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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
___________________________________________
FORM 10-Q
___________________________________________
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended July 31, 2022
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to ________
Commission File Number: 001-40348
___________________________________________
path-20220731_g1.jpg
UiPath, Inc.
(Exact Name of Registrant as Specified in its Charter)
___________________________________________
Delaware47-4333187
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
452 5th Avenue, 22nd Floor
New York, New York
10018
(Address of principal executive offices)(Zip Code)
Registrant’s telephone number, including area code: (844) 432-0455
___________________________________________
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading
Symbol(s)
Name of each exchange on which registered
Class A common stock, par value
$0.00001 per share
PATHNew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes      No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).     Yes      No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     Yes      No  
As of September 2, 2022, the registrant had 467,153,998 shares of Class A common stock and 82,452,748 shares of Class B common stock, each with a par value of $0.00001 per share, outstanding.



Table of Contents
Page



SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), about UiPath, Inc. and its consolidated subsidiaries (“UiPath,” the “Company,” “we,” “us,” or “our”) and our industry that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q, including statements regarding our future results of operations or financial condition, business strategy, and plans and objectives of management for future operations, are forward-looking statements. In some cases, you can identify forward-looking statements because they contain words such as “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” or “would” or the negative of these words or other similar terms or expressions. These forward-looking statements include, but are not limited to, statements concerning the following:
our expectations regarding our annualized renewal run-rate ("ARR"), revenue, expenses, and other operating results;
our ability to acquire new customers and successfully retain existing customers;
our ability to increase the number of users who access our platform and the number of automations built on our platform by our existing customers;
our ability to effectively manage our growth and achieve or maintain profitability;
future investments in our business, our anticipated capital expenditures, and our estimates regarding our capital requirements;
the costs and success of our marketing efforts and our ability to maintain and enhance our brand;
our growth strategies, including any further expansion into the top 25 countries as measured by gross domestic product;
the estimated addressable market opportunity for our platform and automation generally;
our reliance on key personnel and our ability to attract and retain highly-qualified personnel, integrate new team members, and execute management transitions;
our ability to obtain, maintain, protect, and enforce our intellectual property rights and any costs associated therewith;
the effect of global events, such as the COVID-19 pandemic and the war in Ukraine, on our business, industry, and the global economy including inflation and currency fluctuations;
our ability to compete effectively with existing competitors and new market entrants; and
the size and growth rates of the markets in which we compete.
You should not rely on forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this Quarterly Report on Form 10-Q primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, and operating results. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties, and other factors described in the section titled “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q, and in the section titled "Risk Factors" and elsewhere in our Annual Report on Form 10-K for the fiscal year ended January 31, 2022 filed with the Securities and Exchange Commission ("SEC") on April 4, 2022 (the "2022 Form 10-K"). Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Quarterly Report on Form 10-Q. The results, events, and circumstances reflected in the forward-looking statements may not be achieved or occur, and actual results, events, or circumstances could differ materially from those described in the forward-looking statements.


In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based on information available to us as of the date of this Quarterly Report on Form 10-Q. While we believe that information provides a reasonable basis for these statements, that information may be limited or incomplete. Our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all relevant information. Such statements are inherently uncertain, and investors are cautioned not to unduly rely on these statements.
The forward-looking statements made in this Quarterly Report on Form 10-Q relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this Quarterly Report on Form 10-Q to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q or to reflect new information or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures, or investments.


PART I—FINANCIAL INFORMATION
Item 1. Financial Statements.
UiPath, Inc.
Condensed Consolidated Balance Sheets
Amounts in thousands except per share data
(unaudited)
As of
July 31,
2022
January 31, 2022
ASSETS
Current assets
Cash and cash equivalents$1,607,356 $1,768,723 
Marketable securities114,188 96,417 
Accounts receivable, net of allowance for doubtful accounts of $2,672 and $2,566, respectively
193,483 251,988 
Contract assets94,760 74,831 
Deferred contract acquisition costs35,259 29,926 
Prepaid expenses and other current assets63,430 55,416 
Total current assets2,108,476 2,277,301 
Marketable securities, non-current2,396 19,523 
Contract assets, non-current5,722 2,730 
Deferred contract acquisition costs, non-current106,654 100,224 
Property and equipment, net25,517 17,176 
Operating lease right-of-use assets44,074 48,953 
Intangible assets, net26,856 16,817 
Goodwill86,180 53,564 
Deferred tax asset7,995 10,628 
Other assets, non-current20,807 25,534 
Total assets$2,434,677 $2,572,450 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable$12,122 $11,515 
Accrued expenses and other current liabilities74,666 87,958 
Accrued compensation and employee benefits80,961 130,673 
Deferred revenue292,323 297,355 
Total current liabilities460,072 527,501 
Deferred revenue, non-current66,598 68,665 
Operating lease liabilities, non-current46,765 49,843 
Other liabilities, non-current11,693 4,524 
Total liabilities585,128 650,533 
Commitments and contingencies (Note 11)
Stockholders' equity
Preferred stock, $0.00001 par value per share, 20,000 shares authorized as of July 31, 2022 and January 31, 2022; 0 shares issued and outstanding as of July 31, 2022 and January 31, 2022
  
Class A common stock, $0.00001 par value per share, 2,000,000 shares authorized as of July 31, 2022 and January 31, 2022; 466,998 and 458,773 shares issued and outstanding as of July 31, 2022 and January 31, 2022, respectively
5 4 
Class B common stock, $0.00001 par value per share, 115,741 shares authorized as of July 31, 2022 and January 31, 2022; 82,453 shares issued and outstanding as of July 31, 2022 and January 31, 2022
1 1 
Additional paid-in capital3,577,278 3,406,959 
Accumulated other comprehensive income11,150 10,899 
Accumulated deficit(1,738,885)(1,495,946)
Total stockholders’ equity1,849,549 1,921,917 
Total liabilities and stockholders’ equity$2,434,677 $2,572,450 
The accompanying notes are an integral part of these condensed consolidated financial statements.
1

UiPath, Inc.
Condensed Consolidated Statements of Operations
Amounts in thousands except per share data
(unaudited)
Three Months Ended July 31,Six Months Ended July 31,
2022202120222021
Revenue:
Licenses$103,696 $95,547 $220,700 $195,763 
Subscription services124,656 90,319 240,150 167,961 
Professional services and other13,870 9,655 26,438 18,014 
Total revenue242,222 195,521 487,288 381,738 
Cost of revenue:
Licenses2,170 2,434 4,707 4,888 
Subscription services22,326 12,238 43,371 26,417 
Professional services and other20,080 20,922 41,514 53,299 
Total cost of revenue44,576 35,594 89,592 84,604 
Gross profit197,646 159,927 397,696 297,134 
Operating expenses:
Sales and marketing181,547 144,268 371,329 350,019 
Research and development67,849 57,646 136,539 150,686 
General and administrative68,443 55,834 125,973 130,249 
Total operating expenses317,839 257,748 633,841 630,954 
Operating loss(120,193)(97,821)(236,145)(333,820)
Interest income4,505 766 5,496 1,707 
Other expense, net(600)(1,225)(3,411)(4,443)
Loss before income taxes(116,288)(98,280)(234,060)(336,556)
Provision for income taxes4,090 1,746 8,879 3,133 
Net loss$(120,378)$(100,026)$(242,939)$(339,689)
Net loss per share attributable to common stockholders, basic and diluted$(0.22)$(0.19)$(0.45)$(0.91)
Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted546,058 526,512 544,014 373,488 
The accompanying notes are an integral part of these condensed consolidated financial statements.
2

UiPath, Inc.
Condensed Consolidated Statements of Comprehensive Loss
Amounts in thousands
(unaudited)
Three Months Ended July 31,Six Months Ended July 31,
2022202120222021
Net loss$(120,378)$(100,026)$(242,939)$(339,689)
Other comprehensive income (loss), net of tax:
Unrealized gain (loss) on available-for-sale marketable securities, net159 36 (301)9 
Foreign currency translation adjustments550 3,660 552 7,914 
Other comprehensive income (loss), net709 3,696 251 7,923 
Comprehensive loss$(119,669)$(96,330)$(242,688)$(331,766)
The accompanying notes are an integral part of these condensed consolidated financial statements.
3

UiPath, Inc.
Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders’ Equity (Deficit)
Amounts in thousands
(unaudited)
Convertible Preferred
Stock
Common StockAdditional
Paid-in
Capital
Accumulated Other
Comprehensive Income (Loss)
Accumulated
Deficit
Total
Stockholders’
Equity (Deficit)
Class AClass B
SharesAmountSharesAmountSharesAmountAmountAmountAmountAmount
Balance as of January 31, 2022 $ 458,773 $4 82,453 $1 $3,406,959 $10,899 $(1,495,946)$1,921,917 
Issuance of common stock upon exercise of stock options— — 1,283 — — — 2,683 — — 2,683 
Vesting of early exercised stock options— — — — — — 1,355 — — 1,355 
Issuance of common stock upon settlement of restricted stock units— — 3,499 — — — — — — — 
Tax withholdings on settlement of restricted stock units— — (1,125)— — — (24,827)— — (24,827)
Stock-based compensation expense— — — — — — 102,085 — — 102,085 
Other comprehensive loss, net of tax— — — — — — — (458)— (458)
Net loss— — — — — — — — (122,561)(122,561)
Balance as of April 30, 2022 $ 462,430 $4 82,453 $1 $3,488,255 $10,441 $(1,618,507)$1,880,194 
Issuance of common stock upon exercise of stock options— — 1,418 — — — 1,878 — — 1,878 
Issuance of common stock upon settlement of restricted stock units— — 3,183 1 — — — — — 1 
Tax withholdings on settlement of restricted stock units— — (1,040)— — — (18,922)— — (18,922)
Charitable donation of Class A common stock— — 300 — — — 5,499 — — 5,499 
Shares issued in connection with business acquisition— — 570 — — — 2,965 — — 2,965 
Issuance of common stock under employee stock purchase plan— — 578 — — — 9,070 — — 9,070 
Repurchase of unvested early exercised stock options— — (441)— — — — — — — 
Stock-based compensation expense— — — — — — 88,533 — — 88,533 
Other comprehensive income, net of tax— — — — — — — 709 — 709 
Net loss— — — — — — — — (120,378)(120,378)
Balance as of July 31, 2022 $ 466,998 $5 82,453 $1 $3,577,278 $11,150 $(1,738,885)1,849,549 
4

Convertible Preferred
Stock
Common StockAdditional
Paid-in
Capital
Accumulated Other
Comprehensive Income (Loss)
Accumulated
Deficit
Total
Stockholders'
(Deficit)
Equity
Class AClass B
SharesAmountSharesAmountSharesAmountAmountAmountAmountAmount
Balance as of January 31, 2021294,257 $1,221,968 75,177 $1 110,653 $1 $179,175 $(12,521)$(970,360)$(803,704)
Issuance of convertible preferred stock, net of issuance costs12,043 749,836 — — — — — — — — 
Conversion of convertible preferred stock to common stock upon initial public offering(306,300)(1,971,804)306,300 3 — — 1,971,801 — — 1,971,804 
Issuance of common stock upon initial public offering, net of underwriting discounts and commissions and other issuance costs— — 13,000 — — — 687,903 — — 687,903 
Conversion of shares of Class B common stock into shares of Class A common stock— — 28,200 — (28,200)— — — — — 
Shares issued as consideration for business acquisition— — 543 — — — 30,446 — — 30,446 
Issuance of common stock upon exercise of stock options— — 1,881 — — — 3,114 — — 3,114 
Vesting of early exercised stock options— — — — — — 1,646 — — 1,646 
Issuance of common stock upon settlement of restricted stock units— — 389 — — — — — — — 
Tax withholdings on settlement of restricted stock units— — (164)— — — (9,218)— — (9,218)
Stock-based compensation expense— — — — — — 252,986 — — 252,986 
Other comprehensive income, net of tax— — — — — — — 4,227 — 4,227 
Net loss— — — — — — — — (239,663)(239,663)
Balance as of April 30, 2021 $ 425,326 $4 82,453 $1 $3,117,853 $(8,294)$(1,210,023)$1,899,541 
Shares issued as consideration for business acquisition— — — — — — 21 — — 21 
Issuance of common stock upon exercise of stock options— — 2,993 — — — 3,537 — — 3,537 
Vesting of early exercised stock options— — — — — — 615 — — 615 
Issuance of common stock upon settlement of restricted stock units— — 2,492 — — — — — — — 
Tax withholdings on settlement of restricted stock units— — (18)— — — (1,175)— — (1,175)
Stock-based compensation expense— — — — — — 92,744 — — 92,744 
Other comprehensive income, net of tax— — — — — — — 3,696 — 3,696 
Net loss— — — — — — — — (100,026)(100,026)
Balance as of July 31, 2021 $ 430,793 $4 82,453 $1 $3,213,595 $(4,598)$(1,310,049)$1,898,953 
The accompanying notes are an integral part of these condensed consolidated financial statements.
5

UiPath, Inc.
Condensed Consolidated Statements of Cash Flows
Amounts in thousands
(unaudited)
Six Months Ended July 31,
20222021
Cash flows from operating activities
Net loss$(242,939)$(339,689)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization8,065 6,966 
Amortization of deferred contract acquisition costs21,860 10,971 
Net amortization of premium on marketable securities860 867 
Stock-based compensation expense189,706 343,448 
Charitable donation of Class A common stock5,499  
Amortization of operating lease right-of-use assets4,597 3,580 
Provision for deferred income taxes1,505 (134)
Impairment of long-lived assets2,881  
Other non-cash credits, net (1)
(1,031)(526)
Changes in operating assets and liabilities:
Accounts receivable51,707 32,961 
Contract assets(26,146)(20,355)
Deferred contract acquisition costs(39,572)(44,946)
Prepaid expenses and other assets(4,277)(4,340)
Accounts payable2,759 (3,663)
Accrued expense and other liabilities(14,507)8,484 
Accrued compensation and employee benefits(45,042)(32,686)
Operating lease liabilities, net(2,422)(3,698)
Deferred revenue9,876 19,237 
Net cash used in operating activities(76,621)(23,523)
Cash flows from investing activities
Purchases of marketable securities(45,600)(94,157)
Sales of marketable securities 89,383 
Maturities of marketable securities47,433 36,605 
Purchases of property and equipment(16,298)(3,641)
Capitalization of software development costs (771)
Payments related to business acquisitions, net of cash acquired(29,477)(5,498)
Other investing, net(507) 
Net cash (used in) provided by investing activities(44,449)21,921 
Cash flows from financing activities
Proceeds from initial public offering, net of underwriting discounts and commissions 692,369 
Payments of initial public offering costs (3,734)
Proceeds from issuance of convertible preferred stock 750,000 
Payments of issuance costs for convertible preferred stock (164)
Proceeds from exercise of stock options4,682 6,651 
Payments of tax withholdings on net settlement of equity awards(38,717)(9,554)
Net (payments) receipts of tax withholdings on sell-to-cover equity award transactions(10,132)9,483 
Proceeds from employee stock purchase plan contributions8,507 6,902 
Repurchase of unvested early exercised stock options(1,493) 
Net cash (used in) provided by financing activities(37,153)1,451,953 
Effect of exchange rate changes(3,144)4,883 
Net (decrease) increase in cash, cash equivalents and restricted cash(161,367)1,455,234 
Cash, cash equivalents, and restricted cash - beginning of period1,768,723 371,190 
Cash, cash equivalents, and restricted cash - end of period$1,607,356 $1,826,424 
Supplemental disclosure of cash flow information
Cash paid for interest$527 $313 
Cash paid for income taxes17,610 4,035 
Supplemental disclosure of non-cash investing and financing activities
Stock-based compensation capitalized for software development$ $2,282 
Value of shares issued in payment of business acquisitions2,965 30,467 
Reduction in accrued expenses and other liabilities for vesting of early exercised stock options1,355 2,261 
Payable for marketable securities purchase3,638  
Deferred payments related to business acquisitions11,433  
Tax withholdings on net settlement of restricted stock units, accrued but not yet paid5,129 996 
((1) Prior period amounts have been combined to conform to current presentation
The accompanying notes are an integral part of these consolidated financial statements.
6

UiPath, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)

1. Organization and Description of Business
Description of Business
UiPath, Inc. (the “Company,” “we,” “us,” or “our”) was founded in Bucharest, Romania in 2005, was incorporated in Delaware in June 2015, and is headquartered in New York. We offer an end-to-end automation platform which provides a range of robotic process automation (“RPA”) solutions via a suite of interrelated software offerings that allow our customers to discover automation opportunities and to build, manage, run, engage, measure, and govern automations across departments within an organization.
We derive revenue primarily from the sale of: (1) software licenses for use of our proprietary software and related maintenance and support; (2) the right to access certain software products we host (i.e., software as a service, or "SaaS"); (3) hybrid solutions (which are comprised of three performance obligations, consisting of a term license, maintenance and support, and SaaS); and (4) professional services.
We have legal presence in 32 countries, with our principal operations in the United States, Romania, and Japan.
7

UiPath, Inc.
Notes to Condensed Consolidated Financial Statements (Continued)
(unaudited)
2. Summary of Significant Accounting Policies
Our significant accounting policies are discussed in Note 2, Summary of Significant Accounting Policies, in the Notes to Consolidated Financial Statements included in the 2022 Form 10-K. There have been no significant changes to these policies during the six months ended July 31, 2022.
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and applicable regulations of the SEC regarding interim financial reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by U.S. GAAP may be condensed or omitted. The accompanying unaudited condensed consolidated financial statements and related financial information should be read in conjunction with the audited consolidated financial statements and the accompanying notes thereto for the fiscal year ended January 31, 2022, which are included in the 2022 Form 10-K.
The unaudited condensed consolidated financial statements have been prepared on the same basis as the Company’s audited consolidated financial statements and, in the opinion of management, reflect all adjustments, consisting only of normal recurring adjustments, that are necessary for the fair presentation of the Company’s financial information. The unaudited condensed consolidated financial statements include the financial statements of UiPath, Inc. and its wholly owned subsidiaries in which we hold a controlling financial interest. Intercompany transactions and accounts have been eliminated in consolidation.
The results of operations for the six months ended July 31, 2022 and 2021 are not necessarily indicative of the results to be expected for the fiscal year ending January 31, 2023 or for any other future interim or annual period.
Fiscal Year
Our fiscal year ends on January 31. References to fiscal year 2023, for example, refer to the fiscal year ending January 31, 2023.
Use of Estimates
The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts of assets and liabilities at the balance sheet date and the amounts of revenue and expenses reported during the period. We evaluate estimates based on historical and anticipated results, trends, and various other assumptions. Such estimates include, but are not limited to, revenue recognition, estimated expected benefit period for deferred contract acquisition costs, allowance for doubtful accounts, fair value of financial assets, fair value of acquired assets and assumed liabilities, useful lives of long-lived assets, capitalized software development costs, carrying value of operating lease right-of-use (“ROU”) assets, incremental borrowing rates for operating leases, amount of stock-based compensation expense including determination of fair value of common stock prior to our initial public offering ("IPO"), timing and amount of contingencies, costs related to our restructuring actions, and valuation allowance for deferred income taxes. Actual results could differ from these estimates and assumptions.
Foreign Currency
The functional currency of our non-U.S. subsidiaries is the local currency. Asset and liability balances denominated in non-U.S. dollar currencies are translated into U.S. dollars using period-end exchange rates, while revenue and expenses are translated using the average monthly exchange rates. Differences are included in stockholders’ equity as a component of accumulated other comprehensive income. Financial assets and liabilities denominated in currencies other than the functional currency are recorded at the exchange rate at the time of the transaction and subsequent gains and losses related to changes in the foreign currency are included in other expense, net in the condensed consolidated statements of operations. For the three months ended July 31, 2022 and 2021, we recognized transaction losses of $0.8 million and $2.3 million, respectively. For the six months ended July 31, 2022 and 2021, we recognized transaction losses of $2.2 million and $5.2 million, respectively.
8

UiPath, Inc.
Notes to Condensed Consolidated Financial Statements (Continued)
(unaudited)
Concentration of Risks
Financial instruments that potentially subject us to significant concentrations of credit risk consist principally of cash and cash equivalents, marketable securities, and accounts receivable. We maintain our cash balance at financial institutions that management believes are high-credit, quality financial institutions, where our deposits, at times, exceed Federal Deposit Insurance Corporation (“FDIC”) limits. As of July 31, 2022 and January 31, 2022, 99% and 96%, respectively, of our cash and cash equivalents were concentrated in the United States, European Union (“EU”) countries, and Japan.
We extend differing levels of credit to customers based on creditworthiness, do not require collateral deposits, and when necessary maintain reserves for potential credit losses based upon the expected collectability of accounts receivable. We manage credit risk related to our customers by performing periodic evaluations of creditworthiness and applying other credit risk monitoring procedures.
Significant customers are those that represent 10% or more of our total revenue for the period or accounts receivable at the balance sheet date. For the three and six months ended July 31, 2022 and 2021, no single customer accounted for 10% or more of our total revenue. As of July 31, 2022 and January 31, 2022, no single customer accounted for 10% or more of our accounts receivable.
Internal-Use Software
Pursuant to Accounting Standards Codification ("ASC") 350-40, Internal Use Software, we capitalize costs incurred to implement cloud computing arrangements that are service contracts and costs incurred to develop internal-use software, which has historically included our SaaS products. ASC 350-40 prescribes capitalization of costs incurred during the application development stage, costs incurred to develop or obtain software that allows for access to or conversion of old data by new systems, and costs incurred in connection with upgrades and enhancements to internal-use software if it is probable that such expenditures will result in additional functionality. These capitalized costs exclude training costs, project management costs, and data migration costs. We evaluate our long-lived assets, including these capitalized costs, for indicators of possible impairment when events or changes in circumstances indicate the carrying amount of an asset or asset group may not be recoverable.
Beginning in the fourth quarter of fiscal 2022, we began to broadly market on-premises versions of certain of our SaaS products, thereby establishing a pattern of deciding to market internal-use software and a rebuttable presumption that we intend to market any SaaS products we develop. As a result, our ongoing and future SaaS projects must be accounted for under ASC 985-20, Costs of Software to be Sold, Leased or Marketed, which is discussed below under "Software Development Costs."
Prior to the fourth quarter of fiscal 2022, costs incurred to develop our SaaS products were capitalized and amortized on a straight-line basis over the product’s estimated useful life of five years and are included in cost of subscription services revenue on the condensed consolidated statements of operations. Capitalized costs included salaries, benefits, and stock-based compensation charges for employees that were directly involved in developing our SaaS products. These capitalized costs are included in other assets, non-current on the condensed consolidated balance sheets. Gross capitalized internal-use software development costs were $7.9 million and $10.1 million as of July 31, 2022 and January 31, 2022, respectively. Related amortization expense was $0.4 million and $0.3 million for the three months ended July 31, 2022 and 2021, respectively. Related amortization expense was $0.7 million and $0.5 million for the six months ended July 31, 2022 and 2021, respectively. Accumulated amortization was $2.4 million and $1.7 million as of July 31, 2022 and January 31, 2022, respectively.
Capitalized costs related to the implementation of cloud computing arrangements that are service contracts are amortized on a straight-line basis over the terms of the associated hosting arrangements and are recorded under operating expenses in the same line item on the condensed consolidated statements of operations as the associated hosting arrangement fees. These gross capitalized costs were $2.2 million and $2.3 million as of July 31, 2022 and January 31, 2022, respectively, and are recorded in other assets, non-current on our condensed consolidated balance sheets. Related amortization expense was $0.2 million and $0.2 million for the three months ended July 31, 2022 and 2021, respectively. Related amortization expense was $0.4 million and $0.4 million for the six months ended July 31, 2022 and 2021, respectively. Accumulated amortization was $1.6 million and $1.2 million as of July 31, 2022 and January 31, 2022, respectively.
9

UiPath, Inc.
Notes to Condensed Consolidated Financial Statements (Continued)
(unaudited)
Software Development Costs
We account for costs incurred to develop software to be licensed in accordance with ASC 985-20, Costs of Software to be Sold, Leased or Marketed. This guidance requires that all costs incurred to establish technological feasibility be expensed as they are incurred. Technological feasibility is established when the working model is complete. Production costs incurred subsequent to establishing technological feasibility are capitalized until the product is available for general release to customers, at which point they are amortized on a product by product basis. Capitalized costs are included in other assets, non-current on the condensed consolidated balance sheets. These costs are amortized over the estimated useful life of the software, which is five years, on a straight-line basis, and are included in cost of licenses revenue or cost of subscription services revenue in the condensed consolidated statements of operations, based on the nature of the underlying product. Management evaluates the useful life of these assets on an annual basis and tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets. Gross capitalized software development costs were $4.2 million and $4.3 million as of July 31, 2022 and January 31, 2022, respectively. Amortization expense was $0.2 million and $0.2 million for the three months ended July 31, 2022 and 2021, respectively. Related amortization expense was $0.4 million and $0.3 million for the six months ended July 31, 2022 and 2021, respectively. Accumulated amortization was $1.6 million and $1.2 million as of July 31, 2022 and January 31, 2022, respectively.
Business Acquisitions
Purchase consideration in a business combination is allocated to the assets acquired and liabilities assumed, based on their respective fair values at the date of the acquisition. Determination of the fair value of assets acquired and liabilities assumed relies on management judgments and involves the use of estimates and assumptions, including but not limited to assumptions about future cash inflows and outflows, discount rates, and lives of intangible and other assets. Any excess of the purchase consideration over the fair value of the net assets acquired is recognized as goodwill.
In cases when we issue stock or cash awards to the shareholders of an acquired business, we must also evaluate whether the awards represent purchase consideration or compensation for post-acquisition services by considering, among other things, whether the vesting of the awards is contingent upon the continued employment of the receiving shareholders. If continued employment is required, the awards are treated as compensation for post-acquisition services and recognized as expense over the requisite service period.
During the one-year measurement period following an acquisition, we may record adjustments to the fair value of the assets acquired and liabilities assumed, with a corresponding offset to goodwill. Upon the conclusion of the measurement period, subsequent adjustments, if any, are recorded in our condensed consolidated statements of operations.
Acquisition costs, such as legal and consulting fees, are expensed as incurred.
Impairment of Long-Lived Assets
We evaluate our long-lived assets for indicators of possible impairment when events or changes in circumstances suggest that the carrying amount of an asset or asset group may not be recoverable. We assess recoverability by comparing the carrying amount of such asset or asset group to the net undiscounted future cash flows we expect the asset or asset group to generate. If the carrying amount of an asset or asset group exceeds the related undiscounted cash flows, it is considered to be impaired and an impairment charge is recognized for the amount by which the carrying value of the asset or asset group exceeds its fair value. During the three and six months ended July 31, 2022, we concluded that the carrying values of long-lived assets related to our Brooklyn, NY office, including operating lease ROU assets, leasehold improvements, and furniture and fixtures, exceeded their estimated fair values as the result of restructuring actions. See Note 11, Commitments and Contingencies—Restructuring, for further details.
Net Loss Per Share Attributable to Common Stockholders
Basic and diluted net loss per share is calculated by dividing net loss attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period. Net loss is allocated between Class A and Class B common stock based on the weighted-average shares outstanding for each class.
10

UiPath, Inc.
Notes to Condensed Consolidated Financial Statements (Continued)
(unaudited)
Diluted net loss per share is the same as basic net loss per share because potentially dilutive common stock equivalents are anti-dilutive when in a net loss position.
In a period of net income, diluted net income per share would be calculated by giving effect to all potentially dilutive securities outstanding for the period (including unvested restricted stock units and unexercised stock options under our equity incentive plans, outstanding purchase periods under our employee stock purchase plan, unvested restricted stock awards and early exercised options subject to repurchase, and returnable common stock issued in connection with business acquisitions) using the treasury stock method.
For past periods in which our convertible preferred stock was outstanding, we computed net income or loss per share using the two-class method. The two-class method requires income available to common stockholders for the period to be allocated between common stock and participating securities based upon their respective rights to receive dividends as if all income for the period had been distributed. We considered our convertible preferred stock to be a participating security, as holders had non-forfeitable dividend rights in the event of our declaration of a dividend for shares of common stock. Our convertible preferred stock did not contractually require holders to participate in our losses. As such, net loss for the periods presented was not allocated to our convertible preferred stock.
Recently Adopted Accounting Pronouncements
As an emerging growth company, the Jumpstart Our Business Startups Act (the “JOBS Act”) allows us to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. We have elected to use this extended transition period under the JOBS Act.
In October 2021, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU). No. 2021-08, Business Combinations (Topic 805)—Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, to amend the current accounting guidance in ASC 805 to require entities to apply ASC 606 to recognize and measure contract assets and contract liabilities acquired in a business combination. We early adopted ASU No. 2021-08 on a prospective basis on February 1, 2022, and the adoption did not have a material impact on our condensed consolidated financial statements.
Recently Issued Accounting Pronouncements
In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740)—Simplifying the Accounting for Income Taxes, which is intended to simplify various aspects related to accounting for income taxes. ASU No. 2019-12 removes certain exceptions associated with (1) intraperiod tax allocations, (2) recognition of deferred tax liabilities for equity method investments of foreign subsidiaries, and (3) the calculation of income taxes in an interim period when in a loss position within the framework of ASC 740. ASU No. 2019-12 also clarifies and amends existing guidance to improve consistent application. ASU No. 2019-12 will be effective for us for annual periods beginning February 1, 2022 and for interim periods in fiscal years beginning February 1, 2023. We do not expect the adoption to have a material impact on our condensed consolidated financial statements.
In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, to amend the current accounting guidance which requires the measurement of all expected losses to be based on historical experience, current conditions, and reasonable and supportable forecasts. For trade receivables, contract assets, and other financial instruments, we will be required to use a forward-looking expected loss model that reflects probable losses rather than the incurred loss model for recognizing credit losses. ASU No. 2016-13 will be effective for us beginning February 1, 2023. Early adoption is permitted. We are currently evaluating the impact of this pronouncement on our condensed consolidated financial statements.
11

UiPath, Inc.
Notes to Condensed Consolidated Financial Statements (Continued)
(unaudited)
3. Revenue Recognition
Disaggregation of Revenue
The following tables summarize revenue by geographical region (dollars in thousands): 
Three Months Ended July 31,
20222021
AmountPercentage of
Revenue
AmountPercentage of
Revenue
Americas (1)
$120,977 50 %$89,266 46 %
Europe, Middle East, and Africa69,521 29 %60,405 31 %
Asia-Pacific (2)
51,724 21 %45,850 23 %
Total revenue$242,222 100 %$195,521 100 %
(1)Revenue from the United States represented 45% and 42% of our total revenues for the three months ended July 31, 2022 and 2021, respectively.
(2)Revenue from Japan represented 9% and 12% of our total revenues for the three months ended July 31, 2022 and 2021, respectively.
Six Months Ended July 31,
20222021
AmountPercentage of
Revenue
AmountPercentage of
Revenue
Americas (1)
$235,128 48 %$173,892 46 %
Europe, Middle East, and Africa139,124 29 %110,489