Perfect. All right. Morning, everybody. Welcome to the 2026 version of the KeyBanc Emerging Technology Summit. My name's Jackson Ader, software analyst here at KeyBanc Capital Markets Inc. Very pleased to have Jackson Ader here, who's a celebrity as of last night. New incoming CFO at Asana, former head of FP&A and IR. Got the promotion, yeah, literally last night, right?
Yeah.
Was the announcement, I guess, to the, to the public. Couple of quick things. We will just. I've got a bunch of questions prepared obviously. We'll let Jackson Ader introduce the company for those that aren't perfectly familiar just briefly. I will open it up to you guys if you have any questions, but we'll try and keep it tight to 25 minutes. With that, Jackson Ader , yeah, thanks for being here.
Absolutely.
Why don't you do a just a very quick overview of the company, and then we'll talk about earnings. They released earnings last night.
Terrific. Well, it's great to be with you. It's my first fireside or in this new role as of 12 hours, it's good to be here. Asana, if you're not familiar with the company, we are a leader in the collaborative work management space, and that space is really transitioning into human AI collaboration, execution and coordination. We were founded about 17 years ago by Dustin Moskovitz, who's the chairman of our board and still very active in the company around this premise. You know, he founded Facebook and the social graph, and connecting users and communities, and translating that architecture to work. He came up with this Work Graph architecture which connects the who, the what, the why, the when of work, and drives better productivity, and connection through organizations.
We're about a $800 million revenue business, profitable, and love to unpack that. you know, no debt, clean balance sheet, and really at that cycle where we are tapping and focused on this new agentic enterprise opportunity, a large, and faster growing TAM than our traditional CWM. We're, we're excited about the platform we've built and the innovation pipeline and, re-accelerating growth in the long term.
Last night announced fourth quarter fiscal 2026 results and gave your initial guidance for fiscal 2027, calendar 2026. Slight beat on the top line. Outlook for 2027 below what the street and what we were hoping for for 2027. How did the year end, and what kind of puts and takes are factored into next year's guidance?
Yeah. We characterize FY 2026 and Q4 as really solid. You know, FY 2026 was really a transition year from being a single platform, single product company into a multi-product company. We introduced our AI workflow platform in Q1 of FY 2026, then we went beta with AI teammates, our agentic offering, just this past quarter. Really a transition year to a multi-product company, the results we're proud of. You know, we grew revenue in Q4 by about 9.2%, which was above the midpoint of our guide. We had solid operating profit. You know, we've sequentially improved operating margin for now five straight quarters. We delivered 9% operating margin, which is about, you know, 1.5% on a margin basis, above our guide.
That translated into strong free cash flow, 13% free cash flow margin. If you look about our journey year-over-year on our operating margin basis, we improved operating margin in fiscal 2026 by 1,300 basis points. You know, 7% for the full year. You know, on the KPI basis, we saw NRR improve for the 3rd straight quarter on an in-quarter basis, which is really encouraging. You know, we started predominantly tech. You know, we were a new company with a new idea. Tech is often early adopters.
Yeah. Dustin came from tech too.
Dustin came from tech.
I mean, like, you know, you're gonna sell to your friends first.
Yeah. Our largest customers are in tech.
Yeah.
Our tech business has declined for 6 straight quarters because of the pressure on expansion. They're not hiring as fast, then some of them are reducing headcount. Q4 was the first time in 7 quarters where we did not decline in the tech business. That was on the back of really strong net retention on our large renewals, which were predominantly tech, as well as some strong new lands. Really proud about that as well. Then AI Studio, it was introduced Q1. We've now had three full quarters with AI Studio. We generated $6 million in ARR for the year. We have now 8 customers as of the end of the quarter generating $100,000 or more in ACV, and so we're super excited about that and the progress there.
AI teammates is in beta, and we're seeing strong reaction to that. Solid quarter. You know, the guide, we guided to 7.5%-8.5% on growth. So 8% midpoint, which was I think about 30, 40 basis points below consensus. You know, baked into that guide is a few different assumptions. One, our PLG business. Our business is kind of split between 40% SMB, which is predominantly product-led growth, and then 60% on the sales-led, which is mid-market enterprise. That product-led growth business is a headwind right now. It's about a 2% headwind to ARR. In absent of that headwind, we would've guided above consensus and to a re-acceleration year. We can unpack the reasons for that.
You know, the discovery of tools like Asana has changed because of AI, and companies need to adapt. We've been adapting, and we've seen improvements, but just not at the rate that we'd previously expected, and we have a plan to turn that headwind into a tailwind, but that's a key embedded piece of the guidance. Then we've been prudent in how we factored in future NRR improvement. We've been modest about that in the guide. The tech stabilization we've seen, too early to call a trend, so we're not factoring that into the guide as a stable element of our business. Then, you know, AI teammates, which we're super excited about. It brings agents to the full base. It's a large opportunity.
We fully go GA across both our motions late in Q2. Ramp timing is more skewed to the second half and Q4. The contribution to the revenue is very different full year versus what it would be in the second half.
Then another strong view on operating margins, an opening guide of 9.5% at least on the operating margin, which is 250 basis points above where we landed for fiscal year 2026, and there's more to do there. Strong operating profit, being prudent on the revenue side, number of factors playing into how we guide it, and we're guiding how we see the business today, and that could change over the course of the year.
Given that it's your first guide in the new seat, right? 12 hours in. Any, you know, any change in the philosophy from maybe how Sonali guided versus how you think about guidance?
Yeah. No, no change, in the philosophy on guidance. You know, Sonali, Dan, and I were partners in setting this guide for the full year in Q1. Sonali and I have been partners on setting the guide for as long as we've been here, so the last four quarters, so no change. Philosophy is close to the pin, call what we're seeing right now in the business, be inherently prudent about it, and then being flexible to change our expectations as the business evolves through the year.
The PLG headwind, I have two follow-ups on that. One, so 200 basis points here in fiscal 2027. What was the headwind in fiscal 2026 on that motion?
It was less pronounced.
Okay.
We didn't specifically call that out, but it was less pronounced.
Right. Cause it was there, it just... Yeah.
It was there, you know, the rate of change over the quarters, you know, the early quarters kinda softened that for the full year.
Okay.
It had a more pronounced impact in Q4 than the full year, but still less than the 2%.
Actually three follow-ups, sorry. The second one is, does the 200 basis point headwind assume, like, continued PLG deterioration? Or is it like, "Hey, we're now living in the new normal, and we're annualizing this headwind going forward," but, like, this is where it's gonna be?
Yeah. It's more the latter.
Okay.
You know, we've seen improvement in top-of-funnel quarter-over-quarter. The change in tone is that we're not seeing an improvement at the rate that we had previously expected.
In the guide, we basically assume kinda stabilization at a at the current prevailing rates.
Yeah
no improvement from here. That's not what we plan or expect, just in the absent. It's early with a lot of our initiatives. We're waiting for the proof points. Those proof points are early. We wanna see that out over the next several quarters.
We just came off of a breakfast keynote talking about agentic commerce, and a big portion of that was how are brands going to be discovered, right?
Yeah.
It was like they're speaking directly to me here. What is it that you can do from a marketing or top-of-funnel standpoint that can offset the headwinds?
There's three areas, and we just brought on a amazing CMO from Checkr maybe three or so months ago, and she's all over it. I mean, she has a deep PLG background. It's really three areas. It starts at the top of funnel and how software tools like Asana are discovered, middle of the funnel when we think about conversion, and kind of the end of the funnel when we think about the products that we're bringing to those customers once they're in the funnel. At the top of funnel, the way that consume businesses are discovering software has changed. Where they source the information has changed. It's no longer the traditional channels that we had been focused on since our inception.
Shifting your channel mix and your resourcing mix, making those decisions is quick, but seeing the benefit takes time.
You know, you have to have consistent branding, consistent messaging. It has to resonate over several quarters in order to see more of a material pickup. On the AI discovery front, you know, we are super focused on our content, our branding, how we show up, the form of content, video, long-form video, short-form, how we show up in community forums like Reddit, in peer review sites like G2. That's really the source information of how LLMs and AI search are picking up the information. We're also embedding more directly into places like Claude and OpenAI to make the experience more seamless. If you're discovering tools in ChatGPT and being able to come back into the buying experience or buying funnel into Asana into a seamless way, that's a big opportunity for us as well.
We hadn't really been as focused in the past on influencer channels. Now that's a huge focus. How do we better source influencers, build the community with influencers? Because, like, they are a key engine for customer acquisition. They're showing potential customers how to use the product, how to build workflows, the benefits of Teammates and AI-enabled workflows. It's a huge opportunity. The middle of the funnel, you know, once they're in a trial, once they're on the site, presenting them the information, making it verticalized, making it more persona-based to increase conversion, and then more product diversity. Like, we've had 1 product at the self-serve base. We spend a lot of money to acquire them, only give them 1 thing. Teammates comes out in Q2. That's a huge opportunity 'cause while Teammates is one product, it's a multitude of use cases and personas.
It really opens us up to new buying personas, new TAMs, new types of customers being discovered in a different way. That's super exciting.
Okay. Can we talk about AI? You have AI Studio ended the year really at $6 million. If I do some napkin math, you know, if you're saying it's gonna be 15% of the net new ARR in 2027, we could be on the verge of tripling that number by the time we kinda exit this year. How much, you know, should we think about that being AI Studio versus the products that are in beta now that will go GA? Also just tell us what AI Studio is, what AI teammates is.
Yeah. I think that math is roughly in the ballpark.
You know, Studio is inserting LLMs and AI into a workflow. Basically, if a workflow is a series of steps or nodes, it's putting AI into those steps to assist in human to AI, human to agent handoffs in a workflow. I do something, I hand it off to AI Studio, LLM, it hands off to Eva hands it off to Dan to sign off. It's kind of a workflow with multi-steps, which is how a workflow is designed.
Teammates can operate in that workflow. It can replace the human in the workflow, or it can act outside of the workflow. It can tap into the data store, that system of action that is the Work Graph, the data model for Asana, to help drive tasks and to help drive execution of work. Examples are, you know, you're running a campaign, you're asking the teammate, "Hey, check the campaign against our brand guideline policies. Check the campaign against the spec doc that we created for the campaign. Walk the campaign through the approval process and be those checkpoints." It's really powerful in IT ticketing and help desk applications, in HR onboarding, and vendor onboarding, where there's multi-steps where an agent could step in.
Studio has been out for three full quarters, $6 million in ARR for FY 2026. We saw 50% sequential growth in Q4, and we're landing with larger lands, which has been a key part of the growth.
in Q4 and will be going forward. We see Studio as a meaningful part of that growth equation. Studio, its value is in well, more well-adopted customers who have built rules or workflows. Now, we're helping the customers build the workflows and the rules if they don't have it. Teammates is a lot more democratic to the base.
Okay
Fit for small customers, like our self-serve, it's fit for large customers. The addressable market is a lot larger. The sequential ramp we expect from Q2 to Q4 on Teammates will be pretty dramatic. However, you know, it's beta. We've gotten great feedback from the 200 customers in beta. We've got paying customers from the customers of beta, but we need to see it GA. We need to see the attach rates to seats. We need to see the AE participation. We need to see how it accretes the overall deal size before we can get more constructive of how we factor that into guide and expectations.
Yeah.
A lot more learning to do there. We did our best in the guide, but we're super excited and bullish on that opportunity. It really completes the agentic AI platform that we're building, and it's a huge opportunity, and the feedback's been really encouraging.
I asked the question, I don't know if this was on the main call or on the call back about. It doesn't matter. Whether AI is truly additive, like these are dollars that we just simply would not have if it weren't for AI, versus yesterday I was spending $100 with Asana, tomorrow I'm spending $105, but like 3 of them come from AI, whereas five would have come from just regular kind of, you know, either pricing or seats or adding before.
It's, it's all of the above. AI Studio and we believe Teammates plays really well in renewal conversations.
Okay
And plays well in renewal expansion conversations 'cause we've up until having Studio four quarters ago, we didn't have anything actually to introduce to the customer new as a new monetization. We could just only talk about pricing uplift or seats. It's played really well in expansion. It also plays well in downgrade. If people are, they've cut their workforce a bit and have less need for seats.
Having that ability to introduce Studio, and then in the future, Teammates into the conversation, it's not dependent on seats. It can drive value independent of the human in the seat. Being able to have that value and that outcome conversation is super important. It's mitigating downgrade, it's helping preserve the NRR, if that's the situation. It's helping drive expansion. And it's driving ACV uplift. You know, we found that through these betas and getting feedback from the customers aren't ready for the full consumption experience and model yet.
Yeah.
They want predictability and transparency into the pricing and the value that the product will drive. We've, for both Studio and Teammates have come out with pricing that's kind of hybrid. You know, we have a consumption element in the sense that we have a fixed fee type pricing. On AI Studio, it's a platform fee for the organization. Teammates, it's a per seat pricing, but that comes with an allotment of credits, and if you go over, there's additional credit packages you can purchase to kind of top up. It has the fixed element with the consumption element. You know, right now that fee fits customers' buying appetite and what they're used to, and in the future, positions us well to move full consumption. Expansion driver, key reason that we've stabilized NRR for three now straight quarters.
Retention tool, especially when those downgrade conversations are coming up.
Since it's only been live for three quarters, there probably haven't been too many customers that have.
Right
butted up against their usage level and needed to come back for more credits. What is the expectation? Will the customer say, like, "Rather than coming back and buying more, you know, buckets or credit packs-
Yeah
Can we just increase my fee, my platform fee so that I don't have to feel like I'm always kinda..." Do you expect that upon renewal?
Yeah.
Like, what kind of behavior are you seeing?
There's definitely the pricing discovery in the AI world right now for traditional software companies is incredible. Like, there's so many different ways you can go, and there's different flavors. It's hard to have, like, a uniform approach. Some of our largest customers, we've had that conversation. We've landed six-figure deals with larger customers that have greater credit allotments than in our standard packaging, right? There are some bespoke things, right?
We've seen customers eclipse the limit, and come back for, you know, not just 1 tranche but multi tranches to try to replicate how they view their max consumption environment, and we're open to that. It's a lot of learning right now, but we're flexible and, you know, we have 8 customers as of end of Q4 spending over $100,000 with us on AI Studio. That's meaningful monetization. Those are both tech and non-tech across the globe.
Okay. One more question from me, and then I'll come to the audience, so be thinking of your questions. What about your internal AI usage, right? The, as of last Thursday, you know, Block reducing their headcount dramatically. We're just kinda curious, like, what about Asana? How much are you using internal tools, and do you see it as a headcount or a, you know, a way to reduce your workforce?
Yes. I mean-
Full time.
... on our beta, pre-beta, we eat our own dog food. We're probably the number 1 user of AI Studio and AI teammates right now. We've automated a ton of processes internally. You know, it's been a key part of the operating lev- of being able to flow the near 90% gross margin down to operating income and really realize that operating leverage. If you've looked at our R&D headcount, we haven't grown R&D headcount year-over-year. Despite that, our innovation pipeline is probably the greatest it's been in the company's history. We've been able to realize that efficiency. Like, our ability to drive the roadmap, create output, create better decisions 'cause of AI is really high, and we'll continue to do that.
It's not creating mass kind of workforce changes, but we're doing a lot more with the existing workforce we have.
Got it. Yeah. Any quick questions from the audience? We have a few minutes left. If not, I've got some on margin. Non-GAAP margin heading higher, I think, over 200 basis points is the starting point for where should we.
Yeah
Where we should be thinking. It's like incremental margin, much higher, right? In the 30s. How should we think about non-GAAP margin and maybe GAAP margin? What are you doing with stock-based compensation? It's been a bigger portion of compensation.
Yeah. non-GAAP, we guided to at least 9.5% for the full year, which is, you know, about 230 basis points higher than we finished for FY 2026. It was a similar guidance philosophy as FY 2026, where we guided to at least 5 and landed at 7+ for the year. there's more room on margin.
You know, we guide that way with reserves flexibility, but there's more room. On SBC, like, in this current market environment, it's a tough thing to balance, like, driving down SBC with retaining employees and having the right people in place to drive that robust innovation and that go-to-market leverage. But we will bring down SBC this year from mid-20s to low 20s. We're more focused on dilution. With just using half the buyback, we'll have 0% dilution. That's kind of the base plan. If the stock hangs out here, we view buybacks as a really attractive way to return capital, and take advantage of kind of what we view as a short-term, like, dislocation. If we do that, we'll net reduce the shares. By driving improvements in the operating margin, SBC will follow.
Diversifying where our headcount sits, moving more to offshore locations, getting more leverage from our existing headcount are all drivers to improving SBC. It is a focus. We've come down, and there's more to do.
Okay. All right, great. Oh, one quick one. Yep.
Just AI upload, productivity gains, like, how are you dealing with seat compression as a result?
We're more insulated from seat compression than we've been. Our business has gone pretty quickly from, like, a third plus in tech down to 25% in tech. Less reliance on tech, more diversity. When companies adopt workflows they're a lot more sticky, that's what AI Studio and Teammates is all about. We're seeing greater utilization in the base as well, which creates more resilience. Versus 2026 and 2025, we have less concentration in the renewal base. We had a very large renewal in both of the last two years. We don't have that this year. The RPO, if you've seen that grow, we have now multi-year contracts. Multi-year contracts create less year-to-year risk and more time to sell other products. We're not immune to it, but we've diversified and de-risked the business, and having multiple products today puts us in a lot better position because those products are not seat-based. The value they drive is not seat-based.
All right, great. Aziz, thank you.
Awesome.
Thanks, everybody.
Thank you.
Appreciate it.