UiPath stock drops 20% after outlook falls short of Wall Street expectations

UiPath Inc. shares dropped in the extended session Wednesday after the “software robot” provider’s weaker-than-expected Outlook overshadowed a beat of Wall Street’s Quarterly results estimates.

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UiPath PATH,
-7.52%
shares sank more than 20% after hours, following a 7.5% drop in the regular session to close at $ 29.04, or 48% below their April 2021 IPO price of $ 56 a share.

The company forecast revenue of $ 223 million to $ 225 million and an annualized Renewal run rate (ARR) of $ 960 million to $ 965 million for the first quarter, while analysts surveyed by FactSet expect revenue of $ 247 million and ARR of $ 968.2 million. 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 expects revenue of $ 1.08 billion to $ 1.09 billion and an ARR of $ 1.2 billion to $ 1.21 billion, while analysts forecast revenue of $ 1.26 billion and an ARR of $ 968.2 million.

Additionally, UiPath said that Chief Revenue Officer Thomas Hansen was leaving the company but would stay on until the end of the first quarter. The company also appointed Chris Weber, a former Microsoft Corp. MSFT,
-0.49%
executive, to the position of Chief Business Officer.

The company reported a fourth-quarter loss of $ 63.1 million, or 12 cents a share, versus net income of $ 26.3 million in the year-ago period. Adjusted earnings, which exclude stock-based compensation expenses and other items, were 5 cents a share, compared to 9 cents a share in the year-ago period.

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

Revenue rose to $ 289.7 million from $ 207.9 million in the year-ago quarter. The company’s ARR rose 59% to $ 925.3 million from a year ago.

Analysts had estimated earnings of 3 cents a share on revenue of $ 283 million and an ARR of $ 902.5 million, based on UiPath’s forecast revenue of $ 281 million to $ 283 million and an ARR of $ 901 million to $ 903 million for the fourth quarter.

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