Agentic AI success helps UiPath swing to a profit, but investors weren’t impressed

Business automation software company UiPath Inc. delivered mixed results in its latest quarter, posting a solid revenue beat but falling short on earnings — but it did at least manage to return to profitability.

The company reported first-quarter earnings before certain costs such as stock compensation of 15 cents per share, falling just shy of Wall Street’s 16-cent-per-share target. On the other hand, its revenue climbed 17% from a year earlier, to $418.4 million, easily beating the $397.5 million consensus estimate.

With greater revenue, UiPath was able to engineer a swing back into the black. It reported net income for the quarter of $22.5 million, reversing from a loss of $22.6 million in the same period one year ago.

Founder and Chief Executive Daniel Dines (pictured) told analysts he was pleased with the company’s strong start to the new fiscal year, and was especially encouraged to see its annual recurring revenue grow at a 12% clip to reach $1.901 billion.

“One year into general availability, our agentic products are moving from pilot to production with customers standardizing on UiPath as the orchestration and automation execution layer for their enterprise AI transformation,” Dines said. “The launch of UiPath for Coding Agents marks the next step in that journey, accelerating time to value, and driving the deeper platform adoption that reinforces our position as the long-term business orchestration and automation platform for enterprise AI.”

Dines was referring to a new platform-wide integration that enables artificial intelligence coding agents to become “enterprise-deployable.” It combines third-party coding agents like Cursor and Claude Code with UiPath’s visual agentic orchestration platform, enabling builders to create, test, deploy, operate and govern coding projects using the agent of their choice.

On a conference call with analysts, Chief Financial Officer Ashim Gupta said the company is seeing strong and rising demand for its AI agents and orchestration tools. Historically, UiPath has focused on robotic automation tools that follow rigid and predetermined rules, and this kind of workflow automation is still a key part of its business.

However, the emergence of generative AI and autonomous AI agents has prompted UiPath to step up its game. It’s now focused on more intelligent automations, and offers a selection of agents that can reason, adapt and work autonomously without human supervision. The company’s push into these services is meant to reassure investors that it can benefit from the AI boom, rather than slide into obscurity.

Gupta said many of the company’s new deals involve the new agentic offerings. “Our fastest-growing area is agentic and AI-based automation,” he said in response to an analyst’s question. “Sixteen of our top 20 deals had AI and agentic as part of what they did.”

“UiPath showed good cost management, barely growing its operating expenses, and the result was a $50 million swing year-over-year, moving from a $25 million loss to a $25 million profit,” said Holger Mueller of Constellation Research. “This is the first four-quarter profit swing UiPath has ever had.”

Despite making progress in agentic AI, UiPath’s guidance didn’t generate too much excitement. The company said it’s targeting revenue of between $395 million and $400 million in the second quarter, which is more or less in line with the Street’s view of $397 million. For the full year, UiPath is targeting sales of $1.78 billion, just ahead of the $1.76 billion modeled by analysts.

Mueller said he had concerns about UiPath’s guidance, because for it to reach it’s full-year target, it’s going to have to deliver a lot of revenue growth in the second half of the year. “It requires a substantial acceleration, but UiPath still has to prove not only that its agentic offerings can deliver value, but also monetize them with customers and prospects,” he said. “It’s going to be a busy year.”

UiPath’s stock fell more than 3% in late trading on today’s report, erasing the 3% gain it had made during the regular trading session. So far this year, the stock is down 29%.

Photo: SiliconANGLE