Automation software provider UiPath Inc. posted financial results that beat expectations today, but the strong performance wasn’t enough to stop its stock sliding in after-hours trading.

The company reported a third-quarter loss of $122.8 million, amounting to less than a penny per share. That was on revenue of $220.8 million during the period, up 50% from the same quarter a year ago.

Wall Street analysts were modeling a bigger loss of four cents per share on revenue of $209.9 million. UiPath’s stock fell more than 4% in extended trading.

UiPath is a leading player in the robotic process automation market. It sells an RPA platform that helps companies to reduce costs and operational errors by automating repetitive work. It relies on artificial intelligence models that learn how employees perform common tasks in business applications. Then, it creates software robots that can replicate those workflows, thereby reducing the need to perform many of those tasks manually.

UiPath co-founder and Chief Executive Daniel Dines (pictured) said the company is showing strong growth at large scale, driven by customers across a number of industries and the recognition that “automation not only increases efficiency, but drives revenue growth.”

“Automation is essential to digital transformation and UiPath is leading the way,” he said.

UiPath is certainly growing very quickly. It reported annualized recurring revenue of $814.4 million, up 58% from a year ago. In addition, it reported net new ARR of $91.9 million, up 44%. ARR is an important metric as far as investors are concerned because it shows how much revenue the company expects to repeat, meaning it serves as a measure of progress and also as a prediction of future growth.

The quarter just gone was a busy period for UiPath, not least because it held its annual user conference, UiPath Forward IV, where it announced a host of new improvements and features in its platform. The biggest news was UiPath 2021.10 hitting general availability, which added new RPA bot development functionality. With the new UiPath Integration Service, developers can now create bots that interact with programs via its application programming interface, as well as its user interface.

Constellation Research Inc. analyst Holger Mueller told SiliconANGLE that UiPath is on a roll, fueled by the enterprise need to automate across silos and find new best practices. However, he said the company management will need to work much harder if UiPath is ever going to turn a profit.

“UiPath’s 50% revenue growth is strong, but its losses are piling up even more and it is on track to lose more than half a billion dollars on a GAAP basis for the full year,” he said. “That’s not a sustainable pace. Investors will be looking closely over the next full year to see what the management is doing to turn the company back toward a profit.”

Looking to the fourth quarter, UiPath is forecasting revenue of $282 million to $283 million, just ahead of Wall Street’s consensus estimate of $281.1 million in sales.

Dines appeared on theCUBE, SiliconANGLE Media’s livestreaming studio, during UiPath Forward IV, where he talked about the company’s roadmap and its “customer value-first” growth strategy:

Photo: SiliconANGLE