Executive Summary

Q3 FY2025 delivered top- and bottom-line above the high end of guidance, with revenue $183.9M (+10% YoY) and non-GAAP operating loss of $7.6M (−4% margin), while launching AI Studio and raising full-year outlook .
Full-year FY2025 guidance was raised: revenue to $723–$724M (from $719–$721M) and non-GAAP operating loss to $46–$45M (from $58–$55M), with Q4 expected to be positive free cash flow .
Retention metrics stabilized in-quarter and cohorts improved (Core NRR 98%, $100K+ cohort NRR 99%), supported by non-tech vertical growth (+15% YoY) and record multiyear deals .
Catalysts: AI Studio consumption model, vertical diversification (manufacturing, energy, retail, media), and FedRAMP pursuit; caution remains around tech-sector spending and longer sales cycles .

What Went Well and What Went Wrong

What Went Well

AI Studio launched; management called it “the birth of a new category” with potential to eclipse current revenue over time; early demand and workflow consumption pricing provide additive expansion avenues .
Non-tech verticals grew faster than overall (- tech drag), up 15% YoY and now ~two-thirds of business; record multiyear deals and cohort improvements (Core +11% to 23,609; $100K+ +18% to 683) .
RPO reaccelerated to $405.7M (+21% YoY), with 82% current portion; management highlighted path to sustained margin expansion and positive FCF in Q4 .

What Went Wrong

Cash burn in Q3: operating cash flow −$14.9M and FCF −$18.2M; GAAP net loss remained significant at −$57.3M (−$0.25 per share) .
Gross margins compressed modestly YoY (non-GAAP gross margin 89.4% vs. 90.6% in Q3 FY2024), reflecting mix and investments .
Macro and tech vertical remain headwinds; sales cycles elongated for larger deals; management sees stabilization rather than a broad demand recovery in tech .

Financial Results

Quarterly financials vs prior periods

Metric	Q1 FY2025 (Apr 30, 2024)	Q2 FY2025 (Jul 31, 2024)	Q3 FY2025 (Oct 31, 2024)
Revenue ($USD Millions)	$172.448	$179.212	$183.882
YoY Growth (%)	13%	10%	10%
GAAP Gross Margin %	89.7%	88.8%	89.2%
Non-GAAP Gross Margin %	89.8%	89.1%	89.4%
GAAP Operating Margin %	−38.4%	−42.9%	−32.7%
Non-GAAP Operating Margin %	−9.1%	−8.7%	−4.1%
GAAP Net Loss ($USD Millions)	−$63.722	−$72.189	−$57.326
GAAP Net Loss per Share ($)	−$0.28	−$0.31	−$0.25
Non-GAAP Net Loss ($USD Millions)	−$13.323	−$11.050	−$4.777
Non-GAAP Net Loss per Share ($)	−$0.06	−$0.05	−$0.02
Cash from Operations ($USD Millions)	−$1.898	$15.858	−$14.890
Free Cash Flow ($USD Millions)	−$4.275	$12.760	−$18.181

Guidance vs actual (Q3 FY2025)

Metric	Q3 Guidance (given with Q2 results)	Q3 Actual	Result
Revenue ($USD Millions)	$180.0–$181.0	$183.882	Beat above high end
Non-GAAP Operating Loss ($USD Millions)	$19.0–$18.0	$7.631	Beat
Non-GAAP Net Loss per Share ($)	−$0.07	−$0.02	Beat

KPIs

KPI	Q1 FY2025	Q2 FY2025	Q3 FY2025
Core Customers (≥$5K annualized)	22,162	22,948	23,609
$100K+ Customers (annualized)	607	649	683
Overall Dollar-Based NRR (%)	100%	98%	96%
Core Customer NRR (%)	102%	99%	98%
$100K+ Customer NRR (%)	108%	103%	99%
RPO ($USD Millions)	—	$394.5	$405.7
Deferred Revenue (Total, $USD Millions)	—	$289.2	$282.1
Cash + Marketable Securities ($USD Millions)	—	~$521.6	~$455.3

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue ($USD Millions)	FY2025	$719–$721	$723–$724	Raised
Non-GAAP Operating Loss ($USD Millions)	FY2025	$58–$55	$46–$45	Improved (lower loss)
Non-GAAP EPS ($)	FY2025	−$0.20 to −$0.19	−$0.15 to −$0.14	Improved (lower loss)
Revenue ($USD Millions)	Q4 FY2025	N/A	$187.5–$188.5	New
Non-GAAP Operating Loss ($USD Millions)	Q4 FY2025	N/A	$6.5–$5.5	New
Non-GAAP EPS ($)	Q4 FY2025	N/A	−$0.02 to −$0.01	New
Free Cash Flow	Q4 FY2025	“Durable positive FCF by end of Q4” ; “Full-year FCF positive” (Q1)	“On track to deliver positive FCF for Q4”	Maintained Q4; full-year language narrowed

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 & Q2)	Current Period (Q3)	Trend
AI initiatives (AI Teammates → AI Studio)	Previewed AI workflows/AI Studio; beta with enterprise interest; seat + add-on + usage-based monetization path	AI Studio launched; consumption pricing with platform fee + credit tranches; early paid packages; aim for GA in late Q1 FY2026	Accelerating commercialization
Pricing & consumption model	Discussed shift to add-ons and usage-based AI revenue	Consumption credits (~$500 tranche units), platform fee for predictability; value not tied to seats	Strategic shift gaining traction
Macro & sales cycles	Longer sales cycles; deals pushed but remained in pipeline	Sales cycles roughly unchanged QoQ; stabilization vs robust recovery	Stable; cautious
Vertical diversification	Non-tech mid-teens growth; EMEA/Japan strength; government momentum; FedRAMP pursuit	Non-tech +15% YoY; manufacturing, energy, retail, media highlighted	Positive
Retention & NRR	Stabilization point; lapping tough comps	In-quarter NRR slightly better than Q2; overall NRR 96% (Core 98%; $100K+ 99%)	Stabilizing
Capital allocation	$150M repurchase program; CEO 10b5-1 plan to buy ASAN	Repurchased $55M in Q3; $75M remaining authorization	Ongoing buybacks

Management Commentary

Dustin Moskovitz (CEO): “The launch of AI Studio is the birth of a new category… unlocking a massive TAM and growth opportunity… we believe AI Studio has the potential to eclipse our current revenue scale over time.” .
Sonalee Parekh (CFO): “We delivered a solid quarter with stabilizing revenue growth… Non-GAAP operating margins improved YoY… we see significant potential for both re-acceleration of growth and operating margin expansion.” .
On consumption pricing: “Revenue potential isn’t tied to seat-based licensing… we expect AI Studio revenue from some customers to exceed their core seat-based license revenue in the near term.” .
On Q4/Cash: “Q3 free cash flow was −$18.2M… We expect positive free cash flow in Q4.” .

Q&A Highlights

AI Studio monetization and seat dynamics: Management expects consumption to be incremental and stickier, potentially unlocking seat expansions while not requiring broad end-user behavior changes .
Consumption credits sizing: Tranches around ~$500; platform fee covers typical use; heavier users negotiate commits/discounts akin to usage businesses .
NRR trajectory: In-quarter NRR improved; overall NRR should lift as tough comps roll off; AI Studio expected to be a tailwind over time .
Free cash flow path: Actions on hiring timing and third-party spend rationalization support Q4 positive FCF, with more meaningful margin improvements in FY2026 .
Demand environment: Stable rather than robust recovery; tech subsectors mixed; focus on what Asana can control and multi-product positioning .

Estimates Context

Wall Street consensus from S&P Global was unavailable at time of retrieval due to data limits. As a proxy, the company exceeded its own Q3 guidance on revenue, non-GAAP operating loss, and non-GAAP EPS, and raised full-year guidance .
Implication: Absent consensus, estimate models likely need upward revisions for FY revenue and improved non-GAAP margin trajectory given the guidance raise and in-quarter stabilization signals .

Key Takeaways for Investors

AI Studio is a meaningful new vector with consumption economics and early paid traction; expect additive NRR tailwind as GA approaches and use-cases compound across workflows .
Vertical diversification is working: non-tech +15% YoY; watch manufacturing, energy, retail, media for faster lands/expansions vs tech headwinds .
Cohort strength and RPO reacceleration (+21% YoY to $405.7M; 82% current) support near-term revenue visibility and improving in-quarter NRR .
FY2025 outlook raised and margins improving: non-GAAP operating loss guide tightened to −6% margin; Q4 positive FCF expected, with deeper efficiencies targeted in FY2026 .
Risk monitor: macro stability vs. recovery, elongated enterprise sales cycles, and gross margin drift; keep an eye on trajectory of deferred revenue and cash/marketable securities (~$455M) .
Capital allocation remains shareholder-friendly with $75M buyback capacity after $55M in Q3 repurchases .
Near-term trading: potential positive bias from guidance raise and AI Studio narrative; offset by Q3 cash burn and continued GAAP losses—focus on Q4 FCF delivery and AI Studio GA timeline .

Additional Relevant Q3 Press Releases

Recognized as a Leader in Gartner Magic Quadrant (Dec 5, 2024), supporting enterprise credibility and positioning .
Strategic partnership with Datacom (Nov 26, 2024) to enhance enterprise solutions in ANZ—supports channel and implementation scale in regulated/public sectors .
Upcoming investor event participation (Dec 9, 2024) .

Notes: All figures are GAAP unless stated otherwise. Non-GAAP reconciliations reflect adjustments primarily for stock-based compensation, employer payroll tax on RSUs, and certain non-cash/non-recurring items **[1477720_0001477720-24-000105_asana8-kex991q3fy25.htm:3]** **[1477720_0001477720-24-000105_asana8-kex991q3fy25.htm:4]** **[1477720_540877ff8e6245b8acfbd2ecc10aa2d8_4]** **[1477720_540877ff8e6245b8acfbd2ecc10aa2d8_5]**.

Sources: Q3 FY2025 8-K earnings release and exhibits ; Q3 FY2025 earnings call transcript –; Q3 press release –; Q2 FY2025 press release and transcript – –; Q1 FY2025 8-K earnings release –; Datacom partnership PR –; Gartner PR ; investor event PR .

Asana, Inc. (ASAN)·Q3 2025 Earnings Summary