Shares of the work management platform have lost three-quarters of their value since the beginning of this year.
Asana announced a record set of earnings for its fiscal first quarter of 2023, ended April 30. Revenue jumped by 57% year over year to $120.6 million and the company ended the quarter with 126,000 paying customers. CEO Dustin Moskovitz sounded an optimistic note and mentioned that Asana is capturing larger customers as a whole, a group that is expanding at a rapid clip. The dollar-based net retention rate for customers with more than $50,000 in annualized spend stood at 145%, and this segment of customers has doubled year over year to 979 from 485.
Investors, however, were probably concerned about slower growth at the company. Revenue soared 61% year over year in the prior-year period, though net loss also ballooned from $35.8 million to $60.7 million during that time. It's disappointing to note that Asana's net loss continued to head up in Q1 2023 despite a record top-line performance, climbing by 63% year over year to $98.9 million.
Asana's guidance for fiscal 2023 also did little to allay concerns over its declining growth rate, with a projection for a 42% to 43% year-over-year jump in revenue to between $536 million and $540 million. As a comparison, in fiscal 2022, revenue surged by 67% year over year.
The market may be expecting too much from the company, as Asana has demonstrated its ability to consistently grow its revenue quarter over quarter. By adopting a subscription-based business model and a "land-and-expand" strategy, the company has seen revenue almost triple from $48 million in Q1 2021 to $121 million for its latest quarter. Its overall dollar-based net retention rate of 120% is also impressive and shows its customers' stickiness.
Last month, Asana launched a new package of features and tools to better support managers and their teams to improve innovation and reduce wasted time. Real-time insights are provided for key initiatives, thus reducing the need for excessive micromanagement and status meetings. The company believes it can tap into a vast total addressable market of 1.1 billion workers, and with less than 5% penetration, it's just getting started.