Asana, Inc.

Thank you for standing by and welcome to Asana's fourth quarter 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 1-1 on your telephone. To remove yourself from the queue, you may press star 1-1 again. I would now like to hand the call over to Eva Lund. Head of Investor Relations. Please go ahead.

Good afternoon, and thank you for joining us on today's conference call to discuss the financial result for Astana's fourth quarter and fiscal year 2026. With me on today's call are Dan Rogers, our Chief Executive Officer, and Somali 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 and our expectations for revenue to be generated by those offerings, our retention and expansion opportunities, our expectation for our financial outlook, including our FY27 four-year guidance, strategic plans, our market position and growth opportunities, and our capital allocation strategy, including our stock repurchase program, among other items. Forward-looking statements include 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 limitations of using non-GAAP measures versus their closest GAAP equivalents are available in our earnings release, which is posted on our investor relation webpage at investors.asanas.com. And with that, I'd like to turn the call over to Dan.

Thank you, Eva. FY26 was a year of progress for Asana. We exited the year with solid momentum. We evolved into a multi-product platform with the launch of AI Studio. And we advanced our AI capabilities with the introduction of AI teammates, all of which to help us build a foundation layer of agentic enterprise. Importantly, we stabilized NRR, materially expanded our operating margins and free cash flows. And we set the structural foundations for our long-term profitable growth. So let me share a few highlights of the quarter. Q4 revenues were $205.6 million. growing 9% year-over-year. We generated non-GAAP operating income of $18.2 million, or a 9% non-GAAP operating margin. Our operating margin reflects disciplined cost management, as well as a thoughtful reallocation of spending towards those higher leverage areas. And we still preserve capacity to invest in our AI platform. Our adjusted free cash flows were also strong at $25.7 million in the quarter, or 13% on a margin basis. Customer health improvements continue to take hold. Our reported NIR remains stable, and for the third consecutive quarter, our in-quarter NIR improved. Our top 10 renewals in the quarter delivered net revenue retention above 100%. This reflects a long-term commitment of our largest customers, sustained value that the platform continues to deliver for the world's leading companies. Key renewals with expansions this quarter included a leading global advertising and marketing organization, a top-tier European markets infrastructure provider, and several large tech customers, including a Fortune 10 tech platform. Looking at our AI momentum, it continued to be strong across both monetization and engagement. AI Studio continued to scale rapidly, in fact, We exited FY26 with over $6 million in ARR and grew over 50% quarter-on-quarter in Q4. Our customers are embedding AI Studio in their business-critical workflows, like campaign launches, product intake, and service ticketing, where human and AI collaboration accelerates coordination, reduces cycle time, and improves quality across teams. Our US revenue accelerated in Q4, and our technology vertical returned to flat year-over-year performance after nearly two years of quarterly declines. This stabilization was driven by strong renewal performance within our largest tech accounts and improved business execution. We secured one of the largest new enterprise wins with a global leader in data integration and analytics, serving enterprises worldwide. where they consolidated critical workflows from multiple tools right onto Asana. We also delivered a significant seed expansion and AI studio deployment with a global leader in collaborative design. This customer powers digital product teams at thousands of organizations. It is now deepening its commitment to Asana as its execution foundation. International markets remain a strength for our business. Our international revenues grew 11% year over year. We continue to increase our presence in non-tech, with those sectors once again growing in the teens. Manufacturing, energy, and utilities verticals, along with retail and consumer goods and healthcare, continue to do well. Some notable international vertical wins include a top 10 European multinational hospitality company, a major Japanese energy provider, and one of the largest energy retailers in Australia. Government represents an important new opportunity for TAM expansion. These early wins include a major public health agency as well as a marquee deployment with a prominent defense innovation accelerator. Our channel ecosystem delivered consistent progress in FY26 with the percentage of partner attached deals improving every single quarter. In Q4, 20% of AI Studio deals included a partner, and we believe we're still early in unlocking the potential of this motion. As enterprises scale AI across business-critical workflows, partners play an increasingly important role in implementation, change management, and expansion. This positions the channel as a meaningful driver of incremental ARR in the long term. Notably, through a partner, We secured a large AI studio deployment with one of Japan's leading global technology and infrastructure providers. We also drove expansion with one of South Korea's largest global automotive manufacturers and signed the National Institute of Cybersecurity in the Asia-Pacific region. These wins demonstrate how our partner ecosystem is unlocking scaled enterprise opportunities across the globe. Our forward-looking indicators in Q4 were strong. Billings and current RPO accelerated this quarter, reflecting enterprise demand strength and their commitment to multi-year, multi-product deployments. Last quarter, we outlined three waves of work transformation. We believe we're now firmly in the third wave, the agentic enterprise. This has the potential to fundamentally redefine how organizations collaborate. It's increasingly clear that the future of work is one where humans and AI agents are working together. And agents won't just drive small incremental productivity gains. They'll actually reshape how work is coordinated, how decisions are made, and how execution scales across the organization. From individual productivity to enterprise-wide orchestration is the foundation of the agentic enterprise. Asana is the foundational system of action layer that gives that progression context, accountability, and structure. For that orchestration to work in practice, agents have to operate against a shared, real-time context, not in isolation. So delivering on this vision requires deep visibility into how individuals work and how teams operate across the organization. At Asana, That context is captured and structured through our work graph, which creates a semantic memory of how work connects across people, teams, and outcomes. Agents need this rich individual context. What am I working on? What's blocked? What's at risk? They also need workflow and portfolio context. How does your work connect across the systems, across teams, and to outcomes? The more context that's captured within the system of action, the more capable the agents become. That foundation of context is what powers AI teammates and AI studio, enabling our agents to operate with clarity, accountability, and precision. AI teammates is where this context turns into action. Unlike isolated chat threads, these teammates work directly inside Asana workflows with full visibility and full governance. When you look at what's happening in the market, three things clearly differentiate us. First, AI teammates are inherently multiplayer. This is important. It means teams can work together with each other and with those AI agents. Second, our agents have operational context from the work graph. And thirdly, our AI teammates get the benefits from compounding institutional memory. They learn from team feedback and improve over time while respecting the permission boundaries that are already established for those teams. This is AI embedded in execution, not layered on top of it. We've now onboarded over 200 customers into the beta program for AI teammates. What's encouraging is not just the signup number, it's how quickly those customers are able to drive productivity. Let's look at a few examples. KW Automotive, a large automotive organization. They deployed AI teammates across marketing, IT, and support, and they're driving measurable ROI. For example, their analyst teammate saves up to three hours per report by proactively correlating cross-project data, while their support teams are achieving high-quality multilingual resolutions. Their vision? is to scale the digital workforce, to replace traditional forms with conversational AI, and to modernize both the employee and customer experience. Let's look at another example, Living Spaces, a home furniture retailer. They're leveraging AI teammates to audit their legacy automation for data accuracy and rewrite complex operating procedures. Their team found that the platform works out of the box, quickly able to replace Detailed prompt engineering with natural conversational training. Ease of setup allows them to resolve unreliable workflows and standardized operating procedures with minimal configuration. When AI is embedded across workflows in marketing, sales, operations, and IT, it becomes part of how the company runs. This expands our platform footprint. It increases our stickiness, gives us new buying centers to talk to, and compounds our value over time. We expect AI teammates will become generally available to sales-led customers by the end of Q1 and our self-serve customers in the second half of the year. Now let's look at AI Studio. AI Studio brings intelligence into the workflow architecture itself. AI Studio places LLM reasoning directly inside workflow nodes so humans and systems collaborate at each step of the process. Customers are not just automating tasks. They're designing intelligent workflows in natural language that spans across their portfolios, systems, functions, and business units. With our studio, customers can encode operational logic into workflows, connect structured and unstructured context, automate cross-functional processes, and reduce manual coordination at scale. This shifts Asana from a coordination system to a programmable operating layer. Now, as I noted earlier, AI Studio delivered strong sequential growth in Q4. That acceleration was driven by deeper expansion within our existing customers and a larger initial enterprise commitment for our new deployments. We now have eight customers, for example, across North America, EMEA, and APJ, spending over $100,000 annually on AI Studio alone. This is in addition to the Core Suite subscriptions. Let me share a couple of use cases from Q4 that really bring us to life. A premier UK-based fashion and home retailer has already realized a meaningful impact from AI Studio, using it to identify production risks in real time. This quarter, they expanded their investment to power a new skew to factory workflow, streamlining production, prioritizing accelerating approvals across global teams. E.ON Next, a sustainable European energy provider, is using AI Studio to automate intake and triage processes that historically slowed complex energy projects. By deploying custom AI agents, the team now clarifies project briefs and surfaces missing information immediately before work begins. And that increases request capacity by nearly 500% while improving cross-functional visibility. Taken together, AI Studio and AI teammates are becoming foundational to our platform strategy. We're seeing meaningful ARR growth, enterprise expansion, deeper workflow penetration, and measurable productivity gains and improved business outcomes for our customers. Let's look at our differentiation. Asana is uniquely architected for the agentic enterprise. We provide the rails upon which enterprise agents run. As foundational models become more powerful, the bottleneck is no longer the intelligence of those engines. It's a lack of persistent memory and structured execution. A model can think, but it can't act without that context, accountability, and a system of record. There are four areas of our differentiation. The first is our work graph. This is the memory layer. It's the context fabric of the enterprise. While traditional infrastructure provides the plumbing for data, SANA provides a vectorized, structured, and semantic map of an organization's intent. Without this infrastructure, agents have no home. They have no memory, no sense of priority, no sense of understanding of who's doing what and why. The second area of differentiation is that we have built our system of action around a fundamental unit that we call the task. And the task is the unit of work that agents can consume and execute. By capturing the institutional memory of how organizations operate, the ownership, the dependencies, and the goals, we provide the necessary structure that transforms raw model intelligence into business results. Thirdly, as we discussed with AI teammates, our environment is inherently multiplayer. So the AI teammates operate within the context of existing projects alongside human team members. They collaborate natively within the system of record. And fourth and finally, our differentiation is our enterprise grade by design, which means our agents operate with auditability and the governance required for them to operate at scale. So the combination of persistent memory, task-based accountability, multiplayer collaboration, and governance is what enables our agents to move from experimentation to trusted enterprise deployment. are the orchestration layer for agents. This is why the world's most sophisticated enterprises and leading AI innovators are deepening their investment in Asana. In FY26, two of the world's five most valuable public companies expanded with us. One of the world's leading AI labs continues their seat expansion again this quarter. They now deploy Asana across thousands of employees themselves to coordinate their mission-critical workflows. spanning compliance, finance, product, and engineering. In addition, they leverage AI Studio to automate elements of their risk register and compliance operations, embedding AI directly into how mission-critical work is governed and executed. For that company that builds foundational AI models, Asana is how they get their work coordinated and governed at scale. Together, these customers validate our position as the foundational system of action layer for the modern enterprise. Looking at our FY27 priorities, our leadership ambitions in the agentic enterprise directly inform our FY27 operating priorities. While AI momentum was strong in FY26, accelerating and compounding that progress is critical to accelerating revenue growth in the long term and our continued margin expansion. Converting early adoption into broader enterprise expansion and higher monetization require disciplined execution across four priorities. Priority one, scaling the agentic enterprise platform. This is the focus of our R&D investments. We're expanding our R&D team to augment our AI platform talent pool and accelerate our roadmap. This investment is directed towards expanding the depth and breadth of workflows we address, increasing the operational surface areas where agents and smart workflows can operate, and embedding more persona-based use cases across IT, engineering, operations, and professional services. This is about moving from strong early adoption to broader enterprise standardization, increasing context density, and embedding ourselves deeper into mission-critical workflows. Priority two, our focus on product-led growth. And here, we're aiming to redefine how users discover Asana, and how quickly they realize value once they enter. As we discussed last quarter, PLG is currently a headwind to our growth because of shifts in AI-driven search that is reshaping the top of the funnel. Sooner or later we'll speak more directly to how that dynamic impacts us in the near term. In response, we're aligning our entire PLG motion to this new environment. First, we're evolving our discovery strategy towards answer engine optimization and high authority use case driven content to capture intent where it starts today. At the same time, we're redesigning the product experience to deliver immediate value out of the box. This includes prompt to project onboarding and AI powered activation using preconfigured verticalized use cases to reduce friction and accelerate time to value. By sharpening our ICP towards teams with true collaborative intent and improving early engagement, we aim to improve our conversion efficiency, strengthen our retention, and rebuild PLG as a durable growth driver over time. Our third priority is go-to-market excellence. We drove meaningful productivity in sales efficiency gains in Q4. Our focus in FY27 is to compound that progress. We're redesigning our territories towards the highest propensity opportunities to align our coverage. We're equipping our sellers with AI-powered tools to prioritize high intent leads and surface clear next best actions in real time. We're investing in channel tooling and enablement, and we're going to better align our incentives between our field teams and partners to scale enterprise expansion more efficiently. At the same time, we're going to be strengthening that connection between our PLG and SLG by better surfacing product-qualified leads with demonstrated intent and a high conversion propensity. Together, these initiatives position go-to-market execution as both a growth lever and a sales efficiency lever. Our final priority is around speed and discipline. Realizing our potential as a foundational system of action layer of the agendic enterprise requires greater velocity and disciplined capital allocation. We're accelerating the build-out of our low-cost R&D hubs, which we expect to meaningfully expand our development capacity by the end of FY27, while also improving our cost structure. At the same time, we're prioritizing the highest leverage initiatives, reallocating resources towards areas of strongest return and embedding AI throughout our internal operations to drive productivity and efficiency. We believe these actions increase execution velocity, while also freeing up capital to reinvest in growth and expand our margins. For us, accelerating growth and expanding margins are not trade-offs this year or going forward. They're mutually reinforcing outcomes of disciplined execution. Taken together, our structural differentiation, our role as a semantic memory and execution layer for enterprise work, and the accelerating enterprise adoption of our AI platform underscore that Asana is becoming the foundational system of action layer of the agentic enterprise. Before I pass it to Sonali, I want to share a leadership update. Sonali has decided to pursue another opportunity in a non-competitive, non-adjacent space. While we'll certainly miss her, we're all super grateful for the leadership, partnership, and financial discipline she's brought to Asana. But more importantly, I'm excited to announce our new CFO, Aziz Meghji. Sonali brought Aziz Meghji into Asana as her first priority hire. and he currently leads our FP&A and investor relation functions. Many of you on this call are already familiar with Aziz. He has been and continues to be a driving force in shaping our financial strategy, operating rigor, and investor and analyst engagement. Aziz brings with him more than 20 years of experience leading technology companies across strategy, capital markets, and FP&A. I've been intentionally pulling him into broader strategic work, including spearheading key initiatives within our go-to-market strategy. His impact there, combined with his deep institutional knowledge, makes him a natural choice to lead our finance organization going forward. This is a well-deserved promotion. I couldn't be more excited. And I expect a seamless transition that allows us to maintain our momentum without missing a beat. I want to thank Sonali for her contributions and leadership, and I'll now turn it over to her.