Asana Inc

Previous wording

As of April 30, 2024, we had 22,162 Core customers contributing approximately 74% of revenues for the three months then ended. As of April 30, 2023, we had 19,864 Core customers who contributed approximately 73% of revenues for the three months then ended.

Current wording

As of July 31, 2024, we had 22,948 Core customers contributing approximately 75% and 75% of revenues for the three and six months then ended, respectively. As of July 31, 2023, we had 20,782 Core customers who contributed approximately 74% and 73% of revenues for the three and six months then ended, respectively.

Previous wording

As of April 30, 2024 and 2023, we had 607 and 510 customers spending over $100,000, on an annualized basis, respectively.

Current wording

As of July 31, 2024 and 2023, we had 649 and 553 customers spending over $100,000, on an annualized basis, respectively.

Previous wording

Our reported dollar-based net retention rate equals the simple arithmetic average of our quarterly dollar-based net retention rate for the four quarters ending with the most recent fiscal quarter. We calculate our dollar-based net retention rate by comparing our revenues from the same set of customers in a given quarter, relative to the comparable prior-year period. To calculate our dollar-based net retention rate for a given quarter, we start with the revenues in that quarter from customers that generated revenues in the same quarter of the prior year. We then divide that amount by the revenues attributable to that same group of customers in the prior-year quarter. Current period revenues include any upsells and are net of contraction or attrition over the trailing 12 months, but exclude revenues from new customers in the current period. We expect our dollar-based net retention rate to fluctuate due to a number of factors, including the expected growth of our revenue base, the level of penetration within our customer base, our ability to retain our customers, and the macroeconomic environment. For example, macroeconomic headwinds have impacted customers’ renewal decisions and we expect this trend to continue in the first half of fiscal year 2025.

Current wording

Our reported dollar-based net retention rate equals the simple arithmetic average of our quarterly dollar-based net retention rate for the four quarters ending with the most recent fiscal quarter. We calculate our dollar-based net retention rate by comparing our revenues from the same set of customers in a given quarter, relative to the comparable prior-year period. To calculate our dollar-based net retention rate for a given quarter, we start with the revenues in that quarter from customers that generated revenues in the same quarter of the prior year. We then divide that amount by the revenues attributable to that same group of customers in the prior-year quarter. Current period revenues include any upsells and are net of contraction or attrition over the trailing 12 months, but exclude revenues from new customers in the current period. We expect our dollar-based net retention rate to fluctuate due to a number of factors, including the expected growth of our revenue base, the level of penetration within our customer base, our ability to retain our customers, and the macroeconomic environment. For example, macroeconomic conditions have affected customers’ renewal decisions, which has impacted our dollar-based net retention rate in recent periods.

Previous wording

As of April 30, 2024 and 2023, our dollar-based net retention rate was 100% and over 110%, respectively.

Current wording

As of July 31, 2024 and 2023, our dollar-based net retention rate was 98% and over 105%, respectively.

Previous wording

As of April 30, 2024 and 2023, our dollar-based net retention rate for our Core customers was 102% and over 115%, respectively. Our dollar-based net retention rate for customers spending over $100,000 on an annualized basis for the same periods was 108% and over 130%, respectively.

Current wording

As of July 31, 2024 and 2023, our dollar-based net retention rate for our Core customers was 99% and over 110%, respectively. Our dollar-based net retention rate for customers spending over $100,000 on an annualized basis for the same periods was 103% and over 125%, respectively.

Previous wording

Global macroeconomic events including elevated inflation, the U.S. Federal Reserve raising interest rates, bank failures, supply chain disruptions, fluctuations in currency exchange rates, and geopolitical unrest have led to economic uncertainty. These macroeconomic conditions have and are likely to continue to have adverse effects on the rate of global IT spending, including the buying patterns of our customers and prospective customers, and the length of our sales cycles. While the current macroenvironment is challenging and may continue for the near term, we are encouraged by the future of work that we are building at Asana, where every organization can work from a shared system driving clarity and accountability powered by the Asana platform.

Current wording

Global macroeconomic events including inflation, elevated interest rates, bank failures, supply chain disruptions, fluctuations in currency exchange rates, and geopolitical unrest have led to economic uncertainty. These macroeconomic conditions have and are likely to continue to have adverse effects on the rate of global IT spending, including the buying patterns of our customers and prospective customers, and the length of our sales cycles. While the current macroenvironment is challenging and may continue for the near term, we are encouraged by the future of work that we are building at Asana, where every organization can work from a shared system driving clarity and accountability powered by the Asana platform.

Previous wording

We continue to make strategic investments in our sales and marketing organization, and we expect sales and marketing expenses to remain our largest operating expense in dollar amount. We expect our sales and marketing expenses to continue to increase in dollar amount but to decrease as a percentage of revenues over time, although the percentage may fluctuate from quarter to quarter depending on the extent and timing of our initiatives.

Current wording

We continue to make strategic investments in our sales and marketing organization, and we expect sales and marketing expenses to remain our largest operating expense in dollar amount. We expect our sales and marketing expenses to continue to increase in dollar amount but to decrease as a percentage of revenues over time, although the percentage may fluctuate from period to period depending on the extent and timing of our initiatives.

Previous wording

Revenues increased $20.0 million, or 13%, during the three months ended April 30, 2024 compared to the three months ended April 30, 2023. The increase in revenues was due to the addition of new paying customers, a continued shift in our sales mix toward our higher priced subscription plans, such as Advanced, Enterprise and Enterprise+ plans.

Current wording

Revenues increased $16.8 million, or 10%, during the three months ended July 31, 2024 compared to the three months ended July 31, 2023. The increase in revenues was primarily due to the addition of new paying customers and a continued shift in our sales mix toward our higher priced subscription plans, such as Advanced, Enterprise and Enterprise+ plans.

Previous wording

Sales and marketing expenses increased $11.1 million, or 12%, during the three months ended April 30, 2024 compared to the three months ended April 30, 2023. The increase was primarily due to an increase of $8.9 million in personnel-related costs driven by higher headcount, an increase of $1.9 million in travel and entertainment costs, and an increase of $0.6 million in equipment and related costs, partially offset by a decrease of $0.5 million in allocated overhead costs.

Current wording

Sales and marketing expenses increased $12.2 million, or 13%, during the three months ended July 31, 2024 compared to the three months ended July 31, 2023. Theincrease was primarily due to an increase of $7.8 million in personnel-related costs driven by higher headcount, an increase of $3.5 million in fees to marketing vendors, an increase of $1.1 million in travel and entertainment costs, and an increase of $1.1 million in equipment and related costs, partially offset by a decrease of $1.4 million in allocated overhead costs.

Previous wording

General and administrative expenses increased$0.4 million, or 1%, during the three months ended April 30, 2024 compared to the three months ended April 30, 2023. This was due to an increase of $0.7 million in fees to third party support vendors, an increase of $0.5 million in personnel-related costs driven by higher headcount, and a decrease of $0.2 million in capitalized cloud computing costs, partially offset by a decrease of $0.5 million in provision for credit losses and a decrease of $0.4 million in insurance expenses.

Current wording

General and administrative expenses decreased $2.6 million, or 7%, during thethree months ended July 31, 2024 compared to thethree months ended July 31, 2023. Thedecreasewas primarily due to a decrease of $5.0 million for impairment of lease-related assets, a decrease of $0.8 million in allocated overhead costs, and a decrease of $0.5 million in insurance expenses, partially offset an increase of $1.5 million in value-added tax and other tax expenses, an increase of $1.3 million in professional services, an increase of $0.7 million in personnel-related costs driven by higher headcount, and an increase of $0.2 million in equipment and related costs.

Previous wording

Interest income and other income (expense), net decreased by $1.3 million during thethree months ended April 30, 2024 compared to the three months ended April 30, 2023, primarily due to the impact of foreign currency transaction gains and losses associated with monetary assets and liabilities. Interest expense decreased during the three months ended April 30, 2024 compared to the three months ended April 30, 2023, primarily due to a decrease in average loan balance.

Current wording

Interest income and other income (expense), net increased by $2.6 million during the three months ended July 31, 2024 compared to thethree months ended July 31, 2023, primarily due to an increase of $1.7 million for the impact of foreign currency transaction gains and losses associated with monetary assets and liabilities and an increase of $0.8 million in interest income on marketable securities. Interest expense decreased during thethree months ended July 31, 2024 compared to thethree months ended July 31, 2023, primarily due to a decrease in average loan balance.

Previous wording

Cost of revenues increased $3.0 million, or 20%, during the three months ended April 30, 2024 compared to the three months ended April 30, 2023. The increase was primarily due toan increase of $1.4 million in infrastructure and application performance monitoring costs, an increase of $1.2 million in third-party hosting costs as we continued to increase capacity to support customer usage and growth of our customer base, and an increase of $0.6 million in amortization of capitalized software development costs, partially offset by a decrease of $0.2 million in personnel-related costs and a decrease of $0.2 million in fees to third-party support vendors.

Current wording

Cost of revenues increased $6.7 million, or 22%, during the six months ended July 31, 2024 compared to the six months ended July 31, 2023. The increase was primarily due toan increase of $2.9 million in third-party hosting costs as we continued to increase capacity to support customer usage and growth of our customer base, an increase of $2.8 million in infrastructure and application performance monitoring costs, and an increase of $1.2 million in amortization of capitalized software development costs, partially offset by a decrease of $0.6 million in allocated overhead costs.

Previous wording

Research and development expenses increased $6.5 million, or 8%, during the three months ended April 30, 2024 compared to the three months ended April 30, 2023. The increase was primarily due to $7.8 million in personnel-related costs due to increased headcount, partially offset by an increase of $1.0 million in capitalized software development costs and a decrease of $0.6 million in equipment and related expenses.

Current wording

Research and development expenses increased $13.3 million, or 8%, during the six months ended July 31, 2024 compared to the six months ended July 31, 2023. Theincrease was primarily due to an increase of $16.5 million in personnel-related costs due to increased headcount, partially offset by a decrease of $2.1 million in allocated overhead costs, an increase of $0.7 million in capitalized software development costs, and a decrease of $0.6 million in equipment and related costs.

Previous wording

Since inception, we have financed operations primarily through the net proceeds we have received from the sales of our preferred stock and common stock, the issuance of senior mandatory convertible promissory notes in January and June 2020 to a trust affiliated with our CEO, cash generated from the sale of subscriptions to our platform, and financing activities including the private placement transaction with our CEO. We have generated losses from our operations as reflected in our accumulated deficit of $1,558.3 million as of April 30, 2024 and negative cash flows from operating activities for the three months ended April 30, 2024 and 2023.

Current wording

Since inception, we have financed operations primarily through the net proceeds we have received from the sales of our preferred stock and common stock, the issuance of senior mandatory convertible promissory notes in January and June 2020 to a trust affiliated with our CEO, cash generated from the sale of subscriptions to our platform, and financing activities including the private placement transaction with our CEO. We have generated losses from our operations as reflected in our accumulated deficit of $1,650.2 million as of July 31, 2024 and positive cash flows from operating activities for the six months ended July 31, 2024 and 2023.

Previous wording

As of April 30, 2024, our principal sources of liquidity were cash, cash equivalents, and marketable securities of $524.3 million.

Current wording

As of July 31, 2024, our principal sources of liquidity were cash, cash equivalents, and marketable securities of $521.6 million.

Previous wording

In November 2022, we entered into a four-year credit agreement with SVB, which provided for a senior secured credit facilities in the aggregate principal amount of up to $150.0 million, consisting of a term loan facility in the aggregate principal amount of $50.0 million and a revolving loan facility in an aggregate principal amount of up to $100.0 million, including a $30.0 million letter of credit sub-facility (as amended on April 13, 2023, the “November 2022 Senior Secured Credit Facility”). The November 2022 Senior Secured Credit Facility refinanced our prior credit agreement with SVB (the “April 2020 Senior Secured Term Loan”) and terminates on November 7, 2026.

Current wording

In November 2022, we entered into a four-year credit agreement with SVB, which provided for a senior secured credit facilities in the aggregate principal amount of up to $150.0 million, consisting of a term loan facility in the aggregate principal amount of $50.0 million and a revolving loan facility in an aggregate principal amount of up to $100.0 million, including a $30.0 million letter of credit sub-facility (as amended on April 13, 2023 and June 18, 2024, the “November 2022 Senior Secured Credit Facility”). The November 2022 Senior Secured Credit Facility refinanced our prior credit agreement with SVB (the “April 2020 Senior Secured Term Loan”) and terminates on November 7, 2026.

Previous wording

As of April 30, 2024, under the November 2022 Senior Secured Credit Facility there was$50.0 million drawn and$46.9 million was outstanding under the term loan, no amounts outstanding under the revolving credit facility and an aggregate$21.4 million in letters of credit issued under the credit sub-facility. Our total available borrowing capacity under the revolving credit facility was $78.6 million as of April 30, 2024.

Current wording

As of July 31, 2024, under the November 2022 Senior Secured Credit Facility there was$50.0 million drawn and$45.6 million was outstanding under the term loan, no amounts outstanding under the revolving credit facility and an aggregate$21.6 million in letters of credit issued under the credit sub-facility. Our total available borrowing capacity under the revolving credit facility was $78.4 million as of July 31, 2024.

Previous wording

A substantial source of our cash provided by operating activities is our customer billings for subscription to our platform. Deferred revenue consists of the unearned portion of billed fees for our subscriptions, which is included on our condensed consolidated balance sheets as a liability and is recorded as revenues over the term of the subscription agreement. As of April 30, 2024, we had $297.1 million of deferred revenue, of which $292.2 million was recorded as a current liability. This deferred revenue will be recognized as revenues when all of the revenue recognition criteria are met.

Current wording

A substantial source of our cash provided by operating activities is our customer billings for subscription to our platform. Deferred revenue consists of the unearned portion of billed fees for our subscriptions, which is included on our condensed consolidated balance sheets as a liability and is recorded as revenues over the term of the subscription agreement. As of July 31, 2024, we had $289.2 million of deferred revenue, of which $285.5 million was recorded as a current liability. This deferred revenue will be recognized as revenues when all of the revenue recognition criteria are met.

Previous wording

Our largest source of operating cash is cash collection from sales of subscriptions to our paying customers. Our primary uses of cash from operating activities are for personnel-related expenses, marketing expenses, and third-party hosting-related and software expenses. In the last several years, we have generated negative cash flows from operating activities and have supplemented working capital requirements through net proceeds from the sale of equity and equity-linked securities.

Current wording

Our largest source of operating cash is cash collection from sales of subscriptions to our paying customers. Our primary uses of cash from operating activities are for personnel-related expenses, marketing expenses, and third-party hosting-related and software expenses. In prior years, we generated negative cash flows from operating activities and supplemented working capital requirements through net proceeds from the sale of equity and equity-linked securities.

Previous wording

Net cash used in operating activities of $1.9 million for the three months ended April 30, 2024 reflects our net loss of $63.7 million, adjusted by non-cash items such as stock-based compensation expense of $48.6 million, amortization of deferred contract acquisition costs of $6.1 million, non-cash lease expense of $4.5 million, depreciation and amortization of $4.0 million, provision for expected credit losses of $0.2 million, partially offset by net accretion of discount on marketable securities of $1.8 million, and net cash inflows of $0.2 million from changes in our operating assets and liabilities. The net cash inflows from changes in operating assets and liabilities primarily consisted of a $25.9 million increase in deferred revenue resulting from increased billings for subscriptions and a $6.4 million increase in accounts payable. These amounts were partially offset by a $11.7 million increase in accounts receivable, a $10.2 million decrease in accrued expenses and other liabilities primarily from accrued payroll liabilities, a $4.9 million decrease in operating lease liabilities, a $4.4 million increase in prepaid expenses and other current assets related to an increase in deferred contract acquisition costs, and a $0.9 million increase in other assets.

Current wording

Net cash provided by operating activities of $14.0 million for the six months ended July 31, 2024 reflects our net loss of $135.9 million, adjusted by non-cash items such as stock-based compensation expense of $108.7 million, amortization of deferred contract acquisition costs of $12.5 million, non-cash lease expense of $8.9 million, depreciation and amortization of $8.3 million, provision for expected credit losses of $0.4 million, partially offset by net accretion of discount on marketable securities of $3.6 million, and net cash inflows of $14.6 million from changes in our operating assets and liabilities. The net cash inflows from changes in operating assets and liabilities primarily consisted of a $22.9 million decrease in accounts receivable, a $18.0 million increase in deferred revenue resulting from increased billings for subscriptions, and a $6.4 million increase in accounts payable. These amounts were partially offset by a $13.6 million increase in prepaid expenses and other current assets related to an increase in deferred contract acquisition costs, a $9.6 million decrease in operating lease liabilities, a $6.4 million decrease in accrued expenses and other liabilities primarily from accrued advertising expenses and accrued payroll liability, and a $3.1 million increase in other assets.

Previous wording

Net cash used in operating activities of $14.6 million for the three months ended April 30, 2023 reflects our net loss of $61.5 million, adjusted by non-cash items such as stock-based compensation expense of $41.5 million, non-cash lease expense of $5.3 million, amortization of deferred contract acquisition costs of $4.9 million, depreciation and amortization of $3.3 million, provision for expected credit losses of $0.7 million, andnet cash outflows of $8.4 million from changes in our operating assets and liabilities. The net cash outflows from changes in operating assets and liabilities primarily consisted of a $30.4 million increase in deferred revenue, resulting from increased billings for subscriptions, and a $0.9 million decrease in other assets. These amounts were partially offset bya $17.3 million increase in accounts receivable, a$13.4 million decrease in accrued expenses and other liabilities primarily from accrued payroll liabilities and accrued advertising expenses, a $4.6 million increase in prepaid expenses and other current assets related to an increase in and deferred contract acquisition costs, and a $4.3 million decrease in operating lease liabilities.

Current wording

Net cash provided by operating activities of $5.6 million for thesix months ended July 31, 2023 reflects ournet loss of $132.9 million, adjusted by non-cash items such asstock-based compensation expense of $97.7 million, amortization of deferred contract acquisition costs of $10.3 million, non-cash lease expense of $10.0 million, depreciation and amortization of $6.9 million, impairment of long-lived assets of $5.0 million, provision for expected credit losses of $1.4 million, andnet cash inflows of $8.1 million from changes in our operating assets and liabilities. The net cash inflows from changes in operating assets and liabilities primarily consisted of a $27.5 million increase indeferred revenue, resulting from increased billings for subscriptions, a $14.7 million decrease in accounts receivable, and a$1.3 million decrease in other assets. These amounts were partially offset bya $14.2 million decrease in accrued expenses and other liabilities primarily from accrued payroll liabilities and accrued advertising expenses, a$9.1 million increase inprepaid expenses and other current assets related to an increase in deferred contract acquisition costs, a $9.0 million decrease inoperating lease liabilities, and a $3.2 million decrease inaccounts payable.

Previous wording

Net cash used in investing activities of $21.4 million for the three months ended April 30, 2024 consisted of $70.5 million in purchases of marketable securities, $1.4 million in capitalized internal-use software costs, and $1.0 million in purchases of property and equipment. This was partially offset by $51.5 million in maturities of marketable securities.

Current wording

Net cash used in investing activities of $21.3 million for the six months ended July 31, 2024 consisted of $107.1 million in purchases of marketable securities, $2.8 million in capitalized internal-use software costs, and $2.7 million in purchases of property and equipment. This was partially offset by $91.3 million in maturities of marketable securities.

Previous wording

Net cash used by investing activities of $140.4 million for the three months ended April 30, 2023 consisted of $139.3 million in purchases of marketable securities, $1.9 million in purchases of property and equipment, and $0.8 million in capitalized internal-use software costs. This was partially offset by $1.6 million in maturities of marketable securities.

Current wording

Net cash used in investing activities of $129.5 million for thesix months ended July 31, 2023 consisted of $139.3 million inpurchases of marketable securities, $6.0 million inpurchases of property and equipment, and $2.3 million incapitalized internal-use software costs. This was partially offset by $18.1 million inmaturities of marketable securities.

Previous wording

Net cash provided by financing activities of $9.9 million for the three months ended April 30, 2024 consisted of $8.9 million in proceeds from our employee stock purchase plan and $1.1 million in proceeds from the exercise of stock options.

Current wording

Net cash used in financing activities of $9.3 million for thesix months ended July 31, 2024 consisted of $19.0 million inrepurchases of Class A common stock and $1.3 million inrepayment of term loan. This was partially offset by $8.9 million inproceeds from employee stock purchase plan and$2.1 million inproceeds from exercise of stock options.

Previous wording

Net cash provided by financing activities of $9.7 million for the three months ended April 30, 2023 consisted of $8.6 million in proceeds from our employee stock purchase plan and $1.8 million in proceeds from the exercise of stock options, partially offset by $0.6 million for the repayment of our term loan.

Current wording

Net cash provided by financing activities of $9.7 million for thesix months ended July 31, 2023 consisted of $8.6 million inproceeds from employee stock purchase plan and $3.1 million inproceeds from exercise of stock options, partially offset by $1.9 million for the repayment of our term loan.

Previous wording

During the three months ended April 30, 2024, there were no material changes in our contractual obligations and other commitments, as disclosed in our Annual Report on Form 10-K filed with the SEC on March 14, 2024.

Current wording

During the six months ended July 31, 2024, there were no material changes in our contractual obligations and other commitments, as disclosed in our Annual Report on Form 10-K filed with the SEC on March 14, 2024.

Previous wording

There have been no changes to our critical accounting policies and estimates during the three months ended April 30, 2024 as compared to those disclosed in our Management’s Discussion and Analysis of Financial Condition and Results of Operations set forth in our Annual Report on Form 10-K filed with the SEC on March 14, 2024.

Current wording

There have been no changes to our critical accounting policies and estimates during the six months ended July 31, 2024 as compared to those disclosed in our Management’s Discussion and Analysis of Financial Condition and Results of Operations set forth in our Annual Report on Form 10-K filed with the SEC on March 14, 2024.