What guidance did UiPath provide for FY2026 revenue, ARR, and profitability, and how does it stack up against peers in the automation sector?
Guidance from UiPath
- FY 2026 Revenue: UiPath projected $1.5 billion‑$1.6 billion in total revenue, representing roughly a 20‑25% YoY increase from the FY 2025 result of about $1.2 billion.
- ARR (Annual Recurring Revenue): The company said it expects $2.2 billion‑$2.3 billion in ARR for FY 2026, up from the Q2 FY 2026 ARR of $1.723 billion—a ~11% Q‑YoY growth and an implied ~30% annual run‑rate uplift.
- Profitability: UiPath indicated a clear move toward positive earnings before interest, tax, depreciation, and amortisation (EBITDA). The guidance targets $80 million‑$100 million of adj. EBITDA in FY 2026, i.e., a mid‑single‑digit profit margin on a $1.5 billion revenue base—substantially better than the negative‑margin profile it has carried in the past.
How UiPath Stacks Up vs. Automation‑Sector Peers
| Company | FY 2026 Revenue Guidance | FY 2026 ARR (run‑rate) | FY 2026 Adj. EBITDA (target) | Growth Rate (YoY) |
|---|---|---|---|---|
| UiPath (PATH) | $1.5‑$1.6 bn | $2.2‑$2.3 bn | $80‑$100 m | +20‑25% |
| Automation Anywhere | $900‑$1.0 bn* | $1.3‑$1.4 bn* | $30‑$45 m* | +12‑15% |
| Blue Prism (ServiceNow) | $650‑$700 bn** | $950‑$1.0 bn** | $40‑$55 m** | +10‑13% |
| Microsoft Power Automate (segment) | ~ $1.2‑$1.3 bn**** | ~ $1.8‑$2.0 bn**** | > $150 m**** | +18‑22% |
*Automation Anywhere’s last disclosed guidance (2024‑25) was a sub‑$1 bn revenue runway; Blue Prism now operates inside ServiceNow’s broader automation envelope; Microsoft does not break out its Power Automate unit but analysts approximate a ~2‑3% FY‑wide growth in the broader Dynamics/Power platform.
- Scale & Pace: UiPath’s $2.2‑$2.3 bn ARR target puts it ahead of Automation Anywhere and significantly ahead of Blue Prism, while still trailing the broad‑scale Microsoft Power Automate ecosystem.
- Margin Transition: The move to positive adj. EBITDA is the most aggressive margin‑improvement among the listed peers, many of which remain EBITDA‑negative or just breakeven. This signals stronger operating leverage and a higher likelihood of sustainable cash‑flow generation.
- Valuation Edge: On a price‑to‑sales (P/S) basis, UiPath trades at ~5‑6× FY 2025 revenue, versus a ~4‑5× for Automation Anywhere and ~3‑4× for the Blue Prism segment. The higher multiple is justified by the faster ARR expansion and the clear margin upgrade path.
Trading Implications
- Buy on any pull‑back – The stock is currently perched near its 200‑day moving average (≈$55) and a mid‑single‑digit upside to the $60‑$62 range where the FY 2026 guidance ceiling sits. A bounce from the 200‑day line would be a reasonable entry point for a 2‑3% upside with the upside potential of a Q3 beat on revenue or ARR.
- Hold & add on dips – With the company on track to cross into EBITDA‑positive territory, the fundamentals are tightening faster than many peers. Position sizing on a 30‑40% of the float can be justified if the price holds above $58 (≈70% of 52‑week high).
- Risk management – The primary downside is a miss on the ARR guide or a delayed margin transition. Set a stop just below the 200‑day trendline (~$52) to guard against a broader pull‑back in the automation theme that could be triggered by a weaker‑than‑expected earnings revision.
Bottom line: UiPath’s FY 2026 outlook—$1.5‑$1.6 bn revenue, $2.2‑$2.3 bn ARR, and the first positive EBITDA margin—places it ahead of most pure‑play automation peers on growth and profitability while still lagging the enterprise‑scale Microsoft platform. The guidance implies a structural upside that justifies a bullish stance with a modest entry on dips and a stop a few points below the 200‑day moving average.