Company: PATH
Filing Date: 2025-12-08
Form Type: 10-Q
Source: 0001734722-25-000050
Chunk: 49

Company: UiPath, Inc.
Filing Date: 2025-12-08
Form: 10-Q
Item: Part I, Item 1
Chunk 49
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 expectation of future profits in the U.S., we believe it is more likely than not that our U.S. federal DTA is realizable. Therefore, during the three and nine months ended October 31, 2025, we released $175.1 million of the valuation allowance associated with the U.S. federal DTA and $9.3 million of the valuation allowance associated with the New York State and New York City DTAs. We continue to maintain a full valuation allowance against our Romania DTAs and other U.S. state DTAs as of October 31, 2025 because we believe it is more likely than not that these DTAs will not be realized. We intend to maintain each of these full valuation allowances until sufficient positive evidence exists to support a reversal of, or decrease in, each of the respective valuation allowances.As of October 31, 2025, we had a reserve for gross unrecognized tax benefits totaling $9.1 million related to income taxes, which would impact the effective tax rate if recognized. Of this amount, $5.4 million pertains to uncertain tax positions, and the remainder relates to interest and penalties, which are accounted for as a component of our income tax provision. Our tax positions are subject to income tax audits in multiple tax jurisdictions globally. Our estimates of the potential outcome of any uncertain tax position are subject to management's assessment of the relevant risks, facts, and circumstances existing at that time. We believe that we have provided adequate reserves for our income tax uncertainties in all open tax years. However, our future results may include adjustments to estimates in the period the audits are settled, which may impact our effective tax rate.Our Indian subsidiary is currently appealing the corporate income tax assessment of $2.1 million for the audit period of April 2019 through March 2021. It also has an open corporate income tax audit for the period from April 2022 through March 2024. Our Romanian subsidiary is currently appealing the corporate income tax audit decision for the period from January 2018 through January 2022. In addition, we have engaged in two bilateral transfer pricing negotiations for our transfer pricing model, one between the U.S. and Romania, and one between Japan and Romania. The U.S.-Romania negotiation is in its final stage, and we anticipate that an agreement will be reached in the next three months. During the nine months ended October 31, 2025, we recorded a $3.1 million decrease to the U.S. DTA and the corresponding valuation