Improvement in free cash flow and operating cash flow year over year

Expect to be free cash flow positive for the full year

Revenues from customers spending $5,000 or more grew 15% year over year

Asana, Inc. (NYSE: ASAN)(LTSE: ASAN), a leading work management platform, today reported financial results for its first quarter fiscal 2025 ended April 30, 2024.

“AI is transforming how we work, and Asana is delivering the ideal platform for this new era where people and AI collaborate to reach new levels of productivity and innovation," said Dustin Moskovitz, co-founder and chief executive officer of Asana. “With Asana’s Work Graph® architected to link work and workflows to higher level objectives, Asana provides the structure and visibility for organizations to scale AI with confidence. We have an incredible opportunity ahead of us, and I believe Asana is uniquely positioned to capture a large swath of enterprise workflows as rigid software categories of the past are reshaped.”

First Quarter Fiscal 2025 Financial Highlights

• Revenues: Revenues were $172.4 million, an increase of 13% year over year.
• Operating Loss: GAAP operating loss was $66.2 million, or 38% of revenues, compared to GAAP operating loss of $65.2 million, or 43% of revenues, in the first quarter of fiscal 2024. Non-GAAP operating loss was $15.8 million, or 9% of revenues, an improvement year over year compared to non-GAAP operating loss of $22.3 million, or 15% of revenues, in the first quarter of fiscal 2024.
• Net Loss: GAAP net loss was $63.7 million, compared to GAAP net loss of $61.5 million in the first quarter of fiscal 2024. GAAP net loss per share was $0.28, compared to GAAP net loss per share of $0.28 in the first quarter of fiscal 2024. Non-GAAP net loss was $13.3 million, compared to non-GAAP net loss of $18.5 million in the first quarter of fiscal 2024. Non-GAAP net loss per share was $0.06, compared to non-GAAP net loss per share of $0.09 in the first quarter of fiscal 2024.
• Cash Flow: Cash flows from operating activities were negative $1.9 million, compared to negative $14.6 million in the first quarter of fiscal 2024. Free cash flow was negative $4.3 million, compared to negative $16.6 million in the first quarter of fiscal 2024.

Business Highlights

• The number of Core customers, or customers spending $5,000 or more on an annualized basis, in Q1 grew to 22,162, an increase of 12% year over year. Revenues from Core customers in Q1 grew 15% year over year.
• The number of customers spending $100,000 or more on an annualized basis in Q1 grew to 607, an increase of 19% year over year.
• Overall dollar-based net retention rate in Q1 was 100%.
• Dollar-based net retention rate for Core customers in Q1 was 102%.
• Dollar-based net retention rate for customers spending $100,000 or more on an annualized basis in Q1 was 108%.
• Launched a new suite of AI tools for the CIO, including new AI capabilities that empower IT leaders to drive intelligent transformation with the right data foundation, safeguards, and controls.
• Released Asana’s second-annual State of IT research, which revealed 77% of IT leaders feel responsible for leading AI transformation within their organization.
• Kicked-off Asana’s global Work Innovation Summits in Sydney, Australia, and Tokyo, Japan. Highlighting both the State of Work Innovation: Australia 2024 Report, and State of Work Innovation Japan 2024 Report – in-depth analysis around the evolution and future of work.

Financial Outlook

For the second quarter of fiscal 2025, Asana expects:

• Revenues of $177.0 million to $178.0 million, representing year over year growth of 9% to 10%.
• Non-GAAP operating loss of $23.0 million to $21.0 million, with 12% operating loss margin at the midpoint.
• Non-GAAP net loss per share of $0.09 to $0.08, assuming basic and diluted weighted average shares outstanding of approximately 230 million.

For fiscal 2025, Asana expects:

• Revenues of $719.0 million to $724.0 million, representing year over year growth of 10% to 11%.
• Non-GAAP operating loss of $59.0 million to $55.0 million, with 8% operating loss margin at the midpoint.
• Non-GAAP net loss per share of $0.21 to $0.19, assuming basic and diluted weighted average shares outstanding of approximately 231 million.

These statements are forward-looking and actual results may materially differ. Refer to the “Forward-Looking Statements” section below for information on the factors that could cause Asana’s actual results to materially differ from these forward-looking statements.

A reconciliation of non-GAAP outlook measures to corresponding GAAP measures is not available on a forward-looking basis without unreasonable effort due to the uncertainty regarding, and the potential variability of, many of these costs and expenses that may be incurred in the future. Asana has provided a reconciliation of GAAP to non-GAAP financial measures in the financial statement tables for its first quarter fiscal year 2025 non-GAAP results included in this press release.

Earnings Conference Call Information

Asana will hold a conference call and live webcast today to discuss these results at 1:30 p.m. Pacific Time. A live webcast and replay will be available on the Asana Investor Relations webpage at: https://investors.asana.com.

Forward-Looking Statements

This press release contains “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are based on management’s beliefs and assumptions and on information currently available to management. Forward-looking statements include, but are not limited to, statements about our market opportunity, the prominence and impact of AI, our ability to execute on our current strategies, our technology and brand position, Asana’s outlook for the fiscal quarter ending July 31, 2024 and the full fiscal year ending January 31, 2025, Asana’s outlook for free cash flow, expected benefits of our offerings, and our market position. Forward-looking statements generally relate to future events or Asana’s future financial or operating performance. Forward-looking statements include all statements that are not historical facts and in some cases can be identified by terms such as “anticipate,” “expect,” “intend,” “plan,” “believe,” “continue,” “could,” “potential,” “may,” “will,” “goal,” or similar expressions and the negatives of those terms. However, not all forward-looking statements contain these identifying words. Forward-looking statements involve known and unknown risks, uncertainties and other factors, including factors beyond Asana’s control, that may cause Asana’s actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. These risks include, but are not limited to, risks and uncertainties related to: Asana’s ability to achieve future growth and sustain its growth rate, Asana’s ability to attract and retain customers and increase sales to its customers, Asana’s ability to develop and release new products and services and to scale its platform, including the successful integration of artificial intelligence, Asana’s ability to increase adoption of its platform through Asana’s self-service model, Asana’s ability to maintain and grow its relationships with strategic partners, the highly competitive and rapidly evolving market in which Asana participates, Asana’s international expansion strategies, and broader macroeconomic conditions. Further information on risks that could cause actual results to differ materially from forecasted results are included in Asana’s filings with the SEC, including Asana’s Annual Report on Form 10-K for the year ended January 31, 2024 and subsequent filings with the SEC. Any forward-looking statements contained in this press release are based on assumptions that Asana believes to be reasonable as of this date. Except as required by law, Asana assumes no obligation to update these forward-looking statements, or to update the reasons if actual results differ materially from those anticipated in the forward-looking statements.

Use of Non-GAAP Financial Measures

To supplement Asana’s consolidated financial statements, which are prepared and presented in accordance with GAAP, Asana utilizes certain non-GAAP financial measures to assist in understanding and evaluating its core operating performance. In this release, Asana’s non-GAAP gross profit, gross margin, operating expenses, operating expenses as a percentage of revenue, operating loss, operating margin, net loss, net loss per share, and free cash flow are not presented in accordance with GAAP and are not intended to be used in lieu of GAAP presentations of results of operations. These non-GAAP financial measures, which may be different from similarly titled measures used by other companies, are presented to enhance investors’ overall understanding of Asana’s financial performance and should not be considered a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. Investors are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measures which can be found in the accompanying financial statements included with this press release.

Asana is presenting these non-GAAP financial measures because it believes that these non-GAAP financial measures provide useful information about its financial performance, enhance the overall understanding of Asana’s past performance and future prospects, facilitate period-to-period comparisons of operations against other companies in Asana’s industry, and allow for greater transparency with respect to important metrics used by Asana’s management for financial and operational decision-making.

Asana believes excluding the following items from its non-GAAP financial measures is useful to investors and others in assessing Asana’s operating performance due to the following factors:

• Share-based compensation expenses. Although share-based compensation is an important aspect of the compensation of our employees and executives, management believes it is useful to exclude share-based compensation expenses to better understand the long-term performance of Asana’s core business and to facilitate comparison of its results to those of peer companies.
• Employer payroll tax associated with RSUs. The amount of employer payroll tax-related items on employee stock transactions is dependent on Asana’s stock price and other factors that are beyond its control and that do not correlate to the operation of the business.
• Non-cash and non-recurring expenses. Non-cash expenses include charges for impairment of long-lived assets. Non-recurring expenses include costs related to restructuring. Asana believes the exclusion of certain non-cash and non-recurring items provides useful supplemental information to investors and facilitates the analysis of its operating results and comparison of operating results across reporting periods.

There are a number of limitations related to the use of non-GAAP financial measures as compared to GAAP financial measures, including that the non-GAAP financial measures exclude stock-based compensation expense, which has been, and will continue to be for the foreseeable future, a significant recurring expense in Asana’s business and an important part of its compensation strategy.

In addition to the non-GAAP financial measures outlined above, Asana also uses the non-GAAP financial measure of free cash flow, which is defined as net cash from operating activities less cash used for purchases of property and equipment and capitalized internal-use software costs, plus non-recurring expenditures such as capital expenditures from the purchases of property and equipment associated with the build-out of Asana’s corporate headquarters and costs related to restructuring. Asana believes free cash flow is an important liquidity measure of the cash that is available, after capital expenditures and operational expenses, for investment in its business and to make acquisitions. Asana believes that free cash flow is useful to investors as a liquidity measure because it measures Asana’s ability to generate or use cash. There are a number of limitations related to the use of free cash flow as compared to net cash from operating activities, including that free cash flow includes capital expenditures, the benefits of which are realized in periods subsequent to those when expenditures are made.

Definitions of Business Metrics

Customers spending $5,000 or more on an annualized basis, or Core customers

We define customers spending $5,000 or more, which we also refer to as Core customers, as those organizations on a paid subscription plan that had $5,000 or more in annualized GAAP revenues in a given quarter, inclusive of discounts.

Customers spending $100,000 or more on an annualized basis

We define customers spending $100,000 or more as those organizations on a paid subscription plan that had $100,000 or more in annualized GAAP revenues in a given quarter, inclusive of discounts.

Dollar-based net retention rate

Asana’s reported dollar-based net retention rate equals the simple arithmetic average of its quarterly dollar-based net retention rate for the four quarters ending with the most recent fiscal quarter. Asana calculates its dollar-based net retention rate by comparing its revenues from the same set of customers in a given quarter, relative to the comparable prior-year period. To calculate Asana’s dollar-based net retention rate for a given quarter, Asana starts with the revenues in that quarter from customers that generated revenues in the same quarter of the prior year. Asana then divides that amount by the revenues attributable to that same group of customers in the prior-year quarter. Current period revenues include any upsells and are net of contraction or attrition over the trailing 12 months, but exclude revenues from new customers in the current period. Asana expects its dollar-based net retention rate to fluctuate in future periods due to a number of factors, including the expected growth of its revenue base, the level of penetration within its customer base, and its ability to retain its customers.

About Asana

Asana, the #1 AI work management platform, is where work connects to goals. Over 150,000 customers like Amazon, Accenture, and Suzuki rely on Asana to manage and automate everything from goal setting and tracking to capacity planning to product launches. To learn more, visit asana.com.

Disclosure of Material Information

Asana announces material information to its investors using SEC filings, press releases, public conference calls, and on its investor relations page of Asana’s website at https://investors.asana.com. Asana uses these channels, as well as social media, including its X (formerly Twitter) account (@asana), its blog (blog.asana.com), its LinkedIn page (www.linkedin.com/company/asana), its Instagram account (@asana), its Facebook page (www.facebook.com/asana/), and Threads profiles (@asana and @moskov), to communicate with investors and the public about Asana, its products and services and other matters. Therefore, Asana encourages investors, the media and others interested in Asana to review the information it makes public in these locations, as such information could be deemed to be material information.

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