UiPath (ticker: PATH) reported better-than-expected revenue growth in its latest earnings report, causing shares to rise by 4.3% to $16.92 in premarket trading. However, the company still faces skepticism from analysts regarding the impact of artificial intelligence (AI) on its business.
Despite a 28% increase in shares this year, investors remain divided on whether UiPath will benefit or suffer from the rise of AI technology. The recent earnings results have not provided a definitive answer to this debate.
D.A. Davidson analyst Gil Luria expressed caution, stating that while UiPath has yet to prove that Generative AI can provide a unique advantage in the competitive automation software market, the company is demonstrating improvement in margins and free cash flow.
UiPath exceeded analysts’ estimates by reporting adjusted earnings of 9 cents per share for the quarter ended in July. Revenue also rose by 19% to $287.3 million, surpassing the expected $281.5 million.
During a Q&A session, analysts pressed UiPath executives about how generative AI is affecting client spending. Co-CEO Daniel Dines assured that competition in the automation platform industry remains unchanged and he expects AI to have a positive impact on UiPath’s business moving forward.
For the third quarter, UiPath forecasts revenue between $313 million and $318 million. The company projects annual revenue to be in the range of $1.27 billion to $1.28 billion. Analysts had estimated third-quarter revenue at $318.5 million and annual revenue at $1.27 billion.
In addition, UiPath has implemented a $500 million share buyback program.