[Management View]
Asana achieved non-GAAP profitability for the first time in Q1 FY2026, with total revenue of $187.3 million, up 9% YoY. AI Studio surpassed $1 million in ARR, showcasing strong early momentum. The company closed its largest deal ever, a three-year $100 million-plus contract renewal, enhancing forward visibility.

[Outlook]
Asana expects FY2026 revenue of $775 million to $790 million, representing 7%-9% YoY growth. Non-GAAP operating margin is projected to be at least 5.5%. The introduction of tiered AI Studio packages and Smart Workflow Gallery aims to drive AI adoption and usage-based revenue streams.

[Financial Performance]
- Total Revenue: $187.3 million, up 9% YoY
- Non-GAAP Operating Margin: 4%, improved by over 1,300 basis points YoY
- Adjusted Free Cash Flow Margin: 5%, improved by over 700 basis points YoY
- Core Customers: 24,297, up 10% YoY
- $100,000+ Customer Cohort: 728, up 20% YoY
- Net Retention Rates: Overall NRR 95%, Core Customer NRR 96%, $100,000+ Cohort NRR 95%

[Q&A Highlights]
Question 1: Great to see AI Studio cross the $1 million ARR threshold. Can you break down the $1 million ARR and discuss potential upside scenarios for the back half of FY2026?
Answer: The $1 million ARR represents a diverse distribution of customers across regions and segments. It comprises AI Studio Pro platform fees. Future upside includes incremental consumption, the launch of the Smart Workflow Gallery, and the introduction of the Plus SKU and AI teammates, which will open up more to the SMB market and enhance user benefits.

Question 2: Can you provide more details about the $100 million contract renewal in the tech vertical and its impact on ACV and AI Studio?
Answer: The renewal was the largest deal in Asana's history, with a $100 million TCV over three years. It resulted in a modest ACV downgrade, impacting net retention, particularly in the tech vertical. The renewal provides greater visibility into FY2027 and FY2028. AI Studio is not yet factored into the renewal, presenting potential upside.

Question 3: How do you view the ROI of AI Studio compared to other AI agents in the market, and are you confident in achieving significant AI Studio revenue by year-end?
Answer: Asana's AI Studio is successful because it integrates into existing workflows, avoiding the need for behavior change. Customers see value in AI Studio's ability to handle parts of workflows and collaborate with humans. While achieving significant AI Studio revenue by year-end is likely, it depends on customer adoption and usage.

Question 4: Can you clarify the pressure on enterprise and mid-market segments and how Asana is mitigating churn and contraction?
Answer: Asana is seeing early signs of budget pressures, workforce reductions, and tool consolidation in enterprise and the Americas region. Mitigation efforts include increased customer success management, flexible pricing, AI Studio, and foundational service plans to enhance customer value and retention.

Question 5: How does the lower end of the revenue guidance reflect potential macroeconomic risks?
Answer: The lower end of the guidance reflects a more prudent view, incorporating additional macroeconomic risks and potential worsening of the environment. It accounts for increased buyer scrutiny and downgrade activity, particularly in enterprise and corporate customer bases.

Question 6: How did Q1 billings perform versus internal plans, and what should we expect for billings seasonality and dynamics for the rest of the year?
Answer: Q1 billings growth was 5%, in line with seasonality and the timing of multiyear deal renewals. Billings are expected to align with the guided revenue growth range, with strengths in the SMB business offsetting enterprise downgrade pressures.

Question 7: How does AI Studio act as a catalyst for larger customers to consolidate onto Asana?
Answer: AI Studio enables customers to replace point solutions with integrated workflows on Asana, enhancing data reliability and cross-team collaboration. This consolidation opportunity is driven by the value of having all workflows on a single platform.

Question 8: What are your thoughts on the future of work for young humans in the context of AI advancements?
Answer: AI will significantly impact the workforce, and society needs to prepare for this transition. Redistribution of wealth may be necessary to address job displacement. Asana aims to make the transition smoother by enhancing human-AI collaboration and providing secure, effective tools.

[Sentiment Analysis]
Analysts were positive about Asana's AI Studio momentum and strategic renewals but expressed concerns about macroeconomic pressures and their impact on net retention rates. Management remained confident in long-term growth and profitability.

[Quarterly Comparison]
| Metric | Q1 FY2026 | Q1 FY2025 |
|-------------------------------|-----------|-----------|
| Total Revenue | $187.3M | $171.8M |
| Non-GAAP Operating Margin | 4% | -9% |
| Adjusted Free Cash Flow Margin| 5% | -2% |
| Core Customers | 24,297 | 22,088 |
| $100,000+ Customer Cohort | 728 | 607 |
| Overall NRR | 95% | 98% |

[Risks and Concerns]
- Non-GAAP net retention rate is expected to face headwinds in Q2 FY2026 due to downgrade pressure in enterprise and middle market segments.
- Macroeconomic risks may impact buyer scrutiny and downgrade activity, particularly in enterprise and corporate customer bases.

[Final Takeaway]
Asana's Q1 FY2026 earnings call highlighted the company's transition to non-GAAP profitability and the strong early momentum of AI Studio. The largest deal in company history, a $100 million-plus contract renewal, enhances forward visibility despite a modest ACV reduction. While macroeconomic pressures pose risks to net retention rates, Asana's strategic initiatives, including AI Studio and Smart Workflow Gallery, position the company for long-term growth and profitability.