To The Moon

$UiPath(PATH)$ is scheduled to report their quarterly earnings on 05 December 2024 after market close.

UiPath beat analysts’ revenue expectations by 4.1% last quarter, reporting revenues of $316.3 million, up 10.1% year on year. It was a very strong quarter for the company, with an impressive beat of analysts’ billings estimates and a solid beat of analysts’ EBITDA estimates.

For this reporting quarter, analysts are expecting UiPath’s revenue to grow higher at 6.7% year on year to $347.7 million, slowing from the 24% increase it recorded in the same quarter last year.

The consensus estimated for adjusted earnings are expected to come in at $0.07 per share.

UiPath Customers by Products and Services

The top three products and services offering customers that use UiPath for Business Process Management (BPM) are Digital Transformation (234), Data Analytics (188), Consulting (186).

UiPath Inc, a leader in Robotic Process Automation (RPA), is navigating a complex landscape as it transitions from a pure RPA provider to a comprehensive AI automation platform. The company's recent performance and strategic shifts have drawn mixed reactions from analysts, highlighting both opportunities and challenges in its path forward.

If we looked at similar company who has reported their earnings like $Salesforce.com(CRM)$ , the key message from CRM earnings is the strong demand for Salesforce’s new generative AI initiative, Agentforce.

Why I am mentioning Salesforce because CRM earnings indicated that demand for software remains strong in this latest quarter, as enterprises spend big on artificial intelligence.

So this is important for PATH as UiPath is actively transitioning from a pure RPA provider to a broader AI automation platform. This strategic shift aims to capitalize on the growing demand for comprehensive automation solutions and position the company for long-term success in a rapidly evolving market.

The company's focus on innovation and expansion within the AI automation sector is seen as a potential driver for future growth. Analysts note that UiPath operates within a $65 billion Total Addressable Market (TAM), providing significant room for expansion.

UiPath's competitive landscape appears favorable, with the company maintaining its position as a leader in the RPA space. However, as the company expands into broader AI automation, it may face increased competition from both established players and new entrants.

UiPath's Expansion Into AI Automation To Drive Future Growth

UiPath's strategic shift towards becoming a comprehensive AI automation platform provider opens up significant growth opportunities. The broader AI automation market represents a much larger total addressable market compared to pure RPA, potentially allowing UiPath to expand its customer base and increase revenue per customer.

By leveraging its existing expertise in RPA and combining it with advanced AI capabilities, UiPath can offer more sophisticated and valuable solutions to its clients. This expansion could lead to deeper integration within customer organizations, increasing stickiness and potentially driving higher retention rates and upsell opportunities.

Furthermore, as businesses increasingly seek end-to-end automation solutions, UiPath's expanded offering could position it as a one-stop shop for enterprise automation needs, potentially accelerating adoption and driving long-term growth.

UiPath's Strong Performance in Cloud ARR. Last Quarter 19% Growth Significant

UiPath's strong performance in cloud ARR, growing at 65% year-over-year and now accounting for over half of total ARR, demonstrates the success of its cloud-first strategy. This shift towards cloud-based solutions aligns with broader industry trends and customer preferences for flexible, scalable, and easily deployable automation tools.

The cloud-first approach enables UiPath to more rapidly innovate and deliver updates to its platform, ensuring customers have access to the latest features and capabilities. This agility can be a significant competitive advantage in the fast-moving automation market.

This can be seen in PATH last quarter report which saw a 19% year-on-year and we could be seeing a higher percentage in this fiscal third-quarter 2025 earnings.

Competitive Landscape Looks To Favour UiPath

The automation industry continues to evolve rapidly, with increasing focus on AI-driven solutions. UiPath's expansion beyond traditional RPA into a broader AI automation platform aligns with these trends and positions the company to capture a larger share of the growing market.

Analysts note that the competitive landscape currently appears favorable for UiPath. However, the dynamic nature of the industry means that new entrants or advancements by competitors could quickly alter this landscape.

The top three of UiPath’s competitors in the Business Process Management (BPM) category are Sage Business Cloud with 20.58%, Oracle EBS with 14.31%, Oracle Project Management with 12.26% market share.

We should be seeing more market share as enterprise continue with their spending on the back of AI evolution. As UiPath expands beyond its core RPA offerings into the broader AI automation space, it faces increased competition from both established players and new entrants. The company's ability to differentiate its products and maintain its technological edge will be crucial in retaining its market position.

The rapid pace of innovation in AI and automation technologies means that UiPath must continuously invest in research and development to stay ahead. Any lag in product development or failure to meet evolving customer needs could result in loss of market share to more agile competitors.

Challenges Still There As UiPath Work Towards Profitable Growth At Scale

The automation industry continues to evolve rapidly, with increasing focus on AI-driven solutions. UiPath's expansion beyond traditional RPA into a broader AI automation platform aligns with these trends and positions the company to capture a larger share of the growing market.

UiPath faces several challenges as it moves forward. The company has lowered its guidance for the upcoming fiscal year, citing increased macroeconomic pressures, go-to-market execution challenges, and potential short-term disruption from leadership changes.

Achieving profitable growth at scale remains a key focus for UiPath. The company's ability to navigate the transition to a broader AI automation platform while maintaining its strong position in RPA will be crucial for its long-term success.

Technical Analysis - MACD and Multi-timeframe (MTF)

PATH have benefit from the strong earnings from Salesforce, we saw PATH up by 6.61% on Wednesday (04 Dec) trading due to the improved market optimism around innovators in the software as a service (SaaS) space.

We saw Salesforce sign 200 deals within a week of launching Agentforce, its new AI platform for enterprise customers. We could be seeing similar trend in PATH earnings.

This has made PATh trading nicely above the long-term MA (200-days period), and MACD is showing upside movement, though MTF has yet to give us a clear upward trend, so I am looking more into how PATH would continue to trade today (05 Dec).

I will be watching to load up some of this SaaS stock as part of the software sector diversification.

Summary

PATH earnings might be another SaaS player which should give us an idea how enterprises are spending on these softwares, and AI no doubt would be another focus in PATH earnings.

How much AI automation would be contributing towards its revenue should be watched also, and I am also watching PATH ability to navigate the transition to a broader AI automation platform while maintaining its strong position in RPA will be crucial for its long-term success.

Appreciate if you could share your thoughts in the comment section whether you think PATH would be able to provide an earning surprise on the growth of its AI automation platform.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.