Asana, Inc.

Thank you for standing by and welcome to Asana's fourth quarter and fiscal year 2024 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during this session, you will need to press star 1-1 on your telephone. To remove yourself from the queue, you may press star 1-1 again. I would now like to hand the call over to Catherine Buon, Head of Investor Relations. Please go ahead.

Good afternoon, and thank you for joining us on today's conference call to discuss the financial results of Asana's fourth quarter and fiscal year 2024. With me on today's call are Dustin Moskovitz, 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 for free cash flow, are financial outlook, strategic plans, 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 will discuss non gap financial measures. These non gap financial measures are in addition to and not a substitute for or superior to measures of financial performance prepared in accordance with gap. A reconciliation between gap and non gap financial measures and a discussion of the limitations of using non gap measures versus their closest gap equivalents are available in our earnings release, which is posted on our investor relations web page at investors.asana.com. And with that, I'd like to turn the call over to Dustin.

Thank you, Catherine, and thank you all for joining us on the call today. In Q4, we beat the top and bottom line guidance as we continued on our path to move up market and win the largest enterprises. Today, I'll first go through the business highlights from the quarter and year. And then I'll talk about our excitement and increased focus on our new AI offering, Asana Intelligence, the early traction we're seeing and how the WorkGraph plus AI is differentiated. And finally, I'll share what we're hearing from CIOs, IT leaders, and how we're focusing on their pain points. In Q4, revenues grew 14% year over year, and fiscal year revenue grew 19% year over year. Q4 non-GAAP operating loss margin came in at 9%, improving 16 percentage points versus Q4 last year. And for the fiscal year 2024, our non-GAAP operating loss margin improved 29 percentage points versus the previous year. This is a huge achievement, and credit goes to each and every person on the Asana team for their focus on expense management and effective investments. We'll continue to be focused on growth and profitability. And on a free cash flow basis, we expect to achieve free cash flow positive by the end of this year. Tim will talk in more detail about this shortly. In the quarter, we continue to land and expand with some of the largest companies across major industries, including manufacturing, healthcare and pharmaceuticals, transportation and logistics, and financial services, among many others. And as you know, the fiscal year highlighted customer wins, including three major automotive manufacturers, four of the largest telecommunications and internet service providers, five of the largest media conglomerates, and six major financial services firms. And these are just some of our largest names from each of the last four quarters. Across our entire customer base, 73% of the Fortune 500 are Asana customers. We've also had great success in partnering with customers to grow at a massive scale. We have several Asana customers who have over 10,000 paying seats, with our largest deployment at over 200,000 seats. We have more than 150,000 paying customers as demand for our work management solution continues to increase. The number of customers with over $100,000 annualized spend grew 20% year over year. As these customers continue to grow with Asana, their dollar net retention rate continues at a strong pace at 115%. Revenue from this cohort grew 29% for the fiscal year, faster than the overall growth, and represented 27% of our total revenue. What makes me feel good about our success with enterprises is not only in the number of large customers and the growth, but also the health of these enterprise accounts. In most of our largest customers, Asana is highly utilized. The IT leads are helping us grow and expand, and the accounts have the ability to keep growing even more. This is true even in the organizations where heightened focus on budgets has temporarily slowed account expansion. I'm also excited about the progress we've made with AI and the opportunity in front of us. Asana Intelligence strengthens our core value proposition. It helps our customers drive more clarity, accountability, and impact up, down, and across their organizations. As you know, we run our business on Asana. and we're constantly testing our latest innovations. As part of this, we've been quickly adopting our latest AI features, and the insights are remarkable. The state of the art is advancing quickly, and we believe LLMs and AI generally will only get better from here. I'm excited for the future, and we're seeing real value now. Like many of our customers, we've just wrapped up our objectives and key results process for the year, leveraging Asana Intelligence, our AI solution, to quickly report status across levels of the organization. These processes always feel like a heavy lift, and frankly, a bit of a burden, even though they're important, as everyone's eager to move on to the new year's priorities. But using smart status cuts this process in half or more with higher quality results, and will only get better over time. Similarly, we just went through our company-wide 360-degree performance reviews, another famously onerous process. I personally used our Smart Answers product within each of the one-on-one projects I maintain with our executives, summarizing in minutes all the important topics and accomplishments we've discussed in the past year. At my direction, it even highlighted all the specific times I gave recognition or feedback, so I could easily include them in the reviews. That's not a special performance review feature we built, to be clear. I simply asked the product to help me use our general Smart Answers feature, suggesting specific categories and questions to consider. Even as an end user, I was empowered and had the flexibility to write a custom workflow in minutes that saved me hours of work across my whole team. Executives and managers love the visibility into their team's work and the insights they can derive with AI. This has proven to be not only a significant productivity boost, but it's also yielding higher quality outcomes. This wouldn't be possible if we were running our business with email, chat, spreadsheets, and slides. And that's why Asana is different. The Work Graph plus AI are more than the sum of their parts. Since the Work Graph acts as a map of an organization's plan of record and preferred processes, We have a unique opportunity to solve collaborative work problems because we have the most relevant context and data to create useful and accurate generative outputs. We believe we're the only work management platform that has this combination. AI powered by a clear structured map of how work actually gets done across organizations. This empowers our customers to ensure people and AI work together to accomplish objectives and achieve results. We're still early in our AI journey as a company, but we're seeing some exciting trends beginning to play out since we first launched Asana Intelligence last fall. AI is coming up in virtually every conversation we're having with our enterprise customers as they look to us for help implementing AI in their workflows. Customers are excited about AI now, and they're actively making purchase decisions based on our AI vision. Pressure's coming from the top down, and leaders want to better understand how they can drive business value with AI at scale and do so safely and securely. And we're even turning skeptics into believers as we're able to demo how AI is not just a chat tool, but how it can solve critical business problems when embedded directly in Asana workflows. Just the other week at our Work Innovation Center, we hosted an executive from one of our largest customers. She said she was hesitant to adopt AI. Our team positioned the value of AI to deliver faster and more effective project status updates, a key part of the job for many of our customers that typically takes considerable time and effort to do well. With Asana intelligence, this status can be written generatively, deep linking relevant work from Asana so they know where every fact came from, and highlighting progress made against company goals. The tone and style can even be personalized. We showed this in our customer meeting and immediately turned this skeptic into a believer, and they're now rolling out this functionality to their whole organization. This is just one powerful early example of how differentiated our solution is. The time savings were amazing, but what really impressed the customer was the quality of the output and the fact that it's linked straight to the source references. This is the power of the WorkGraph plus AI at work. Demand for our AI features is one of the leading drivers of growth in our new product tiers, especially in Advanced, Enterprise, and Enterprise Plus. Although it's still early, we've had over 20,000 customers adopt the new tiers with AI. What's next? We've started rolling out our next wave of innovation, starting with Smart Digests, which provide quick summaries of what happened since you last visited a project. It can catch you up if you're out on vacation or simply focused elsewhere. Next is powering goal standardization, workflows, status updates, and business insights at every level of the work graph with AI. I believe in the foreseeable future, Asana will give you real-time insights on qualitative information about the status of work across all levels of the work graph. in the same way that our dashboards do for numerical data, delivering a huge part of our original vision. On the partnership front, we have strategic partnerships with Anthropic, OpenAI, and AWS, which allow us to build world-class solutions with leading LLM providers. We're able to get early access to foundation models to help test and prototype against our enterprise AI solutions, as you just heard from Anthropic's announcement of Quad 3. And this benefit is a two-way street. as these LLM providers tune their models to our use cases over time. As one of their customers, they trust us to set the bar for what great looks like, referencing our work together to help conceptualize their models. And in return, this helps power our most ambitious and complete vision for collaborative work management. And as Asana customers, they each enjoy the fruits of our combined efforts to power their own work and dream even bigger. These partnerships form a virtuous cycle, and we expect the benefits to compound over time. We're also partnering more and more with CIOs and IT leaders through our Work Innovation Lab, which is regularly featured in Forbes, The Wall Street Journal, and Harvard Business Review, among others. CIOs are being asked by their CEOs and boards to drive AI strategy and rollout, operationalize business objectives, and help accelerate go-to-market. They feel the urgency to get value from AI now, but must do so in a safe and trusted way. CIOs are not just chief information officers, they're chief intelligence officers. This is an important expansion in the operating role of the CIO, and Asana is uniquely positioned to help. We're investing in making sure CIOs can connect all their work data to build the right foundation for AI. We'll soon be launching new innovations like a workflow console, deeper integrations with Microsoft 365, and ways to intelligently draft and standardize goals across the entire organization. We're helping CIOs deploy trusted AI across every department with the right safeguards and transparent controls, with features like sandboxes, multi-org deployments, and AI-powered custom onboarding designed to support companies at scale. And CIOs want to see wins with AI by delivering immediate impact in ROI now, and they can do this with the Asana platform. Features including our new executive summaries capabilities, smart answers across all WorkGraph objects, from tasks to projects to portfolios to goals, in smart status updates at the portfolio and goal level. They're providing real value, time savings, and better outcomes for CIOs and their stakeholders across the business. Again, I want to really emphasize that Asana's ability to connect work all the way up to higher level objectives gives us the ability to provide unique and powerful real-time insights at every level. One way of looking at our roadmap this year is we're going to be investing, leveraging, and amplifying that powerful source of differentiation. The pace of change is only going to accelerate in this new AI age, and we believe we're extremely well positioned to capture this opportunity thanks to our investment in the WorkGraph data model and our incredibly scalable architecture that's proven to support 200,000-plus seed deployments within a single organization. Because of this investment, our position today, and our product vision, that Gartner recognized Asana as a leader in the Gartner Magic Quadrant for Collaborative Work Management, and they positioned us furthest in completeness of vision. You'll hear all about our latest AI innovations and all the investments we're making to help CIOs thrive, coming out of our next stop on the Work Innovation Summit tour on March 19th in Sydney, Australia, and then later in San Francisco in June. Stay tuned for more announcements. Before closing, I wanted to highlight the recognitions our team has been awarded during fiscal 2024. For another consecutive year, Asana was recognized by Fortune and Great Places to Work across several categories. Best Places to Work in the Technology Industry, best places to work for millennials, best places to work in the Bay Area. Inc. Magazine also awarded Asana best workplaces for the sixth year in a row. And Fast Company awarded Asana best workplaces for innovators in the enterprise category. Finally, I'm very aware of the dynamic market conditions that continue to impact our near-term business. Our strategic initiatives are aligned with navigating these headwinds to ensure sustained growth and a path to profitability. At the same time, I'm more excited than ever about the potential of Asana, our vision for collaborative work management, and the value we can provide for our customers in this new era of work. Everything we're focused on today is in service of driving enterprise growth and customer success, building pipeline, retention, and C-level customer engagement. Now I'll turn it over to Anne.