What happened

Shares of UiPath (PATH -3.82%) were moving higher today after the robotic process automation specialist reported better-than-expected preliminary third-quarter earnings results and announced another round of layoffs.

As of 9:39 a.m. ET, UiPath stock was up 16.2%.

So what

First, UiPath, whose software makes bots that automate workflows, said it expected to report revenue of approximately $260 million for the third quarter, an increase of 18% from the quarter a year ago and ahead of estimates at $245.3 million.

It also reported annual recurring revenue of about $1.2 billion, up 6.2% from the second quarter, and an adjusted operating profit of $15 million, which was better than its guidance calling for a loss of $15 million.

Additionally, the company announced another workforce reduction, saying that it would lay off 6% of its staff, or roughly 250 employees, and it now expects to take a restructuring charge of $30 million in the second half of the current fiscal year. 

A cooler-than-expected Producer Price Index reading also lifted tech stocks today, and UiPath is likely benefiting from that news, as it makes it more likely that the Federal Reserve will put the brakes on interest rate hikes. 

Now what

Like other tech stocks, UiPath stock has fallen sharply over the past year as valuations in the software sector have compressed and growth has slowed.

However, today's update clearly offers encouraging news as UiPath is growing faster than expected, and its cost structure should improve after the layoffs. Additionally, signs that inflation is slowing should support a rebound in UiPath and its peers.

UiPath stock may not be cheap at price-to-sales ratio of 7.5 based on this year's revenue estimates, but the company is moving in the right direction. Look for more detail when it releases its full third-quarter earnings report on Dec. 1.