Asana’s 10% revenue growth was a bright spot in Q2

Work management platform provider drain (ASAN -5.48%) reported fiscal second-quarter 2025 earnings on Tuesday, which showed a 10% year-over-year increase in revenue to $179.2 million. However, the company also reported increased net and operating losses on a generally accepted accounting principles (GAAP) basis year over year.

The quarter showed mixed results overall, with strategic developments in AI and customer acquisition as well as continued profitability challenges.

Source: Asana. Note: Management expectations are based on guidance provided as of May 30, 2024.

Asana’s business overview

Asana specializes in providing a work management platform that enables teams to organize, track and manage their work. The company’s competitive edge lies in its unique technology, particularly the Asana Work Graph, which maps how work is done across organizations. Recently, the company has focused on integrating artificial intelligence (AI) capabilities, significantly improving its platform. Customer acquisition was robust, particularly among high-income customers.

Notable developments in Q2

Asana’s second-quarter revenue beat management’s expectations. This growth reflects strong market adoption and successful customer acquisition strategies. Asana reported a 17% year-over-year increase in customers spending $100,000 or more annually to 649 customers.

Serving all those added customers helped push the company’s GAAP operating loss to $76.8 million from $73.4 million a year ago. Non-GAAP operating loss of $15.7 million was below expectations of $21 million to $23 million, showing improved operating efficiency. However, GAAP net loss increased slightly to $72.2 million, indicating challenges in controlling overall losses. The company also faced a reduction in free cash flow to $12.8 million from $14.6 million a year earlier, showing stress in operating cash generation.

Asana’s integration of AI into its platform was a key focus this quarter. The launch of “Asana AI Teammates” aims to use AI to increase productivity. This initiative is part of its broader strategy to incorporate cutting-edge technology into its work management solutions.

Separately, Asana announced the appointment of Sonalee Parekh as Chief Financial Officer. Parekh will take over on September 11, succeeding Tim Wan, who has held the role since 2017. Wan will remain with the company in an advisory role to support the transition.

Looking ahead

For the third quarter of 2025, Asana projects revenue of $180 million to $181 million, representing 8% to 9% year-over-year growth. The company anticipates a non-GAAP operating loss of $18 million to $19 million and projected a non-GAAP net loss per share of $0.07. Asana cut the high end of its previous full-year revenue guidance to $721 million from $724 million, while maintaining the low end of $719 million. That still suggests about 10% annual growth in the middle.

Investors should focus on the company’s ability to manage costs and drive additional AI innovation to sustain competitive advantages.