UiPath Achieves GAAP Profitability as Nebius Soars; Expansion Metrics Under Scrutiny

What happened

UiPath reported its first GAAP profitable quarter in Q3 FY2026, a significant milestone amid The Motley Fool's comparison to Nebius's 547% quarterly revenue surge, highlighting divergent competitive trajectories. However, the DeepValue report reveals that UiPath's dollar-based net retention has declined to 107% and net-new ARR was $59M in Q3, below the thresholds needed for growth re-acceleration. The investment thesis centers on whether agentic automation features—like Maestro and NVIDIA integrations—can boost these expansion metrics to NDR ≥110% and net-new ARR ≥$70M per quarter. The article's emphasis on Nebius's explosive growth underscores market pressures and the risk that UiPath's profitability may stem from cost cuts rather than durable demand. With the stock at $11.70, investors await Q4 FY2026 results to see if agentic adoption translates into measurable ARR acceleration and retention improvement.

Implication

UiPath's GAAP profitability, while positive, is largely driven by restructuring and cost discipline, not expansion, limiting upside if growth remains sluggish. Nebius's rapid revenue growth signals intense competition that could erode UiPath's market share and compress renewal rates. For the stock to rerate, management must show that agentic automation leads to sustained NDR above 110% and net-new ARR exceeding $59M per quarter, moving beyond promotional partnerships. If expansion metrics fail to improve in the next two quarters, the bear case of $9.00 becomes more plausible, reflecting growth stagnation. Conversely, evidence of agentic-driven expansion could support a rally to the $13.50-$17.00 range, making near-term earnings critical for conviction.

Thesis delta

The new article does not shift the core thesis but reinforces the competitive urgency: UiPath must prove that agentic automation can drive expansion metrics upward, as profitability alone is insufficient. The contrast with Nebius's growth highlights the need for UiPath to demonstrate platform durability against aggressive rivals, keeping the focus on Q4 FY2026 results for validation.