Asana, Inc.

At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. To remove yourself from the question queue, you may press star 11 again. I would now like to hand the call over to Eva Leung, Head of Investor Relations. Please go ahead.

Good afternoon and thank you for joining us on today's conference call to discuss the financial results for Asana's fourth quarter and fiscal year 2025. With me on today's call are Duskin Moscovitz, Asana's co-founder and CEO, Anne Raimondi, our chief operating officer and head of business, and Sonali Parag, our chief financial officer. Today's call will include forward-looking statements including statements regarding the expected release and benefits of our product offerings, including AI Studio and our expectation for revenue to be generated by AI Studio, our expectation for our financial outlook, strategic plans, our market position, and growth opportunities. Forward-looking statements involve risks, uncertainties, and assumptions that may cause our actual results to be materially different from those expressed or implied by the forward-looking statements. Please refer to our filings with the SEC, including our most recent annual report on Form 10-K and quarterly report on Form 10-Q for additional information on risks, uncertainties, and assumptions that may cause actual results to differ materially from those set forth in such statements. In addition, during today's call, we will discuss non-GAAP financial measures. These non-GAAP financial measures are in addition to and not a substitute for or superior to measures of financial performance prepared in accordance with GAAP. Reconciliation between GAAP and non-GAAP financial measures and a discussion of the limitation of using non-GAAP measures versus the closest GAAP equivalents are available in our earnings release, which is posted on our investor relations website at investor.asana.com. And with that, I'd like to turn the call over to Dustin.

Thank you all for joining us on the call today. We delivered solid Q4 results while building the foundation for profitable growth and continued innovation. In Q4, total revenues were up over 10% year over year, exceeding the top end of our guidance when adjusted for the impact of currency by using prior year FX rates. This reflects continued stabilization in our growth rate. Non-GAAP operating margins improved more than 800 basis points year over year, from an operating loss margin of 9% to an operating loss margin of 1%. We expect to reach non-GAAP profitability in Q1 this year, which Sonali will discuss in more detail. We hit a significant milestone in our company's history as we reached positive free cash flow for the full year, fiscal year 25. I'm particularly proud of the team for managing towards this achievement while simultaneously investing in growth and establishing Asana as a multi-product company. Once again, our non-tech verticals grew faster than overall growth for the quarter and were up 15% year over year, a slight acceleration when adjusted for currency. Some of our fastest-growing verticals this quarter include manufacturing and energy, consumer retail, and media. We continue to make progress in our enterprise customer acquisition. Our $100,000 and over customers grew 20% year over year and accelerated from last quarter. Overall NRR and core customer NRR were stable, and we saw an uptick in in-quarter NRR for these cohorts. During the quarter, we continued to execute on our enterprise strategy. made significant progress in improving profitability, and entered a new era as we established ourselves as a multi-product company with AI Studio. This quarter marks a pivotal moment for Asana as we chart our course towards becoming the definitive platform for human AI coordination. It starts with AI Studio. Even before general availability, the momentum is exceeding our expectations. Hundreds of our largest customers are now actively running smart workflows powered by AI Studio. While we anticipated strong enterprise interests, we've been struck by the breadth of demand across all segments. The enthusiastic response from mid-market and small business customers prompted us to accelerate our self-serve offering, which we intend to launch around mid-year. To date, thousands of customers have enabled AI Studio, with particularly strong adoption in the EMEA region, which is notable given the increased scrutiny and higher bar for AI deployment in that region. We're seeing significant customer demand across industries, from manufacturing and financial services to healthcare and technology. What's particularly exciting is how quickly customers are realizing concrete value. For example, one global media company has reduced manual work in their creative request process by 60%, while decreasing overall request processing time by 69%. This customer, in a matter of a few months, has twice purchased additional credits that in total exceed its initial platform credit allotment by 150%. We're standing up a dedicated sales team with AI Studio specialists to capitalize on this opportunity. With millions of pipeline and general availability launching later in Q1, plus thousands of smart workflows already running across our customer base, we're more confident than ever in AI Studio's transformative potential. Stepping back, my vision for Asana is to be the defining platform for human AI coordination. This isn't just about adding AI features. It's about fundamentally transforming how organizations coordinate and execute work at scale, enabling more and higher level work to become self-driving over time. And what's important to understand is AI Studio goes beyond basic AI summarization and chat. It orchestrates real work. Our approach mirrors how organizations themselves adopt AI, starting with specific, well-defined processes and expanding to more dynamic collaboration as trust grows. What sets us apart is our unique foundation, the work graph. Unlike standalone AI chatbots or simple task automation, we provide a structured, intuitive framework that both humans and AI can navigate and evolve together. This enables us to deliver AI capabilities exactly where teams work, with the essential context and security controls that enterprises demand. And our power extends beyond our proverbial walls. Our strategy is to be the essential coordination layer for humans and AI across all teams and tools. When work happens in Asana or originates in other systems, we intelligently coordinate the right actions, getting approvals, requesting supplies, and generating creative assets, all while maintaining complete accountability. AI Studio is not only strengthening our core value proposition and the workflows customers rely on Asana for every day, it's also unlocking entirely new use cases. One of our customers, a leading Swiss healthcare company, is now using AI Studio to revolutionize SAP process testing by using AI to map complex workflows and dependencies automatically. The system eliminates manual review of 50-plus page documents, creates tasks based on SAP codes, and assigns roles dynamically. This saves their team multiple working days of manual analysis. And the same company has also transformed technician report handling. They previously lost an estimated $1 million annually to manual data entry errors while processing a high volume of daily PDF reports. Now AI Studio automatically converts these reports into structured Asana tasks, cutting processing time from months to hours. All communication flows through the task level, eliminating email chains and improving accuracy. Our own security team has transformed their mission-critical workflows with AI Studio. They use AI Studio to transform alert and vulnerability management with AI teammates triaging alerts into three categories, malicious threats requiring investigation, contained threats requiring no action, and false positives to ignore. Every AI action remains inspectable with clear approval workflows enabling humans to guide and refine the AI's work. AI will increasingly be a part of how the world accomplishes work, and the limiting factor is not going to be AI capability. but the ability for humans to coordinate, guide, and collaborate with AI. Asana is positioned to be the first and best to fully unlock this potential. We see AI evolving along two possible paths, gradual evolution or rapid emergence of AGI. Asana is well positioned for either scenario. As AI continues to advance, organizations need a trusted coordination layer that bridges employees, AI systems, and enterprise tools. We provide the critical structure, security, and observability that makes AI workflows governable at scale, connecting goals, tasks, and departments in ways that meet enterprise compliance requirements. And we've been laying the groundwork for many years. Importantly, the core fundamentals we've built into the work graph, project structures, sharing models, permission systems, and collaboration frameworks, are likely to become requirements for any platform seeking to coordinate AI and human work at scale. We see other platforms, including the leading Ai labs themselves are realizing they need at least some of this structure to make Ai useful and team contacts. And thus are beginning to add basic versions of these capabilities like simple project sharing and Ai chat interfaces and lightweight tasks in what were previously simple message and response chat interfaces. we've spent years refining these essential building blocks and real world enterprise contacts building mature automation system around them and integrating with other services. This gives us a significant head start. Instead of having to build and test these foundational elements from scratch, we can focus on extending our proven structures to support new AI capabilities that we can leverage from the leading AI providers. It's unsurprising then that many of the leading AI labs are themselves long-term Asana customers. In fiscal 26, we'll build more autonomous agentic capabilities into AI Studio. enabling an adaptive approach to complex work management so that customers can delegate as much or as little of a process to an agent as desired. These agents will be designed to intelligently manage both structured and open-ended work by decomposing complex campaigns into step-by-step workflows, automatically assigning tasks across teams, including to other AI agents, monitoring progress with real-time adjustments, identifying bottlenecks before they impact deadlines, and seamlessly coordinating work across various team tools. all while maintaining human oversight and approval where needed. This blend of flexibility and predictability will help teams work more efficiently while maintaining appropriate controls and oversight. Moreover, our system is built so humans remain in the loop. For example, if the AI suggests rewriting a sensitive contract, Asana can require approval using our built-in approval workflows before changes go live. This model fosters predictability and confidence that AI will act within well-defined guardrails without requiring you to follow every step as it happens. What's also distinct about Asana is our competitive advantage doesn't depend on owning massive amounts of data. Instead, we excel at orchestrating work across multiple AI agents and human teams, managing complex access controls and governance frameworks, and connecting cross-system workflows with enterprise-grade reliability. The core fundamentals we've built into the work graph project and process structures, sharing models, permission systems, and collaboration frameworks give us a big head start and position us to lead the coordination of AI and human work at scale. Our differentiation stems from three key advantages. Our work graph clear boundaries and permissions that gives teams transparency and control. Sophisticated human AI collaboration with inspectable actions and improve workflows. and enterprise-ready security with well-engineered access controls, comprehensive audit trails, and industry-leading compliance frameworks. As I've mentioned in previous calls, we're evolving our pricing model to align with the value we deliver through AI Studio and other advanced capabilities, enabling organizations to scale AI adoption effectively while maintaining clarity and control. This is a new monetization avenue for us, not relying on seats. A small number of users can be large consumers and represent a significant revenue opportunity. We've structured it in two tiers, basic and pro. Each tier runs on a credit system. Think of credits as the fuel for AI workflows. All paying customers have AI Studio Basic, and the monthly credit allowance scales with the levels. When teams are ready to scale their usage, they can move to our pro tier. The pro tier, which comes with a much larger quarterly credit allowance, lets you purchase extra credits if needed, and the option for implementation services to help teams redesign their workflows. We've built this structure to support organizations at every stage of their AI adoption journey. Before I hand it off to Anne, I want to take a moment to discuss the leadership transition process we announced earlier today. To best position Asana to redefine the future of work through AI and capitalize on a generational opportunity, we announced that I plan to transition from day-to-day operations and CEO role to board chair. This will allow me to focus on our AI product vision and strategy. ensuring Asana maintains its category leadership amid the evolving AI landscape that's reshaping our industry. I'm looking forward to this more focused contribution, where I believe I can add the greatest value to Asana going forward, while stepping away from the day-to-day operational demands that a CEO must prioritize. In addition, I plan to focus more on my philanthropic work through my foundation, Good Ventures. As I reflect on my journey with Asana since co-founding it nearly 17 years ago, I'm filled with immense gratitude. Creating and leading Asana has been more than just building a company. It's been a profound privilege to build something that helps teams do their most meaningful work. What began as a small internal tool at Facebook has evolved into a global platform, empowering millions of users in nearly 200 countries. We've weathered market shifts, navigated a pandemic, taken the company public, and built something that truly matters. All while maintaining the values that make Asana unique. The board is engaged in a thorough process with the leading executive search firm to identify the right successor to oversee Asana's next phase of growth. I'll provide my full assistance to the board in the search and transition and support my successor when the time comes. And I'll remain CEO until successor begins enroll. I plan to maintain my shareholdings in the company, given my confidence in Asana's ability to leverage AI to continue transforming how work gets done and create significant long-term value. As you'll hear more from Anne and Sonalee, We are getting better than ever at allocating our resources effectively to drive productivity, boost cash flow, and strengthen our financial profile. You're seeing that clearly in the margin expansion we delivered in fiscal year 25 and will continue to deliver in fiscal year 26. I'm confident that an experienced leader, well-matched to the company's scale and potential, will build on Asana's strong track record of innovation, including the recent launch of AI Studio, and usher in a new era of growth and profitability. With that, let me turn it over to Anne to discuss our go-to-market momentum and key initiatives in customer wins.