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Asana (ASAN) to Report Q3 Earnings: What's in the Cards?

Asana ASAN is slated to report its third-quarter fiscal 2023 results on Dec 1.

For the fiscal third quarter, Asana anticipates non-GAAP net loss to be 33-32 cents per share. The Zacks Consensus Estimate for the bottom line is pegged at a loss of 33 cents per share, which has remained steady over the past 30 days.

Asana expects revenues in the range of $138.5-$139.5 million, indicating growth between 38% and 39% from the year-ago period’s reported figure.

The Zacks Consensus Estimate for revenues stands at $138.97 million, suggesting an improvement of 38.49% from the year-ago quarter.

Asana’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 12.34%.

Asana, Inc. Price and EPS Surprise

Asana, Inc. Price and EPS Surprise
Asana, Inc. Price and EPS Surprise

Asana, Inc. price-eps-surprise | Asana, Inc. Quote

Factors to Note

Asana’s fiscal third-quarter results are likely to reflect positive traction from aggressive investing in their enterprise solutions. The company’s top-of-the-funnel investments to increase awareness regarding its brand and varied products are expected to have benefited the to-be-reported quarter’s performance. Investments in marketing activities are likely to have increased web traffic and sign-ups impacted customer growth positively.

The number of customers spending $5,000 or more on an annualized basis grew to 18,040, reflecting an increase of 41% year over year in the fiscal second quarter. The number of customers spending $50,000 or more on an annualized basis grew to 894, suggesting an increase of 125% year over year.

Asana’s largest customer base has been growing the fastest in the previous few quarters. In the last reported quarter, the number of customers spending $100,000 or more on an annualized basis grew 104% year over year.

The company witnessed high retention rates in the fiscal second quarter, which translated into sustained strong net new paying customer growth and strong seed expansion for its Asana Goals solutions. The launch of new integrations from Asana Partners is also contributing to the company’s expanding customer base. Asana’s new Rules integrations with Gmail, PagerDuty, Twilio, and more have automated work across tools, which help customers to stay connected seamlessly and remove bottlenecks amid the digitization process and the hybrid work environment. This momentum is likely to have sustained in the to-be-reported quarter.

However, volatile macroeconomic conditions have created an unstable forex environment. This is expected to have impacted the company’s bottom-line growth in third-quarter fiscal 2023.

What Our Model Indicates

Per the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.

Asana has an Earnings ESP of -1.70% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Consider

Here are some companies worth considering,as our model shows that these have the right combination of elements to beat on earnings in their upcoming releases:

Bilibili BILI has an Earnings ESP of +6.77% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

BILI’s shares are down 73.5% in the year-to-date period compared with the Zacks Internet-Servicessector’s decline of 35.5%.

Coupa Software COUP has an Earnings ESP of +71.17% and a Zacks Rank of 2.

COUP’s shares have fallen 60.3% year to date compared with the Zacks Internet – Softwaresector’s decline of 60.5%.

Splunk SPLK has an Earnings ESP of +9.43% and a Zacks Rank #2.

SPLK’s shares have declined 32.3% in the year-to-date period in the Zacks Internet – Software sector.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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Splunk Inc. (SPLK) : Free Stock Analysis Report

Coupa Software, Inc. (COUP) : Free Stock Analysis Report

Bilibili Inc. Sponsored ADR (BILI) : Free Stock Analysis Report

Asana, Inc. (ASAN) : Free Stock Analysis Report

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