UiPath shares slipped 2.85% in premarket trading Friday to $11.25, reversing gains from the prior session, as the automation software firm reported higher quarterly revenue and lifted its full-year outlook. Despite posting its first GAAP-profitable quarter, investors remained cautious about how artificial intelligence will translate into sustained sales growth.
The stock had closed Thursday at $11.58, up 3.76%, but the premarket retreat highlights lingering uncertainty over the company's transition from robotic process automation to an agentic automation platform. PATH remains well below its 52-week high of $19.84.
For the fiscal first quarter ended April 30, UiPath reported revenue of $418 million, a 17% increase year over year. Annualized renewal run-rate (ARR), which measures the value of subscription and maintenance invoices, rose 12% to $1.901 billion. The company achieved operating income of $28 million on a GAAP basis, marking its first GAAP-profitable first quarter. On a non-GAAP basis, operating income reached $92 million, excluding stock-based compensation and acquisition-related amortization. Dollar-based net retention stood at 109%, indicating customer expansion after churn.
CEO Daniel Dines described the quarter as a "strong start to the fiscal year," noting that the company's agentic products are moving "from pilot to production." CFO Ashim Gupta highlighted "operational discipline" following the milestone. UiPath guided for full fiscal year 2027 revenue in the range of $1.776 billion to $1.781 billion, with ARR expected between $2.058 billion and $2.063 billion by January 31, 2027. The company also targets full-year non-GAAP operating income of approximately $430 million.
Management noted on the earnings call that 16 of UiPath's top 20 deals in the quarter included AI products. Expansion deals tied to AI were roughly six times larger than those without AI, according to Dines. The company's coding agents are designed to slash the months-long automation deployment process.
UiPath faces stiff competition from Microsoft Power Automate, Automation Anywhere's Agentic Process Automation System, and ServiceNow's AI Platform, all cited by Gartner Peer Insights in the same business orchestration and automation category. The company must prove its orchestration push can hold up against larger tech stacks.
Broader market futures held gains early Friday after the S&P 500 and Nasdaq closed at records Thursday. S&P 500 futures edged up 0.08%, and Nasdaq futures added 0.05%. Daniela Hathorn, senior market analyst at Capital.com, noted that "risk appetite has improved" with less focus on geopolitics, but markets remain watchful of inflation and headlines.
BofA Securities maintained its Underperform rating on UiPath, raising its price target to $13 from $12, citing better execution. However, the bank flagged concerns about the longevity of UiPath's value proposition as AI continues to reshape the software landscape. BofA also expects UiPath's calendar 2027 growth to lag other infrastructure-software names.
In summary, UiPath is delivering revenue growth, generating cash, and strengthening its AI narrative compared to a year ago. The sticking point is that agentic automation still appears more like a feature customers are testing, rather than a must-have that drives significant budget increases or quickly moves the stock's valuation multiple.
