EPS of $-0.17 increased by 39.3% from previous year
Gross margin of 89.7%
Net income of -40.02M
""Q1 was a milestone quarter. We achieved nonâGAAP profitability for the first time and AI Studio reached general availability in Q1, surpassing $1 million in ARR, demonstrating powerful early momentum."" - Dustin Moskovitz
Asana Inc (ASAN) QQ1 2026 Results Analysis â AI Studio Momentum, Landmark Enterprise Renewal, and Margin Expansion Driving LongâTerm Growth
Executive Summary
Asana reported a transformative QQ1 2026, marked by the first nonâGAAP profitability in the companyâs history and AI Studio reaching over $1 million in ARR. Revenue rose 9% YoY to $187.3 million, with nonâGAAP operating margin turning positive (4%) versus a prior operating loss and free cash flow margin improving to 5%. The results underscore the companyâs leverage in AIâdriven workflows embedded in Asana, a robust enterprise and international growth trajectory, and visible longâterm profitability dynamics as AI Studio transitions from a product line to a growth engine. Management highlighted meaningful enterprise wins, accelerated AI adoption, and a differentiated approach to AI with humanâinâtheâloop controls and deep work graph context, while also signaling nearâterm NRR headwinds tied to a large multiâyear renewal and macroârelated downgrades. The guide for FY2026 reflects an improving but cautious macro backdrop, with revenue growth guided to 7â9% for the year and nonâGAAP operating margin raised to at least 5.5%, contingent on execution and macro stability. The companyâs strategic bets center on expanding AI Studio adoption, growing the channel, and delivering priceâtoâvalue alignment through foundational service plans and tiered AI Studio offerings.
Key Performance Indicators
Revenue
187.27M
QoQ: -0.57% | YoY:8.59%
Gross Profit
168.04M
89.73% margin
QoQ: -0.41% | YoY:8.66%
Operating Income
-43.90M
QoQ: 30.96% | YoY:33.65%
Net Income
-40.02M
QoQ: 35.76% | YoY:37.20%
EPS
-0.17
QoQ: 37.04% | YoY:39.29%
Revenue Trend
Margin Analysis
Key Insights
Revenue: $187.3 million in Q1 FY2026, up 9% YoY; guided Q2 revenue $192â$194 million (+7% to +8% YoY); fullâyear revenue guidance raised to $775â$790 million (+7% to +9%).
Profitability: Q1 nonâGAAP operating income of about $8.1 million (nonâGAAP margin ~4%), versus GAAP operating income of â$43.9 million; net income of â$40.0 million; GAAP EPS â$0.17; nonâGAAP EPS guidance 4â5 cents for Q2, and FY2026 net income per share of $0.22 (diluted).
Cash flow: Adjusted free cash flow of $9.9 million (5% margin); operating cash flow $6.764 million; net change in cash +$9.216 million; cash balance ~ $194 million at period end; total debt $259.3 million; cash and cash equivalents ~$194 million; net debt â $65.5 million.
Balance sheet health: Total assets $877.1 million; total liabilities $640.8 million; stockholdersâ equity $236.3 million; RPO $420.7 million (up 11% YoY); CRPO 83% of RPO; pro forma RPO ~$521 million (up 37% YoY).
Financial Highlights
- Revenue: $187.3 million in Q1 FY2026, up 9% YoY; guided Q2 revenue $192â$194 million (+7% to +8% YoY); fullâyear revenue guidance raised to $775â$790 million (+7% to +9%).
- Gross margin: ~89.7% (GAAP gross margin â 0.8973).
- Profitability: Q1 nonâGAAP operating income of about $8.1 million (nonâGAAP margin ~4%), versus GAAP operating income of â$43.9 million; net income of â$40.0 million; GAAP EPS â$0.17; nonâGAAP EPS guidance 4â5 cents for Q2, and FY2026 net income per share of $0.22 (diluted).
- Cash flow: Adjusted free cash flow of $9.9 million (5% margin); operating cash flow $6.764 million; net change in cash +$9.216 million; cash balance ~ $194 million at period end; total debt $259.3 million; cash and cash equivalents ~$194 million; net debt â $65.5 million.
- Balance sheet health: Total assets $877.1 million; total liabilities $640.8 million; stockholdersâ equity $236.3 million; RPO $420.7 million (up 11% YoY); CRPO 83% of RPO; pro forma RPO ~$521 million (up 37% YoY).
- Customer metrics: 24,297 core customers; 728 customers spending $100k+; core revenue 75% of total; dollarâbased net retention rate (NRR) 95% (core NRR 96%, $100k+ NRR 95%).
- AI Studio: AI Studio ARR > $1 million; crossâvertical demand with early wins in manufacturing, retail, technology, financial services, and healthcare; AI Studio ARR sometimes exceeding seatâbased ARR; Smart Workflow Gallery launched; AI Studio Plus tier introduced; threeâtier pricing (Basic, Plus, Pro).
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
187.27M
8.59%
-0.57%
Gross Profit
168.04M
8.66%
-0.41%
Operating Income
-43.90M
33.65%
30.96%
Net Income
-40.02M
37.20%
35.76%
EPS
-0.17
39.29%
37.04%
Key Financial Ratios
Net Income vs. Revenue
Expense Breakdown
Management Commentary
- AI Studio as a strategic growth lever: Management emphasized AI Studio ARR surpassing $1M and the potential for usageâbased revenue beyond perâseat licenses, driven by a broader AI strategy and the Smart Workflow Gallery.
- Enterprise momentum and pricing strategy: A landmark $100M+ renewal (TCV) over three years was closed with a major global employer, providing longâterm visibility into FY27âFY28, though with a modest ACV downgrade that pressures Q2 NRR in the $100k+ cohort and tech vertical.
- Product and GTM evolution: Introduction of AI Studio Plus, a threeâtier AI offering (Basic, Plus, Pro), and foundational service plans aimed at improving customer health, retention, and monetization. The Smart Workflow Gallery accelerates AI Studio adoption by providing prebuilt workflows; partner channel momentum is contributing to deal flow (roughly 40% of APAC deals have partners attached).
- Operating efficiency and margin expansion: Q1 marked a substantial improvement in operating margins (nonâGAAP) and a disciplined approach to marketing spend and cloud costs, contributing to a 1,300+ basis point YoY improvement in nonâGAAP operating margin. The company signaled continued margin expansion through goâtoâmarket efficiency and vendor optimization.
- Market backdrop and outlook: Management noted stable demand environment with early signs of increased buyer scrutiny and longer decision cycles, particularly in enterprise and tech verticals; pipeline remains healthy with strong international demand (EMEA and Japan). The guidance acknowledges macro risk and expands the range to reflect potential deterioration while maintaining a path to profitable growth.
"Q1 was a milestone quarter. We achieved nonâGAAP profitability for the first time and AI Studio reached general availability in Q1, surpassing $1 million in ARR, demonstrating powerful early momentum."
â Dustin Moskovitz
"Looking to H2, we'll be introducing new goalâoriented agentic collaborators, AI teammates, rounding out the full spectrum of AI capabilities inside Asana."
â Dustin Moskovitz
Forward Guidance
- Nearâterm outlook: Q2 revenue guidance of $192â$194 million (7â8% YoY growth) with nonâGAAP operating income of $8â$10 million (4â5% margin). FY2026 revenue guidance raised to $775â$790 million (7â9% YoY) and nonâGAAP operating margin raised to at least 5.5% (versus prior floor of 5%), with fullâyear diluted net income per share of $0.22 and ~243 million shares outstanding.
- Key growth drivers: AI Studio expansion (Plus tier, selfâserve later in Q3), broader adoption across verticals, and the Smart Workflow Gallery enabling faster timeâtoâvalue. Channel expansion and addâons (foundational service plans, resource management in Q3) are expected to improve priceâtoâvalue alignment and support net dollar retention in the longer term.
- Risks and caveats: Macro uncertainty may magnify downgrades, particularly in enterprise and tech verticals; large renewal ACV downgrades can pressure Q2/Q3 NRR and offset some addâon/revenue mix benefits in the near term. Management asserts levers exist to preserve profitability (cost discipline, pricing, and operating leverage) if macro conditions worsen.
- Investor takeaway: The QQ1 results establish a framework for profitability and growth through AI Studio as a longâterm growth engine, supported by a strong balance sheet and significant RPO visibility. Watch AI Studio adoption metrics, GM/operating margin trajectory, NRR progression in H2, and the effectiveness of the Plus tier and foundational services in sustaining growth and retention.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
ASAN Focus
89.73%
N/A
N/A
N/A
BILL
82.00%
6.13%
0.22%
156.40%
DDOG
79.30%
-1.63%
0.85%
345.33%
GTLB
88.90%
-31.10%
-9.62%
-37.97%
TEAM
81.70%
-2.69%
-12.00%
-83.56%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Over the medium term, Asanaâs trajectory hinges on translating AI Studio adoption into durable, multiâproduct ARR growth while sustaining high gross margins and improving operating leverage. The large enterprise renewal enhances visibility into FY27âFY28 and validates Asana as a scalable platform for humanâAI coordination. The companyâs success will depend on: 1) accelerating AI Studio usage via Plus tier and selfâserve channels, 2) deepening channel partnerships to drive AI Studio adoption and renewals, 3) maintaining priceâtoâvalue alignment with foundational plans and addâons, and 4) sustaining retention improvements through customer health initiatives. Against this backdrop, the stock could outperform if AI Studio monetizes more aggressively through usageâbased revenue, while monitoring risks from macro headwinds, NRR volatility around large deals, and competition. In the near term, expect quarterly variability in NRR and bookings as large renewals impact results, but with a clear path to profitability expansion and longâterm growth driven by AIâenabled workflows.
Key Investment Factors
Growth Potential
Significant longâterm upside from AI Studio as a platform for humanâAI coordination. Expected to drive usageâbased revenue beyond seat licenses via Plus and Pro tiers, AI teammates, and prebuilt workflows (Smart Workflow Gallery). Large enterprise deployment (e.g., $100M+ renewal) expands addressable market and provides multiâyear visibility into FY27âFY28; AI Studio adoption across SMB and international markets (EMEA, APAC) offers diversified growth.
Profitability Risk
Nearâterm NRR headwinds due to the large renewal's ACV downgrade and ongoing enterprise/midâmarket downgrades; macro uncertainty could elongate sales cycles and pressure budgets, especially in tech and enterprise segments. Revenue mix sensitivity to renewals and the pace of AI Studio utilization could create volatility in quarterly results. Competition from point solutions and other AIâenriched platforms may pressure adoption unless Asana differentiates through integrated workflow context (work graph) and humanâinâtheâloop governance.
Financial Position
Strong balance sheet with cash and marketable securities around $471 million and total debt ~$259 million; net debt ~ $65.5 million; RPO $420.7 million (up 11% YoY) with pro forma RPO ~$521 million (up 37% YoY); CRPO 83% of RPO, providing revenue visibility. Gross margin near 90% with improving operating leverage (nonâGAAP), and free cash flow margin of 5% in Q1; share repurchase program enhanced by $100 million in May.â},
SWOT Analysis
Strengths
Industryâleading gross margins near 90% and strong variable cost leverage.
Strong enterprise traction including a landmark $100M+ renewal (TCV) over three years.
Clear AI strategy with AI Studio embedded in workflows, not a standalone tool; proven multiâvertical demand.
Robust balance sheet and positive free cash flow generation potential.
Global footprint with improving international growth (EMEA and Japan) and growing channel ecosystem.
Weaknesses
Nearâterm NRR headwinds driven by large renewal ACV downgrades and enterprise downgrades.
GAAP profitability remains negative in the near term; reliance on nonâGAAP adjustments for margins.
Macro sensitivity and potential elongation of software buying cycles in enterprise segment.
Opportunities
AI Studio plus tiered pricing (Basic/Plus/Pro) to broaden addressable market, including SMBs and selfâserve channels.
Smart Workflow Gallery and foundational service plans to uplift retention and addâon bookings.
Crossâvertical expansion (manufacturing, retail, healthcare, financial services) and international growth.
Channel partnerships acting as both deal accelerants and AI Studio expansion engines.
Threats
Competition from other AIâenabled work management or point solutions requiring broader organizational buyâin.
Macro downside risks (budget tightening, enterprise consolidation) that could dampen demand and renewals.
Execution risk in scaling AI Studio adoption and maintaining priceâtoâvalue alignment across customers.