Asana, Inc. Q3 FY2025 earnings call

1. Launch of AI Studio as a new multi-product offering with consumption-based pricing, showing early momentum across sectors like media, financial services, and manufacturing. 2. Successful Work Innovation Summit in New York and Europe, showcasing innovations such as Strategy Map, view-only licenses, and executive reporting. 3. Strong customer growth trends, including core and $100k+ customers growing, and a record number of multi-year deals. 4. Vertical growth with non-tech verticals up 15% YOY, including manufacturing, energy, consumer retail, and media. 5. Execution machine coming online with stable gross retention and an uptick in in-quarter NRR.

Total Revenues were up over 10% year-over-year. Non-tech verticals grew 15% year-over-year, accounting for over two-thirds of the business. Core Customer base grew 11% year-over-year, and $100,000+ customers grew 18% year-over-year. Dollar-based net retention rate was 96%, with core customers at 98% and $100k+ customers at 99%.

For Q4 Fiscal 2025, revenues are expected to be $187.5 million to $188.5 million (10% growth YOY). Non-GAAP operating loss is expected to be $6.5 million to $5.5 million (negative 3% operating margin). For full fiscal year 2025, revenues are expected in the range of $723 million to $724 million (11% growth YOY). Non-GAAP operating loss is $46 million to $45 million (negative 6% operating margin). Expect positive free cash flow in Q4 and focus on improving financial efficiency while maintaining growth investments.

General macroeconomic uncertainties impacting sales cycles, especially for larger enterprises. Competition in the AI-powered work management space. Potential challenges in scaling AI Studio and achieving expected revenue growth.

Q: Josh Baer asks about seat growth and AI Studio's impact on seat expansion.

A: Dustin Moskovitz responds that AI Studio is incremental, with early deals showing both AI Studio sales and seat expansion. Anne Raimondi adds that a customer saw value in AI Studio and committed to a three-year renewal with seat expansion.

Q: Rob Oliver asks about AI Studio's use cases and sales force skills.

A: Dustin Moskovitz discusses early use cases like workflow automations and Anne Raimondi mentions the need for sales force to adapt to selling consumption-based AI Studio.

Q: Brent Bracelin asks about non-tech pipeline and path to positive free cash flow.

A: Anne Raimondi talks about non-tech vertical investments, and Sonalee Parekh mentions timing of hires and spend rationalization to achieve positive free cash flow in Q4.

Q: Steven Enders asks about net retention and AI Studio's impact.

A: Anne Raimondi states net retention is stabilizing due to lapping tough comps and AI Studio tailwinds.

Q: Michael Funk asks about AI Studio pricing and net retention improvement.

A: Dustin Moskovitz and Anne Raimondi discuss the consumption-based pricing model and net retention factors like lapping tough comps and post-sales investments.

Q: Brent Thill asks about tech demand and Sonalee about margin expansion opportunities.

A: Dustin Moskovitz comments on tech subsectors, and Sonalee Parekh says efficiencies are evenly spread across sales, R&D, and G&A.