Asana, Inc. (NYSE:ASAN) Q3 2024 Earnings Call Transcript

Notably, we’re also seeing adoption of Asana within leading AI companies like Anthropic, OpenAI and Alignment Research Center. Our new packaging strategy, introduced at our Investor Day in October and launched less than a month ago, will further adoption of AI and help on-ramp customers to our Advanced and Enterprise tiers. Early feedback from the sales force was that customers are excited to learn about our multiple enterprise offerings. In closing, I’m more excited than ever about the potential of Asana, and where we can go with the platform and capabilities. For example, it’s even more amazing to work with our own R&D team right now. I’ll have an idea for something LLMs might do in the product and very often a couple weeks later they’ll come back and say they’ve got a working version, that it was easier to build than they expected, and the output is more impressive than they predicted it would be.

Everything we are focused on today is in service of enterprise growth: building pipeline, retention and C-level customer engagement. And now, I’ll turn it over to Anne

Anne Raimondi: Thanks, Dustin. In Q3, we continued to be impacted by macroeconomic headwinds. Deal cycles continue to be longer and budgets continue to be a significant factor. However, as Dustin mentioned, we are beginning to see signs of stabilization, especially for new business which includes expansion. We still need to work through some of the original headwinds that are impacting larger customers. Geographically we saw bright spots in Asia, especially Japan, and Europe this quarter. As an example, Asana was particularly strong with high profile retail and consumer product goods companies this quarter. Our pipeline continues to build, especially with the success of events such as our Work Innovation Summit in New York City and London in October.

Revenue from our top two product tiers grew over 25% in Q3. As we continue to roll out our new packaging that was shared at Investor Day, we expect to see new customers, in particular, accelerate their journey into our premium tiers, to utilize our most unique enterprise capabilities. Enterprise customers representing organizations with over 2,000 employees continue to be our fastest growing customer cohort. Executives are planning long term and looking to partner with one strategic partner, and we believe this is driving multi-year commitments for us. Our enterprise customers are asking us about AI and automations in Asana. For example, customers we’re meeting with through our Executive Briefing program are excited about the roll up of status reports using Asana’s AI features.

Currently, writing project status might take hours, but with AI, each report can be written in just a few minutes, while never missing an important detail, leaving employees and executives with more time for more valuable work. Also, Asana plus AI helps organizations ramp usage where change management may otherwise be a factor. We believe our AI roadmap and our new packaging will help to further drive adoption. We are seeing new business broadly across several diverse industries, healthcare, financial services, media, transportation, manufacturing, among many others. Within Media, customers rely on Asana to manage their core business processes such as developing on-air creative, managing production workflows, and sourcing new talent on our platform.

Paramount Global, a leading global media and entertainment company, has been a customer of ours for a few years now and expanded their use of Asana to all their employees this quarter. And we had another large media conglomerate, Direct TV, that had a significant expansion this quarter. We’re seeing continued growth within the healthcare and biotech vertical this quarter. For example, Norton Healthcare, who we have talked about in the past, increased their commitment with Asana this quarter. They use Asana to onboard hundreds of new physician providers to their vast hospital and healthcare system. Additionally, another healthcare provider that serves over 100 million people around the world expanded their use of Asana. Departments that serve their clinical programs, as well as marketing and financial operations, rely on Asana to automate work, manage strategic projects, enable seamless collaboration across teams, and facilitate executive reporting so they can increase operating efficiency to drive better patient outcomes.

And we continue to expand in other industries. A global transportation and food delivery marketplace company expanded their use of Asana in a multi-year early renewal deal. Our robust analytics capabilities, Jira data sync integration, and product roadmap, including AI capabilities, were key factors for this win. Our enterprise solution is a strategic application for the company and is used cross-functionally by many departments for everything from business strategy planning to product development to account management. One of the largest hospitality companies in the world headquartered in France chose Asana in a multi-year land deal for their global marketing, communications, and e-commerce departments. A Global 2000 retail company with over 1,000 store locations expanded their use of Asana and upgraded to our enterprise solution to manage the openings and maintenance of their metro stores, as well as their quarterly planning workflow.