Asana, the project software company, exceeded expectations for fourth-quarter revenue, reporting revenue of $150.2 million, up 34% from the previous year. The surge in revenue can be attributed to the number of customers spending $5,000 or more on an annualized basis, which increased by 26% from the previous year, while revenue from these customers grew 42%.
Asana’s adjusted net loss per share was 15 cents, which was better than the expected net loss of 27 cents a share. For the full year, Asana’s revenue rose by 45% to $547.2M, showing a strong growth trend.
Asana’s Strong Q1 Forecast
For the first quarter of 2023, Asana is forecasting revenue of $150.0M to $151.0M, which would be up 24% to 25% from last year. The company also expects an adjusted loss per share of 18 cents to 19 cents.
Despite the optimistic forecast, KeyBanc analysts reiterated a Sector Weight rating on Asana stock, noting the heightened execution risk, despite the company’s increasing focus on expenses.
Analysts Remain Positive on Asana
JMP analysts, on the other hand, raised the price target to $28 per share on Asana. The analysts listed four reasons why they remain positive on Asana’s story.
Firstly, Asana has product superiority in the enterprise. Secondly, the company addresses a large TAM, estimated to be $50.7B by 2025. Thirdly, the company is on track to be FCF positive at some point before the end of FY2024. Finally, Mr. Moskovitz purchased 19M shares of Asana stock in September 2022 and announced today an additional 30M share trading agreement, further demonstrating his faith in the company and removing any doubt surrounding Asana’s liquidity.
Asana’s Full-Year Forecast
For the full year, Asana is forecasting revenue of $638.0M to $648.0M, which would be up 17% to 18%. The company also sees an adjusted net loss per share of 55 cents to 59 cents.
Despite the heightened execution risk, Asana’s surge in customer revenue and optimistic Q1 forecast are signs of a company on an upward growth trajectory. With product superiority in the enterprise, addressing a large TAM, and a CEO who is investing heavily in the company’s future, Asana has the potential to become a major player in the software industry.
