Shares of UiPath Inc. plunged more than 25% in trading on Thursday, wiping out more than $4 billion in market capitalization after the “software robot” provider issued a weaker-than-expected outlook.
shares sank to a record intraday low of $20.59 in Thursday’s session, down 29.1% from Wednesday’s closing price. The stock is now more than half off its April 2021 IPO price of $56 a share, which valued the software company at nearly $30 billion.
After the bell on Wednesday, executives forecast first-quarter revenue of $223 million to $225 million and an annualized renewal run rate, or ARR, of $960 million to $965 million for the first quarter, while analysts surveyed by FactSet had expected revenue of $247 million and ARR of $968.2 million. ARR is a metric often used by software as a service companies to show how much revenue the company can expect based on subscriptions.
For the year, UiPath expects revenue of $1.08 billion to $1.09 billion and ARR of $1.2 billion to $1.21 billion, while analysts had forecast revenue of $1.26 billion and ARR of $1.26 billion.
Read: UiPath IPO: 5 things to know about the ‘software robot’ company valued at nearly $30 billion
Additionally, UiPath said Chief Revenue Officer Thomas Hansen would be leaving the company but would remain until the end of the first quarter. The company also named Chris Weber, former Microsoft Corp. MSFT,
executive, in charge of Commercial Director.
Executives attributed the anticipated shortfall to the change at the top of the sales structure, as well as Russia’s continued invasion of Ukraine. UiPath has clients in the region and executives said the conflict would disrupt their business.
“Looking ahead, we are confident in our leadership position in the automation market and prospects for large-scale future growth, but believe it is prudent at this time to consider both our European exposure and the transition from market leadership. in the financial perspectives. Chief Executive Daniel Dines said in a statement.
Analysts at Oppenheimer called the guidance “disappointing” and wrote that “issues are macro and inside sales leadership/execution.” They lowered their price target to $35 from $56 on Thursday, one of at least 17 analysts who lowered their targets in response to earnings.
“Overall, we favor higher growth at a lower valuation, but we also recognize that the bearish narrative about the competition remains in charge,” they wrote.
The company reported a fourth-quarter loss of $63.1 million, or 12 cents per share, compared to net income of $26.3 million in the same period a year earlier. Adjusted earnings, which exclude stock-based compensation expense and other items, were 5 cents per share, compared with 9 cents per share in the same period a year earlier.
Revenue increased to $289.7 million from $207.9 million in the prior year quarter. The company’s ARR increased 59% to $925.3 million from a year ago.
Analysts had estimated earnings of 3 cents per share on revenue of $283 million and an ARR of $902.5 million, based on UiPath’s forecast of revenue of $281 million to $283 million and an ARR of $901 million to $903 million for the fourth quarter. .
MarketWatch Staff Writer Jeremy C. Owens contributed to this article.