Asana Q1 Earnings Call Highlights

Key Points

• Asana beat Q1 revenue guidance with $205.1 million in revenue, up 9.5% year over year, and expanded non-GAAP operating margin to 11.5%. The company also reported improved customer retention and expansion, with net retention rising to 97% for core customers.
• AI products are becoming a major growth driver, with AI Studio and AI Teammates helping boost retention, seat expansion, and adoption. AI product bookings made up 17% of net new ARR in the quarter, ahead of Asana’s full-year target of 15%.
• Asana announced the acquisition of StackAI to expand its AI workflow capabilities across enterprise systems, and said the deal accelerates its roadmap by more than a year. The company expects StackAI to contribute about 50 basis points to revenue growth in both Q2 and the full year.

Asana NYSE: ASAN reported fiscal first-quarter revenue that exceeded its guidance range and said customer retention, expansion activity and adoption of its artificial intelligence products improved during the period.

Chief Executive Officer Dan Rogers said the company generated revenue of $205.1 million in the first quarter of fiscal 2027, up 9.5% from a year earlier. He said non-GAAP operating margin expanded to 11.5%, an improvement of 720 basis points year over year, reflecting “continued progress in driving both growth and operating efficiency across the business.”

Rogers said the company saw positive trends in customer retention and expansion, with overall in-quarter net retention improving for the fourth consecutive quarter to 97%. He said the improvement was broad-based across gross retention and expansion activity, supported by healthier seat adoption, improved customer engagement and early traction from Asana’s AI products.

AI Products Drive Expansion Activity

Rogers said Asana’s strategy is to become “the operating system for human agent teams,” positioning the company around workflows where employees and AI agents collaborate on business-critical processes. He said the company believes many organizations have experienced personal productivity gains from AI chatbots but have not yet translated those gains into broader team or enterprise productivity.

The company highlighted growing adoption of AI Studio, which Rogers said became generally available roughly a year ago. AI Studio is used to automate repeatable work such as intake, classification, routing, quality checks and reporting. Rogers said early data shows customers adopting AI Studio have higher retention and stronger net revenue retention than the broader customer base, with the primary driver being seat expansion rather than lower churn alone.

During the quarter, Rogers said the number of customers spending more than $100,000 annually on AI Studio nearly doubled. In the question-and-answer session, Chief Financial Officer Aziz Megji clarified that those customers were spending more than $100,000 on the AI Studio SKU itself, excluding their core Asana seat spend.

Rogers also discussed AI Teammates, shared AI agents assigned to projects that work alongside employees within Asana’s Work Graph. He said paid conversion from the beta cohort has been strong and that tasks involving AI Teammates are completed nearly nine times faster. Asana said AI product bookings represented 17% of net new annual recurring revenue in the first quarter, ahead of its full-year target of 15%.

StackAI Acquisition Expands AI Workflow Ambitions

Asana announced the acquisition of StackAI, a privately held AI software company that offers a no-code AI workflow platform for designing, testing, deploying and governing custom AI agents and intelligent automations. Rogers said StackAI extends Asana’s AI Studio capabilities by enabling workflows across enterprise systems such as CRMs, ERPs, databases, support systems, contracts and custom infrastructure.

Rogers said StackAI accelerates Asana’s roadmap by more than a year. In response to a question from Robert Oliver of Baird, Rogers said customers had been asking to extend AI Studio workflows into third-party systems, and StackAI already had demonstrated traction in complex operating environments, including regulated industries.

Megji said the transaction includes approximately $75 million in upfront cash consideration, along with an equity-based earn-out opportunity. He said the acquisition adds about 50 employees across engineering and AI-focused go-to-market functions. After adjusting for the deal, Megji said Asana would have more than $350 million in cash equivalents and marketable securities remaining on its balance sheet, including an assumption of $3 million of cash on StackAI’s balance sheet.

Customer Metrics and Vertical Trends Improve

Megji said Asana ended the quarter with 26,103 “core customers,” defined as customers spending $5,000 or more on an annualized basis. Revenue from core customers grew 10% year over year and represented 76% of total revenue. The company had 817 customers spending $100,000 or more on an annualized basis, up 12% year over year.

Overall dollar-based net retention was 96%, while core customer net retention was 97%. Among customers spending $100,000 or more, net retention was 96%. Megji noted that these figures are trailing four-quarter averages and therefore lag more recent trends.

Rogers said the technology sector returned to positive year-over-year growth for the first time in eight quarters, aided by adoption across multiple products. He cited CoreWeave and Epson as customers that expanded with additional seats and AI products during the quarter. Megji said the improvement in tech was primarily driven by expansion, including add-on AI Studio and AI Teammates adoption, as well as seat expansion and improving retention.

Growth in non-technology sectors continued to outpace overall company growth, according to Rogers. He said international revenue rose 12% year over year, led by EMEA and APAC, and noted new customers including a British athletic apparel brand and IKEA Australia.

Profitability, Cash Flow and Buybacks

Megji said Asana’s non-GAAP gross margin was 88%. Research and development expenses were $47.5 million, or 23% of revenue, while sales and marketing expenses were $83.5 million, or 41% of revenue. General and administrative expenses were $26.7 million, or 13% of revenue.

Non-GAAP net income was $24.4 million, or $0.10 per diluted share. Megji said profitability improvements were driven by operating leverage, disciplined spending, infrastructure and cloud cost optimization, and headcount discipline as the company uses AI across internal workflows.

Asana ended the quarter with $424.6 million in cash equivalents and marketable securities. Remaining performance obligations were $518.1 million, up 23% year over year, while current remaining performance obligations grew 18% year over year. Adjusted free cash flow was $34.4 million, or 17% of revenue.

The company repurchased $45 million of Class A common stock during the quarter, buying 7.4 million shares at an average price of $6.11 per share. Megji said Asana had roughly $155 million remaining under its current repurchase authorization as of April 30.

Guidance Includes StackAI Contribution

For the second quarter of fiscal 2027, Asana expects revenue of $213 million to $215 million, representing growth of 8.2% to 9.2% year over year. The outlook includes an expected StackAI contribution of about 50 basis points to growth. The company expects non-GAAP operating income of $18 million to $20 million and non-GAAP net income of $0.08 to $0.09 per share.

For the full fiscal year, Asana expects revenue of $855.5 million to $863.5 million, also representing growth of 8.2% to 9.2%. The full-year outlook includes the first-quarter outperformance and an expected StackAI contribution of approximately 50 basis points to growth. Asana expects a full-year non-GAAP operating margin of at least 9.75% and non-GAAP net income of $0.37 per share.

Megji said the company’s outlook continues to assume roughly a two-point drag on annual recurring revenue growth from its product-led growth motion, only modest improvement in net retention over the year, and AI product bookings contributing about 15% of net new ARR in fiscal 2027. He said Asana plans to provide a more comprehensive update on AI product contribution during its second-quarter call.

About Asana NYSE: ASAN

Asana, Inc NYSE: ASAN is a leading provider of work management and collaboration software designed to help teams organize, track and manage their work. Founded in 2008 by Dustin Moskovitz and Justin Rosenstein, Asana's platform enables users to create projects, assign tasks, set deadlines and visualize progress across diverse workflows. The company's cloud-based solution includes customizable project templates, timeline views, boards and automated rules that streamline routine processes and reduce manual effort.

Built for both small teams and large enterprises, Asana supports integrations with a wide array of third-party applications, including communication tools, file-sharing services and DevOps platforms.

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