Daniel Dines, billionaire co-founder of automation software company UiPath, at the company’s offices in Bucharest, Romania, Thursday, May 20, 2021.
Andrzej Pungovski | Bloomberg | Getty Images
Shares of software company UiPath plunged more than 30% on Wednesday after the company announced that CEO Rob Ensslin would step down on June 1 and be replaced by co-founder Daniel Dines, who stepped down as co-CEO on January 31.
“I am confident that UiPath will continue to define what’s possible for our customers and partners in the AI and automation market,” Ensslin said, adding that the decision to step down came “after much consideration.”
Daines co-founded UiPath with Marius Tylka in 2005. The company makes software that automates repetitive, “menial” tasks, but its shares have struggled under Ensslin’s sole leadership: The company had one of the largest initial public offerings in U.S. software history in 2021, but its shares are down 26% so far this year.
The company also reported first-quarter results on Wednesday, reporting revenue up 16% year over year to $335 million, beating LSEG’s consensus estimate of $333 million. UiPath’s loss per share narrowed to 5 cents from 6 cents a year ago.
But Chief Financial Officer Ashim Gupta warned UiPath that sales cycles for larger, multi-year deals are getting longer and that clients are “increasing their scrutiny of transactions,” and said these factors, along with the management changes, will weigh on the company’s updated full-year guidance.
The company lowered its full-year revenue outlook. It now expects revenue to be between $1.45 billion and $1.41 billion, compared with last quarter’s guidance of $1.55 billion to $1.56 billion.
Ensslin joined UiPath from Google Cloud, where Dines praised him as an executive with “the right balance of experience and skills” and the operational experience needed to grow UiPath, allowing Dines to focus on “culture, vision and product innovation.”
Daines’ decision to hire an operations chief is one that many founders make. Facebook Co-founder Mark Zuckerberg did something similar with former COO Sheryl Sandberg, a move that is credited with propelling the company towards maturity.
It didn’t have the same effect on Ensslin. UiPath’s stock has never traded above its opening price, except for a brief rally after its IPO. The company’s shares are down about 76% since its May 2021 IPO.
—CNBC’s Ari Levy contributed to this report.
