UiPath, Inc. PATH shares are trading higher after the company reported better-than-expected first-quarter results, issued second-quarter sales guidance above estimates, and raised its FY26 guidance.
On Thursday, the company reported revenue of $356.62 million, versus estimates of $332.87 million, and adjusted EPS of 11 cents, exceeding the estimates of 10 cents.
The company raised its fiscal 2026 forecast from a range of $1.52 billion to $1.53 billion to a new range of $1.549 billion to $1.554 billion versus estimates of $1.53 billion.
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Many analysts raised the price forecast on the stock following the results.
RBC Capital analyst Matthew Hedberg maintained a Sector Perform rating and raised the price target from $13 to $15.
After a challenging initial FY26 guide and miss to end last year due to public sector issues, UiPath showed encouraging progress in that vertical through proactive engagement, said the analyst.
According to the analyst, the Federal renewals met expectations, with some agencies even outperforming, though budget finalizations still present some pressure.
UiPath is seeing early success with agentic initiatives, including over 250,000 agent runs on Agent Builder and 11,000 process instances powered by Maestro since their preview releases, Hedberg remarked in an analyst note.
The analyst said that despite ongoing macroeconomic variability, management expressed continued prudence in their FY26 guidance, which was nonetheless raised across the board.
Hedberg highlighted the company's optimism about its agentic AI opportunities and early customer interest, though significant revenue contributions from this area are not anticipated until FY27.
Needham analyst Scott Berg reiterated a Hold rating.
In an analyst note, Berg observed that UiPath posted a solid upside in revenue and operating income versus low Street expectations, primarily driven by strong license revenue that exceeded their estimate by 24%.
However, net new ARR came in at $27 million, a 39% year-over-year decrease (compared to a consensus of +$22.6 million), which the analyst attributes to lingering impacts from go-to-market (GTM) changes and execution improvements from FY25.
Berg pointed out that the current guidance indicates an increasingly second-half weighted performance, with 76% of net new ARR expected in the second half versus 57% in FY25, suggesting a moderately more challenging ramp-up.
The guidance comes despite continued declines in key metrics, including Net Revenue Retention (NRR), which dropped to 108% in the quarter, Berg added.
KeyBanc analyst Jason Celino retained a Sector Weight rating on the stock.
The analyst revised the FY26 estimates to account for the first quarter results and updated the outlook, expecting revenue of $1.552 billion (vs. $1.528 billion prior & consensus of $1.522 billion) for FY26.
While the analyst finds the improved results and advancements within the public sector encouraging, he maintained the rating due to the early stage of the agentic AI opportunity and ongoing macroeconomic uncertainty.
Truist analyst Terry Tillman raised the price forecast from $12 to $13 while maintaining a Hold rating.
In an analyst note, Tillman underscored that the company surpassed their estimates, with particularly strong beats in total revenue and non-GAAP operating income.
Positive traction appears to be building from agentic solutions, the new partner program, and the recently acquired Peak, among other initiatives, which led the analyst to raise the estimates based on the improved outlook.
In particular, Tillman now sees revenue of $1.547 billion (vs. $1.527 billion earlier) compared to a consensus of $1.522 billion for FY26.
The analyst emphasized the company's narrative is still a work in progress concerning the improvement of its annualized renewal run rate (ARR) and the return of net new ARR to a trajectory of robust growth.
Price Action: PATH shares are trading higher by 1.20% to $13.10 at last check Friday.
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