As tech companies large and small shed staff in hopes of better aligning their income statements to a new market reality, it’s clear that cutting costs to delight investors is the new norm. But there are other ways to make the investing public happy, including smashing growth and profitability expectations.
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That’s what UiPath did last week when it reported its trailing financial performance, which included a top- and bottom-line beat compared to analyst expectations. Its shares soared.
It turns out that while slashing staff, curtailing projects and treating cash with more respect is fashionable among tech companies and many of their customers today, there’s a wrinkle in the trend. One way to make your staffing cheaper is to reduce it. Another is to make it more productive, making your spend more effective on a per-dollar basis.
That’s where UiPath and the larger automation market — robotic process automation, or RPA — may have an edge on other software categories. Last month’s positive earnings report from Appian and the lengthy discussions of its automation work during its earnings call underscored that tech companies see strong demand for automation help.
There’s even more data on the point we’ve been chewing on. A recent report on software spend from Battery Ventures that we previously discussed contains even more bullish data.
In short, sure, everyone wants to save a buck on their software spend. But if your startup is building tech to automate tasks and drive quick productivity gains, you might be able to duck the downturn. Let’s talk about it.