What Happened?
Shares of automation software company UiPath (NYSE:PATH) jumped 24.2% in the afternoon session after the company reported strong third-quarter 2025 financial results, beating analyst expectations for both revenue and profit.
The automation software firm announced revenue of $411.1 million, a 15.9% increase year-over-year, which surpassed Wall Street's estimates. It also reported adjusted earnings per share of $0.16, which was also higher than expected. Management attributed these results to increased adoption of its automation platform, particularly the integration of deterministic automation with its AgenTiKi AI capabilities. CEO Daniel Dines highlighted the value customers are seeing from agentic automation, noting, “Our automation strategy, combining the reliability of deterministic automation with the intelligence and adaptability of AgenTiKi, continues to align with what customers want most: trusted enterprise-grade automation that delivers tangible ROI fast.”
A key highlight was the company's significant turnaround in profitability, posting an operating margin of 3.2%, a stark improvement from a loss of 12.2% in the prior year's quarter. Additionally, UiPath's Annual Recurring Revenue (ARR) grew 10.9% to $1.78 billion, narrowly beating estimates. Looking ahead, the company provided revenue guidance for the fourth quarter that was in line with analyst forecasts. Overall, this was an impressive quarter.
The shares closed the day at $18.46, up 22.6% from previous close.
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What Is The Market Telling Us
UiPath’s shares are very volatile and have had 25 moves greater than 5% over the last year. But moves this big are rare even for UiPath and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 14 days ago when the stock dropped 4.4% on the news that markets faded the Nvidia rally in the morning session, as investors remained uncertain about future rate cuts. While the trading day began with significant enthusiasm, pushing the Dow Jones Industrial Average up more than 700 points and the Nasdaq Composite up 2.6%, momentum quickly evaporated as the session wore on. The primary catalyst for this sharp reversal was a stronger-than-expected jobs report, which reduced the implied odds of a December interest rate cut to less than 40%. This macroeconomic anxiety overshadowed stellar corporate performance. Nvidia initially surged 5% on blockbuster earnings and CEO Jensen Huang's bullish outlook on "off the charts" demand for Blackwell chips. However, the stock eventually turned negative, acting as a heavy weight that dragged the broader indices into the red. The sell-off partly reflects a deepening caution regarding high-flying tech valuations in a "higher-for-longer" rate environment. Consequently, investors appeared to rotate capital away from volatile growth sectors and toward defensive staples, evidenced by Walmart's 6% gain following its own earnings beat. Ultimately, the market could not sustain the morning's euphoria, as traders prioritized rate realities over AI potential.
UiPath is up 41.3% since the beginning of the year, and at $18.27 per share, it is trading close to its 52-week high of $18.51 from October 2025. Investors who bought $1,000 worth of UiPath’s shares at the IPO in April 2021 would now be looking at an investment worth $264.78.
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