Significant improvement towards profitability
year over year Revenues from Core customers, customers spending
$5,000 or more, grew 20% year over year Ended the quarter with over
three million paid seats
Asana, Inc. (NYSE: ASAN)(LTSE: ASAN), a leading work management
platform, today reported financial results for its third quarter
fiscal 2024 ended October 31, 2023.
“Asana’s Q3 results beat expectations on the top and bottom
line. Overall revenue growth was better than our guidance, revenues
from our Core customers grew 20 percent, and operating margin
improved significantly year over year," said Dustin Moskovitz,
co-founder and chief executive officer of Asana. “Revenues from
customers spending $100,000 or more grew even faster than our
overall revenues as we continue to forge partnerships with some of
the largest organizations in the world. More and more, the world’s
leading companies are choosing Asana – powered by Asana’s Work
Graph® and AI – to drive clarity and accountability, maximize
impact, and scale with confidence.”
Third Quarter Fiscal 2024 Financial Highlights
- Revenues: Revenues were $166.5 million, an increase of 18% year
over year.
- Operating Loss: GAAP operating loss was $63.4 million, or 38%
of revenues, an improvement year over year compared to GAAP
operating loss of $101.1 million, or 71% of revenues, in the third
quarter of fiscal 2023. Non-GAAP operating loss was $9.8 million,
or 6% of revenues, an improvement year over year compared to
non-GAAP operating loss of $52.6 million, or 37% of revenues, in
the third quarter of fiscal 2023.
- Net Loss: GAAP net loss was $61.8 million, compared to GAAP net
loss of $100.9 million in the third quarter of fiscal 2023. GAAP
net loss per share was $0.28, compared to GAAP net loss per share
of $0.49 in the third quarter of fiscal 2023. Non-GAAP net loss was
$8.2 million, compared to non-GAAP net loss of $52.4 million in the
third quarter of fiscal 2023. Non-GAAP net loss per share was
$0.04, compared to non-GAAP net loss per share of $0.26 in the
third quarter of fiscal 2023.
- Cash Flow: Cash flows from operating activities were negative
$8.2 million, compared to negative $46.2 million in the third
quarter of fiscal 2023. Free cash flow was negative $11.5 million,
compared to negative $48.5 million in the third quarter of fiscal
2023.
Business Highlights
- The number of Core customers, or customers spending $5,000 or
more on an annualized basis, in Q3 grew to 21,346, an increase of
14% year over year. Revenues from Core customers in Q3 grew 20%
year over year.
- The number of customers spending $100,000 or more on an
annualized basis in Q3 grew to 580, an increase of 18% year over
year.
- Ended the quarter with over three million paid seats.
- Overall dollar-based net retention rate in Q3 was over
100%.
- Dollar-based net retention rate for Core customers in Q3 was
over 105%.
- Dollar-based net retention rate for customers spending $100,000
or more on an annualized basis in Q3 was over 120%.
- Hosted inaugural Asana Work Innovation Summit in New York and
London, bringing together leaders from around the world to delve
into the new era of work.
- Unveiled new AI innovations powered by Asana’s Work Graph® to
help every organization work smarter.
- Released Asana’s State of AI at Work Report, underscoring the
growing role of artificial intelligence (AI) in the workplace.
Financial Outlook
For the fourth quarter of fiscal 2024, Asana expects:
- Revenues of $167.0 million to $168.0 million, representing year
over year growth of 11% to 12%.
- Non-GAAP operating loss of $23.0 million to $21.0 million.
- Non-GAAP net loss per share of $0.10 to $0.09, assuming basic
and diluted weighted average shares outstanding of approximately
223 million.
For fiscal 2024, Asana expects:
- Revenues of $648.5 million to $649.5 million, representing year
over year growth of 19%.
- Non-GAAP operating loss of $66.0 million to $64.0 million.
- Non-GAAP net loss per share of $0.27 to $0.26, assuming basic
and diluted weighted average shares outstanding of approximately
219 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 third quarter of fiscal 2024 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
ability to execute on our current strategies, our technology and
brand position, Asana’s outlook for the fiscal quarter and the full
fiscal year ending January 31, 2024, expected benefits of our
offerings, Asana’s market position, and potential market
opportunities. 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, broader
macroeconomic conditions and the residual impacts of the COVID-19
pandemic. 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 Quarterly Report
on Form 10-Q for the quarter ended July 31, 2023 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 empowers organizations to work smarter. Asana has over
147,000 customers and millions of users in 200+ countries and
territories. Customers like Amazon, Roche, and T-Mobile, rely on
Asana to manage everything from goal setting and tracking to
capacity planning, to product launches. For more information, visit
www.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.
ASANA, INC. CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per
share data) (unaudited)
Three Months Ended October
31,
Nine Months Ended October
31,
2023
2022
2023
2022
Revenues
$
166,503
$
141,439
$
481,369
$
396,981
Cost of revenues(1)
16,053
15,160
47,132
41,354
Gross profit
150,450
126,279
434,237
355,627
Operating expenses:
Research and development(1)
81,028
75,509
241,715
215,947
Sales and marketing(1)
98,349
113,713
288,034
320,228
General and administrative(1)
34,494
38,165
106,537
128,064
Total operating expenses
213,871
227,387
636,286
664,239
Loss from operations
(63,421
)
(101,108
)
(202,049
)
(308,612
)
Interest income and other income
(expense), net
3,479
1,291
13,310
(219
)
Interest expense
(1,012
)
(457
)
(2,947
)
(1,125
)
Loss before provision for income taxes
(60,954
)
(100,274
)
(191,686
)
(309,956
)
Provision for income taxes
796
631
2,946
2,786
Net loss
$
(61,750
)
$
(100,905
)
$
(194,632
)
$
(312,742
)
Net loss per share:
Basic and diluted
$
(0.28
)
$
(0.49
)
$
(0.89
)
$
(1.60
)
Weighted-average shares used in
calculating net loss per share:
Basic and diluted
221,776
204,657
219,094
195,261
_______________
(1) Amounts include stock-based compensation expense as
follows:
Three Months Ended October
31,
Nine Months Ended October
31,
2023
2022
2023
2022
Cost of revenues
$
413
$
461
$
1,177
$
1,200
Research and development
29,384
25,030
83,928
70,606
Sales and marketing
15,584
15,018
43,438
43,028
General and administrative
7,485
7,482
22,026
21,000
Total stock-based compensation expense
$
52,866
$
47,991
$
150,569
$
135,834
ASANA, INC. CONDENSED
CONSOLIDATED BALANCE SHEETS (in thousands) (unaudited)
October 31, 2023
January 31, 2023
Assets
Current assets
Cash and cash equivalents
$
268,314
$
526,563
Marketable securities
261,726
2,739
Accounts receivable, net
68,032
82,363
Prepaid expenses and other current
assets
46,069
48,726
Total current assets
644,141
660,391
Property and equipment, net
98,241
94,984
Operating lease right-of-use assets
182,779
176,189
Other assets
22,519
23,399
Total assets
$
947,680
$
954,963
Liabilities and Stockholders’
Equity
Current liabilities
Accounts payable
$
9,988
$
7,554
Accrued expenses and other current
liabilities
65,698
83,488
Deferred revenue, current
249,673
226,443
Operating lease liabilities, current
17,592
14,831
Total current liabilities
342,951
332,316
Term loan, net
44,856
46,696
Deferred revenue, noncurrent
5,770
7,156
Operating lease liabilities,
noncurrent
220,181
210,012
Other liabilities
1,753
2,209
Total liabilities
615,511
598,389
Stockholders’ equity
Common stock
2
2
Additional paid-in capital
1,767,633
1,595,001
Accumulated other comprehensive loss
(3,278
)
(873
)
Accumulated deficit
(1,432,188
)
(1,237,556
)
Total stockholders’ equity
332,169
356,574
Total liabilities and stockholders’
equity
$
947,680
$
954,963
ASANA, INC. SUMMARY OF
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands)
(unaudited)
Three Months Ended October
31,
Nine Months Ended October
31,
2023
2022
2023
2022
Cash flows from operating
activities
Net loss
$
(61,750
)
$
(100,905
)
$
(194,632
)
$
(312,742
)
Adjustments to reconcile net loss to net
cash used in operating activities:
Allowance for expected credit losses
683
(315
)
2,072
1,045
Depreciation and amortization
3,531
3,204
10,407
9,507
Amortization of deferred contract
acquisition costs
5,668
3,937
15,971
10,509
Stock-based compensation expense
52,866
47,991
150,569
135,834
Net amortization (accretion) of premium
(discount) on marketable securities
(636
)
(7
)
(1,568
)
50
Non-cash lease expense
3,954
4,058
13,998
11,426
Impairment of long-lived assets
—
—
5,009
—
Amortization of discount on revolving
credit facility and term loan issuance costs
31
5
91
13
Changes in operating assets and
liabilities:
Accounts receivable
(2,407
)
(6,580
)
12,251
(1,377
)
Prepaid expenses and other current
assets
(4,707
)
5,547
(13,764
)
(22,155
)
Other assets
(606
)
(1,178
)
742
(3,201
)
Accounts payable
6,857
(1,864
)
3,612
(3,333
)
Accrued expenses and other liabilities
(2,668
)
(1,258
)
(16,885
)
15,225
Deferred revenue
(5,693
)
4,665
21,843
40,614
Operating lease liabilities
(3,356
)
(3,478
)
(12,310
)
(10,374
)
Net cash used in operating activities
(8,233
)
(46,178
)
(2,594
)
(128,959
)
Cash flows from investing
activities
Purchases of marketable securities
(145,018
)
2
(284,312
)
(72,216
)
Sales of marketable securities
12
—
12
—
Maturities of marketable securities
7,500
54,314
25,641
110,204
Purchases of property and equipment
(1,255
)
(1,457
)
(7,221
)
(3,140
)
Capitalized internal-use software
costs
(1,977
)
(882
)
(4,325
)
(952
)
Net cash provided by (used in) investing
activities
(140,738
)
51,977
(270,205
)
33,896
Cash flows from financing
activities
Repayment of term loan
(625
)
(1,000
)
(2,500
)
(2,667
)
Proceeds from private placement—related
party, net of offering costs
—
347,384
—
347,384
Repurchases of common stock
—
—
—
(2
)
Proceeds from exercise of stock
options
783
980
3,856
4,627
Proceeds from employee stock purchase
plan
6,511
7,959
15,069
17,115
Taxes paid related to net share settlement
of equity awards
—
—
(7
)
—
Net cash provided by financing
activities
6,669
355,323
16,418
366,457
Effect of foreign exchange rates on cash,
cash equivalents, and restricted cash
(3,081
)
(489
)
(1,868
)
(1,207
)
Net increase (decrease) in cash, cash
equivalents, and restricted cash
(145,383
)
360,633
(258,249
)
270,187
Cash, cash equivalents, and restricted
cash
Beginning of period
413,697
149,957
526,563
240,403
End of period
$
268,314
$
510,590
$
268,314
$
510,590
ASANA, INC. Reconciliation of
GAAP to Non-GAAP Data (in thousands, except percentages)
(unaudited)
Three Months Ended October
31,
Nine Months Ended October
31,
2023
2022
2023
2022
Reconciliation of gross profit and
gross margin
GAAP gross profit
$
150,450
$
126,279
$
434,237
$
355,627
Plus: stock-based compensation and related
employer payroll tax associated with RSUs
418
470
1,209
1,226
Non-GAAP gross profit
$
150,868
$
126,749
$
435,446
$
356,853
GAAP gross margin
90.4
%
89.3
%
90.2
%
89.6
%
Non-GAAP adjustments
0.2
%
0.3
%
0.3
%
0.3
%
Non-GAAP gross margin
90.6
%
89.6
%
90.5
%
89.9
%
Reconciliation of operating
expenses
GAAP research and development
$
81,028
$
75,509
$
241,715
$
215,947
Less: stock-based compensation and related
employer payroll tax associated with RSUs
(29,788
)
(25,293
)
(86,416
)
(72,216
)
Non-GAAP research and development
$
51,240
$
50,216
$
155,299
$
143,731
GAAP research and development as
percentage of revenue
48.7
%
53.4
%
50.2
%
54.4
%
Non-GAAP research and development as
percentage of revenue
30.8
%
35.5
%
32.3
%
36.2
%
GAAP sales and marketing
$
98,349
$
113,713
$
288,034
$
320,228
Less: stock-based compensation and related
employer payroll tax associated with RSUs
(15,745
)
(15,185
)
(44,438
)
(43,744
)
Less: restructuring costs
—
—
173
—
Non-GAAP sales and marketing
$
82,604
$
98,528
$
243,769
$
276,484
GAAP sales and marketing as percentage of
revenue
59.1
%
80.4
%
59.8
%
80.7
%
Non-GAAP sales and marketing as percentage
of revenue
49.6
%
69.7
%
50.6
%
69.6
%
GAAP general and administrative
$
34,494
$
38,165
$
106,537
$
128,064
Less: stock-based compensation and related
employer payroll tax associated with RSUs
(7,621
)
(7,587
)
(22,636
)
(21,510
)
Less: impairment of long-lived assets
—
—
(5,009
)
—
Less: restructuring costs
—
—
(26
)
—
Non-GAAP general and administrative
$
26,873
$
30,578
$
78,866
$
106,554
GAAP general and administrative as
percentage of revenue
20.7
%
27.0
%
22.1
%
32.3
%
Non-GAAP general and administrative as
percentage of
revenue
16.1
%
21.6
%
16.4
%
26.8
%
Reconciliation of operating loss and
operating margin
GAAP loss from operations
$
(63,421
)
$
(101,108
)
$
(202,049
)
$
(308,612
)
Plus: stock-based compensation and related
employer payroll tax associated with RSUs
53,572
48,535
154,699
138,696
Plus: impairment of long-lived assets
—
—
5,009
—
Plus: restructuring costs
—
—
(147
)
—
Non-GAAP loss from operations
$
(9,849
)
$
(52,573
)
$
(42,488
)
$
(169,916
)
GAAP operating margin
(38.1
)%
(71.5
)%
(42.0
)%
(77.7
)%
Non-GAAP adjustments
32.2
%
34.3
%
33.2
%
34.9
%
Non-GAAP operating margin
(5.9
)%
(37.2
)%
(8.8
)%
(42.8
)%
ASANA, INC. Reconciliation of
GAAP to Non-GAAP Data (in thousands, except percentages and per
share data) (unaudited)
Three Months Ended October
31,
Nine Months Ended October
31,
2023
2022
2023
2022
Reconciliation of net loss
GAAP net loss
$
(61,750
)
$
(100,905
)
$
(194,632
)
$
(312,742
)
Plus: stock-based compensation and related
employer payroll tax associated with RSUs
53,572
48,535
154,699
138,696
Plus: impairment of long-lived assets
—
—
5,009
—
Plus: restructuring costs
—
—
(147
)
—
Non-GAAP net loss
$
(8,178
)
$
(52,370
)
$
(35,071
)
$
(174,046
)
Reconciliation of net loss per
share
GAAP net loss per share, basic
$
(0.28
)
$
(0.49
)
$
(0.89
)
$
(1.60
)
Non-GAAP adjustments to net loss
0.24
0.23
0.73
0.71
Non-GAAP net loss per share, basic
$
(0.04
)
$
(0.26
)
$
(0.16
)
$
(0.89
)
Weighted-average shares used in GAAP and
non-GAAP per share calculation, basic and diluted
221,776
204,657
219,094
195,261
Three Months Ended October
31,
Nine Months Ended October
31,
2023
2022
2023
2022
Computation of free cash flow
Net cash provided by (used in) investing
activities
$
(140,738
)
$
51,977
$
(270,205
)
$
33,896
Net cash provided by financing
activities
$
6,669
$
355,323
$
16,418
$
366,457
Net cash used in operating activities
$
(8,233
)
$
(46,178
)
$
(2,594
)
$
(128,959
)
Less: purchases of property and
equipment
(1,255
)
(1,457
)
(7,221
)
(3,140
)
Less: capitalized internal-use software
costs
(1,977
)
(882
)
(4,325
)
(952
)
Plus: restructuring costs paid
—
—
707
—
Plus: purchases of property and equipment
from build-out of corporate headquarters
—
—
—
2
Free cash flow
$
(11,465
)
$
(48,517
)
$
(13,433
)
$
(133,049
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231204242797/en/
Catherine Buan Asana Investor Relations ir@asana.com
Marianne Ridgeway Asana Corporate Communications
press@asana.com
Asana (NYSE:ASAN)
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