Good afternoon, and thank you for joining the Asana First Quarter Fiscal Year '24 Earnings Call. My name is Kate, and I will be the moderator for today's call. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. I would now like to pass the call over to our host, Catherine Buan, you may proceed.

Good afternoon, and thank you for joining us on today's conference call to discuss the financial results for Asana's first quarter 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, 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 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-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. Reconciliation between GAAP and non-GAAP financial measures and a discussion of limitations of using non-GAAP measures versus their closest GAAP equivalents are available in our earnings release, which is posted on our Investor Relations webpage 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. Asana had a good first quarter. Q1 revenues grew 26% year-over-year, customers over $100,000 grew faster at 31%, and non-GAAP operating margins had a 30 percentage point improvement year-over-year. Our growth continues to be fueled by some of the largest and most strategic companies in the world. In Q1, we closed and expanded some of our largest deals across industries such as media, professional services, healthcare, logistics, and financial services. Our largest deployment is now at 200,000 paid seats. We're really excited about this partnership and how much impact we've had across their organization, and this is still the beginning of what's possible here. As far as we know, this is the largest deployment of collaborative work management from any provider. Our strategic customers are partnering with Asana to define what work management at scale looks like. These partnerships will be particularly critical as we move to the next generation of work management, which I'll talk about more in a moment. Despite more budget scrutiny in enterprises, our win rates remain strong. We continue to see an increase in multiyear commitments year-over-year. In Q1, we made great progress on improving our non-GAAP operating margins. We expect to build on this momentum and drive significant improvement in non-GAAP operating margin this year as we focus on operational efficiency and growth, which Tim will talk about more. It's been a good start to the year, and we continue to focus on our enterprise playbook, improving sales productivity and bringing on enterprise leadership. I know that artificial intelligence is top of mind for everyone, so let me start with that topic. I've been personally passionate about the short- and long-term opportunities, as well as the complex implications on society. In fact, through the foundation that was started by my wife and I, we've been studying the risks and opportunities around advanced AI for years. Furthermore, some of the top AI companies are Asana customers and partners. So as you can imagine, my interest level and involvement is both deep and broad. At Asana, we've been laying our AI foundation and building blocks for the past 15 years, recently powering some of our features with machine learning. The more recent and rapid developments in AI play into Asana's core strengths. AI can now significantly accelerate our ability to achieve our mission of helping humanity thrive by enabling the world's teams to work together effortlessly. The large language models fit even better into our vision than I imagined, and the evolving dynamics around AI highlight the benefits of the Asana Work Graph. We're moving quickly to realize the possibilities. With the Asana Work Graph, we already have the most complete picture of work in organizations, giving us the ability to help our customers drive business outcomes. The Work Graph is also the underlying technology that makes it easy for us to facilitate human-to-AI collaboration. This means AI can join our customers' teams with confidence that Asana will keep data secure and available. Quality of data is essential. Our data model provides a single source of truth and connects all the units of work to higher-level portfolios and goals. These connections are especially important to ensure the accuracy and usefulness of Asana AI recommendations. It helps AI understand organizations so the recommendations are clear, actionable, and continuous, while the structured nature of the Work Graph enables teams to ensure the reliability, accuracy, and traceability of generative output. Customers are eager to use AI to make better decisions and maximize impact. Asana is adopting the best of AI capabilities for them, so it's easy to start making use of these exciting new technologies with the security, data, and privacy they expect. In other words, we, Asana, can become our customer's AI strategy. Starting today, I am pleased to formally announce Asana Intelligence. With Asana Intelligence, AI has officially joined your organization to help you work together more effectively and efficiently. In fact, many of our AI capabilities are already in the hands of our customers. These include machine learning-powered productivity enhancers, such as priority Inbox and priority tasks, designed to help you discover and focus your attention on the most relevant work, including what's high priority or blocking. To further support team efficiency, Asana now surfaces a personalized list of recommended projects for you to join. We also shipped smart rule suggestions, where Asana suggests rules to automate and save time on repeat actions. Admins have the ability to enable or disable these capabilities from the admin console in Asana based on organizational preferences. In addition to what we've already shipped, we also have new large language model features in closed beta, powered by OpenAI. With the Work Graph and large language models now supercharging each other, we can move even faster and offer an even deeper level of functionality. Asana was built for this moment. Our vision is for Asana Intelligence to give people automatic recommendations that help them identify risks, make the right decisions faster and more often, and drive business outcomes, such as goals-based resource management. The first step, Health Check, is currently in beta and makes it much faster to assemble a project status update. With the click of a button, Asana AI automatically writes your first draft, highlighting progress, risks, and ways for you to improve towards hitting your goals, and even surfacing information that you might have otherwise missed. Again, the key input is the Work Graph and how it connects units of work, information about that work, and the people responsible. Next, we're focusing on helping teams improve productivity and achieve more together. Our vision is to build self-optimize workflows, where Asana will give you an automated plan based on the goal you're trying to achieve, all tailored to relevant functions and industries. Today, we offer in beta instant summaries that transcribe and summarize action items from meetings, tasks, and common threads, multi-home suggestions that are valuable structure plus the writing assistant to help you compose more compelling, simplified, and clear responses. Many of you are already familiar with how Chat GPT answers questions and assists with tasks. Similarly, one of Asana's intelligent solutions powered by OpenAI helped us create Ask Asana Anything, also in beta, which lets you ask questions like 'Where the blockers are in this project' and get instant answers. Work organizer, also in beta, lets you start work faster by auto-generating custom fields so you can easily bring structure to unstructured projects and report on the status of work. Again, it's the structure of the Work Graph that allows us to seamlessly integrate AI into customer workflows. So its recommendations are in service of your goals, include important context, and have real benefits rather than merely delivering an assistant on the side. We'll continue to use AI to serve our customers more effectively by helping them achieve their goals and deliver on their missions faster, with the choice and control over how and when AI is used. The VP of Technology Operations from Benevity said, and I quote, 'I'm incredibly excited about our participation in the Asana Intelligence Beta and the possibilities that will unlock for our teams at Benevity. These capabilities will enable us to work more efficiently than ever, allowing us to better fulfill our mission of powering purpose-driven business.' We'll share more about Asana's AI products and vision in the coming months, including at the Investor Day on October 3, as part of our fall customer event in New York City. In short and long run, we are committed to AI safety and transparency, both in practice and within our product, and to giving our customers choice and control over how and when AI is used in Asana. At Asana, we don't just see a feature powered by AI. We see a future where AI and human ingenuity combined to radically improve the lives of individuals and help teams work together, unleashing the full potential of every business and organization. That's the future we're building together, one feature, one team, and one step at a time. Now I will turn it over to Anne.

Thanks, Dustin. AI is impacting knowledge work first, and our customers are turning to us to help make AI a reality for them. Our AI roadmap is quickly becoming a top request for executive briefings and customer meetings, and our intent is for our customers to leverage Asana AI capabilities to achieve their goals and objectives more efficiently and faster than ever before. We're also already using AI to increase our own efficiency at Asana, both within our own product and by using complementary tools. For our paid ad campaigns, we've been using AI voices to generate international voiceovers. This library of voices takes one script and scales it into multiple languages and markets in a few days. Historically, this process would have taken weeks; this change has accelerated our go-to-market timelines and reduced our creative production budget significantly. We're also using AI to serve our global customers more quickly. Customer support can now send automated replies to customers in supported languages, meaning that what used to take about 48 hours can now be addressed in an instant. Our translation cost is now a fraction of what it was, and we have more AI initiatives ahead to help assist our customers better and faster and make our teams even more effective. Turning to our business, the macro headwinds continue to impact our expansions and created longer sales cycles in Q1. We expect to see similarities throughout fiscal year 2024. The good news is that pockets of the market have stabilized. For example, top-of-funnel demand and our free-to-paid conversion rate remain steady in the first quarter. Engagement with our product remains high, and we continue to focus on outbounding to build and strengthen our enterprise capabilities. We're making good progress with more work to do. Collaborative work management is at an inflection point. Customers are viewing the platform and a system of record for all of their work, and the purchasing decisions have moved up the chain. CIOs and CEOs are telling us they need Asana for cross-functional use cases, not just marketing or ops or HR, but for connecting systems of work across their entire organization. Our ability to scale makes Asana a top of mind for the strategic procurement committee, and our 200,000 seat deployment is a great proof point for that. Our Goals product continues to be strategically differentiated and is reaching new levels of traction within the buying committee, and the addition of AI can take this functionality to the next level. Our enterprise customers, which we define as organizations with over 2,000 employees, continue to be our fastest-growing customer segment, and this segment is further diversifying. 70% of our top 20 Q1 deals were in non-tech sectors. Customers are anchoring on long-term investments, and we are involved in many multiyear deals and consolidation conversations. We're also seeing some seven-figure opportunities emerge as various industries accelerate their efforts in digital transformation, which may now be further accelerated with AI. Forbes, the Global Media branding and technology company that reaches over 140 million people worldwide each month across all of its platforms, is digitizing legacy operations across their marketing, video, social, and HR teams with Asana. In the last quarter, Asana expanded to their editorial newsroom, where the team will now manage the cross-team end-to-end workflows responsible for all content that appears on forbes.com and in print. We've also upgraded to our enterprise solution this quarter, moving away from manual operations and towards automation that makes it easier to scale. Maersk, a global logistics leader operating in more than 130 countries, has expanded their partnership with Asana, trusting Asana to help lead their digital transformation. They've standardized their warehouse and distribution implementation process, which kept customers onboarded and set up in Maersk warehouses around the world to handle their products. Asana is used to coordinate and manage work across more than seven cross-functional teams and provides robust reporting into key data points, such as project status, delivery timelines, and critical pathing. As a result, Maersk is targeting to reduce their onboarding timelines and increase the on-time launch rate while reducing service costs, and we are seeing expansions broadly across several diverse industries as we continue to expand beyond our leadership in the tech industry. New Balance, a leading sporting goods manufacturing company, is a new customer this quarter. In an effort to consolidate the technology used by their global marketing team, Asana was selected as the strategic platform they'll use to build best-in-class operations as part of their digital transformation to modernize their tech stack at New Balance. Managing over 400 assets per day, the team needed a centralized tool to eliminate the collaboration gap. Asana's flexibility and customization help the team create standard operating processes that increase adoption and scale across their global team. Lastly, Asana will give everyone more visibility into OKRs and the status of strategic initiatives, something they didn't have before. Navan, the all-in-one travel corporate card and expense management super app, recently signed a net new 500-seat deal with Asana. They will be rolling Asana out across their marketing, customer service, operations, product, engineering, and HR teams, as they consolidate their technology investments and look to scale the adoption of work management to eliminate silos and facilitate better cross-functional partnerships. As tech organizations continue to choose Asana over competitors, it's clear that Asana is the only choice for enterprises. We're seeing continued success in the financial services industry and the healthcare and biotech verticals as well. A hospital and healthcare customer expanded their use of Asana by another 1,000 employees in Q1 and is now a $1 million ARR customer. They started using Asana to onboard new physician providers and have seen extensive value from automating previously manual processes and reducing inaccuracies by consolidating information in a central organized place. The company will now expand their Asana usage to manage talent acquisition and community and event management. This digital transformation is a crucial step for scaling, which we are seeing more and more with Asana's growth within the healthcare industry. As you can see, we've already helped to digitally transform dozens of our largest customers. We believe digital transformation will pale in comparison to intelligence transformation and we are preparing to be the leading platform for change in this new revelation of technology. In summary, we are seeing more multiyear deals, winning on vendor consolidation decisions, and continuing to diversify our enterprise success across more and more industries. My continued focus for the year is to better serve our enterprise and strategic customers. These customers are looking for long-term partnerships that can grow and scale with them. You can see our efforts from the growth of these accounts. Our strategic accounts as a cohort grew over 50% year-over-year. We are partnering with them on our product roadmap and pricing and packaging. We are beta-testing some strategic pricing and packaged updates with select customers that will help Asana usage accelerate across their organizations. Over the quarter, we've added great new leaders with enterprise experience from DocuSign, Cisco, and Salesforce, who have many initiatives in place to accelerate our upmarket growth. We'll continue to improve our sales enablement capabilities and lead generation initiatives targeted at enterprise accounts. We're creating a repeatable playbook to scale Enterprise accounts to become 100,000 plus customers and we're improving on our customer success strategy to scalably serve more customers. And with that, I'll hand it over to Tim.

Thank you, Anne. Q1 revenues came in at $152.4 million, up 26% year-over-year. Revenue from the US grew 31% year-over-year, accounting for 61% of our total revenue. International grew 20% year-over-year, accounting for 39% of our revenue. Revenue from customers spending $5,000 or more on an annualized basis grew 32% year-over-year. This cohort represented 73% of our revenue in Q1, up from 70% in the year-ago quarter. We have 19,864 customers spending $5,000 or more on an annualized basis. Our largest customers remain our fastest-growing cohort. We have 510 customers spending $100,000 or more on an annualized basis, and this customer cohort grew at 31% year-over-year. As a reminder, we define these customer cohorts based on annualized GAAP revenues in a given quarter. Our dollar-based net retention rates were lower, driven by lower expansion and downgrades but remained healthy across every cohort. Our overall dollar-based net retention rate was over 110%. Among customers spending $5,000 or more, our dollar-based net retention rate was over 115%, and among customers spending $100,000 or more, our dollar-based net retention rate was over 130%. As a reminder, our dollar-based net retention rate is a trailing four-quarter average calculation. We continue to see stable logo churn rates overall and low churn in our largest accounts, demonstrating the value we deliver for our enterprise customers. Companies remain mindful of the near-term economic challenges, and we expect our overall dollar-based net retention rates to trend lower, particularly in the lower end of the market. As I turn to expense items and profitability, I would like to point out that I'll be discussing non-GAAP results in the balance of my remarks. Keep in mind, non-GAAP results exclude stock-based compensation and one-time costs related to restructuring. Gross margins came in at 90.5%. Research and development was $51.8 million or 34% of revenue. Sales and marketing was $81.5 million or 53% of revenue, an improvement from 69% a year ago. G&A was $26.9 million or 18% of revenue, an improvement from 31% a year ago. Operating loss was $22.3 million, and our operating loss margin was 15%, representing a 30 percentage point margin improvement versus a year ago. The improvement in operating margin demonstrates our ability to drive more efficient growth and manage our operating expenses with increased discipline. Net loss was $18.5 million, and our net loss per share was $0.09. Moving onto the balance sheet and cash flow, cash and marketable securities at the end of Q1 were approximately $523.5 million. Our remaining performance obligations or RPO was $332.1 million, up 33% from the year-ago quarter. 86% of RPO will be recognized over the next 12 months. That current portion of RPO grew 30% from the year-ago quarter. Our total ending Q1 deferred revenue was $263.9 million, up 31% year-over-year. Our free cash flow is defined as net cash from operating activities less cash used in property and equipment and capitalized software costs, excluding non-recurrent items such as costs related to restructuring. Q1 free cash flow was negative $16.6 million or negative 11% on a margin basis, an improvement from negative 35% from the year-ago quarter. Moving to guidance for Q2 fiscal 2024, we expect revenues of $157.5 million to $158.5 million, representing a growth rate of 17% year-over-year. We expect non-GAAP loss from operations of $26 million to $24 million, representing an operating margin of negative 16% at the midpoint of guidance, a measurable improvement from the same year-ago period. And we expect net loss per share of $0.12 to $0.11, assuming basic and diluted weighted average shares outstanding of approximately $218 million. For the full fiscal 2024, we expect revenues to be in the range of $640 million to $648 million, representing a growth rate of 17% to 18% year-over-year. We expect non-GAAP loss from operations of $120 million to $110 million, representing an operating margin of negative 18% at the midpoint of guidance, down from negative 38% in fiscal year 2023, and we expect net loss per share of $0.55 to $0.50, assuming basic and diluted weighted average shares outstanding of approximately $219 million. Our guidance assumes that macroeconomic continues to create headwinds in fiscal year 2024. We are committed to maintaining a disciplined and balanced approach to optimizing costs and improving efficiency and profitability. We will continue to invest in future growth opportunities like AI, which we expect will drive long-term value. We remain committed to reaching positive free cash flow before the end of calendar 2024 and have increased confidence in our ability to drive meaningful improvements in the coming year. With that, I'll hand the call back to Dustin for some final remarks.

I'm very excited about the product development we have in flight. Customers are eager to adopt AI to help them work more effectively and efficiently, and Asana will adopt the best-of-AI capabilities for them. Intelligence transformation is the second wave of digital transformation, and this time it's a tsunami. The work management market is an enormous underpenetrated market, but I believe we're well-positioned to lead, especially given our underlying connected architecture. We have adequate investment and plenty of runway to do what we need to do. Asana, with the power of AI, can introduce our product for more users, address more use cases, and create more value for our customers. And with that, I'll turn it back to the operator for questions.

Thank you. We will now begin the question-and-answer session. The first question will be from Andrew DeGasperi with Berenberg. Your line is now open.

Thank you for taking my question. Dustin, regarding the potential of AI, I know you've been working on it with the Work Graph for some time. I'm curious about how changes in customer behavior might unfold as they start using more AI tools. Are you concerned that certain end markets could be affected, which might in turn impact Asana's seat count from a long-term viewpoint?

Hey, Andrew, this is Dustin. Just to understand, you mean like because of job replacements or what are you getting at here?

Yeah, more on, let's say, some markets like Hi-Tech or things like that could see some disruption in their employment trends and things like that.

I think a lot's happening with AI, and I think change is inevitable. It's hard to predict exactly how that change is going to play out. Certainly, in the next few years, I would not place a bet on there being fewer knowledge workers in tech companies; I think the flip side of that argument is that each of them are going to become a lot more leveraged. In fact, using things like Asana Intelligence inside Asana is part of how they become more leveraged. So it's actually going to be even more valuable to have people working inside those organizations. Longer run, things could change, but I feel confident that we could adjust our pricing model to meet that change because really our pricing is about the value that we're delivering to customers. So if the value we're delivering for customers is actually helping them scale their workforces further to get more from the same number of people, then that means we're providing more value and should be able to monetize more of it. Maybe that will mean that we need to have very different pricing per seats or maybe we'll have consumption-based pricing, but I'm not concerned that it means that our business shrinks.

That's helpful. And then maybe Tim, in terms of the macro impact you mentioned, I guess in terms of your framework for the guidance you've mentioned headwinds, you expect them to continue, do you think things get worse? I know you mentioned some pockets of the market stabilizing. I guess, are you assuming status quo going forward?

I believe our approach is consistent with the guidance we provided last quarter and for the year. I don’t anticipate significant downside in the guidance, but it’s still premature to expect any upside at this stage. The situation remains somewhat uncertain, and we will keep an eye on it as we progress. However, we are confident in our guidance, the bottom line, and our ability to meet the free cash flow timeline we previously established.

Thank you. The next question will be from Brent Thill with Jefferies. You may proceed.

Hi. Thanks. This is [indiscernible] on for Brent Thill. I have one more question about the macro situation. You mentioned some areas where conditions have stabilized, and I would like if you could elaborate on that, providing insights by geography or sector. Additionally, regarding AI, could you discuss monetization and when we might start to see an impact on revenue? Thank you.

I'll take the first part. So in terms of like what we've seen just from a stabilization standpoint, what I would say is, it really depends on the segment. I think some of the names that Anne mentioned and we mentioned on the script, those are great names, and many of those are not in tech. I think tech, the segment in tech is still kind of working itself out, and I think we'll continue to see some pressure there. But kind of given the customer lands, the expansion that we saw, we feel really good about the traction that we're seeing in other pockets that are non-tech related.

I'll address the question about pricing, which essentially asks about the potential for revenue growth. AI is not a singular concept; it will manifest in various forms in our product as we integrate it into the architecture of Workflow and the Work Graph. This creates opportunities for both increased adoption and seat growth, alongside additional revenue growth in average selling price. Much of what drives adoption may be offered at no charge, as it adds value for customers and supports long-term revenue opportunities, leading us to balance average selling price and seat growth. Certain features will belong to existing functionalities and higher-price tiers; for instance, enhancements to goals will naturally be included in our business and enterprise tiers since that is where the Goals' functionality is located. Eventually, we may introduce add-on features, potentially with a consumption-based pricing model, but this will depend on customer value perception and the associated costs. Regarding timing, initially, we aim to encourage more customers to upgrade for additional functionalities. Following that, we expect considerable seat growth due to the successful adoption of AI-driven features. Lastly, we will introduce new SKUs or add-ons directly related to AI developments. We anticipate this sequence of events will unfold. There has been significant interest, especially from our enterprise customers, which has made us very pleased with the beta response. There’s substantial potential here to enhance our business based on the value we can provide through the work graph, representing an upside to our business model, though we have not set specific expectations in our guidance.

Thank you.

Thank you. The next question is from the line of George Iwanyc with Oppenheimer. Your line is now open.

Thank you for taking my question. Anne, earlier in the year you were targeting a 20% increase in sales productivity by the end of the year, can you give us a sense of where you stand right now and how you feel about that target?

Hey, George. Thanks so much for the question. Yeah. We've been really focused on building and scaling our enterprise selling infrastructure, so this quarter, something that I'm very pleased with is we've added strong leadership to our sales operations and enablement team and have been really focused on consistently delivering data tools and training to the field that is needed to repeatedly and predictably land and expand in our larger accounts. The addition of strong enterprise sales leaders in our top priority markets, in Japan and DACH, UK is also strengthening our operational rigor. So we're continuing to focus on that, but Q1 really was about investing in the right leadership and then making sure we're prioritizing the right things that will pay off throughout the year.

Thank you. The next question is from the line of Steve Enders with Citi. Your line is now open.

Okay. Great. Thanks for taking the question here. I guess I just want to have ask on the profitability drivers in the quarter here, I mean it was particularly strong here. So I guess, what were the biggest areas of upside that led to that and I guess how should we think about what that looks like going forward and if there is any maybe shifting in expenses that moved into the rest of the year here?

I think it's important to point out that we will be hosting both a customer and an investor event in Q3, specifically in October. This will result in a slight increase in our marketing expenses. However, the main factors contributing to our profitability are the team's efforts and a more careful approach to resource management, focusing on initiatives that are most important and yield the highest return on investment. Sometimes that means not pursuing certain activities, while other times it involves intensifying our efforts on initiatives we believe will grow over time. I want to take a moment to commend the employees for their hard work, as this achievement is a collective effort rather than the result of any individual.

Likewise, I'd just like to add some praise for Tim and the rest of the company planning team. I think they've just been really disciplined and diligent about looking for opportunities to save wherever we can and just being that much more intentional about every incremental investment. I think all that has added up to a good outcome here.

Thank you. The next question is from the line of Jackson Ader with SVB. Your line is now open.

Great. Thanks for taking our questions. Dustin, the discussion around the potential to change the revenue model if needed, just curious, do you have good enough data now or either on your ROI and the value that you create for your customers to be able to even kind of credibly say this is the value we're driving and we take a certain percentage of that currently and how do you measure it?

Yeah. It's a really complex question because I would say we do have data like that, including reports that have been run by our third parties like IDC that kind of looking at what is the kind of work about work that we're helping eliminate or make faster, what kind of meetings we're saving, how much time we save whenever something gets automated in the product, but that's not the type of proof that would be relevant in this, imagine the future. So I think we'll have to play that by ear if we're really playing out into a different revenue model, and I just want to be clear that like that's not something we're moving to do right now, and that's not something that I think is likely in the next few years.

Thank you. The next question is from the line of Alex Zukin with Wolfe Research. Your line is now open.

Hey, this is Ethan substituting for Alex. I appreciate you taking my question. Dustin and Tim, could you elaborate on the demand environment throughout the quarter? Now that we're about a month into the second quarter, how do you see the guidance for Q2 and the rest of the year? What trends have you noticed in the first month compared to April regarding buying behavior and customer discussions? Have things stabilized or worsened as we look at the last couple of months of this quarter, and what assumptions are you making? Thank you.

Hi, Ethan. It's Anne. I can address the question regarding buying behavior and what we’re observing in customer interactions. We're experiencing a consistent and solid pipeline growth across all our regions. If anything, conditions have stabilized for many of our customers. Some encouraging trends include an increase in consolidation discussions and more multiyear agreements. A notable example is a leading biotech company that signed a three-year agreement with us to standardize their work practices, which helps them to expedite and streamline their product launches globally. I believe we are having very positive discussions with our key accounts, as well as in industries outside of tech, where decision-making tends to result in longer deal cycles due to a more cautious approach to investments. However, this cautiousness leads to deals that are more sustainable and resilient. Our focus on diversification beyond tech is yielding promising outcomes. Ultimately, we view these successes as beneficial for us because these innovative companies set benchmarks in their sectors for work management purchases, making our investments in this area particularly significant given the current stage of category development.

The next question is from the line of Jason Celino with KeyBanc. Your line is now open.

Hey, great. Thanks for taking my question. In the script, Anne mentioned seeing some seven-figure deals, those opportunities start to emerge, it sounds pretty encouraging, just curious of those opportunities are those mostly enterprises without work management platforms looking to deploy a single vendor or those expansions of your existing customers? Thanks.

Yes. We're actually seeing both. We are seeing ones where it is RFP-based picking one vendor where there are no existing solutions, or if there are, it's really, really fragmented and the CIO offices making a decision to pick one partner. So we are engaged in more of those as well as ones that are expansion deals, where we've had strong deployments on a departmental level, and then we are now partnering with the centralized buyer to expand. So the Navan example that I mentioned is going wall to wall. Our portfolios and our products in particular were the reason that they chose us, and as part of that consolidation eliminated other products that, again, were widely adopted but still were displacing any existing tool.

Your next question is from the line of Josh Baer with Morgan Stanley. Your line is now open.

Great. Thanks for the question. For Dustin, you talked about the potential first time to become your customer's AI strategy, which is a really interesting concept and opportunity. I guess, thinking longer term, do you see knowledge workers using a single core AI tool for all things AI or is there a scenario where workers would use AI embedded within all the different apps and workflows, and then related where Asana does sit alongside Office 365, what are some of the reasons why you see Asana as that core customer AI strategy versus Microsoft's Office other co-pilots? Thank you.

Thank you for the question. That's an excellent one. Overall, we see collaboration software divided into three main areas: content tools like Office 365, communication tools such as Zoom and Slack, and collaborative work management that focuses on managing work in progress and clarifying who is responsible for what and by when. While I don't want to position Asana as the sole tool for all these functions, I believe companies are considering how to navigate a new phase of digital transformation. They are looking to integrate tools into their workflows to enhance team productivity on a daily basis. I think Asana can serve as an accessible solution for this, particularly for existing customers, and it plays a significant role in the initial wave of digital transformation that encourages digital collaboration over traditional methods like meetings and whiteboards. In the future, I envision Asana as the central hub coordinating work across various systems, although you will still likely use document editors or creative tools like Adobe Creative Cloud for producing larger content pieces, which may also have their own specialized AI features. Regarding our unique value proposition, the Work Graph enhances the capabilities of AI, especially for large enterprises, by ensuring data reliability, accuracy, and traceability. Without a Work Graph backend, AI and intelligence processes are limited by disjointed organizations, tools, and projects, leading to lower quality results as they cannot connect across teams, often resulting in reliance on outdated or duplicated data without proper version control. The Work Graph links everything from goals to work execution and resource allocation, facilitating AI's ability to gather and interpret all the necessary information for effective decision-making. Furthermore, Asana is the only platform that supports cross-team and cross-functional coordination without work duplication, which is crucial for ensuring high-quality data. I have noted before that deploying Asana yields increasing returns to scale, and AI is amplifying this effect. It's beneficial to have relevant content interconnected within the system, even if some is created using tools like Office 365. Asana improves the AI's understanding of how everything fits together in the context of ongoing work. The Work Graph is updated in real time, making it reliable for generating insights and suggestions, thus providing a comprehensive dataset for understanding work dynamics. This foundation is integral for integrating machine intelligence that allows both humans and AI to work in tandem to achieve organizational goals. We have been developing this concept for quite some time, which gives us a unique capability to serve our customers and assist them in navigating this intelligence revolution. It also guides the design of our product's vision and architecture, ensuring we have the right tools to leverage alongside language models for rapidly delivering value. Additionally, we have strong ties to leading AI labs, including a shared board member, D'Angelo. My foundation was instrumental in funding the establishment of OpenAI in 2017, and Sam Altman is also a significant investor in Asana. We are genuinely excited about the future as the Work Graph establishes a distinctive quality of output by providing a single source of truth throughout the workflow, which is why Collaborative Work Management and the Work Graph will be essential components of future solutions for our customers.

The next question is from the line of Brent Bracelin with Piper Sandler. Your line is now open.

Hi, everyone. This is Mauro on for Brent. Thanks for taking our questions here. So I just had one around these large language model features that you're testing in beta. Could you just share a little bit with us about how you're thinking about maintaining the integrity of governance, compliance, and trust capabilities as you layer in these features into the Asana platform, just considering the needs of your large and enterprise customers? Thanks.

Is there a specific concern you have within that?

Could you provide more insight into how Asana plans to maintain the integrity of customer data while accommodating the data requirements for training large language models?

It's important to be transparent about how intelligence is integrated into our products. Before we launch these products in beta, we're informing companies about their use and allowing them the option to opt-out before their employees have any exposure. Additionally, the commercial agreements we've made with the labs include measures to protect customer data, ensuring it isn't used to retrain the model without consent. Looking ahead, there will be a training dataset, but once the model is developed, customer data will not be included unless it's for fine-tuning, and even then, it would belong to Asana and not be re-licensed to the labs. I believe customers will soon have the opportunity to express their preferences regarding the foundational models they wish to use, as they will be concerned about the compliance and security of the cloud providers. There is a layered structure here, such as using Anthropic with AWS as the cloud provider; customers are interested in both aspects. Ultimately, we aim to offer a range of choices and maintain transparency about data usage, ensuring it aligns with what customers expect and what Asana intends.

The next question will be from the line of Robert Simmons with D.A. Davidson. Your line is now open.

Hey, thanks for taking the question. So, I know you've been experimenting with some pricing and packaging changes. I wonder if you could give us any update on how those are going, any specifics you can share? And then, are you seeing good results so far that you'd want to scale up and might help out sometime this year, maybe company-wide results?

Yeah, Robert. So our pricing and packaging updates are really focused on our enterprise customers. We've got two primary goals we're working towards: first is landing better and then the second is creating an easier, more frictionless journey for them to grow with us from there. So we're working very thoughtfully to align value and to more easily enable these customers to quickly add additional functions and use cases as they grow. So we're early in our beta testing with selected customers and getting good feedback. We're ultimately looking forward to sharing more at our investor event in October, but working really hard right now to make final decisions based on customer feedback and based on where we see the most value for our customers.

The last question will be from the line of Patrick Walravens with JMP Securities. Your line is now open.

Great. Thank you. Tim, a couple of related questions for you. So just as we look at revenues for the year-over-year growth of 26% is one thing, but the sequential growth is like the lowest that I think you've ever had. So if you could just comment on that a little bit on what's the right way to think about the right metric. And then, but then on a more positive note, the RPO growth is higher than the reported revenue growth, so is that just the enterprise, how do we think about that? Thank you.

No, you're correct. In terms of multi-year deals, we experienced an increase of nearly 66% year-over-year in the number of such deals. As Anne mentioned during the call, customers are increasingly committing to a work management platform. Many larger enterprises are considering consolidation if they currently use multiple platforms. I believe these are positive indicators. Our guidance reflects the broader economic context, but I want to emphasize that we feel optimistic about the guidance we are providing for both revenue and profits, so hopefully that is helpful.

That concludes our question-and-answer session for today. I will now pass the call back over to Dustin for some closing remarks.

Yeah. Thanks. Just wanted to thank everyone on the call again for making the time to join today and we're really looking forward to seeing you at both our customer event and the Investor Day in New York City on October 3. So hope to see you there. Thanks, everyone.

That concludes today's call. Thank you for your participation.