UiPath Stock Falls Despite Q3 Beat But Retail Sentiment Stays Firmly Positive

UiPath said in FY26, it will focus on stabilizing net new ARR dollars while accelerating non-GAAP adjusted free cash flow growth rate.

Enterprise automation and artificial intelligence (AI) software company UiPath, Inc. ($PATH) announced better-than-expected fiscal year 2025 third-quarter results. While the stock pulled back following the earnings release, retail sentiment remained upbeat.

The New York-based company reported non-GAAP earnings per share (EPS) of $0.11, lower than the year ago’s $0.12 but exceeding the $0.07 consensus.

The non-GAAP operating income came in at $50 million.

Revenue climbed 9% year-over-year (YoY) to $355 million versus the average analysts’ estimate of $347.64 million and the company’s guidance of $345 million-$350 million.

Daniel Dines, UiPath’s CEO, said, “Our customers’ response to the agentic automation vision and roadmap that we announced at FORWARD has been energizing and reinforces our leading position in the AI-powered automation market.”

Annual recurring revenue (ARR) climbed 17% YoY to $1.607 billion, with net new ARR at $56 million. The dollar-based net retention rate was 113%. 

The Y0Y revenue and ARR growth slowed from the second quarter’s 10% and 19%, respectively.

Ashim Gupta, UiPath’s CFO, said in fiscal year 2026, the company will focus on stabilizing net new ARR dollars while accelerating non-GAAP adjusted free cash flow growth rate.

UiPath guided to fourth-quarter revenue between $422 million and $427 million, with ARR in the range of $1.669 billion-$1.674 billion, as of Jan. 31, 2025. The consensus estimate calls for revenue of $423.85 million for the year. 

The company expects quarterly non-GAAP operating income of about $100 million.

Sentiment toward UiPath stock was ‘extremely bullish’ (95/100), with the reading improving from (77/100) a day ago. Message volume was ‘extremely high.’

A few Stocktwits users termed the post-earnings sell-off an overreaction, adding that the stock is undervalued.

Another weighed in on the stock reaction and said it may be triggered by slowing growth and no near-term target to break even on a GAAP basis. 

After closing Thursday’s regular session down 2.48% at $14.95, UiPath stock fell 6.42% in the after-hours. The stock has shed about 40% this year.

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