UiPath tops expectations and swings to a profit on solid AI momentum – News

UiPath Inc. raised its full-year revenue outlook after cruising past Wall Street’s expectations and swinging to a profit in its latest quarterly results, powered by momentum in its artificial intelligence products.

The automation software provider reported second-quarter earnings before certain costs such as stock compensation of 15 cents per share, trouncing the analyst consensus estimate, which called for a profit of just seven cents. Revenue for the period jumped 14%, to $362 million, surpassing the Street’s $347.5 million target.

Annual recurring revenue rose 11% from a year earlier, to $1.723 billion, while net new ARR clocked in at $31 million. The company also reported an adjusted free cash flow of $45 million, with $1.52 billion in cash and equivalents on its books.

The strong performance meant UiPath was able to break out of the red, delivering a net income of $1.6 million in the quarter, up from a loss of $86.1 million a year earlier.

Investors liked what they saw, and UiPath’s stock gained more than 4% after-hours, having stayed flat during the regular trading session. However, it still has room for improvement, with the stock down 14% in the year to date.

UiPath made its name as a pioneer of robotic process automation, selling tools that can help businesses to lower costs and reduce operational errors by automating repetitive tasks such as data entry. This technology is powered by AI 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 turned its attention to more sophisticated AI agents, sometimes known as “digital laborers,” which utilize large language models to perform more complex tasks on behalf of users with minimal supervision.

UiPath founder and Chief Executive Daniel Dines (pictured) said the results reflect the growing momentum of these agentic AI capabilities and the company’s improved execution. “Our best-in-class products are enabling customers across industries to move beyond pilots into production deployments, orchestrating agents, robots, and humans to achieve real outcomes,” Dines said. “Customers consistently tell us that automation and agentic AI are stronger together, and with orchestration, they’re delivering real value today.”

Analyst Holger Mueller of Constellation Research Inc. told News he shares Dines’ optimism, adding that its swing back into a profit was quite a remarkable achievement considering its revenue growth wasn’t exactly sensational.

“UiPath did this by growing its top line in revenue by around $45 million while simultaneously reducing its operating expenses by nearly $40 million,” Mueller explained. “That resulted in a swing of $85 million and a very small profit. If UiPath delivers one more quarter like this, it should finally start producing the regular profit it has been chasing for years.”

The momentum UiPath is seeing has given it the confidence to raise its full-year revenue guidance, and it’s now forecasting total sales of $1.571 billion to $1.576 billion, up from a previous range of $1.549 billion to $1.554 billion. For the current quarter, it’s looking for revenue of $390 million to $395 million. In contrast, Wall Street’s guidance is more cautious. Analysts are looking for annual revenue of just $1.55 billion and third-quarter sales of $384.6 million.

“The momentum we’re seeing from customers and partners around our agentic automation platform, combined with our continued focus on operational efficiency, positions us well as we enter the second half of the year,” UiPath’s financial chief Ashim Gupta said.

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