06:25 AM EDT, 05/30/2024 (MT Newswires) -- UiPath ( PATH ) shares tanked early Thursday after lowering its full-year revenue outlook amid increased deal scrutiny and lengthy sales cycles for large multi-year transactions, while the software company reappointed its former chief executive to the top role, effective June 1.

Daniel Dines, who currently serves as the company's executive chairman and chief innovation officer, will return as CEO and take over from the resigning Rob Enslin, UiPath ( PATH ) said in a late Wednesday statement. Dines co-founded the firm in 2005 and served as CEO or co-CEO from that time through Jan. 31. Enslin, who will remain with UiPath ( PATH ) as an adviser during the transition period, joined the company as co-CEO in April 2022 and became sole chief executive in the beginning of February.

"I thank Rob for his contributions to UiPath ( PATH ) during the past two years, during which he played a significant role in the company's growth," Dines said. "I'm excited to step back into the CEO role and I am looking forward to leading the company through our next phase of profitable growth and innovation."

The company, which makes robotic process automation software, separately said it now expects revenue of up to $1.41 billion for fiscal 2025 versus prior projections for at least $1.56 billion. The consensus on Capital IQ is for $1.47 billion. Annualized renewal run-rate, or ARR, is forecast to be in a range of $1.66 billion to $1.67 billion, down from the previous guidance of up to $1.73 billion. The stock tumbled 29% in recent premarket activity.

"In mid-March, we began seeing increased deal scrutiny and longer sales cycle with our large multiyear deals," Chief Financial Officer Ashim Gupta said during an earnings call, according to a Capital IQ transcript. "Our updated guidance takes into consideration both the macroeconomic environment, our leadership transition and improved operating discipline, which will take time to implement."

For the three months through April, adjusted earnings ticked up to $0.13 per share from $0.11 the year before, topping the Street's view for $0.12. Revenue climbed 16% to $335.1 million, just ahead of analysts' $333 million estimate.

Licenses revenue grew to $140.1 million from $134 million in the 2023 quarter, while subscription services advanced to almost $185.1 million from $146.4 million. ARR jumped 21% to $1.51 billion during the quarter, driven by net new ARR of $44 million, Gupta said on the call. The company's dollar-based net retention rate was 118%.

UiPath ( PATH ) anticipates revenue of $300 million to $305 million for the second quarter, while the Street is looking for $326.9 million. ARR is pegged at $1.54 billion to $1.55 billion. "Profitability remains a core pillar of our go-forward strategy, and we will continue to drive efficiencies across our business to generate strong operating margins and meaningful non-GAAP adjusted free cash flow," Gupta told analysts.

Price: 12.61, Change: -5.69, Percent Change: -31.09