Asana, Inc. Class A Common Stock Piper Sandler 5th Annual Growth Frontiers Conference

Yeah, thanks for having us.

Yeah, absolutely. For those who don't know Asana or don't know it well, we were founded about 18 years ago, and really the mission was to help drive better coordination and management of work. Dustin Moskovitz, who's the founder of Facebook, founded Asana, really on the premise of this idea of the Enterprise Work Graph. I'm going to connect the who, what, where, why of work and be the really living brain and context source of work. As we fast-forward today, in an agentic world, in an agentic enterprise, that same architecture is exactly what agents and humans need to coordinate and execute work in this next era of work, and it's really all around context.

The Work Graph providing the context, that living brain of an organization, it enables the right governance, the persistence memory, multiplayer environments, and that is where we are really driving the product roadmap. We have been a company that has really been focused on seats and subscriptions, and now the new Asana is really around both seats and subscriptions and consumption and outcomes. Just this week, we will release Agentic Work Management, where we will bring together collaborative work management with our AI products, Asana AI Studio, our workflow automation tool, Asana AI Teammates, our agents that work alongside humans in workflows, and then Asana Dash, our chief of staff. Super excited about that, as well as rolling out additional agentic apps, which are bringing us into new buying centers and personas and really expanding the aperture of who we serve and our TAM.

Yeah. Q2 was a strong quarter. I think the headline for us was really improving health of the business, and you called that out. We report three cohorts for our net retention rate. All three improved, with the most dramatic increase occurring with our largest customers, who went from 96% net retention to 98%, and that is a four-quarter average. If you back into actually what the quarter was, it is much better than that. We also see that same trend with our 5K plus customers. What we attribute that improving health and improving net retention with our largest customers is really the adoption of AI. Now, 25% of our 100K plus customers have an AI product, and we see when they engage with those AI products, better retention and expansion trends from those customers. Our up-market continues to perform well.

America's returned to double-digit growth for the first time in two years. We look at the balance sheet metrics as a leading indicator and good proxy for up-market growth. CRPO accelerated to 11% in the quarter, from 7% last quarter. Really encouraged what we are seeing up market. A lot of it is driven by better AI expansion, but also seat expansion and much better gross retention as well. Then you contrast that with some of that goodness is being masked by what is happening down market. If we look at our PLG business, which is mostly comprised of sub 5K, that continues to be a drag on both overall growth and NRR. Our 5K plus cohort and our 100K cohort in the quarter are trending or at or above 100%.

What's dragging that down to 97% overall, which is still improved five straight quarters, is that sub 5K. What we've seen there is the ICP mix has shifted a bit to smaller customers outside of our target industries, which tend to be a little bit more churny and have lower expansion, and we're all over tackling that problem. Then you add on, as we shift to this AWM and new packaging model, there's a little bit of rev rec timing that's being pushed out at Q3 and Q4 into next year, and so we called that out as well. We beat the quarter on the top line by $2.4 million, 10% growth, $2.4 million beat on our guidance. We rolled about 1.5, and then if you factor in that push out from a rev rec perspective, about 1.2, we would've rolled the whole thing.

It's a little bit complex this quarter, but there's a lot changing, and we think it's the right strategy for the long term.

Yeah. The tech vertical, it's the third quarter of improvement in the tech vertical, so second straight quarter of growth. Improving not only growth, but improving growth. A lot of that is attributed to they've been early adopters of our AI products. So 25% of our net new ARR last quarter was from our AI products. That's up from 17% in Q1. They've been a heavy adopter of that, both what we call new tech, kind of AI modern, AI native companies that we called out last quarter. CoreWeave is expanding with us. We've got both the labs we count as customers. They continue to expand with us as they grow headcount, not only just with the subscription, but also with Asana AI Studio and Asana AI Teammates as well. Our traditional tech customers have been strong adopters of Asana AI Studio and are seeing the benefits there.

It is really having more to expand and to mitigate contraction with those customers that is really leading to better outcomes from the tech vertical. If you think about one of the examples we called out, it was not in the tech vertical, it was more in the broader TMT space. This was a customer that three years ago expanded with us. Three years later, when they come up for renewal, they have less headcount. A year and a half ago, we would be facing a $1 million churn event because we would have nothing to offset less headcount other than raising prices. Raising prices to offset churn is not really the best kind of lever to be pulling. We seeded them with Asana AI Studio and Asana AI Teammates. We found a killer workflow in marketing. We saved them 30% on a campaign cycle time.

When it came up for renewal, they were comfortable making a big bet on Asana AI Teammates and Asana AI Studio. They did a $1 million-plus TCV deal with us. So instead of contracting $1 million, we actually expanded that account. Over time, as they see the benefits and continue to see the benefits of those products, we have a consumption and expansion vector that is not tied to headcount and seed. Those types of examples really excite me now with five different products to drive a much more robust deal strategy to not only mitigate churn, but create expansion. As we think about NRR coming off from 100%-plus several years ago to where it is today, a lot of that has become because of expansion coming down, not because of retention coming off.