Asana Reports Smaller-than-Feared Q3 Loss; Shares Plunge After-Hours

Asana (ASAN) has reported a smaller-than-expected loss in the fiscal third quarter (ended October 31) of 2022 and surpassed analysts’ revenue expectations. Despite the beat, shares of the team work management platform plunged 16.1% in Thursday’s extended trading session after closing 1.2% higher on the day.

Results in Detail

Asana incurred a loss of $0.23 per share in Q3, compared to the $0.26 loss per share estimated by analysts. The company recorded a loss of $0.34 per share in the same quarter last year.

Total revenue came in at $100.3 million, topping analysts’ expectations of $93.69 million and rising 70% year-over-year. Record user adoption and large enterprise wins acted as growth drivers. (See Asana stock charts on TipRanks)

The total number of paying customers grew by 7,000 and ended the third quarter with a total of more than 114,000. Additionally, the number of customers spending $5,000 or more on an annualized basis increased to 14,143, up 58% year-over-year. Notably, revenues from these customers were up 96%.

Furthermore, the number of customers spending $50,000 or more on an annualized basis increased to 739, up 132%.

CEO Comments

In response to the third-quarter results, Asana CEO Dustin Moskovitz said, “We are excited to be announcing that we exceeded two million paid seats and we are landing bigger with larger customers and expanding significantly across our customer base. With some of the most valuable companies in the world deploying Asana to manage initiatives across entire divisions, Asana exemplifies what cross-functional work management at scale looks like.”

Guidance

For Fiscal 2022, the company anticipates total revenue of $371 million to $372 million, which would represent year-over-year growth of 63% to 64%. The consensus estimate stood at $358.75 million. Adjusted net loss per share is projected in the range of $0.96 to $0.95, compared to analysts’ expectations of a loss of $1.00 per share.

For Fiscal Q4, the company projects revenue in the range of $104.5 million to $105.5 million, versus the consensus estimate of $98.74 million. Adjusted loss per share is expected to land between $0.28 and $0.27 versus a loss of $0.27 per share estimated by analysts.

Analyst Recommendations

The Street is cautiously optimistic about the stock and has a Moderate Buy consensus rating based on 5 Buys and 2 Holds. The average Asana price target of $128.43 implies 41.1% upside potential. Shares have gained 147.4% over the past six months.

Smart Score

According to TipRanks’ Smart Score system, Asana gets a 7 out of 10, which indicates that the stock is likely to perform in line with market averages. (See Top Smart Score Stocks on TipRanks)