Will Asana's stock-based compensation fall below 25% of revenue for any quarter in FY2027?

The ~2pp/year decline trend (34.5% to 31.0% to 29.2%) projects to ~27.2% for FY2027 full year, but the question asks about ANY single quarter. Quarterly SBC tends to be front-loaded (Q1/Q2) due to annual grant cycles, meaning Q3/Q4 FY2027 would have lower SBC as a percentage of revenue. If revenue grows ~10% YoY, Q4 FY2027 revenue could reach ~$225M+. With SBC at ~$220M/year, a back-half quarter could see $50-52M SBC on $225M revenue (~22-23%). However, CEO Rogers' equity grants ($35M over 3 years, ~$12M/year additional) partially offset the trend. The quarterly seasonality creates a plausible but narrow path for one quarter to dip below 25%.

The math is tight. FY2027 annual SBC projected at ~$220-225M on ~$870M revenue = 25.3-25.9%. To get any single quarter below 25%, you need either a lighter-SBC quarter or a particularly strong revenue quarter. SBC grant cycles create Q1/Q2 front-loading, so Q3/Q4 could be lighter. But Rogers' $35M in new grants over 3 years adds ~$3-4M/quarter. The 2pp/year decline rate has been partly driven by headcount reductions — with headcount now stabilized at 1,819, the rate of decline may slow. The FY2027 full-year projection of ~25.3-25.9% means even a favorable quarterly distribution barely crosses 25%.

The 2pp/year decline has been partly driven by two restructurings (9% in Nov 2022, 5% in FY2025) and geographic labor arbitrage (Warsaw as top hiring location), which may produce lower-cost equity comp. If Asana's revenue growth accelerates above 10% from AI Teammates uptake, the denominator grows faster. But the accumulated deficit of $1.83B and never-GAAP-profitable status suggests the board may not aggressively cut SBC — it remains a key retention tool. Q4 FY2027 is the best candidate due to strongest revenue seasonality. At current trajectory, this is a close call but slightly more likely to miss than hit the 25% threshold.

SBC declining 2pp/year from 34.5% to 29.2% over two years. Extrapolating two more years of decline at that rate gives ~25.2% by FY2027 full year — but the decline rate is likely decelerating as headcount cuts are exhausted. New CEO grants add ~1.4pp friction ($12M/year on ~$870M revenue). Net expected FY2027: ~26-27%. A favorable Q3 or Q4 quarter with lower grant vesting could approach 25% but likely lands just above. The committee correctly assessed this as 'mathematically plausible but tight.'

SBC expense is recognized relatively evenly across quarters via amortization over vesting periods — it is not lumpy. This means quarterly variation in SBC/revenue ratio is primarily driven by revenue seasonality, not SBC seasonality. Asana's Q4 (January quarter) is typically their strongest revenue quarter, which helps the denominator. If Q4 FY2027 revenue is strong (~$230M+) and quarterly SBC is ~$55M, that yields ~23.9% — below 25%. But this requires all favorable assumptions stacking up simultaneously: revenue acceleration, no new large equity grants, and no hiring surge for AI Teammates.

The committee found this 'mathematically plausible but tight' — the most precise framing available. The new CEO grants and stabilized headcount slow the decline trajectory versus the historical 2pp/year. The best case scenario is Q4 FY2027 where strongest revenue seasonality meets lower back-half SBC recognition. But front-loading of new grants in early FY2027 pushes Q1/Q2 well above 25%, and Q3/Q4 must carry the entire burden. On balance, roughly 1-in-3 odds that one quarter dips below 25%, with Q4 FY2027 being the swing quarter.

SBC trend: 34.5% to 31.0% to 29.2%, declining ~2pp/year. Extrapolating gives ~27.2% for FY2027. Need any quarter below 25%, which requires a 2pp gap below the annual average in a favorable quarter. Revenue seasonality in Q4 helps the denominator, but new CEO grants and stable headcount create drag on the SBC numerator improvement. Slightly below 1-in-3 odds.

The 2pp/year decline is clear but approaching a floor as easy headcount cuts are exhausted. FY2027 projected at ~27% SBC/revenue. Even with quarterly variation, 25% requires a 2pp gap below the projected average. SBC amortization limits quarterly swings on the numerator side, so this depends heavily on Q4 revenue being meaningfully above trend. Given revenue guidance of only 9% growth, the denominator expansion is modest. Low probability.

SBC declining but decelerating. Headcount stable, CEO grants added. Revenue growth at 9-10% helps the denominator but not enough to bridge the gap in most quarters. Q4 FY2027 is the best shot due to strongest revenue seasonality. The resolution window covers all four FY2027 quarters, giving four chances rather than just one. This slightly improves odds versus a single-quarter question, but each quarter's probability of hitting <25% is low.