UiPath Inc. (NYSE:) reported solid first-quarter results, but soft guidance sent shares sharply lower in premarket trading Thursday.
UiPath reported first-quarter earnings per share (EPS) of $0.13, which was slightly higher than analyst forecasts of $0.12.
The company’s revenue for the quarter also exceeded expectations, coming in at $335.1 million, versus the expected $333.88 million.
Looking ahead, UiPath provided guidance for second-quarter revenue, which came in between $300 million and $305 million. This forecast falls short of the market consensus, which had estimated higher revenue of $342.4 million.
For the full fiscal year 2025, UiPath expects revenues to be between $1.405 billion and $1.410 billion, well below consensus estimates of $1.56 billion.
In addition, investors were hit by the surprising news that Rob Enslin resigned as CEO and member of the board of directors as of June 1. Daniel Dines, founder, former CEO and current Chief Innovation Officer, will return to the role of CEO.
UiPath shares fell nearly 30% on the news.
“While our revenue and operating margin guidance is impacted by the timing and duration of contracts, we are confident in our ability to generate sustainable ARR growth at scale, and meaningful non-GAAP adjusted free cash flow,” officials said. Company.
The company also forecasts that its ARR will be between $1.660 billion and $1.665 billion as of January 31, 2025.
Commenting on Wednesday’s developments, RBC Capital Markets analysts said the results were “messy” while the CEO transition was “surprising.”
Meanwhile, analysts at KeyBanc Capital Markets downgraded the stock from Overweight to Sector Weight following the report.
“Previously, our thesis was based on improving corporate execution and GTM to drive further expansion and platform adoption,” they wrote.
“With the upcoming leadership changes, we see increased near-term execution risk, which presents a more challenging path back to 20% ARR growth levels,” she added.
Similarly, TD Cowen analysts also downgraded the stock to Hold from Buy, citing “a notable 1-2 punch that could create significant equity pressure and likely leave the stock languishing as the Street tries to make sense of this rapid deterioration and recovery period.”
