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Asana Banks on its Expanding Zoom Partnership

Posted on Wednesday, Oct 13th 2021

The global enterprise collaboration market is estimated to grow 9% from $29.45 billion in 2020 to $53.3 billion by 2028. San Francisco-based Asana (NYSE:ASAN) recently announced stellar quarterly results.

Asana’s Financials

For the second quarter of fiscal 2022, Asana reported revenue of $89.5 million, up 72%. GAAP net loss was $68.4 million, compared to GAAP net loss of $41.1 million a year ago. Non-GAAP net loss per share was $0.23, compared to non-GAAP net loss per share of $0.34 a year ago. The market was looking for revenues of $82.3 million and non GAAP loss of $0.26 per share.

It ended the quarter with over 107,000 paying customers. The number of customers spending $5,000 or more an annualized basis grew to 12,806, an increase of 61%. The number of customers spending $50,000 or more on an annualized basis grew to 598, an increase of 111%.

For the third quarter of fiscal 2022, the company expects revenues of $93 million to $94 million, or growth of 58% to 60%. Non-GAAP net loss per share is expected to be $0.27 to $0.26.

For the fiscal year, Asana expects revenues of $357 million to $359 million, or a growth of 57% to 58%. The market was looking for revenues of $358.3 million for the year with a loss of $0.99 per share.

Asana’s Expanding Offerings

Given the current pandemic conditions, office workspace conditions still remain vague. Organizations are not entirely certain of their in-premise / virtual working conditions. Asana is trying to make this uncertainty manageable by coming up with products that help drive efficiency and collaboration. During the first half of the year, it announced Asana Partners, a partner network that features more than 200 technology partners, the Channel Partner Network, and seven new languages. Asana is now available in 13 languages globally. In June, it also added several new features designed to help individuals achieve greater focus and flow. These features include the ability to video message through their partnership with Vimeo. It also enhanced My Tasks, the Asana desktop app, and its Clockwise smart calendar assistant integration.

Asana’s Zoom Partnership

Recently, Asana announced its app for Zoom, which hosts 1400+ essential tools to boost productivity and collaboration. The app is available on Zoom marketplace and will allow teams to drive meeting workflows and collaborate effortlessly. They will be able to create a Zoom meeting directly from an Asana task. Teams can draft and share the agenda before the meeting and create and assign Asana tasks directly from the meeting to capture action items without having to switch between apps. After the meeting, they will be able to access Zoom recordings and transcripts that will automatically be attached to the Asana task as searchable.

I think that Asana’s deep integration with Zoom may make it a good acquisition target for Zoom. Zoom’s recent planned acquisition of Five9 fell through after Five9’s shareholders disagreed on the acquisition price. Zoom was planning on leveraging Five9 to combine its communications platform with Five9’s Contact Center as a Service solution, and enhance its presence with enterprise customers. While Asana may not offer UCaaS capabilities, its recently added integrations enhance the meeting experience within Zoom and expand Zoom’s suite of enterprise collaboration tools. Asana would be a marginally expensive buy for Zoom. Five9 had reported revenues of $434.9 million last year, and is trading at a market cap of $10 billion. Asana, on the other hand, is targeting revenues of over $350 million for the year, and is trading at a market cap of $19.5 billion.

Asana went public just over a year ago, at an opening price of $27 and a valuation of $5.5 billion. Its stock is currently trading at $105.45 with a market cap of $19.5 billion. It had touched a high of $124.85 in September. It had fallen to a low of $20.57 in November last year.

Disclosure: All investors should make their own assessments based on their own research, informed interpretations, and risk appetite. This article expresses my own opinions based on my own research of product-market fit, channel execution, and other factors. My primary interest is in product strategy. While this may have bearing on stock movements, my writings tend to focus on long-term implications. The information presented is illustrative and educational, but should not be regarded as a complete analysis nor recommendation to buy or sell the securities mentioned herein. I am not a registered investment adviser and I am not receiving compensation for this article.

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