UiPath Exceeds Q1 Expectations; Shares Dive 7% After-Hours

UiPath, Inc. (PATH), an enterprise automation software vendor, reported its first public quarterly earnings post IPO. The company beat both earnings and revenue expectations backed by solid growth in ARR. However, shares dived 7.2% in the extended trading session on June 8.

UiPath is a dominant player in robotic process automation (RPA) and artificial intelligence (AI). The company automates repetitive business processes, saving time and money, and helping employees focus on more meaningful, strategic work.

Earnings for the quarter stood at $0.02 per share, compared to a loss of $0.09 per share in the year-ago period. As per the earnings whisper number, the company was expected to post a loss of $0.10 per share.

The company reported revenue of $186.2 million, up 65% year-over-year, and surpassed the earnings whisper number of $167.3 million. (See UiPath stock analysis on TipRanks)

Compared to the prior-year period, Licenses revenue grew 57.2% to $100.22 million, Maintenance and support revenue grew 79.7% to $77.64 million, and Services and Other revenue grew 35.9% to $8.36 million.

At the quarter-end, the company’s Annualized renewal run-rate (ARR) was $652.6 million, up 64% year-over-year backed by net new ARR of $72 million.

The company has 8,500 customers worldwide, including 1,105 customers contributing more than $100,000 to ARR, and 104 customers contributing more than $1 million to ARR.

Daniel Dines, the company’s Co-Founder and CEO said, “We believe automation is the next layer in the software stack… Our end-to-end automation platform, flexible deployment model, and growing ecosystem of partners position us well to capitalize on the more than $60 billion market opportunity ahead of us.”

For the second quarter, the company projects revenue and ARR to fall in the range of $180 – $185 million and $702 – $704 million, respectively. The consensus estimate for revenue is pegged at $176.11 million.

For the full Fiscal year 2022, the company forecasts ARR to be in the range of $850 – $855 million.

Following the results, Oppenheimer analyst Brian Schwartz maintained a Hold rating on the stock and said, “PATH has open-ended growth as the company exerts its market leading position as the defining pure-play software supplier in RPA to gain share… However, high quality software companies are often paired with high valuations, and we believe shares are fairly valued at current levels, and we would wait on the side-lines for a better entry point.”

The Wall Street community is cautiously optimistic about the stock with a Moderate Buy consensus rating based on 8 Buys and 12 Holds. The UiPath average analyst price target of $75.50 implies that shares are fully valued at current levels. Shares have gained 10.1% since it commenced trading on April 21.

According to TipRanks’ Smart Score system, UiPath gets a 7 out of 10, which indicates that the stock is likely to perform in line with market averages.

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