What happened
Shares of UiPath (PATH 1.35%) were pulling back today after the robotic process automation specialist offered disappointing guidance in its second-quarter earnings report.
As of 12:28 p.m. ET, the stock was down 12.9% on the news.
NYSE: PATH
Key Data Points
So what
UiPath, which deploys bots to automate business processes through low-code software, actually beat estimates in the second quarter of fiscal 2023, which ended July 31.
Revenue increased 24% to $242.2 million, which was ahead of the consensus at $230.8 million. Annual recurring revenue also topped $1 billion for the first time, growing 44% to $1.04 billion. UiPath's dollar-based net retention rate was 132%, showing existing customers grew their spending by 32% over the last year.
On the bottom line, the low-code stock posted an adjusted loss of $0.02, which compared to a per-share profit of a penny in the quarter a year ago, but was better than estimates of a per-share loss of $0.11.
CFO Ashim Gupta said in the release: "We delivered a solid second quarter fiscal 2023 despite increasing FX [foreign exchange] headwinds and macro uncertainty. While our global footprint is an asset to the business, it exposes us to foreign exchange and macroeconomic volatility which is reflected both in our fiscal second quarter results and our fiscal third quarter and full year 2023 financial outlook."
Now what
The real reason for the sell-off seemed to be the company's guidance, as it called for revenue of $243 million to $253 million in the current quarter, up 25% from the quarter a year ago at the midpoint, but short of the consensus at $269.6 million.
Full-year revenue guidance of $1 billion to $1.01 billion was also below the analyst target at $1.09 billion.
A number of analysts lowered their price targets and downgraded the cloud stock on the news, saying its growth has slowed and profits remain elusive. However, there was nothing particularly alarming from UiPath in the update. The company is facing the same headwinds as its cloud peers, and is also being punished by a market that has been unforgiving of unprofitable growth stocks.
