Financial Data and Key Metrics Changes - Total revenues for Q2 2026 were $196.9 million, up 10% year over year, exceeding the high end of guidance by 1% [38] - Non-GAAP operating margin expanded almost 1,600 basis points year over year to 7%, above guidance range [12][44] - Net income was $15.1 million, or $0.06 per share, driven by operating leverage and cost optimization [45] Business Line Data and Key Metrics Changes - Customer growth remained healthy, with the number of customers spending $100,000 or more growing 19% year over year [11] - Revenues from core customers (spending $5,000 or more annually) grew 12% year over year, representing 76% of total revenues [39] - AI Studio ARR more than doubled quarter over quarter, indicating strong adoption and momentum [12] Market Data and Key Metrics Changes - International revenue grew 13% year over year, while U.S. market revenue grew 8% year over year [27] - Non-tech customers continued to grow in the mid-teens, while tech customer growth was stable [11] - Japan emerged as one of the fastest-growing markets, with significant customer expansion [27] Company Strategy and Development Direction - The company is focused on enhancing its AI capabilities, particularly through AI Studio, to drive productivity and efficiency [5][20] - There is a strategic emphasis on deepening engagement in non-tech industries and expanding into regulated sectors [7] - The company aims to sharpen go-to-market execution and focus on high-propensity accounts to accelerate growth [24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's positioning to capitalize on AI-driven productivity gains [9][25] - The operating environment remains challenging, with buyer scrutiny and elongated decision-making processes impacting growth [33][49] - Management anticipates continued improvements in customer health and retention, driven by foundational service plans and AI Studio adoption [30][31] Other Important Information - The company repurchased $27.8 million of its Class A common stock during the quarter [47] - The remaining performance obligation (RPO) was $507.3 million, up 29% from the year-ago quarter [46] - The company is raising its full-year revenue guidance to $780 million to $790 million, reflecting strong Q2 results [48] Q&A Session Summary Question: Why Asana? Why now? - The CEO highlighted the transformative potential of AI in modern enterprises and Asana's unique position to deliver on that opportunity [53][54] Question: How repeatable are AI Studio use cases? - Management noted that deploying AI Studio across cross-functional use cases reveals further opportunities for workflow creation, indicating a strong expansion potential [62] Question: How are you addressing top-of-funnel pressures? - The company is focusing on driving higher quality traffic and improving conversion rates despite a decline in top-of-funnel traffic [64][70] Question: What is the outlook for tech renewals? - Management indicated improvements in renewal hygiene and utilization, with a focus on foundational service plans to enhance account health [75][76]

Core Insights - Asana achieved its first non-GAAP operating profit in Q1 FY2026, with revenue of $187.3 million, marking a 9% year-over-year increase and a significant improvement in non-GAAP operating margin by over 1,300 basis points [1][2][3] Financial Performance - The gross margin remained strong at approximately 90%, while adjusted free cash flow margin improved by over 700 basis points to 5%, reflecting effective cost control measures [2] - The company reported a positive operating income of $8.1 million, representing a 4% margin, which is 300 basis points above the midpoint of guidance [3] Strategic Developments - AI Studio surpassed $1 million in annual recurring revenue (ARR), with evidence of its ARR growth outpacing traditional seat-based ARR in select accounts [4][5] - The introduction of the Smart Workflow Gallery and AI Studio Plus tier aims to enhance adoption among SMBs and enterprises, reducing reliance on per-seat pricing [4] Contractual Achievements - Asana secured a record-breaking three-year contract renewal valued at over $100 million, increasing remaining performance obligations to approximately $521 million, a 37% year-over-year increase [6] - Despite the significant total contract value, there was a modest downgrade in annual contract value (ACV), which is expected to impact net revenue retention in Q2 FY2026 [6][7] Future Outlook - Guidance for Q2 FY2026 anticipates revenue between $192 million and $194 million, reflecting 7%-8% year-over-year growth, with a non-GAAP operating margin of 4%-5% [9] - Full-year revenue guidance for FY2026 has been revised to $775 million to $790 million, indicating 7%-9% growth year-over-year, with an increased target for non-GAAP operating margin of at least 5.5% [9]

Summary of Asana Conference Call Company Overview - **Company**: Asana - **Event**: Bank of America Conference - **Key Participants**: Mike Funk (Bank of America), Matt Bullock (Software Analyst), Sonali (CFO), Aziz (AI Studio Lead) Key Points and Arguments Financial Guidance and Currency Impact - Asana guided for a revenue growth of **7% to 9%** for the year, with an **8% midpoint** [7][9] - Previous guidance in March was **8% to 9%**, with currency fluctuations impacting the ARR base by approximately **$5.5 million** [12][19] - The company experienced a **50 basis point tailwind** from foreign exchange (FX) for the full year, although it only contributed about **20 basis points** to Q1 growth [14][15] - The guidance incorporates a **worsening macroeconomic environment**, with elongated sales cycles and increased buyer scrutiny noted [21][23] Major Contracts and Customer Relationships - Asana secured a **$100 million Total Contract Value (TCV)** deal over three years, marking the largest deal in the company's history [30] - The deal involved an expansion of seats but included some discounting due to the long-term nature of the contract [32] - The renewal process was strategic, trading off some pricing for long-term visibility and stability [33] Net Retention Rate (NRR) Challenges - NRR is currently a priority for Asana, with the company acknowledging it is not at desired levels [39] - The recent contract downgrade will pressure NRR, expected to decrease by at least **one percentage point** [40] - Strategies are in place to improve NRR, including better coverage of the small business base and the introduction of AI Studio [41][42] AI Studio Developments - AI Studio crossed the **$1 million ARR** threshold shortly after its launch, indicating strong demand and adoption [46] - The platform is seeing significant uptake among larger customers, with **40% of the top 100 customers** enabled on AI Studio [48] - Future enhancements include the introduction of a **Smart Workflow Gallery** and **AI Teammates**, aimed at increasing adoption among non-builders [50][51] Margin Improvement and Cost Management - Asana reported a **1,300 basis point year-over-year improvement** in operating profit, with expectations for continued margin expansion [61] - The company has made strategic cuts, including a **5% reduction in workforce**, to optimize costs [62] - Gross margins are strong at **90%**, providing significant operating leverage for future growth [63] Small and Medium Business (SMB) Growth - The SMB segment is growing above the corporate average, driven by optimized marketing spend and improved onboarding processes [74][78] - Efforts are being made to reduce churn in the SMB base, which is critical for improving overall net retention [78] Additional Important Insights - The macroeconomic environment is described as more uncertain than in previous quarters, necessitating a cautious approach to guidance [24][25] - Asana's management emphasizes the importance of balancing growth with efficiency, aiming for sustainable long-term value creation [72][73] - The company is focused on leveraging AI capabilities to enhance customer engagement and drive future growth [72][73]

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]

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 ...