• Total Revenue: $187.3 million, up 9% year-over-year.

• Non-GAAP Operating Margin: Improved by more than 1,300 basis points year-over-year, reaching 4%.

• Adjusted Free Cash Flow Margin: Improved by more than 700 basis points year-over-year, reaching 5%.

• Core Customers: 24,297 customers spending $5,000 or more annually, with revenue growth of 10% year-over-year.

• Customers Spending $100,000 or More: 728 customers, growing 20% year-over-year.

• Gross Margin: Approximately 90%.

• Net Income: $12 million or $0.05 per share.

• Cash and Cash Equivalents: Approximately $470.8 million.

• Share Repurchase: $15.6 million of Class A common stock repurchased.

• Q2 Revenue Guidance: $192 million to $194 million, representing 7% to 8% growth year-over-year.

• Full Year Revenue Guidance: $775 million to $790 million, representing 7% to 9% growth year-over-year.

• Warning! GuruFocus has detected 4 Warning Signs with ASAN.

Release Date: June 03, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Asana Inc (NYSE:ASAN) achieved non-GAAP profitability for the first time in Q1 fiscal year 2026, marking a significant milestone.

• AI Studio reached general availability and surpassed $1 million in ARR, demonstrating strong early momentum.

• Total revenues increased by 9% year-over-year, exceeding the top end of guidance.

• Non-tech verticals grew faster than overall growth, with manufacturing, energy, media, entertainment, and financial services showing strong performance.

• A landmark $100 million-plus contract renewal with one of the largest employers in the world highlights Asana's enterprise capabilities.

Negative Points

• The $100 million-plus renewal, while significant, resulted in a modest ACV downgrade, impacting net retention rates.

• There is increased buyer scrutiny and elongation in decision-making processes, particularly in enterprise and tech verticals.

• Net retention rate (NRR) is expected to be pressured in Q2 due to downgrade pressures in enterprise and middle market segments.

• The macroeconomic environment presents risks, with potential for elongated sales cycles and increased budget scrutiny.

• Despite strong new business momentum, downgrade pressures and macroeconomic risks may limit the reflection of growth in overall revenue.

Q & A Highlights

Q: Can you provide more details on the $1 million ARR achieved by AI Studio and potential growth scenarios for fiscal '26? A: Dustin Moskovitz, CEO, explained that the $1 million ARR from AI Studio reflects a diverse customer base across regions and industries. The growth is driven by AI Studio Pro platform fees, with potential future upside from incremental consumption. The launch of the smart workflow gallery and the introduction of a more affordable Plus SKU and AI mates are expected to drive further growth in the second half of fiscal '26.