Asana at Bank of America Conference: Balancing Growth and Profitability

On Wednesday, 04 June 2025, Asana (NYSE:ASAN) participated in the Bank of America Global Technology Conference 2025. The company outlined its strategy amidst financial challenges and opportunities, focusing on growth through AI innovation and maintaining profitability. While facing headwinds from a renegotiated enterprise contract, Asana remains optimistic about its AI Studio’s potential and future financial stability.

Key Takeaways

• Asana’s AI Studio has reached $1 million in annual recurring revenue, showing strong adoption.
• The company’s net retention rate is expected to face short-term pressure due to a renegotiated contract.
• Asana aims to expand its operating margins and reinvest in growth initiatives.
• The company is optimizing its sales and marketing efforts to improve cash flow.
• Despite macroeconomic challenges, Asana remains committed to growth through strategic investments.

Financial Results

• Financial Guidance and FX Impact:

- Initial Q4 growth guidance was 8% to 9% with a 0.75% FX headwind; updated to 7% to 9% with a 50 basis point FX tailwind.

- The renegotiated contract and macroeconomic headwinds offset the FX tailwind.

- Q1 growth saw a 20 basis point boost from the FX tailwind.

• Large Deal Impact:

- Asana secured a $100 million total contract value deal over three years, the largest in its history.

- The deal’s annual contract value included a modest downgrade compared to the previous year but offers expansion opportunities.

• Net Retention Rate (NRR):

- NRR is a priority for improvement, though expected to decline by at least 1 percentage point due to the large deal.

- Stabilization and improvement in NRR are anticipated after fiscal year 2027.

• Profitability and Margins:

- Q1 operating profit margin improved by 1,300 basis points year-over-year.

- Full-year operating margin guidance increased to at least 5.5%.

- Gross margins are at 90%, with expectations for continued margin expansion.

Operational Updates

• AI Studio:

- AI Studio has reached a $1 million annual recurring revenue milestone.

- 90% of account executives have generated AI Studio pipeline.

- Strong adoption among builders, with over 40% of top 100 customers enabled on AI Studio.

- Plans to introduce Smart Workflow Gallery and AI Teammates in Q3.

• Sales and Marketing:

- Significant reduction in performance marketing spend with minimal impact on pipeline quality.

- Optimization of marketing channels for higher return on investment.

• Research and Development:

- Reallocation of R&D dollars with a focus on optimizing employee mix in high-cost versus low-cost regions.

• SMB Segment:

- Growth in the small and medium-sized business segment is above the corporate average.

- Focus on optimizing channel and geographic mix for better onboarding and retention.

Future Outlook

• Growth Strategies:

- Stabilizing and improving net retention is a key focus.

- AI Studio is expected to become a more significant part of bookings and revenue.

- Channel sales acceleration through AI Studio and reinvestment of savings into growth.

• Potential Headwinds:

- Challenges include a potentially worsening macro environment, elongated sales cycles, smaller deal sizes, and increased buyer scrutiny.

Q&A Highlights

• Clarification on FX impact showed a mix of headwinds and tailwinds.
• Discussion on the $100 million deal’s impact on NRR, with expectations of temporary decline but future stabilization.
• AI Studio’s adoption and future product additions were elaborated upon.
• Margin expansion plans were highlighted, balancing efficiency with growth reinvestment.
• Strength in the SMB segment attributed to optimized marketing and product efforts.

For further insights, readers are encouraged to refer to the full conference call transcript.

Full transcript - Bank of America Global Technology Conference 2025:

Mike Funk, Bank of America, SMIDCAP Software Analyst, Bank of America: Jobs to keep things on time today. Once again, Mike Funk, Bank of America, SMIDCAP. Software analyst joined on stage by Matt Bullock, also works on the software team. He’ll be asking some questions today as well. Very grateful once again to have Asana and Sonali and Aziz here with us at the Bank of America Conference.

So thank you.

Sonali, CFO, Asana: Thank you. We are really delighted to be here.

Mike Funk, Bank of America, SMIDCAP Software Analyst, Bank of America: And really great timing, my perspective at least. You reported earnings last night, so of hot off the press. I wanted to kick off with a few points, maybe some clarification. I think maybe some investors were confused on last evening. And on the FX first suddenly, last quarter, I I think you talked about kind of a hundred basis point headwind, but that was rounded to maybe withdrawing more 80 basis points last quarter.

I want your guide to for the year, a lot of change in FX. And, investors were thinking that it should have been a much larger help than how you framed it last time. Think last night you framed it now as a 50 basis point tailwind, right? So can you just, I guess correct me if I’m wrong on that, and then kind of give us the like for like back to how you talked about 80 basis point last quarter to where we are today.

Sonali, CFO, Asana: Sure. Okay. Starting with a very technical, specific tactical question. I love it.

Mike Funk, Bank of America, SMIDCAP Software Analyst, Bank of America: I just wanna I just wanna address the kind of biggest question.

Sonali, CFO, Asana: Yeah. No. Absolutely. So so I think firstly, I’m gonna go back to when we guided q four, which was in March, where I’m just going to repeat what I said on the call yesterday. That was a really different time in terms of the macro than where we find ourselves today.

So when we guided in March, we guided eight to 9%, eight point five % midpoint. And we said that currency was about one percentage point headwind to that. It was about point 7%. So Okay. Yes.

That was around

Mike Funk, Bank of America, SMIDCAP Software Analyst, Bank of America: I I was close with the point. Exactly.

Sonali, CFO, Asana: It was about you know? Actually, probably point 75%, something like that. But you’re you’re there or thereabouts. And last night, we guided seven to 9%, so 8% midpoint, and we didn’t specifically call out the tailwind from FX in that new guide. So in that new guide, there is a tailwind from FX, and it’s about 5,000,000.

Aziz, Unidentified role related to AI Studio, Asana: Yeah. Think that that

Mike Funk, Bank of America, SMIDCAP Software Analyst, Bank of America: the right way to think about it, Aziz?

Aziz, Unidentified role related to AI Studio, Asana: Or Yeah.

Sonali, CFO, Asana: And I

Mike Funk, Bank of America, SMIDCAP Software Analyst, Bank of America: anything else?

Aziz, Unidentified role related to AI Studio, Asana: You know, I think one of the one we framed the nine to 10 comparison in q four versus the guide of eight to nine. It was really to say, you’re in in our q four, the change of currency devalued our ARR base by about 5 and a half million dollars. So if that wouldn’t have happened, the guide would have been more like 8.7 to 9.7 or rounded to nine to 10. And that was her basis of comparison because, you know, analyst models and had not taken that into account. They were at 11%, but that didn’t take into account Got it.

Currency coming down. So that was just a frame of reference, not meant to be a guide. And then

Mike Funk, Bank of America, SMIDCAP Software Analyst, Bank of America: Really more to help analysts and their modeling when you felt that people, they were out of bounds with how they were modeling.

Aziz, Unidentified role related to AI Studio, Asana: Exactly. This is year help the headwind that we had faced over the course of Q4. Now fast forward, we did have a tailwind over the course of Q1 that’s driving about 50 basis points to the full year. It wasn’t felt that pronounced in Q1. It was only about 20 basis points to our Q1 growth, but 50 basis points to the full year.

So that’s about if you want a like for like, it would be eight nine would have been eight to nine would have been the constant currency guide, and then the the the new guide would be on a constant currency 6.5 to 8.5.

Mike Funk, Bank of America, SMIDCAP Software Analyst, Bank of America: Okay. Thank thank you for for answering that. I know it was kinda more technical maybe than

Unidentified speaker: you Yeah.

Mike Funk, Bank of America, SMIDCAP Software Analyst, Bank of America: Wanted to address first.

Sonali, CFO, Asana: Just to add there is like, we don’t intend every quarter to guide in two separate ways. Like, we really exactly. And we really called it out in q four because it was such a big impact in a single quarter. So that was why we called it out.

Mike Funk, Bank of America, SMIDCAP Software Analyst, Bank of America: And I think there were two other points, I think, last night that are important. There was also the offsetting factor in the guidance from the renegotiated contract with a customer. I don’t think you named a customer on the call, but

Sonali, CFO, Asana: No, we didn’t. But it’s a large enterprise tech customer and our largest customer.

Mike Funk, Bank of America, SMIDCAP Software Analyst, Bank of America: Yes, exactly. And that was an offset to the FX help in the guidance as well. And then you also had, I think, what you characterized as unseen but possible macro headwinds that you’re now incorporating. Last quarter, I think you said the guidance incorporated no change in the macro. So did I did I capture everything

Sonali, CFO, Asana: that was And so just to be clear on the seven to 9% that we guided last night, the low end of that guide incorporates a worsening of the macro Okay. In terms of what we’re seeing today. And we did call out some trends that we began to see really around April, and I think we’re not alone there. I’ve seen others call out, you know, post Liberation Day.

And and some of those trends that that we’ve seen are slightly more elongated sales cycles

Unidentified speaker: Okay.

Sonali, CFO, Asana: Slightly smaller lens, just a bit more buyer scrutiny. And by the way, I’m I’m scrutinizing things more like as because he is like things that come to my desk. I’m like, no. You know, the, like, the the the first first response is no. But but to get to that lower end of the guide, we would need to see things change for the worse in a meaningful way.

Okay. But I wanted to give ourselves that room and that space because I feel like, you know, as I started with my opening remarks, the macro that, you know, the world we’re operating in today is more uncertain than it was when I last guided, which was in March. It’s just a more uncertain

Aziz, Unidentified role related to AI Studio, Asana: one.

Mike Funk, Bank of America, SMIDCAP Software Analyst, Bank of America: Would you characterize low end of your guide as being de risked?

Sonali, CFO, Asana: I would say it’s prudent.

Mike Funk, Bank of America, SMIDCAP Software Analyst, Bank of America: Okay, but not de risked, wouldn’t go that far?

Sonali, CFO, Asana: I mean, again, don’t know if you don’t know, right? But I would say it incorporates a degree conservatism and prudence.

Mike Funk, Bank of America, SMIDCAP Software Analyst, Bank of America: Okay. Fair enough. I want to let Matt jump in now with some questions. Aziz, I think, going to answer a lot on AI Studio. He spent a lot of time and obviously Sonnaly everything else.

Matt Bullock, Software Analyst, Bank of America: Thanks, Mike. And Sonnaly, before we get into the AI Studio, I wanted to touch on that $100,000,000 plus TCV deal over three years. Obviously, you know, a huge deal for the company speaks to the strategic nature of Asana. But I know there are some puts and takes in terms of the ACV there. I believe seats did expand, but there was some incremental discounting because of the three year deal.

Maybe you could help us better understand kind of how that renewal process went and kind of the financial impact of it.

Sonali, CFO, Asana: Sure. Absolutely. So you’re you’re right. It’s a hundred million TCV deal over three years. Largest deal in our company’s history.

We feel a real testament to not just our leadership in the category, but our ability to scale, to be able to serve a customer at that level. And we didn’t disclose the actual number of seats, but you are indeed right. It was an expansion. And the expansion covers up to a certain number of seats, but we actually see room for it to expand even beyond that. So we actually think that it could expand from a financial point of view as well.

And the deal, the hundred million TCV doesn’t cover add ons, things like AI studio, which we think, you know, we we feel excited could be an add on. And then also things like services, foundational service plans, which we’ve talked about, again, that could be incremental. But when we, you know, we’re and and Aziz were and I were part of the the deal team and like, you know, there’s some commercial sensitivity here, and I’m sure that partner will will listen to these remarks. Like there are always puts and takes, and it’s not unusual for a deal of that size and scale for you to be willing to, you know, afford a slight slightly higher discount than the last time around. Because the last time we negotiated with that counterpart, it was for a one year renewal.

So I was willing to trade off a bit on price in order to get the visibility. And my CFO loves visibility, and now fiscal year twenty seven and fiscal year twenty eight is significantly derisked. We don’t have to go back to that negotiating table again. And in the meantime, well, if you think about our roadmap, which Aziz will touch on, there’s a lot of new stuff that’s going to be coming out between now and then. You know, AI teammates, Dustin talked about on the call, AI sorry, resource management, and AI Studio Plus.

So all of these things we believe could be add on, and we are nowhere close to going wall to wall with this

Aziz, Unidentified role related to AI Studio, Asana: customer. Right.

Sonali, CFO, Asana: It’s a significant customer, obviously, if the ACV is, you know, a hundred million divided by three. Right. But the ACV did incorporate a modest downgrade compared to where we were a year ago. And and, know, you asked how the how the negotiation went. You know, some of the things that we are going to do with this customer is partner with them on innovation.

And actually, they are one of the greatest innovators in the world. So so we we see upside from that too. They have a huge marketplace, we see upside from that too. So there’s more to go for.

Matt Bullock, Software Analyst, Bank of America: Interesting. And maybe if you could you could touch on the the impact to NRR, that’s certainly been topical for the Asana debate. How does how is NRR gonna be influenced by that renewal? Maybe two q throughout the remainder of Yeah.

Sonali, CFO, Asana: Fiscal twenty twenty?

Sonali, CFO, Asana: Really good question. Thank you for asking it. So as you know, we had been seeing, like, let me start firstly by saying net retention is not where we want it to be. It is a huge priority. We need to to fix it.

And and we have, you know, a lot of strategies, including a new Chief Customer Officer in place to drive that. In in in the current quarter, our in quarter net retention was actually stable. But as we look ahead, as the renewal comes into our numbers from q two and into the rest of the year, that downgrade to ACV will pressure our in quarter NRR. So you should expect that to go down. I don’t think we quantified it by but, you know, I would say at least a percentage point.

That being said, you know, a lot of the strategies that we have in place now, things like better coverage of our small business base, which actually have not really been covered, and it tends to be a churnier part of our overall, you know, customer base. We have a much better coverage model in place now. That should start to bear fruit as we exit this year. We also have, you know, we’ve become a multiproduct company. So we have AI studio that we can introduce into renewals conversations.

That has been really helpful. That should continue to help and offset. And what I would say is if it weren’t for this landmark deal, which specifically impacts our tech vertical, our enterprise tech vertical, we would have seen a continued stabilization in our net retention. And, you know, our our goal as a management team is not just stabilization. Once we get into fiscal year twenty seven and the impact of this ACB downgrade makes its way through, we should expect stable to improving NRR again.

So we sort of see it as like stabilization interrupted, but interrupted by this, like, very specific deal. And then the only other thing I would call out, and and AI Studio is is a big mitigant to this, we have since April seen, you know, slightly more cautious behavior, particularly in our renewals book from certain customers in the enterprise side. And there, what I would say is, whilst we’re seeing some downgrade activity there, we’re retaining the logos. And that’s really important because that means when the macro comes back, you have an opportunity to expand again with those customers. And in fact, our logo churn this past quarter has improved, and I expect that trend to continue.

So it’s not all bad news on NRR. It’s just we felt it was really important to give you a view because we had talked about the stabilization on what was likely to happen over the next couple of quarters.

Matt Bullock, Software Analyst, Bank of America: Absolutely. And it’s a good segue into some more questions for Aziz on AI Studio because we had the very exciting $1,000,000 ARR threshold crossed last night. Maybe Aziz, could you help us think about what’s driving the success of AI Studio so far? How are customers utilizing it? How quickly do they get comfortable with it?

And maybe walk us through some of the upside cases for the remainder of the year in terms of adoption and revenue contribution.

Aziz, Unidentified role related to AI Studio, Asana: Yeah, sure. Thanks. Yeah, it was a huge milestone of the quarter in just a couple months since going GA of generating a million plus ARR, and the pipeline is really strong going into Q2. So strong demand, strong uptake. It’s really cross vertically, cross regionally.

And our AEs and our sales apparatus have really embraced it. I think this last quarter we had 90% of the AEs have generated pipeline and a high degree of that’s late stage. So really strong enablement efforts to drive that pipeline, and our whole field is participating in that. The value that it drives is what’s driving the demand. So I think we talked about this first layer that we were targeting is really the builders within our base, those who have built automations with with Asana, and we’re seeing really strong uptake of those.

Those tend to be some of our larger customers. So of our top hundred, I think about 40 plus are enabled on AI Studio. So we’re seeing really strong adoption amongst builders, those who build automations, and they’re deriving a ton of value. I mean, we’ve seen some really large customers drive significant ROI that’s many, many multiples of what they’re spending. So it’s really encouraging.

And from a usage basis, that cohort that had started in our early trial preview type phase, the growth of that that cohort in terms of usage has grown and grown and grown. And we’ve seen, you know, a handful plus that have actually graduated to consumption based and are buying top up credits and and moving on and so forth. So that’s super encouraging. What will drive the continued strength is really bringing AI Studio from those who have built automations, to more of our general base. And that’s really in two ways.

One, we introduced the Smart Workflow Gallery, which is gallery of templated use cases like HR onboarding, building a marketing campaign, agile product development, project management, ticketing, amongst others, that customers can adopt extremely quickly and start realizing the value of AI Studio in a matter of hours and less than days. So this is really targeted to those who are not builders, who aren’t gonna build custom rules, but want things that have worked for others that drive value very quickly. And it’s early, but we’re seeing strong adoption that’s driving and fueling the funnel. Because you can imagine, like, our Salesforce now is really coming with, here’s solutions you can adopt today to common to common outcomes and business outcomes that our customers wanna drive. I think the second thing is bringing this capability to our full base.

So self-service will be available in q three, and that will open this up to the whole base. And then also in q three, we’re introducing a new kind of add on to AI Studio, AI Teammates, which allows work to be done in a multistep way with basically agents or teammates that are doing the work, that are executing the task, complementing the humans that are teamed with those those agents. So that’s super exciting. That’s, again, targeted non builders and and driving more value from Asana and from the work they do.

Matt Bullock, Software Analyst, Bank of America: So sounds like there’s multiple catalysts to really even further accelerate the AI studio momentum in the back half of the year, which is is exciting. Maybe if you could talk about the monetization strategy over the medium term. I think it’s fair to say we’re certainly still in the proliferation phase. But right now, most of the ARR is platform fees. Hopefully, down the line, we start to see more consumption based contribution from those large power users.

But help us think about, is there a critical mass you’re targeting before you flip a switch to more monetization from proliferation? Or how should we think about the business model?

Aziz, Unidentified role related to AI Studio, Asana: Yeah. So we think there’s a huge opportunity just in the platform fee. And we’ve seen in cases of customers, the platform fee actually eclipsing the ARR for that customer because a few users can drive a tremendous amount of value from AI Studio. And so that’s really, really encouraging, and it’s key to the monetization strategy. Because we designed this where the platform fee would allow the customer to do do a lot with AI Studio and not have to worry about overages or top ups because just the credit allotment provides, you know, ample ability to execute workflows cross functionally and no barriers to proliferating this within the organization.

And that’s been really well received. So we do think there’s a huge opportunity just in the platform fee. And as Dustin has said on many of our last earnings calls, there are these emergence of these whales who are going to eclipse the platform fee and go into consumption in a very big way. We’re seeing those emerge. How many?

How quickly? Still TBD. But that’s an opportunity to expand and accelerate on top of the platform fee. And then the real beta is bringing this to the base, of bringing this to non builders, to bringing this in a templated use case by function, by vertical, that’s the real opportunity to create the beta, and that’s what’s happening in the second half with self serve, what’s happening now with Smart Workflow galleries, with teammates, and that really will drive that beta. So it’s both the consumption element, but then bringing this to a more broader set of our customers.

Matt Bullock, Software Analyst, Bank of America: That’s that’s helpful. And I wanted to switch gears here to Sonali. Mike and I know you from your your days at RingCentral when you were phenomenal driving profitability improvements. And certainly

Sonali, CFO, Asana: I’ve been phenomenal at Asana.

Matt Bullock, Software Analyst, Bank of America: You have. I was getting to that. Huge outperformance in 1Q on the margin side. It seems like you’re making a ton of progress on go to market efficiency as well. So I guess what I’d like to ask you is what have you had success what has been the low hanging fruit that you focused on in your ten months at Asana?

Are there anything other initiatives that you’re looking at to drive continued margin expansion? And how do you balance that with this incredible growth opportunity you have going forward?

Sonali, CFO, Asana: Yeah. No. Great question. And I’m glad you asked about the balance because it is a balance. And just for everyone in the room here, I I I seem to have a reputation as being the person who drives profitability and efficiency.

And and and I do believe we should be as efficient as possible, but, I love growth too.

Mike Funk, Bank of America, SMIDCAP Software Analyst, Bank of America: You don’t need chainsaw, so I’m like

Matt Bullock, Software Analyst, Bank of America: No.

Sonali, CFO, Asana: Please nobody repeat that. Just start a beat.

Aziz, Unidentified role related to AI Studio, Asana: Not so.

Sonali, CFO, Asana: Good to have so, yeah, look, we’re super proud of of what we’ve accomplished at Asana in in, you know, the last ten months. And, you know, the 1,300 basis point year over year improvement in in OP that we posted this quarter, what I would say is, like, don’t model that for next year because that’s you know, it’s it’s not linear. What I can say for certain is that you will continue to see sequential margin improvement, and you will continue. I can guarantee this to see continued annual multi year margin expansion from where we are today. And you saw that we increased the guide to at least 5.5% for this year.

And if you think about where we were in Q1, that implies that at q four where we’re exiting, it’s going to be significantly above where we were in q one, which was 4.3. So I think that story is very much intact, and there’s lots more to do there. And just from the actions that we took from when I first arrived, that continues to help actually every quarter this year because, you know, the savings ramp. And, you know, we made a very difficult decision to to let go of about 5% of our FTE workforce. That, again, it it it it it works its way through the p and l all year.

The other thing I would say here, and this is really different from, you know, other companies. I’m I’m not gonna say RingCentral specific, but other companies that I worked at, of which there have been several. Like, our gross margin here, we start from a very, like, enviable position. Like, we have 90% gross margins. Right.

Like, it’s a beautiful thing. And so, you know, everything and anything we do below that line just, you know, with our growth drives significant, significant operating leverage. And I think there’s more for us to do on the sales and marketing side. Hopefully, you’ve seen good progress. I think, you know, as we exit when we get to q four, you’ll look at where we were a year ago as a percentage of sales, and I’ll say, wow.

You know, it’s never like, you you you talked about, like, the easy stuff. It’s never easy, but, you know, one of the things that I would say, you know, we’re really excited about is we cut back our performance marketing dollars significantly. And we have seen very minimal change to pipe, and if anything, we’ve seen the quality of the pipe increase. So really paying attention to, you know, those marketing channels and where we’re getting the highest ROI has been, like, a winning strategy and an area where I think we can go even deeper and segment even more. And, you know, Aziz works really closely with with the marketing team and with the data science team.

So I think, like, more to go for there. The other thing I would say is, like, the r and d spend. Like, if you look at the last couple of years, we’ve we’ve spent a lot as a percentage of revenue compared to our peer group. But a lot of that was the investments we are making in AI Studio. So AI Studio, that investment has been many, years in the making.

You shouldn’t expect now, even though our road map sounds super sexy and cool, we’re excited about it with, you know, teammates and AI Studio Plus and self serve. That’s a real reallocation of r and d dollars. So you shouldn’t expect r and d dollars to suddenly balloon or explode. On the contrary, you should expect them as a percentage of revenue to continue coming down. And what I would say there is when I arrived, you know, if you look at our employee mix kind of where the headcount sits, high cost versus low cost geos, it was off benchmark.

And that’s an area where we’ve been able to, partly through attrition and partly through, you know, a little bit of the FTE action that that that we took last year, we’ve been able to, you know, get that more in line to industry benchmarks. And I think as we continue to see, you know, just normal attrition, we will do that. And and the beauty of that is when you lose r and d people in San Francisco or New York, you can often go to a lower costume and replace them with, you know, not just one head, but one and a half or two. So you actually end up, you know, getting a lot more productivity for those dollars. And we don’t always do that, and we’re always looking for, you know, opportunities to optimize.

You know? Again, you’re not, like, slashing and burning. You’re optimizing your r and d spend. And I think I think we’re doing a really good job there. The other thing I would say, and, like, I sit in this category as does my salary, like, g and a.

Like, you know, it’s too high. And this quarter actually was a little bit elevated partly because of taxes going to g and a, but I think that there’s more we can do there just by being more disciplined. And, you know, I I I like to think that the discipline that we can show in those areas will free up dollars to reinvest in things like, you know, AI studio and all the exciting initiatives that Aziz was talking about. And and I think you should when you when when you think about, you know, the margin potential of this business, keep in mind that, like, we want to grow and we want to reaccelerate growth. And we feel that once we stabilize net retention and, you know, as as that deal works its way through, once we stabilize net retention, that alone is a huge tailwind to growth.

You add to that AI studio starting to become a more meaningful today, it’s a more meaningful percentage of our bookings, our net bookings, but when it actually starts to be a more meaningful contributor to revenue. And then you combine that with some of the things we’re doing on channel, which we think truly lends its AI Studio truly lends itself to selling with the channel more, and we think we can really accelerate that. You know, you get to a point where, know, you’re looking beyond this year, and and and you reaccelerate growth. So I want to make sure that people realize that, you know, some of the savings, we want to reinvest in the business. And this category has, like, this amazing greenfield opportunity.

You know, my my enthusiasm and and and you asked you’ve asked me before, like, why did you join Asana? I remember you asked me, Mike. And and, you know, the category and the structural growth, and you combine that with the AI opportunity, like, my enthusiasm is so much higher today, ten months on. And, like, I I I feel like there’s almost no limit to where it can go and, like, all the adjacencies and, you know, at the same time becoming more efficient, the financial profile we can drive, I just think there’s a huge amount of value creation that can come from that.

Matt Bullock, Software Analyst, Bank of America: It’s fantastic. And I wanted to wrap up. We have a few minutes here left. I wanted to wrap up by touching on SMB because that’s been, I would say, given, you know, all the noise, a really nice upside case for Asana. Believe growing well above the corporate average in SMB, very topical.

I used the opportunity to plug our SMB primer as well. Check it out. We published that last week. Can you talk about what’s driving that strength in the SMB segment? You mentioned you’re even spending less dollars.

Are you benefiting from lower CPMs? Are you just you know, more efficiently allocating dollars to different channels? Anything would be helpful there.

Aziz, Unidentified role related to AI Studio, Asana: Yeah. I think it’s it’s it’s both. We’re you know, from a a channel and a geo mix, really have optimized and primed that to understand. And and a lot of this is the models and things we’ve built behind this to be able to be a lot more precise about understanding dollar and ROI and kinda cost curves. And so we’ve been able, as somebody said, to drive healthier pipeline, more pipeline, higher converting pipeline with less dollars.

And that’s benefit a lot of that paid media is going towards SMB. I think the second is on the product side. Like, there’s been some some great new features and focus on SMB onboarding and how do we not only convert them from the trials, but once they’re here, keep them for longer. Because that SMB base, especially those on monthly, they churn at a higher rate, and it’s a disproportionate amount of our churn. So the SMB strength has not been not only been the pay on the booking side because of the efficiency of the market spend and driving better pipe and conversion, but is now a conservative effort.

Well, now we have them. How do we keep them for longer? We’re starting to see early signs of success there, but it’s a huge opportunity because basis point two, three goes a long way in terms of our net retention and our growth. So it’s it continues to be the strength, and you’re right. It’s growing above the corporate average, and we expect that to continue.

Mike Funk, Bank of America, SMIDCAP Software Analyst, Bank of America: That’s that’s great, guys. Thank you guys so much, Sonali and Ziz. Thank you for coming in. Well, I appreciate it, and thank you all for

Sonali, CFO, Asana: Thank you.

Unidentified speaker: Sonley, thank you so much.

Mike Funk, Bank of America, SMIDCAP Software Analyst, Bank of America: Yeah. I I apologize for the delay.

Sonali, CFO, Asana: Thank you. Is this a bit is it there that last one?

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