Shares of an enterprise software company Asana (NYSE: ASAN) absolutely skyrocketed on Friday after it reported fiscal third-quarter 2025 financial results — results that left the investing world quite optimistic about the future. As of 9:50 a.m. ET, shares of Asana were up about 40%, hitting a 52-week high.
Asana offers workplace management software. This allows customers to set goals and track progress. The company expected third-quarter revenue of $180 million to $181 million. But it generated revenue of nearly $184 million in the third quarter.
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Beating the top end of the guidance by 1% seems incompatible with a 40% increase in Asana’s stock price. But as you might have guessed, there’s a little more to the story.
Since the company went public in 2020, Asana’s growth has fallen at an alarming rate, as the chart below shows.
However, with its third-quarter results, Asana management highlighted the recent launch of its artificial intelligence (AI) product, AI Studio. In short, customers love it and some bypass a pilot period and dive straight into a subscription. Investors are hopeful that this will not only reinvigorate Asana’s growth, but also that it will even expand the company’s addressable market. And these developments are what investors are celebrating today.
In the upcoming fourth quarter, Asana management expects to generate revenue of $187.5 million to $188.5 million, which would represent 10% year-over-year growth. That is the same as the growth rate in the second quarter and in the third quarter, indicating that the slowdown is bottoming out.
Asana has negative free cash flow of $10 million through the first three quarters of fiscal 2025. But management expects positive free cash flow in the fourth quarter.
With a successful AI launch, stabilizing growth and positive free cash flow, investors are right to be excited about Asana stock today.
Consider the following before purchasing shares in Asana:
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