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Research Alert: Path Delivers Strong Start To Fy 27 On Sequential Topline Acceleration

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CFRA, an independent research provider, has providedwith the following research alert. Analysts at CFRA have summarized their opinion as follows:

PATH delivered strong Q1 results with revenue of $418M, up 17% Y/Y, beating consensus by $20.9M, achieving first positive Q1 GAAP operating income of $28M. Non-GAAP EPS of $0.15 missed by $0.01, though non-GAAP operating margin expanded to 22%. ARR reached $1.901B, up 12% with $49M in net new ARR, while net retention improved 200 bps Q/Q to 109%. We highlight agentic AI strategy gaining meaningful traction, transitioning from pilot to production deployments, supported by partnerships with Databricks, Microsoft, Google Cloud, and Salesforce. Management's FY 27 guidance implies revenue growth of ~9% and ARR growth of ~11%, with non-GAAP operating margin expected to expand to ~24%. We note 240 bps Y/Y margin expansion and robust cash generation of $132M in operating cash flow. Professional services revenue surged 47% Y/Y, suggesting increased implementation activity, supporting our positive view of PATH's competitive positioning in enterprise AI orchestration.

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