UiPath - PATH

I’d like to bring a company to this board that recently confirmed its upcoming IPO within the next couple of months – UIPath (PATH).

Description: UiPath provides robotic process automation (RPA) software. RPA is a way to configure software to complete actions with minimal input from the user (think of an Excel macro that can execute actions across your apps – not just within Excel). The simplified value proposition’s is that implementing RPA allows humans to spend more time doing valuable tasks, while reducing costs.

Market & Competition: The RPA market was estimated to be ~$5B in 2019, and is expected to top $12B by 2023 (expanding at 24% CAGR) according to Forrester[1]. While the market is very saturated (200+ RPA companies), the largest 3 players (UiPath, BluePrism, and Automation Anywhere) control ~30% of the market. On Forrester’s latest assessment, UiPath was named the leader, with the strongest current offering and the strongest strategy[2]. UiPath was also named the leader in its ability to execute by Gartner, although its completeness of vision was slightly lagging a few players[3]. Similar results were found by Everest Group[4].

Leadership: UiPath is lead by founder CEO Daniel Dines. Born in Romania (where UiPath launched), Daniel self-taught himself coding until he received an offer from Microsoft which led him to relocate to the US. After a few years, he relocated to Romania to launch his first company (DeskOver) which eventually pivoted to become UiPath[5]. After reaching $500k in revenue in 2014, he raised $1.6M from European VCs and began scaling UiPath to the multinational leader that is now. They’ve recently recruited a strong addition of board directors with enterprise SaaS public market experience, including Dan Springer (Docusign CEO) and Jennifer Tejada (PagerDuty CEO).

Business Metrics:
-7,968 customers including Amazon, Bank of America, Uber, and 63% of Fortune 5000
-1,002 customers with ARR > $100k ARR (up from 597 last year)
-89 customers with ARR > $1M (up from 43 last year)

Financial Metrics:
-$608M revenue for their last fiscal year (+81% YoY, down from +126% growth the previous year)
-$580M FY21’Q4 ARR (+65% YoY)
-89% gross margins (up from 81% last year)
-145% dollar net retention rate (97% dollar gross retention rate)
-$26M in free cash flow (up from -$380M loss last year)
-$92M in net loss (down from $520M loss last year). Operating expense decreased all across the board, although S&M was the most notable decline

-The company recently raised $750M at a $35B valuation. Using their latest figures, it seems like they were valued at ~58 P/S (LTM). Assuming they grow at ~70% over the next year, that translates to ~34 P/S (NTM). That being said, we obviously don’t know how the market we react, or what the official offering price will be.

Conclusion: UiPath meets the criteria of many of the top companies discussed on this board. It continues to grow at hyper-scale, and has recently shown operating leverage. Questions remain regarding its public market valuation and quarterly growth rates (they’ll be revealed in an amended S-1 soon), but the purpose of this post is to initiate a discussion so that we can be prepared once it makes its public debut.

[1] https://www.forrester.com/report/The+RPA+Services+Market+Wil…
[2] https://www.uipath.com/resources/automation-analyst-reports/…
[3] https://www.uipath.com/resources/automation-analyst-reports/…
[4] https://www.uipath.com/resources/automation-analyst-reports/…
[5] https://www.forbes.com/sites/alexkonrad/2019/09/11/from-comm…
S-1: https://www.sec.gov/Archives/edgar/data/1734722/000119312521…

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Thanks RMT for proposing. My company is a PATH customer. UIPath - and all similar RPA utility software providers - fill a need for financial services companies or back-office operations in a specific void, which is: the middle ground between manually doing menial computer operations the way they are currently done, and replacing old enterprise software with expensive leading edge modernized automated integrated packages or loosely-coupled components with open REST-ful APIs.

Financial services and other “back-office” operations in less- or less-than-profitable, slower growing companies (like mine) are prime candidates for UIPath, BluePrism, and Automation Anywhere and the other 30 competitors.

But therein lies the rub - the target market is full of really cheap customers who are either not investing in modern software, or not interested in transforming their operations. These programs enable a company to keep doing things like cutting and pasting values from invoices into spreadsheets or a financial system data entry screen - without paying a person doing it.

Our model, by way of example, is we are so “expense-conscious” that we won’t even hire technical employees to learn and develop UIPath scripts. We pay an India-based company offshore rates to build and support the scripts. We’re eliminating the work from the on-shore business staff role, AND not paying a US salary to automate the eliminated work.

And UiPath’s licensing model is typical classic: on-premise, seat-based, differentiated between “attended” bots (user executed processes) and “unattended” (scheduled processes).

So yeah - there’s PLENTY of growth opportunities in the RPA space. But my caution is, it’s a low-cost knife fighting space where the cheapest provider & licensing model wins. My company has zero loyalty to UIPath the way that we do to ZScaler or Proofpoint, intentional or “locked-in”. The lowest cost provider would win. Yes, it’s better software than Automation Anywhere or BluePrism and I’m happy that we (literally) lucked into it; but for many companies similar to mine, that just doesn’t make a difference.


PATH finally IPOed few days ago. All main metrics look very good - founder-led, high topline growth, high growth in total and bigger customer numbers, very high GM, becoming profitable (operational leverage works), very high retention rate etc.

It trades around 40b market cap now. Considering that it will make let‘s say 1b in 2021 calendar/fiscal 2022 year (~65% growth), we would have 40x P/S NTM. That‘s more expensive than our top position CRWD for example. Of course, SNOW is more expensive, although SNOW also will grow faster.

In principle, I like the company, but for me it‘s too expensive now. I‘ve got an impression that this year has been and will continue being pretty volatile, hence allowing us to buy great companies at good prices.

Any thoughts on PATH from other board members?



the target market is full of really cheap customers

From their investor presentation, it looks like over 1000 “cheap customers” out of 8000 total are spending over $100,000 a year…

Long time lurker, first time poster here on Saul’s board… hoping to give back a little after getting so much from Saul and all the other amazing posters here on this board…

I did start a 1% position on the day of the IPO and may be looking to get more in the future…
The numbers for UIPath look incredible, as RMTZP listed above:
89% gross margins!
145% net retention rate
65% YoY growth rate…
70% customer CAGR

The only negative I can see is YoY growth is slowing down quite rapidly… 126% to 81% to maybe 65%… but this is expected as they are approaching $1B annual revenue…