UiPath shares fall 16% after cut outlook

Shares of UiPath Inc. fell in the extended session on Tuesday after the software robot vendor cut its forecast for the year due to foreign exchange headwinds and macroeconomic uncertainty.

UiPath
ROAD,
-3.17%

shares fell about 16% after hours, after falling 3.2% in the regular session, to close at $15.59, well below IPO price in April 2021 of $56 per share. The stock has fallen more than 75% over the past 12 months, while the S&P 500
SPX,
-0.41%

has declined by 14% during that time.

UiPath forecast third-quarter revenue of $243 million to $245 million and an annualized renewal rate, or ARR, of about $1.09 billion, while analysts had forecast revenue of $269.6 million and an ARR of about $1.12 billion. ARR is a metric often used by software-as-a-service companies to show how much revenue the company can expect based on subscriptions.

For the year, UiPath lowered its forecast slightly. The company now expects revenue of $1 billion to $1.01 billion and ARR of $1.15 billion to $1.16 billion, compared to its previous forecast of revenue of about $1.09 billion and ARR of $1.22 billion to $1.23 billion for the year.

Analysts polled by FactSet had estimated revenue of $1.09 billion and ARR of $1.22 billion for the year.

Read: UiPath IPO: 5 things you need to know about the ‘software robot’ company valued at nearly $30 billion

“We delivered a solid second quarter of fiscal 2023 despite increasing headwinds in the foreign exchange market and macro uncertainty,” Ashim Gupta, UiPath’s chief financial officer, said in a statement. “While our global footprint is an asset to the business, it exposes us to currency and macroeconomic volatility. which is reflected in both our fiscal second quarter results and our fiscal third quarter and full year 2023 financial outlook,”

The company reported a second-quarter loss of $120.4 million, or 22 cents per share, compared with a loss of $100 million, or 19 cents per share, in the prior period. The adjusted loss, which excludes stock-based compensation expense and other items, was 2 cents per share, up from adjusted net income of one penny per share in the year-ago period.

Revenue rose to $242.2 million from $195.5 million in the year-ago quarter, while ARR increased 44% to $1.04 billion from the year-ago period.

Analysts had forecast a loss of 11 cents per share on revenue of $230.7 million and ARR of $1.04 billion, based on UiPath’s forecast of $229 million to $231 million and ARR of about $1.04 billion.

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