>>Studios in Palo Alto in Boston, connecting with thought leaders all around the world. This is a cute conversation. >>Hello everyone. This is Dave Volante. Welcome to this cube conversation. This is a company that we've been following now for the last couple of years in a trend in robotic process automation, and then automation specifically, uh, it's a, it's a company in an area that we really like. Uh, we've been researching this and publishing and Daniel Dienes is here. He's the CEO of UI path. Yeah, it was great to see you again. Thanks for coming on. >>Thank you for inviting me, David. >>That's our pleasure. So let's, let's get an update in your business. You know, we covert obviously you sent everybody for a loop. We had been and have been following you guys quite, quite closely. How's how are things going for UI path? How has the pandemic affected your business? >>We we've designed this company from day one to work in a hybrid mode, local and under, obviously working from anywhere. And the transition to working from anywhere model was a really fast to implement for us. So COVID-19 itself. In the fact of the way we work on the business side, I would say that we are seeing, you know, mixed of events, some, uh, industries that was, that were mostly affected by COVID we're putting their budgets one hole while other industries were increasing 10 times. What I can tell you that in, um, in a nutshell, the numbers for us were really good. We are able to keep eating and beating the thought gets that we set pretty COVID and we focused quite a lot on helping our customers, not the gating through these murky waters. We have quite a lot of, um, involvement in healthcare and federal business. We worked with a few hospitals to help with accelerating the COVID test. In one case, we were able to save two hours a day for every nurse. So instead of filling up paperwork, they are able to focus on the patient. And that's not one isolated instance. We've done tremendous work across the, across the globe. And, uh, you know, we, uh, you know, that we raised our last round in, uh, June end of June. And that was a recognition of our accelerated business, >>Right? Yes. I mean, you raised it in the, of the pandemic, you know, I I've been saying that. I mean, everybody of course says the covert has accelerated a number of trends and I've been saying there's a, that there's now an increased mandate for automation, I think there was before, but yeah, maybe there was some complacency, although you didn't see it in your numbers, you guys obviously growing very right fast. You mentioned healthcare. I would think of banking and financial as well, which of course was a stronghold. But when you think about in the U S anyway, that the payroll protection act and the number of loans that had to be processed, you know, bank bankers would talk to me and say, we are volume, increased two orders of magnitude. We had, we had no way to do it. And they turn to automation to do that. So, so I've said that there is an automation mandate, and I think there, there, there has been because of the productivity gap, particularly in the U S in Europe, you don't see it so much in, in of course in China. Uh, but, but certainly the U S in the last couple of decades has declined in terms of productivity. So, you know, people are not going to be able to solve the world's biggest problems without automation. How are you thinking about that? Um, in, in this post COVID world, >>As you said, the awareness that we have to automate has increased 10 times compared to pre COVID the days. I would not say that yet automation is number one priority on the company's leader's agenda, not in the same way as conferencing and video conferencing, and all this directly affected, positively affected the software industries. But I believe that, uh, while automation is slower to adopt, and it requires a lot more investment to adopt it's, uh, it's gone, uh, dominate the agenda post COVID in the, in the sense that people will have to recoup, you know, all the losses that they had in the COVID, they learn their lessons. And, uh, you know, for instance, I talked to the few CEOs of watch, you know, fortune 500 businesses, and they are telling me, Daniel, I wish that we have started earlier. So now we are seeing, you know, an adoption that is more top down and adoption that is starting from the C level suite, even the CEO of large enterprises. >>Yeah. I mean, it seems to me that if a customer has tasted, you know, the benefits of, of RPA and automation, uh, and as realizes what it can do for their business, they're gonna maybe double down on it, especially in a time when revenues might be under pressure. Uh, and, and you're not hiring a, a no, a lot of people have put, you know, freezes on number of head layoffs. You've got to do more with less you guys. I wonder if you could bring up this, this chart, I want to share this and get Daniel's reaction. So we all were talking about land and expand. So what this is ETR data, and what it does is it asks customers where they're at. Do they know about a vendor in this case? It's it's UI path is on the left and automation anywhere, and then some others, but do you know about the vendor? >>And, and are you planning on, you know, are you evaluating it? Are you planning to implement it? Uh, and this chart shows those respondents that said, yes, we, we, we are a customer. And we, we plan to expand our usage and you can see over the last three surveys that the yellow is even an uptick. And so people, this essentially the takeaway here is that once people taste it, that you land, and then they expand and find new use cases, are you seeing that in your business? And maybe you can give us some, some high level examples we've seen quite the look >>We have today more than 60 customers with, uh, over a million dollars in spending with us, uh, more than, uh, like 800 customers that spend more than a hundred K we've lost. And our net expansion rate is more than 140% consistent over many past quarters that shows a very solid, uh, expansion desire from our customers. And it shows that our technology is very well suitable for large case automation, deployments, enterprise wide, especially with our, uh, program or robot for every person. We are seeing huge interest and way bigger deals. We are able to lend upfront work to upscale our existing customers. You know, in a way I don't believe that in five years from now on, we will ever have people just to mindlessly move data from one screen to the other. I think this is a thing of the past, as much as plowing the fields is a thing of the past. >>So I wonder if he could talk a little bit about the, where you've come from as a company. So, I mean, you started in 2005. So, I mean, I think of you as a startup, but you've been around for a long time. Uh, and, and my sense is you started as a product company, but, you know, recently you guys announced this end to end platform for what you call or maybe Gardner calls. I don't know their term of hyper automation, but, but you've gone from a product company to a platform company. I wonder if you could talk about how you think about that transition and, and, and the platform generally >>To become a platform requires of certain level. And it's in a way, a harder business to promote to one enterprise customer. They, uh, they are very likely to test water with the product, but when, uh, you know, bad thing, everything, automation, why don't a platform, it's a different game. So this is why we, uh, we had to go from the steps of products, you know, product then like a couple of products, and then putting everything together into a platform. The power of the platform in, uh, in this particular instance comes from, uh, the integration of all pieces in a platform and an automation, white platform will have a different sets of products that play from the discovery of the processes that you automated, the implementation and maintenance of the process into the analytics that helps you track your progress. And also you have technologies that addresses two different persona in an enterprise from, you know, software engineers, RPA developers into the citizen developers. >>So it's a, it's a, it's a huge offering. And, um, the, what is really important for us is that we give full fledged platform. So an enterprise customer knows we will be able to build everything on the top of this platform, and they will offer best in class where it matters. And we believe that best-in-class matters in few important areas like RPA, like process mining, like analytics, while they will offer good enough where they will offer integration with best-in-class products where, uh, it's, uh, it's not so important in the, in the grand scheme of deploying automation, but the integration is tremendously important piece, put yourself in the shoes of a big enterprise instead of buying 20 different products, different, a licensing agreement, different maintainers stuff, different teams to support them. You just have one and they, and you have the guarantee. They work very well together. It's a very big proposition. I did requires maturity of the platform when they are making, you know, big strides into having the credibility that you know is required to have such a big investment. >>Well, I have to bring you bring that up. I have to ask you, so you guys are obviously a RPA and automation specialist building out a platform, very focused on that. And we always talk about this best of breed versus, uh, versus integrated suites. And you're sort of talking about integration. Of course, we saw Microsoft come out and as, as well as others, IBM, I think SAP have announced sort of what I would consider one dot products, you know, not nearly as robust as you and some of your, your leading competition, but how do you think about that in terms of staying ahead of that? I mean, you know, we all know Microsoft, you used to work there, they come out with a one Datto and, you know, then the two dot O and it's just still, and then eventually they get it right? So you have to move fast. >>Yes, absolutely. And we, we proved that we can move fast. We've built this company from zero five years ago to, you know, we are almost half a billion dollar in era today. So wait, we are fast. This is one of the four tenants of our culture be fast. But speaking about what the strategy in, uh, I believe that the space of low code, no code business application development, and the hyper automation space will, uh, converge into one single space, a company like Microsoft started with, uh, a simple product like, uh, if TTT and, uh, that was dedicated only to citizen developer to build very, you know, small and quick integrations. Like if you look at, uh, if you look at the power automate use cases, you'll see one of the most common use cases to set on a lot for myself. Well, I understand the value of such use case, but it's a far cry from setting an alarm and to automating, you know, end to end, procure to pay or order to cash for a big enterprise or COVID testing. >>And basically where we are coming from two different angles. We are coming from the RPA angle that is putting computer vision at the center of the technology. And they are coming from weak API integration. And we are making, we are making progress, you know, towards each other. My belief, I believe that, um, we have an advantage here in a sense that, uh, RPA is a technology that can produce immediate returns, but the labs K Y LA while the anther type of technologies, first of all, traditional automation, and then all this new type of API economy, API integrations kind of largely failed to show scalability within big enterprises. They are nice to have, but they are not essential when you are choosing a platform. My, uh, take is that you are choosing a platform based on what you need the most. This is where you choose the best in class. And you need the certainty that you partner with a vendor that invest the most. Well, this is our bread and butter. This is where we start. And of course we are offering every piece that the other are doing while they are also getting into, into our world. But our advantage being cloud agnostic, being ERP, agnostic, being CRM agnostic, and having started from the most sensitive technology that offer you, you know, the most, uh, the most savings center, best productivity increases. It's a tremendous advantage. >>And of course, you know, I'm excited about this opportunity and I've talked to a number of your customers. And so, you know, to me, that's the proof in the pudding, but you mentioned your annual recurring revenue, you know, approaching half a billion. So I got add, and, you know, as well that in my breaking analysis, we took a look at the total available market for RPA. And then I think, well, we've extended that I think we kinda missed the broader automation agenda in the platform thinking, and we've, we've updated those figures. I mean, it's, uh, it's hundreds of billions of dollars of an opportunity at least. And so the reason I bring this up is of course, last week we saw the hottest software IPO in history, and snowflake is a company with $400 million ARR growing at 120%. The company went from, you know, early this year, $15 billion valuation went up to 20, went up to 30. >>They, they launched a 33 billion within five minutes. It was worth 80 billion. You know, of course it's settling down now in the 60 billion, but unbelievable. And I would argue that your total available market is perhaps even even larger. I would say it is larger because it has a deeper business impact, uh, than, than say a snowflake. And of course, people watching my programs know that I'm a very, very high on that company. So my question is, what do you think about that, that IPO? How are you thinking about your, your own IPO? It would seem that that UI path is in a great position to at some point become a public company. >>We, first of all, if you are speaking about the time way, nobody would argue that our team is not higher than a snowflake. Pam, I, we can argue that their market is maybe more consolidated. Everybody understands data market in a way, and our market might be way more scattered across different use cases, but in a way, it's the market of data versus the market of all data versus old processes in the world. It's way, way more people are tasked today with processes then to analyzing and working with data in the way we are going after a very large problem that we have to solve. And we have to empower people of doing what they are naturally built to do, like, you know, talking to other people, socially interact, being creative, making decision, instead of doing this numbing part of their daily jobs that aren't required by this state of the industry. >>So our time we talked with different bankers and I've seen various figures from like 200 BD, one, two way into like two, three years for something that it's happy with. So time is the problem. It's the way, the way we are. I think, uh, we, uh, what we want to build, it's a durable business and it's a, it's a durable growth. Why in the same time being a cashflow positive, and we are very close to achieve this goals. And that will look, I believe that will be a very compelling proposition for our own IPO. I don't know if we can get snowflake multiples or not, but this is the feeling not the more, the biggest thing when my agenda, my, my agenda is to build a longterm sustainable, durable business. I am looking to next five to 10 years of this business. And IPO is just the fundraising event in, in, you know, after all. >>Great. So yeah, that's good. I wanted to ask you kind of what the, what the parameters are and, you know, I think you answered it is you're not rushing to get in, to draft off of some event that you had no control over that that notion of cashflow positive is really interesting to me. I said about the snowflake. I feel they have plenty of Tam just like you guys. And I agreed somewhere between 200 billion and 3 trillion. That's about right. And so, and, but, but I think that the, what I said about Snowflake's IPO is that I'm not worried about their lack of profitability right now. At some point I'm really going to be focused on their operating cash flow. And if you can, if you can come out with the large Tam, your, your growth that you're at the large ARR and cashflow positive, I can't wait to see that IPO Daniel. That's going to be super exciting. So we'll, we'll, uh, we'll be patient, but Daniel Dienes thank you so much for coming back into QBR. I was a great guest. Really appreciate the update on your business. >>Thank you so much. I really appreciate the invitation. Thanks. You're welcome. And >>Keep it right there. Everybody we'll be back with our next guest. Run up to this short break. This is Dave Volante.