Business automation software company UiPath Inc. is flying high today, with its stock surging more than 11% after hours on better-than-expected financial results and strong guidance for the current quarter.

The company reported first-quarter earnings before certain costs such as stock compensation of 11 cents per share, edging past Wall Street’s view of a 10-cent-per-share profit. Revenue for the period rose 6% from a year earlier, to $356.6 million, surging past analysts’ consensus estimate of $332.9 million.

For the quarter, UiPath posted a net loss of $22.5 million, improving on the $28.7 million loss it reported in the year-ago period.

UiPath is a leader in the robotic process automation industry. It sells tools that can help businesses to lower costs and reduce operational errors by automating repetitive tasks such as data entry. This core technology is powered by artificial intelligence models that study how employees perform common tasks, such as data entry, so they can replicate that work with no mistakes.

Recently, the company has been looking to develop more sophisticated AI models, believing it’s well-placed to capitalize on the growing interest in so-called agentic AI. These AI agents, sometimes known as “digital laborers,” and have the ability to perform more complex tasks on behalf of users with minimal supervision.

UiPath outlined its strategy for agentic AI last October, and last month it finally put some meat on the bones of that plan with the launch of a new platform called Maestro, which allows users to build and orchestrate teams of AI agents. The platform can be used to create AI agents that automate, model and optimize complex business processes, leveraging the company’s flagship “process intelligence” capabilities. It also offers real-time monitoring of key performance indicators, so teams can continuously optimize fleets of AI agents.

Maestro is critical to the future success of UiPath, which has struggled with slow revenue growth over the last couple of years, having historically grown much faster. AI agents can exceed the potential of UiPath’s RPA bots by performing much more sophisticated tasks with minimal supervision.

In a conference call with analysts, UiPath Chief Executive Daniel Dines (pictured) said the launch of Maestro was “one of the most important and successful product introductions in our history.” He told analysts that the momentum following its launch has been “exciting,” matching the company’s strong first-quarter financial results.

UiPath said it ended the quarter with $1.693 billion in annual recurring revenue, up 12% from a year earlier. Meanwhile, its cash flow from operations reached $119 million, with adjusted free cash flow of $117 million. It ended up with $1.59 billion in cash, cash equivalents and marketable securities.

“We executed with discipline and focus in what continues to be a variable macroeconomical environment, exceeding expectations on the top and bottom line,” Dines said.

Chief Financial Officer and Chief Operating Officer Ashim Gupta said he’s encouraged by the early traction the company is seeing with its agentic AI solutions, but he warned investors not to expect too much too soon. “Adoption is still in its early phases, and as such we don’t expect a material revenue contribution in fiscal 2026,” he said.

On the other hand, Dines alluded to the progress the company is making in terms of customer acquisition. He referenced a new “multiyear, multimillion-dollar expansion” with a Fortune 15 healthcare company, as well as a new “AI partnership” with Google LLC.

UiPath managed to grow its revenue at about double the rate of inflation, but although that represents good progress, it’s not exactly great, said analyst Holger Mueller of Constellation Research Inc. He said investors will be wanting to see much more acceleration once its agentic AI platform is bedded in.

“The good news is UiPath improved its cost structure, reducing sales and marketing spending to save around $20 million overall, and that is what helped it to cut its operating loss by about a third compared to the year-ago quarter,” the analyst said. “But Daniel Dines and team will be looking for more acceleration in terms of revenue and profit in the rest of the year. Much will depend on how UiPath’s customers transform their RPA assets into agentic assets, and how quickly they learn to adopt those new offerings.”

For the current quarter, UiPath is anticipating revenue of between $345 million and $350 million, well ahead of Wall Street’s target of $333.1 million. The company also upped its full-year revenue forecast from a range of $1.52 billion to $1.53 billion to a new range of $1.549 billion to $1.554 billion. The new range compares more favorably with Wall Street’s target of $1.53 billion.

“As we look to the remainder of the year, we remain focused on executing our strategy, investing in innovation and maintaining operational discipline to drive sustainable growth and profitability,” Gupta said.

The after-hours market action means UiPath’s stock is now up 2% in the year to date, but it still has a way to go, as it remains down more than 29% over the last 12 months.

Photo: SiliconANGLE