On Thursday, Evercore ISI increased its price target for UiPath Inc. (NYSE:PATH) to $27.00, up from the previous target of $24.00, while retaining an In-Line rating for the stock. This adjustment follows UiPath's strong performance in the fiscal year 2024, with the company's revenue, annual recurring revenue, and operating profit all exceeding expectations.
The firm's initial ARR guidance for fiscal year 2025 is set at $1,727.5 million, a growth of 18%, which is slightly above the consensus estimate of $1,699.2 million or a 17% increase. This forecast suggests that net new ARR will grow for the first time since fiscal year 2022.
The first quarter ARR guidance for UiPath stands at $1,510.5 million, a 21% increase, surpassing the Street's projection of $1,489.1 million or a 19% rise. The company's operating margin guidance indicates an approximate 100 basis points expansion for fiscal year 2025, leaving potential for further upside and implying a 1280 basis point expansion over two years.
UiPath's growth in larger deals and successful partnerships, such as the one with SAP, are noted as operational strengths that contribute to new opportunities and customer base expansion.
UiPath's first quarter and full fiscal year 2025 revenue growth guidance are $332.5 million, a 14.8% increase, and $1,557.5 million, a 19.1% increase, respectively. These figures are conservative compared to Street estimates of $346.8 million, a 19.8% increase, and $1,530.0 million, an 18.9% increase. The company's operating margin guidance of 16.5% for the first quarter and 18.9% for the full year also surpasses Street estimates of 14.9% and 17.0%.
The dollar-based net retention rate for UiPath was reported at 119%, slightly down from 121% in the previous quarter. The number of customers generating over $1 million in ARR increased from 264 to 288, accounting for 52% of revenue, while customers with $100k+ ARR rose from 1,974 to 2,054, representing 86% of revenue.
Notably, 65% of the top 100 deals included intelligent document processing. The company's operating margins reached 27%, attributed to strong revenue performance and cost control, and the expectation is for continued margin expansion.
UiPath has also been active in share repurchases, buying back 2.6 million shares at an average price of $19.21 up to January 31 and an additional 938,000 shares at an average price of $23.46 thereafter.
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