Asana (NYSE:ASAN) shares fell 10.9% in pre-market trading after the work management software company reported second-quarter fiscal 2027 revenue and adjusted earnings above expectations but issued third-quarter guidance that came in below some analyst forecasts.
Second-quarter revenue reached $216.4 million, an increase of 10% from a year earlier and above the upper end of the company’s guidance range. Adjusted earnings per share were $0.10, compared with the consensus estimate of $0.09.
For the third quarter, however, Asana forecast adjusted earnings per share of $0.08, below the $0.09 analyst consensus.
Asana Forecasts Q3 Revenue of $217 Million to $219 Million
Asana expects third-quarter revenue of between $217 million and $219 million, compared with a consensus estimate of approximately $218.2 million.
The guidance represents anticipated year-over-year revenue growth of approximately 8% to 9%, compared with the 10% increase reported for the second quarter.
Gross margin declined to 87%, approximately 120 basis points lower sequentially. The company cited higher AI infrastructure costs, the integration of its StackAI acquisition and a shift in product mix towards AI offerings among the factors affecting margins.
Product-Led Growth Changes Affect Near-Term Revenue
Asana also expects changes associated with its product-led growth strategy to affect near-term revenue growth.
Lower bookings among customers spending less than $5,000 are expected to reduce growth by approximately 100 basis points in the third quarter and 150 basis points in the fourth quarter.
At the same time, AI products, including AI Studio and AI Teammates, accounted for 25% of net new annual recurring revenue during the second quarter, up from 17% in the previous quarter.
Analysts Maintain Ratings Following Results
Citizens reiterated its Market Outperform rating on Asana and maintained a $15 price target.
Citi also retained its Buy rating while increasing its price target to $12. Both firms highlighted the contribution from Asana’s AI products to net new ARR during the quarter.
Broader U.S. equity markets showed comparatively modest gains, with the S&P 500 up 0.1% and the Nasdaq rising 0.4% in pre-market trading.
Following its 10.9% pre-market decline, Asana shares traded at $8.99, within a cited 52-week range of $5.38 to $15.48.