UiPath stock rockets after company announces further layoffs, suggests revenue could beat

Shares of UiPath Inc.
PATH,
+11.29%
were headed more than 11% higher in premarket trading Tuesday after the automation software company announced preliminary revenue ahead of expectations and disclosed further moves to restructure its business. The company revealed in an 8-K filing late Monday that it expects fiscal third-quarter revenue of about $260 million. The company also anticipates recording annual recurring revenue of roughly $1.108 billion, as of Oct. 31. The FactSet consensus for fiscal third-quarter revenue was $246.3 million as of Nov. 11, while the FactSet consensus for ARR was $1.093 billion. RBC Capital Markets analyst Matthew Hedberg wrote that he was “particularly happy to see the company generate a non-GAAP profit” as UiPath expects about $15 million in adjusted operating income. Additionally, UiPath announced “further restructuring actions” beyond those it disclosed in late June, when the company it planned to reduce its workforce of 4,200 by about 5%. The latest restructuring actions seem to focus on the elimination of 6% of jobs across the company’s workforce of about 4,025 employees (as of Oct. 31). UiPath phrased this in its filing as an “additional reduction across functions,” adding that the “workforce reduction will further support the company’s strategic positioning designed to increase execution velocity, operational efficiency, and customer centricity.”