Non-GAAP Profitability Achieved as Asana Advances AI Innovation
For the third quarter of fiscal 2026, Asana reported solid financial results that highlight both improved operating efficiency and continued growth in key customer segments. Notably, the company posted a non-GAAP operating income of $16.34 million, marking a significant swing from a loss in the previous year. This comes as the company exceeded the high end of its revenue guidance and doubled down on innovation in artificial intelligence with its AI Teammates announcement.
Core Customer Revenue Jumps 10%, Retention Remains Strong
Asana's focus on its highest-value customers continues to pay off. The number of customers spending $5,000 or more annually grew by 8% year over year, reaching 25,413 in Q3. Even more telling, revenues from these core customers climbed 10%. The retention story remains solid, with an overall dollar-based net retention rate of 96%, and 97% specifically among core customers—showcasing robust customer loyalty even as Asana expands its feature set and moves further into AI-driven productivity.
| Metric | Q3 FY26 | Change YoY |
|---|---|---|
| Revenues (million) | $201.03 | +9% |
| Non-GAAP Operating Income (million) | $16.34 | +— (vs. loss prior year) |
| Core Customers (>$5,000/yr) | 25,413 | +8% |
| Core Customer Revenue | — | +10% |
| Net Retention Rate | 96% | - |
| Core Net Retention Rate | 97% | - |
| Cash Flow from Operations (million) | $16.17 | Improved (from -$14.89M) |
| Adjusted Free Cash Flow (million) | $13.43 | Improved (from -$18.18M) |
AI-Driven Product Announcements Point to Long-Term Strategy
The quarter saw Asana launch "AI Teammates," collaborative AI agents designed to enhance productivity and work quality by executing tasks alongside human teams. Early customer results suggest meaningful productivity improvements—a key driver for both customer retention and upsell. This innovation comes as Asana bolsters its executive team with a new Chief Product Officer and expands its influence through flagship events, reinforcing its push to shape the future of work with AI-powered solutions.
Financial Performance: Margins Up, GAAP Loss Narrows
While the GAAP operating loss stood at $70.0 million (35% of revenue), Asana delivered non-GAAP net income of $17.89 million for the quarter, versus a non-GAAP net loss a year ago. Non-GAAP gross margin remained strong at 89.1%. On the cash flow side, both operating and adjusted free cash flow turned positive after being negative the previous year. These improvements are attributed to more efficient spending and the scaling of higher-margin services.
| Profitability Metrics | Q3 FY26 | Q3 FY25 |
|---|---|---|
| Non-GAAP Operating Margin | 8.1% | -4.1% |
| Non-GAAP Net Income (million) | $17.89 | -$4.78 |
| GAAP Net Loss Per Share | -$0.29 | -$0.25 |
| Non-GAAP Diluted Net Income Per Share | $0.07 | -$0.02 |
Outlook: Continued Growth with Focus on Margin Improvement
Looking ahead, Asana has raised the high end of both its full-year revenue and non-GAAP operating income guidance. The company now expects Q4 revenue between $204.0 and $206.0 million (8%–9% growth), and FY26 revenue of $789.0 to $791.0 million (9% growth). Non-GAAP operating income for the year is projected between $52.5 and $54.5 million with operating margins at 7%. For investors and industry watchers, these targets, paired with strong retention and AI-driven initiatives, suggest management’s focus is firmly on sustainable growth and operational leverage.
Key Takeaways for Stakeholders
Asana's third quarter paints a picture of a company executing on its dual mandates: drive sustainable profitability while expanding its AI leadership. Strength in high-value customer segments, improved margins, and positive cash flow all point to greater financial discipline and long-term resilience. With the introduction of new AI tools and elevated guidance, Asana is positioning itself as a leading platform for modern work, underscored by tangible business gains and technological progress.
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