Asana's (NYSE:ASAN) Q1: Beats On Revenue
Is now the time to buy Asana? Find out in our full research report.
Revenue: $187.3 million vs analyst estimates of $185.5 million (8.6% year-on-year growth, 0.9% beat)
Adjusted EPS: $0.05 vs analyst estimates of $0.02 (significant beat)
Adjusted Operating Income: $8.14 million vs analyst estimates of $2.70 million (4.3% margin, significant beat)
The company reconfirmed its revenue guidance for the full year of $782.5 million at the midpoint
Management raised its full-year Adjusted EPS guidance to $0.22 at the midpoint, a 12.8% increase
Operating Margin: -23.4%, up from -38.4% in the same quarter last year
Free Cash Flow Margin: 2.1%, down from 6.6% in the previous quarter
Net Revenue Retention Rate: 95%
Market Capitalization: $4.33 billion
Founded in 2008 by Facebook's co-founder Dustin Moskovitz, Asana (NYSE:ASAN) is a cloud-based project management software, where you can plan and assign tasks to employees and monitor and discuss progress of work.
A company's long-term sales performance is one signal of its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Thankfully, Asana's 20.5% annualized revenue growth over the last three years was decent. Its growth was slightly above the average software company and shows its offerings resonate with customers.
This quarter, Asana reported year-on-year revenue growth of 8.6%, and its $187.3 million of revenue exceeded Wall Street's estimates by 0.9%. Company management is currently guiding for a 7.7% year-on-year increase in sales next quarter.
Looking further ahead, sell-side analysts expect revenue to grow 8% over the next 12 months, a deceleration versus the last three years. This projection is underwhelming and indicates its products and services will face some demand challenges.
Today's young investors likely haven't read the timeless lessons in Gorilla Game: Picking Winners In High Technology because it was written more than 20 years ago when Microsoft and Apple were first establishing their supremacy. But if we apply the same principles, then enterprise software stocks leveraging their own generative AI capabilities may well be the Gorillas of the future. So, in that spirit, we are excited to present our Special Free Report on a profitable, fast-growing enterprise software stock that is already riding the automation wave and looking to catch the generative AI next.
This quarter, Asana reported 24,297 enterprise customers paying more than $5,000 annually,
We were glad to see Asana raise its full-year EPS guidance and beat analysts' revenue, EPS, and adjusted operating income expectations. Overall, we think this was still a solid quarter with some key areas of upside. The market seemed to be hoping for more, and the stock traded down 1.8% to $18.63 immediately after reporting.
Is Asana an attractive investment opportunity right now? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here, it's free.
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