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Asana (ASAN) Q2 Loss Narrower Than Expected, Revenues Up Y/Y
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Asana (ASAN - Free Report) reported second-quarter fiscal 2023 non-GAAP loss of 34 cents per share, narrower than the Zacks Consensus Estimate of a loss of 39 cents. However, the figure was wider than a loss of 23 cents reported in the year-ago fiscal quarter.
Asana reported revenues of $134.9 million in the fiscal second quarter, which surpassed the Zacks Consensus Estimate by 5.75%. The top line improved 51% from the year-ago fiscal quarter’s level.
In the fiscal second quarter, Asana's revenues were driven by its investments in the Enterprise and Business tier and solid growth in the United States. Customer spending increased in the reported quarter, which directly affected top-line growth.
Asana’s shares have fallen 74.5% year to date compared with the Zacks Internet Software industry’s decline of 51.1%. The Zacks Computer & Technology sector has slumped 30.2%.
In the fiscal second quarter, Asana’s product-based strategy paid off as ASAN is steadily attracting more customers with product launches.
Asana’s total number of paying customers grew 5,000 in the reported fiscal quarter. At the end of the fiscal first quarter, ASAN had more than 131,000 paying customers.
The number of customers spending $5K or more on an annualized basis grew to 18,040, up 41% year over year. Revenues from these customers soared 64% year over year.
The number of customers spending $50K or more on an annualized basis grew to 1,141, up 91% year over year.
Overall, dollar-based net retention rate was more than 120%. Dollar-based net retention rate for customers with $5K or more in annualized spending was 130%. Dollar-based net retention rate for customers with $50K or more in annualized spending was more than 145%.
Non-GAAP gross margin expanded 90 basis points (bps) from the year-ago fiscal quarter’s level to 90.1%.
Non-GAAP research and development margin was 37%, which expanded 130 bps from the year-ago fiscal quarter’s tally. Sales and marketing and general and administrative expenses margin were 70% and 29%, which decreased 10 bps and 160 bps, respectively.
Non-GAAP operating loss was $64.3 million, wider than $39.8 million reported in the year-ago fiscal quarter.
Balance Sheet
As of Jul 31, 2022, cash and cash equivalents, and marketable securities were $239 million compared with $283 million as of Apr 30, 2022.
In the second quarter, remaining performance obligations amounted to $261.6 million compared with the previous fiscal quarter’s $250 million.
As of Jul 31, 2022, free cash outflow was $42.3 million compared with $42.2 million as of Apr 30, 2022.
Guidance
For the third quarter of fiscal 2023, revenues are expected in the range of $138.5-$139.5 million, indicating growth between 38% and 39%.
Non-GAAP operating loss is projected to be $66-$63 million.
Non-Gaap net loss per share is expected between 33 cents per share and 32 cents.
For fiscal 2023, the company anticipates total revenues between $544 million and $547 million.
Zacks Rank & Stocks to Consider
Asana currently carries a Zacks Rank #3 (Hold).
Here are some better-ranked stocks in the broader Computer and Technology sector:
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Asana (ASAN) Q2 Loss Narrower Than Expected, Revenues Up Y/Y
Asana (ASAN - Free Report) reported second-quarter fiscal 2023 non-GAAP loss of 34 cents per share, narrower than the Zacks Consensus Estimate of a loss of 39 cents. However, the figure was wider than a loss of 23 cents reported in the year-ago fiscal quarter.
Asana reported revenues of $134.9 million in the fiscal second quarter, which surpassed the Zacks Consensus Estimate by 5.75%. The top line improved 51% from the year-ago fiscal quarter’s level.
In the fiscal second quarter, Asana's revenues were driven by its investments in the Enterprise and Business tier and solid growth in the United States. Customer spending increased in the reported quarter, which directly affected top-line growth.
Asana’s shares have fallen 74.5% year to date compared with the Zacks Internet Software industry’s decline of 51.1%. The Zacks Computer & Technology sector has slumped 30.2%.
Asana, Inc. Price, Consensus and EPS Surprise
Asana, Inc. price-consensus-eps-surprise-chart | Asana, Inc. Quote
Quarter in Detail
In the fiscal second quarter, Asana’s product-based strategy paid off as ASAN is steadily attracting more customers with product launches.
Asana’s total number of paying customers grew 5,000 in the reported fiscal quarter. At the end of the fiscal first quarter, ASAN had more than 131,000 paying customers.
The number of customers spending $5K or more on an annualized basis grew to 18,040, up 41% year over year. Revenues from these customers soared 64% year over year.
The number of customers spending $50K or more on an annualized basis grew to 1,141, up 91% year over year.
Overall, dollar-based net retention rate was more than 120%. Dollar-based net retention rate for customers with $5K or more in annualized spending was 130%. Dollar-based net retention rate for customers with $50K or more in annualized spending was more than 145%.
Non-GAAP gross margin expanded 90 basis points (bps) from the year-ago fiscal quarter’s level to 90.1%.
Non-GAAP research and development margin was 37%, which expanded 130 bps from the year-ago fiscal quarter’s tally. Sales and marketing and general and administrative expenses margin were 70% and 29%, which decreased 10 bps and 160 bps, respectively.
Non-GAAP operating loss was $64.3 million, wider than $39.8 million reported in the year-ago fiscal quarter.
Balance Sheet
As of Jul 31, 2022, cash and cash equivalents, and marketable securities were $239 million compared with $283 million as of Apr 30, 2022.
In the second quarter, remaining performance obligations amounted to $261.6 million compared with the previous fiscal quarter’s $250 million.
As of Jul 31, 2022, free cash outflow was $42.3 million compared with $42.2 million as of Apr 30, 2022.
Guidance
For the third quarter of fiscal 2023, revenues are expected in the range of $138.5-$139.5 million, indicating growth between 38% and 39%.
Non-GAAP operating loss is projected to be $66-$63 million.
Non-Gaap net loss per share is expected between 33 cents per share and 32 cents.
For fiscal 2023, the company anticipates total revenues between $544 million and $547 million.
Zacks Rank & Stocks to Consider
Asana currently carries a Zacks Rank #3 (Hold).
Here are some better-ranked stocks in the broader Computer and Technology sector:
ASE Technology (ASX - Free Report) carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
ASX’s shares have slumped 29.2% in the year-to-date period compared with the Zacks Electronics - Semiconductors industry’s decline of 31%.
Monolithic Power Systems (MPWR - Free Report) carries a Zacks Rank of 2, currently.
MPWR’s shares have fallen 13.4% in the year-to-date period against the Zacks Semiconductor - Analog and Mixedindustry’s decline of 20.9%.
Arista Networks (ANET - Free Report) presently sports a Zacks Rank #1.
ANET’s shares have dropped 16.3% in the year-to-date period compared with the Zacks Communication - Components industry’s decline of 18.2%.