Asana, Inc. (NYSE: ASAN), a prominent work management platform focused on human and AI coordination, reported its first-quarter results for fiscal year 2026, revealing a significant milestone in its financial trajectory. For the quarter, which ended April 30, 2025, the company generated revenues of $187.3 million, representing a 9% increase year-over-year. This result exceeded the midpoint of their guidance by 1%.

Asana achieved non-GAAP profitability for the first time, with a reported non-GAAP operating income of $8.1 million, equating to an operating margin of 4%. This marked a substantial improvement from a non-GAAP operating loss of $15.8 million in the same quarter a year prior. Furthermore, non-GAAP operating margins improved by over 1,300 basis points year-over-year.

During the quarter, Asana’s core customers, defined as those spending $5,000 or more annually, increased to 24,297, a 10% rise from the previous year. The company’s revenue from these core customers grew by 10% year-over-year. Additionally, the number of customers spending $100,000 or more on an annualized basis grew 20% year-over-year, totaling 728 customers.

Asana’s dollar-based net retention rate stood at 95% for the quarter, while for core customers, it was 96%. Among the highest-value customers (those spending $100,000 or more), the retention rate was also 95%.

Cash flow dynamics showed a positive trend, with cash flows from operating activities reaching $6.8 million, compared to negative cash flows of $1.9 million in the prior year. Adjusted free cash flow margin improved to 5%, up more than 700 basis points from the previous year.

Looking forward, Asana expects to generate revenues between $192 million and $194 million for the next quarter, indicating year-over-year growth of 7% to 8%. The company’s full-year revenue guidance has been updated to a range of $775 million to $790 million, projecting a year-over-year growth rate of 7% to 9%. Notably, the non-GAAP operating margin guidance for the year has been raised to at least 5.5%.

Asana’s operating expenses in the first quarter broken down into specific categories showed research and development expenses of $48.9 million, a 11% decrease year-over-year; sales and marketing expenses were $83.7 million, down 5.5%; while general and administrative expenses were $27.7 million, reflecting a minor increase of 2.2% from the previous year.

Additionally, the company’s cash, cash equivalents, and marketable securities totaled approximately $470.8 million at the end of Q1. Deferred revenue represented $290.3 million, about 2% lower compared to the same quarter of the previous year.

Despite positive growth in several business metrics, the company did identify potential headwinds related to net retention, particularly concerning the technology vertical and ongoing enterprise customer downgrades.