Summary
Asana closed its fiscal 2022 third quarter with record revenue. Revenue was $100.3 million for the quarter ended October 31, 2021, up 70% from the prior-year quarter, and the company said quarterly revenue surpassed $100 million. Year-to-date revenue was $266.5 million, up 68% from the prior-year period. The company ended the quarter with over 114,000 paying customers, up from over 89,000 a year earlier, and added 7,000 paying customers during the quarter. Paid seats exceeded two million. Customers spending $5,000 or more on an annualized basis grew to 14,143, up 58% year over year, and revenue from those customers rose 96%. Customers spending $50,000 or more grew to 739, up 132%. Dollar-based net retention was over 120% overall, 130% for the $5,000-plus group, and over 145% for the $50,000-plus group.
Asana also unveiled the Enterprise Work Graph at its Asana Scale event. The suite includes a new Goals API, Workflow Builder and Library, Universal Reporting on data trends and workflows over time, and additional data security and scalability features. The company expanded its Asana Partners Enterprise IT ecosystem with new integrations with Splunk and Netskope. It was named a leader in the IDC MarketScape Worldwide Collaboration and Community Applications 2021 vendor assessment. It also appeared on Fast Company's first annual list of Brands That Matter and Inc. Magazine's inaugural list of Best-Led Companies in 2021.
Gross margin expanded to 90.5% from 87.6% in the prior-year quarter. GAAP operating loss was $68.1 million, down from $61.9 million, and the loss widened. GAAP net loss narrowed to $69.3 million from $73.3 million. GAAP net loss per diluted share was $0.37, compared with $0.65 in the prior-year quarter, so the per-share loss narrowed. On a non-GAAP basis, operating loss was $41.3 million versus $37.3 million, net loss was $42.5 million versus $38.3 million, and net loss per share was $0.23 versus $0.34. The non-GAAP figures exclude stock-based compensation and related payroll taxes, among other items. The company said revenue growth came from new paying customers, a continued shift in the sales mix toward larger customer contracts, and expansion within existing customers.
Cash flow and billing metrics showed improvement. Operating cash flow was negative $28.5 million, up from negative $34.4 million in the prior-year quarter. Free cash flow was negative $29.5 million, compared with negative $19.5 million. Capital expenditures were $10.7 million, down from $22.8 million. Deferred revenue rose 71.7% to $154.7 million from $90.1 million a year earlier. That deferred revenue balance suggests customers continue to commit to the platform ahead of revenue recognition. The company said gross margin increased because it grew revenues, managed third-party hosting costs more efficiently, and realized economies of scale from its technology and infrastructure.
Management issued guidance for the fourth quarter and the full fiscal year. For the fourth quarter of fiscal 2022, Asana expects revenue growth of 53% to 54%, a non-GAAP operating loss of $53.0 million to $51.0 million, and non-GAAP net loss per share of $0.28 to $0.27, assuming basic and diluted weighted average shares of approximately 187 million. For the full fiscal year 2022, management expects revenue growth of 63% to 64%, a non-GAAP operating loss of $166.0 million to $164.0 million, and non-GAAP net loss per share of $0.96 to $0.95, assuming approximately 176 million shares. The fourth-quarter outlook points to slower growth than the 70% reported this quarter.
Risks remain. The company cites the COVID-19 pandemic as a factor that could affect global IT spending, lengthen sales cycles, reduce subscription value or duration, hurt collections, cause paying customers to fail, limit travel by the direct sales force, and raise contraction or attrition. Asana also faces execution risks around sustaining growth, attracting and retaining customers, increasing sales to customers, developing and releasing new products, scaling the platform, growing self-service adoption, maintaining partner relationships, competing in a rapidly evolving market, and expanding internationally.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q3 FY2022 | Q2 FY2022 | QoQ | Q3 FY2021 | YoY |
|---|---|---|---|---|---|
| Revenue | $100.3M | $89.5M | +12.1% | $58.9M | +70.3% |
| Gross profit | $90.8M | $79.6M | +14.0% | $51.6M | +75.9% |
| Gross margin | 90.5% | 89.0% | +1.5 pp | 87.6% | +2.9 pp |
| Research & development | $53.8M | $48.5M | +11.0% | $33.0M | +63.0% |
| Sales & marketing | $73.3M | $63.9M | +14.6% | $48.0M | +52.6% |
| General & administrative | $31.8M | $27.3M | +16.4% | $32.5M | -2.2% |
| Total operating expenses | $158.8M | $139.7M | +13.7% | $113.5M | +39.9% |
| Operating income (loss) | -$68.1M | -$60.1M | -13.4% | -$61.9M | -9.9% |
| Operating margin | -67.9% | -67.1% | -0.8 pp | -105.1% | +37.3 pp |
| Net income (loss) | -$69.3M | -$68.4M | -1.4% | -$73.3M | +5.5% |
| Net margin | -69.0% | -76.4% | +7.3 pp | -124.4% | +55.4 pp |
| Diluted EPS | -$0.37 | -$0.40 | +$0.03 | — | — |
| Net retention rate | 120.0% | 118.0% | +2.0 pp | 115.0% | +5.0 pp |
Risks
The company expects its revenue growth rate to decline in future periods while it continues to invest for growth. For the nine months ended October 31, 2021, operating loss widened to $178.1 million from $124.6 million and net loss widened to $198.3 million from $150.2 million in the prior-year period.
As the company focuses on larger organizations, sales efforts require greater cost, longer sales cycles, and less predictability. MD&A reports customers spending over $50,000 grew to 739 as of October 31, 2021 from 318 as of October 31, 2020.
The work management market is highly competitive with low barriers to entry, and competitors include larger productivity suites with greater resources that may use aggressive pricing or COVID-related price concessions. Failure to compete could reduce revenues, gross profit, gross margin, and market share.
Substantially all revenues come from a single work management solution, so demand shifts, competitive pressure, or customer decisions to build internal tools could disproportionately harm results. Larger customers may also develop or acquire their own tools instead of using the platform.
Success depends on key personnel including co-founder, President, CEO, and Chair Dustin Moskovitz; competition for executive, engineering, and sales talent is intense. Equity awards may be less effective as retention incentives as the company matures, and the company does not have key person insurance.
COVID-19 continues to create uncertainty and could reduce global IT spending, lengthen sales cycles, reduce subscription value or duration, and hurt collections. MD&A notes overall dollar-based net retention returned to pre-pandemic levels after declining early in the pandemic, but the duration and extent of the impact remain unknown.
SaaS KPIs
All quarters →Free cash flow
Non-GAAP operating margin
Dollar-Based Net Retention Rate (Overall)
Paid Users
Dollar-Based Net Retention Rate (Customers Spending $5,000+)
Dollar-Based Net Retention Rate (Customers Spending $50,000+)
Summary, forecast, risks and KPIs are extracted from Asana, Inc.'s SEC filings for Q3 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.