By Elsa Ohlen

UiPath stock jumped Friday after the automation-software company's earnings beat expectations and hiked guidance in its latest earnings report. The results eased fears that cuts in U.S. federal spending could hurt its financial results.

Shares were up 11% to $14.34 in premarket trading following the report, released Thursday after the bell. Despite the beat-and-raise quarter, and positive market reaction, analysts remained largely cautious.

"While we're encouraged by the better results and progress with the public sector, we remain [Sector Weight] given the agentic opportunity remains early days and persistent macro uncertainty," said KeyBanc analysts led by Jason Celino. They don't have a price target on the stock.

Agentic refers to artificial intelligence systems that have autonomy and can reach their own decisions or take their own actions.

"There is really enthusiasm about what agentic automation can bring--to bring efficiency into the federal government," CEO Daniel Dines said in an earnings call late Thursday. "Renewals are progressing well," he added.

In March, shares tumbled after the company reported a disappointing quarter and highlighted uncertainty in the U.S. public sector amid Elon Musk's Department of Government Efficiency, or DOGE, efforts to slash government spending.

Those fears now seem to have largely retracted for UiPath investors and, if early Friday's gains hold, the stock will be up double digits in 2025.

Analysts aren't quite so optimistic. D.A. Davidson analyst Will Jellison also reiterated a Neutral rating following the earnings report, joining the 73% of analysts with a Hold-equivalent rating on shares, according to FactSet. Jellison raised his price target on shares to $14 from $11, reflecting the company's increased full-year profit estimates.

For the 2026 fiscal year, the company now expects revenue between $1.549 billion and $1.554 billion, up 1.6% from previously issued guidance at the midpoint.

For its first fiscal quarter ended April 30, UiPath's adjusted earnings came in at 11 cents a share on revenue of $357 million, beating analysts' expectations of 10 cents a share on revenue of $332 million, according to FactSet.

ARR came in at $1.693 billion, slightly above expectations of $1.689 billion.

It was a "solid start" to the fiscal year, said Evercore analysts led by Kirk Materne, who rate the stock In-Line. However, "stringing a couple quarters together of outperformance, a flattening of NRR [Net Revenue Retention], and further proof points around the agentic strategy are likely needed to shift investor sentiment in a more positive direction."

Write to Elsa Ohlen at elsa.ohlen@barrons.com

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May 30, 2025 07:02 ET (11:02 GMT)

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