A month has gone by since the last earnings report for UiPath (PATH). Shares have lost about 12.6% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is UiPath due for a breakout? Well, first let’s take a quick look at its most recent earnings report in order to get a better handle on the recent catalysts for UiPath, Inc. before we dive into how investors and analysts have reacted as of late.
UiPath’s quarterly earnings of 30 cents per share beat the Zacks Consensus Estimate by 20% and increased 15.4% year over year. Revenues of $481.1 million for the quarter surpassed the Zacks Consensus Estimate by 3.5% and increased 13.6% year over year
The company ended its fiscal year on a strong note, reporting results that exceeded the upper end of its guidance across major financial metrics. The quarter reflected continued demand for automation software as enterprises accelerate digital transformation initiatives.
Fourth-quarter revenue reached $481 million, representing 14% year-over-year growth. For the full fiscal year, revenue climbed to $1.611 billion, increasing 13% from the prior year. Annual recurring revenue also expanded, reaching $1.853 billion in the fourth quarter with $70 million in net new ARR added during the period.
A major highlight from the year was the company achieving full-year GAAP profitability for the first time. This milestone reflects significant progress in balancing growth investments with operational discipline while scaling the business.
UiPath’s profitability metrics improved notably during the quarter. Non-GAAP operating income reached $150 million in the fourth quarter, translating to a 31% operating margin. For the full year, non-GAAP operating income totaled $370 million with a margin of 23%. GAAP net income reached $104 million for the quarter, while full-year GAAP net income totaled $282 million. The company also generated strong cash flows, producing $182 million in adjusted free cash flow in the fourth quarter and $372 million for the fiscal year.
ARR trends show steady demand across periods. ARR rose from $1.78 billion in the third quarter of fiscal 2026 to $1.85 billion in the fourth quarter of fiscal 2026, with year-over-year ARR growth running about 11%. Net new ARR was $70 million in the fourth quarter of fiscal 2026, and the first-quarter fiscal 2027 ARR guide implies roughly $1.894-$1.899 million. Customer scale is increasing: customers with more than $100k ARR and more than $1 million ARR grew year over year as of the fourth quarter of fiscal 2026 versus the third quarter of fiscal 2025. These factors indicate a sticky enterprise base that underpins durable, compounding expansions.
UiPath ended the quarter with approximately $1.7 billion in cash, cash equivalents, and marketable securities while maintaining a debt-free balance sheet. During the quarter, the company completed a $1 billion share repurchase program and approved an additional $500 million in buyback capacity.
Management emphasized that the convergence of artificial intelligence and automation is reshaping enterprise software development. The company believes the industry is approaching a turning point in how applications are built and managed.
UiPath’s strategy focuses on leveraging its unified automation platform, large installed customer base, and long-standing enterprise relationships. These factors provide a foundation for expanding AI-powered automation across corporate workflows.
The company highlighted several customer deployments demonstrating the value of its platform. One semiconductor firm implemented agentic workflows within a very short time frame, while another enterprise dramatically reduced a multi-day order-to-cash process to just minutes while targeting substantial cost savings.
UiPath is also advancing AI-driven coding capabilities designed to automatically generate and maintain production-ready automation processes. These innovations could significantly shorten development timelines and accelerate adoption across enterprises.
Management provided guidance for fiscal year 2027 that points to continued expansion across key financial metrics. The company expects revenue in the range of $1.754 billion to $1.759 billion and annual recurring revenue between $2.051 billion and $2.056 billion.
Non-GAAP operating income is projected to reach approximately $415 million for the fiscal year. Management also expects non-GAAP gross margin to remain strong at around 84% and anticipates adjusted free cash flow of roughly $425 million.
Additionally, the company updated its long-term non-GAAP operating margin target to 30%, reflecting increased confidence in the scalability and efficiency of its operating model. Leadership also expects the business to become GAAP profitable meaningfully by fiscal 2027, with continued expansion in profitability over time.
It turns out, estimates revision have trended upward during the past month.
The consensus estimate has shifted 27.78% due to these changes.
At this time, UiPath has a great Growth Score of A, a score with the same score on the momentum front. However, the stock has a grade of C on the value side, putting it in the middle 20% for value investors.
Overall, the stock has an aggregate VGM Score of A. If you aren’t focused on one strategy, this score is the one you should be interested in.
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, UiPath has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
UiPath is part of the Zacks Internet – Software industry. Over the past month, Zoom Communications (ZM), a stock from the same industry, has gained 12.1%. The company reported its results for the quarter ended January 2026 more than a month ago.
Zoom reported revenues of $1.25 billion in the last reported quarter, representing a year-over-year change of +5.3%. EPS of $1.44 for the same period compares with $1.41 a year ago.
Zoom is expected to post earnings of $1.41 per share for the current quarter, representing a year-over-year change of -1.4%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Zoom. Also, the stock has a VGM Score of D.
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This article originally published on Zacks Investment Research (zacks.com).
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