Group 1 - The article discusses Asana (NYSE: ASAN) and previously assigned a hold rating, suggesting that investment would be safer when the business shows positive growth inflection [1] - The author notes pockets of strength in Asana's performance during 1Q26, indicating potential for future growth [1] Group 2 - The author emphasizes a diverse investing background, incorporating fundamental, technical, and momentum investing strategies to refine the investment process [1] - The purpose of writing on Seeking Alpha is to track investment ideas and connect with like-minded investors [1]

This quarterly report represents an earnings surprise of 150%. A quarter ago, it was expected that this company would post a loss of $0.01 per share when it actually produced break-even earnings, delivering a surprise of 100%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. Asana, which belongs to the Zacks Internet - Software industry, posted revenues of $187.27 million for the quarter ended April 2025, surpassing the Zacks Consensus Estimate by 1.31%. This compar ...

Financial Data and Key Metrics Changes - In Q1, total revenues reached $187.3 million, representing a 9% year-over-year increase, exceeding the midpoint of guidance by 1% [37] - Non-GAAP operating margins improved by over 1,300 basis points year-over-year, achieving a 4% operating income margin for the first time [5][43] - Adjusted free cash flow margin improved by over 700 basis points year-over-year, reaching 5% for the quarter [5][45] - The company reported a net income of $12 million, or $0.05 per share [43] Business Line Data and Key Metrics Changes - The number of core customers (spending $5,000 or more annually) grew to 24,297, with revenues from core customers increasing by 10% year-over-year [37] - Customers spending $100,000 or more annually grew by 20% year-over-year, totaling 728 customers [38] - Non-tech verticals grew in the mid-teens year-over-year, with notable growth in manufacturing, energy, media, and financial services [5][27] Market Data and Key Metrics Changes - International revenue grew by 11% year-over-year, with strong demand particularly in EMEA and Japan [25][26] - The company has not observed a material change in demand across segments or regions compared to previous quarters, although there are signs of increased buyer scrutiny [26][48] Company Strategy and Development Direction - The company aims to position itself as the leader in human and AI coordination, with a focus on AI Studio as a key growth driver [20][23] - Strategic initiatives include launching the Smart Workflow Gallery and AI Studio Plus to enhance customer engagement and adoption [15][17] - The company is committed to long-term profitable growth, focusing on customer health, acquisition, and value through product innovation, especially in AI [23][49] Management's Comments on Operating Environment and Future Outlook - Management noted early signs of budget pressures and tool consolidation among enterprise customers, particularly in the Americas region [82] - The company expects net retention rates to be pressured in Q2 due to downgrades, particularly in the enterprise and tech verticals [39][48] - Despite short-term challenges, management remains confident in long-term improvements in net retention due to investments in customer success and AI Studio [41][84] Other Important Information - The company repurchased $15.6 million of its Class A common stock during the quarter, with an increased share repurchase authorization of $100 million [46] - The company updated its full-year revenue guidance to $775 million to $790 million, reflecting a 7% to 9% year-over-year growth [47][49] Q&A Session Summary Question: Can you provide details on the $1,000,000 ARR for AI Studio? - The $1,000,000 ARR consists of diverse customers across regions and industries, primarily from the AI Studio Pro platform fees, with potential for increased consumption in the future [54][55] Question: What impact does the $100,000,000 contract renewal have? - The renewal represents the largest deal in Asana's history, with a modest downgrade in annual contract value (ACV) impacting net retention, particularly in the tech vertical [60][61] Question: How is the company addressing competition in AI? - The company differentiates itself by integrating AI into workflows, allowing for seamless human-AI collaboration, which enhances customer success across various use cases [71][72] Question: What are the expectations for revenue from tech customers? - The tech vertical remains stable, with non-tech growing in the mid-teens, despite the impact of the recent large renewal [78][79] Question: How is the company navigating macroeconomic pressures? - The company is actively working to mitigate churn and contraction through enhanced customer success management and flexible pricing strategies [83][84]

Financial Data and Key Metrics Changes - In Q1 2026, total revenues reached $187.3 million, representing a 9% year-over-year increase, exceeding the guidance midpoint by 1% [37] - Non-GAAP operating margins improved significantly, achieving a positive operating income margin of 4%, a 1,300 basis point improvement year-over-year [4][42] - Adjusted free cash flow margin was 5%, reflecting an improvement of over 700 basis points year-over-year [4][44] Business Line Data and Key Metrics Changes - Non-tech verticals grew in the mid-teens year-over-year, outpacing overall growth, with notable growth in manufacturing, energy, media and entertainment, and financial services [4][27] - The number of customers spending $100,000 or more annually grew by 20% year-over-year, indicating strong enterprise customer acquisition [5][38] Market Data and Key Metrics Changes - International revenue grew by 11% year-over-year, with strong demand particularly in EMEA and Japan [25][26] - The overall dollar-based net retention rate was 95%, with core customer NRR at 96% [38] Company Strategy and Development Direction - The company is focusing on AI Studio as a key growth driver, with plans to enhance customer adoption through initiatives like the Smart Workflow Gallery and AI Studio Plus [14][17] - A strategic emphasis is placed on customer health, acquisition, and value delivery through product innovation, particularly in AI [22][27] Management's Comments on Operating Environment and Future Outlook - Management noted early signs of increased buyer scrutiny and elongated decision-making processes, particularly in enterprise and tech segments [26][47] - The company remains confident in long-term NRR improvement due to investments in customer success and AI Studio [40][48] Other Important Information - The company achieved non-GAAP profitability for the first time, marking a significant milestone [3][4] - A landmark $100 million contract renewal was secured, providing greater visibility into future revenues despite a modest downgrade in annual contract value [5][60] Q&A Session Summary Question: Breakdown of AI Studio's $1,000,000 ARR - The $1,000,000 ARR consists of diverse customers across regions and industries, primarily from the AI Studio Pro platform fees, with potential for increased consumption in the future [52][54] Question: Details on the $100,000,000 contract renewal - The renewal was in the tech vertical, representing the largest deal in Asana's history, with a modest downgrade in annual contract value but significant long-term visibility [57][60] Question: ROI perspective on AI Studio - The company is seeing instances where AI Studio ARR exceeds seat-based ARR, indicating strong value delivery, and is optimistic about achieving larger accounts by year-end [66][73] Question: Impact of macroeconomic pressures - Early signs of customer budget pressures and tool consolidation were noted, particularly in enterprise and mid-market segments, but the company is implementing strategies to mitigate churn [81][84] Question: Revenue guidance adjustments - The lower end of the revenue guidance reflects prudent assumptions about potential macroeconomic pressures and their impact on net retention [88]

Customer Metrics - As of April 30, 2025, the company had 24,297 Core customers, contributing approximately 75% of revenues, up from 22,162 Core customers contributing 74% of revenues as of April 30, 2024[141]. - The dollar-based net retention rate for Core customers was 96% as of April 30, 2025, down from 102% in the prior year, indicating a decline in revenue retention from existing customers[145]. Revenue and Growth - The company reported revenues of $187.3 million for the three months ended April 30, 2025, representing a $14.8 million increase or 9% growth compared to $172.4 million for the same period in 2024[167]. - The company entered into its largest subscription agreement in history in May 2025, valued at $100 million over a three-year term, billed annually[142]. Profitability and Expenses - Gross profit for the three months ended April 30, 2025, was $168.0 million, with a gross margin of 90%, consistent with the prior year[163]. - Operating expenses totaled $211.9 million for the three months ended April 30, 2025, a decrease from $220.8 million in the same period in 2024[163]. - The net loss for the three months ended April 30, 2025, was $40.0 million, compared to a net loss of $63.7 million for the same period in 2024[163]. - Research and development expenses were $75.1 million for the three months ended April 30, 2025, down from $82.8 million in the prior year, reflecting a focus on efficiency[163]. - Sales and marketing expenses were $99.8 million for the three months ended April 30, 2025, compared to $104.3 million in the same period in 2024, indicating a strategic investment approach[163]. - General and administrative expenses increased by $3.3 million, or 10%, driven by a $1.8 million increase in personnel-related costs[174]. Cash Flow and Financial Position - Free cash flow was $3,995 thousand for the three months ended April 30, 2025, compared to a negative $4,275 thousand in the same period of 2024[186]. - As of April 30, 2025, the company had cash, cash equivalents, and marketable securities totaling $470.8 million[188]. - As of April 30, 2025, the company had $290.3 million in deferred revenue, with $289.0 million recorded as a current liability[194]. - Net cash provided by operating activities for the three months ended April 30, 2025, was $6.8 million, reflecting a net loss of $40.0 million adjusted by non-cash items[199]. - The company reported a decrease in deferred revenue of $12.5 million due to decreased billings for subscriptions during the three months ended April 30, 2025[199]. - Net cash provided by investing activities for the three months ended April 30, 2025, was $4.2 million, primarily from $41.0 million in maturities of marketable securities[201]. - Net cash used in financing activities for the three months ended April 30, 2025, was $5.5 million, mainly due to $14.5 million in repurchases of Class A common stock[203]. - The company had cash and cash equivalents of $193.8 million as of April 30, 2025[212]. Future Outlook and Strategic Plans - The company anticipates continued investment in research and development, particularly in AI integration, with expenses expected to increase in dollar amount but decrease as a percentage of revenues over time[153]. - The company may seek to raise additional funds through equity or debt in the future to support its capital requirements[195]. - The company believes its current cash and marketable securities will be sufficient to meet working capital and capital expenditure requirements for at least the next 12 months[195]. Currency and Risk Management - 27% of the company's sales for the three months ended April 30, 2025, were denominated in currencies other than U.S. dollars[216]. - The company does not currently enter into derivative or hedging transactions for foreign currency risks but may consider it if exposure increases[217].

Q1'26 ASANA'S MISSION Asana Investor Overview Forward-Looking Statements This presentation and the accompanying oral presentation include express and implied "forward-looking statementsˮ within the meaning of the Private Securities Litigation Reform Act of 1995, including but not limited to, statements regarding our financial outlook, product development, business strategy and plans, and market trends, opportunities and positioning. These forward-looking statements are based on current expectations, estimat ...

Financial Performance - Q1 revenue was $187.3 million, an increase of 9% year over year[5] - GAAP operating loss was $43.9 million, or 23% of revenues, improved from a loss of $66.2 million, or 38% of revenues, in Q1 fiscal 2025[5] - Non-GAAP operating income was $8.1 million, or 4% of revenues, compared to a non-GAAP operating loss of $15.8 million, or 9% of revenues, in Q1 fiscal 2025[5] - Revenues for the three months ended April 30, 2025, were $187,267,000, representing a 8.6% increase from $172,448,000 in the same period of 2024[27] - GAAP revenue for Q2 2025 was $187,267, up from $172,448 in Q2 2024, reflecting an increase of approximately 8.5%[34] - Revenue adjusted for the impact of foreign currency in Q2 2025 was $187,630, compared to $172,477 in Q2 2024, showing a similar growth trend[34] Customer Growth - The number of Core customers grew to 24,297, an increase of 10% year over year[5] - Customers spending $100,000 or more annually increased to 728, a 20% year-over-year growth[5] - The dollar-based net retention rate for Core customers in Q1 was 96%[7] Cash Flow and Expenses - Cash flows from operating activities were $6.8 million, compared to negative $1.9 million in Q1 fiscal 2025[5] - Cash and cash equivalents increased to $193,791,000 as of April 30, 2025, up from $184,728,000 at the end of January 2025[29] - Total operating expenses decreased to $211,944,000 from $220,813,000 year-over-year, reflecting a 4% reduction[27] - Free cash flow for Q2 2025 was $3,995, compared to a negative free cash flow of $4,275 in Q2 2024, indicating a turnaround[34] - Adjusted free cash flow for Q2 2025 reached $9,882, contrasting with a negative adjusted free cash flow of $4,275 in Q2 2024[34] - The company reported a net cash provided by operating activities of $6,764 in Q2 2025, compared to $(1,898) in Q2 2024, indicating improved operational efficiency[34] Profitability - Non-GAAP net income per share is projected to be $0.04 to $0.05, assuming diluted weighted average shares outstanding of approximately 243 million[7] - Non-GAAP income from operations was $8,137,000 for the three months ended April 30, 2025, compared to a loss of $15,770,000 in the same period of 2024[32] - GAAP net loss for Q2 2025 was $40,018, compared to a loss of $63,722 in Q2 2024, representing a 37% improvement[34] - Non-GAAP net income for Q2 2025 was $12,023, a significant recovery from a loss of $13,323 in Q2 2024[34] - GAAP net loss per share, basic, improved to $(0.17) in Q2 2025 from $(0.28) in Q2 2024[34] - Non-GAAP net income per share, basic, was $0.05 in Q2 2025, recovering from a loss of $(0.06) in Q2 2024[34] Future Outlook - For fiscal 2026, Asana expects revenues of $775.0 million to $790.0 million, representing year-over-year growth of 7% to 9%[6] - Asana entered into the largest subscription agreement in its history with a renewal exceeding $100 million over a three-year term[7] Assets and Equity - Total assets decreased to $877,133,000 from $891,415,000 since January 31, 2025[29] - Asana's total stockholders' equity increased to $236,304,000 from $227,523,000 since January 31, 2025[29] Research and Development - The company plans to continue investing in research and development, with R&D expenses at $75,127,000 for the quarter, down from $82,791,000 in the previous year[27] - The company reported stock-based compensation expense of $48,167,000 for the three months ended April 30, 2025, slightly down from $48,640,000 in the prior year[27]

Group 1 - The article emphasizes a focus on intrinsic value in equity research, prioritizing undervalued and growing companies, particularly those in early development stages [1] - There is an internal wishlist for potential investment opportunities, inviting readers to suggest tickers or leave comments [1] Group 2 - No specific companies or stocks are mentioned in the article, and there are no current positions or plans to initiate positions in any mentioned companies [2] - The article does not provide any investment recommendations or advice, highlighting that past performance does not guarantee future results [3]

Summary of Insider Transactions Analysis Industry Overview - The analysis covers insider transactions across various companies in the enterprise software sector, particularly focusing on small to mid-cap (SMID Cap) firms. Key Insights - **March 2025 Insider Transactions**: The total insider transaction value was over $900 million, with 97% being sell transactions and only 3% buy transactions, excluding transactions by >10% external shareholders [5][7] - **Sell Transactions**: 95% of sell transactions were not executed under Rule 10b5-1, which allows for pre-scheduled trades. This percentage drops to 94% when excluding sales made to satisfy tax obligations. After adjusting for Nutanix's share sales by Bain Capital, the percentage of non-10b5-1 sell transactions falls to 4% and 3% respectively [5][7] - **Buy Transactions**: All buy transactions in March were executed under Rule 10b5-1, indicating a structured approach to buying shares by insiders [5][7] Notable Transactions - **Asana (ASAN)**: CEO Dustin Moskovitz purchased 1.8 million shares worth $25.6 million, holding 37.23% of total shares outstanding [5][7] - **C3.ai (AI)**: CEO Tom Siebel sold 639,000 shares valued at $13.9 million, owning 5.5% of total shares outstanding [5][7] - **Elastic (ESTC)**: CEO Ashutosh Kulkarni sold approximately 24,000 shares for $2.2 million, while co-founder Shay Banon sold around 203,000 shares for $21.9 million, with most sales not under 10b5-1 [5][7] - **GitLab (GTLB)**: Director Matthew Jacobson sold 153,000 shares worth $8 million, not under 10b5-1 [5][7] - **Nutanix (NTNX)**: Bain Capital sold 11 million shares valued at $819.6 million, not under 10b5-1, related to the conversion of convertible notes [5][7] - **Sprinklr (CXM)**: Director Neeraj Agrawal sold 26,000 shares for $242,000, not under 10b5-1 [5][7] Year-to-Date (YTD) Insights for 2025 - **Total Transactions**: The aggregate insider transaction value for the year was $1.1 billion, with 98% being sell transactions and 2% buy transactions [7] - **Sell Transactions**: 77% of sell transactions were not executed under 10b5-1, dropping to 76% when excluding tax-related sales. Adjusting for Nutanix's sales, this number falls to 3% [7] - **Buy Transactions**: All buy transactions executed in 2025 were under 10b5-1 [7] Additional Noteworthy Transactions - **Asana (ASAN)**: Co-founder Justin Rosenstein sold 1.35 million shares for $27.9 million, with ownership declining from 1.53% to 0.57% [7] - **Elastic (ESTC)**: Similar patterns of non-10b5-1 sales were observed among executives [7] - **Nutanix (NTNX)**: Continued significant sales by Bain Capital [7] - **Sprinklr (CXM)**: Multiple executives sold shares not under 10b5-1 [7] Conclusion - The analysis indicates a trend of significant insider selling across the covered companies, with a notable lack of buy transactions, suggesting potential caution among insiders regarding future performance. The structured nature of buy transactions under Rule 10b5-1 may reflect strategic planning by insiders amidst market uncertainties.

Core Viewpoint - Asana, Inc. (ASAN) shows a significantly improving earnings outlook, making it a solid choice for investors as analysts continue to raise their earnings estimates for the company [1][2]. Estimate Revisions - The upward trend in earnings estimate revisions indicates growing optimism among analysts regarding Asana's earnings prospects, which is expected to positively impact its stock price [2]. - The consensus earnings estimates for the next quarter and the full year have increased considerably, reflecting strong agreement among analysts [3]. Current-Quarter Estimates - For the current quarter, Asana is expected to earn $0.02 per share, representing a year-over-year increase of +133.33% [5]. - Over the past 30 days, four estimates have been revised upward for Asana, with no negative revisions, leading to a 24.09% increase in the Zacks Consensus Estimate [5]. Current-Year Estimates - For the full year, Asana is projected to earn $0.20 per share, which is a change of +253.85% from the previous year [6]. - The current year's estimate revisions are promising, with eight estimates moving higher and no negative revisions, resulting in a 26.41% increase in the consensus estimate [6][7]. Zacks Rank - Asana currently holds a Zacks Rank 2 (Buy) due to favorable estimate revisions, indicating a strong potential for outperformance compared to the S&P 500 [8]. - Stocks with Zacks Rank 1 (Strong Buy) and 2 (Buy) have historically outperformed the S&P 500, suggesting a positive outlook for Asana [8]. Stock Performance - Asana shares have increased by 9.1% over the past four weeks, indicating investor confidence in the company's earnings growth prospects [9].