Asana, Inc.

Good afternoon and thank you for attending today's ASANA second quarter fiscal year 2023 earnings call. My name is Austin and I'll be your moderator for today. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. If you'd like to ask a question, please press star 1 on your telephone keypad. I would now like to pass the conference over to our host, Catherine Wan. Catherine, you may proceed.

Good afternoon. And thank you for joining us on today's conference call to discuss the financial results of Asana's second quarter fiscal 2023. With me on today's call are Dustin Moskowitz, Asana's co-founder and CEO, Anne Raimondi, our chief operating officer and head of business, and Tim Wan, our chief financial officer. Today's call will include forward-looking statements, including statements regarding our expectations regarding free cash flow, our financial outlook, strategic plans, our market position, and growth opportunities. Forward-looking statements involve risks, uncertainties, and assumptions that may cause our actual results to be materially different from those expressed or implied by the forward-looking statements. Please refer to our filings with the SEC, including our most recent annual report on Form 10-K and quarterly report on Form 10-Q for additional information on risks, uncertainties, and assumptions that may cause actual results to differ materially from those set forth in such statements. In addition, during today's call, we'll discuss non-GAAP financial measures. These non-GAAP financial measures are in addition to and not a substitute for or superior to measures of financial performance prepared in accordance with GAAP. The reconciliation between GAAP and non-GAAP financial measures and a discussion of the limitations of using non-GAAP measures versus their closest GAAP equivalents are available in our earnings release, which is posted on our investor relations website at investors.asana.com. And lastly, in service of investors and customers who need ESG data for reporting and RFP requirements for our many enterprise deals, we publish comprehensive and easy-to-use disclosures around ESG on our IR website. You'll find downloadable SASB index data and climate data along with our annual ESG report. And with that, I'd like to turn the call over to Dustin.

Thank you, Catherine, and thank you to everyone for joining us on the call today. Asana's Q2 results beat expectations on both the top line and the bottom line. Revenue grew 51% year over year and beat our guidance by 6%, driven by strength in the U.S. and enterprise businesses. We had 462 customers spending $100,000 or more in annualized gap revenue and are seeing broad adoption at some of the world's leading enterprises. Dollar-based net retention rate remains strong overall. Across our customers spending $100,000 or more, the dollar-based net retention rate is well over 145%, illustrating that we're not only winning large deals, but these large deals have the highest expansion rate among our customer cohorts. In particular, our enterprise business is growing more rapidly than our overall growth rate, and thus becoming a larger and larger portion of our business over time. We remain committed to building the most effective, most scalable work management platform capable of serving organizations of all sizes around the world, Evidence of our progress includes our continued success with the industry's largest deployments, plus our end user adoption rate, now at over 2.5 million paid seats. As a result, we're raising our top line guidance for fiscal year 2023 to $544 to $547 million, representing a growth rate of 44% to 45%. We expect currency headwinds to continue to be a significant factor this year. Excluding the currency impact, our guidance would represent 46% to 47% growth. We're winning across important industries and with iconic enterprise leaders. And where we have the greatest leverage, we're focusing, growing, and investing to win. The growth we've seen over the last several quarters has been driven by both the trends we see in the market and the way our product strategy delivers on what companies need as a result. Companies are investing in solutions that offer time to value, help them do more with their technology stack, and better align their employees around the work that matters. And the bigger the company, the more true this becomes. We've recently performed an analysis of how our enterprise customers get value from Asana and found that the vast majority are using it for cross-functional collaboration. I share this with you because this is truly how we're most differentiated from other work management software. These tools make it easy to track single projects for single teams. In contrast, more than half of all work tracked in Asana is cross-functional in nature. This number jumps to over 60% for customers spending more than $100,000. And we see an even higher proportion of this cross-functional collaboration and the features we've built as we've moved up market, including goals and portfolios. Asana also creates shared clarity and accountability at every level. Leaders have to know how the work being done delivers on business priorities. Asana uniquely does this because the work graph creates a map for all the work in your organization, including where it stands, the people responsible, and how it connects all the way up to company-wide goals. That's incredibly powerful, especially when it's critical to keep a large team in sync around changing plans. The Asana platform serves as a critical hub for your most important business applications, helping customers make better use of existing investments and giving employees a single place to track requests across email, chat, documents, and other frequently used applications. Asana is built on the foundation of safety, security, and performance at scale that global enterprises expect. companies are continuing to recognize Asana as an essential partner for solving modern work challenges. This is why we continue to improve on and expand functionalities required by the largest and most complex organizations. We have a strong fiscal year 2023 product cycle, and on October 11th, we'll be giving investors a preview of how we'll be delivering even more value in three big ways that help companies successfully execute on their top priorities. First, by helping decision makers quickly understand the health of strategic work across the organizations. SANA goals is already the number one product, according to the G2 enterprise objectives and key results software market. And we're about to make it even better. Customers will soon be able to use the Salesforce for goals integration, our first out of the box integration with the SANA goals. When work happens in Salesforce, the progress of linked goals in the SANA will be automatically updated, making it easier to monitor impact and make informed decisions. Leaders will also be able to get a bird's eye view of goals in universal reporting. including the ability to report, filter, and group goals metadata. We're also rolling out all new integrations from SANA partners that help our customers improve the productivity and quality of work across their applications. New rules integrations with Gmail, PagerDuty, Twilio, and more automate work across tools to help teams stay connected and remove bottlenecks. Contact switching between tools makes it hard for individuals to stay focused on the work itself and oftentimes causes that work to fall through the cracks. With a new Asana for Workplace integration with Meta, teams can create Asana tasks, receive project notifications, and seed link previews for important status or milestone updates right from Workplace. A new independent report by Nucleus found that Asana can cut the time it takes to complete a project by as much as 60% and increase project loads by up to 25% without adding stack. The study also found that users of Asana reduce errors by as much as 90% when automating complex processes. And the third thing to note about our product roadmap this fall is that we're further elevating security, privacy, and compliance. Asana now offers data residency options and flexibility in Australia and Japan to meet customers' needs, in addition to EMEA. We're also supporting global organizations with enhanced mobile data controls, so admins can ensure data stays secure with biometric authentication and restricted attachment sharing, while empowering employees to work from the Asana app anywhere. For companies that store, consume, and transmit personal health information for different business processes, Asana plans to introduce a HIPAA-compliant offering this fall. And our new API and partnerships will provide IT leaders with data loss prevention, e-discovery, and archiving solutions for increased control and support of security and compliance controls while still facilitating important cross-functional connections. I'll close by acknowledging that we're actively managing our business and staying vigilant as we carefully navigate through the current macroeconomic cycle. We'll continue to balance growth and profitability, which includes managing our investments conscientiously while maintaining our leadership in product innovation and vision. And now I'll turn it over to Ann.