Asana Inc (ASAN) Reports Q3 Fiscal 2024 Earnings: Nears Profitability with Strong Revenue Growth
Asana Inc (NYSE:ASAN) sees an 18% year-over-year revenue increase to $166.5 million in Q3 fiscal 2024.
GAAP operating loss improved to $63.4 million from $101.1 million in the same quarter last year.
Non-GAAP operating loss reduced to $9.8 million, marking a substantial improvement from the previous year's $52.6 million.
The company ended the quarter with over three million paid seats and a dollar-based net retention rate for Core customers over 105%.
On December 5, 2023, Asana Inc (NYSE:ASAN) released its 8-K filing, detailing the financial results for the third quarter of fiscal year 2024, which ended on October 31, 2023. The company, a leading work management platform, has reported significant strides towards profitability with a marked improvement in both top-line growth and bottom-line reductions in operating losses.
Financial Performance Overview
Asana Inc (NYSE:ASAN) reported revenues of $166.5 million, an 18% increase year over year, surpassing expectations. The growth was particularly strong among Core customersthose spending $5,000 or more annuallywith a 20% increase in revenue from this segment. The company also reported a decrease in GAAP operating loss to $63.4 million, or 38% of revenues, which is a significant improvement from the $101.1 million, or 71% of revenues, reported in the third quarter of fiscal 2023. Non-GAAP operating loss was also notably lower at $9.8 million, or 6% of revenues, compared to $52.6 million, or 37% of revenues, in the same period last year.
GAAP net loss was $61.8 million, with a GAAP net loss per share of $0.28, which is an improvement from the GAAP net loss of $100.9 million and a net loss per share of $0.49 in the third quarter of fiscal 2023. Non-GAAP net loss was $8.2 million, with a non-GAAP net loss per share of $0.04, better than the non-GAAP net loss of $52.4 million and a net loss per share of $0.26 in the prior year's quarter.
Operational Highlights and Future Outlook
Asana Inc (NYSE:ASAN) ended the quarter with more than three million paid seats and saw a 14% year-over-year increase in the number of Core customers. The dollar-based net retention rate for Core customers was over 105%, and for customers spending $100,000 or more annually, it was over 120%. These figures indicate a strong and expanding customer base with increasing commitment to Asana's platform.
For the fourth quarter of fiscal 2024, Asana expects revenues between $167.0 million and $168.0 million, representing a year-over-year growth of 11% to 12%. The company anticipates a non-GAAP operating loss of $23.0 million to $21.0 million and a non-GAAP net loss per share of $0.10 to $0.09. For the full fiscal year 2024, Asana projects revenues of $648.5 million to $649.5 million, which would be a 19% increase year over year, with a non-GAAP operating loss of $66.0 million to $64.0 million and a non-GAAP net loss per share of $0.27 to $0.26.
Balance Sheet and Cash Flow
Asana Inc (NYSE:ASAN) reported cash and cash equivalents of $268.3 million as of October 31, 2023. The company experienced negative cash flows from operating activities of $8.2 million, an improvement from negative $46.2 million in the third quarter of fiscal 2023. Free cash flow was also less negative at $11.5 million compared to negative $48.5 million in the same quarter of the previous year.
The company's balance sheet remains robust with total assets of $947.7 million and total liabilities of $615.5 million, resulting in total stockholders' equity of $332.2 million.
Conclusion
Asana Inc (NYSE:ASAN) has demonstrated a strong performance in the third quarter of fiscal 2024, with significant revenue growth and a marked improvement in profitability metrics. The company's focus on expanding its Core customer base and the successful retention of existing customers are key drivers of its financial success. As Asana continues to innovate and expand its offerings, investors and stakeholders have reason to be optimistic about its trajectory towards sustained growth and profitability.
For a detailed breakdown of Asana Inc (NYSE:ASAN)'s financial results, please refer to the full 8-K filing.
Explore the complete 8-K earnings release (here) from Asana Inc for further details.
This article first appeared on GuruFocus.
