UiPath (PATH) Stock Drops 5% Despite Impressive Earnings Beat on Every Metric

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TLDR

  • UiPath exceeded Q4 projections: adjusted EPS of $0.30 (vs. $0.26 expected) and revenue of $481M (vs. $465M expected)
  • The stock dropped over 5% in premarket trading despite these beats
  • Annual Recurring Revenue (ARR) reached $1.853B as of January 2026 end, marking an 11% year-over-year increase
  • Management revealed $200M in ARR tied to AI-related products for the first time
  • FY27 revenue guidance of $1.754B–$1.759B was higher than the $1.74B consensus estimate

UiPath delivered a robust Q4 performance, yet the market remained unimpressed. The stock fell over 5% in premarket trading on Thursday, even as the company outperformed both revenue and earnings expectations.

UiPath Inc. (PATH)
PATH Stock Card

In Q4 fiscal 2026, UiPath reported adjusted earnings of $0.30 per share. Revenue totaled $481.11 million, exceeding Wall Street’s forecasts of $0.26 per share and $464.88 million in revenue.

Fiscal 2026 full-year revenue amounted to $1.611 billion, a 13% year-over-year rise.

As of January 31, 2026, ARR stood at $1.853 billion, an 11% year-over-year increase. Net-new ARR grew 20% on a reported basis but declined 5% when adjusted for constant currency.

UiPath disclosed $200 million in ARR linked exclusively to its AI products for the first time. This includes its agents, Maestro orchestration platform, and Intelligent Document Processing tools.

CEO Daniel Dines highlighted a semiconductor client that rolled out agentic workflows in less than two weeks. He also mentioned One New Zealand, which reduced its four-to-five day order-to-cash process to 10 minutes and projects $20 million in savings this year.

“We are at an inflection point in how software is built,” Dines said.

Guidance Exceeds Consensus, Though ARR Growth Concerns Remain

For Q1 fiscal 2027, UiPath provided revenue guidance of $395 million to $400 million. Full-year FY27 revenue guidance ranged from $1.754 billion to $1.759 billion, topping the $1.74 billion consensus estimate.

The company forecasts FY27 ARR between $2.051 billion and $2.056 billion, representing approximately 11% growth at the midpoint and around 1.6% above consensus.

Morgan Stanley analyst Sanjit Singh noted the guidance includes a contribution from the WorkFusion acquisition, which closed in Q1 FY27. He said on an organic basis, the ARR guide implies “relatively flat net-new ARR growth for the year.”

Truist Securities analyst Terry Tillman called it a “solid quarter highlighted by continued sales execution and traction in AI-driven automation.”

Profitability Milestone & Stock Buyback

UiPath reported GAAP net income of $282 million for the full fiscal year, marking the first time in its history the company has achieved full-year GAAP profitability.

CFO Ashim Gupta revised the company’s long-term non-GAAP operating margin target to 30%, up from its previous guidance. FY26 non-GAAP operating income totaled $370 million, a 23% margin.

The company closed Q4 with $1.7 billion in cash and no debt. It finished its $1 billion stock repurchase program during the quarter and approved a new $500 million buyback.

Q4 adjusted free cash flow amounted to $182 million, while full-year free cash flow hit $372 million.

UiPath projects non-GAAP operating income of roughly $415 million for FY27, with non-GAAP gross margin anticipated to be around 84%.