Cloud Stocks: Analysis Of UiPath’s Re:Infer Acquisition

UiPath automation

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The global intelligent process automation market is estimated to grow 16.5% CAGR from $9.52 billion in 2021 to reach $37.63 billion by 2030. New York-based UiPath (NYSE: PATH) recently announced its second-quarter results that continued to outpace market expectations. But the weaker-than-expected outlook has sent its stock tumbling.

UiPath’s Financials

Revenues for the second quarter grew 24% to $242.2 million, ahead of the market’s forecast of $231 million. Annual Run-Rate Revenue (ARR) grew 44% to $1.043 billion, making it the milestone quarter where ARR crossed a billion dollars. Net loss of $0.02 per share, compared with a profit of $0.01 per share a year ago, and significantly ahead of the market’s forecast of a loss of $0.11 per share.

UiPath forecast revenues of $243-$245 million for the third quarter and revenues of $1.002-$1.007 billion for the year. A quarter ago, the company had forecast revenues of $1.085-$1.090 billion for the year. The outlook was lowered on account of slowdown of growth. During the quarter, the company only added 170 new customers, compared with the 230 new customers added a quarter ago. The market was looking for revenues of $269.6 million for the quarter and revenues of $1.09 billion for the year.

UiPath’s Re:Infer Acquisition

Recently, UiPath announced the acquisition of Re:Infer, a London-based natural language processing (NLP) company focused on unstructured documents and communications. Re:Infer was set up in 2015 by scientists from the Centre for Artificial Intelligence at University College London. Its technology uses machine learning capabilities to identify context from communication messages and transforms these insights into actionable data. There is a boom in the unstructured data generated today due to the increasing use of social media, emails, and chats. Organizations have to sift through this data to determine the right course of action for their customers.

Re:infer mines, monitors, and extracts context and semantics from the unstructured data found in a variety of communications methods and uses ML and NLP technologies to identify recourse. It is an industry-agnostic no-code solution that is easy for non-developers to rapidly train and deploy into company workflows. By acquiring Re:Infer, UiPath is expanding its native NLP capabilities. Terms of the acquisition were not disclosed. Prior to the acquisition, Re:Infer had raised $11 million in funding and its customer portfolio included brands like Deloitte, Natwest, UBS, Deutsche Bank, and Accenture.

UiPath’s Network

Meanwhile, the company also continued to build its partner network. It expanded its tie-ups with Snowflake to help incorporate Snowflake data into UiPath automations. As part of the agreement, in the future, the two will allow robots to collect data from virtually anywhere, validate and enrich the data, and then store it in Snowflake. It also expanded its partnership with Workday to automate actions in other systems from Workday Business Processes. This integration will help customers to use Workday and UiPath together to automate processes related to onboarding, job transitions, and other HCM & Financials transactions.

UiPath had at the end of the fiscal year 2022, more than 4,000 UiPath team members serving more than 10,000 customers and working with more than 5,000 partners. It reached more than 1.1 million learners
worldwide via UiPath Academy, its free online platform. It works with its partners to develop accessible paths to fulfilling careers and meaningful employment opportunities. As part of its UiPath Academic Alliance program, it partners with 1,690 organizations to equip students and workers with automation skills. It has 1.8M Community Members across a vibrant ecosystem of professionals and citizen developers. About 686K new members joined in 2021.

UiPath’s stock is currently trading at $12.52 with a market capitalization of $6.8 billion. It had climbed to a high of $59.57 in November last year. The weak outlook for the coming quarter had sent its stock falling to a 52-week low of $11.10.

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Disclosure: All investors should make their own assessments based on their own research, informed interpretations, and risk appetite. This article expresses my own opinions based on my own research ...

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