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UiPath, Inc.

Lead Plaintiff Deadline 11/06/2023
The law firm of Kirby McInerney LLP announces that a class action lawsuit has been filed in the U.S. District Court for the Southern District of New York on behalf of those who acquired UiPath, Inc. (“UiPath” or the “Company”) (NYSE: PATH) securities during the period from April 18, 2021 through March 30, 2022, inclusive (the “Class Period”). Investors have until November 6, 2023 to apply to the Court to be appointed as lead plaintiff in the lawsuit.
On April 21, 2021, UiPath conducted its initial public offering (“IPO”), selling over 27.5 million UiPath shares for gross proceeds of more than $1.5 billion.
On September 7, 2021, UiPath announced an unexpected slowdown in the Company’s revenues and reported annualized recurring revenue (“ARR”) metrics. UiPath further revealed that it had engaged in substantial discounting of its products prior to its 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 UiPath to offer widespread discounting as it had before. On this news, the price of UiPath shares declined by $6.01, or approximately 9.6%, from $62.46 per share to close at $56.45 on September 8, 2021.
Then, on December 8, 2021, UiPath announced that the Company’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. On this news, the price of UiPath shares declined by $3.66, or approximately 7.67%, from $47.71 per share to close at $44.05 on December 10, 2021.
Finally, on March 30, 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 disappointing ARR and revenue guidance, revealing that the declining growth trends adversely impacting UiPath were expected to continue. UiPath also announced the abrupt departure of Thomas Hansen, UiPath’s Chief Revenue Officer, who was responsible for developing relationships with the Company’s current and prospective customers, expanding its partnership network, and fostering UiPath’s developer community. On this news, the price of UiPath shares declined by $7.45, or approximately 25.65%, from $29.04 per share to close at $21.59 on March 31, 2022.
The lawsuit alleges that, throughout the Class Period, Defendants made false and/or misleading statements, as well as failed to disclose that: (i) UiPath had enacted a widespread discounting program prior to its IPO, which had the effect of temporarily boosting UiPath’s revenue and ARR metrics, cannibalizing its future sales, eroding the Company’s margins, and increasing the risk of client churn; (ii) UiPath’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 the Company; (iii) UiPath was losing customers to Microsoft, ServiceNow, SAP, Salesforce, IBM, and other established enterprise software vendors that were building automation into their platforms; (iv) UiPath was losing customers due to the increased availability of low-code automation software offered by vendors, which were capable of addressing the majority of customer use cases at a fraction of the price of the Company’s products and services; and (v) UiPath was suffering from a loss of channel sales due to strained relationships with UiPath’s partners as a result of increased competition.

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