What happened
Shares of tech stock Asana (ASAN 3.84%) jumped as much as 14.7% in trading Thursday after the company reported third-quarter 2020 results. Shares slid some as the day went on, but they were still up 8% at 3 p.m. EST.
So what
The work management platform's revenue jumped 55% in the quarter to $58.9 million, and net loss ballooned to $73.3 million, or $0.65 per share. On an adjusted basis, net loss was $0.34 per share, which was three cents better than analysts were expecting.
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A growth stock like Asana isn't going to be judged based on losses at this point in time, so investors are focused entirely on top-line growth. And the revenue growth was impressive, bolstered by a 58% jump in customers spending over $5,000 per year to 8,938 and a 104% increase in those spending over $50,000 to 318 customers.
Now what
Asana's product certainly has traction in the market, and its revenue growth is impressing investors already. But I'm concerned that losses as a percentage of revenue are growing instead of decreasing as the company gets bigger. That's why I'm skeptical of the pop today as much as I like Asana's products long term.
