Summary
Asana reported record first quarter fiscal 2022 revenue of $76.7 million, up 61% year over year. Gross profit rose 65.7% to $68.8 million, and gross margin was 89.7%, up 2.7 percentage points. Non-GAAP gross margin was 89.8%, compared with 87.1% a year earlier. The quarter ended April 30, 2021 with over 100,000 paying customers. Customers spending $5,000 or more on an annualized basis reached 11,272, up 53% year over year, and they contributed about 64% of revenues for the three months then ended. Customers spending $50,000 or more reached 485, up 92%. The top 100 customers accounted for approximately 13% of revenues, compared with 10% a year earlier.
Product and partner moves accompanied the customer growth. Asana announced Universal Reporting, which gives leaders real-time visibility into work across an organization. It introduced Asana Partners with over 200 Technology Partners, including new integrations with Zendesk, ServiceNow, Adobe, Canva, InVision, Looker, and Lucidchart. It launched a Channel Partner network across 75 countries. It also added Traditional Chinese, Russian, Dutch, and Polish languages, with three more languages coming soon.
Profitability remained negative. GAAP operating loss widened to $50.0 million, and operating margin was negative 65.2%, down 4.2 percentage points. GAAP net loss widened to $60.7 million. Diluted loss per share narrowed to $0.37. Non-GAAP operating loss was $33.3 million, or 43% of revenues, compared with $23.9 million, or 50% of revenues, a year earlier. Non-GAAP net loss was $33.8 million, and non-GAAP net loss per share was $0.21. The non-GAAP measures exclude stock-based compensation and related employer payroll tax, amortization of debt discount, non-cash interest, and direct listing expenses.
Cash flow improved from a year earlier. Operating cash flow was negative $7.4 million, up 59.0% year over year. Free cash flow was negative $7.7 million, compared with negative $17.1 million a year earlier. Capital expenditures were $17.0 million, up 715.4%, largely for the build-out of the corporate headquarters in San Francisco. Deferred revenue was $125.9 million at April 30, 2021. Overall dollar-based net retention was over 115%, retention for customers spending $5,000 or more was 123%, and retention for customers spending $50,000 or more was over 140%. The overall retention rate declined from over 120% a year earlier, which the company linked to the COVID-19 pandemic and its disproportionate impact on smaller businesses.
Guidance calls for solid but slower growth. For the second quarter of fiscal 2022, Asana expects revenues of $81.0 million to $83.0 million, representing year-over-year growth of 56% to 60%. The company guides to a non-GAAP operating loss of $44.0 million to $42.0 million and a non-GAAP net loss per share of $0.27 to $0.26, assuming weighted average shares outstanding of approximately 163 million. For the full fiscal year 2022, Asana expects revenues of $336.0 million to $340.0 million, representing year-over-year growth of 48% to 50%. It said it cannot reconcile non-GAAP outlook measures to GAAP without unreasonable effort.
Risks remain centered on growth and competition. Asana cites its ability to sustain growth, attract and retain customers, increase sales to existing customers, develop and release new products, scale its platform, grow through its self-service model, maintain partner relationships, expand internationally, and compete in a rapidly evolving market. The COVID-19 pandemic could continue to affect demand, sales cycles, subscription durations, collections, customer attrition, and IT spending. The company also expects research and development and sales and marketing expenses to increase in dollar amount, which may keep profitability under pressure as it invests.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2022 | Q4 FY2021 | QoQ | Q1 FY2021 | YoY |
|---|---|---|---|---|---|
| Revenue | $76.7M | $68.4M | +12.1% | — | — |
| Gross profit | $68.8M | $60.2M | +14.3% | — | — |
| Gross margin | 89.7% | 88.0% | +1.7 pp | — | — |
| Research & development | $40.0M | $39.8M | +0.4% | — | — |
| Sales & marketing | $56.8M | $53.5M | +6.1% | — | — |
| General & administrative | $22.0M | $17.8M | +23.5% | — | — |
| Total operating expenses | $118.7M | $111.1M | +6.8% | — | — |
| Operating income (loss) | -$50.0M | -$51.0M | +1.9% | — | — |
| Operating margin | -65.2% | -74.5% | +9.4 pp | — | — |
| Net income (loss) | -$60.7M | -$61.5M | +1.4% | — | — |
| Net margin | -79.1% | -90.0% | +10.9 pp | — | — |
| Diluted EPS | -$0.37 | — | — | — | — |
| Net retention rate | 115.0% | 115.0% | ±0.0 pp | — | — |
Risks
COVID-19 has disrupted operations and customer demand, with a disproportionate impact on smaller businesses. MD&A states the dollar-based net retention rate declined to over 115% as of April 30, 2021 from over 120% as of April 30, 2020, and the filing notes longer sales cycles and customers seeking lower prices.
Dollar-based net retention rate declined year over year to over 115% as of April 30, 2021, driven by COVID-19 and pressure on smaller customers. Further contraction or attrition could slow revenue growth.
Net loss widened to $60.7 million for the three months ended April 30, 2021 from $35.8 million in the prior-year quarter, and operating loss widened to $50.0 million from $29.1 million as operating expenses rose 68% to $118.7 million. Accumulated deficit was $602.1 million as of April 30, 2021.
The company expects its revenue growth rate to decline in future periods. Although revenue increased 60.7% to $76.7 million for the three months ended April 30, 2021, the filing states recent growth rates may not be indicative of future growth and depends on widespread adoption of work management software.
The work management market is highly competitive, fragmented, and has relatively low barriers to entry. Competitors may have greater resources, offer lower prices or concessions, or bundle work management into productivity suites, which could reduce revenue, gross margin, and market share.
The company is focusing on larger enterprise customers, which requires costly sales efforts, longer sales cycles, and greater customization and support. COVID-19 has also limited travel and in-person meetings, interrupting sales activity.
Top 100 customers accounted for approximately 13% of revenues for the three months ended April 30, 2021, up from 10% for the three months ended April 30, 2020, increasing customer concentration risk. Loss of key customers could harm results.
Data protection obligations are expanding, including GDPR, CCPA, CPRA, and cross-border transfer restrictions following Schrems II. Inability to transfer personal information from Europe could decrease demand and increase compliance costs.
The company depends on key personnel, especially co-founder, President, CEO, and Chair Dustin Moskovitz. Competition for executive, engineering, and sales personnel in the San Francisco Bay Area is intense, and equity incentives may be less effective.
Capital expenditures increased to $17.0 million for the three months ended April 30, 2021 from $2.1 million in the prior-year quarter, largely for construction in progress. The company expects approximately $392.4 million of future minimum payments and capital commitments related to its San Francisco headquarters lease as of April 30, 2021.
The $450.0 million senior mandatory convertible promissory notes issued in January and June 2020 to a trust affiliated with the CEO could convert into an aggregate 17,012,822 to 27,220,504 shares of Class B common stock, resulting in dilution. An aggregate $534.5 million is due upon settlement.
SaaS KPIs
All quarters →Free cash flow
Non-GAAP operating margin
Net Revenue Retention
Non-GAAP gross margin
Paying Customers
Summary, forecast, risks and KPIs are extracted from Asana, Inc.'s SEC filings for Q1 FY2022 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 2, 2026.