Company: PATH
Filing Date: 2025-12-08
Form Type: 10-Q
Source: 0001734722-25-000050
Chunk: 98

Company: UiPath, Inc.
Filing Date: 2025-12-08
Form: 10-Q
Item: Part I, Item 8
Chunk 98
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 respectively. Our effective tax rate for these periods differed from the U.S. federal statutory rate primarily as a result of change in U.S. valuation allowance (as discussed below) and due to tax rate differences between the U.S. and foreign countries. For the three and nine months ended October 31, 2024, we had a benefit from income taxes of $14.8 million and $7.2 million, respectively. Our effective tax rate for these periods differed from the U.S. federal statutory rate primarily as a result of change in U.K. valuation allowance and due to tax rate differences between the U.S. and foreign countries.The realization of tax benefits of net deferred tax assets ("DTAs") is dependent upon future levels of taxable income of an appropriate character in the periods the items are expected to be deductible or taxable. As of October 31, 2025, based on the available positive and negative evidence, including the amount of taxable income in the U.S. in recent years and our 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