UiPath (PATH) Stock Drops 18% Despite Q2 Revenue Beat and Raised Guidance

TLDR

• UiPath reported Q2 revenue of $410 million, beating estimates of $397.8 million, with EPS of $0.15 meeting expectations
• The stock initially jumped 10% after results but reversed sharply, falling over 18% in Friday trading
• Full-year fiscal 2027 revenue guidance raised to $1.789B-$1.794B, up from prior range
• Annual recurring revenue grew 12% year-over-year to $1.938 billion; net revenue retention held at 109%
• Analyst price targets were raised by Mizuho ($14), Wells Fargo ($15), and TD Cowen ($16), though Canaccord downgraded to Hold on valuation concerns

UiPath (PATH) stock was trading at $16.63 in Friday’s premarket, down around 8.7%, after swinging as much as 10% higher right after earnings dropped Wednesday evening.

UiPath Inc., PATH

The automation software company posted Q2 revenue of $410 million, up 13% year-over-year and 16% excluding foreign exchange effects. That came in roughly $12 million above the Wall Street consensus of $397.8 million.

Earnings per share came in at $0.15 on a non-GAAP basis, matching analyst estimates exactly.

It was UiPath’s fourth straight quarter of GAAP profitability, which is worth noting for a company that spent years burning cash.

UIPATH $PATH Q2’27 EARNINGS HIGHLIGHTS

🔹 Revenue: $410M (Est. $398M) 🟢; +13% YoY
🔹 Adj. EPS: $0.15 (Est. $0.15) 🟡; flat YoY
🔹 ARR: $1.94B; +12% YoY
🔹 Non-GAAP Oper Income: $89M (Est. $75.2M) 🟢

FY27 Guide:
🔹 Revenue: $1.789B-$1.794B (Est. $1.78B) 🟢
🔹 Non-GAAP Oper… pic.twitter.com/5OW32X47W7

— Wall St Engine (@wallstengine) September 3, 2026

Non-GAAP operating margin reached 21.7%, about 290 basis points ahead of expectations. Gross profit margin held at 83%.

Annual recurring revenue totalled $1.938 billion, up 12% year-over-year. Net new ARR came in at $37 million, up from $31 million in the same period last year. Net revenue retention was steady at 109%.

One number that caught attention: AI featured in 18 of the top 20 deals in the quarter. UiPath has consistently argued that AI increases demand for robotic process automation rather than threatening it.

Guidance Gets a Lift

Management raised its fiscal 2027 revenue guidance by $13 million to a range of $1.789 billion to $1.794 billion. Non-GAAP operating income guidance also moved higher, to roughly $445 million from $430 million previously.

Free cash flow dipped to $31 million in the quarter, due to the timing of tax payments. The company kept its full-year free cash flow target at $425 million.

UiPath also made leadership changes, promoting Hitesh Ramani to chief financial officer while Ashim Gupta shifts focus to his chief operating officer role.

What Analysts Said

Mizuho raised its price target to $14 from $12, keeping a Neutral rating. Wells Fargo lifted its target to $15, maintaining Equal Weight. TD Cowen went to $16, pointing to steady results and healthy ARR trends.

Canaccord moved the other way, downgrading UiPath to Hold from Buy despite raising its price target to $17. The firm cited valuation concerns after the strong quarter.

PATH has gained nearly 70% over the past year but is up only 12% in 2026. Concerns that AI could eat into software revenue have weighed on the stock in recent months.

Share buybacks dropped sharply, falling to 2.4 million in Q2 from 20.4 million in Q1.

The stock trades at a market cap of approximately $9.44 billion based on recent prices.

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