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Asana (ASAN -24%) is losing its CEO and past four months of gains today as shares tumble following Q4 (Jan) results and news that its co-founder, CEO, and Chairman Dustin Moskovitz will be transitioning to the sole position of Chairman upon hiring a replacement CEO. At the same time, the workforce management software developer issued mixed guidance for the upcoming quarter and FY26, projecting earnings above consensus in both instances -- likely reflecting its recent decision to trim its workforce by around 5% -- but predicting revenue that missed the mark.

• ASAN's Q4 numbers were still decent. Revenue of $188.3 mln, a 10.1% increase yr/yr, met the high end of the company's prior $187.5-188.5 mln forecast. Meanwhile, ASAN's adjusted earnings broke even in the quarter, better than its $(0.02)-$(0.01) prediction. Non-GAAP operating margins jumped by over 800 bps yr/yr to an operating loss margin of just 1%. Mr. Moskovitz expects the company to reach non-GAAP profitability in Q1 (Apr), projecting adjusted EPS of $0.02.
• Non-tech verticals underpinned revenue growth in Q4 as they continued to outpace overall growth, climbing by 15% yr/yr. Some of ASAN's fastest-growing verticals included manufacturing, energy, consumer retail, and media. Also supporting sales growth in the quarter was ASAN's ongoing progress in its enterprise customer acquisition, with its $100,000 cohort expanding by 20% yr/yr, an acceleration from last quarter.
• Like many tech firms, AI remains pivotal to current and future growth. The outgoing CEO mentioned that momentum surrounding AI exceeded expectations, with hundreds of its largest customers actively running workflows powered by AI Studio. Notably, Mr. Moskovitz was struck by the breadth of AI demand across all segments. Looking ahead, ASAN is forming a dedicated sales team for AI Studio to pounce on the outsized opportunity, especially as the general availability of AI Studio launches later in Q1.
• Given the incredible AI demand, ASAN's revenue outlook is discouraging, anticipating Q1 revs of $184-186.5 mln, a slight sequential dip, and FY26 revs of $782-790 mln, an 8.6% increase yr/yr at the midpoint, down slightly from an 11.0% jump in FY25. Underlying the guidance is no material change to the current macroeconomic or spending climate, which is somewhat worrisome, given the increasing risks of a macroeconomic slowdown. Also, ASAN is optimizing its go-to-market by reallocating some resources, which can take several quarters before benefits are realized.

Today's disappointment centers on guidance and Dustin Moskovitz's departure as CEO. The co-founder has been at ASAN through it all, supporting the company's 2020 IPO and its struggles during the rising interest rate environment that followed. As the market shifts away from riskier assets, ASAN has been getting punished, down considerably from levels before its +40% surge following Q3 (Oct) results in December. Investors are not only concerned about the growing risks of a deteriorating macroeconomic picture but also about the direction ASAN will take without its co-founder at the helm, potentially keeping a lid on near-term appreciation.