UiPath Eyeing Q1 Results Amid Revenue Concerns

UiPath Inc. (PATH) faces challenges as it approaches its Q1 fiscal 2026 results, with earnings and revenue expectations indicating a decline. Despite a resilient subscription model and partnership strengths, investor sentiment remains cautious.

Date: 28-05-2025

AI Rating: 5

Earnings Per Share (EPS): UiPath is expected to report earnings of 10 cents, which is a significant decline of 23% year-over-year. This decrease paints a negative outlook for investors. Given the company's record of beating earnings estimates in the past, the current projections suggest a potential for disappointment, impacting stock perceptions.

Revenue Growth: The consensus estimate for total revenue stands at $332.3 million, signaling a 0.8% decline from the previous year. More concerning is the anticipated decline in license services revenue, which is pegged at $115 million (an 18% drop year-over-year) and subscription revenue estimated at $137.3 million (a 12% decline). Both figures suggest a weakening demand for UiPath's core offerings, which could negatively affect investor confidence.

Net Income & Profit Margins: While specific net income numbers are not provided, the anticipated earnings decline indicates a potential contraction in profit margins as well. If costs are not managed effectively, the drop in revenue coupled with declining earnings will reflect poorly on the profit margins.

Free Cash Flow (FCF): The report does not provide details on free cash flow; however, given the projections of diminishing revenues and lower earnings, observers should be wary of the company’s cash generation capabilities moving forward, especially in a landscape where cash flow is critical for operational agility.

Return on Equity (ROE): There is no mention of return on equity in the report, highlighting a lack of insight into how effectively the company is utilizing its equity capital to generate profits.

Despite the challenging outlook, PATH has shown resilience with increasing annual recurring revenue (ARR) to $1.67 billion (up 14% year-over-year). Strategic partnerships with tech giants like Microsoft, Amazon, and Salesforce suggest potential long-term growth. However, the immediate short-term forecast is clouded by uncertainty in earnings and revenues.

Given the projected earnings and revenue declines, and a Zacks Rank of #3 (Hold), professional investors may consider adopting a cautious stance while awaiting Q1 results

Stocks: PATH MSFT AMZN CRM