UiPath’s revenue growth slows to a crawl as it chases agentic AI dream, and its stock falls sharply

Shares of the business automation software company UiPath Inc. were battered and bruised today after it posted mixed results in its latest earnings report and offered guidance for the year ahead that trailed Wall Street’s expectations.

The company reported fourth-quarter earnings before certain costs such as stock compensation of 26 cents per share, beating the Street’s target of 20 cents. However, revenue for the period inched up just 5% from a year earlier, to $424 million, just short of the Street’s $425.1 million consensus estimate.

Still, the company did well to boost its profitability, reporting net income of $51.8 million in the quarter, up from $33.9 million in the year-ago period.

Looking to the new fiscal year, UiPath Chief Financial Officer Ashim Gupta warned investors that the company is bracing itself for “increasing global macroeconomic uncertainty” due to U.S. trade policies and the prospect of tariffs, among other things. “This uncertainty is reflected both in our fiscal first quarter and full-year 2026 financial outlook,” he said.

The company forecast sales of between $1.525 billion and $1.53 billion for fiscal 2026, quite a bit lower than the Street’s target of $1.58 billion in annual sales.

The near-term picture looks just as glum. For the current quarter, UiPath is eyeing revenue of between $330 million and $335 million, some way off the analyst’s forecast of $367.5 million.

Investors were dismayed, and many ran for the hills, sending UiPath’s stock down more than 16% after the report.

The company is a leader in the robotic process automation industry. It sells tools that can help businesses to lower costs and reduce operational errors by automating repetitive tasks such as data entry. This core technology is powered by artificial intelligence models that study how employees perform common tasks, such as data entry, so they can replicate that work with no mistakes.

More recently, UiPath has been looking to develop more sophisticated AI models, believing it’s well-placed to capitalize on the growing interest in so-called “agentic AI”. These AI agents are sometimes known as “digital laborers”, and have the ability to perform more complex tasks on behalf of users with minimal supervision.

AI agents are the hottest thing in AI right now, with everyone from OpenAI and Microsoft Corp. to ServiceNow Inc. and Salesforce Inc. all racing to develop them. UiPath has also joined the race, and Chief Executive Daniel Dines (pictured) insisted today that the company is making rapid progress in this area.

“Fiscal 2025 was our most innovative year in recent history,” he said, citing the launch of new products such as Autopilot, Agent Builder, Agentic Orchestration and Agentic Testing.

“I am happy with the progress we made over the last several quarters,” he added. “As we enter fiscal year 2026, we are focused on continuing to innovate across our agentic roadmap, helping our customers derive value from their investments, and continuing to drive operational rigor across the organization.”

Analyst Holger Mueller of Constellation Research Inc. said UiPath’s pivot towards AI agents is necessary, because agentic AI is likely one of the main reasons why it hasn’t been able to maintain its traditionally much-higher revenue growth rates.

“The thing is, these AI copilots and AI agents are helping people to do many of the menial tasks that UiPath tackles with its older RPO bots, only they’re arguably better at it,” Mueller said. “That’s why UiPath requires its own AI agents, and why it’s trying to become a specialist in this niche. But with the competition it faces, it’s not clear if it can reignite growth back into the double-digits, even if it does succeed.”

Even so, the analyst said the company has been able to minimize the impact of its lower growth by improving the efficiency of its business. “The management has done well to improve its profitability, but there’s more work to be done in fiscal 2025,” he added.

In recent weeks, some analysts have voiced concerns about when the technology industry’s multibillion-dollar investments into AI will start to deliver returns. With the rise of companies like China’s DeepSeek Ltd., which claim to have developed powerful AI models at significantly reduced costs, there are fears that such enormous spending might not be necessary.

More broadly, U.S. President Donald Trump’s trade policies have spooked the global markets, and the technology industry is feeling it. That’s why the shares of other companies invested in AI agents, such as Salesforce, have also taken a beating in recent weeks.

Despite that uncertainty, UiPath seems convinced that AI agents are still a big opportunity that’s worth spending money on. Alongside its results, it announced today that it has acquired a U.K.-based AI company called Peak AI Ltd. for an undisclosed price.

Peak sells AI agents that optimize product inventory and pricing decisions for businesses to try and maximize their profitability. UiPath said it will be able to help Peak scale up its AI technology globally and bring it to many new markets, while improving its grip on the manufacturing and retail markets it currently operates in.

“With the acquisition of Peak, we are accelerating our mission to strengthen our vertical AI solutions strategy,” Dines said in a statement. “When combined with the UiPath platform, Peak’s exceptional purpose-built AI applications will enhance our ability to provide solutions that optimize industry-specific use cases and deliver incredible value to customers.”

Dines spoke more about his company’s strategy for AI agents during the company’s annual user conference, UiPath Forward, in October:

Photo: SiliconANGLE

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