Management View

• Daniel Rogers, CEO, highlighted that “FY ’26 was a year of progress for Asana, we exited the year with solid momentum. We evolved into a multi-product platform with the launch of AI Studio, and we advanced our AI

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Shares of Asana, which operates a work management software platform, rose about 4% premarket on Thursday.

“We see an opportunity for new leadership to improve S&M [Sales & Marketing] spend efficiency from bottom quartile closer to the median based on delivered results from both new CEO Rogers and CFO Parekh in prior roles, helping support potential top-line reacceleration and further margin improvements,” said analysts led by Steven Enders.

The analysts see additive growth potential from AI Studio, which they conservatively estimate will drive +1 point of growth to Annual Recurring Revenue, or ARR, in fiscal year 2027. They also see a potential acceleration along with adding an AI consumption element to the model, which should prove helpful in combating pessimism around the seat-based model/other generative AI, or GenAI, tooling fears.

“While early, our conversations with implementation partners suggest strong initial interest in AI Studio, positive feedback on delivered ROI, and a differentiated offering,” said Enders and his team.

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Management View

• CEO Daniel Rogers described the quarter as solid, highlighting that “Q3 revenues were $201 million, growing 9% year-over-year, exceeding the high end of our guidance.” Rogers emphasized the foundational role of AI Studio and the introduction of AI teammates, which are being used by customers to drive productivity gains. He noted, “I’m excited to share more about our AI platform…AI Studio delivered another good quarter with solid growth in sequential bookings, including early traction with self-serve users.”
• Rogers announced that retention within Asana’s monthly customer base is at a 12-month high and pointed to key customer expansions, including a Fortune 100 health care service provider crossing the $1 million ARR threshold and a global pharmaceutical leader adopting Asana for mobile clinical trial workflows.
• Asana introduced AI teammates at its Work Innovation Summit events, with general availability expected early next year and positive feedback from 30 beta customers. Rogers highlighted, “We’ve already built out 12 out-of-the-box teammates across engineering, IT, marketing, operations and PMO.”
• The company is not backfilling the COO role after Anne Raimondi’s departure, with go-to-market leaders now reporting directly to Rogers, aiming for tighter alignment and faster execution.
• CFO Sonalee Parekh stated, “Q3 revenues came in at $201 million, up 9% year-over-year, which exceeded the high end of our guidance by almost 1 percentage point.” Parekh added that non-GAAP operating income was $16.3 million for an 8% operating margin and reported, “Net income was $17.9 million or $0.07 per share on a diluted basis.”

Outlook

• For Q4 fiscal 2026, Parekh guided for revenues of $204 million to $206 million, “representing 8% to 9% growth year-over-year.” Non-GAAP operating income is expected at $14 million to $16 million with an operating margin of 7% to 8%, and non-GAAP net income per share of $0.07.
• Full year revenue guidance was adjusted to $789 million to $791 million, up from $780 million to $790 million previously, with non-GAAP operating income guidance raised to $52.5 million to $54.5 million (7% margin).
• Parekh indicated, “We are reinvesting a portion of our Q3 operating profit outperformance back into the business, primarily in our AI platform and product development initiatives.”

Financial Results

• Q3 revenues reached $201 million, with 25,413 core customers (spending $5,000+ annually); revenues from this cohort grew 10% year-over-year and represented 76% of total revenues. The $100,000+ cohort grew 15% year-over-year to 785 customers.
• Dollar-based net retention rate (NRR) was 96%; core customer NRR was 97%, and $100,000+ customer NRR was 96%. In-quarter NRR improved across all cohorts, “marking our second consecutive quarter of in-quarter NRR improvement,” according to Parekh.
• Gross margin was reported at 89%. R&D expenses were $47.3 million (24% of revenue), sales and marketing $86.5 million (43% of revenue), and G&A $29.1 million (14% of revenue). Free cash flow was $13.4 million (7% margin).
• Share repurchases totaled $30.8 million for 2.2 million shares at an average price of $14.10 per share, with $97.5 million remaining authorized.

Q&A

• Matthew Bullock, BofA Securities: Asked about AI Studio self-serve launch and its impact on ARR and renewals. Anne Raimondi responded that “wide adoption and customers really trying it out” is encouraging and that AI Studio “has been a real help in renewal conversations” by providing more value and strategic discussion.
• Steven Enders, Citigroup: Inquired about tech sector headwinds and Q4 guidance changes. CEO Rogers noted tech vertical is stabilizing, stating, “Once they’re downgraded once, they tend not to downgrade again…several of our largest tech customers this quarter actually expanded as they renewed.” Parekh pointed to enterprise strength, stable demand, improved NRR, and AI momentum as factors in raising guidance.
• Josh Baer, Morgan Stanley: Asked about Asana’s competitive position as AI agents become more common. Rogers explained, “Our AI platform has context, controls and checkpoints built in…AI teammates address many of those gaps because they operate as true members of the team, not just individual copilots.”
• Robert Oliver, Baird: Queried about the partner ecosystem. Rogers described the channel as early-stage but promising, while Parekh highlighted continued margin expansion opportunities balanced with reinvestment in AI.
• Jackson Ader, KeyBanc: Questioned retention and revenue growth dynamics. Raimondi explained improvements in downgrade and investments in multiproduct strategy, while Parekh reaffirmed the goal of both margin expansion and revenue acceleration through AI initiatives.
• Patrick Walravens, Citizens JMP: Asked about increasing organizational velocity. Rogers cited decision-making, rapid beta launches, and strong operating rhythm as methods. Parekh stated, “There is no reason in my mind that we can’t eventually aspire to be among the best-in-class in terms of enterprise SaaS software companies on margin.”
• Arsenije Matovic, Wolfe Research: Questioned large tech renewals versus expectations. Raimondi confirmed Q3 renewals performed better than expected, and Parekh indicated increased confidence going into Q4.

Sentiment Analysis

• Analysts were largely positive or cautiously optimistic, focusing on AI Studio adoption, retention improvements, tech sector resilience, and margin expansion, while asking for clarity on guidance and competitive differentiation.
• Management maintained a confident and upbeat tone in prepared remarks and Q&A, frequently referencing operational rigor and the impact of new AI products. Rogers used phrases such as “I’m excited” and “clear measurable progress,” while Parekh described guidance adjustments as based on “confidence on raising the guide overall.”
• Compared to the previous quarter, management’s tone was more assertive about NRR bottoming and more explicit on AI teammates’ rollout, while analysts appeared incrementally more constructive on retention and strategy.

Quarter-over-Quarter Comparison

• Q3 saw revenue growth of 9%, slightly below 10% in Q2, with core customer and $100,000+ cohort growth rates moderating from 12% and 19% to 10% and 15%, respectively.
• Guidance language shifted from cautious (potential NRR downgrades) in Q2 to more confident (NRR at or near the floor) in Q3. Management raised full-year revenue and margin guidance and signaled increased investment in AI.
• AI Studio and AI teammates momentum was more prominent in Q3, with specific customer wins and internal use cases highlighted.
• Analysts in Q3 continued to focus on retention, AI monetization, operational efficiency, and tech vertical headwinds but expressed greater confidence in management’s execution and multiproduct strategy.
• Strategic focus shifted toward deeper sector penetration, AI self-serve expansion, and organizational realignment after the COO’s departure.

Risks and Concerns

• Tech sector headwinds continue to impact growth, but Rogers noted stabilizing trends and less risk of further downgrades among tech customers.
• SMB segment remains pressured by evolving search landscape and LLM-driven changes, expected to persist through Q4. Management’s mitigation includes self-serve experience improvements, content strategy evolution, and behavioral personalization.
• Large enterprise renewals concentrated in the technology vertical present ongoing risk, but management expressed increased confidence due to operational rigor and new product offerings.
• Management acknowledged the need to balance margin expansion with reinvestment in AI to sustain product leadership and accelerate growth.

Final Takeaway

Asana delivered Q3 results that beat guidance on both revenue and margin, driven by disciplined execution, continued adoption of AI Studio, and the early success of AI teammates. Retention improvements, enterprise customer expansions, and positive initial feedback from new AI offerings underpin management’s confidence in raising full-year guidance. The departure of the COO led to a streamlined leadership structure, while investments in AI and operational efficiency remain central to the company’s long-term growth and profitability strategy.

Read the full Earnings Call Transcript

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Management View

• Daniel Rogers, CEO, called Q2 a solid quarter, citing performance “above expectations across our business” and noting total revenues were up 10% year-over-year, exceeding the top end of guidance. Rogers highlighted strong contributions from “all customer cohorts and geographies,” with international growth outpacing the U.S. and verticals such as manufacturing, energy, financial services, and retail showing strong momentum. He stated, “Rolling 4-quarter NRR went to 96% from 95% last quarter” and emphasized that $100,000-plus customers grew 19% year-over-year.
• Rogers underscored AI Studio as a key driver, stating, “We’ve more than doubled our AI Studio ARR quarter-over-quarter and adoption continues to strengthen as customers build and scale on the platform.” He also noted a focus on non-tech industries and deepening market penetration in sectors like retail and regulated industries.
• Rogers shared, “Our continued focus on profitable growth and efficient scaling is driving meaningful margin expansion. Non-GAAP operating margin expanded almost 1,600 basis points year-over-year to 7%, above our guidance range.”
• Anne Raimondi, COO, reported, “International revenue grew 13% year-over-year and the U.S. market grew 8% year-over-year. Japan is one of our fastest-growing markets… they grew their Asana footprint by nearly 70% this quarter.”
• Raimondi noted, “Foundational service plans, or FSPs, are a strategic initiative to boost customer health and retention. Since launching, customers with FSPs show a 20% increase in utilization of their Asana seats within 3 months of adopting an FSP plan.”
• Sonalee Parekh, CFO, stated, “Q2 revenues came in at $196.9 million, up 10% year-over-year, which exceeded the high end of our guidance by 1%. Excluding the impact of currency, our Q2 revenue was up 9.4% year-over-year, still exceeding the high end of our guide.”

Outlook

• Parekh provided guidance for Q3 fiscal 2026: “We expect revenues of $197.5 million to $199.5 million, representing 7.4% to 8.5% growth year-over-year. We expect non-GAAP operating income of $12 million to $14 million, representing an operating margin of 6% to 7%, and we expect non-GAAP net income per share of $0.06 to $0.07.”
• For the full year, Parekh said, “We are updating our revenue guidance to $780 million to $790 million, representing 8% to 9% year-over-year growth from $775 million to $790 million previously.”
• Parekh explained, “We are raising the low end of our guidance to incorporate our actual Q2 results and maintaining the high end of our guide.”

Financial Results

• Parekh reported, “We have just over 25,000 core customers or customers spending $5,000 or more on an annualized basis. Revenues from core customers grew 12% year-over-year. This cohort represented 76% of our revenues in Q2.”
• The company had 770 customers spending $100,000 or more on an annualized basis, with this cohort growing 19% year-over-year.
• Net income was $15.1 million or $0.06 a share. Parekh noted, “Our profitability improvement continues to be driven by operating leverage, reallocating spends to the highest ROI go-to-market motions, optimizing infrastructure and cloud costs and exercising discipline across discretionary spend.”
• Cash, cash equivalents, and marketable securities at the end of Q2 were approximately $475.2 million. Q2 adjusted free cash flow was $35.4 million or 18% on a margin basis.
• The company repurchased $27.8 million of Class A common stock at an average price of $14.20, with $128 million remaining for repurchases moving forward.

Q&A

• Brent Bracelin, Piper Sandler: Asked Rogers why he joined Asana and about surprises since joining. Rogers described Asana as well positioned for “the inflection point of the Agentic enterprise” and said, “We’re already deeply embedded.”
• Aleksandr Zukin, Wolfe Research: Asked about AI Studio expansion and demand environment. Raimondi explained, “The more that customers are deploying AI Studio across… cross-functional use cases, they’re discovering other opportunities to create more workflow.” She also stated, “We’re definitely still seeing about the same demand environment dynamics we described last quarter, increased buyer scrutiny and elongation in decisions… However, it’s not worsened.”
• Steven Enders, Citi: Inquired on SEO-related pressures and guidance assumptions. Raimondi described investments in “more modern self-service, AI-driven experiences.” Parekh added, “Our Q3 and full year revised outlook does include the potential impact of that SMB and LLM disruption continuing.”
• Matthew Bullock, BofA: Asked about tech vertical renewals and AI Studio as a lever. Raimondi said, “We’re seeing improvements in logo churn and expansion overall. Specifically, what’s been helping… is healthy AI Studio and Foundational Service Plan adoption.”
• Rishi Jaluria, RBC: Asked about collaborative AI and productization. Rogers highlighted AI Teammates, stating, “AI Teammates is actually able to reason alongside humans and understand all that rich context and decide what the next step is and follow through on the execution.”
• Lucky Schreiner, D.A. Davidson: Asked about partner contributions to AI Studio deals. Raimondi confirmed, “Partners are critical in many of our consolidation deals.”

Sentiment Analysis

• Analysts focused on AI Studio adoption, vertical growth, and retention risks, with a slightly positive to neutral tone and probing for details on product traction and renewal performance.
• Management maintained a confident and optimistic tone, especially about AI Studio and international growth, while acknowledging ongoing pressures in SMB and renewal cycles. Parekh noted, “It’s too early to call Q2 an inflection point given potential downgrade pressure.”
• Compared to the previous quarter, both management and analysts maintained a consistent, constructive tone, with management incrementally more confident on AI momentum and expansion.

Quarter-over-Quarter Comparison

• The company updated full-year revenue guidance by lifting the low end, reflecting stronger Q2 results and ongoing growth in AI Studio and international markets.
• Strategic focus sharpened on AI-powered workflow products, partner expansion, and vertical market penetration, with added emphasis on self-serve and product-led growth.
• Analysts continued to press on renewal risk, AI Studio monetization, and the impact of search-driven SMB headwinds.
• Key metrics saw improvement: total revenues rose from $187.3 million to $196.9 million, NRR ticked up to 96%, and operating margin expanded from 4% to 7%.
• Management tone was more operationally focused this quarter, highlighting execution discipline and efficiency gains.

Risks and Concerns

• Management flagged potential downgrade pressure in the second half, especially in the tech vertical, noting, “We have several large enterprise renewals in the second half that are concentrated in our technology vertical.”
• Persistent top-of-funnel headwinds in SMB due to evolving search and AI-driven discovery. Raimondi stated, “It’s becoming increasingly critical to develop AI-native self-service experiences.”
• Despite improvements in logo churn and expansion, Parekh warned, “It’s too early to call Q2 an inflection point given potential downgrade pressure that could cause NRR to revert back to Q1 levels.”

Final Takeaway

Asana’s Q2 2026 performance demonstrated broad-based growth, with AI Studio adoption and international expansion leading the way. Management raised the low end of full-year revenue guidance, reflecting confidence in ongoing demand, while remaining vigilant about renewal cycles and SMB pressures. AI-driven workflows, foundational service plans, and strategic investments in self-serve and partner channels are positioned to support continued growth, even as the company plans for potential headwinds in the second half of the year.

Read the full Earnings Call Transcript

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