Shares of an enterprise software company Asana (NYSE: ASAN) It rose significantly on Friday after it reported its financial results for the third fiscal quarter of 2025 — results that had the investment world feeling optimistic about its future. As of 9:50 a.m. ET, Asana stock was up nearly 40% and reached a new 52-week high.
Asana offers workplace management software. Through it, his clients set goals and track progress. The company expected third-quarter revenues to range from $180 million to $181 million. But it achieved revenues in the third quarter of about $184 million.
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Beating the 1% higher end of guidance seems incompatible with a 40% gain in Asana’s stock price. But as you might have guessed, there’s more to the story.
Since the company went public in 2020, Asana’s growth rate has declined at an alarming pace, as the chart below shows.
However, with its third-quarter results, Asana’s management highlighted its recent launch artificial intelligence (AI) Producer, AI Studio. In short, its customers love it and some skip the trial period and dive straight into the subscription. Investors hope not only that this will revitalize Asana’s growth, but also that it may expand the company’s target market. These developments are what investors are celebrating today.
In the upcoming fourth quarter, Asana’s management expects revenue between $187.5 million to $188.5 million, representing 10% year-over-year growth. This is the same growth rate in the second quarter and in the third quarter, indicating that the slowdown has bottomed out.
Passive asana Free cash flow $10 million through the first three quarters of its fiscal 2025. But management expects positive free cash flow in the fourth quarter.
With a successful AI launch, stable growth, and positive free cash flow, investor enthusiasm for Asana stock is justified today.
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