Loading...
01/09 23:51
Loading...
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call summary and Q&A reveal strong financial performance, optimistic guidance, and strategic product developments, particularly in AI, which are likely to drive growth. Positive factors include improved customer retention, international expansion, and a raised full-year guidance. Despite some uncertainty in tech verticals, Asana's diverse strategies and cost optimization efforts support a positive outlook. The market cap of approximately $3.1 billion suggests a moderate reaction, leading to a predicted stock price movement of 2% to 8% over the next two weeks.
Q3 revenues $201 million, growing 9% year-over-year, exceeding the high end of guidance. Reasons for growth include disciplined cost management and reallocation of spending towards high-leverage areas.
Non-GAAP operating income $16.3 million or an 8% operating margin, exceeding the high end of guidance. Improvement reflects disciplined cost management and reallocation of spending towards high-leverage areas.
Free cash flow $13.4 million in the quarter or 7% on a margin basis. Reasons for strong cash flow include disciplined cost management and operational efficiency.
Net retention rate (NRR) 96%, a slight improvement across all cohorts from last quarter. Improvement attributed to strengthened customer satisfaction and in-product experience.
Core customer NRR 97%, improved by 100 basis points. Improvement attributed to enhancements in support infrastructure and customer satisfaction metrics.
$100,000+ customer NRR 96%, improved by 100 basis points. Improvement attributed to multiproduct strategy and seat reach.
Core customers spending $5,000 or more 25,413 customers, revenues from this cohort grew 10% year-over-year. Growth attributed to improved customer satisfaction and retention.
Customers spending $100,000 or more 785 customers, this cohort grew 15% year-over-year. Growth attributed to multiproduct strategy and seat reach.
International revenue Grew 12% year-over-year. Growth attributed to strong performance in EMEA and Japan.
U.S. market revenue Grew 7% year-over-year. Growth attributed to improved customer satisfaction and retention.
Gross margin 89%, expected to maintain these levels in fiscal year '26. High gross margin attributed to operational efficiency and cost management.
R&D expenses $47.3 million or 24% of revenue, down 14% year-over-year. Reduction attributed to disciplined cost management.
Sales and marketing expenses $86.5 million or 43% of revenue, down 3% year-over-year. Reduction attributed to disciplined cost management.
G&A expenses $29.1 million or 14% of revenue. Reflects disciplined cost management.
Net income $17.9 million or $0.07 per share on a diluted basis. Improvement attributed to operating leverage and disciplined cost management.
Adjusted free cash flow $13.4 million or 7% on a margin basis. Improvement attributed to disciplined cost management and operational efficiency.
AI Studio: Delivered solid growth in sequential bookings, with early traction among self-serve users. Customers across industries are using the platform to modernize workflows, such as marketing and planning processes.
AI Teammates: Announced at Work Innovation Summit, with strong positive feedback from 30 beta customers. Expected to be generally available early next year. Includes 12 prebuilt teammates across various functions, enabling collaborative AI-driven work.
International Revenue: Grew 12% year-over-year, with strong performance in EMEA and Japan. U.S. market grew 7% year-over-year.
Vertical Expansion: Significant wins in healthcare, financial services, and public sector. Examples include a $1 million ARR healthcare expansion and a German government research agency adopting Asana for project management.
Revenue Growth: Q3 revenues reached $201 million, growing 9% year-over-year, exceeding guidance.
Profitability: Non-GAAP operating income was $16.3 million, with an 8% operating margin. Free cash flow was $13.4 million, or 7% margin.
Customer Retention: NRR improved to 96%, with retention at a 12-month high for monthly customers. Core customer NRR was 97%.
AI Strategy: Focused on human-AI collaboration with context, checkpoints, and controls. AI Studio and AI Teammates are central to this strategy.
Leadership Change: COO Anne Raimondi is leaving after 7 years. The role will not be backfilled, and go-to-market leaders will report directly to the CEO to enhance alignment and focus.
AI adoption risks: Many AI projects are failing to deliver on their productivity promise due to lack of context, checkpoints, and controls. This could hinder the adoption and effectiveness of Asana's AI solutions.
Data security and governance: AI agents often have more access to data than employees, posing risks to data security and governance. This could impact customer trust and compliance.
Tech sector headwinds: The technology sector continues to be a headwind to growth, affecting renewals and expansion opportunities.
SMB top-of-funnel pressure: Evolving search landscape and changes in paid media investments are creating top-of-funnel pressures, impacting small business growth.
Customer retention challenges: While NRR improved slightly, retention remains a key focus area, especially with large enterprise renewals concentrated in the technology vertical.
Operational execution risks: The departure of the COO and the decision not to backfill the role could impact operational alignment and execution.
Revenue Guidance for Q4 FY 2026: Expected revenues of $204 million to $206 million, representing 8% to 9% growth year-over-year.
Full Year Revenue Guidance for FY 2026: Updated revenue guidance to $789 million to $791 million, representing 9% year-over-year growth.
Non-GAAP Operating Income Guidance for Q4 FY 2026: Expected non-GAAP operating income of $14 million to $16 million, representing an operating margin of 7% to 8%.
Full Year Non-GAAP Operating Income Guidance for FY 2026: Expected non-GAAP operating income of $52.5 million to $54.5 million, representing an operating margin of 7%, up from prior guidance of 6%.
Non-GAAP Net Income Per Share Guidance for Q4 FY 2026: Expected non-GAAP net income per share of $0.07, assuming diluted weighted average shares outstanding of approximately 244 million.
Full Year Non-GAAP Net Income Per Share Guidance for FY 2026: Expected non-GAAP net income per share of $0.25 to $0.26, assuming diluted weighted average shares outstanding of approximately 243 million.
AI Platform and Product Development Investments: Reinvesting a portion of Q3 operating profit outperformance into AI platform and product development initiatives to support the roadmap and build toward long-term growth acceleration.
NRR (Net Retention Rate) Outlook: Belief that NRR is at or near the floor, with initiatives in place to position for continued improvement over the intermediate and long term.
AI Teammates Availability: AI teammates expected to be generally available early next year, with 12 prebuilt teammates across various functions and the ability for customers to build their own teammates.
Stock Repurchase Program: This quarter, we bought back $30.8 million of our Class A common stock or 2.2 million shares at an average price of $14.10 per share. As of October 31, we had $97.5 million remaining for repurchases moving forward.
The earnings call summary and Q&A reveal strong financial performance, optimistic guidance, and strategic product developments, particularly in AI, which are likely to drive growth. Positive factors include improved customer retention, international expansion, and a raised full-year guidance. Despite some uncertainty in tech verticals, Asana's diverse strategies and cost optimization efforts support a positive outlook. The market cap of approximately $3.1 billion suggests a moderate reaction, leading to a predicted stock price movement of 2% to 8% over the next two weeks.
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
