Detailed Narrative
Retention inflection across all cohorts
Reported rolling 4-quarter NRR improved across all cohorts, while in-quarter overall NRR improved for the fourth consecutive quarter to 97% — the largest single-step improvement in that sequence coming from Q4 to Q1. Trailing dollar-based NRR was 96%, with core-customer NRR at 97% and $100K+ NRR at 96%. Gross retention has now also improved for four straight quarters. The larger share of the NRR improvement came from expansion rather than churn, driven by broader multiproduct adoption, growing AI-product contribution and continued seat expansion within enterprise customers.
AI product monetization and the 'OS for human-agent teams' strategy
Roughly one year after AI Studio's GA, AI product bookings reached 17% of net new ARR in Q1, ahead of the ~15% full-year target. The number of customers spending over $100,000 annually on the AI Studio SKU nearly doubled quarter-over-quarter (spend on AI Studio runs at a double-digit percentage of a customer's core Asana spend). AI Teammates reached GA roughly 60 days ago with 20+ out-of-the-box teammates; tasks involving AI Teammates are completed nearly 9x faster, and paid beta-cohort conversion has been strong. Management frames Asana as the operating system for human-agent teams, differentiated by the Work Graph, multiplayer mode, shared memory and enterprise governance.
StackAI acquisition
Asana announced the acquisition of StackAI, a San Francisco-based no-code AI workflow platform (MIT-PhD co-founders Tony Rosinol and Bernard Aceituno) that orchestrates agents across CRMs, ERPs, databases, support systems and contracts. Deal terms: ~$75M upfront cash plus an equity-based earn-out, adding ~50 engineering and AI-focused go-to-market employees. Management says StackAI accelerates the AI roadmap by over a year and is the logical evolution of AI Studio; some StackAI customers already run 1,400 workflows in a single deployment. Post-transaction, Asana would retain over $350M in cash and marketable securities.
Technology vertical returns to growth
The technology vertical returned to positive YoY growth for the first time in 8 quarters, following flat growth the prior quarter — a two-quarter improvement after roughly two years of headwind. The recovery is driven primarily by expansion (AI Studio and AI Teammates adoption) and seat expansion among tech customers such as CoreWeave, Anthropic and [Epson]. Management deliberately excluded this recovery from guidance, still assuming trends from two quarters ago, and noted multiproduct mitigants have prevented seat downgrades even amid continued tech-sector layoffs.
Profitability and operating efficiency
Non-GAAP operating margin expanded to 11.5% ($23.6M operating income), up 720 bps YoY, aided by ~$3M of opex shifting from Q1 into H2 (Work Innovation Summit timing). Non-GAAP gross margin was 88%. R&D was $47.5M (23% of revenue, down 270 bps), S&M $83.5M (41%, improved 20 bps) and G&A $26.7M (13%, improved 360 bps). Gains reflect operating leverage, infrastructure/cloud-cost optimization, headcount discipline and internal AI deployment — e.g., embedding AI Teammates into security review delivered 10x–15x greater coverage without added headcount.
Balance sheet, cash flow and capital return
Cash, equivalents and marketable securities ended Q1 at ~$424.6M. Adjusted free cash flow was $34.4M (17% margin), boosted partly by earlier-than-expected collections expected to normalize📎. Asana repurchased $45M of Class A stock (7.4M shares at an average $6.11), leaving ~$155M of authorization. RPO rose 23% YoY to $518.1M and cRPO grew 18% YoY (79% of total RPO, to be recognized over the next 12 months), with both growth rates accelerating versus last quarter. Deferred revenue was $323.1M, up 11% YoY. The StackAI deal does not change buyback plans or the intent to retire the term loan at maturity.