NEW YORK, Sept. 07, 2023 (GLOBE NEWSWIRE) -- Gainey McKenna & Egleston announces that a securities class action lawsuit has been filed in the United States District Court for the Southern District of New York on behalf of all persons or entities who purchased or otherwise acquired UiPath, Inc. (“UiPath” or the “Company”) (NYSE: PATH) securities between April 21, 2021 and March 30, 2022, both dates inclusive (the “Class Period”), seeking to recover damages caused by Defendants’ violations of the federal securities laws and to pursue remedies under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Rule 10b-5 promulgated thereunder, against the Company and certain of its top officials.
The Complaint alleges Defendants made false and/or misleading statements and/or failed to disclose that: (i) the Company had enacted a widespread discounting program prior to its IPO, which had the effect of temporarily boosting the Company’s revenue and annualized recurring revenue (“ARR”) metrics, cannibalizing its future sales, eroding the Company’s margins, and increasing the risk of client churn; (ii) the Company’s actual total addressable market was not as large as portrayed by Defendants, because many companies included in UiPath’s market survey did not need the type of high-cost, high-functionality automation products offered by UiPath; (iii) the Company was losing customers to Microsoft, ServiceNow, SAP, Salesforce, IBM, and other established enterprise software vendors that were building automation into their platforms; (iv) the Company was losing customers due to the increased availability of low-code automation software offered by vendors, such as Microsoft’s Power Automate software, which were capable of addressing the majority of customer use cases at a fraction of the price of UiPath’s products and services; and (v) the Company was suffering from a loss of channel sales due to strained relationships with UiPath’s partners as a result of increased competition between UiPath and these partners.
On September 7, 2021, the Company announced financial results for the quarter ended July 31, 2021. Specifically, the Company revealed an unexpected slowdown in its revenues and reported ARR metrics. The Company further revealed that it had engaged in substantial discounting of its products prior to the IPO and that the Company was in the process of altering the structure of its contracts to include a “ramping” feature whereby customer contract commitments would start small and increase over time and thereby reduce the need for the Company to offer widespread discounting as it had before.
On December 8, 2021, the Company announced its financial results for the quarter ended October 31, 2021. UiPath revealed that UiPath’s growth had stalled further, disclosing that its ARR annual growth rate during the quarter had declined for the third quarter in a row to 58% and that its net new ARR remained subdued at 42% growth year-over-year, down substantially from the 55% growth reported in the first quarter 2022 earnings release.
Finally, on March 30, 2022, the Company announced financial results for the quarter and year ended January 31, 2022. UiPath disclosed that it had earned revenues of just $289.7 million during the quarter, representing year-over-year growth of 39%. The Company further revealed deeply disappointing ARR and revenue guidance, revealing that the declining growth trends adversely impacting UiPath were expected to continue. The Company also announced the abrupt departure of Thomas Hansen, UiPath’s Chief Revenue Officer, who was responsible for developing relationships with UiPath’s current and prospective customers, expanding UiPath’s partnership network, and fostering UiPath’s developer community.
Investors who purchased or otherwise acquired shares of UiPath should contact the Firm prior to the November 6, 2023 lead plaintiff motion deadline. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. If you wish to discuss your rights or interests regarding this class action, please contact Thomas J. McKenna, Esq. or Gregory M. Egleston, Esq. of Gainey McKenna & Egleston at (212) 983-1300, or via e-mail at tjmckenna@gme-law.com or gegleston@gme-law.com.
Please visit our website at http://www.gme-law.com for more information about the firm.
