Work management platform provider Asana (ASAN -0.19%) reported fiscal 2025 second-quarter earnings on Tuesday that showed a 10% year-over-year growth in revenue to $179.2 million. However, the company also reported increased generally accepted accounting principles (GAAP) operating and net losses year over year.
The quarter showed mixed results overall, with strategic developments in AI and customer acquisition as well as continuing profitability challenges.
| Metric | Q2 FY 2025 | Management Guidance | Q2 FY 2024 | Change (YOY) |
|---|---|---|---|---|
| Revenue | $179.2 million | $177-$178 million | $162.5 million | 10.3% |
| GAAP operating loss | $76.8 million | N/A | $73.4 million | N/A |
| Adj. operating loss | $15.7 million | $21-$23 million | $10.4 million | N/A |
| GAAP net loss | $72.2 million | N/A | $71.4 million | N/A |
| Adj. net loss per share | $0.05 | $0.08-$0.09 | $0.04 | N/A |
| Free cash flow | $12.8 million | N/A | $14.6 million | -12.3% |
Source: Asana. Note: Management expectations are based on guidance provided on May 30, 2024.
Asana’s Business Overview
Asana specializes in providing a work management platform that allows teams to organize, track, and manage their work. The company’s competitive edge lies in its unique technology, especially the Asana Work Graph, which maps how work is done within organizations. Recently, the company focused on integrating artificial intelligence (AI) capabilities, significantly enhancing its platform. Customer acquisition has been robust, particularly among high-revenue clients.
NYSE: ASAN
Key Data Points
Notable Developments in Q2
Asana's second-quarter revenue topped management expectations. This growth reflects solid market adoption and successful customer acquisition strategies. Asana reported a 17% year-over-year increase in customers spending $100,000 or more annually, reaching 649 customers.
Providing services to all those added customers helped boost the company's GAAP operating loss to $76.8 million from $73.4 million a year ago. The non-GAAP operating loss of $15.7 million came in below the anticipated $21 million to $23 million, showing improved operational efficiency. However, GAAP net loss rose slightly to $72.2 million, indicating challenges in controlling overall losses. The company also faced a reduction in free cash flow to $12.8 million from $14.6 million the previous year, showing stress in operational cash generation.
Asana’s integration of AI into its platform was a key focus this quarter. The launch of "Asana AI teammates" aims to leverage AI to enhance productivity. This initiative is part of its broader strategy to embed cutting-edge technology into its work management solutions.
Separately, Asana announced the appointment of Sonalee Parekh as Chief Financial Officer. Parekh will take over on Sept. 11, succeeding Tim Wan, who has served in the role since 2017. Wan will remain with the company in an advisory position to support the transition.
Looking Ahead
For fiscal 2025's Q3, Asana projects revenue between $180 million to $181 million, representing an 8% to 9% growth year over year. The company anticipates a non-GAAP operating loss between $18 million to $19 million and has projected a non-GAAP net loss per share of $0.07. Asana lowered the high end of its previous full-year revenue guidance to $721 million from $724 million while maintaining the low end at $719 million. That still suggests annual growth of about 10% at the midpoint.
Investors should focus on the company’s ability to manage costs and drive further AI innovations to sustain competitive advantages.
