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Investing.com -- UiPath (NYSE:PATH) shares surged more than 11% in pre-market trading Friday after the company reported stronger-than-expected fiscal first-quarter results and raised its full-year guidance, driven by improved execution and a stronger deal pipeline.
The company posted revenue of $357 million for the quarter, a 6.4% increase from a year earlier and $25 million above consensus estimates.
Annual recurring revenue rose 12% to $1.69 billion. Net new ARR totaled $27 million, down 39% from the prior year but above BMO Capital Markets’ estimate of $23 million. Foreign exchange had no material impact on the results.
UiPath raised its full-year revenue forecast to a midpoint of $1.55 billion from $1.53 billion and increased its full-year ARR guidance slightly to $1.82 billion from $1.82 billion.
For the second quarter, the company projected ARR of $1.72 billion and revenue of $348 million, representing year-over-year growth of 11% and 10%, respectively.
Remaining performance obligations rose 12% to $1.23 billion, while current RPO increased 14% to $776 million. Both figures decelerated from a year ago but showed sequential improvement or stability.
Gross retention remained at 98%. Dollar-based net retention was 108%, below internal forecasts.
Analysts at TD Cowen cited macroeconomic volatility and the U.S. federal government transition as factors contributing to the decline. ARR contributions from new customers came in above expectations.
The number of customers generating more than $100,000 in ARR rose 13% year-over-year and 3% sequentially to 2,365.
Clients with over $1 million in ARR declined by one to 316. The overall customer count was flat, as the company continued to focus on higher-value accounts and allowed churn among smaller clients.
In the U.S. public sector, the company signed a first-quarter deal with the U.S. Air Force but noted that procurement scrutiny continued to affect conversion timelines.
Management said broader market conditions remained largely unchanged, with no meaningful shift in sales cycles or client decision-making.
TD Cowen raised its fiscal 2026 and 2027 revenue estimates by 2% and 4% and increased adjusted EBIT forecasts by 7% and 9%.
The brokerage lifted its price target to $15 and maintained a "hold" rating. BMO Capital Markets raised its target to $15.50 and kept a "market perform" rating.