Asana(ASAN) - 2026 Q2 - Quarterly Results

Executive Summary Q2 FY26 Performance Overview Asana exceeded its Q2 FY26 revenue guidance, demonstrating significant year-over-year improvements in both GAAP and non-GAAP operating margins, with NRR stabilizing quarter-over-quarter driven by AI Studio expansion - Q2 revenue exceeded the high end of guidance[1] - Q2 GAAP operating margin improved 18 percentage points year over year[1] - Q2 non-GAAP operating margin improved 16 percentage points year over year[1] - NRR stabilized quarter over quarter with improvement in expansion as AI Studio ramps[2] FY26 Guidance Update Asana has raised the midpoint of its full fiscal year 2026 revenue guidance and increased its non-GAAP operating margin guidance, reflecting strong confidence in the company's ability to achieve long-term durable growth and sustained profitability - Raises midpoint of FY26 revenue guidance range[1] - Raises FY26 non-GAAP operating margin guidance[1] - CFO expressed confidence in Asana's ability to drive long-term durable growth and sustained profitability[2] Second Quarter Fiscal 2026 Results Financial Highlights Asana reported Q2 FY26 revenues of $196.9 million, a 10% year-over-year increase, significantly reducing its GAAP operating loss and achieving a non-GAAP operating income of $14.0 million, with positive non-GAAP net income and increased cash flow | Metric | Q2 FY26 (Millions) | Q2 FY25 (Millions) | YoY Change | | :-------------------------------- | :----------------- | :----------------- | :--------- | | Revenues | $196.9 | $179.2 | +10% | | GAAP Operating Loss | $(49.5) (25% of rev) | $(76.8) (43% of rev) | Improved 18 pp | | Non-GAAP Operating Income (Loss) | $14.0 (7% of rev) | $(15.7) (9% of rev) | Improved 16 pp | | GAAP Net Loss | $(48.4) | $(72.2) | Reduced | | GAAP Net Loss per Share | $(0.20) | $(0.31) | Reduced | | Non-GAAP Net Income (Loss) | $15.1 | $(11.1) | Turned positive | | Non-GAAP Net Income (Loss) per Share | $0.06 | $(0.05) | Turned positive | | Cash from Operating Activities | $39.8 | $15.9 | +150% | | Adjusted Free Cash Flow | $35.4 | $12.8 | +177% | Business Highlights Asana demonstrated strong customer growth, particularly among higher-value segments, advanced its AI integration with new product launches, secured a FedRAMP 'In Process' Designation, expanded key partnerships, and appointed a new CEO - The number of Core customers (spending $5,000 or more on an annualized basis) grew to 25,006 in Q2, an increase of 9% year over year[5] - Revenues from Core customers in Q2 grew 12% year over year[5] - The number of customers spending $100,000 or more on an annualized basis in Q2 grew to 770, an increase of 19% year over year[5] - Overall dollar-based net retention rate in Q2 was 96%[5] - Appointed Dan Rogers to Chief Executive Officer[8] - Launched the new Smart Workflow Gallery, a suite of prebuilt, AI-powered workflows[8] - Announced FedRAMP 'In Process' Designation, marking commitment to secure work for the public sector[8] - Expanded Asana's partnership with Mastercard, giving small businesses access to Asana at a discounted rate[8] Financial Outlook Third Quarter Fiscal 2026 Outlook For the third quarter of fiscal 2026, Asana anticipates revenues between $197.5 million and $199.5 million, representing a year-over-year growth of 7.4% to 8.5%, with non-GAAP operating income of $12.0 million to $14.0 million and non-GAAP net income per share of $0.06 to $0.07 | Metric | Range | YoY Growth | | :-------------------------- | :-------------------- | :--------- | | Revenues | $197.5M - $199.5M | 7.4% - 8.5% | | Non-GAAP Operating Income | $12.0M - $14.0M | | | Non-GAAP Operating Margin | 6% - 7% | | | Non-GAAP Net Income per Share | $0.06 - $0.07 | | Full Fiscal Year 2026 Outlook Asana has updated its full fiscal year 2026 guidance, projecting revenues between $780.0 million and $790.0 million, indicating an 8% to 9% year-over-year growth, with non-GAAP operating income of $46.0 million to $50.0 million and non-GAAP net income per share forecasted at $0.23 to $0.25 | Metric | Range | YoY Growth | | :-------------------------- | :-------------------- | :--------- | | Revenues | $780.0M - $790.0M | 8% - 9% | | Non-GAAP Operating Income | $46.0M - $50.0M | | | Non-GAAP Operating Margin | 6% | | | Non-GAAP Net Income per Share | $0.23 - $0.25 | | Non-GAAP Financial Measures Purpose and Rationale Asana uses non-GAAP financial measures to complement its GAAP financial statements, aiming to provide a clearer understanding of its core operating performance, enhance investor understanding, facilitate period-to-period comparisons, and offer greater transparency into management's operational decision-making metrics - Non-GAAP financial measures assist in understanding and evaluating Asana's core operating performance[12] - They enhance the overall understanding of Asana's past performance and future prospects[14] - Non-GAAP measures facilitate period-to-period comparisons of operations against other companies in the industry[14] - They allow for greater transparency with respect to important metrics used by Asana's management for financial and operational decision-making[14] Adjustments and Exclusions Asana's non-GAAP adjustments primarily exclude stock-based compensation expenses (including related employer payroll tax), non-cash expenses such as impairment charges, and restructuring-related costs, as these are considered non-core to long-term business performance, with revenues also adjusted for foreign currency impact and free cash flow defined as a key liquidity measure - Non-GAAP financial measures exclude stock-based compensation expense, which is a significant recurring expense and an important part of compensation strategy[15][16] - Employer payroll tax associated with RSUs is excluded due to its dependence on stock price and other uncontrollable factors not correlated to business operations[16] - Non-cash expenses, such as charges for impairment of long-lived assets, are excluded to provide useful supplemental information and facilitate analysis of operating results[16] - Restructuring related costs (benefits) are excluded to better understand core business performance and facilitate comparisons[16] - Revenues are adjusted for the impact of foreign currency by applying prior period average exchange rates to current period non-USD billed revenues, to assess underlying business performance[16] - Free cash flow is defined as net cash from operating activities less cash used for purchases of property and equipment and capitalized internal-use software costs[17] - Adjusted free cash flow is defined as free cash flow plus costs paid related to restructuring[17] Definitions of Business Metrics Core Customers Core customers are defined as organizations on a paid subscription plan that generate $5,000 or more in annualized GAAP revenues within a given quarter, inclusive of any discounts - Core customers are organizations on a paid subscription plan with $5,000 or more in annualized GAAP revenues in a given quarter, inclusive of discounts[18] Customers Spending $100,000 or More This metric identifies organizations on a paid subscription plan that have generated $100,000 or more in annualized GAAP revenues during a specific quarter, including any applied discounts - Customers spending $100,000 or more are organizations on a paid subscription plan that had $100,000 or more in annualized GAAP revenues in a given quarter, inclusive of discounts[19] Dollar-based Net Retention Rate Asana's reported dollar-based net retention rate is calculated as the simple arithmetic average of its quarterly rates over the most recent four fiscal quarters, comparing revenues from the same customer cohort year-over-year, accounting for upsells, contractions, and attrition, but excluding new customers, and is expected to fluctuate based on various factors - The dollar-based net retention rate equals the simple arithmetic average of quarterly rates for the four quarters ending with the most recent fiscal quarter[20] - Calculated by comparing revenues from the same set of customers in a given quarter relative to the comparable prior-year period, including upsells and net of contraction or attrition, but excluding new customers[20] - Expected to fluctuate in future periods due to factors such as revenue base growth, customer penetration, retention ability, and the macroeconomic environment[20] Additional Information About Asana Asana is a leading work management platform that facilitates collaboration between humans and AI, serving over 170,000 customers globally by helping them align teams, accelerate organizational impact, and bring clarity to complex initiatives through AI-powered workflows - Asana is a leading work management platform for human and AI collaboration[21] - Over 170,000 customers, including Accenture, Amazon, Anthropic, and Suzuki, rely on Asana[21] - Helps organizations align teams, accelerate organizational impact, and bring clarity to complexity with AI[21] Earnings Conference Call Information Asana will host a conference call and live webcast on September 3, 2025, at 1:30 p.m. Pacific Time to discuss its second quarter fiscal 2026 financial results, with a replay available on the Asana Investor Relations webpage - Conference call and live webcast to discuss results on September 3, 2025, at 1:30 p.m. Pacific Time[10] - A live webcast and replay will be available on the Asana Investor Relations webpage at: https://investors.asana.com[10](index=10&type=chunk) Forward-Looking Statements This press release contains forward-looking statements based on management's current beliefs and assumptions, covering areas such as market opportunity, AI impact, product launches, and financial outlook, which are subject to known and unknown risks and uncertainties that could cause actual results to differ materially, and Asana disclaims any obligation to update these statements unless legally required - Statements are based on management's beliefs and assumptions and are not historical facts, identifiable by terms like 'anticipate,' 'expect,' 'intend,' 'plan,' 'believe,' etc[11] - Cover topics including market opportunity, potential and impact of AI, expected benefits of AI Studio, product launches, and financial outlook for Q3 and FY26[11] - Involve known and unknown risks, uncertainties, and other factors that may cause actual results to differ materially[11] - Risks include Asana's ability to achieve future growth, attract and retain customers, develop new products (including AI integration), and broader macroeconomic conditions[11] - Asana assumes no obligation to update these forward-looking statements, except as required by law[11] Disclosure of Material Information Asana communicates material information to its investors through official channels such as SEC filings, press releases, public conference calls, and its dedicated investor relations website, also utilizing various social media platforms to engage with the public and disseminate information, encouraging stakeholders to review these sources for potentially material updates - Asana announces material information using SEC filings, press releases, public conference calls, and its investor relations page (https://investors.asana.com)[22](index=22&type=chunk)[23] - The company also uses social media channels (X, blog, LinkedIn, Instagram, Facebook, Threads, TikTok) to communicate with investors and the public[23] - Investors, media, and others are encouraged to review information made public in these locations, as it could be deemed material[23] Condensed Consolidated Financial Statements Statements of Operations This section presents Asana's unaudited condensed consolidated statements of operations for the three and six months ended July 31, 2025, and 2024, detailing key financial metrics including revenues, gross profit, operating expenses, loss from operations, net loss, and net loss per share, along with a breakdown of stock-based compensation expenses | Metric (in thousands) | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | Six Months Ended July 31, 2025 | Six Months Ended July 31, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenues | $196,936 | $179,212 | $384,203 | $351,660 | | Gross profit | $176,715 | $159,225 | $344,755 | $313,869 | | Loss from operations | $(49,456) | $(76,797) | $(93,360) | $(142,966) | | Net loss | $(48,360) | $(72,189) | $(88,378) | $(135,911) | | Net loss per share (Basic and Diluted) | $(0.20) | $(0.31) | $(0.38) | $(0.59) | | Total stock-based compensation expense | $62,154 | $60,107 | $110,321 | $108,747 | Balance Sheets This section provides Asana's unaudited condensed consolidated balance sheets as of July 31, 2025, and January 31, 2025, detailing the company's financial position, including current and non-current assets, current and non-current liabilities, and stockholders' equity | Metric (in thousands) | July 31, 2025 | January 31, 2025 | | :-------------------------------- | :-------------- | :--------------- | | Total current assets | $598,511 | $600,741 | | Total assets | $883,157 | $891,415 | | Total current liabilities | $424,082 | $415,817 | | Total liabilities | $658,601 | $663,892 | | Total stockholders' equity | $224,556 | $227,523 | Statements of Cash Flows This section outlines the cash generated from or used in operating, investing, and financing activities for the three and six months ended July 31, 2025, and 2024, providing insight into the company's liquidity and cash management | Metric (in thousands) | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | Six Months Ended July 31, 2025 | Six Months Ended July 31, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $39,835 | $15,858 | $46,599 | $13,960 | | Net cash (used in) provided by investing activities | $(18,918) | $56 | $(14,742) | $(21,305) | | Net cash used in financing activities | $(30,556) | $(19,228) | $(36,079) | $(9,281) | | Net decrease in cash, cash equivalents, and restricted cash | $(9,408) | $(2,194) | $(192) | $(16,808) | | Cash, cash equivalents, and restricted cash, End of period | $184,672 | $219,855 | $184,672 | $219,855 | Reconciliation of GAAP to Non-GAAP Data This section provides detailed reconciliations of Asana's GAAP financial measures to their corresponding non-GAAP counterparts for the three and six months ended July 31, 2025, and 2024, covering gross profit, operating expenses, operating income/loss, net income/loss, net income/loss per share, free cash flow, adjusted free cash flow, and revenue adjusted for foreign currency impact, highlighting adjustments for items like stock-based compensation and restructuring costs | Metric (in thousands) | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | Six Months Ended July 31, 2025 | Six Months Ended July 31, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | GAAP loss from operations | $(49,456) | $(76,797) | $(93,360) | $(142,966) | | Plus: stock-based compensation and related employer payroll tax associated with RSUs | $63,463 | $61,139 | $113,287 | $111,538 | | Adjustment for: restructuring costs | — | — | $2,217 | — | | Non-GAAP income (loss) from operations | $14,007 | $(15,658) | $22,144 | $(31,428) | | GAAP operating margin | (25.1)% | (42.9)% | (24.3)% | (40.7)% | | Non-GAAP operating margin | 7.1% | (8.7)% | 5.8% | (8.9)% | | Metric (in thousands) | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | Six Months Ended July 31, 2025 | Six Months Ended July 31, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | GAAP net loss | $(48,360) | $(72,189) | $(88,378) | $(135,911) | | Plus: stock-based compensation and related employer payroll tax associated with RSUs | $63,463 | $61,139 | $113,287 | $111,538 | | Adjustment for: restructuring costs | — | — | $2,217 | — | | Non-GAAP net income (loss) | $15,103 | $(11,050) | $27,126 | $(24,373) | | Non-GAAP net income (loss) per share, diluted | $0.06 | $(0.05) | $0.11 | $(0.11) | | Metric (in thousands) | Three Months Ended July 31, 2025 | Three Months Ended July 31, 2024 | Six Months Ended July 31, 2025 | Six Months Ended July 31, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $39,835 | $15,858 | $46,599 | $13,960 | | Free cash flow | $35,382 | $12,760 | $39,377 | $8,485 | | Adjusted free cash flow | $35,439 | $12,760 | $45,321 | $8,485 |