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UiPath shares plunged more than 30% on Wednesday after the software company said CEO Rob Enslin is resigning effective June 1, and being replaced by co-founder Daniel Dines, who stepped down as co-CEO on Jan. 31.
“I am convinced that UiPath will continue to define what’s possible for our customers and partners in the AI and automation market,” Enslin said, adding his decision to resign came “after much reflection.”
Dines co-founded UiPath in 2005 with Marius Tirca. The company makes software which automates repetitive and “menial” tasks, but its stock has suffered under Enslin’s sole leadership. Shares are down 26% year-to-date, after the company debuted in one of the largest U.S. software IPOs ever in 2021.
The company also reported first fiscal quarter earnings on Wednesday, with revenue growing 16% year-over-year to $335 million, better than the LSEG consensus estimate of $333 million. UiPath’s loss per share narrowed to 5 cents, compared to 6 cents in the year-ago period.
But CFO Ashim Gupta also warned that sales cycles for larger, multi-year deals were elongating and that customers were subjecting UiPath to “increased deal scrutiny,” and that those factors along with the leadership reshuffle weighed on its updated full-year guidance.
The company lowered its guidance for full year revenue. It now expects revenue to fall between $1.405 billion and $1.41 billion, compared to its prior-quarter guidance of $1.55 billion to $1.56 billion.
Enslin joined UiPath from Google Cloud. He was heralded by Dines at the time as an executive with “the right balance of experience and skills” and an operations background to grow UiPath, leaving Dines free to focus on “culture, vision and product innovation.”
Dines decision to bring in an operations executive was one that many founders have made. Facebook co-founder Mark Zuckerberg did something similar with former COO Sheryl Sandberg, a move that is credited with galvanizing the company into maturity.
Enslin did not have the same effect. UiPath shares, barring a brief post-IPO bump, have never traded above their debut price. The stock is down nearly 76% from its May 2021 IPO.
— CNBC’s Ari Levy contributed to this report.