Asana (ASAN -24%) faces a significant drop in shares due to its Q4 results and the announcement that co-founder, CEO, and Chairman Dustin Moskovitz will transition to the sole position of Chairman once a new CEO is appointed. The workforce management software company provided mixed guidance for the upcoming quarter and fiscal year 2026, with earnings projections above consensus but revenue expectations falling short.

ASAN's Q4 performance showed revenue of $188.3 million, a 10.1% year-over-year increase, aligning with the high end of its forecast range of $187.5-188.5 million. Adjusted earnings broke even, surpassing the predicted $(0.02)-$(0.01) range. Non-GAAP operating margins improved by over 800 basis points year-over-year, resulting in an operating loss margin of just 1%. Moskovitz anticipates non-GAAP profitability in Q1, projecting an adjusted EPS of $0.02.

Non-tech verticals significantly contributed to Q4 revenue growth, rising by 15% year-over-year. Fast-growing sectors included manufacturing, energy, consumer retail, and media. ASAN also made strides in enterprise customer acquisition, with its $100,000 cohort growing by 20% year-over-year, an acceleration from the previous quarter.

AI remains crucial to ASAN's growth strategy. Moskovitz noted that AI momentum exceeded expectations, with hundreds of large customers using workflows powered by AI Studio. ASAN plans to form a dedicated sales team for AI Studio, capitalizing on the opportunity as AI Studio's general availability launches later in Q1.

Despite the strong AI demand, ASAN's revenue outlook is disappointing, with Q1 revenue expected at $184-186.5 million, a slight sequential decline, and FY26 revenue projected at $782-790 million, an 8.6% year-over-year increase at the midpoint, down from an 11.0% rise in FY25. The guidance assumes no significant changes in the macroeconomic or spending environment, which is concerning given the risks of a macroeconomic slowdown. ASAN is also optimizing its go-to-market strategy by reallocating resources, which may take several quarters to realize benefits.

The main concerns today are the guidance and Moskovitz's departure as CEO. His leadership has been pivotal since ASAN's 2020 IPO and throughout the challenges posed by rising interest rates. As the market shifts away from riskier assets, ASAN's stock has suffered, dropping significantly from levels before its +40% surge following Q3 results in December. Investors worry about the macroeconomic risks and the company's direction without its co-founder, which could hinder near-term stock appreciation.