Shares of UiPath Inc. rose sharply in extended trading today after the business automation software provider beat expectations for its fourth-quarter financial results and offered strong guidance.

The stock rose 13% in the after-hours trading session, adding to a gain of almost 2% earlier in the day.

UiPath had “a very strong quarter, reflecting the progress we have made on our strategic initiatives and the strength of our AI-powered business automation platform,” Rob Enslin (pictured), the company’s co-chief executive officer, said on a call with analysts. He added that the company also closed on a “record number of deals over $1 million.”

UiPath delivered a net loss for the quarter of $27.7 million, down from a $63.1 million loss one year earlier. Earnings before certain costs such as stock compensation came to 15 cents per share, while revenue increased by 7%, to $308.5 million. Wall Street had been targeting earnings of just seven cents per share on lower sales of $278.6 million.

The company is widely held to be a leader in the robotic process automation market. It sells an RPA platform that helps companies reduce costs and operational errors by automating many repetitive work-related tasks such as data entry. Its platform is powered by artificial intelligence models that learn how employees perform common tasks in their business applications. Those models then build software “robots” that are able to replicate those workflows, meaning they no longer need to be done manually.

No doubt investors were happy to see that UiPath’s annualized renewal run rate jumped by 30% from a year earlier, to $1.2 billion. ARR is a key metric for software-as-a-service firms like UiPath, since it reveals its sales expectations based on subscriptions.

Enslin also said during the conference call that UiPath now has 229 customers that generate at least $1 million in ARR, and 1,785 that contribute at least $100,000 per year.

For fiscal 2023, UiPath managed to reduce its net loss from $525.6 million to just $328.4 million. Total revenue for the year rose 19% from a year ago, to $1.06 billion.

Analyst Holger Mueller of Constellation Research Inc. told SiliconANGLE that UiPath enjoyed a strong year, breaking the $1 billion revenue barrier for the first time. “UiPath’s co-CEOs Rob Enslin and Daniel Dines showed good cost management, with only R&D costs rising and all of the others being reduced,” Mueller said. “Good things generally come to companies that can manage their costs effectively, and now UiPath is on track to break even, maybe by the second quarter and certainly by the end of the year. UiPath’s progress will depend on the effectiveness of its new go-to-market initiatives, and the first quarter will likely tell us how these are going.”

Looking to the first quarter, UiPath offered a revenue forecast of $270 million to $272 million, ahead of Wall Street’s consensus estimate of $269.6 million. For fiscal year 2024, UiPath estimates its revenue at $1.253 billion to $1.258 billion, nicely ahead of Wall Street’s target of $1.214 billion.

Photo: SiliconANGLE