UiPath's AI Ambitions Face Headwinds as Revenue Growth Slows and Stock Tumbles

UiPath's revenue growth slows to a crawl as it chases agentic AI dream, and its stock falls sharply - SiliconANGLE

UiPath's revenue growth slows to a crawl as it chases agentic AI dream, and its stock falls sharply Shares of the business automation software company UiPath Inc. were battered and bruised today after it posted mixed results in its latest earnings report and offered guidance for the year ahead that trailed Wall Street's expectations. The company reported fourth-quarter earnings before certain costs such as stock compensation of 26 cents per share, beating the Street's target of 20 cents. However, revenue for the period inched up just 5% from a year earlier to $424 million, just short of the Street's $425.1 million consensus estimate. Still, the company did well to boost its profitability, reporting a net income of $51.8 million in the quarter, up from $33.9 million in the year-ago period. Looking to the new fiscal year, UiPath Chief Financial Officer Ashim Gupta warned investors that the company is bracing itself for "increasing global macroeconomic uncertainty" due to U.S. trade policies and the prospect of tariffs, among other things. "This uncertainty is reflected both in our fiscal first quarter and full-year 2026 financial outlook," he said. The company forecast sales of between $1.525 billion and $1.53 billion for fiscal 2026, quite a bit lower than the Street's target of $1.58 billion in annual sales. The near-term picture looks just as glum. For the current quarter, UiPath is eying revenue of between $330 million and $335 million, some way off the analyst's forecast of $367.5 million. Investors were dismayed, and many ran for the hills, sending UiPath's stock down more than 16% after the report. The company is a leader in the robotic process automation industry. It sells tools that can help businesses to lower costs and reduce operational errors by automating repetitive tasks such as data entry. This core technology is powered by artificial intelligence models that study how employees perform common tasks, such as data entry, so they can replicate that work with no mistakes. More recently, UiPath has been looking to develop more sophisticated AI models, believing it's well-placed to capitalize on the growing interest in so-called "agentic AI". These AI agents are sometimes known as "digital laborers", and have the ability to perform more complex tasks on behalf of users with minimal supervision. AI agents are the hottest thing in AI right now, with everyone from OpenAI and Microsoft Corp. to ServiceNow Inc. and Salesforce Inc. all racing to develop them. UiPath has also joined the race, and its Chief Executive Daniel Dines (pictured) insisted today that the company is making rapid progress in this area. "Fiscal 2025 was our most innovative year in recent history," he said, citing the launch of new products such as Autopilot, Agent Builder, Agentic Orchestration and Agentic Testing. "I am happy with the progress we made over the last several quarters," he added. "As we enter fiscal year 2026, we are focused on continuing to innovate across our agentic roadmap, helping our customers derive value from their investments, and continuing to drive operational rigor across the organization." It remains to be seen if UiPath can translate that progress into financial success, though. In recent weeks, some analysts have voiced concerns about when the technology industry's multibillion dollar investments into AI will start to deliver returns. With the rise of companies like China's DeepSeek Ltd., which claim to have developed powerful AI models at significantly reduced costs, there are fears that such enormous spending might not be necessary. More broadly, U.S. President Donald Trump's trade policies have spooked the global markets, and the technology industry is feeling it. That's why the shares of other companies invested in AI agents, such as Salesforce, have also taken a beating in recent weeks. Despite this uncertainty, UiPath seems convinced that AI agents are still a big opportunity that's worth spending money on. Alongside its results, it announced today that it has acquired a U.K.-based AI company called Peak AI Ltd. for an undisclosed price. Peak sells AI agents that optimize product inventory and pricing decisions for businesses to try and maximize their profitability. UiPath said it will be able to help Peak scale its AI technology globally and bring it to many new markets, while improving its grip on the manufacturing and retail markets it currently operates in. "With the acquisition of Peak, we are accelerating our mission to strengthen our vertical AI solutions strategy," Dines said in a statement. "When combined with the UiPath platform, Peak's exceptional purpose-built AI applications will enhance our ability to provide solutions that optimize industry-specific use cases and deliver incredible value to customers." Dines spoke more about his company's strategy for AI agents during the company's annual user conference, UiPath Forward, in October:

UiPath Hit By Slowing ARR Growth, Deal Timing Woes: Analyst Remains Optimistic For AI, Cloud Spark - UiPath (NYSE:PATH)

UiPath Inc PATH stock price declined Thursday after the company reported a fourth-quarter revenue miss. The New York-based company issued first-quarter revenue guidance below estimates on Wednesday.It reported largely disappointing fourth-quarter results, predominantly driven by deal delays in its US Fed segment. These delays also drove initial fiscal 2026 guidance below estimates due to additional uncertainty of deal timing for this vertical. Also Read: Cathie Wood-Led Ark Invest Roblox, Roku, UiPath As Markets Take A Dip Needham analyst Scott Berg reiterated UiPath with a Hold. Total revenues of $423.6 million were below his $425.3 million estimate. Berg noted currency exchange rate fluctuations had a negative $2 million impact on revenues. When adjusting a similar effect to ARR, the net new ARR of $59 million was ~$5 million below guidance. On the optimistic side, customers are now using 3k of UiPath's Agents, which the analyst noted as a strong initial interest in Agentic innovations. The analyst would expect the small pilots to expand substantially in the second half of 2026. UiPath also noted stronger-than-expected growth of its Cloud model, with ARR up more than 50%, which Berg said was a catalyst to incremental AI adoption since much of the innovation is better served in the Cloud. The fourth-quarter revenue and adjusted EPS were $423.6 million and $0.26, compared to the analyst's $425.3 million and $0.19 estimates. Total revenue increased by 4.5%, subscription revenue grew by 22.3%, and license revenue went down by 10.2%. ARR grew 13.8% to $1.67 billion, a deceleration from the 16.6% growth in the third quarter and the 21.6% growth seen last year. Net new ARR of $59 million represents a 31% decline. The customer count of 10,750 decreased by 140 sequentially and was down 0.7% compared to last year. To date, customers have deployed over 3,000 agents on the UiPath platform. Overall, AI has a 20% customer attach rate, with a greater than 85% attach rate for customers with over $1 million in ARR. UiPath's acquisition of AI-native company Peak has a relatively small impact on fiscal 2026 financials, given that it falls under the regulatory threshold on financial disclosure. UiPath is facing elevated levels of uncertainty driven by public sector dynamics, macro volatility, and currency exchange rate fluctuations. Revenue growth guidance of 6.8% to $1.525 billion -- $1.530 billion missed the consensus $1.584 billion forecast. Price Action: PATH stock is down 14.54% at $10.11 at last check Thursday. Also Read: Archer Taps Palantir's AI to Supercharge Electric Aircraft Production and Flight Tech Image: Courtesy of UiPath, Inc. PATHUiPath Inc$10.13-14.3%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum17.62Growth83.40Quality-Value57.55Price TrendShortMediumLongOverviewMarket News and Data brought to you by Benzinga APIs

UiPath Stock Down: Faces Caution Despite Margin Gains, Analyst Doubtful About Company's AI Transition Capability - UiPath (NYSE:PATH)

The new Benzinga Rankings show you exactly how stocks stack up -- scoring them across five key factors that matter most to investors. Every day, one stock rises to the top. Which one is leading today? UiPath, Inc. PATH shares are trading lower on Thursday. The company released its fourth-quarter results after Wednesday's closing bell. Here's a look at the key figures from the report. UiPath reported quarterly earnings of nine cents per share, which beat the analyst consensus estimate of three cents. Quarterly revenue of $424 million missed the analyst consensus estimate of $425.36 million and is an increase over revenue of $405.25 million from the same period last year. Scotia Bank analyst Nick Altmann reiterated the Sector Perform rating on the stock, lowering the price forecast to $12 from $15. Altmann expresses caution about rewarding UiPath for its margin improvements, given that medium-term concerns persist regarding the company's ability to effectively transition into AI, with growth continuing to face pressure. Also Read: Stock Of The Day: Is Dollar Tree Set To Move Higher? (Updated) While the analyst acknowledges the company's 9% ARR growth forecast, which aligns with its guidance, and a second-half weighted NNARR guide, Altmann highlights the stock is likely to remain range-bound. The analyst notes the public sector represents UiPath's third-largest vertical, although management refrains from specifying the exact mix. Given the ongoing macroeconomic pressures, management is adopting a more cautious approach to its guidance. Additionally, the analyst highlights a dip in NRR, which fell to 110% from the previous 113%. The low-end segment continues to face challenges, as evidenced by a decline in net adds, with a drop of 40 this quarter compared to a smaller loss of 20 in the prior quarter. Despite these concerns, the analyst acknowledges margins remain a positive aspect, with record operating margins of 32%, and the FY26 guidance of approximately 18%, which is above the consensus of 15%. The primary focus for the company continues to be stabilizing growth, which has yet to materialize, Altmann adds. PATH Price Action: UiPath shares are trading lower by 14.38% to $10.15 at publication Thursday. Read Next: * Trump Threatens 200% Tariff On European Wine, Alcohol Stocks React Photo: Courtesy of UiPath, Inc. PATHUiPath Inc$10.14-14.3%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum17.62Growth83.40Quality-Value57.55Price TrendShortMediumLongOverviewMarket News and Data brought to you by Benzinga APIs

UiPath: Mixed Earnings, EPS Outperforms | The Motley Fool

Key highlights included an EPS of $0.26, which beat analyst estimates of $0.20 by 30%, while total revenue reached $424 million, slightly missing the consensus analyst forecast of $425 million. Despite this small shortfall, the overall assessment of the quarter is broadly positive, as the company met its own revenue guidance and demonstrated strong earnings performance. However, UIPath's stock price fell sharply on the news due to modest next-year guidance targets. This financial update presents a mixed yet optimistic outlook as UiPath navigates a competitive landscape. Source: SEC filings. Analyst estimates provided by FactSet. UiPath offers an AI-powered business automation platform. This platform automates everything from simple tasks to complex operations using technology like machine learning and natural language processing. Known for its end-to-end automation solutions, UiPath has prioritized AI integration to enhance its platform's capabilities. Recently, UiPath focused on strengthening its position through AI advancements and strategic partnerships. Its key success levers include AI-powered tool development, market expansion, and fostering strategic alliances. These areas are vital to support growth and enhance client offerings. During the past quarter, UiPath introduced new AI products like Autopilot and Agent Builder, moving towards reshaping the automation field. These products aim to provide better automation capabilities, with CEO Daniel Dines noting that fiscal 2025 was a year of significant innovation. Acquisitions, such as that of Peak AI Limited, have bolstered the company's capabilities with vertically specialized solutions. Strategic partnerships with firms like Deloitte enhance its reach in fields like ERP, underscoring a focus on comprehensive market presence. Revenue reached $424 million, a slightly below analyst forecasts but aligning with management's guidance of $422 to $427 million. The ARR came to $1.666 billion, just shy of the midpoint of management's guidance range from $1.669 to $1.674 billion. UiPath posted a dollar-based net retention rate of 110%, capturing solid customer retention levels and growth from existing clients. However, CFO Ashim Gupta mentioned concerns over macroeconomic uncertainty that may impact future growth. Looking towards fiscal 2026, UiPath projects revenue between $1.525 billion and $1.530 billion, with a planned non-GAAP operating income of approximately $270 million. The revenue target represents approximately 6.8% full-year revenue growth, down from 9.3% in fiscal year 2025. The adjusted operating income guidance suggests 12% year-over-year growth. Focus areas include stabilizing new ARR dollars and accelerating free cash flow growth. Investors should watch UIPath's ongoing product innovations and strategic partnerships. While there are concerns over macroeconomic uncertainty, UiPath appears positioned to leverage its robust automation platform towards sustained growth.

Why UiPath Stock Is Falling Hard Today

Shares of the artificial intelligence (AI)-powered business automation company UiPath (PATH -15.01%) plunged today after the company released fiscal fourth-quarter revenue results and first-quarter sales guidance that were both below Wall Street's consensus estimates. UiPath's fiscal year 2025 ended Jan. 31. UiPath's stock gave up 14.8% as of 10:39 a.m. ET as investors processed the latest results, adding to the company's already significant share price decline amid fears over a U.S.-led trade war. Two misses and a beat UiPath's non-GAAP (adjusted) earnings of $0.26 in the quarter were up 13% from the year-ago quarter and easily outpaced Wall Street's consensus estimate of $0.20 per share. But investors mostly ignored the company's earnings today and instead focused on the two areas where UiPath results fell short. Specifically, the company's fourth-quarter sales of $424 million rose 5% from the year-ago quarter but were just below analysts' consensus estimate of $425 million. UiPath's management also issued first-quarter revenue guidance in the range of $330 million to $335 million, far below Wall Street's consensus estimate of $368 million. Those two misses were compounded by comments made by Ashim Gupta, UiPath's CFO and chief operating officer. "Over the last several weeks we have seen increasing global macro economic uncertainty, particularly in the U.S. public sector, and this uncertainty is reflected both in our fiscal first quarter and full year 2026 financial outlook," he said. Uncertainty looms Gupta's comments are likely why investors reacted so strongly to UiPath's fourth-quarter results. Investors are starting to believe there's potential pain ahead for the U.S. economy as President Trump has launched escalating tariffs with trade partners. While some tariff threats have been rescinded, the uncertainty is weighing down stocks and causing many companies to issue conservative guidance. Investors understand that ongoing tariffs could cause significant disruption in the economy and lead to rising inflation, just as it begins to moderate. While tariffs may not directly affect all companies, UiPath and other tech companies could feel the effects of a general economic slowdown, if it occurs.