Shares of UiPath Inc. plunged more than 25% in trading Thursday, wiping out more than $4 billion in market cap after the “software robots” maker issued a weaker-than-expected outlook.
Shares fell to an all-time intraday low of $20.59 in Thursday’s session, down 29.1% from Wednesday’s close. The stock is now more than half its April 2021 IPO price of $56 per share, which valued the software company at nearly $30 billion.
After Bell Wednesday, executives are forecasting first-quarter revenue of $223-$225 million and an annualized renewal run rate, or ARR, of $960-$965 million for the first quarter, while analysts polled by FactSet are forecasting revenue of 247 million US$ and ARR expected of US$968.2 million. ARR is a metric commonly 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 expect revenue of $1.26 billion and ARR of $1.26 billion had forecast.
Read: UiPath IPO: 5 things to know about the nearly $30 billion “software robot” company
Additionally, UiPath said Chief Revenue Officer Thomas Hansen is leaving the company but will remain through the end of the first quarter. The company also appointed Chris Weber, a former Microsoft Corp. MSFT,
Executive, to the position of Chief Business Officer.
Executives blamed changes at the top of the sales structure, as well as Russia’s ongoing invasion of Ukraine, for the projected shortfall. UiPath has customers in the region and executives said the conflict would disrupt their business.
“Looking ahead, we are confident in our market-leading position in automation and the prospects for future growth at scale, but at this stage we feel it is prudent to expand both our European exposure and the transition to market leadership in the financial markets.” include outlook.” Chief Executive Daniel Dines said in a statement.
Oppenheimer analysts called the guidance “disappointing,” writing, “The issues are macro and internal sales leadership/execution.” Response to lower earnings.
“In general, we favor higher growth at lower valuation, but also recognize that the bearish narrative on competition remains the order of the day,” they wrote.
The company reported a loss of $63.1 million, or 12 cents a share, in the fourth quarter from net income of $26.3 million in the year-ago period. Adjusted earnings, which exclude stock-based compensation expense and other items, were 5 cents per share, compared to 9 cents per share in the year-ago period.
Revenue increased to $289.7 million from $207.9 million in the year-ago quarter. The company’s ARR rose 59% year over year to $925.3 million.
Analysts estimated earnings per share at 3 cents on sales of $283 million and an ARR of $902.5 million based on UiPath’s projected earnings of $281-$283 million and an ARR of 901 to $903 million for the fourth quarter.
MarketWatch contributor Jeremy C. Owens contributed to this article.
https://www.marketwatch.com/story/uipath-stock-drops-20-after-outlook-falls-short-of-wall-street-expectations-11648672221?rss=1&siteid=rss UiPath stock wipes out more than $4 billion in market cap after guidance hit by Ukraine conflict and sales leadership change