$UiPath(PATH)$ is now set to print cash.

In my original UiPath deep dive, I pointed out the two key drivers that will potentially trigger a financial inflection point:

1. Semantic automation: this will allow UiPath to better understand the workflows and their content, in order to automate tasks of higher value over time.

2. Low code: this will allow UiPath to democratize access to the platform, by enabling anyone to automate workflows. (Low code enables folks to build things without code).

This quarter I see no particular progress made on the semantic automation front, while UiPath is advancing well on the low code front.

In Q1 2024, UiPath released Clipboard AI, which I identified as the key mechanism via which UiPath was developing semantic automation. Unfortunately, there have been no mentions of the feature in any quarterly call since.

In the Q3 2024 call, CEO David Dines discusses the launch of the next-generation Intelligent Document Processing technology. This technology allegedly speeds up model training time by 80%, quite significant.

But, management makes no explicit mention of what the tech understands within documents.

In the Q&A section, it was nonetheless interesting to hear David Dines discussing his vision for UiPath as a data repository for AIs that help automate work.

Although the company seems to have not made explicit progress on the semantic automation front, it remains true that as the platform automates more work, the potential for further automation increases too:

"And going forward on a longer term basis with UiPath are in one of the best positions to build the next generation foundational models that understand processes, tasks, screens and documents, the type of multi-modal that is built in, in order to drive automation.

So it's -- to me, it's clear that the world is going into that direction. And again, we are really in a very good position to take advantage of it.-UiPath CEO David Dines during the Q3 FY2024 call."

On the other hand, management is quite vocal about the “inflection point” to be brought on by generative AI, which will allow folks of decreasing technical expertise to create value from the platform.

In Q3 FY2024, UiPath released platform version 2023.10, which includes a feature called UiPath Autopilot.

This feature is “intended to help developers across skill levels build automations faster by leveraging natural language descriptions to generate automation workflows.”

Exactly as I hypothesized in my original deep dive.

I believe this sort of automation will increase gross margins going forward. UiPath incurs costs when deploying its software for clients and providing maintenance.

Generative AI is likely to bring those costs down, by removing complexity.

With the feature recently launched, the impact on the financials is yet to materialize. This will be a key element of my analysis going forward.

In the conference call, David Dines shared how they are currently seeing features in the autopilot family impact deployment times directly proportional to deployment costs:

"This is always one of our major product focus on how can we shorten the adoption curve for our customers.

And we are already seeing with our autopilot family that is in private preview some really good results with the initial set of few hundreds of customers that are testing the product."