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AI

Asana, Inc. (ASAN)·Q1 2026 Earnings Summary

Executive Summary

  • Q1 FY2026 delivered a clean beat: revenue $187.3M (+9% YoY) vs consensus $185.4M and non-GAAP EPS $0.05 vs consensus $0.02; first-ever positive non-GAAP operating margin (4.3%) with ~1,300 bps YoY improvement *.
  • Guidance mix: FY26 non-GAAP operating margin raised to ≥5.5% (from ≥5%), non-GAAP EPS raised to $0.22; FY26 revenue range widened to $775–$790M (low end reduced), implying prudence amid macro headwinds and downgrade pressure in tech/enterprise .
  • AI as growth vector: AI Studio crossed $1M ARR in first quarter of GA and is catalyzing enterprise adoption and add-on monetization; mgmt outlined AI Studio Plus and Smart Workflow Gallery to accelerate usage across segments .
  • Watch-outs: trailing four-quarter NRR at 95% and expected to be pressured in Q2 due to a $100M+ renewal with modest ACV downgrade; mgmt flagged increased buyer scrutiny/elongated decisions in enterprise/mid-market, especially tech .
  • Capital allocation: share repurchase authorization increased by $100M (total $156M available) with no expiration; Q1 buybacks of ~$15.6M signal confidence and support EPS/stock supply dynamics .

What Went Well and What Went Wrong

What Went Well

  • Achieved first quarter of non-GAAP operating income; non-GAAP operating margin expanded 1,300 bps YoY to 4.3%, exceeding guidance by >300 bps .
  • AI Studio momentum: surpassed $1M ARR in first GA quarter; global pipeline robust; Smart Workflow Gallery and new AI Studio Plus tier launched to broaden access and accelerate adoption .
  • Enterprise validation: largest subscription agreement in company history ($100M+ over three years) underscores capability to power complex, cross-functional work at scale .

What Went Wrong

  • Net retention headwinds: overall NRR at 95% with management guiding Q2 NRR down due to a modest ACV downgrade on the $100M+ renewal and downgrade pressure in tech/enterprise .
  • Macro friction: early signs of increased buyer scrutiny and elongated decisions in enterprise/mid-market; tech vertical remains drag despite stabilization .
  • Deferred metrics timing: CRPO/RPO/deferred revenue impacted by renewal timing (shift from Q1 to Q2), complicating billings optics; pro forma adjustments required for clearer trend .

Financial Results

MetricQ3 2025Q4 2025Q1 2026
Revenue ($USD Millions)$183.9 $188.3 $187.3
Revenue Consensus ($USD Millions)$180.7*$188.1*$185.4*
Revenue Surprise ($USD Millions)+$3.2*+$0.2*+$1.9*
GAAP EPS ($USD)($0.25) ($0.27) ($0.17)
Non-GAAP EPS ($USD)($0.02) $0.00 $0.05
Non-GAAP EPS Consensus ($USD)($0.068)*($0.013)*$0.020*
Non-GAAP EPS Surprise ($USD)+$0.048*+$0.013*+$0.030*
GAAP Gross Margin %89.2% 89.6% 89.7%
Non-GAAP Gross Margin %89.4% 89.8% 89.9%
GAAP Operating Margin %(32.7%) (33.8%) (23.4%)
Non-GAAP Operating Margin %(4.1%) (0.9%) 4.3%

Values with asterisks retrieved from S&P Global.

KPIs

KPIQ3 2025Q4 2025Q1 2026
Core customers (≥$5k ARR)23,609 24,062 24,297
Customers ≥$100k ARR683 726 728
Overall NRR96% 96% 95%
Core NRR98% 97% 96%
≥$100k NRR99% 96% 95%
Operating Cash Flow ($M)(14.9) 15.9 6.8
Adjusted Free Cash Flow ($M)(11.5) 12.3 9.9

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($USD Millions)Q2 FY26N/A (not guided in Q4 call)$192–$194 New
Non-GAAP Operating Income ($M)Q2 FY26N/A$8–$10 (4–5% margin) New
Non-GAAP EPS ($USD)Q2 FY26N/A$0.04–$0.05 New
Revenue ($USD Millions)FY26$782–$790 $775–$790 Lowered low-end; maintained high-end
Non-GAAP Operating Margin %FY26≥5.0% ≥5.5% Raised
Non-GAAP EPS ($USD)FY26$0.19–$0.20 $0.22 Raised
Diluted Shares (assumption, M)Q2/FY26~245/247 ~243 Lower share base assumption

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 FY25)Previous Mentions (Q4 FY25)Current Period (Q1 FY26)Trend
AI Studio monetization/useLaunch; strong demand; early productivity gains; multi-million pipeline GA ramp in Q1; cohorts compounding usage; high-beta upside; power-law consumption potential Crossed $1M ARR; Plus tier; Smart Workflow Gallery; AI teammates roadmap Accelerating
Net Retention (NRR)Overall/Core NRR 96–98%; improving in-quarter Stabilization; tech drag; in-quarter improving Trailing NRR 95%; Q2 pressure expected from ACV downgrade and downgrades in tech/enterprise Deteriorating near term
Enterprise/large dealsExpansion with large customers; upmarket progress Record multi-year deals; CRPO/RPO acceleration $100M+ renewal; rigorous selection; global scale use cases Strengthening duration/visibility
Channel strategyUnder-penetrated; plans to revamp partner program Reallocation to channel; partner enablement; tiering Double-digit partner-led growth; APAC/EMEA traction; partners critical to AI Studio scale Improving
Pricing/value alignmentEarly commentary on aligning price to value Tests show positive trade-off; multi-product add-ons AI Studio tiers (Basic/Plus/Pro); Foundational Service Plans to boost health/NRR Improving
Macro/buyer scrutinyNoted softness in tech; elongated decisions Soft macro; prudence in FY26 guide Increased buyer scrutiny; elongated decisions enterprise/mid-market Cautious

Management Commentary

  • CEO on AI Studio: “AI Studio…surpassed $1 million in ARR, demonstrating powerful early momentum…positions Asana as the definitive platform for human and AI coordination.”
  • CFO on margin/efficiency: “We delivered…$8.1M of operating income…driven by rationalizing program spend, optimizing cloud spend, and shifting hiring to more cost-effective regions.”
  • COO on enterprise renewal: “After a rigorous evaluation…Asana [is] foundational…for company-wide goal setting, logistics, device launches…across several hundred thousand employees.”
  • CEO on product roadmap: “AI teammates…a persistent coworker…unlock usage-based revenue streams beyond seat licenses.”

Q&A Highlights

  • AI Studio ARR/usage mix: Current ARR from Pro platform fees; Plus SKU and AI Teammates expected to broaden adoption; consumption likely power-law with potential six/seven-figure “whales” by year-end .
  • $100M+ renewal: Largest deal; modest ACV downgrade impacts NRR; not yet embedding AI Studio (upside optionality); moved billing from Q1 to Q2, affecting RPO/CRPO timing .
  • Macro/NRR outlook: Early signs of downgrade activity in enterprise/mid-market; Q2 NRR guided down; logo churn improving, suggesting future upsell potential .
  • Billings/seasonality: Pro forma billings growth ~5% in Q1; billings seasonally stronger in H2; monthly billing (~⅓ of business) tempers RPO leading-indicator utility .
  • Channel momentum: Single-digit revenue contribution historically; reallocating resources; more partner-led deals, critical for AI Studio scale .

Estimates Context

  • Q1 FY26 beat vs S&P consensus: Revenue $187.3M vs $185.4M (+$1.9M); non-GAAP EPS $0.05 vs $0.02 (+$0.03). Prior quarters also beat both top and bottom lines (Q3 FY25 and Q4 FY25) *.
  • Consensus trajectory implies FY26 EPS ~$0.236 and revenue ~$786.3M; company raised margin/EPS guidance while widening revenue range lower-bound for prudence. Expect upward estimate revisions on EPS/margins; revenue estimates may drift toward mid-range given macro caution *.

Values retrieved from S&P Global.

Key Takeaways for Investors

  • The quarter resets profitability narrative: first positive non-GAAP operating margin and sustained gross margin ~90% underpin multi-year margin expansion; mgmt raised FY margin/EPS guidance .
  • AI Studio is scaling from proofs to monetization: $1M ARR in first GA quarter with widening tiers (Plus) and Smart Workflow Gallery; expect consumption-driven upside as adoption deepens .
  • Near-term NRR headwinds likely: Q2 NRR to be pressured from a modest ACV downgrade on a $100M+ renewal and broader enterprise/tech downgrades; watch Q2 retention metrics for inflection .
  • Revenue cadence prudent: FY26 revenue widened to $775–$790M; look for H2 contribution from AI Studio and channel to offset downgrade pressure; billings/RPO timing noise should normalize in Q2 .
  • Capital allocation supportive: buyback authorization lifted to $156M total and no expiry; Q1 repurchases (~$15.6M) mitigate dilution and may support EPS over time .
  • Trading lens: Strong beat and margin raise are positive catalysts; any commentary on Q2 NRR pressure and macro scrutiny could temper multiple. Watch AI Studio attach rates and consumption metrics on the Q2 call for upside signals .

Appendix: Additional Context and Recognitions

  • Recognitions: Leader in Forrester Wave: Collaborative Work Management (highest strategy score); Gartner Voice of the Customer 4.5/5 rating—supports enterprise positioning .
  • Q2 FY26 snapshot (post-Q1): Revenue $196.9M (+10% YoY); non-GAAP operating margin 7%; FY26 revenue/operating margin guidance raised; validates momentum into H2 .