Despite releasing better-than-expected financial results for the October quarter, work management software company Asana is facing a decline in its stock price due to ongoing macroeconomic challenges that have slowed its growth rate.
Financial Performance
In the latest quarter, Asana reported revenue of $166.5 million, marking an 18% increase compared to the same period last year. This surpassed the company’s guidance range of $163.5 million to $164.5 million and also exceeded the Street consensus estimate of $164.1 million.
On an adjusted basis, Asana recorded a narrower loss of 4 cents per share in the quarter, surpassing its projected loss of 10 to 11 cents per share. Analysts had anticipated a loss of 11 cents per share.
Strong Guidance for January Quarter
Asana’s guidance for the upcoming January quarter is equally positive. The company expects revenue for the period to range between $167 million and $168 million, beating the consensus estimate of $166.9 million. Additionally, Asana anticipates an adjusted loss of 9 to 10 cents per share, outperforming the Street’s forecast for a loss of 16 cents per share.
Revised Full-Year Outlook
The company has also revised its full-year outlook for the fiscal year ending in January. Asana now forecasts revenue to be between $648.5 million and $649.5 million, with a loss of 26 to 27 cents per share. This is an improvement from the previous guidance, which predicted revenue of $642 million to $648 million and a loss of 39 to 42 cents per share.
CEO’s Perspective
CEO Dustin Moskovitz acknowledged the ongoing challenges in the macroeconomic landscape, particularly affecting their renewal base, but noted signs of stabilization in new business. Chief Operating Officer Anne Raimondi highlighted that deal cycles are becoming longer, and budgets remain a significant factor in decision-making.
Impact on Net-Retention Rates
CFO Tim Wan stated that macroeconomic issues continue to impact Asana’s net-retention rates, a measure of repeat business. Asana reported that its net retention rate for the quarter was “over 100%,” reaching over 120% for customers spending more than $100,000 annually with the company.