Shares of UiPath (PATH +1.85%) were surging today after the digital automation specialist posted better-than-expected results in its third-quarter earnings report.
The cloud software company beat estimates on both the top and bottom lines and posted guidance in line with expectations, assuaging earlier fears about a slowdown in growth.
As a result, the stock closed up 26.7% on the news.
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UiPath tops expectations
UiPath, which specializes in robotic process automation (RPA), essentially bots that help automate workflows, reported revenue was up 24% to $325.9 million, which was better than the consensus at $315.6 million. Annual recurring revenue was also up 24% to $1.378 billion, showing stable growth.
On the bottom line, the company continued to be unprofitable on a generally accepted accounting principles (GAAP) basis, but on an adjusted basis, earnings per share improved from $0.05 to $0.12 as general and administrative expenses fell in the quarter. That result topped estimates at $0.07.
UiPath has been seen by some investors as an AI stock, as its technology is based on machine learning and other kinds of artificial intelligence, and its new Clipboard AI, which removes the need to manually copy and paste, was just named one of the best inventions of 2023 by Time magazine.
Co-CEO Rob Enslin said, "My conversations with customers and partners validate the strategic role enterprise automation plays in digital transformation, and I am excited about the investments we continue to make in AI to further extend our market leadership."
What's next for UiPath?
Looking ahead, the company sees fourth-quarter revenue at $381 million-$386 million, up 24.2% at the midpoint from the quarter a year ago. It also forecast annual recurring revenue of $1.45 billion-$1.455 billion, and it expects adjusted operating income of $78 million, which compares to an adjusted operating profit of $43.7 million.
Overall, the numbers show UiPath continued to deliver solid growth and improve profitability. The stock is still down more than 70% from its peak during the pandemic shortly after its IPO, but the quarter shows UiPath is executing in a challenging environment for tech companies, and the stock is benefiting from diminished expectations.
