UiPath’s revenue growth slows to a crawl as it chases agentic AI dream, and its stock falls sharply

Let’s dive into UiPath’s recent performance in the fast-paced tech world. Their latest earnings report caught some eyes on Wall Street, and not quite in the way they’d hoped.

The robotic process automation (RPA) software company delivered mixed results. They beat expectations with earnings of 26 cents per share, exceeding the predicted 20 cents. But revenue growth slowed to 5% year-over-year, reaching $424 million. It fell short of what analysts anticipated.

Even so, UiPath’s improved profitability can’t be ignored. Net income rose to $51.8 million, a big jump from last year’s $33.9 million—showing effective management in tough times.

Looking at fiscal 2026, CFO Ashim Gupta voiced caution about “global macroeconomic uncertainty” from U.S. trade policies and tariffs. Predicted sales of $1.525-1.53 billion were below Wall Street’s $1.58 billion expectation. This led to a 16% drop in UiPath’s stock after their announcement.

How is UiPath using AI?

UiPath stands strong in providing tools that automate repetitive business tasks, like data entry. Their technology replicates routine work processes with stunning precision. Recently, they shifted focus to AI agents, which are also known as “digital laborers”. These agents perform more complex tasks with little supervision.

The market for AI agents is fiercely competitive. Heavy hitters like OpenAI, Microsoft, and ServiceNow are all working hard to develop these advanced capabilities. CEO Daniel Dines remains upbeat, saying fiscal 2025 was “our most innovative year in recent history.” They launched products like Autopilot, Agent Builder, and Agentic Orchestration.

What are the trends in robotic process automation?

Robotic process automation is always evolving. Traditional RPA bots handle repetitive tasks, but now AI agents are taking the stage. These agents can manage tasks that require a bit of human-like decision-making. This evolution is needed as businesses seek more dynamic automation solutions.

UiPath’s move into AI agent technology shows a shift in the RPA industry. Analyst Holger Mueller suggests these AI agents, also called copilots, might have influenced UiPath’s revenue slowdown. The company needs them to stay competitive in the changing tech landscape.

Facing the competitive landscape

UiPath is up against tough competition. OpenAI, Microsoft, and ServiceNow are approaching AI solutions with their unique strategies. OpenAI is known for its cutting-edge AI models. Microsoft combines AI with its massive cloud services, while ServiceNow is integrating AI into its workflow platforms.

UiPath’s differentiator is its focus on AI agents for specific business industry applications. By acquiring the UK-based AI company Peak, they aim to optimize product inventory and pricing for profitability. CEO Dines says this move bolsters their vertical AI solutions strategy.

Impact on businesses

UiPath’s AI innovations could change day-to-day business operations. For example, AI agents could optimize inventory management, saving time and reducing waste. Automating complex tasks eases the workload on employees, freeing them to focus on strategic tasks.

However, businesses should be cautious with AI’s limitations. Over-reliance might lead to blind spots or errors if not monitored. A balance between human oversight and AI task performance is crucial.

What’s next?

As the tech world grapples with AI’s potential, global markets feel the jitters from trade uncertainties. This affects tech companies diving deep into AI agents. Salesforce has faced similar pressures recently. Still, UiPath charges forward, driven by innovation.

Their road is bumpy, but the company’s commitment to progress is clear. Whether their strategy revives faster growth will unfold against the fierce competition they face. For investors and potential customers, understanding these dynamics is crucial.

In the end, despite challenges, UiPath sees a bright future with AI agents. Businesses keen on AI in business automation should watch closely as these trends continue to unfold.