2225

Reflecting On Automation Software Stocks’ Q1 Earnings: UiPath (NYSE:PATH)


Adam Hejl /
2024/06/13 2:59 am EDT

Wrapping up Q1 earnings, we look at the numbers and key takeaways for the automation software stocks, including UiPath (NYSE:PATH) and its peers.

The whole purpose of software is to automate tasks to increase productivity. Today, innovative new software techniques, often involving AI and machine learning, are finally allowing automation that has graduated from simple one- or two-step workflows to more complex processes integral to enterprises. The result is surging demand for modern automation software.

The 5 automation software stocks we track reported a weak Q1; on average, revenues were in line with analyst consensus estimates. while next quarter's revenue guidance was 4.6% below consensus. Stocks, especially growth stocks where cash flows further in the future are more important to the story, had a good end of 2023. But the beginning of 2024 has seen more volatile stock performance due to mixed inflation data, and automation software stocks have had a rough stretch, with share prices down 15.9% on average since the previous earnings results.

UiPath (NYSE:PATH)

Started in 2005 in Romania as a tech outsourcing company, UiPath (NYSE:PATH) makes software that helps companies automate repetitive computer tasks.

UiPath reported revenues of $335.1 million, up 15.7% year on year, in line with analysts' expectations. It was a weak quarter for the company, with underwhelming revenue guidance for the next quarter and a decline in its gross margin.

“We are pleased to report that ARR surpassed $1.5 billion in the first quarter of fiscal 2025, a testament to our market leading Business Automation Platform and the strategic role automation plays in digital transformation,” said Daniel Dines, UiPath Founder and Chief Innovation Officer.

UiPath Total Revenue

UiPath delivered the weakest full-year guidance update of the whole group. The stock is down 35.2% since the results and currently trades at $11.86.

Is now the time to buy UiPath? Access our full analysis of the earnings results here, it's free.

Best Q1: Jamf (NASDAQ:JAMF)

Founded in 2002 by Zach Halmstad and Chip Pearson, right around the time when Apple began to dominate the personal computing market, Jamf (NASDAQ:JAMF) provides software for companies to manage Apple devices such as Macs, iPads, and iPhones.

Jamf reported revenues of $152.1 million, up 15.1% year on year, outperforming analysts' expectations by 2%. It was a mixed  quarter for the company: Jamf narrowly topped analysts' revenue expectations. On the other hand, its billings unfortunately missed analysts' expectations and its gross margin shrunk.

Jamf Total Revenue

Jamf achieved the biggest analyst estimates beat and highest full-year guidance raise among its peers. The stock is down 19.8% since the results and currently trades at $15.82.

Is now the time to buy Jamf? Access our full analysis of the earnings results here, it's free.

Weakest Q1: Pegasystems (NASDAQ:PEGA)

Founded by Alan Trefler in 1983, Pegasystems (NASDAQ:PEGA) offers a software-as-a-service platform to automate and optimize workflows in customer service and engagement.

Pegasystems reported revenues of $330.1 million, up 1.4% year on year, falling short of analysts' expectations by 2.1%. It was a weak quarter for the company, with a decline in its gross margin and a miss of analysts' billings estimates.

Pegasystems had the weakest performance against analyst estimates and slowest revenue growth in the group. The stock is down 0.6% since the results and currently trades at $58.55.

Read our full analysis of Pegasystems's results here.

ServiceNow (NYSE:NOW)

Founded by Fred Luddy, who wrote the code for the company's initial prototype on a flight from San Francisco to London, ServiceNow (NYSE:NOW) offers a software-as-a-service platform that helps companies become more efficient by allowing them to automate workflows across IT, HR, and customer service.

ServiceNow reported revenues of $2.60 billion, up 24.2% year on year, in line with analysts' expectations. It was a weak quarter for the company, with decelerating growth in large customers and a miss of analysts' ARR (annual recurring revenue) estimates.

ServiceNow delivered the fastest revenue growth among its peers. The company added 36 enterprise customers paying more than $1m annually to reach a total of 1,933. The stock is down 3.5% since the results and currently trades at $720.5.

Read our full, actionable report on ServiceNow here, it's free.

Appian (NASDAQ:APPN)

Founded by Matt Calkins and his three friends out of an apartment in Northern Virginia, Appian (NASDAQ:APPN) sells a software platform that lets its users build applications without using much code, allowing them to create new software more quickly.

Appian reported revenues of $149.8 million, up 10.8% year on year, in line with analysts' expectations. It was a weak quarter for the company, with a miss of analysts' billings estimates and a decline in its gross margin.

The stock is down 20.3% since the results and currently trades at $29.26.

Read our full, actionable report on Appian here, it's free.

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