Commitments and Contingencies

9 Months Ended

Oct. 31, 2023

Commitments and Contingencies Disclosure [Abstract]

Letters of Credit

We had a total of $3.2 million and $4.3 million in letters of credit outstanding in favor of certain landlords for office space and for credit line facilities as of October 31, 2023 and January 31, 2023, respectively. These letters of credit renew annually and expire on various dates through fiscal year 2025.

Indemnification

In the ordinary course of business, we may provide indemnification of varying scope and terms to customers, vendors, directors, and officers with respect to certain matters, including, but not limited to, losses arising out of our breach of such agreements, services to be provided by us, or from intellectual property infringement claims made by third parties.

These indemnification provisions may survive termination of the underlying agreement and the potential amount of future payments we could be required to make under these indemnification provisions may not be subject to maximum loss clauses. The maximum potential amount of future payments we could be required to make under these indemnification provisions is indeterminable. As of October 31, 2023 and January 31, 2023, we have not accrued a liability for these indemnification arrangements because the likelihood of incurring a payment obligation, if any, in connection with these indemnification arrangements was remote.

Restructuring

On June 24, 2022, our board of directors approved restructuring actions to manage our operating expenses by reducing our global workforce by approximately 5%. The workforce reduction aimed to simplify our go-to-market approach and improve sales productivity. In connection with these workforce reductions, we also ceased use of our office in Brooklyn, NY. On November 10, 2022, our board of directors approved further restructuring actions to reduce our global workforce across functions by an additional 6%.

For the nine months ended October 31, 2023, we incurred $2.6 million of expense associated with employee termination benefits in connection our restructuring actions, which were completed during the second quarter of fiscal year 2024.

The following table shows the total amount incurred, and the liability, which is recorded in accrued compensation and employee benefits in the condensed consolidated balance sheets, for restructuring-related employee termination benefits as of October 31, 2023 (in thousands):


	Employee Termination Benefits
Accrued restructuring costs as of January 31, 2023	$	3,889
Restructuring costs incurred during the nine months ended October 31, 2023	2,631
Amount paid during the nine months ended October 31, 2023	(6,072)
Accrued restructuring costs as of October 31, 2023	$	448

Defined Contribution Plans

We sponsor retirement plans for qualifying employees, including a 401(k) plan in the U.S. and defined contribution plans in certain other countries, to which we make matching contributions. Our total matching contributions to all defined contribution plans was $3.3 million and $2.7 million for the three months ended October 31, 2023 and 2022, respectively, and $12.4 million and $11.4 million for the nine months ended October 31, 2023 and 2022, respectively.

Litigation

From time to time, we may be involved in lawsuits, claims, investigations, and proceedings, consisting of intellectual property, commercial, employment, and other matters, which arise in the ordinary course of business. In accordance with ASC 450, Contingencies, we make a provision for a liability when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. UiPath and certain of its officers are currently parties to the following litigation matters:

On September 6, 2023, a putative class action lawsuit was filed in the United States District Court for the Southern District of New York against UiPath, Co-CEO Daniel Dines, and CFO Ashim Gupta, captioned Samhita Gera v. UiPath, Inc., et. al. (Case No. 1:23-cv-07908) (the "Securities Action"). The lawsuit asserts claims under Sections 10(b) and 20(a) of the Exchange Act, and alleges that defendants made material misstatements and omissions, including regarding UiPath’s competitive position and its financial results. The complaint is purportedly brought on behalf of a putative class of persons who purchased or otherwise acquired UiPath common stock between April 21, 2021 and March 30, 2022. It seeks unspecified monetary damages, costs and attorneys’ fees, and other unspecified relief as the Court deems appropriate. The proceeding is at a very early stage.

On November 30, 2023, a purported shareholder derivative lawsuit was filed in the United States District Court for the Eastern District of New York against UiPath, as nominal defendant, and Co-CEO Daniel Dines, CFO Ashim Gupta, and several of UiPath’s current and former directors. The case is captioned Polilingua Limited v. Daniel Dines, et al. (Case No. 1:23-cv-08810). The lawsuit alleges that the individual defendants breached their fiduciary duties and committed other alleged misconduct in connection with the statements at issue in the Securities Action and by causing the Company to repurchase shares at inflated prices.The plaintiff seeks unspecified damages and/or restitution on behalf of UiPath, as well as costs and attorneys’ fees, and certain changes to UiPath’s corporate governance and internal controls. The proceeding is at a very early stage.

We have not recorded any accrual related to the aforementioned litigation matters as of October 31, 2023.

Warranty

We warrant to customers that our platform will operate substantially in accordance with its specifications. Historically, no significant costs have been incurred related to product warranties. Based on such historical experience, the probability of incurring such costs in the future is deemed remote. As such, no accruals for product warranty costs have been made.

Non-Cancelable Purchase Obligations

In the normal course of business, we enter into non-cancelable purchase commitments with various parties, mainly for hosting services, software products and services, and credits toward purchase of products and services from strategic alliance partners.

As of October 31, 2023, we had outstanding non-cancelable purchase obligations with a term of 12 months or longer as follows (in thousands):


	Amount
Remainder of year ending January 31, 2024	$	11,164
Year ending January 31,
2025	91,225
2026	64,667
2027	21,679
2028	8,245
Thereafter	—
Total	$	196,980