UiPath Outperforms Expectations in Q1; Shares Drop 7% After-Hours

UiPath, Inc. (PATH), an enterprise automation software company, released its first quarterly earnings after its first public offering. The company exceeded profit and revenue estimates, owing to strong ARR growth. However, during the June 8 extended trading session, shares fell 7.2 percent.

In the fields of robotic process automation (RPA) and artificial intelligence, UiPath is a market leader (AI). The business saves time and money by automating routine business operations, allowing staff to focus on more important, strategic tasks.

The quarter’s earnings were $0.02 per share, compared to a loss of $0.09 per share the year before. The company was predicted to lose $0.10 per share, according to the earnings whisper number.

The company posted revenue of $186.2 million, up 65 percent year over year, above the $167.3 million profit whisper number.

License income increased by 57.2 percent to $100.22 million, maintenance and support revenue increased by 79.7% to $77.64 million, and services and other revenue increased by 35.9% to $8.36 million.

The company’s annualized renewal run-rate (ARR) was $652.6 million at the end of the quarter, up 64 percent year over year, backed by $72 million in net new ARR.

The company has 8,500 clients around the world, with 1,105 of them giving more than $100,000 to ARR and 104 giving more than $1 million.

“We believe automation is the next step in the software stack,” said Daniel Dines, the company’s Co-Founder and CEO. Our end-to-end automation platform, flexible deployment approach, and expanding ecosystem of partners position us well to take advantage of the $60 billion market opportunity that lies ahead.”

Revenue and ARR are expected to be in the range of $180 – $185 million and $702 – $704 million in the second quarter, according to the business. Revenue is expected to be $176.11 million, according to the consensus estimate.

The business expects ARR to be between $850 and $855 million for the whole fiscal year 2022.

Following the announcement, Oppenheimer analyst Brian Schwartz kept his Hold recommendation on the stock, stating, “PATH has open-ended growth as the firm exerts its market leading position as the defining pure-play software supplier in RPA to gain share… However, high-quality software firms are frequently accompanied by high valuations, and we believe the stock is adequately valued at current levels, so we would wait for a better entry point.”

With a Moderate Buy consensus rating based on 8 Buys and 12 Holds, the Wall Street community is cautiously enthusiastic about the stock. The average analyst price objective for UiPath is $75.50, implying that the stock is adequately priced at present prices. Since it began trading on April 21, the stock has gained 10.1 percent.

UiPath receives a 7 out of 10 from TipRanks’ Smart Score algorithm, indicating that the stock is likely to perform in line with market averages.