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Asana's Mixed Fiscal Q3 Results Hit by Sharp Billings Deceleration; Competition, Market Opportunity Concerns Remain, RBC Says

11:09AM ET 12/03/2021 MT Newswires
Asana's (ASAN) fiscal Q3 results were mixed as the company narrowed its non-GAAP net loss per share amid higher revenue but also reported a sharp deceleration in billings, RBC Capital Markets said in a note Friday.

The work management software developer late Thursday reported an adjusted loss of $0.23 per share for the quarter ended Oct. 31, compared with a loss of $0.34 per share a year earlier, as revenue jumped to $100.3 million from $58.9 million.

Analysts polled by Capital IQ expected a normalized loss of $0.27 per share and revenue of $93.9 million.

RBC said it understands management's view on the volatility of billings given that about a third of Asana's customer base is on monthly contracts, but the magnitude of the roughly 30 point deceleration "does give us pause."

Still, the firm said there were several positives to note in the results, including an acceleration of customers spending more than $50,000 a year and healthy dollar-based net expansion rates.

"Stepping back, we continue to like Asana for its business focus, scalability, positive customer due diligence, and rapid growth but remain [sector perform] rated on the stock on concerns around competition, market opportunity, and valuation," RBC said.

It maintained a $75 price target on Asana shares and increased its fiscal 2022 revenue estimate for the company to $371.5 million from $356.1 million.

The company's shares were down about 27% in recent morning trading.

Price: 68.17, Change: -22.83, Percent Change: -25.09