Asana shares tumble on weak third quarter earnings outlook

Investing.com -- Asana Inc (NYSE: ASAN) shares fell 14% in after-hours trading Thursday after the company issued third quarter earnings guidance that fell short of analyst expectations, despite beating estimates for the second quarter.

The work management software company reported second quarter revenue of $216.4 million, up 10% YoY and above the consensus estimate of $214.15 million. Adjusted EPS came in at $0.10, topping the analyst estimate of $0.09. However, Asana projected third quarter adjusted EPS of $0.08, below the consensus of $0.09. The company expects third quarter revenue of $217 million to $219 million, with a midpoint of $218 million slightly below the consensus estimate of $218.2 million.

"Our core business continues to strengthen, with improving retention, accelerating growth in our upmarket motion and broad-based momentum across industries and geographies," said Dan Rogers, Chief Executive Officer of Asana.

For fiscal 2027, Asana raised its full-year revenue guidance to $858.5 million to $863.5 million, with a midpoint of $861 million in line with the consensus of $860.9 million. The company maintained its full-year adjusted EPS outlook at $0.37, matching analyst expectations.

Asana's adjusted operating margin expanded approximately 300 basis points YoY to 10% in the second quarter. GAAP operating loss improved to $41.2 million, or 19% of revenues, compared to a loss of $49.5 million, or 25% of revenues, in the same quarter last year.

The company's dollar-based net retention rate was 97% overall, with Core customers at 98%. Asana added customers spending $100,000 or more on an annualized basis grew 16% YoY to 890. Core customers, defined as those spending $5,000 or more annually, increased 7% YoY to 26,778.

Asana announced the launch of Agentic Work Management in the third quarter, bringing AI Teammates, AI Studio and Asana Dash to every paid tier.

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