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.

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 ARR of $1.2 billion to $1.21 billion, while analysts forecast revenue of $1.26 billion and 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, to form 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 with 9 cents a share in the year-ago period.

Read: UiPath IPO: 5 things to know about the ‘software robots’ 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 ARR of $901 million to $903 million for the fourth quarter.

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