of want to share or AI should be doing? I know it's a bit of a fundamental question again, but it's just coming up again, and so it would be good to go through that again. And then I have one follow-up for Ashim.

Daniel Dines

Look, I had many discussions with our customers across the last few months. I think if you look at AI is getting more powerful with the day obviously, but there is an interesting limitation of AI, which I want to point you to, which is the AI cannot learn on the job. Like when you hire an employee, you expect that -- you don't give them manual. This is how our business run. No company is able to have this manual. And an employee learns by reading some documentation, but learning from other people, being in meetings, talking to customers. It's a continuous learning. So they get transformed by this experience.

That's not true for AI. It's the same model you apply to all enterprises. In every question you ask AI, you basically have to provide the entire modus operandis of your enterprise. So that's -- if you think of this limitation, it's becoming clearly that enterprises will have to create, what I call, a map of work where you will have to describe in a very specific way how the enterprise work. And you will have to also put as much effort as possible into building the framework that gives your rails in how the business operate. In my opinion, everything that can be done by automation and orchestration should be done by that because it's exact. It's reliable. It's tokenless. It costs less.

And then AI is basically surrounding into this enterprise framework. You can -- in a way, you can look at our platform like an enterprise harness that can control and give AI all the information required to run an enterprise. But all the customers I talk to, they want these workflows to sit on their property, not on the model's property. And all this manual that I'm talking is their property. It's not model's company's properties. So to me, that's the -- that's really the best combination into having the enterprise framework that provides orchestration automation and that is the harness around the model. That would provide the best optionality for an enterprise.

Raimo Lenschow

Yes. Okay. Okay. Perfect. Yes, it makes sense. And then Ashim, if I think about ARR and revenue -- or the subscription revenue that you're reporting, there is obviously -- there is a relationship, last couple of years, revenue growth kind of run ahead of like what we see on ARR growth. Like how do you think about that relationship and especially going forward as we think about going from here? And all the best.

Ashim Gupta

Thanks, Raimo. And I'm still here, but I appreciate everything, and I'm super excited to partner with Hitesh and Daniel. Look, Raimo, look, from -- remember, like we have the 606 accounting phenomenon that is there. And so as we sell more of our total platform upfront, there is more -- it changes the mix of licenses and kind of the cloud-based software is particularly in some of the bundling of our platform. We'll get into more of that at Investor Day, so to speak. There's still a minor SaaS headwind that hits there, but depending on the mix of the deals and where we're selling more platform, that can result in a mix shift between kind of the subscription service revenue and the license revenue. That's really what it is.

And so when you look at overall ARR, as we point to in net new ARR, we're actually pleased with the acceleration that now -- we're now seeing here, right? And as I just want to emphasize that for everybody between 606 and beyond, last year, we're really kind of going down year-over-year. First half of this year, we were kind of -- like first quarter, we were pretty well stable. And you can see the results there for second quarter in terms of the acceleration, and that really shows you what we feel is the better reflection of the business and its trajectory today.

Operator

Your next question will come from Terry Tillman with Truist Securities.

Terrell Tillman

Yes. Can you all hear me okay?

Hitesh Ramani

Yes, Terry.

Terrell Tillman

Yes. And Hitesh, congrats to you on this expanded role as CFO. And 2 questions. The first question is just on the 18 of the top 20 deals, including some sort of AI product attached. I am curious though, is it pretty similar in terms of that initial landing or impact? And was outcome-based monetization involved in any of those? And then I had a follow-up for Ashim.

Hitesh Ramani

Yes. I mean, again, the 18 of the top 20 deals, which include AI is basically how we are seeing an excitement towards the platform from our customers. That's what we are seeing that we see whenever AI is part of -- or the platform is part of the deal composition, the deal is naturally much larger than what we would have seen otherwise. And so that trajectory is there.

Ashim Gupta

Do you have a question for me?

Terrell Tillman

Absolutely, I did. Yes, I've got the harder one for you, Ashim. I'm kidding. Talking about strengthening execution and leading strategic priorities, I assume you've got a whole slew of things that are more kind of low-hanging fruit, near-term things and then maybe as you all end the year and you continue to evolve products, maybe there are some bigger things into next year. Anything at all you could share early on, on some excitement in areas you see where you could have a quick impact?

Ashim Gupta

Yes. I think we're already having quick impact. Look, I think, especially kind of in terms of getting off to a fast start post sale, I've seen a really remarkable execution and turnaround from our teams. Those turnaround times are now happening pre-deal closure where our teams are moving faster on the delivery area. The second piece is just the coordination between our partners, our services team and our FTE team as we go through complex implementations. I feel like those are areas where, while we can always improve, we're seeing some of the low-hanging fruit getting addressed there.

And I will tell you, I'm just super excited by the delivery and the connectivity that we see with the product team. Raghu Malpani, our CTO, is incredibly field oriented. And so that connection between product and delivery and go to market, I think is something that, as it continues to strengthen, really gives us a right to win as we take on larger and more complex problems for our customers.

Operator

Your next question will come from [ Vinod ] with Evercore.

Unknown Analyst

You mentioned improved sales execution. Can you talk about some of the specific factors that are driving the improvement? And then are there any changes to how you're kind of compensating reps to incentivize them to get customers to try out more of your AI products?

Ashim Gupta

Yes. I think the first thing is it's really like the team on the ground. Like we have incredible leaders across our, what I would say, our market units, like U.S. financial services, U.S. health care, public sector, our manufacturing and what we call summit, kind of like our industrial and manufacturing enterprises and really globally. And many of them have been in seat for a good period of time.

And so I think it really starts upfront with their focus, right? It's less about kind of Daniel, myself and top-level leadership but really the expertise that is being deployed on the field and just the message around customer first and trying to continue to cut the bureaucracy that we have over the last 2 years, and we still can do more, to be super clear on that.

So I think that's one. The second piece is I do think like the cross-functional connectivity between product, sales, marketing, like I think that is continuing to strengthen. It's very fast paced. So how do we enable our sales teams faster and more thoroughly with better content? Like those are areas of focus for us that are being driven really by a number of leaders across the company.

And in terms of compensation, we, of course, use sales comp as a tool to drive it. The reality is in a lot of customers, there is a pull towards a broader platform. And frankly, combining probabilistic with deterministic automation really gives -- it is a part of what we have. As we launch new products, we, of course, try to do incentives, whether that's STIPs or uplifts on quota retirements. We do that selectively, and we're really pleased with the results. But we have to continue to do that as the environment and our product portfolio moves.

Operator

Next question will come from Sanika Merchant with RBC Capital.

Sanika Merchant

This is Sanika on from Matt Hedberg from RBC. Congrats on the quarter. You've talked about the positive traction you're seeing on your agentic offerings. Can you talk through how you're thinking about pricing for the company's agentic offerings over time, especially as customer adoption of these offerings starts to scale?

Daniel Dines

We -- I think we are still experiencing with different pricing model on our agentic. We introduced recently a transaction-based pricing that it's all inclusive in our process orchestration of all the necessary calls that one has to do to complete the transaction. I would say that probably we are going more towards outcome-based pricing that would be inclusive of the tokens required to complete the transaction.

Sanika Merchant

Got it. Super helpful. And just as a follow-up, you've talked about ARR acceleration and also talked about reaching the $2 billion ARR milestone. What would you say are the most important factors that could drive you to the higher end of your fiscal year '27 ARR expectations? And are there any puts or takes you would call out that we should keep in mind?

Ashim Gupta

Yes. I mean, again, as I mentioned earlier, we are seeing significant alignment with our customers and the platform story is resonating extremely well with our customers, especially the combination of deterministic and agentic. That is -- which is helping us expand the deal size. And so that is one of the key things, which we are excited about, and that is something which is baked into our guidance as we think about Q3 and Q4.

Operator

Your next question will come from Keith Bachman with BMO Capital Markets.

Unknown Analyst

This is [ Jonathan ] on for Keith. Daniel, I wanted to direct this to you. You've talked a lot about governance and orchestration as customers are moving AI initiatives into production. So I wanted to ask, as you're engaging with customers today, where are you seeing the greatest urgency? And do those discussions tend to start with governance and control requirements or with broader orchestration initiatives?

Daniel Dines

I would say that there is an increased appetite of our customers to get the breadth of our platform. I think in a way, our platform aligns very well with the Gartner Magic Quadrant that is called business orchestration and automation technology. So I don't think necessarily that is -- customers are waking up thinking I want to buy orchestration. But I think definitely, our customers are waking up thinking what is the best platform that can help me get the outcomes, run the processes faster with less human errors and bringing the AI but in a way that preserves my intellectual property. I think this combination of factors is what drives the platform at this point.

Operator

This concludes our Q&A session. I'd now like to turn the call back over to management for closing remarks.

Daniel Dines

Thank you so much for all the questions, and we are looking forward to seeing as many of you during the next few months and especially at our FUSION event in Vegas. Thank you.