Narayan AmmachchiAutomation software maker UiPath faces a double blow: CEO Robert Enslin abruptly resigned, and the company lowered its revenue forecast for the next quarter.
The double whammy has caused trouble for UiPath in Wall Street. Company stock fell 30% in after-hours trading following both announcements.
Co-founder Daniel Dines, the company’s former CEO, will take back the reins on June 1st of this year. However, investors interpreted Enslin’s departure as a sign of missed growth targets, while the weak guidance hinted at deeper issues.
Analysts point to the seemingly contradictory decision to bring Dines back after replacing him two years ago. This move could suggest the board is either seeking a permanent CEO or focusing on developing new products for the generative AI era with Dines at the helm.
Despite the leadership change, UiPath reported positive results for the previous quarter. Earnings per share exceeded analyst expectations, and revenue grew 16% year-over-year, beating estimates.
The company’s outlook for the second quarter fell short, nevertheless, with projected revenue falling significantly below analyst forecasts.
On the earnings call for the quarter, Dines acknowledged challenges in closing deals and longer sales cycles for large contracts, yet expressed confidence in UiPath’s future, particularly in the area of generative AI.
Founded in 2005, UiPath’s software automates repetitive tasks using AI models that mimic employee workflows. While a major player in the field, UiPath faces growing competition from tech giants and new generative AI startups.
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