Asana NYSE: ASAN reported second-quarter fiscal 2027 revenue of $216.4 million, up 10% year over year and above the high end of its guidance, as the work-management software company cited improving retention, stronger enterprise performance and growing adoption of its artificial intelligence products.
Chief Executive Officer Dan Rogers said the company’s underlying business health continued to improve, with growth accelerating and retention strengthening across reported customer cohorts. Overall dollar-based net retention rose to 97% from 96%, while net retention among core customers and customers spending at least $100,000 annually each reached 98%.
“Growth is accelerating, retention is improving again, and we saw broad-based strength across industries and geographies,” Rogers said.
Enterprise Momentum and AI Adoption
Revenue from core customers, defined as those spending at least $5,000 annually, increased 11% year over year and accounted for 77% of second-quarter revenue. Asana had 26,778 core customers at quarter-end, including 890 customers spending $100,000 or more annually. The number of those larger customers increased 16% year over year.
The company said U.S. revenue rose 10% year over year, returning to double-digit growth for the first time in more than two years. Rogers attributed the improvement to better bookings and retention among technology customers, increased AI adoption and accelerating new-logo acquisition. Technology-sector revenue posted its second consecutive quarter of year-over-year growth, while non-technology industries continued to grow faster than the company overall.
Asana’s AI Studio and AI Teammates products accounted for about 25% of net new annual recurring revenue during the quarter, up from 17% in the prior quarter. Excluding a large deal, the contribution was closer to 22%, according to Chief Financial Officer Aziz Megji.
More than 25% of Asana’s customers spending at least $100,000 annually have purchased AI Studio or AI Teammates, Rogers said. The company said customers adopting those products are engaging more deeply, retaining better and expanding faster than its broader customer base.
Rogers highlighted a three-year, multimillion-dollar expansion agreement with a Fortune 500 media company that included AI Studio and AI Teammates. AI products represented nearly half of the contract’s total value, he said, helping offset pressure from the customer’s smaller workforce. In one creative marketing workflow, the customer reduced content operations cycle time by 30%, according to Rogers.
Agentic Work Management Launch
In mid-September, Asana plans to introduce what it calls Agentic Work Management, or AWM, across new customer accounts, self-service customers and sales-led renewals. The offering combines AI Teammates, AI Studio and Asana Dash, an AI assistant designed to help users manage goals, priorities and work-related decisions.
AWM will include a base allotment of AI Teammates and Dash requests in every paid package tier without changing tier pricing. Rogers said the company is seeking to make AI capabilities a natural part of customers’ workflows rather than separate products that must be discovered and purchased independently.
The company will use “requests” as its unit of AI consumption. Rogers said the approach is intended to give customers predictable pricing and usage visibility while allowing Asana to select and optimize the AI models used behind the scenes.
Asana also announced early-access offerings for Client Management and Service Management, along with an upcoming early-access launch for Command by Asana. Client Management is designed to coordinate client delivery workflows, while Service Management targets service requests across IT, HR, facilities and legal. Command is intended to provide planning and orchestration capabilities for product and engineering teams using coding agents and other tools.
Rogers said the company expects the newer applications to expand its addressable markets and buying centers, but Megji said the fiscal 2027 outlook assumes minimal revenue contribution from Client Management, Service Management and Command. Their financial impact is expected to become more meaningful in fiscal 2028 because of enterprise sales cycles and deployment timelines.
Profitability, Cash Flow and Outlook
On a non-GAAP basis, Asana delivered a 10% operating margin in the second quarter, an expansion of roughly 300 basis points from a year earlier. The company reported net income of $23.8 million, or $0.10 per diluted share.
Gross margin was 87%, down about 120 basis points sequentially. Megji attributed the decline primarily to higher AI infrastructure and compute costs related to product scaling and development, the lower-margin profile of StackAI, and a greater mix of AI products relative to seat-based revenue.
Asana ended the quarter with approximately $340 million in cash equivalents and marketable securities. Adjusted free cash flow was $42.3 million, representing a 20% margin, though the company said the figure benefited by about $5 million from stronger-than-expected collections.
For the third quarter of fiscal 2027, Asana forecast:
- Revenue of $217 million to $219 million, representing 8% to 9% year-over-year growth.
- Non-GAAP operating income of $18 million to $19 million, or an 8% to 9% operating margin.
- Non-GAAP earnings of $0.08 per diluted share.
For the full fiscal year, the company projected revenue of $858.5 million to $863.5 million, representing 9% growth at the midpoint, and non-GAAP operating income of $84.5 million to $86.5 million, or an operating margin of about 10%. It expects non-GAAP earnings per share of $0.37.
Megji said the outlook reflects a $1.2 million second-half revenue timing impact from the transition to consumption-based recognition for AI Teammates and revised AWM packaging. The change does not affect ARR, bookings, billings, deferred revenue, remaining performance obligations or cash flow, he said.
The guidance also incorporates ongoing pressure from Asana’s product-led growth, or PLG, business. The company expects the PLG trend to reduce revenue growth by about 100 basis points in the third quarter and 150 basis points in the fourth quarter. Management said it is focusing acquisition spending on customers with stronger ideal-customer-profile characteristics, higher potential lifetime value and better retention prospects.
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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