Asana, Inc.

Thank you for standing by and welcome to Asana's first quarter and fiscal year 2026 earnings conference call. 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 queue, you may press star 11 again. I would now like to hand the call over to Eva Lung, 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 first quarter fiscal year 2026. With me on today's call are Duskin Moscovitz, Asana co-founder and CEO, Anne Raimondi, our Chief Operating Officer and Head of Business, and Sumalee Parekh, our Chief Financial Officer. Today's call will include for looking statements, including statements regarding expected release and benefits of our product offerings. Including Ai studio and our expectation for revenue to be generated by Ai studio our retention expansion opportunities. Our expectation for our financial outlook, including our revised for your guidance strategic plans and our market position and growth opportunities and our capital allocation strategy. including our stock repurchase programs. 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 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. Q1 was a milestone quarter. We achieved non-GAAP profitability for the first time, and AI Studio, which reached general availability in Q1, surpassed $1 million in ARR, demonstrating powerful early momentum. This progress fuels our journey to sustained profitable growth and positions Asana as the definitive platform for human and AI coordination. In Q1, total revenues were up 9% year over year, exceeding the top end of our guidance. Non-GAAP operating margins improved more than 1300 basis points year over year, from an operating loss margin of 9% to an operating income margin of 4%. That is a significant milestone for the company as we reached non-GAAP profitability for the first time. Adjusted free cash flow margin also improved more than 700 basis points year over year, with free cash flow margin at 5% for the quarter. Once again, our non-tech verticals grew faster than overall growth for the quarter and grew mid-teens year over year. Some of our fastest growing verticals this quarter included manufacturing and energy, media and entertainment, and financial services. We continue to make progress in our enterprise customer acquisition. Our $100,000 and over customers grew 20% year over year, consistent with last quarter. A landmark achievement last month was closing the largest deal in Asana's history, with one of the largest employers in the world. This three-year, $100 million-plus contract renewal is a testament to Asana's unique ability to power complex, cross-functional execution at an enterprise scale. The growth within this customer showcases a powerful combination of organic adoption and intentional expansion, driven by our close partnership with the enterprise engineering teams to demonstrate ongoing value. After a rigorous evaluation, Asana was selected as its company-wide standard for project, task, work, and goal management, making Asana foundational to how they plan, track, and execute their most critical work. Now let's turn to AI Studio. We've seen tremendous momentum since our Q4 update, driven by customers recognizing the tangible value AI Studio delivers in solving real business problems. We've already crossed $1 million in AI Studio ARR and are entering Q2 with a robust and rapidly growing pipeline. The interest is truly global, with strong traction across all our major geographies. We're even seeing instances where AI Studio ARR is exceeding seat-based ARR. This highlights how a few users leveraging AI Studio can drive outsized value, and it underscores our conviction that AI Studio has the potential to not only equip the revenue scale of seat-based licenses over time, but also to reduce our overall reliance on per-seat monetization. The cross vertical interest is also exciting with notable customer wins across manufacturing retail technology financial services and healthcare demonstrating strong and widespread demand. what's most encouraging about Ai studios momentum isn't the initial sales it's the everyday usage we're saying. Because the product is embedded directly in the workflows teams rely on automation happens where the work happens that makes it Ai studio inherently sticky. avoiding the shelfware fate of many hyped AI tools that live in separate apps or chatbots and end up underutilized. Our customers choose AI Studio for three clear reasons. First, it's built natively into Asana, eliminating the need for behavior or workflow change. Second, its human-in-the-loop controls are built on familiar Asana features, approvals, work assignments, comments, and audit trails, keeping people firmly in charge of every AI step. Third, it runs on our work graph, a continuously updating data store of every project, task, goal, and conversation. That deep structured context lets AI handle longer, more complex workflows and enables true human AI coordination, something point solution agents simply can't match. This real-world impact is evident with Woolworths, one of Australia's largest supermarket chains with over 1,000 stores. They've implemented AI Studio to transform their safety and capital governance process for store changes. Previously relying on inconsistent slide decks and meetings with up to 60 attendees, they've built a smart workflow with AI Studio that analyzes submissions, identifies required approvers, and automatically routes requests with all relevant context. This acceleration in decision-making allows Woolworths to implement strategic store improvements faster while maintaining rigorous safety and compliance standards. This kind of targeted automation showcases how our AI capabilities drive both immediate ROI and deeper adoption within enterprise customers. We've also secured our first AI Studio deal in India for a popular bakery chain. Working with a local partner, we've developed an AI Studio solution to prevent fuel theft across their fleet of dozens of vehicles, a common challenge in that market. Using a simple form to upload fuel receipts, AI Studio automatically extracts and logs fuel data, creating a complete audit trail while eliminating manual entry. This has given managers real-time visibility into fleet expenses and improved coordination between drivers and finance teams. The solution is now fully embedded in their daily operations, delivering measurable efficiency gains within weeks of implementation. AI Studio is designed specifically for human AI coordination, enabling people to move work forward when and where they're needed. Standalone agent models can only succeed when they're capable of automating entire workflows, ironically relegating them to narrow use cases. In contrast, we focus on augmenting human capabilities at key points in the process, triaging inbound requests, drafting briefs, extracting unstructured data, running deep research, or crunching complex analyses, while teams keep full visibility and control. We don't replace human expertise, we amplify it in a predictable way, freeing people to focus on higher impact work. The result, work moves faster, customers are cutting response times from days to hours, and eliminating slow meeting-driven processes altogether, delivering immediate measurable productivity gains that compound over time. We are just at the beginning of a long-term opportunity with AI Studio, our initial offering in a broader AI strategy. With AI Studio, our focus has been on empowering customers who want to build their own AI-powered workflows, automating steps and taking on repetitive work within clearly defined and controlled processes. Realizing the full transformative potential of AI Studio and for it to truly become a major growth driver depends significantly on broader adoption across our customer base. To that end, To accelerate the uptake of AI and AI Studio, we're launching several key initiatives. Last month at our Work Innovation Summit event in Sydney, we launched the Smart Workflow Gallery, a suite of pre-built AI-powered workflows designed to help organizations scale the use of AI in everyday workflows. Based on best practices from a wide range of global companies, these smart workflows provide a blueprint for effective human plus AI coordination across marketing, IT, and operations. Customers can choose to build from scratch with AI Studio or adopt one of these pre-built workflows to get started with AI immediately. For instance, a creative team could deploy a gallery workflow in minutes to have AI review new work requests, evaluate briefs, gather information, flag blockers, and prioritize tasks, elevating humans out of tedious work while maintaining oversight. Our smart workflow gallery is now live with several key workflow templates for IT, marketing, and operations available today. and we'll be rolling out many more over the coming months. We're also introducing AI Studio+, a new mid-tier package launching this month through sales and partner channels, and later this summer for self-serve customers. This strategic addition creates a three-tier structure, Basic, Plus, and Pro. Each tier offers distinct value. Basic, which as of this month will be available as part of all Asana paid tiers, provides AI Studio credits with monthly usage caps. Plus gives customers the flexibility to self-serve and scale up their usage over time, while Pro delivers generous quarterly credit allowances and enterprise-grade controls. This tiered approach ensures customers can select the right level of AI capabilities for their specific needs. Our strategy here extends beyond simply broadening access to AI Studio. By complementing it with new offerings, like foundational service plans and upcoming product add-ons, such as Resource Management in Q3, we are systematically enhancing how we deliver value. This approach is designed to improve price-value alignment for our customers, which we expect will in turn strengthen net dollar retention. This is consistent with the value-based pricing strategy we've discussed, and we see this combination as a powerful engine for significant long-term expansion. Looking to H2, we'll be introducing new goal-oriented agentic collaborators, AI teammates, rounding out the full spectrum of the AI capabilities inside Asana. At the foundation of AI Studio is our AI-powered workflow automation engine, built to automate the repeatable workflows across your business. The Smart Workflow Gallery packages these best practice automations into pre-built AI workflows any team can deploy in minutes. AI teammates sit on top as more flexible agents. They keep multi-step work moving with minimal guidance, leveraging prior context, our work graph, and fine-grained permissions. For instance, a product lead can assign an AI teammate to implement the feature. It can write code using the Quad Code API, initiate and participate in review and approval workflows, generate and apply fixes in response to feedback, merge the update, and ask another dedicated AI teammate to get started on customer support material, all while posting live status updates in Asana showing its progress. By evolving these capabilities into a persistent coworker, We deepen human AI coordination and unlock usage-based revenue streams beyond seat licenses, further strengthening our leadership and AI-powered work management. We're fundamentally repositioning Asana as the platform for human and AI coordination, marking a powerful new chapter in our company narrative. As AI becomes integral to how work gets done, the need for a system that coordinates work between people and AI at scale is paramount. This is more than just a technological shift. It's a redefinition of teamwork itself We believe Asana is uniquely equipped to lead this charge. Our WorkGraph data model provides the essential structured context, the map of an organization's work, goals, and processes that AI needs to be truly effective in a collaborative environment. This, combined with our deep expertise in fostering human coordination, allows us to build AI solutions that don't just automate tasks, but enhance clarity, alignment, and accountability across entire organizations. This is the generational opportunity we're seizing. to find the future of how humans and AI achieve great things together. As we look to the future in regards to the CEO search, we're seeing strong interest in considering candidates carefully. We'll be patient to find the absolute right leader to guide Asana through this next phase of growth. I'm fully committed to driving our strategy as CEO until my successor is in place. And I'm incredibly excited to partner with our future CEO on our product and AI strategy as we work together to establish Asana as the leader in this generational opportunity. Our key priorities for fiscal year 26 are centered on setting Asana up for long-term profitable growth. These include driving customer health, accelerating customer acquisition, and delivering increasing customer value through product innovation, particularly with AI. And with that context, let me turn it over to Anne to discuss our go-to-market momentum, key initiatives, and customer wins.