UiPath Hit By Slowing ARR Growth, Deal Timing Woes: Analyst Remains Optimistic For AI, Cloud Spark

UiPath Inc PATH stock price declined Thursday after the company reported a fourth-quarter revenue miss.

The New York-based company issued first-quarter revenue guidance below estimates on Wednesday.It reported largely disappointing fourth-quarter results, predominantly driven by deal delays in its US Fed segment.

These delays also drove initial fiscal 2026 guidance below estimates due to additional uncertainty of deal timing for this vertical.

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Needham analyst Scott Berg reiterated UiPath with a Hold.

Total revenues of $423.6 million were below his $425.3 million estimate. Berg noted currency exchange rate fluctuations had a negative $2 million impact on revenues. When adjusting a similar effect to ARR, the net new ARR of $59 million was ~$5 million below guidance.

On the optimistic side, customers are now using 3k of UiPath’s Agents, which the analyst noted as a strong initial interest in Agentic innovations. The analyst would expect the small pilots to expand substantially in the second half of 2026.

UiPath also noted stronger-than-expected growth of its Cloud model, with ARR up more than 50%, which Berg said was a catalyst to incremental AI adoption since much of the innovation is better served in the Cloud. The fourth-quarter revenue and adjusted EPS were $423.6 million and $0.26, compared to the analyst’s $425.3 million and $0.19 estimates.

Total revenue increased by 4.5%, subscription revenue grew by 22.3%, and license revenue went down by 10.2%.

ARR grew 13.8% to $1.67 billion, a deceleration from the 16.6% growth in the third quarter and the 21.6% growth seen last year. Net new ARR of $59 million represents a 31% decline.

The customer count of 10,750 decreased by 140 sequentially and was down 0.7% compared to last year.

To date, customers have deployed over 3,000 agents on the UiPath platform. Overall, AI has a 20% customer attach rate, with a greater than 85% attach rate for customers with over $1 million in ARR.

UiPath’s acquisition of AI-native company Peak has a relatively small impact on fiscal 2026 financials, given that it falls under the regulatory threshold on financial disclosure.

UiPath is facing elevated levels of uncertainty driven by public sector dynamics, macro volatility, and currency exchange rate fluctuations. Revenue growth guidance of 6.8% to $1.525 billion—$1.530 billion missed the consensus $1.584 billion forecast.

Price Action: PATH stock is down 14.54% at $10.11 at last check Thursday.

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Image: Courtesy of UiPath, Inc.