Good afternoon, and thank you for joining us on today's conference call to discuss the financial results for Asana first quarter fiscal year 2026. With me on today's call are Dustin Moskovitz, Asana co-founder and CEO; Anne Raimondi, our Chief Operating Officer and Head of Business; and Sonalee Parekh, our Chief Financial Officer. Today's call will include forward-looking statements, including statements regarding expected release and benefits of our product offerings, including AI Studio, and our expectation for revenue to be generated by AI Studio, our retention and expansion opportunities, our expectation for our financial outlook, including our revised full-year guidance, strategic plans, and our market position and growth opportunities, and our capital allocation strategy, including our stock repurchase programs. Forward-looking statements involve risks, uncertainties, and assumptions that may cause our actual results to be materially different from those expressed or implied by the forward-looking statements.
Please refer to our filings with the SEC, including our most recent annual report on Form 10-K and quarterly report on Form 10-Q, for additional information on risks, uncertainties, and assumptions that may cause actual results to differ materially from those set forth in such statements. In addition, during today's call, we will discuss non-GAAP financial measures. These non-GAAP financial measures are in addition to, and not a substitute for, or superior to measures of financial performance prepared in accordance with GAAP. Reconciliation between GAAP and non-GAAP financial measures and a discussion of the limitation of using non-GAAP measures versus the closest GAAP equivalents are available in our earnings release, which is posted on our Investor Relations website at investor.asana.com. I would like to turn the call over to Dustin.
Thank you all for joining us on the call today. Q1 was a milestone quarter. We achieved non-GAAP profitability for the first time, and AI Studio, which reached general availability in Q1, surpassed $1 million in ARR, demonstrating powerful early momentum. This progress fuels our journey to sustained profitable growth and positions Asana as the definitive platform for human and AI coordination. In Q1, total revenues were up 9% year- over- year, exceeding the top end of our guidance. Non-GAAP operating margins improved more than 1,300 basis points year-over-year, from an operating loss margin of 9% to an operating income margin of 4%. That is a significant milestone for the company as we reached non-GAAP profitability for the first time. Adjusted free cash flow margin also improved more than 700 basis points year-over-year, with free cash flow margin at 5% for the quarter.
Once again, our non-tech verticals grew faster than overall growth for the quarter and grew mid-teens year-over-year. Some of our fastest-growing verticals this quarter included manufacturing and energy, media and entertainment, and financial services. We continue to make progress in our enterprise customer acquisition. Our $100,000 and over customers grew 20% year-over-year, consistent with last quarter. A landmark achievement last month was closing the largest deal in Asana's history, with one of the largest employers in the world. This three-year, $100 million+ contract renewal is a testament to Asana's unique ability to power complex, cross-functional execution at an enterprise scale. The growth within this customer showcases a powerful combination of organic adoption and intentional expansion, driven by our close partnership with the enterprise engineering teams to demonstrate ongoing value.
After a rigorous evaluation, Asana was selected as its company-wide standard for project, task, work, and goal management, making Asana foundational to how they plan, track, and execute their most critical work. Now let's turn to AI Studio. We've seen tremendous momentum since our Q4 update, driven by customers recognizing the tangible value AI Studio delivers in solving real business problems. We've already crossed $1 million in AI Studio ARR and are entering Q2 with a robust and rapidly growing pipeline. The interest is truly global, with strong traction across all our major geographies. We're even seeing instances where AI Studio ARR is exceeding seat-based ARR.
This highlights how a few users leveraging AI Studio can drive outsized value, and it underscores our conviction that AI Studio has the potential to not only eclipse the revenue scale of seat-based licenses over time, but also to reduce our overall reliance on per-seat monetization. The cross-vertical interest is also exciting, with notable customer wins across manufacturing, retail, technology, financial services, and healthcare, demonstrating strong and widespread demand. What's most encouraging about AI Studio's momentum isn't the initial sales. It's the everyday usage we're seeing. Because the product is embedded directly in the workflows teams rely on, automation happens where the work happens. That makes AI Studio inherently sticky, avoiding the shelfware fate of many hyped AI tools that live in separate apps or chatbots and end up underutilized. Our customers choose AI Studio for three clear reasons.
First, it's built natively into Asana, eliminating the need for behavior or workflow change. Second, its human-in-the-loop controls are built on familiar Asana features: approvals, work assignments, comments, and audit trails, keeping people firmly in charge of every AI step. Third, it runs on our Work Graph, a continuously updating data store of every project, task, goal, and conversation. That deep, structured context lets AI handle longer, more complex workflows and enables true human-AI coordination, something point solution agents simply can't match. This real-world impact is evident with Woolworths, one of Australia's largest supermarket chains with over 1,000 stores. They've implemented AI Studio to transform their safety and capital governance process for store changes. Previously relying on inconsistent slide decks and meetings with up to 60 attendees, they've built a smart workflow with AI Studio that analyzes submissions, identifies required approvers, and automatically routes requests with all relevant context.
This acceleration in decision-making allows Woolworths to implement strategic store improvements faster while maintaining rigorous safety and compliance standards. This kind of targeted automation showcases how our AI capabilities drive both immediate ROI and deeper adoption within enterprise customers. We've also secured our first AI Studio deal in India for a popular bakery chain. Working with a local partner, we've developed an AI Studio solution to prevent fuel theft across their fleet of dozens of vehicles, a common challenge in that market. Using a simple form to upload fuel receipts, AI Studio automatically extracts and logs fuel data, creating a complete audit trail while eliminating manual entry. This has given managers real-time visibility into fleet expenses and improved coordination between drivers and finance teams. The solution is now fully embedded in their daily operations, delivering measurable efficiency gains within weeks of implementation.