Earnings call transcript Q4 2023

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Operator

Good afternoon, and thank you for attending today's Asana Fourth Quarter and Fiscal Year 2023 Earnings Call. My name is Danial, and I will be the moderator for today's call. [Operator Instructions]

It is now my pleasure to pass the conference over to our host, Catherine Buan, Head of Investor Relations. Catherine, you may proceed.

Catherine Buan

you the us fourth financial fiscal XXXX. thank call today's quarter and year discuss to results afternoon, for on joining conference and Good for Asana's

plans, and call and statements Officer of regarding market statements free Today's business; our our for Moskovitz, With call Chief Wan, Head are cash Tim our financial Financial on Raimondi, our expectations growth today's Asana's me outlook, and flow, including Co-Founder opportunities. Chief CEO; and will Anne Operating forward-looking strategic Dustin position our Officer. include

quarterly Forward-looking may information statements. cause those for Form statements most expressed to different recent assumptions our report materially our to such annual involve or risks, uncertainties the refer on those Please cause statements. on that may uncertainties be and report additional that with and actual assumptions results from forward-looking forth results our including filings actual in from differ the and to implied by XX-Q, SEC, set on risks, XX-K Form materially

In using versus Relations not web GAAP. today's measures a to page in financial with These and of and financial posted prepared Investor addition our our is non-GAAP measures. are on available GAAP measures between earnings or at their equivalents in in discuss non-GAAP and will the addition, performance non-GAAP call, non-GAAP limitations substitute to measures financial for accordance superior are of during discussion GAAP Reconciliations of a measures closest release which financial we investors.asana.com.

the And to Dustin. with over call turn that, like to I'd

Dustin Moskovitz

today. profitability. Despite and serving in our year, you meaningful all growth, continued customers for success you, us fiscal progress driven thank the strong we've joining Thank challenging towards Catherine, call by on a enterprise XXXX with and

and some telecommunications, transportation, fiscal year customers QX revenues year-over-year. and who industries by services. automotive, This health professional companies grew revenue growth care, such logistics, the manufacturing, services, XX% are media, largest in Asana fueled world represent as was year-over-year the of XX% grew financial and

top fiscal the the of year, media top with X we a services providers, X X world's are specific the Overall, deals customers logistics company, X and telecommunications QX of of Internet largest professional And closed service the XX% X Asana services and tech Fortune XXX the Asana. companies financial of manufacturers, firms. X wins. of more conglomerates, in large During share Anne moment, XX and companies, our of the and largest use largest automotive will shipping several a

we look with base our our enterprise segment those penetration, over you X,XXX enterprise employees, customers. at customer than have When more X,XXX even more well precise by an

seat in accounts Our percentages penetration single-digit significant still is in on most these average. of but the

opportunity So growth. for there's future a large

in define of to Some what are strategic like. world the the most work partnering looks scale Asana at management companies with

seats. paying XX,XXX have to have XXX,XXX than as We paying We work more customers demand over have customers Asana who solution for increase. continues our several now management

over $XXX,XXX annualized year-over-year. with Customers XX% spend grew

win strong. as commitments of represents over cohort these with continues about large more to this for As grow X/X and our fiscal are more remain the a rate enterprises, retention investment dollar net We're customers Revenue Despite very in total their their revenue. in multiyear an seeing continue our scrutiny in from budget XX% Asana, at increase strong winning deals pace grew customers year grow XXX%. and consolidation Asana. rates at

we in over momentum momentum continue corner, the and to the operating the our expect In margins next quarters. several positive QX, turned non-GAAP

operational we expect focus growth, non-GAAP on We margin efficiency coming will significant more. about operating this in year improvement to talk which as Tim drive and in

enterprise go-to-market the discipline, talent ensuring our We'll excellence have strategies. organization, XXXX, we winning and more As and focusing we look across scaling playbook operational increasing towards even fiscal sales proven our we're entire the to be lead. on

environment anywhere. macroeconomic their out. continue are isn't get to challenging the going While term, to the need status transformation making they are way The trends the investments. value expect playing digital encouraged time the ROI near and Customers Asana measurable quo the for and for to disrupt current by multiyear longer-term we're we with look as commitments for

And the their given on financial leagues, to Working the We're serve in when we innovative work winning. of learn fortunate management, need companies has companies we're manufacturing want to unique organizations consolidate consumer growth to years. also services, opportunities multinational across sports into in us and most coming goods, some from world. evolve and the in major spend areas potential insights media, where the with

excited the the many across way these most customers. be leveraged the these the work of workflows. and can Core is our customers We product stage users, Asana to and model I'm volume as and where incredibly evolved has has most serving more large enterprise value can well. support has Asana investments the believe architecture data scalable that reached complex create largest to

large goals, becoming they for looking quickly compliance, and we've to the in There where collaboration, enterprise: work solution cross-functional work. areas management is organizations X of platform integrations. recent traction are the Asana The the way choice seen transform

and Goals product ones Key do Asana GX connect Enterprise XX% customers and them according was already Results to Objectives of work. more our majority Software the use or vast market. goal the $XXX,XXX over the of that goals to The #X

and consolidation CIOs goal a into as Asana, OKR our are are moving opportunity. product recognizing management Companies vendors from standalone

customers work capabilities Our value to continue from which from allow together multiple seamlessly. to realize teams cross-functional people Asana's

businesses processes, everything collaboration run order to business do. it's do, cross-functional they In thing a is not their

a is the Asana get platform that allows companies work to critical way things done.

customers our before, a virtually mentioned cross As on we've of functionally. use us all

of the of track number work customer, that other teams. more $XXX,XXX. cross operation their the look Asana for is projects fund applications for is majority customers than you in single contrast higher within work to the nature in single spending even each If This at

see we collaboration features in moved of cross-functional up built and higher even proportion goals including an We portfolios. we've market, this as

is offering to launched workflows care customers bring enabling more into patient newly their our HIPAA compliance, of For Asana. management

months deals. We're our and also using continue companies X customers health up see release, integrations as we related just insurance in and of after more to care dozens with seeing solution opportunities traction build health care to more and Asana. its open HIPAA have We

customers with existing Rules quality the help and Integrations PagerDuty applications. HubSpot, and their Gmail, Integration better investments These productivity include work of improving and make use of across Twilio.

our in decisions. is Salesforce and in the for When Goals increase is making automatically Asana monitor just for XXX informed make Goals, first work force our this out was out-of-the-box it over happens integration updated, seeing impact customers it in an We're and Asana progress linked goals to customers. to integration already XX% rolled easier of from Salesforce, top sales quarter.

Web supporting we'll and of will Zoom, This Nation doing management, year, and XX, feature event first how hosting Asana March Attendees Asana be our for research using Morningstar. On and Forward. and will IT Live management customers, change excellence. why they're streams Amazon cutting-edge the process insights T-Mobile, software these new hear work virtual Services, real-life drive revenue comps program to

will attending collaborative mean work phase next technology firsthand in the proprietary to of about intelligence, graph. Those Asana's also

Just future as to the a shape defining taking son next led work. we're the way the the category, work of in step management

is apps fastest-growing recent the on mention has recently Business some I I platform. Asana Asana the the in of most top Okta given. app for category recognition industry XXXX, been our Okta's In at Before most want Work popular among Report the close, to XX

our focus. leader Tools Work through management a XXXX was report The structure connects how goal named Collaborative for Report. QX information, in Asana how Graph specifically Asana as Forrester Management that organization, our data and common Also disparate people teams the and work a Wave: organizations Work connect objectives The helps with model differentiated drive

also Asana Work of top Plant-A Diversity greatest was by Asana awarded One And recognized award America's the Workplaces XXX in was Group, for as Newsweek Glassdoor's Best fourth Places the for XXXX. Insights time. cooperation with in to

also into Global more during behaviors our volatility. of release to Index, Germany Work States to impact on XXXX the what's workers understand I time Asana, Work behalf of surveyed collaboration, X,XXX by the how evolved the across not. UK, rapid has the Japan of knowledge and and working in-depth Anatomy today Global Index, this cross-functional and what's of attitudes France, the of annual want work than analysis Conducted of GlobalWebIndex including the an Australia, Anatomy United highlight fourth of

to that the by example boost success cross-functional our leading helps business to collaboration revenue tackle innovation for organizations to more on collaboration, a and of contribute work. serve successful effectively, growth challenges thought employee The continues business adaptability is goals in Asana customers more engagement. another report and partner report of highlights future to and as how clear This how

things to it handing before want three are There to Anne. reiterate I over

fiscal see from over a both you profitability. non-GAAP guidance, year we're business points 'XX margin year our fiscal improve for we're year-over-year. a In to XX would percentage can operating versus as points full First, in expecting we improved QX, This operating long-term XXXX. a and be building on And by investment our by non-GAAP efficient focused XX XX% percentage the growth of and margin our improvement growth. combination sustainable through

opportunities our Second, customers. better match value future to the pricing packaging enterprise and in to for we're planning for price

This help us is and another where understand add area where larger we deployments value. more can evolve

opportunities leads in next better of before, and using Asana's Work we're I expansion technology, this the to as add-ons. We new the And launching third, to phase also work the seat collaborative for future the intelligence, expect proprietary generate mentioned Graph. upsell

and XX, of featuring Morningstar. Services, well, lands. key Zoom, fiscal Amazon will use XXXX, our will to our we're be Live event use March and customers drive Our which actions In serving within growth, cases virtual new optimize new cases T-Mobile, Nation existing that be aligning Web enterprise as for on driver

enterprise. the existing been consistently of the Work well the from working making to leader already every progress are positioned in a direction system Asana largest and Graph. shared of and organization with is reviews future from and users deployments analysts become clarity accountability category on built We've in and work this high The now

is that future life. to Our on strategy focused bringing

to Anne. Now I'll it turn over

Anne Raimondi

sales macro Top year in funnel Thanks, impact our stable longer continue continue headwinds expansions fiscal Dustin. to into going and cycle demand to created QX, in and quarter. fourth us remained XXXX. will of the impact The

our rate and feed helped conversion Our free-to-pay stable number. was customer total also

QX, added somewhat QX The enterprise by customers offset previous our We in the consistent strategic in overachievement and was with X,XXX quarter. accounts. softness in

in story of customers the and largest the ROI potential market. how Asana of much really and Our value is kind delivers opportunity there the tell

over products our build and invested the heavily go-to-market 'XX year enterprise We opportunity our ahead. we in fiscal the organizational growth further will muscle for years, in have

materialize investments We expect to by see this year. of the fully end those

believe for execution and that improvement, increasing Beyond opportunities also I especially better. productivity We've macro building There where areas be additional for for identified even know success. operations. an are I across do important reps and sales time the we sales the can this headwinds, is to ramping longer-term us field

order in still messaging also better for to We new years. execute to and around territories rolled recently be And teams and world. few more all there's regions broadly next position consistently reorganized and work the to us out the in done

When look momentum had significant highlights will and that we carry back, our some business I forward.

our that drive grow cases to There at with number of customers, largest. these are long-term transformation are multiple a Looking projects use our they years. largest Digital us strategic continue for investments.

the providers world's IT has of a been electronics undergoing consumer service and largest One and transformation. industrial manufacturers digital company-wide

by processes make transformation users cross-functional execute business so into being thousands more and and working visibility office to designers, used planning is Asana team decisions project marketing, can and business their across clarity faster. gain they systems business of their

case campaign management. strong and client Asana use for is global Another

work cements world's every largest worldwide choice of global Asana a One MSA, which firms as provider for a office. the signed global management consulting of

differentiator has the very across Goals to use a Asana teams tracking the market so case. significant setting goals be compelling and is in organization a Also, proven in

Goals to mission In to carbon help fact, a and achieve emissions future. revolutionary using build eliminate their transformation fossil-free Asana company a global is

work. our customers connect And these agreements, annualized as more vast and long-term of or of majority the we which more cohort investments to to spend, use Dustin Many started with of. $XXX,XXX Asana have shared, Goals are see in multiyear of them

Another theme this quarter was vendor consolidation.

winning Asana As organizations and is their vendors, consolidation streamline decisions. vendor simplify to look

marketing agencies. world The and Asana for XX,XXX signed as They XX media largest the their with to to a effectively grow agencies campaigns seats agencies and their in help the and multiyear initiative expansion strategic to businesses marketing contract enterprise had across the part around significant market solution, expanding our Asana use of more share. of in One world a gain QX. manage advertising clients' a

meaningful QX. transforming Across platform manage the spend Coupa, at employees drive our their teams, together to Tan, on their Coupa, work marketing, finance Asana, CIO the to of strategic company importance consolidated daily and recognizing goals manage in on enterprise for and customer our as work. well a engineering, Asana agreement multiyear to platform customer-facing for rely way said, to building operations, business projects Eric solution we the tied businesses Coupa, results. common as large communities and IT, a

to most vacation to This to several world's Asana help short-term across for to multiyear the innovation beyond and consistent employees for will them energy and as work and via expansions brands effort customers. system the solution first. remote accountability tech tech stack. our alignment expand as managing leadership in their will company on One business the delivering we that industries have improve all chose a across agreement continue of across now platform their of their on company, strategic method drive collaboration the a foundational we're This for it in And enable broadly in consolidated the a the diverse record create the efficiencies recognized rental industry. experience organization. organization the will platforms best can in workflows enterprise seeing is and our so consolidation their Plus, focus

We're seeing industry. the services continued growth within financial

For exchanges seats. of significantly their example, of to of European largest Asana QX one in use thousands expanded world's the

machine within heavily security only their analytics, that met We execution. their engineering, map and compliance road to now used manage requirements. stringent their is teams project data, the platform learning Asana were product, management and work and

team, that restaurant overseas expansion you XXX now chain food and those will to love multinational a across saw For implementing locations great employees, British business. innovation in be Asana Express, in drive within of all frontline of XXX the Europe the retail with we their in QX their using UK operations, pizza, with across the in Asana and including began They QX. growth Pizza and pizza

seeing can All In we summary, decisions industries. more more diversify do multiyear said, deals, success consolidation across winning our more to more and are enterprise we vendor and this more. continuing

have of big a we year initiatives fiscal number forward, Looking XXXX. in

are our to where ensure already identify focused We've most accounts is would be And can that account First, and initiative. this and initiative we by customer where our accounts strategic we opportunities see to top opportunities. our investments The goal account initiative, leveraged will of on focus reviewed success management, on leveraged. likely R&D our further our ROI. even highly we resources, growth with high this region

consumer And These goods, success. already retail, seen names media some largest the accounts some represent technology, in and financial services, services. of of telecom, professional we've manufacturing, proof

organizations with X,XXX customers, enterprise our customer Our employees segment. which we was define as over fastest-growing

improve is goal sales average enterprise workflows, my per XX% and must end continue high to fiscal enablement lead sales at to digital transformation, and Asana of capabilities Second, of by rep year and ensuring increase XXXX. the cases, productivity a sales time-to-value generation playbook also experience by is to primarily accounts. that elevating focus be reporting, targeted the second ROI customers half our We'll that and use our quick have. on We'll understand goals initiatives

as of EMEA. our Third, recently joined we build Sanj EMEA, strength. General bench new enterprise has further Bhayro leadership will In our Manager

Chief on Officer. Taychakhoonavudh We us Together, combined XX has of as Head as Neeracha Sullivan Duffy new experience in and businesses marketing move as further and companies and Revenue enterprise lead sales Chief Salesforce a help from Oracle. will scaling upmarket. new for We're accelerate Officer, fast-growing also management who actively have Experience. our years And leaders new over brought board Global our Marketing Shannon and Customer new our recruiting of these joined also such

I'll that, hand to over it Tim. with And

Tim Wan

points accounting came our year-over-year, XX% in of our $XXX.X U.S. have for of XX% for at overall from revenue. been grew have total would our growth of and points. basis growth year-over-year. Currency you, the revenue. Anne. international impacted roughly International International about basis impact year-over-year revenue by Thank XX% would the revenues by QX the total XX% rate XX% been year-over-year grew growth up accounting million, without Revenue XX% XXX growth and XX% rate XXX currency. year-over-year,

from year-ago Revenue in QX, from This the more XX% cohort revenues an on quarter. annualized in customers $X,XXX our grew spending of up or basis XX% represented year-over-year. XX%

or XX% annualized XX,XXX We on have more basis, spending up an $X,XXX year-over-year. customers

remain our fastest-growing customers largest Our cohort.

is spending We year-over-year. an XX% on at the $XXX,XXX customer or annualized XXX basis, and cohort growing have customers more

define a cohorts As a reminder, revenues annualized we based GAAP in quarter. given on these customer

rates retention remained across every were net lower, dollar-based but healthy Our cohort.

customers more, rate over rate over Among $XXX,XXX dollar-based Our $X,XXX XXX%. XXX%. net retention was or and spending dollar-based dollar-based was XXX%, retention our net among over was customers more, net spending retention our or rate

As a reminder, a our four-quarter dollar-based net trailing retention rate average is calculation.

churn we demonstrating continue for accounts, see overall the and in cohorts rates our low to the across We stable value gross enterprise deliver our customers. large churn and

However, retention economic of mindful we as remain lower rates near-term to overall expect our the companies trend challenges. dollar-based net

like items to in and will I would balance results point remarks. non-GAAP to turn I the expense discussing of that I my profitability, be As out

in our that XX% at XX.X%. margins marketing was $X.XX. non-GAAP ago. revenue. from Research our growth onetime versus the and $XX.X results XX% we came a development was percentage was costs drive million, XX%, Operating net point G&A or ago. of a incurred year and revenue. ability or or mind, representing efficient was and Keep loss discipline. of of increased more operating revenue, improvement $XX.X exclude $XX.X to restructuring XX loss million was was demonstrates Gross our compensation loss million million and margin QX. million XX% in our a and expenses operating manage $XX.X year $XX.X Net margin an operating The in with stock-based per XX% and was improvement Sales improvement share loss the in

cohort the XXX full almost from basis million. X,XXX basis $XXX,XXX the Looking XX% for an $X,XXX spending full over added the $XXX,XXX more an fiscal or on Fiscal on annualized at $XXX.X from added year. grew And This grew revenues or more basis during annualized customers year. on XX% Revenues the we of revenue fiscal highlights year. year We the year-over-year also customers year. during spending XX% or our year-over-year. more represented spending customers annualized an to

Cash balance the Moving of marketable sheet on flow. $XXX.X securities cash million. at end approximately the were to and and QX

remaining recognized of ago year was over our end the deferred performance at million, million, year or was of next the of revenue months. Our quarter. XX% obligations, grew quarter. XX% year-over-year. $XXX.X Total ago from That up the be RPO, from the RPO XX% QX RPO XX% will portion up XX $XXX.X current

equipment flow to cash as Our property and free such operating capitalized and as excluding related less items, costs, used costs cash defined is from restructuring. software in the cash net nonrecurring activities,

$XX.X basis, was cash from We In quarter. XX% on fiscal improvement QX, million ago ended or employees. free XX% negative negative the negative flow with X,XXX the a the margin an from year year

for Moving guidance to we QX fiscal million $XXX rates to $XXX of XXXX, year-over-year. growth XX% million, representing of expect revenues XX% to

$XX million. non-GAAP $X.XX We shares million of to loss to and from operations million, basic approximately expect share $X.XX, per we assuming net diluted expect loss XXX weighted of and of average $XX outstanding

For rate we $XXX fiscal to to of full year representing a million range revenue the in of XXXX, $XXX to expect XX% XX% year-over-year. million, be the growth

loss $XXX the million. to basic from loss to $X.XX average of at of guidance, $XXX XX% expect and of net share non-GAAP of weighted $X.XX, Operating diluted year improvement operations of assuming a from million. fiscal million outstanding margins expect shares XX% XXX midpoint the approximately per And We 'XX. we

as management to some continues margins, headwinds, baking especially execute our number improve on need leaders as standpoint, implemented Our to begin saw will of macro a initiatives in XXXX. assumptions some expense strategies. guidance new assumes From time that to operating also which an first in we the QX. the manifest our of early you half our to fiscal create I'm environment

for designed free a moving will First, global better charges million on which restructuring from This operating non-GAAP the nonrecurring QX, resources part be reduction improve our headcount in and prioritize we upmarket as resulted and flow long of per our run. of our reduced our $X.X restructuring definition. efficiency excluded in cash to results

better be payback evaluate to continuing there on our are and overlap prioritize with moving with every our match Second, every the renegotiating focus may value third, and that contracts to we realizing aligning providers. with vendor periods we highest consolidating investments continuing these are ROI upmarket. spend we to we are where evaluate the with And shorter ensuring our investment,

expense-related improvements year in We expect drive 'XX these measurable beyond. operating initiatives will and in our fiscal margins

implies grow guidance flat that expenses low to year. the previous in or single operating Our stay the essentially digits

macro while ability our positive the the have with growth uncertainty calendar in before confidence environment, and XXXX, flow free end profitability. the Despite to we increased be balancing of cash

With to for that, Dustin I'll back it some hand remarks. final

Dustin Moskovitz

that trading I'm Tim. One subject XX to Class up XXbX-X want into million cooling-off my A to X, to shares planning purchase XXXX, our stock, of thing is Thanks, to enter on common to add I March formal plan a to the required period. comments

personally especially gives is believe because we're The Working leaders I underpenetrated needs into insights models. undervalued, I I'm in management an doing given the of in I are enormous of lead, most scale the and to of enterprise. Asana unique opportunity in believe shares strategic us the us. industries front market some well this business the that enterprise market alongside positioned various respective complex see work their

inform positions helps solve and product the work customers' critical long understand our This future most to challenges us strategy term. the over our well help and of

Catherine Buan

trading plan and be statements. will him shares this with A want that plan forward-looking of common considered open you, risks Class I And shares trading his before stock note its determinated in common Moskovitz's our there to be modified, forward-looking Q&A, our Dustin. A line parameters it to to the of are can result assurance and subject be statements in in such may to including no plan volume may suspended uncertainties, time, of at regarding and any purchases statements price Thank Class stock purchase Mr. trading his that by expectations up I of that that

we with Q&A. up it open that, for And can operator,

Operator

first Jefferies. comes of Brent the The Instructions] from line of Thill question [Operator

Unidentified Analyst

Thrill. This Brent is [Anic Bamon] on for

is top left which will led, decelerating that do faith continues you that solidify macro the And what is give to face you to Dustin line, to position? what undoubtedly So ultimately enterprise? win of the

Dustin Moskovitz

things that positive really I the lot for of for us. Thanks signs think are a question. Yes. are There

the that are. and I of impressive those most excited the I healthy that is feel think just the customers strength accounts about thing really how we that have

we we've We even sales when to are of know high really talked competitors. headwinds though know there's the deals that last aren't this and that longer even about quarter seen So utilization cycles quarter, in we form going those the customers still stalled.

lot to that have from with over they of a signs intend expand them we And us time.

we room so next And there. and landed commit And in great where really just already, to And customers do feel partner. to especially Fortune of the take places and see think to enterprises. when the about expand the a we conversations, XXX step other looking ton we really we've there's we and know that a consolidation

the and We're get enterprise it credibility into one, that specializing are segment. from those, positioned. the functions have, way high not on cross-functional also many of from existing deployments, and focused the the having from cases. The the we instead of but it's fact just ratings Work really thanks the win we well analysts Graph that the use strength loved We to facilitates often across

Operator

of Ader The next Jackson question comes from SVB.

Jackson Ader

Great.

I it on enterprise? are still was are also like ideas And bouncing Anne, on can the one, packaging, of in enterprise. pricing specifically you works, why these any just some sure opportunities kind I'm first you give the but in the us The specifics of think that and kind that around? focus mentioned

Anne Raimondi

both enterprise existing as question. Yes, we're analysis. your as much so well they're aligning customers with for informed thanks by and for market are and updates exploring we're value our speaking really on the deeply focused prospects customers, Jackson,

are exploring whole options. might number a we you as imagine, priorities, Our of

are they're really, and grow that sure I there thinking as what mentioned delivering and us. think needs they But with Dustin realizing about value scale is add-ons. met, for customer our enterprise we're making them, and we're

that particular And so focusing that's we're on why segment.

and over we're for the And evolved those customers. the specifically base. on with and enterprise, plans for years, current Our packaging have that's existing packaging laser the focused pricing pricing in growth why

Jackson Ader

then like seat And so these sign do like ramps the they Great. go -- deals up that deals they in. those Is minimum Or Fortune how might of shelf companies, are follow-up on I'm have layered adoption big contracts, do the actually, multiyear through a Okay. with those, it curious quick that are some XXX you a the buying multi-years? that multiyear just based? like seats create wear? just pool

Tim Wan

a Jackson. these Tim. say on we Hey, theme that -- plays, one, is, the customers would when of is consolidation Yes. scalable This across want we enterprise platform. kind common to see that these the I multiyear fact consolidate

in deployed they're are lowering cases, across and we work the their of management other players. being spend some So many

So that's to their I just Two, up macro, they the one. are buy, buying are to think of that companies the they most mindful degree seats very given many being how so as usage.

accounts. all are So these very healthy

to are times do Now seats. buy companies tranches set the next degree they for on they that see is ask growing that many what of the we how

flexibility price some them give move with does it up to So some certainty.

Operator

And line the next question Research. Wolfe comes from the of Alex of Zukin

Alex Zukin

for financial data always think most individual one. One AI interactions that then platform, based for I they had right an knowledge question, you generative me. for investors, what's when next visions could comes kind today, the which ask one course one should -- on guess, about kind cross-functional is long you've I the for term, ultimately, visions the and and the few work, corpus right? of of Dustin, Asana, -- par have now what kind is your to I talked that we've of a just maybe of So of when and Asana, do

vision? how ask of I'll how And kind a the value of Asana think platform What's your evolving you this? theoretically -- just then you it vendor table next Is monetize assigns questions. Would this AI to couple way get those thoughts the product in -- do stakes love And on about it of it that do to right that, see generative unlocking every has? work management the could and math actions. assign

Dustin Moskovitz

closely. really our C in actually the also really Yes. back. member Altman, a we're really in OpenAI in Great a I'd like few it's out, Series led time close following point share D'Angelo. CEO, We've to team the question. And Board been to Sam Obviously, Adam We exciting AI. particular. a years

craft, multiple just of ways a about arc the best to the that the about work Asana language value and is to them involves the us kinds to story of AI future. your of And for technology, talk about to question, to able back, models. sort leverage they unique there been just how think leveraging step the larger ChatGPT we've and style GPT So not

we've in build learning product And that continuing we're now. while some actually have on with working been for We to experiences direction. and a data-driven today, machine the

and ideas with We prototyping also a of there. models exciting have things are lot internally language the

use think use In able terms the case that. language you of models I the gave you generative might for to I exact think be stuff,

I approaches better you, and think lot up We've But threads for updates, summarizing the and think with out the a to that long generative in project, trying other products may already. machine all both. be like I of possibilities a just information other highlights, from suited, try do there's that we'll models other status of meeting SaaS pull already a summarizing transcripts. the rating learning aggregate seen lot

the into a whether you're think just information structure the students use corpus important putting AI us Graph suggested we're the just for or incorporate are space, user, data, that using the inherent the we'll case the the I model of Work best another But data, of not what's And or system, end approach, of and I really in of users the a whether particular up. think you give ideas. to our so that understanding leg structure language

to and read important create most data and users understand and help to have the those for models work. insights We direct more

definitely variety ends the Work up So expect an of used Graph a to I being think see but advantage, products. across AI actually

Alex Zukin

report... joke That's about awesome. I'll the in put TPS more no

Dustin Moskovitz

more No anyway. handwritten ones Exactly.

Operator

The Berenberg. DeGasperi next from Andrew question comes of

Andrew DeGasperi

as changes what I back the do to the last we enterprise of of guidance? -- what know we just the next conservatism really or you you're year reflected am the off sales in learn, the making side? guess few this Was you some kind quarters this I how about know is in the sales of in motion, through I baking then you're can since maybe how wondering move this ticked led to shift? the over us think let drastic proceeding in you two growth? reorganization terms the And kind should year? you've the generally, in maybe or guess, did on this I Just

Anne Raimondi

Anne. much that so question. Hi, It's for Thanks Andrew.

thinking infrastructure. selling about So way focused we're and really is our -- scaling building it we're the enterprise on

the what on the So the we And laser-focused is to I'm enablement now expanding frankly rapidly business sure landing reps on is customers focused sales ensuring to and all we're measurable and value. added time with really, we last fast, year. our delivering that that and And sales meet enterprise fiscal right to -- team systems make is investment. scaling really support operational

consistently So that that and we're -- doing in repeatedly more and much every market.

as the bring So that's world. committed that you'll great focus on that's the new that are we focus to the we leaders also and see sales around

the a just bit your Tim think little I question. then And share second more will of about part

Tim Wan

Andrew. Hey,

than that Just adding $XXX,XXX in We Anne, script. have net the this expansion look data, XXX%. Dustin customers. with the was when are last more to do enterprise XX,XXX spending on I rate at customers quarter their this us, And we think mentioned

when Many in the expansions through and we look like the more is majority deployment company. And getting those, aren't through like expansion up-tiering. of growth data, seats and of just onion back across the those the at that peel vast and

moving gives that that in of us terms of confidence a with. So the lot strategy forward we're

that's So one.

I bit, rates. likely still there's the of is still call on of macro And think There's then just this Fed but little two, I the guidance, of -- a kind issues kind seeing lot mentioned to uncertainty. we're raise think in of a I geopolitical terms about. The

be of being the term, especially in customers, spend. we'll very continuing the be really think to our first and kind to in So half see their mindful we're of of terms short challenges thoughtful I that trying

for in our also We've some baked so up to the strategies for and changes their leadership time, hold. to ramp strategies take for

degree enterprise So outperformance, that will the start much will to their think being come it that from businesses investments. releasing thoughtful and about I be budget the there more

just think is, guidance I approach, lot the So of in a the model on and a me don't year. to if my this I there's lot not upside having early think, ask be would the of about not just I model you in cautious or guidance, downside

Andrew DeGasperi

-- on of of mean, just That's bit get the and Alex kind we should to on digits How what math I in ask. question think helpful. didn't that in low And terms taking the terms single rising OpEx just the should of overall should a parts marketing? just think it growing sales moving cut it? faster about be you're R&D little and a Should to really we about that?

Tim Wan

Yes.

revenue R&D and be flat. relatively a I as think marketing sales cut. a is of wouldn't And will percent say I

it on those even where those SMB years is of way focused in were we the towards many direct or still think to year a of the about prior really where upmarket. in of and moving think kind resources where we're reallocation last resources I

and you R&D year-over-year So leverage continue I And in this last to on quarter see this G&A. relatively basis. sales a think then flat I like marketing, to in past you'll expect leverage continue to see and saw would be you'll

Operator

of Oliver comes The next Baird. question from Rob

Rob Oliver

So play nice Anne, had you that, the guys And I you sounds engaging level. a to at that last change a consolidation C know you Anne. for is if or It question, were quarter for Dustin, guys mentioned as relative more the you last for quarter.

talk of is So vendors mentioned guys bit people had? expansion which those seat Tim the wins coming that's other have vendors? they the at can consolidation you of as thing you he's a expense more kind vendor Are same do that doing, little about rationalizing

wins? with Talk bottoms-up decisions? are those guys strength have influenced about a that follow-up. And by I And had just sort C-level users? quick you Are then the little these consolidation they more bit a of

Anne Raimondi

Hi, so Rob. much Thanks question. for your

total to drive supporting. across reduce as the consistency yes, consolidation looking CIOs of they're for organizations our applications are that Asana, and So, we're number especially wins seeing

specifically our are the consolidate driven functions. over in seats divisions these to multiple to for that So to and Work favor, power which or of the strong in growing the our usage point, our of the scale exists allows the product And it's proven your and a and to then love by ability really couple really XXX,XXX factors Graph architecture, organizations organization.

A to work Goals enables product necessary priorities few company's priorities. to other connect those all the things that we've top the that's to been achieve our executives seeing

plus that and customers are $XXX,XXX Goals connected Goals the Asana. can using underlying percent are so The And to XX-plus our using they do of those work. majority in of all

be So this we're valuable environment especially seeing in and that impactful.

Rob Oliver

really relative And that. but you're you. the year it strong, the with I appreciate Great. color to QX giving cadence like That's being then, helpful. appreciate around your thoughts just through one Tim, guidance obviously the sounds I for yourself you of ramp headcount headcount some the to firm? sort it there needs how Is the managers. -- is new of where to that relative with on think on sales some headcount be within both of the room and general headcount the guidance,

Tim Wan

we through comfortable headcount that just Yes. I we're with as get from the a would at can right as we're throughout we for be looking the we'll invest. year, degree pretty perspective, say To now. -- where we signs look where

degree the expectation, is decreasing. that is to stronger So our productivity is pipeline deal cycle increasing, time than

by have. improve our all So the demonstrate But of fairly grow are think our in year-on-year. we things margins look we're We I about fast what operating at want you how on we XX% kind to inform this point, business. if comfortable those will our Even to to us going guidance, leverage want heads. at with

want that -- those throughout So mindful kind the we'll that I be very sure it's progress year. and all to delivering of make are we're think we of

Operator

Piper question comes Brent next Bracelin The Sandler. from of

Brent Bracelin

some the a it's did deals. some Maybe XX How or deals tied I seeing of macro pace for and rate or NRR, bit layoffs Or because multiyear drag space? months, Anne much seat of trailing downtick. in that multiyear slowing focus NRR see It's of Tim, with seeing to on expansions enterprises? but lagging that contraction to the these little on of it guess, love across -- is it? the did that of slowdown the the the downtick. the there enterprise broader XX,XXX with even a we're tech the Sounds like some also the of just the is base are you and

those healthy, Just that period love certainly still trying drags I those to have down-ticked on understand you're seeing? in better to parse very explanation NRR. what are it's to what's in -- downtick a out contributing and but I'd

Tim Wan

This Brent. sure. Yes, is Tim,

NRR the that really I to because driven being driven than add two would So by fast. would expansions -- say primarily is is color us lower It's downtick I aren't hiring things. the by companies historic, really

especially I and our of And churn around within other some tech, who there's in But you $XX,XXX then particularly or when have customer know, downgrades churn, churn piece logo of those customers, the -- logo zero many at the healthy, $XXX,XXX the our those within virtually look is base. layoffs. some had customers, remain

down that the look essentially the seats. term, short more have of of their So with they're But the overhired a I some companies churn in customer layoffs. logo and see terms that downgrades of and have do cohort. the still like companies think hunkering degree may that data, when have to had kind healthy. at of We the we but in deploying are like kind bit spend, And is

And had those consolidation expansions. seat haven't all of that these for some those layoff companies plays, are

Brent Bracelin

Dustin. follow-up last is here for My Great.

an some LOMs API out embrace -- and and plan has of ChatGPT there? that test how Now these released, quickly transformers trial do you to

Dustin Moskovitz

Definitely announce that. on test terms availability We've don't we'll have things, intend I prototyping customer been but away. this them of in to Dustin. have is to of Yes, when right any anything

Operator

Zukin Alex from of Research. is question next The Wolfe

Alex Zukin

below. through the tech guess, those like to then I do it revenue or breakout NRR, are troughs? with you going the to anniversarying for $X,XXX how around shifting? those So lower I you're around it's I've where And $X,XXX trailing just you I long the of of questions promised, exiting kind last? downshifting on kind that first, a commentary clearly And XXX the trends the math interval the year where Where key down of be rightsizing, primary aggregate. the cohorts is and you question confidence about Tim, on given in quick got expect when four-quarter verticals being, feel metric, than And in follow-up do guess up the a it's customers do --

Tim Wan

Yes. Sure, Alex.

it four-quarter -- I when I kind think would some at I continued of like when we a see say you is trailing the number. NRR, compression will look because

provide to layoffs. on start be it's and more -- to expect the started rightsizing some comps was this NRR QX -- to of QX verticals we for kind better lot But and year because that of kind QX having of tech of a I QX more see and us when would

of in Alex. kind terms of the the timing NRR, that's So

Alex Zukin

Got it. in And more giving sales around little heads a being sense. then, -- new for assumptions time the I to all comments and you've made looking the your bit makes conservative guess, to that that ramp

the percent going the revenue cohort from If $X,XXX, you it of that should like -- the go over XXs XXs out, Because does even the high into when year, -- to it model growth. for assume to dip is that as are for we that looks low still that percentage spending customers a total?

understand just what's happening us And also there. help start kind that bit a So could little again, when to of bottom?

Tim Wan

Yes.

think -- question, Alex. no, great I

just much the about in to much moving more referring cohort you're $X,XXX customers slightly the way to it number or is being the upmarket XXs, $XX,XXX. above So we're $XXX,XXX going than focus think the think for to even and low and I pushing the $X,XXX more right? to $XX,XXX on like

type probably I to a in trend as of over So of above the aggregate, total our think XX% our continue towards XX% moving between kind a percent and closer $XXX,XXX $X,XXX time. of But like more focus percentage to the revenue will revenue, is north customers. as of and like even do upmarket

Operator

The Iwanyc of George next from question Oppenheimer. comes

George Iwanyc

And builder you seeing? that's what from you're Can how on consolidation automation and give seeing activity sense your of helping up a on the workflow Goals. you're maybe and comments following us with

Anne Raimondi

so that question. good Yes, that an much way did just with a consolidate. George, customer thanks that example a for is Maybe answer to

to they've global and improved employee and every leading enable single, productivity and gone execution, really on a consistent place platform quarter drive to collaborate consolidated a So Asana have first. rental last to remote vacation

it's more customer time workflows for and automation, no of the their are there's that there's providing to improving helping for and really focus them sure So work for global improved the siloed to accountability also the make customers. experience innovation rules, millions teams on more their that

aspect they're in partnering Asana. and account of most team every really with make excellence to so dedicated of a internal fact, have sure center they team of making our an And the

company implement connect we an the So level, individual of since is now to organization so exactly ability know organization see in employees to the Asana, on and goals. matters entire come what their And those to and company their features connects then goals their through together. down all can and coming way all how their all the work the

distributed that's around especially for because And all completely important are this organization, world. the employees again,

technology so with all collaborating through just And they're and Asana through another. one

George Iwanyc

us some And perspective you're making, give the all system changes integrators? sales the that, on following channel up can doing with what you on you're with and

Anne Raimondi

Yes, absolutely.

our and those that relationships overall on ensure to we in then So partners channel about think in growing want is priority with customers enterprise our We way the markets. because focus we're a strategic building really is really way.

enterprise teams as them actually still companies. to extend as our for and channel for best-of-breed and helping us customers, with markets partnerships as Those important partners deep our sales ground. have on SIs strong important are With are where important, our we're don't in our partners, we partnerships see So our with reach really software the customers. really early well service enterprise

strategy. that's partner So our strategy, just we're channel way approaching but the that our overall not

Operator

Robert Davidson. D.A. from Simmons comes question next The of

Robert Simmons

wondering, for you on First, bit was is? us that? intelligence a of a that I could little give preview Or is too what early collaborative

Tim Wan

and getting about is in on leaders Asana. is put excited up. those view more over and our tops-down that about event executives, the of projects and we into We're And years that progressing. progress portfolios to how aggregating collaborative information the Yes, of really giving intelligence absolutely. see a and across coming work really lot We've workflows made their the customers

So make identify and it to collaboration better, enables hotspots data-driven them really decisions. faster,

everyone about intelligence been version we've of story. Intelligence, about insights and but talking graph, their a we're them really own take putting is all bits put excited lot information work today. of the And really collaborative that. of and of coherent it's Asana able a AI those So views more to view really, a into AI, but also like that provide different because in

Robert Simmons

quarter in of comments, but SMB of pretty relatively the your be larger then kind weaker fair speaking? characterize makes a read customers, your it. Got as actually for accounts side, sense. on That it And between the bit would the to some lines solid maybe

Tim Wan

Yes, Yes. Robert.

a fair statement. I think that's

Operator

The comes from next question Steve of Citi. Enders

Steve Enders

right. talking in on the XX% productivity the want of All to about bit guess kind the go-to-market side, drive -- some dig better the a to of rep trying through Great. I in about little kind comments I year. of

can Tim, front? pull you the and levers you able the I the you changes made can achieve that that then, So guide biggest how of in here? guess, productivity the kind to changes And contemplating about to of are the that for on how being are I kind outlook guess, and thinking be you

Anne Raimondi

that asking productivity appreciate I specifically. you on and

So sales productivity. contributing -- couple to a factors of there's

the The second that in teams first did sales reduction changes. is team and the we productivity impact ramping. about force implemented managers And November and have adjusted in X/X is as is our those of to still

now needed investing accounts. in our on So to focus predictable infrastructure, the and tools especially expands in larger deliver really lands and is several and areas, certainly, training repeatable our the

in about enablement. It's about team, DevOps. also lot with partnership our a investments that's So internally technology enterprise our

about to work So our but on do. lot traction front, of we're we geared it's a the that motion. early excited all And of selling enterprise have that towards know that

those are So the focusing on. areas that are we really

Tim Wan

Yes.

end. at about you I'm sure but we comments, say In talked XX% heard ramping it, the would of Anne's all -- terms the guide, I not really if that

So actually throughout be probably our XX% the But to upside in of the productivity hit -- year, would that that that we're think you we degree progress early can year. it the say, model. would reps the that making and as to I the

Operator

next question Suisse. from Fred Credit of Lee comes The

Fred Lee

the encouraging talked It's prioritize incremental very implied Tim, also the in -- in guide. to increase see high you significant ROI ROI margins every evaluating in the investment to and about quarter little periods. back of about and investments Can shorter those a the priority take tell some a projects you cut that make seat? with bit some the of high investments us payback that

Tim Wan

employee really very with think make at size high at be it's and terms think in those accounts base can where accounts and capped where customer at of of I our base have smaller progress kind may the versus you the we number level, we a mean I where Yes. looking we and employees. penetration really of their of

and So higher then paying the and the upmarket. VSB. many of even -- a an don't when would where and our And really more done the difference kind the paying to the lot say smaller really I are you the can you and kind and -- and of we've the where marketing see churn so break customers, our seat churn SMB you enterprise sales out between of focus downgrade are our you logo expansion in the that's see trying NRR, see accounts, capacity move area spend times both which shifted customers, the

Dustin Moskovitz

is And a regional now to Dustin. add, also angle just this. would there's I this

we just and So stronger a buying have payback where and we more more CAC and and the by have on LTV country, focused where different in sort market of we market little economy already a strength power. the is,

markets Tier our into attention Tier X, more And X shifted so emerging we've in of less some and markets. our

Operator

next of The Jason Celino Markets. KeyBanc question comes from Capital

Jason Celino

the Just one the it the ask How framework operating you're built we question, should and much like or conservatism just sounds so expecting? in on I'll think it aggressiveness you've guidance. plainly. But the given the margin conservatism of maybe some about improvement revenue

Tim Wan

operating would we'll how margin of the would I of I for say made the of And committed under-promise you delivering before guidance. hopefully, kind improvements we're flow over-deliver calendar the to 'XX. end guide. That's and in We've continue vast terms to guys. characterize cash free

Operator

Seyrafi the comes last Shebly Securities. our FBN And question from of line of

Shebly Seyrafi

that talk January? I versus is growth. how how [XX%] it than And about grew noticed quarter? was more also which sequentially, January the like it's you can revenue So by December? the X% February linearity How passed, the -- during much versus receivables

Tim Wan

February. one finish conversations holidays. And year. in an fiscal very to primarily think solid right I would you the the with we tell by the to I is odd would December I Yes. what we're because we're having compare customers we're But of a with seeing now encouraged say, had -- certainly a to

Shebly Seyrafi

your to I down -- model per it's least, That model, growth And you're was flat, much in was the up my was like growth? modeling seat seat? or wondering your according also, I'm ballpark? my price whether in at flat right Am than your in 'XX for XX%. importantly, price And more per Okay. And year-to-year. seat customer

Tim Wan

terms far Yes. I would too of say in your model seat. off is not

as on focus many I we've personal possible value. view call the growth the is moving and seats just up we meeting and those deployment that as and more another even talked large over in and done within we we've think for these as lever when time, seat price that getting deliver as enterprises

So far off about should in you're the you of terms you're how thinking how not business model too and it.

Operator

And we to session today's call. management our the to call like back with of will that, would the remarks. team over conclude I question-and-answer closing now for hand

Catherine Buan

much. so Thanks

seeing Just season. out everybody know I today. look road it's call this to a joining again. We you final thank quarter, and to thanks a the on busy the forward you

Operator

lines. conclude Thank today's disconnect that, you now participating, for And you your we will call. with may and

Asana (ASAN) 8 Mar 232023 Q4 Earnings call transcript