UiPath stock opened down 20% on Wednesday: find out why

UiPath Inc (NYSE: PATH ) reported market-beating results for its fiscal second quarter on Wednesday. Shares still opened 20% lower on reduced future guidance.

UiPath Q2 financial highlights

• It lost $120.4 million compared to the previous $100 million
• Per-share loss climbed from 19 cents to 22 cents
• On an adjusted basis, the loss was 2 cents per share
• Revenue jumped 24% year-on-year to $242.2 million
• Annual recurring revenue rose 44% to $1.04 billion
• The consensus was a loss of 11 cents on $230.7 million in revenue

Mizuho downgrades UiPath stock

Following the tech news, Mizuho downgraded the software and automation company to “neutral” and cut its price objective to $14 per share. Analyst Siti Panigrahi wrote:

We expect shares to remain near range as UiPath’s more enterprise-focused strategy will take time to play out, especially in an uncertain macro environment with strong European exposure and competitive threats from ServiceNow and Microsoft.

For the year, UiPath stock is now down nearly 75%.

UiPath stock slid to reduced guidance

For the full fiscal year, UiPath Inc now expects its revenue to fall between $1.002 billion and $1.007 billion. In comparison, experts predicted $1.09 billion – in line with its earlier estimate. In the earnings press release, CFO Ashim Gupta said:

Our global footprint exposes us to foreign exchange and macro volatility. Our priority going forward is to balance investing for long-term growth while continuing to expand non-GAAP operating margin and delivering sustained positive non-GAAP adjusted free cash in fiscal 2024 and beyond.

UiPath ended the quarter with $1.70 billion worth of cash, equivalents and marketable securities.