UiPath today filed documents to go public, with a plan to list on the New York Stock Exchange under the symbol PATH, according to the robotic process automation (RPA) vendor’s IPO prospectus, filed with the U.S. Securities and Exchange Commission (SEC).

The New York-based UiPath specializes in software that helps companies save time and money by automating repetitive, manual tasks such as entering data into spreadsheets.

While the company announced in December 2020 it had confidentially filed for an IPO, the S-1 form published by the SEC offers a look into the firm’s financials, operating strategy and anticipated risks. According to the filing, the company earned $607 million in revenue for the fiscal year ended Jan. 31, 2021, up from $336 million earned by Jan. 31, 2020.

The firm’s IPO filing follows major fundraising rounds; the RPA vendor announced in February that it raised $750 million in its Series F round that valued the automation software maker at $35 billion.

UiPath has just under 8,000 customers, “including 80% of the Fortune 10 and 61% of the Fortune Global 500,” companies, according to the S-1 form. Notable UiPath customers include financial institutions Bank of America, Bank of Montreal and, Sumitomo Mitsui Banking Corporation; retail brands like Uber and Foot Locker; and automaker Toyota, among others.

Financial performance

UiPath’s IPO filing marks the first time the RPA vendor’s financials have been made public. Founded in Romania in 2005, its S-1 notes it has registered 65% growth in year-on-year annual recurring revenue (ARR), which refers to the revenue the company has earned via renewal of its white-label offerings.

The filing also indicates that while the firm continues to register losses — $92.3 million in FY 2021, compared to $519.9 million in FY 2020 — it has managed to turn cash-flow positive. “Our operating cash flows were $(359.4) million and $29.2 million, and our free cash flows were $(380.4) million and $26.0 million in the fiscal years ended January 31, 2020, and 2021, respectively,” reads the IPO prospectus. The firm cut down on its sales and marketing expenditure while also significantly lowering its expenses on research and development.

According to the filed paperwork, UiPath’s “dollar-based net retention rate,” or its net rate of expansion of ARR, stood at 153% as of January 2021, compared to 145% for the previous year. The filing added that the firm’s ARR from its top 50 customers “increased by a median multiple of approximately 81x,” as of Jan. 31, 2021, as compared to the revenue earned from such customer’s initial month as a UiPath product user.

Overall, UiPath’s financials indicate that the company benefited from the increased demand for automation during the pandemic and has taken steps to trim the fat in its expenditures, thereby leading to an improved fiscal situation.

Risk Factors

While listing risk factors is a routine task for companies looking to go public, some of those listed by UiPath also offer a window into how the firm sees its place among market competitors. Some listed by the firm in its filing include: Automation Anywhere, Blue Prism, EdgeVerve Systems, Kofax and Microsoft Corporation.

One of the risk factors UiPath lists in the S-1 is that it derives a substantial portion of its revenue and ARR from sales to its “top 10% of customers,” so the inability to retain these customers or diversify its customer base could expose the company to “risks associated with customer concentration.”

Another risk factor listed by the firm notes that as UiPath’s market becomes increasingly driven by cloud-based solutions, “native cloud providers may enter this market and provide competitive offerings at lower prices.” Since Ui-Path relies upon third-party providers of cloud-based infrastructure, any disruption in the cloud vendor’s operations could adversely affect the firm’s business and financial conditions, the filing notes.

Competition for employees key to UiPath’s business is intense, according to the filing, “especially for engineers experienced in designing and developing RPA, artificial intelligence (AI), and machine learning (ML), and experienced sales professionals.” A failure to attract qualified personnel could materially harm the firm, the S-1 notes.

Looking ahead

UiPath intends to list Class A common stock, although the S-1 does not indicate the number of shares and price range for the proposed offering. The filing mentions J.P. Morgan, Morgan Stanley, Bank of America, Wells Fargo & Co. and Credit Suisse as among the underwriters for the proposed offering.

While the S-1 doesn’t offer much detail into how UiPath plans to use the money it will raise from the capital market, it notes that, in addition to using the funds for general corporate purposes, the company may “also use a portion of the net proceeds to acquire complementary businesses, products, services or technologies.”

Earlier this week, UiPath announced its March 19 $40.5 million acquisition of Cloud Elements, which provides an API integration platform for software-as-a-service application providers and the digital enterprise. UiPath also recently announced it had added DocuSign CEO Dan Springer to its board of directors.

The SEC’s publication of an S-1 form on its portal is generally seen as the agency clearing the way for a proposed offering, after which companies go on a “roadshow” to shore up demand and answer queries from prospective investors. As that period draws to a close, investment banks and company executives determine the price of the stock, and who will be allocated how much stock, before shares are made tradeable on the index.

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