Company: PATH
Filing Date: 2025-09-08
Form Type: 10-Q
Source: 0001734722-25-000043
Chunk: 122

Company: UiPath, Inc.
Filing Date: 2025-09-08
Form: 10-Q
Item: Part I, Item 8
Chunk 122
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 or decrease in, each of the respective valuation allowances. Given our current earnings and anticipated future earnings, we believe that there is a reasonable possibility that sufficient positive evidence may become available to allow us to conclude that a valuation allowance is no longer needed for our U.S. DTA within the next six months, and for our Romania DTA, or a portion thereof, within the next 18 months. Release of a valuation allowance would result in recognition of DTA and income tax benefit in the period of the respective release.As of July 31, 2025, we had gross unrecognized tax benefits totaling $1.6 million related to income taxes, which would impact the effective tax rate if recognized. Of this amount, the total liability pertaining to uncertain tax positions was $0.9 million, excluding 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 is 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 six months. During the three months ended July 31, 2025, after evaluating recent developments, we recorded a $3.1 million decrease to the U.S. DTA and the corresponding valuation allowance, representing the unrecognized tax benefit related to the U.S.-Romania bilateral advance agreement. Further, during the three months ended July 31, 2025 we also recorded a $4.3 million increase in the Romania DTA and the corresponding valuation allowance. The Japan-Romania negotiation is currently