Second-quarter outcomes beat expectations, as the corporate tries to embrace AI earlier than AI can disrupt it.
Shares of enterprise automation platform UiPath (PATH 4.01%) rallied on Friday, rising 5.8% as of 11:33 a.m. EDT.
UiPath delivered second-quarter outcomes final night time, handily beating analyst expectations. The outcomes appeared at odds with the present concern amongst software-as-a-service corporations that generative synthetic intelligence could also be a menace to their enterprise fashions.
Automation and agentic in a single package deal
Within the second quarter, UiPath grew income 14.4% to $362 million, whereas adjusted (non-GAAP) earnings per share greater than tripled, albeit off a really low base of $0.04, to $0.15. Each figures handily beat analysts’ expectations.
Annualized recurring income (ARR) was up 11%, and administration additionally guided to ending at $1.834 billion to $1.839 billion in ARR for the present fiscal 12 months, which might quantity to 10.2% ARR progress on the midpoint.
UiPath seems to have accomplished an excellent job infusing its automation software program with agentic AI, harnessing AI fairly than being disrupted. CEO Daniel Dines stated on the convention name, “Our AI and agentic options are serving to us win offers and enhance deal sizes sooner than conventional automation engagements and now symbolize a rising share of business exercise.”
Picture supply: Getty Pictures.
UiPath on a path to higher issues?
A part of the explanation UiPath is having an excellent day is that sure, the corporate beat expectations, however the inventory has additionally struggled in 2025. Even after at present’s rally, the inventory is down 11% for 2025.
Many software program shares have struggled this 12 months as generative AI mannequin builders akin to OpenAI start to construct enterprise merchandise and will probably turn out to be future opponents.
That menace nonetheless seems to be a drag on the corporate’s valuation. UiPath trades at simply 3.3 instances this 12 months’s ARR steerage. The corporate additionally has $1.45 billion in money and no debt on the steadiness sheet. So on an enterprise-basis-to-ARR ratio, the corporate trades at an excellent decrease 2.5 instances.
If UiPath is ready to harness AI and fend off competitors within the area, the inventory seems to be like a probably nice worth. Nevertheless, buyers might not know if that is the case for years, so count on the discounted valuation to stay.
Billy Duberstein and/or his shoppers haven’t any place in any of the shares talked about. The Motley Idiot has positions in and recommends UiPath. The Motley Idiot has a disclosure coverage.
