Asana outlines 7%-9% full-year revenue growth outlook with AI Studio expansion and $100M enterprise renewal

Earnings Call Insights: Asana (ASAN) Q1 2026

Management View

• Dustin A. Moskovitz, CEO, highlighted a milestone quarter, stating, “We achieved non-GAAP profitability for the first time, and AI Studio, which reached general availability in Q1, surpassed $1 million in ARR, demonstrating powerful early momentum.” He noted total revenues were up 9% year-over-year and that non-tech verticals grew faster than overall growth, with manufacturing, energy, media, entertainment, and financial services among the fastest-growing sectors. Moskovitz announced, “A landmark achievement last month was closing the largest deal in Asana’s history with one of the largest employers in the world. This 3-year $100 million-plus contract renewal is a testament to Asana’s unique ability to power complex, cross-functional execution at an enterprise scale.” He also described the launch of the Smart Workflow Gallery and the introduction of AI Studio Plus, creating a three-tier AI offering to expand adoption and value alignment.
• Anne Raimondi, COO, reported, “The number of customer net adds from the 100,000-plus cohorts grew 20% year-over-year, same as last quarter.” She emphasized strategic renewal wins and international strength, particularly in EMEA and Japan, and noted, “International revenue grew 11% year-over-year.”
• Sonalee Elizabeth Parekh, CFO, stated, “Q1 revenues came in at $187.3 million, up 9% year-over-year, which exceeded the midpoint of our guidance by 1%. We have 24,297 core customers… Revenues from core customers grew 10% year-over-year. This cohort represented 75% of our revenues in Q1.” Parekh added, “Our overall dollar-based net retention rate was 95%. Core customer NRR was 96%. And among customers spending $100,000 or more, NRR was 95%.” She also noted, “We had a positive operating income quarter for the first time in our company’s history, delivering a 4% margin or $8.1 million of operating income.”

Outlook

• Parekh provided Q2 fiscal 2026 guidance: “We expect revenues of $192 million to $194 million, representing 7% to 8% growth year-over-year. We expect non-GAAP operating income of $8 million to $10 million, representing an operating margin of 4% to 5%. And we expect non-GAAP net income per share of $0.04 to $0.05.”
• Full year revenue guidance was updated to “$775 million to $790 million, representing 7% to 9% year-over-year growth.” Parekh said, “We are raising our full year non-GAAP operating margin guidance to at least 5.5% for the full year, up from our prior guidance of at least 5%.”
• Management noted, “The upper half assumes continued execution within a stable macro, consistent with our Q4 view; the lower half anticipates elongated sales cycles, increased budget scrutiny, and a more cautious procurement environment, particularly with tech and enterprise customers.”

Financial Results

• Q1 revenues were reported at $187.3 million, with a non-GAAP operating income of $8.1 million and net income of $12 million or $0.05 per share.
• Parekh stated, “Our profitability improvement was driven by rationalizing and reallocating program spend, particularly in marketing and lead generation, to meet ROI thresholds without sacrificing pipeline and pipeline coverage.” Gross margin was reported at approximately 90%.
• Cash, cash equivalents, and marketable securities at the end of Q1 were approximately $470.8 million. RPO was $420.7 million, up 11% year-over-year, with an adjusted figure of $521 million, up 37% year-over-year, factoring in the large renewal.
• The company repurchased $15.6 million of Class A common stock. The Board increased share repurchase authorization by $100 million.

Q&A

• Matthew John Bullock, BofA Securities, asked about the composition and upside scenarios of the $1 million AI Studio ARR. Moskovitz explained, “The $1 million ARR really represents a great sort of diversity and distribution of customers… This is entirely comprised right now of the AI Studio Pro platform fees.”
• Bullock followed up on the $100 million contract renewal. Parekh clarified, “There was actually a modest downgrade on an ACV basis. So that will actually impact… our overall net retention and particularly from Q2 and as we look across the rest of the year.”
• Allan M. Verkhovski, Scotiabank, inquired about ROI and large AI Studio deals. Moskovitz responded, “Customers are turning to Asana because they see that they can take on part of the workflow that can be done by AI and sort of hand back and forth with a human or multiple humans that are on the team, and that lets them be successful in a lot more areas.”
• Steven Lester Enders, Citigroup, asked about macro pressures and downgrade trends. Raimondi said, “We just started to see early… some customer budget pressures. There’s still some ongoing workforce reductions and then consolidation of tools under centralized IT management.”
• Taylor Anne McGinnis, UBS, questioned NRR trajectory. Parekh stated, “Q2 to Q4 is likely to be pressured because of this deal that we’ve called out and also because of the enterprise trends.”

Sentiment Analysis

• Analysts expressed concerns over net retention, macro pressures, and the sustainability of AI Studio momentum, with a slightly cautious tone when probing the trajectory of key metrics and the impact of large contract renewals.
• Management maintained a confident tone in prepared remarks, frequently citing “momentum,” “strong pipeline,” and “robust demand,” but shifted to a more measured stance during Q&A, acknowledging “downgrade pressure” and “increased buyer scrutiny.”
• Compared to the previous quarter, management sentiment remains confident but more focused on near-term headwinds, while analysts’ tone has become more probing regarding potential downside scenarios.

Quarter-over-Quarter Comparison

• Revenue growth slowed from over 10% in Q4 2025 to 9% in Q1 2026.
• Net retention rate declined from 96% to 95%; management highlighted continued pressure on NRR, especially in the tech vertical and enterprise segment.
• Operating margin improved from a loss margin of 1% in Q4 2025 to a positive 4% in Q1 2026, marking the first profitable quarter on a non-GAAP basis.
• Guidance for FY26 revenue was updated to $775 million to $790 million, compared to a previous range of $782 million to $790 million, reflecting a wider range to account for macro uncertainty.
• Management sentiment is less optimistic about short-term expansion, with increased attention to potential macroeconomic risks and buyer caution.

Risks and Concerns

• Management cited “continued downgrade pressure, particularly in our enterprise and middle-market segments and the technology vertical.”
• Parekh warned, “In the near term, NRR will remain a headwind, which results in strong new business momentum and scaling contribution from add-ons and the channel being less prominently reflected in our overall revenue growth.”
• Raimondi noted early signs of “increased buyer scrutiny and elongation in decisions related to broader consolidation or software stack transformation efforts.”
• The $100 million contract renewal was described as a “modest ACV downgrade,” expected to weigh on NRR in Q2 and beyond.
• Management indicated readiness to “pull multiple levers” to preserve profitability if the macro environment deteriorates.

Final Takeaway

Asana management emphasized that the company achieved its first non-GAAP profitable quarter, driven by AI Studio momentum and strategic cost discipline. The $100 million enterprise renewal delivers visibility into future revenues but introduces near-term net retention headwinds. Management reaffirmed its commitment to driving profitable growth, scaling AI adoption, and adapting to evolving macroeconomic risks, while maintaining a focus on product innovation and operational efficiency to support long-term expansion.

Read the full Earnings Call Transcript