A Look Back at Automation Software Stocks’ Third Quarter Earnings: UiPath (NYSE:PATH) vs. the Rest of the Pack
The end of an earnings season can be a good time to discover new stocks and assess how companies are coping with the current business environment. Let’s take a look at how UiPath (NYSE:PATH) and the rest of the automation software stocks fared in the third quarter.
The whole purpose of software is to automate tasks to increase productivity. Today, innovative new software techniques, often involving AI and machine learning, are finally enabling automation that has evolved from simple one- or two-step workflows to more complex processes that are integral to enterprises. The result is an increasing demand for modern automation software.
The six automation software stocks we track reported a mixed third quarter. As a group, revenues exceeded analyst consensus expectations by 1.2%, while revenue expectations for the next quarter were in line.
In light of this news, the companies’ share prices have remained stable as they have risen an average of 1.9% since the last earnings results.
Founded in 2005 in Romania as a technology outsourcing company, UiPath (NYSE:PATH) makes software that helps companies automate repetitive computing tasks.
UiPath reported revenue of $354.7 million, up 8.8% year over year. This print exceeded analyst expectations by 2%. Despite the revenue increase, it was still a mixed quarter for the company, with a solid gain in analyst EBITDA estimates but a significant miss in analyst billing estimates.
“Our customers’ response to the agentic automation vision and roadmap we announced at FORWARD energizes and strengthens our leading position in the AI-powered automation market,” said Daniel Dines, Founder and Chief Executive Officer of UiPath.
UiPath total revenue
UiPath scored the highest analyst estimates of the entire group. Yet the market seems dissatisfied with the results. The stock is down 0.2% since reporting and is currently trading at $13.05.
Is Now the Time to Buy UiPath? See our full analysis of earnings results here. It’s free.
Microsoft (NASDAQ:MSFT), short for microcomputer software, is the world’s largest software vendor with its Windows operating system, Office suite and cloud computing services.
Microsoft reported revenue of $65.59 billion, up 16% year over year, beating analyst expectations by 1.6%. The company had a strong quarter with a solid improvement in analysts’ operating profit expectations.
Microsoft’s total revenue
However, the results were likely priced into the stock as it has been trading sideways since reporting. Shares are currently trading at $434.70.
Is Now the Time to Buy Microsoft? See our full analysis of earnings results here. It’s free.
Founded in 1983 by Alan Trefler, Pegasystems (NASDAQ:PEGA) provides a software-as-a-service platform for automating and optimizing customer service and engagement workflows.
Pegasystems reported revenue of $325.1 million, down 2.9% year over year and falling 0.8% short of analyst expectations. It was a disappointing quarter as analysts’ EBITDA and billing estimates were significantly missed.
Pegasystems had the weakest performance compared to analyst estimates and the slowest revenue growth in the group. Interestingly, the stock is up 36.2% since the results and is currently trading at $94.95.
Read our full analysis of Pegasystems’ results here.
ServiceNow (NYSE:NOW) was founded by Fred Luddy, who coded the company’s first prototype on a flight from San Francisco to London. It is a software provider that helps companies automate IT, HR and customer service workflows.
ServiceNow reported revenue of $2.80 billion, up 22.2% year over year. This print exceeded analyst expectations by 1.9%. More broadly, it was a satisfying quarter as it also showed an impressive figure against current analyst estimates of remaining performance commitments, but slowed growth at major customers.
ServiceNow scored the fastest revenue growth among its competitors. The company added 32 enterprise customers paying more than $1 million annually, bringing the total to 2,020. The stock is up 19.7% since reporting and is currently trading at $1,086.
Read our full, actionable report on ServiceNow here. It’s free.
Appian (NASDAQ:APPN), founded by Matt Calkins and his three friends from an apartment in Northern Virginia, sells a software platform that lets users build applications without using much code, allowing them to create new software faster.
Appian reported revenue of $154.1 million, up 12.4% year over year. This result exceeded analyst expectations by 1.3%. That aside, it was a satisfying quarter as it also showed solid improvement over analysts’ EBITDA estimates.
Appian had the weakest full-year guidance update among its peers. The stock has fallen 15.1% since reporting and is currently trading at $34.42.
Read our full, actionable report on Appian here. It’s free.
Thanks to the Fed’s series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs and is moving closer to the 2% target. This disinflation has occurred without serious consequences for economic growth, indicating a soft landing success. The stock market boomed in 2024, boosted by recent interest rate cuts (0.5% in September and 0.25% each in November and December), and a notable rise followed Donald Trump’s victory in the November presidential election, boosting the indices were pushed to historic highs. Nevertheless, the outlook for 2025 remains clouded by the pace and magnitude of future rate cuts and by potential changes to trade policy and corporate taxes once the Trump administration takes over. The path forward is marked by uncertainty.
Do you want to invest in winners with rock-solid fundamentals? Check out our Hidden Gem stocks and add them to your watchlist. These companies are primed for growth regardless of the political or macroeconomic environment.
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