Asana, Inc.

Good day, and thank you for standing by. Welcome to the Asana first quarter fiscal year 2027 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there'll be a question and answer session. To ask a question during the session, you'll need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to turn the conference over to your speaker for today. Eva, 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 Asana's first quarter fiscal year 2027. With me on today's call are Dan Rogers, our Chief Executive Officer, and Asis Maggi, our Chief Financial Officer. Today's call will include forward-looking statements, including statements regarding the expected release and benefit of our product offerings and our expectation 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, including with respect to current or future M&A activity, our market position and growth opportunities, and our capital allocation, including our stock repurchase program, among other items. Forward-looking statements include risks, uncertainties, and assumptions that may cause our actual result 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 might 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 the closest GAAP equivalents are available in our earnings release, which is posted on our investor relation webpage at investors.asana.com. And with that, I'd like to turn the call over to Dan.

We delivered a strong start to the year. With revenue of $205.1 million, up 9.5% year over year, and above the hand of our guidance. We also exceeded expectations on profitability with non-GAAP operating margin expanding up to 11.5%, up 720 basis points year over year. This reflects continued progress in driving both growth and operating efficiency across the business. Importantly, we're seeing positive trends across customer retention, expansion, and AI product adoption. We believe these are encouraging indicators of improving business health. One of the clearest indicators of this progress is net retention rate, or NRR. Our reported rolling four-quarter NRRs improved across all cohorts, while overall in-quarter NRR improved for the fourth consecutive quarter to 97%. This improvement was broad-based across both gross retention and expansion activity. This reflects a healthier seat adoption trend, improved customer engagement, and continued early traction from our AI products. In the technology sector, we returned to positive year-over-year growth for the first time in eight quarters. This is an encouraging sign that this vertical, that has been a headwind over the past couple of years, is now seeing improvement, driven by adoption across multiple products. Customers such as Corweave and Epson expanded with additional seats and AI products this quarter. Growth in non-tech sectors continue to outpace overall company growth. This reflects our diversification across industries and customer use cases. We continue to see strong engagement, where we tailor our solutions to customer-specific ICPs and industry workflows. During the quarter, customers, like one of the nation's premier consulting firms and a Fortune 500 industrial technology company, both expanded their seat deployment and adopted our AI products. International revenue grew 12% year over year, which outpaced the overall business, led by strong performance in both EMEA and APAC. We also added several notable customers during the quarter, including a British athletic apparel brand and IKEA Australia. These underscore the growing global demand for our platform and AI solutions. On reflection, our Q1 performance reflects the deliberate choices we made across go-to-market, and product strategies over the past several quarters. We're beginning to see measurable benefits from initiatives that have been focused on area monetization, customer retention, sales productivity, and operational efficiency. Within our product-led motion, while the business remains a near-term headwind to growth, our ongoing initiatives have us well-positioned for stronger long-term acceleration. Asana's strategy is to become the operating system for human agent teams. We've all experienced the personal productivity uplift from working with AI chatbots. But for many organizations, that has not yet translated into real productive uplift for their teams or their company. This is the great AI gap today. At Asana, we believe this real enterprise productivity unlock comes from humans and agents working together on critical workflows that run the business. We see four reasons. why most companies haven't yet crossed this great AI gap. Firstly, it's hard for teams to discover agents and to visualize their current processes and workflows. Number two, there's really no framework for individuals to interact with agents in a multiplayer mode with the rest of their teams. Number three, most agents aren't onboarded with context of how their teams operate and what they care about. Number four, CAOs and IT leaders are very worried about Agent Palooza. This is agents running a mock with full access to data and with very limited cost oversight. Asana is the solution. We are the operating system for humans and agents to workflow together. Let's address each of these four blockers. Firstly, with Asana, our agents, Asana teammates, they make themselves known offering to help you as you work so you can easily discover them and quickly visualize your workflows with no code builders. Architecturally, Asana is multiplayer from the get-go. This is a fundamentally hard concept to deliver. With Asana, it means all teammates can now train and improve the agents they work with, while agents learn ambiently from tasks and conversations with all of their human teammates. Number three, with shared memory and more than 20 ready-to-go agents across marketing, IT and operations, our teammates can scan all of the existing work in your work graph to pre-train themselves. Then, over time, they compound their learning, operating on a common enterprise ledger to stay coordinated. And fourth, because of our agents operating on the same coordination paradigm built for human collaboration, it's very easy to manage their data access. approve their actions, and provide cost guardrails. So what does this look like in practice? Imagine a manufacturing team launching a new product with Asana. Program manager might kick off a new product introduction process using our AI Studio workflow. Then that might invoke an AI teammate to create the project, draft the plan, and assign the workout. Some of those tasks might end up with humans engineers for example some might be delegated to agents to handle spec reviews and supplier checks as decisions get made the team teaches the agents what good look like and the next launch runs that much sharper this is engineering operations and marketing and agents all working of the same plan and moving together humans and agents moving work faster Looking at our AI products, it's been roughly one year since AI Studio became generally available, and the adoption trends continue to strengthen. Customers are embedding automations into their core operational workflows. AI Studio automates the repeatable work, like intake, classification, routing, quality checks, and reporting. And because AI Studio is no code and embedded directly into existing workflows, customers can deploy and scale it quickly. In fact, customers are embedding AI Studio automations into their business-critical workflows today, and this contributes to strong retention dynamics. Early data shows customers adopting AI Studio have higher retention and stronger net revenue retention relative to the broader customer base. The primary driver of NRR outperformance is seed expansion, not simply lower churn. Customers who embed AI Studio into their workflows are not only staying, they're expanding, adding seats, and deepening their investment in the platform. During the quarter, the number of customers spending over $100,000 annually on AI Studio nearly doubled. This includes expansion with one of the largest managed healthcare companies in the US and a multinational media and entertainment conglomerate. Now let's talk about AI teammates. Remember, these are the shared agents assigned to real projects, working alongside real people. What differentiates AI teammates is they operate within the shared context of Asana's enterprise work graph, with shared memory, governance coordination, and multiplayer mode across teams. These capabilities become increasingly important as enterprises move from experimenting with AI to operationalizing it across real businesses to deliver real productivity. While still early, we're encouraged by the initial customer response. Paid conversion from our beta cohort has been strong, and the productivity impact is tangible. In fact, tasks involving the AI teammate are now completed nearly nine times faster. Today, we offer more than 20 out-of-the-box teammates across functions including marketing, operations, and planning. Taken together, our AI product bookings now represent 17% of net new ARR in Q1. This is ahead of the pace required to achieve our 15% full-year target. What is particularly encouraging is the level of engagement we're seeing with our AI products across some of the leading innovators in AI, including Anthropic and CoreWeave. Anthropic has grown with Asana as they have scaled as a company. Building on their existing investments in AI Studio, Anthropic is also one of our newest AI teammates customers. and employees are now connecting CLAW directly into the work graph through Asana's MCP integration. CoreWave, a leading AI cloud provider, has expanded its use of Asana over the past two years, growing from 15 seats to more than 1,000 across teams. And they're now an AI teammates customer. CoreWave uses Asana across data center operations, IT, supply chain, technical program management, and marketing. In the next two customer examples, FedEx and COS, will demonstrate the operating system for human agent teams and what that looks like in practice. In both cases, Sana's powering business-critical workflows where humans and AI teammates work together with a shared context, shared memory, multiplayer mode, and governance enterprises require. FedEx purchased AI Studio last year. They joined the AI teammates beta at inception. and they've since deployed AI-powered workflows across marketing, sales, strategy, product, and operations, driving a 9x improvement in speed to market and hundreds of thousands of dollars of operational savings. Here's how it works in practice. FedEx Marketing uses AI Studio to consolidate intake from more than 24 forms into a single, intelligent workflow that analyzes submissions, removes duplicate work, and routes requests to the right strategy lead. AI TeamMates then picks up the work. It drafts go-to-market plans and creative briefs, reducing cycle time from weeks to days and reclaiming over 1,200 hours annually. Looking at sales enablement, FedEx Sales was fielding high-volume requests from global teams. With no standardized process for evaluating or sequencing work, requests were assessed manually and in isolation. making it nearly impossible to identify redundant efforts or coordinate across markets. With AI Studio, incoming requests are now automatically matched against the work graph to flag overlapping work and bundle together related initiatives before any human review. Intake review time dropped from 90 minutes to 30 minutes per request. From there, an embedded AI teammate generates go-to-market materials, competitive intelligence materials automatically. while automated portfolios handle cross-region sequencing in real time, so seller capacity flows to the highest priority launches rather than being managed through spreadsheets. And at the leadership level, FedEx deployed AI teammates across their global portfolios, achieving 100% visibility into global initiatives and reclaiming over 300 hours per year previously spent on manual alignment, compressing planning timelines from weeks to days. Looking at Coz. Coz is the global fashion brand within the H&M group. They deployed AI Studio and AI Teammates to automate campaign production across marketing, e-commerce, and regional teams worldwide. Using AI-powered intake and workflow automation, Coz automatically generates full campaign projects with more than 50 structured subtasks. They dynamically assign work based on asset type, region, and team capacity. And they manage cascading deadlines across the product lifecycle. preserving workflow context as work moves between departments. The quality check AI teammate then proactively reviews all completed assets, identifies issues before they cascade, and helps coordinate execution across their global teams. This results in a 90% reduction in campaign setup time for them, a doubling of asset output to more than 1,000 assets per campaign, and adds up to nearly 3,000 hours of annual manual work eliminated. to focus on strategic and creative execution. As Kost described it, Asana hasn't merely improved our processes, it has redefined how we work. We've established a unified and transparent ecosystem where all work is seamlessly visible. At Asana, we believe the great productivity unlock from AI comes when humans and agents work together in your business critical workflows. The stories we just heard from customers like FedEx and KOS show the huge increase in velocity and output that's possible when real workflows are optimized to the AI era. And as we all know, the most complex workflows don't stay with inside a single system. They span CRMs, contracts, ERPs, collaboration tools, and every platform where work actually lives. And that is why today we're announcing the acquisition of Stack AI. Stack AI is a privately held AI software company that offers a no-code AI workflow platform that enables organizations to design, test, deploy, and govern custom AI agents and intelligent automations within business-critical workflows. This platform connects workflows, data, and actions across enterprise systems to automate complex operational processes, such as customer support, IT service requests, compliance workflows, and broader cross-functional business operations at scale. Their customers range from small businesses to large global enterprises, with deployments spanning to more than 1,000 workflows running on the platform. Based in San Francisco, Stack AI has achieved commercial traction and built a strong roster of enterprise customers across industries, including within highly regulated industries where security, governance, reliability, and enterprise-grade controls are critical. Stack AI is the logical evolution of AI Studio and accelerates our roadmap by over a year. While AI Studio made it easy to create powerful automations around intake, routing, and request processing, Stack AI extends those workflows across the enterprise and data sources, enabling customers to orchestrate and automate more complex cross-functional workflows that span CRMs, ERPs, databases, support systems, contracts, and custom infrastructure. Now, Our customers are going to be able to quickly recruit ramped agents into their everyday work with AI teammates, create simple AI rules and automations with AI Studio, and orchestrate whole processes end-to-end with the power of Stack AI. Together, this allows us to deliver the operating system for human agent teams, delivering on the real productivity promise of AI. Now proof of concept with the Stack AI team. Our marketing team were able to gentrify a really complex SEO process. They created bi-directional integrations with five marketing data stores, summarized insights, then handed over to an AI teammate that had been trained by their human teammates to take action. Powerful stuff. We hope our customers are going to be as wowed as we were. The company is led by co-founders Tony Rossignol and Bernard Acetuno. both MIT PhDs and two of the sharpest minds shaping the future of the agentic enterprise. I couldn't be more excited to welcome Tony and Bernard and the entire Stack AI team to Asana. And I'm even more excited to introduce Stack AI to our customers. This is the orchestration capability enterprises have been asking for as their workflows grow more complex, more cross-functional, and more agent-driven. It's been almost a year since I joined Asana. And when I look at the business today, we're making meaningful progress against a very ambitious vision. Asana pioneered collaborative work management. Our next category defining opportunity is becoming the operating system for human agent teams. As organizations increasingly rethink how work gets coordinated and executed in a genetic world. We're executing with significantly greater focus, velocity, and operating discipline. We're shipping products faster, improving sales productivity, expanding margins, and going deeper with customers than ever before, which is reflected in our improving retention rates. And within the last year, we've become a true multi-product AI platform with the launch of AI studios, AI teammates, and now adding Stack AI into our portfolio. On June 4th, we're going to host our annual Marquee customer event, the Work Innovation Summit in London. There, we'll unveil our vision for the agentic enterprise, showcase the next generation of innovations across our AI products and our broader AI platform roadmap. We believe Wiz will mark an important moment in how customers in the market understand Asana's role as the OS for human agent teams. Following Wiz on June 8th, we'll host a webinar for investors and analysts focused on the future of human agent work and the role Asana's OS for human agent teams is going to play in enabling the self-driving enterprise. We'll showcase our latest product innovations and roadmap and demonstrate how customers are already realizing value from AI Studio, AI Teammates, and Stack AI. Additional details about the webinar will be available on our investor relations website shortly. With that, I'll turn things over to Aziz.