Riding strong customer demand for automation software that streamlines businesses, UiPath soundly beat fiscal Q1 consensus estimates for revenue and profitability and raised its guidance for fiscal 2023.
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Comments from Key UiPath Executives
- Co-founder and Co-CEO Daniel Dines: “Our relentless focus on innovation continues to accelerate our customers’ digital transformation initiatives,” he said in a company statement. Case in point: Generac, a UiPath customer that has realized major benefits as part of a digital transformation.
- Dines added on the earnings conference call: “Both prospects and existing accounts tell us automation is the…solution” to the current volatility. “Which leaves us very optimistic about the business long term.”
- CFO Ashim Gupta: “We continue to take market share given the measurable return on investment we create for our customer.”
Customers are at the center of both executives’ statements, another indicator that those companies that align themselves closely with their customers’ business objectives are well-positioned to weather, or even capitalize on, any macroeconomic disruptions or uncertainty.
For instance, a global financial services firm chose to standardize on the entire UiPath platform while phasing out a competitor, implementing automation across its lines of business. “They have a corporate initiative to remove $100 million in cost by 2025 and see automation as instrumental in achieving their goal,” Dines said.
When asked numerous ways about the macroeconomic environment and its impact on the company’s business, UiPath leaders emphasized the strategic role of automation as a cost-saver and a strategic asset that adds value for customers.
Macroeconomic headwinds put considerable pressure on customers to become more efficient, and they rely on automation as a way to navigate today’s challenges, Dines said.
“Both prospects and existing accounts tell us automation is the…solution” to the current volatility. “Which leaves us very optimistic about the business long term.”
Daniel Dines, UiPath co-founder and co-CEO
Key Numbers From the Report:
- Revenue of $245.1 million, increased 32 percent year-over-year – soundly beating the consensus forecast of $225.37M and 21% growth.
- Non-GAAP EPS of -3 cents per share vs. the consensus estimate of -6 cents per share.
- Annualized Revenue Run rate (ARR) of $977.1 million increased 50 percent year-over-year.
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The results come on the heels of several strategic announcements in the last several weeks:
- Appointed Robert Enslin, a former Google Cloud Exec, as Co-Chief Executive Officer: On the earnings call, Enslin, who has now been at the company for two weeks, struck an optimistic outlook on the company’s ability to continue and increase selling to CFOs, heads of supply chain and other key business leaders as automation gains additional strategic momentum.
- Launched next-gen UiPath Automation Cloud including new SaaS and serverless robots.
- Announced technology integrations and partnerships with Adobe Document Services and Adobe Acrobat Sign, to help customers automate end-to-end document processes.
- Announced strategic collaboration with Finastra, one of the world’s largest fintech companies, to launch a new Automation as a Service offering on the Finastra cloud, delivering that is a managed service model for automation to thousands of bank, credit union, and financial institution customers that use Finastra cloud services.
After two weeks in his role as co-CEO, Robert Enslin expressed optimism that UiPath will continue to make strategic inroads with CFOs and other business leaders.
Looking to the rest of the year, UiPath raised its guidance to:
- Revenue in the range of $1.085 billion to $1.090 billion
- ARR in the range of $1.220 billion to $1.225 billion as of January 31, 2023
Officials noted that they continue to invest in services and cloud hosting to grow their business.
Closing Thoughts
For the many nervous investors and market watchers out there, UiPath has once again affirmed that cloud technology that delivers tangible strategic value is becoming a higher priority, not one that’s on the chopping block.
The stress around macroeconomic factors is palpable on quarterly earnings calls. UiPath leadership did a solid job of systematically talking analysts through the case for their technology, the factors that give them confidence that customers aren’t abandoning strategic tech investments, and giving context based on their pipeline visibility.
The company’s stock rose 17% the day after earnings were released.
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