UiPath stock jumps following pre-earnings release - announces further layoffs

© Reuters.

By Sam Boughedda

UiPath Inc (NYSE:PATH) pre-announced its third-quarter results after the close on Monday, sending its shares over 13% higher at the start of Tuesday's session after it topped estimates.

The company reported revenue of approximately $260 million, with an adjusted operating income of roughly $15M. Annualized Renewal Run-rate (ARR) came in at around $1.108 billion.

It also disclosed that it will reduce its global workforce by a further 6% of its approximately 4,025 employees, with most of the reductions expected to occur by the end of fiscal 2023.

UiPath is scheduled to report results on December 1, after the market close.

Following the release, JPMorgan analysts told investors in a note that UiPath came in ahead on all the metrics disclosed while simultaneously declaring an incremental 6% reduction of the company's workforce.

"We view this net-positively and as the right step toward setting UiPath's new trajectory following changes to the company's leadership structure and major resetting of expectations that have occurred over the last 6-9 months," wrote the analysts.

Meanwhile, Evercore ISI analysts stated UiPath's pre-announced results were "nicely ahead of expectations."

"While the additional headcount reductions could foreshadow another conservative guide for F4Q (our read), we believe the solid F3Q top line results and focus on margin expansion should limit further downside risk at current levels (4x EV/CY23 ARR). We believe the key question going forward is how do the headcount reductions impact UiPath's preliminary FY24 outlook and how the ongoing sales reorganization is impacting pipeline development," explained the analysts.

Finally, RBC Capital analysts told investors his firm is pleased to see ARR and revenue, as well as profitability, come in above expectations, and they are "particularly happy" to see the company generate a non-GAAP profit. " We have adjusted our Q3/23 estimates to match preliminary results and made slight adjustments to our Q4/23 and FY/24 estimates," confirmed the analysts.