UiPath Inc. shares plunged more than 25% in Thursday trading, wiping out more than $4 billion in market capitalization after the “software robot” provider issued a weaker-than-expected outlook.
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shares sank to an all-time intraday low of $20.59 in Thursday’s session, 29.1% lower than Wednesday’s closing price. The stock is now more than half-off its April 2021 IPO price of $56 a share, which valued the software company at nearly $30 billion.
After the bell Wednesday, executives forecast first-quarter revenue of $223 million to $225 million and an annualized renewal run rate, or ARR, of $960 million to $965 million for the first quarter, while analysts surveyed by FactSet expected 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 had been forecasting revenue of $1.26 billion and ARR of $1.26 billion.
Read: UiPath IPO: 5 things to know about the ‘software robots’ company valued at nearly $30 billion
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, a former Microsoft Corp.
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executive, to the position of Chief Business Officer.
Executives blamed the forecast shortfall on the change at the top of the sales structure, as well as the continuing invasion of Ukraine by Russia. UiPath has customers in the region and executives said that the conflict would disrupt their business.
“Looking ahead, we feel confident in our market leading position in automation and prospects for future growth at scale but believe it is prudent at this time to factor both our European exposure and go-to-market leadership transition into the financial 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.” They dropped their price target to $35 from $56 Thursday, one of at least 17 analysts to bring down their targets in response to the earnings.
“In general, we favor higher growth at a lower valuation, but also recognize that the bear narrative on competition remains in charge,” they wrote.
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.
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.
MarketWatch staff writer Jeremy C. Owens contributed to this article.
