Global software company UiPath, Inc. (NYSE: PATH) has reported stronger-than-expected results for the first quarter ended April 30, 2022.
Following the results, shares of the company rose 8.7% to close at $18.30 in Wednesday’s extended trading session.
Revenue & Earnings
UiPath reported quarterly revenues of $245.1 million, down 32% from the same quarter last year. However, the figure comfortably surpassed the consensus estimate of $225.3 million. Revenues from licenses (up 16.8% year-over-year) and subscription services (up 48.8% year-over-year) drove the overall growth in revenues for the company.
The company reported a loss of $0.03 per share against the consensus loss estimate of $0.06 per share. The company had posted a loss of $0.02 per share in the year-ago quarter.
UiPath reported an Annualized Renewal Run-rate (ARR) of $977.1 million, which denotes a rise of 50% year-over-year.
However, its gross margin declined from 88% in the previous year to 85%.
Outlook
For the second quarter, the company anticipates revenues between $229 million and $231 million. For Fiscal 2023, the company forecasts revenues in the range of $1.085 billion to $1.090 billion.
Management’s Take
The Co-CEO of UiPath, Daniel Dines, said, “We are pleased to have exceeded first quarter guidance across all metrics with ARR of $977 million growing 50 percent year-over-year. To help our customers more quickly realize the benefits of automation, we recently launched our UiPath 2022.4 platform. This release opens additional pathways in productivity, customer satisfaction, and employee engagement while also expanding our SaaS capabilities with new Automation Cloud™ robots.”
Stock Rating
Overall, the Street is cautiously optimistic about the stock and has a Moderate Buy consensus rating based on 13 Buys and six Holds. PATH’s average price target of $33.24 implies that the stock has upside potential of 97.5% from current levels. Shares have declined 79.2% over the past year.
Hedge Funds’ Confidence
TipRanks’ Hedge Fund Trading Activity tool shows that Hedge Fund Confidence Signal is currently Very Positive on the stock. Further, the cumulative change in holdings across the seven hedge funds that were active in the last quarter was an increase of 4.5 million shares.
Conclusion
UiPath’s better-than-expected results for the quarter and its industry-leading technology position it well to face the prevalent headwinds and emerge stronger.
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