Asana (ASAN - Free Report) reported a loss of 26 cents in third-quarter fiscal 2023, beating the Zacks Consensus Estimate by 18.75% but wider than the year-ago quarter’s loss of 23 cents per share.
Total revenues jumped 41% year over year to $141.4 million and surpassed the consensus mark by 1.78%. Unfavorable forex negatively impacted revenues by 200 basis points (bps).
Revenues from the United States grew 47% year over year, accounting for 61% of the company’s total revenues. International revenues grew 33% year over year, accounting for 39% of total revenues.
Asana’s business expansion slowed down in the reported quarter as its customers faced challenges from slowing economic conditions globally.
ASAN shares were down 18.64% in pre-market trading following the results.
Quarter Details
In the fiscal third quarter, the number of customers spending $5K or more on an annualized basis grew to 18,700, up 32% year over year. Revenues from these customers soared 52% year over year and accounted for 73% of total revenues.
The number of customers spending $100K or more on an annualized basis grew to 493, up 78% year over year.
Overall, the dollar-based net retention rate was more than 120%. Dollar-based net retention rate for customers with $5K or more in annualized spending was 128%. Dollar-based net retention rate for customers with $100K or more in annualized spending was more than 140%.
Non-GAAP gross margin contracted 100 bps year over year to 89.6%.
Non-GAAP research and development expenses, as percentage of revenues, were 35.5%, down 350 bps year over year.
Sales and marketing, as a percentage of revenues, increased 410 bps year over year to 69.7%.
General and administrative expenses, as a percentage of revenues, declined 560 bps year over year to 21.6%.
Non-GAAP operating loss was $52.6 million, wider than the $41.3 million reported in the year-ago fiscal quarter.
Balance Sheet
Asana had $509.1 million in cash and cash equivalents as of Oct 31, 2022 compared with $239 million as of Jul 31, 2022.
In the fiscal third quarter, free cash outflow was $48.5 million compared with $42.3 million in the previous quarter.
Guidance
For fourth-quarter fiscal 2023, Asan expects revenues in the range of $144-$146 million, which indicates year-over-year growth of 30% at the midpoint.
Non-GAAP operating loss is expected in the range of $60-$57 million while non-GAAP net loss is anticipated to be 28-27 cents per share.
In the current quarter, Asana reduced global headcount by 9% as part of its restructuring initiative, which will result in non-recurring restructuring charges of $9-$11 million, expected to be incurred in the fourth quarter of fiscal 2023.
For fiscal 2023, revenues are expected to be $541-$543 million, indicating year-over-year growth of 43%.
Non-GAAP operating loss is expected in the range of $230-$227 million and non-GAAP net loss is anticipated between $1.15 and $1.14 per share.
Zacks Rank & Stocks to Consider
Currently, Asana carries a Zacks Rank #3 (Hold).
ASAN shares have declined 75.8% year to date, underperforming the Zacks Computer & Technology sector’s decline of 30.2%.
Some better-ranked stocks in the sector are Richardson Electronics (RELL - Free Report) , Sanmina (SANM - Free Report) and Super Micro Computer (SMCI - Free Report) . All three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of Richardson Electronics, Sanmina and Super Micro Computer are up 96%, 62.5% and 105.9%, respectively, on a year-to-date basis.
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Asana (ASAN - Free Report) reported a loss of 26 cents in third-quarter fiscal 2023, beating the Zacks Consensus Estimate by 18.75% but wider than the year-ago quarter’s loss of 23 cents per share.
Total revenues jumped 41% year over year to $141.4 million and surpassed the consensus mark by 1.78%. Unfavorable forex negatively impacted revenues by 200 basis points (bps).
Revenues from the United States grew 47% year over year, accounting for 61% of the company’s total revenues. International revenues grew 33% year over year, accounting for 39% of total revenues.
Asana’s business expansion slowed down in the reported quarter as its customers faced challenges from slowing economic conditions globally.
ASAN shares were down 18.64% in pre-market trading following the results.
Quarter Details
In the fiscal third quarter, the number of customers spending $5K or more on an annualized basis grew to 18,700, up 32% year over year. Revenues from these customers soared 52% year over year and accounted for 73% of total revenues.
The number of customers spending $100K or more on an annualized basis grew to 493, up 78% year over year.
Overall, the dollar-based net retention rate was more than 120%. Dollar-based net retention rate for customers with $5K or more in annualized spending was 128%. Dollar-based net retention rate for customers with $100K or more in annualized spending was more than 140%.
Non-GAAP gross margin contracted 100 bps year over year to 89.6%.
Non-GAAP research and development expenses, as percentage of revenues, were 35.5%, down 350 bps year over year.
Sales and marketing, as a percentage of revenues, increased 410 bps year over year to 69.7%.
General and administrative expenses, as a percentage of revenues, declined 560 bps year over year to 21.6%.
Non-GAAP operating loss was $52.6 million, wider than the $41.3 million reported in the year-ago fiscal quarter.
Balance Sheet
Asana had $509.1 million in cash and cash equivalents as of Oct 31, 2022 compared with $239 million as of Jul 31, 2022.
In the fiscal third quarter, free cash outflow was $48.5 million compared with $42.3 million in the previous quarter.
Guidance
For fourth-quarter fiscal 2023, Asan expects revenues in the range of $144-$146 million, which indicates year-over-year growth of 30% at the midpoint.
Non-GAAP operating loss is expected in the range of $60-$57 million while non-GAAP net loss is anticipated to be 28-27 cents per share.
In the current quarter, Asana reduced global headcount by 9% as part of its restructuring initiative, which will result in non-recurring restructuring charges of $9-$11 million, expected to be incurred in the fourth quarter of fiscal 2023.
For fiscal 2023, revenues are expected to be $541-$543 million, indicating year-over-year growth of 43%.
Non-GAAP operating loss is expected in the range of $230-$227 million and non-GAAP net loss is anticipated between $1.15 and $1.14 per share.
Zacks Rank & Stocks to Consider
Currently, Asana carries a Zacks Rank #3 (Hold).
ASAN shares have declined 75.8% year to date, underperforming the Zacks Computer & Technology sector’s decline of 30.2%.
Some better-ranked stocks in the sector are Richardson Electronics (RELL - Free Report) , Sanmina (SANM - Free Report) and Super Micro Computer (SMCI - Free Report) . All three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of Richardson Electronics, Sanmina and Super Micro Computer are up 96%, 62.5% and 105.9%, respectively, on a year-to-date basis.
7 Best Stocks for the Next 30 Days
Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."
Since 1988, the full list has beaten the market more than 2X over with an average gain of +24.2% per year. So be sure to give these hand picked 7 your immediate attention.
See them now >>
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