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Asana Stock Tumbles. The Company Is Warning of Larger Losses.

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Asana reported better-than-expected fiscal fourth quarter results on Wednesday.

Courtesy Asana

Shares of


Asana

are trading sharply lower in late trading Wednesday despite better-than-expected results for the company’s fourth-quarter. That earnings news was overshadowed by Asana’s plans to step up its rate of investment in the business, and its forecast for a higher-than-expected loss for fiscal 2023.

Shares of the company, which provides workplace management software, are down 18% in after-hours trading, to $40.10.

For the fiscal fourth quarter ended Jan. 31, Asana (ticker: ASAN) reported revenue of $111.9 million, up 64% from a year ago. That’s above the company’s guidance range of $104.5 million to $105.5 million and Wall Street’s estimate of $105.2 million.

On an adjusted basis, Asana lost $46.9 million in the quarter, or 25 cents a share, a little narrower than the Wall Street consensus forecast for a loss of 28 cents a share. Under generally accepted accounting principles, the company lost $90 million, or 48 cents a share.

For the full fiscal year, Asana posted revenue of $378.4 million, up 67%, with a non-GAAP loss of $162.9 million, or 92 cents a share.

But the story for investors Wednesday is that the company is planning to ratchet up investment in the business, a bet on growth that will boost losses in the near-term.

For the January 2023 fiscal year, Asana sees revenue of $527 million to $531 million, up 39% to 40%, and above the old Wall Street consensus of $506 million. In remarks prepared for the company’s quarterly conference call with investors, chief financial officer Tim Wan said that as Asana increases its focus on serving large enterprises, it plans to increase its sales and support teams, boostings costs. Asana sees full year non-GAAP operating margin losses on a percentage basis in the mid-40s, widening from -39% in the January 2022 fiscal year.

For the fiscal first quarter, Asana is projecting revenue of $114.5 million to $115.5 million, up roughly 50% and above the Wall Street consensus forecast at $110.9 million, with a non-GAAP loss of 35 to 36 cents a share, wider than analysts’ estimate for a loss of 27 cents a share.

Asana said it ended the year with over 119,000 paying customers. Of that group, 15,437 are paying over $5,000 a year, up 52% from a year ago, and 894 are paying more than $50,000 a year, up 125%.

“Our fiscal year revenue growth accelerated versus the previous year, led by strength in the enterprise and strong demand across the customer base,” co-founder and CEO Dustin Moskovitz said in a statement.

As Barron’s has reported, Moskovitz has been steadily and aggressively buying Asana shares in the open market—since June, he’s purchased more than 19 million Asana shares at a total cost of more than $1.22 billion. A recent filing with the SEC shows that he now controls more than 54% of Asana’s total shares outstanding.

Write to Eric J. Savitz at eric.savitz@barrons.com

Asana stock falls 15% after loss more than doubles, forecast calls for more red ink

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