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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________________________________________________
FORM 10-Q
___________________________________________________________________
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended April 30, 2024

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO

Commission File Number 001-39495
___________________________________________________________________
Asana, Inc.
(Exact name of registrant as specified in its Charter)
___________________________________________________________________
Delaware
26-3912448
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
633 Folsom Street, Suite 100
San Francisco, California 94107
(Address of principal executive offices and Zip Code)
(415) 525-3888
(Registrant’s telephone number, including area code)
___________________________________________________________________
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Class A Common Stock, $0.00001 par value per share
ASAN
New York Stock Exchange
Long-Term Stock Exchange
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Accelerated filer
Non-accelerated filer
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No ☒
As of May 24, 2024, the number of shares of the registrant’s Class A common stock outstanding was 142,617,770 and the number of shares of the registrant’s Class B common stock outstanding was 85,486,680.




TABLE OF CONTENTS
Page





SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which statements involve substantial risk and uncertainties. All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q, including statements regarding our future results of operations or financial condition; business strategy and plans; and objectives of management for future operations are forward-looking statements. In some cases, you can identify forward-looking statements because they contain words such as “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” or “would” or the negative of these words or other similar terms or expressions. Forward-looking statements contained in this Quarterly Report on Form 10-Q include, but are not limited to, statements about: our ability to grow or maintain our dollar-based net retention rate, expand usage of our platform within organizations, and sell subscriptions to our platform; our ability to convert individuals, teams, and organizations on our free and trial versions into paying customers; the timing and success of new features, integrations, capabilities, and enhancements by us, or by our competitors to their products, including the successful integration of artificial intelligence (“AI”), or any other changes in the competitive landscape of our market; our ability to achieve widespread acceptance and use of our platform; growth in the work management market; the amount and timing of operating expenses and capital expenditures, as well as entry into operating leases, that we may incur to maintain and expand our business and operations and to remain competitive; our focus on growth to drive long-term value; the timing of expenses and our expectations regarding our cost of revenues, gross margin, and operating expenses; the effect of uncertainties related to ongoing macroeconomic conditions, including volatile equity capital markets, on our business, results of operations, and financial condition; performance of our sales and marketing activities; our protections against security breaches, technical difficulties, or interruptions to our platform; our ability to successfully defend litigation brought against us, potential dispute-related settlement payments, or other litigation-related costs; potential pricing pressure as a result of competition or otherwise; anticipated fluctuations in foreign currency exchange rates; potential costs and the anticipated timing of expenses related to the acquisition of businesses, talent, technologies, or intellectual property, including potentially significant amortization costs and possible write-downs; general economic conditions affecting domestic or international markets, and the rate of global IT spending, including as a result of a downturn or recession, rising inflation and interest rates, and instability in financial institutions and global financial markets; and geopolitical instability.
You should not rely on forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this Quarterly Report on Form 10-Q primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, and operating results. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties, and other factors described in the section titled Risk Factors and elsewhere in this Quarterly Report on Form 10-Q. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Quarterly Report on Form 10-Q. The results, events, and circumstances reflected in the forward-looking statements may not be achieved or occur, and actual results, events, or circumstances could differ materially from those described in the forward-looking statements.
In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based on information available to us as of the date of this Quarterly Report on Form 10-Q. While we believe that such information provides a reasonable basis for these statements, that information may be limited or incomplete. Our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely on these statements.
The forward-looking statements made in this Quarterly Report on Form 10-Q relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this Quarterly Report on Form 10-Q or to reflect new information or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures, restructurings, or investments.



You should read this Quarterly Report on Form 10-Q and the documents that we reference in this Quarterly Report on Form 10-Q and have filed with the Securities and Exchange Commission (the “SEC”) as exhibits to this Quarterly Report on Form 10-Q with the understanding that our actual future results, levels of activity, performance, and events and circumstances may be materially different from what we expect.
Additional Information

Unless the context otherwise requires, all references in this Quarterly Report on Form 10-Q to “we,” “us,” “our,” “our company,” and “Asana” refer to Asana, Inc. and its consolidated subsidiaries. The Asana logo, “Asana,” “Work Graph,” and our other registered or common law trademarks, service marks, or trade names appearing in this Quarterly Report on Form 10-Q are the property of Asana, Inc. Other trade names, trademarks, and service marks used in this Quarterly Report on Form 10-Q are the property of their respective owners.



SELECT RISK FACTORS AFFECTING OUR BUSINESS
Investing in our common stock involves numerous risks, including the risks described in Part II—Other Information, Item 1A. Risk Factors of this Quarterly Report on Form 10-Q. Below are some of these risks, any one of which could materially adversely affect our business, financial condition, results of operations, and prospects.
We have experienced rapid growth in prior periods, and our prior growth rates may not be indicative of our future growth.
We have a limited operating history at our current scale, which makes it difficult to evaluate our future prospects and may increase the risk that we will not be successful.
We have a history of losses and we may not be able to achieve profitability or, if achieved, sustain profitability.
We believe our long-term value as a company will be greater if we focus on growth, which may negatively impact our profitability in the near and medium term.
Our quarterly results may fluctuate significantly and may not meet our expectations or those of investors or securities analysts.
If we are unable to attract new customers, convert individuals, teams, and organizations using our free and trial versions into paying customers, and expand usage within organizations or develop new features, integrations, capabilities, and enhancements that achieve market acceptance, our revenue growth would be harmed.
If the market for work management solutions develops more slowly than we expect or declines, our business would be adversely affected.
We operate in a highly competitive industry, and competition presents an ongoing threat to the success of our business. Our ability to compete and ensure our success requires developments in our technology, including the successful deployment of artificial intelligence (“AI”) in our product.
Failure to effectively develop and leverage our direct sales capabilities would harm our ability to expand usage of our platform within our customer base and achieve broader market acceptance of our platform.
We must continue to attract and retain highly qualified personnel in very competitive markets to continue to execute on our business strategy and growth plans.
If our information technology systems, or those of third parties upon which we rely, or our data are compromised or operate in an unintended way, we could experience adverse consequences, including but not limited to regulatory investigations or actions; litigation; fines and penalties; disruptions of our business operations; reputational harm; loss of revenue or profits; and other adverse consequences.
If we fail to manage our technical operations infrastructure, or experience service outages, interruptions, or delays in the deployment of our platform, our results of operations may be harmed.
If we are unable to ensure that our platform interoperates with a variety of software applications that are developed by others, including our integration partners, we may become less competitive and our results of operations may be harmed.
The loss of one or more of our key personnel, in particular our co-founder, President, Chief Executive Officer (“CEO”), and Chair, Dustin Moskovitz, would harm our business.
Our culture has contributed to our success, and if we cannot maintain this culture as we grow, we could lose the employee engagement fostered by our culture, which could harm our business.
Our business depends on a strong brand, and if we are not able to maintain and enhance our brand, our ability to expand our base of customers may be impaired, and our business and results of operations will be harmed.



We rely on third parties maintaining open marketplaces to distribute our mobile application. If such third parties interfere with the distribution of our platform, our business would be adversely affected.
Sales to customers outside the United States and our international operations expose us to risks inherent in international sales and operations.
We are subject to stringent and evolving U.S. and foreign laws, regulations, rules, contractual obligations, industry standards, policies and other obligations related to AI, privacy, data protection, and security. Our actual or perceived failure to comply with such obligations could lead to regulatory investigations or actions; litigation; fines and penalties; disruptions of our business operations; reputational harm; loss of revenue or profits; and other adverse business consequences.
The trading price of our Class A common stock may be volatile and could decline significantly and rapidly.
The dual class structure of our common stock has the effect of concentrating voting control with our founders, directors, executive officers, and their respective affiliates. This ownership will limit or preclude your ability to influence corporate matters, including the election of directors, amendments of our organizational documents, and any merger, consolidations, sale of all or substantially all of our assets, or other major corporate transaction requiring stockholder approval.
Sales of substantial amounts of our Class A common stock in the public markets, or the perception that sales might occur, could cause the trading price of our Class A common stock to decline.
If we are unable to adequately address these and other risks we face, our business may be harmed.



PART I—FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)
ASANA, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
April 30, 2024January 31, 2024
Assets
Current assets
Cash and cash equivalents$222,049 $236,663 
Marketable securities302,240 282,801 
Accounts receivable, net 99,773 88,327 
Prepaid expenses and other current assets50,004 51,925 
Total current assets674,066 659,716 
Property and equipment, net96,955 96,543 
Operating lease right-of-use assets182,296 181,731 
Other assets24,851 23,970 
Total assets$978,168 $961,960 
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable$12,895 $6,907 
Accrued expenses and other current liabilities68,111 75,821 
Deferred revenue, current292,191 265,306 
Operating lease liabilities, current20,316 19,179 
Total current liabilities393,513 367,213 
Term loan, net42,380 43,618 
Deferred revenue, noncurrent4,882 5,916 
Operating lease liabilities, noncurrent214,108 215,084 
Other liabilities3,388 3,733 
Total liabilities658,271 635,564 
Commitments and contingencies (Note 7)
Stockholders' equity
Common stock2 2 
Additional paid-in capital1,880,675 1,821,216 
Accumulated other comprehensive loss(2,472)(236)
Accumulated deficit (1,558,308)(1,494,586)
Total stockholders’ equity319,897 326,396 
Total liabilities and stockholders’ equity$978,168 $961,960 

See accompanying Notes to Condensed Consolidated Financial Statements.




1


ASANA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)
Three Months Ended April 30,
20242023
Revenues$172,448 $152,411 
Cost of revenues 17,804 14,847 
Gross profit154,644 137,564 
Operating expenses:
Research and development 82,791 76,316 
Sales and marketing 104,332 93,237 
General and administrative 33,690 33,256 
Total operating expenses220,813 202,809 
Loss from operations(66,169)(65,245)
Interest income and other income (expense), net4,360 5,666 
Interest expense(942)(967)
Loss before provision for income taxes(62,751)(60,546)
Provision for income taxes971 922 
Net loss$(63,722)$(61,468)
Net loss per share:
Basic and diluted$(0.28)$(0.28)
Weighted-average shares used in calculating net loss per share:
Basic and diluted227,069216,413

See accompanying Notes to Condensed Consolidated Financial Statements.
2


ASANA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(in thousands)
(unaudited)
Three Months Ended April 30,
20242023
Net loss$(63,722)$(61,468)
Other comprehensive loss:
Net unrealized gain (losses) on marketable securities(1,375)454 
Change in foreign currency translation adjustments(861)104 
Comprehensive loss$(65,958)$(60,910)

See accompanying Notes to Condensed Consolidated Financial Statements.
3


ASANA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)
(in thousands)
(unaudited)
Three Months Ended April 30, 2024
Common Stock
Additional
Paid-In Capital
Accumulated
Other
Comprehensive Income (Loss)
Accumulated DeficitTotal
Stockholders’ Equity (Deficit)
SharesAmount
Balances at January 31, 2024224,728 $2 $1,821,216 $(236)$(1,494,586)$326,396 
Issuance of common stock upon the exercise of options352 — 1,085 — — 1,085 
Issuance of common stock upon the vesting and settlement of restricted stock units2,302 — (4)— — (4)
Issuance of common stock under employee share purchase plan654 — 8,866 — — 8,866 
Stock-based compensation expense— — 49,512 — — 49,512 
Net unrealized losses on marketable securities— — — (1,375)— (1,375)
Foreign currency translation adjustments— — — (861)— (861)
Net loss— — — — (63,722)(63,722)
Balances at April 30, 2024228,036 $2 $1,880,675 $(2,472)$(1,558,308)$319,897 

See accompanying Notes to Condensed Consolidated Financial Statements.
4


ASANA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT) - CONTINUED
(in thousands)
(unaudited)
Three Months Ended April 30, 2023
Common Stock
Additional
Paid-In Capital
Accumulated
Other
Comprehensive Income (Loss)
Accumulated Deficit
Total
Stockholders’ Equity (Deficit)
SharesAmount
Balances at January 31, 2023214,293 $2 $1,595,001 $(873)$(1,237,556)$356,574 
Issuance of common stock upon the exercise of options793 — 1,798 — — 1,798 
Vesting of early exercised stock options— — 74 — — 74 
Issuance of common stock upon the vesting and settlement of restricted stock units1,232 — — — —  
Issuance of common stock under employee share purchase plan458 — 8,558 — — 8,558 
Stock-based compensation expense— — 41,991 — — 41,991 
Net unrealized gain on marketable securities— — — 454 — 454 
Foreign currency translation adjustments— — — 104 — 104 
Net loss— — — — (61,468)(61,468)
Balances at April 30, 2023216,776 $2 $1,647,422 $(315)$(1,299,024)$348,085 

See accompanying Notes to Condensed Consolidated Financial Statements.
5


ASANA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Three Months Ended April 30,
20242023
Cash flows from operating activities
Net loss$(63,722)$(61,468)
Adjustments to reconcile net loss to net cash used in operating activities:
Allowance for expected credit losses199 737 
Depreciation and amortization4,014 3,288 
Amortization of deferred contract acquisition costs6,087 4,871 
Stock-based compensation expense48,640 41,498 
Net accretion of discount on marketable securities(1,831)(444)
Non-cash lease expense4,452 5,263 
Amortization of discount on revolving credit facility and term loan issuance costs30 30 
Changes in operating assets and liabilities:
Accounts receivable(11,732)(17,252)
Prepaid expenses and other current assets(4,402)(4,625)
Other assets(894)881 
Accounts payable6,446 (14)
Accrued expenses and other liabilities(10,183)(13,417)
Deferred revenue25,851 30,350 
Operating lease liabilities(4,853)(4,291)
Net cash used in operating activities(1,898)(14,593)
Cash flows from investing activities
Purchases of marketable securities(70,484)(139,294)
Maturities of marketable securities51,500 1,615 
Purchases of property and equipment(1,002)(1,866)
Capitalized internal-use software costs(1,375)(821)
Net cash used in investing activities(21,361)(140,366)
Cash flows from financing activities
Repayment of term loan (625)
Proceeds from exercise of stock options1,085 1,798 
Proceeds from employee stock purchase plan8,866 8,558 
Taxes paid related to net share settlement of equity awards(4) 
Net cash provided by financing activities9,947 9,731 
Effect of foreign exchange rates on cash and cash equivalents(1,302)899 
Net decrease in cash and cash equivalents(14,614)(144,329)
Cash and cash equivalents
Beginning of period236,663 526,563 
End of period$222,049 $382,234 

See accompanying Notes to Condensed Consolidated Financial Statements.
6


ASANA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
(in thousands)
(unaudited)
Three Months Ended April 30,
20242023
Supplemental cash flow data
Cash paid for income taxes$873 $1,906 
Supplemental non-cash investing and financing information
Purchase of property and equipment in accounts payable and accrued expenses$1,367 $2,645 
Stock-based compensation capitalized for software development$867 $449 

See accompanying Notes to Condensed Consolidated Financial Statements.
7

ASANA, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
Note 1.    Organization
Organization and Description of Business
Asana, Inc. (“Asana” or the “Company”) was incorporated in the state of Delaware on December 16, 2008. Asana is a leading work management software platform with an enterprise focus that helps organizations orchestrate work, from daily tasks to cross-functional strategic initiatives. The Company is headquartered in San Francisco, California.
Note 2.    Basis of Presentation and Summary of Significant Accounting Policies
Principles of Consolidation
The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America (“GAAP”) and include the accounts of the Company’s wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated on consolidation.
The unaudited condensed consolidated balance sheet as of January 31, 2024 included herein was derived from the audited financial statements as of that date, but does not include all disclosures, including certain notes required by GAAP on an annual reporting basis. In management's opinion, the unaudited condensed consolidated financial statements reflect all normal recurring adjustments necessary to state fairly the balance sheet, statements of comprehensive loss, and stockholders' equity (deficit), and statements of cash flows for the interim periods, but are not necessarily indicative of the results of operations to be anticipated for the full fiscal year or any future period.
These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K filed with the SEC on March 14, 2024.
Use of Estimates
The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported and disclosed in the consolidated financial statements and accompanying notes. Estimates and assumptions reflected in the consolidated financial statements include, but are not limited to, revenue recognition, the useful lives and carrying values of long-lived assets, the fair value of common stock for periods prior to the Company’s direct listing of its Class A common stock on the New York Stock Exchange (“NYSE”) (the “Direct Listing”), stock-based compensation expense, the period of benefit for deferred contract acquisition costs, income taxes, and the valuation of right-of-use assets. Actual results could differ from those estimates.
Risks and Uncertainties
Global macroeconomic events including elevated inflation, the U.S. Federal Reserve raising interest rates, bank failures, supply chain disruptions, fluctuations in currency exchange rates, the Russian invasion of Ukraine, the current armed conflict in Israel and the Gaza Strip, and the residual impact of the COVID-19 pandemic 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 the Company’s customers and prospective customers.
The conditions caused by the aforementioned macroeconomic events have affected and could continue to affect the rate of global IT spending and could adversely affect demand for the Company’s platform, lengthen the Company’s sales cycles, reduce the value or duration of subscriptions, negatively impact collections of accounts receivable, reduce expected spending from new customers, cause some of the Company’s paying customers to go out of business, and affect contraction or attrition rates of the Company’s customers, all of which could adversely affect the Company’s business, results of operations, and financial condition. As of the date of issuance of the financial statements, the Company is not aware of any specific event or circumstance related to the aforementioned macroeconomic events that would require it to update its estimates or judgments or adjust the carrying value of its assets or liabilities. Actual results could differ from those estimates and any such differences may be material to the condensed consolidated financial statements. 
8

ASANA, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
Concentration of Credit Risk
Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash, cash equivalents, and marketable securities. The Company deposits its cash and cash equivalents with financial institutions that management believes are of high credit quality, although such deposits may, at times, exceed federally insured limits. The Company has not experienced any losses on its deposits of cash and cash equivalents to date. Cash equivalents are invested in highly rated securities.
The Company grants credit to customers in the normal course of business. For the three months ended April 30, 2024 and April 30, 2023, there were no individual customers that accounted for 10% or more of the Company’s revenues. The Company had one customer account for approximately 37% of accounts receivable as of April 30, 2024. No customer accounted for more than 10% of accounts receivable as of January 31, 2024.
Fair Value of Financial Instruments
Fair value is defined as the exit price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the reporting date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. Fair value is estimated by utilizing a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:
Level 1—Observable inputs comprised of quoted prices for identical assets or liabilities in active markets.
Level 2—Inputs other than the quoted prices in active markets that are observable either directly or indirectly.
Level 3—Unobservable inputs in which there is little or no market data and that are significant to the fair value of the assets or liabilities.
In determining fair value, a financial instrument’s classification within the three-tier fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as considers counterparty credit risk in its assessment of fair value.
The carrying amount of certain financial instruments, including cash, accounts receivable, accounts payable, and accrued liabilities approximates their fair values due to their short-term nature.
Available-for-sale Investments
The Company’s marketable securities are primarily comprised of U.S. government securities, commercial paper, corporate bonds, and agency bonds. The Company classifies its securities as available-for-sale at the time of purchase and reevaluates such classification at each balance sheet date. The Company may sell these securities at any time for use in current operations even if they have not yet reached maturity. As a result, the Company classifies its marketable securities, including securities with stated maturities beyond twelve months, within current assets in the condensed consolidated balance sheets.
Available-for-sale securities are carried at fair value with unrealized gains and losses reported in accumulated other comprehensive income (loss) as a separate component of stockholders’ equity (deficit) until realized. Unrealized gains and losses for any marketable securities that management intends to sell or is more likely than not that management will be required to sell prior to their anticipated recovery are recorded in other income (expense), net.
Recently Issued Accounting Pronouncements Not Yet Adopted
In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The amendments improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The new standard will be effective for the Company for the annual periods beginning February 1, 2024, and for interim periods beginning February 1, 2025. Upon adoption, the guidance should be applied retrospectively to all prior periods presented in the financial
9

ASANA, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
statements. The Company is currently evaluating the impact of adoption of the standard on disclosures within its consolidated financial statements.
In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures,” which requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. The guidance is effective for the Company’s fiscal years beginning after February 1, 2025, with early adoption permitted. The Company is currently evaluating the impact of adoption of the standard on its consolidated financial statements.
Note 3.    Revenues
Deferred Revenue and Remaining Performance Obligations
The Company recognized $117.4 million and $100.5 million of revenues during the three months ended April 30, 2024 and 2023, respectively, that were included in the deferred revenue balances at January 31, 2024 and 2023, respectively.
Deferred revenue that will be recognized within the next twelve months is recorded as current deferred revenue, and the remaining portion is recorded as noncurrent. As of April 30, 2024, the Company's remaining performance obligations from subscription contracts was $380.0 million, of which the Company expects to recognize approximately 86% as revenues over the next 12 months and the remainder thereafter.
Deferred Contract Acquisition Costs
Deferred contract acquisition costs are amortized over a period of benefit of three years. The period of benefit was estimated by considering factors such as historical customer attrition rates, the useful life of the Company’s technology, and the impact of competition in the software-as-a-service industry.
The following table summarizes the activity of deferred contract acquisition costs (in thousands):
Three Months Ended April 30,
20242023
Beginning balance$39,381 $36,583 
Capitalization of contract acquisition costs5,646 5,626 
Amortization of deferred contract acquisition costs(6,087)(4,871)
Ending balance$38,940 $37,338 
Deferred contract acquisition costs, current$21,716 $19,077 
Deferred contract acquisition costs, noncurrent17,224 18,261 
Total deferred contract acquisition costs$38,940 $37,338 

Deferred contract acquisition costs, current is presented within prepaid expenses and other current assets in the condensed consolidated balance sheets. Deferred contract acquisition costs, noncurrent is presented within other assets in the condensed consolidated balance sheets.
10

ASANA, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
Note 4.    Fair Value Measurements
The following table summarizes, for assets and liabilities measured at fair value, the respective fair value and classification by level of input within the fair value hierarchy (in thousands):
April 30, 2024
Level 1Level 2Level 3Total
Current Assets
Cash equivalents
Money market funds$73,594 $ $ $73,594 
Commercial paper 1,998  1,998 
U.S. Treasury securities2,997   2,997 
Total cash equivalents$76,591 $1,998 $ $78,589 
Marketable securities
U.S. Treasury securities$162,679 $ $ $162,679 
Commercial paper 11,819  11,819 
Corporate bonds 101,610  101,610 
U.S. agency bonds 26,132  26,132 
Total marketable securities$162,679 $139,561 $ $302,240 
Total assets$239,270 $141,559 $ $380,829 
January 31, 2024
Level 1Level 2Level 3Total
Current Assets
Cash equivalents
Money market funds$89,561 $ $ $89,561 
Commercial paper 4,991  4,991 
Total cash equivalents$89,561 $4,991 $ $94,552 
Marketable securities
U.S. Treasury securities$162,328 $ $ $162,328 
Commercial paper 11,670  11,670 
Corporate bonds 72,608  72,608 
U.S. agency bonds 36,195  36,195 
Total marketable securities$162,328 $120,473 $ $282,801 
Total assets$251,889 $125,464 $ $377,353 
11

ASANA, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

The following table summarizes the Company's investments in marketable securities on the condensed consolidated balance sheets (in thousands):
April 30, 2024
Amortized
Cost
Gross
Unrealized
Gains
Gross Unrealized LossesEstimated
Fair Value
Current Assets
U.S. Treasury securities$163,506 $2 $(829)$162,679 
Commercial paper11,813 6  11,819 
Corporate bonds101,520 427 (337)101,610 
U.S. agency bonds26,102 30  26,132 
Total marketable securities$302,941 $465 $(1,166)$302,240 

January 31, 2024
Amortized
Cost
Gross
Unrealized
Gains
Gross Unrealized Losses
Estimated
Fair Value
Current Assets
U.S. Treasury securities$162,485 $85 $(242)$162,328 
Commercial paper11,645 25  11,670 
Corporate bonds71,930 695 (17)72,608 
U.S. agency bonds36,067 128  36,195 
Total marketable securities$282,127 $933 $(259)$282,801 
The following table presents the contractual maturities of the Company’s marketable securities as of April 30, 2024 (in thousands):
April 30, 2024
Amortized CostEstimated Fair Value
Due within one year$162,519 $162,357 
Due within one to three years140,422 139,883 
Total$302,941 $302,240 
The Company periodically evaluates its investments for expected credit losses. The unrealized losses on the available-for-sale securities were primarily due to unfavorable changes in interest rates subsequent to the initial purchase of these securities. Gross unrealized losses of the Company’s available-for-sale securities that have been in a continuous unrealized loss position for twelve months or longer were immaterial as of April 30, 2024 and January 31, 2024. The Company expects to recover the full carrying value of its available-for-sale securities in an unrealized loss position as it does not intend or anticipate a need to sell these securities prior to recovering the associated unrealized losses. The Company also expects any credit losses would be immaterial based on the high-grade credit rating for each of such available-for-sale securities. As a result, the Company does not consider any portion of the unrealized losses as of April 30, 2024 or January 31, 2024 to represent credit losses.
In April 2020 and November 2022, the Company entered into credit agreements (the “April 2020 Senior Secured Term Loan” and “November 2022 Senior Secured Credit Facility” as defined in Note 6. Debt) with Silicon Valley Bank (“SVB”). The credit facilities are carried at amortized cost, which approximated their fair values as of April 30, 2024 and January 31, 2024. If the credit facilities were measured at fair value in the financial statements, they would be classified as Level 2 in the fair value hierarchy. The April 2020 Senior Secured Term Loan was repaid in full and terminated in November 2022. On March 27, 2023, First Citizens BancShares, Inc. announced that it entered into an agreement to purchase assets and liabilities of SVB, inclusive of the November 2022 Senior Secured Credit Facility.
12

ASANA, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
Note 5.    Balance Sheet Components
Property and Equipment, Net
Property and equipment, net, consisted of the following (in thousands):
April 30, 2024January 31, 2024
Leasehold improvements$101,901 $100,795 
Capitalized internal-use software26,303 24,061 
Furniture and fixtures11,779 11,732 
Desktop and other computer equipment2,303 2,122 
Construction in progress941 326 
Total gross property and equipment143,227 139,036 
Less: Accumulated depreciation and amortization(46,272)(42,493)
Total property and equipment, net$96,955 $96,543 

Depreciation and amortization expense was $4.0 million and $3.3 million for the three months ended April 30, 2024 and 2023, respectively.
Prepaid Expenses and Other Current Assets
Prepaid expenses and other current assets consisted of the following (in thousands):
April 30, 2024January 31, 2024
Prepaid expenses$23,379 $25,029 
Deferred contract acquisition costs, current21,716 21,594 
Other current assets4,909 5,302 
Total prepaid expenses and other current assets$50,004 $51,925 
Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities consisted of the following (in thousands):
April 30, 2024January 31, 2024
Accrued payroll liabilities$12,739 $19,219 
Accrued sales and value-added taxes10,826 10,770 
Accrued taxes for fringe benefits10,709 9,452 
Accrued advertising expenses4,551 9,276 
Accrued consulting expenses3,881 4,287 
Other liabilities25,405 22,817 
Total accrued expenses and other current liabilities$68,111 $75,821 
Note 6.     Debt
In April 2020, the Company entered into a five-year $40.0 million term loan agreement with SVB (the “April 2020 Senior Secured Term Loan”) which provided for a senior secured term loan facility, in an aggregate principal amount of up to $40.0 million to be used for the construction of the Company’s corporate headquarters. Interest accrued and was payable monthly based on a floating rate per annum equal to the prime rate (per the Wall Street Journal) plus an applicable margin ranging from 0% to (1.0)% based on the Company’s unrestricted cash balance at the lender. The April 2020 Senior Secured Term Loan was repaid in full and terminated in November 2022.
13

ASANA, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
In November 2022, the Company entered into an agreement for a four-year credit facility (as amended on April 13, 2023, the “November 2022 Senior Secured Credit Facility”) with SVB, which refinanced the April 2020 Senior Secured Term Loan. The November 2022 Senior Secured Credit Facility provides for senior secured credit facilities in the aggregate principal amount of $150.0 million, including a senior secured term loan facility in an 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, maturing on November 7, 2026. On March 27, 2023, First Citizens BancShares, Inc. announced that it entered into an agreement to purchase assets and liabilities of SVB, inclusive of the November 2022 Senior Secured Credit Facility.
Borrowings under the November 2022 Senior Secured Credit Facility may be designated as ABR Loans or SOFR Loans, subject to certain terms and conditions under the agreement. ABR Loans accrue interest at a rate per annum equal to the ABR plus an applicable margin of 1.25%. Term SOFR Loans accrue interest at a rate per annum equal to the applicable adjusted term SOFR rate, which is equal to the applicable term SOFR rate plus a term SOFR adjustment of 10 basis points, provided such adjusted term SOFR rate shall not be less than zero, plus an applicable margin of 2.25%. Interest accrues and is payable on a monthly basis.
The November 2022 Senior Secured Credit Facility contains customary conditions to borrowing, events of default, and covenants, including covenants that restrict the Company’s ability to incur indebtedness, make or hold investments, execute certain change of control transactions, business combinations or other fundamental changes to the business, dispose of assets, make certain types of restricted payments or enter into certain related party transactions, subject to customary exceptions. In addition, the November 2022 Senior Secured Credit Facility contains financial covenants, including a consolidated adjusted quick ratio of 1.25 to 1.00, as well as a minimum cash adjusted EBITDA, each tested on a quarterly basis.
Pursuant to the terms of the November 2022 Senior Secured Credit Facility, the Company may issue letters of credit which may reduce the total amount available for borrowing under the revolving credit facility. Additionally, the Company is required to pay an annual commitment fee that accrues at a rate of 0.15% per annum on the unused portion of the borrowing commitments under the revolving credit facility. The Company had an aggregate of $21.4 million of letters of credit outstanding under the revolving credit facility as of April 30, 2024, and the Company’s total available borrowing capacity under the revolving credit facility was $78.6 million as of April 30, 2024.
As of April 30, 2024, $50.0 million was drawn and $46.9 million was outstanding under the November 2022 Senior Secured Credit Facility. As of April 30, 2024, the Company was in compliance with all financial covenants.
In conjunction with the close of the November 2022 Senior Secured Credit Facility, the Company paid upfront issuance fees of $0.4 million. The upfront fees are amortized over the remaining term of the agreement. As of April 30, 2024, the Company had $0.2 million remaining of upfront issuance fees allocated to the revolving credit facility presented in the Company’s condensed consolidated balance sheet within other assets.
The net carrying amounts of the November 2022 Senior Secured Credit Facility were as follows (in thousands):
April 30, 2024January 31, 2024
Principal$46,875 $46,875 
Accrued interest275 297 
Unamortized loan issuance costs(120)(132)
Net carrying amount$47,030 $47,040 
Term loan, current $4,650 $3,422 
Term loan, noncurrent$42,380 $43,618 

The net carrying amount of the current portion of the term loan is presented within accrued expenses and other current liabilities in the condensed consolidated balance sheets.
14

ASANA, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
The expected future principal payments for all borrowings as of April 30, 2024 is as follows (in thousands):
Fiscal year ending January 31,Expected Principal Payments
2025$3,125 
20265,000 
202738,750 
Total principal payments$46,875 
Note 7.     Commitments and Contingencies
Standby Letters of Credit
As of April 30, 2024, the Company had several letters of credit outstanding related to its operating leases totaling $21.4 million. The letters of credit expire at various dates between 2025 and 2034.
Purchase Commitments
In January 2021, the Company entered into a 60-month contract with Amazon Web Services for hosting-related services. Pursuant to the terms of the contract, the Company is required to spend a minimum of $103.5 million over the term of the agreement. The commitment may be offset by up to $7.3 million in additional credits subject to the Company meeting certain conditions of the agreement, which have been earned as of April 30, 2024. As of April 30, 2024, the Company had purchase commitments remaining of $38.5 million under this contract.
During the three months ended April 30, 2024, other than certain non-cancelable operating leases described in Note 8. Leases and the commitment for hosting-related services described above, there have been no other material changes outside the ordinary course of business to the Company's contractual obligations and commitments from those disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 2024.
Indemnification Agreements
The Company has entered into indemnification agreements with its directors and officers that may require the Company to indemnify its directors and officers against any liabilities that may arise by reason of their status or service as directors or officers, other than liabilities arising from willful misconduct of the individual.
Additionally, in the ordinary course of business, the Company enters into agreements of varying scope and terms pursuant to which it agrees to indemnify customers, vendors, lessors, business partners, and other parties with respect to certain matters, including, but not limited to, losses arising out of the breach of such agreements, services to be provided by the Company, or from intellectual property infringement claims made by third parties. For the three months ended April 30, 2024 and 2023, no demands have been made upon the Company to provide indemnification under such agreements, and there are no claims that the Company is aware of that could have a material adverse effect on its financial position, results of operations, or cash flows.
Contingencies
From time to time in the normal course of business, the Company may be subject to various claims and other legal matters arising in the ordinary course of business. As of April 30, 2024, the Company believes that none of its current legal proceedings would have a material adverse effect on its financial position, results of operations, or cash flows.
Note 8.     Leases
The Company leases real estate facilities under non-cancelable operating leases with various expiration dates through fiscal 2034. The Company has no lease agreements that are classified as finance leases.
15

ASANA, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
Future minimum lease payments (net of tenant improvement receivables) under non-cancelable operating leases with initial lease terms in excess of one year included in the Company’s lease liabilities as of April 30, 2024 are as follows (in thousands):
Fiscal year ending January 31,Operating Lease Payments (Net)
2025$30,942 
202640,607 
202740,671 
202839,218 
2029 and thereafter196,757 
Total undiscounted operating lease payments$348,195 
Less: imputed interest(113,771)
Total operating lease liabilities$234,424 
The Company has subleased certain office space to a third party and has classified the sublease as an operating lease. The sublease has a lease term of five years. Sublease income was $0.4 million for the three months ended April 30, 2024. There was no sublease income for the three months ended April 30, 2023. The Company recognizes sublease income as a reduction of lease expense in the Company’s condensed consolidated statements of operations.
Operating lease amounts in the table above do not include sublease income payments of $8.7 million. As of April 30, 2024, the future total minimum sublease payments to be received were as follows (in thousands):
Fiscal year ending January 31,Sublease Payments to be Received
2025$1,556 
20261,919 
20271,976 
20282,036 
2029 and thereafter1,208 
Total sublease income$8,695 
Note 9.     Net Loss per Share
The Company computes net loss per share using the two-class method required for multiple classes of common stock and participating securities. The rights, including the liquidation and dividend rights, of the Class A common stock and Class B common stock are substantially identical, other than voting rights. Accordingly, the Class A common stock and Class B common stock share equally in the Company’s net income and losses.
The following table presents the calculation of basic and diluted net loss per share (in thousands, except per share data):
Three Months Ended April 30,
20242023
Numerator:
Net loss$(63,722)$(61,468)
Denominator:
Weighted-average shares used in calculating net loss per share, basic and diluted227,069216,413 
Net loss per share, basic and diluted$(0.28)$(0.28)
16

ASANA, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

The potential shares of common stock that were excluded from the computation of diluted net loss per share for the period presented because including them would have been anti-dilutive are as follows (in thousands):
Three Months Ended April 30,
20242023
Stock options9,435 11,128 
Restricted stock units15,739 14,178 
Early exercised stock options 8 
Shares issuable pursuant to the 2020 Employee Stock Purchase Plan149 159 
Total25,323 25,473 
Note 10. Stockholders’ Deficit
Common Stock
There are two classes of common stock that total 1,500,000,000 authorized shares: 1,000,000,000 authorized shares of Class A common stock and 500,000,000 authorized shares of Class B common stock. The rights of the holders of Class A common stock and Class B common stock are identical, except with respect to voting and conversion. Each share of Class A common stock is entitled to one vote per share. Each share of Class B common stock is entitled to 10 votes per share and is convertible into one share of Class A common stock. Prior to the Direct Listing, which was completed on September 30, 2020, all 73,577,455 outstanding shares of redeemable convertible preferred stock were converted into an equivalent number of shares of Class B common stock. There are 142,546,760 shares of Class A common stock and 85,489,359 shares of Class B common stock issued and outstanding as of April 30, 2024. There were 139,238,565 shares of Class A common stock and 85,489,359 shares of Class B common stock outstanding as of January 31, 2024.
All changes in the number of shares of common stock outstanding for the three months ended April 30, 2024 and 2023, were related to changes in Class A common stock.
Private Placement—Related Party
In September 2022, the Company issued and sold 19,273,127 shares of its Class A common stock to the Company’s CEO in a private placement transaction at a purchase price of $18.16 per share, based on the closing trading price of the Company’s Class A common stock on September 2, 2022, for aggregate gross proceeds of approximately $350 million. The Company incurred issuance costs related to the private placement of $2.7 million.
Stock Plans
The Company has a 2009 Stock Plan (the “2009 Plan”), a 2012 Amended and Restated Stock Plan (the “2012 Plan”), and a 2020 Equity Incentive Plan (the “2020 Plan”). Each plan was initially established to grant equity awards to employees and consultants of the Company to assist in attracting, retaining, and motivating employees and consultants and to provide incentives to promote the success of the Company’s business. The number of shares reserved for issuance under the 2020 Plan increased by 9,414,923 shares of Class A common stock on February 1, 2022, by 10,714,637 shares of Class A common stock on February 1, 2023, and by 11,236,396 shares of Class A common stock on February 1, 2024, all pursuant to the evergreen provisions of the 2020 Plan.
There are no outstanding awards under the 2009 Plan, and new issuances under the 2012 Plan terminated upon completion of the Direct Listing. Awards outstanding under the 2012 Plan continue to be outstanding and are governed by the provisions of the 2012 Plan. The 2020 Plan provides for the grant of incentive stock options (“ISOs”), within the meaning of Section 422 of the Code, nonstatutory stock options (“NSOs”), stock appreciation rights, restricted stock awards (“RSUs”), performance-based stock awards, and other forms of equity compensation.
ISOs may be granted only to Company employees (including officers and directors who are also employees). NSOs may be granted to Company employees and consultants. Options under the 2020 Plan may be granted for periods of up to 10 years. The exercise price of ISOs and NSOs shall not be less than 100% of the estimated fair value of the shares on the date of grant as determined by the Company’s board of directors (the “Board of
17

ASANA, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
Directors”). Options granted generally vest over four years and vest at a rate of 25% upon the first anniversary of the vesting commencement date and 1/48 per month thereafter.
The Company has outstanding RSU awards issued pursuant to the 2012 Plan and 2020 Plan. RSUs granted generally vest on a predefined rate over a period of four years contingent upon continuous service.
Shares of common stock purchased under the 2012 Plan are subject to certain restrictions and repurchase rights.
Stock Options
Option activity under the Company’s combined stock plans is set forth below (in thousands, except years and per share data):
Number of
Shares
Weighted-
Average
Exercise
Price
Weighted-
Average
Remaining
Contractual Term
(in years)
Aggregate
Intrinsic Value
Balances at January 31, 20249,788 $3.09 4.2$140,292 
Options granted  
Options exercised (352)3.08 
Options cancelled (1)7.50 
Balances at April 30, 20249,435 $3.09 4.0$111,166 
Vested and exercisable at April 30, 20249,241 $3.10 4.0$108,753 
Vested and expected to vest at April 30, 20249,435 $3.09 4.0$111,166 

The total intrinsic value of options exercised during the periods presented was as follows:
Three Months Ended April 30,
20242023
Aggregate intrinsic value of options exercised (in thousands)$4,510 $14,107 
Early Exercise of Employee Options
The 2009 Plan and 2012 Plan allow for the early exercise of stock options. The consideration received for an early exercise of an option is considered to be a deposit of the exercise price, and the related dollar amount is recorded as a liability and reflected in accrued expenses and other current liabilities and other liabilities in the condensed consolidated balance sheets. This liability is reclassified to additional paid-in capital as the awards vest. If a stock option is early exercised, the unvested shares may be repurchased by the Company in case of employment termination at the price paid by the purchaser for such shares. There were no shares that were subject to repurchase at April 30, 2024 and 8,192 shares subject to repurchase at April 30, 2023.
Restricted Stock Units
The Company’s RSU activity is set forth below (in thousands, except per share data):
Number of
Shares
Weighted-
Average
Grant Date Fair Value
Aggregate
Intrinsic Value
Unvested RSUs at January 31, 202417,190 $23.04 $299,450 
RSUs granted 1,510 18.31 
RSUs vested(2,320)22.85 
RSUs cancelled/forfeited(641)21.87 
Unvested RSUs at April 30, 202415,739 $22.66 $234,039 
RSUs vested, not yet released at April 30, 2024824 $32.25 
18

ASANA, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
Stock-Based Compensation Expense
Stock-based compensation for stock-based awards to employees and non-employees in the Company’s condensed consolidated statements of operations for the periods below were as follows (in thousands):
Three Months Ended April 30,
20242023
Cost of revenues$283 $322 
Research and development26,740 23,497 
Sales and marketing15,248 11,533 
General and administrative6,369 6,146 
Total stock-based compensation expense$48,640 $41,498 

The stock-based compensation expense related to options granted to non-employees for the three months ended April 30, 2024 and 2023 were not material.
Total unrecognized compensation costs related to unvested awards not yet recognized under all equity compensation plans was as follows:
April 30, 2024
Unrecognized Expense
(in thousands)
Weighted-Average Expected Recognition Period
(in years)
Stock options$231 3.7
RSUs325,297 2.8
Total unrecognized stock-based compensation expense$325,528 2.8
2020 Employee Stock Purchase Plan
In September 2020, the Board of Directors adopted and approved the 2020 Employee Stock Purchase Plan (“ESPP”), which became effective on the effective date of the Company's registration statement on Form S-1 filed with the SEC in connection with the Direct Listing. The ESPP initially reserved and authorized the issuance of up to a total of 2,000,000 shares of Class A common stock to participating employees. The number of shares reserved under the ESPP was automatically increased on February 1, 2021 to 3,614,801 shares of Class A common stock, to 5,497,785 on February 1, 2022, to 7,640,712 on February 1, 2023, and to 9,887,991 on February 1, 2024, all pursuant to the evergreen provisions of the ESPP.
Subject to any limitations contained therein, the ESPP allows eligible participants to contribute, through payroll deductions, up to 15% of their eligible compensation to purchase shares of the Company’s Class A common stock at a purchase price equal to 85% of the fair market value of the Class A common stock on either the first day of the offering period or the purchase date, whichever fair market value is lower. The ESPP generally provides for consecutive 24-month offering periods, each consisting of four separate consecutive purchase periods of approximately six months in length. The ESPP also includes a two year look back in purchase price, including a reset feature. The reset feature is triggered if the price on the date of purchase is less than the price on the first day of the offering period.
The Company recognized stock-based compensation expense related to the ESPP of $2.9 million and $0.5 million during the three months ended April 30, 2024 and 2023, respectively. As of April 30, 2024 and January 31, 2024, $1.9 million and $7.2 million, respectively, have been withheld in contributions from employees. As of April 30, 2024, total unrecognized compensation cost related to the ESPP was $12.9 million, which will be amortized over a weighted average vesting term of 1.2 years.
19

ASANA, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
Note 11.    Interest Income and Other Income (Expense), Net
Interest income and other income (expense), net consist of the following (in thousands):
Three Months Ended April 30,
20242023
Interest income$5,376 $4,992 
Unrealized losses on foreign currency transactions(525)699 
Other non-operating expense(491)(25)
Total interest income and other income (expense), net$4,360 $5,666 
Other non-operating expense consists primarily of realized foreign currency gains and losses on transactions in the periods presented.
Note 12.    Income Taxes
The Company's income tax expense was $1.0 million and $0.9 million for the three months ended April 30, 2024 and 2023, respectively, primarily due to income taxes in foreign jurisdictions.
Note 13.    Geographic Information
The following tables set forth revenues and long-lived assets, including operating lease ROU assets, by geographic area for the periods presented below (in thousands):
Revenues
Three Months Ended April 30,
20242023
United States$104,426 $92,993 
International68,022 59,418 
Total revenues$172,448 $152,411 

Revenues by geography are based on the shipping address of the customer.
Long-Lived Assets
April 30, 2024January 31, 2024
United States$269,343 $271,844 
International9,908 6,430 
Total long-lived assets$279,251 $278,274 
Note 14.     Restructuring
On November 15, 2022, the Company authorized a plan to reduce its global headcount by approximately 9%. This plan was adopted as part of a restructuring intended to improve operational efficiencies and operating costs and better align the Company’s workforce with current business needs, top strategic priorities, and key growth opportunities.
20

ASANA, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
The Company has completed payments associated with these restructuring charges in the three months ended April 30, 2023 and did not incur any additional restructuring costs during the three months ended April 30, 2024 and 2023. The following table summarizes the Company’s restructuring liabilities (in thousands):
Restructuring Liability
Beginning balance as of February 1, 2023$873 
Charges (benefit)(147)
Payments(707)
Foreign currency translation adjustment(19)
Ending balance as of April 30, 2023$ 
21


ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K filed with the SEC on March 14, 2024. As described in the section titled “Special Note Regarding Forward-Looking Statements,” the following discussion and analysis contains forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they never materialize or prove correct, could cause our results to differ materially from those expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified below and those discussed in the section titled “Risk Factors” included under Part II, Item 1A below.
Overview
Asana is a leading work management software platform with an enterprise focus that helps organizations drive strategic initiatives and automate work in one place. Customers use Asana to automate complex operational workflows like product launches and employee onboarding, resource planning, tracking company-wide strategic initiatives and more. Our secure and scalable platform with AI-powered features adds structure to unstructured work, creating clarity, accountability, and impact for everyone within an organization—executives, department heads, team leads, and individuals—so everyone understands exactly who is doing what, by when, and why.
Asana is flexible and applicable to virtually any use case across departments and organizations of all sizes. We designed our platform to be easy to use and intuitive to all users, regardless of role or technical proficiency. Our platform allows users to work the way they want with the interface that is right for them, using lists, calendars, boards, timelines, and workload, all while providing trusted scalability and reliability.
Key Business Metrics
We believe that our growth and financial performance are dependent upon many factors, including the key factors described below.
Paying Customers
We are focused on continuing to grow the number of customers that use our platform, and specifically on growing the number of customers spending over $5,000 on an annualized basis (“Core customers”), and those spending over $100,000 on an annualized basis. Our operating results and growth opportunity depend, in part, on our ability to attract new customers and expand within those same organizations. We believe we have significant greenfield opportunities among addressable customers worldwide and we will continue to invest in our research and development and our sales and marketing organizations to address this opportunity.
We define a customer as a distinct account, which could include a team, company, educational or government institution, organization, or distinct business unit of a company, that is on a paid subscription plan, a free version, or a free trial of one of our paid subscription plans. A single organization may have multiple customers. We define a paying customer as a customer on a paid subscription plan.
We define customers spending over $5,000 and $100,000 as those organizations on a paid subscription plan that had $5,000 or more or $100,000 or more in annualized GAAP revenues in a given quarter, respectively, inclusive of discounts. As customers realize the productivity benefits we provide, our platform often becomes critical to managing their work and achieving their objectives, which drives further adoption and expansion opportunities, and results in higher annualized contract values. We believe that our ability to increase the number of these customers is an important indicator of the components of our business, including: the continued acquisition of new customers, retaining and expanding our user base within existing customers, our continued investment in product development and functionality required by larger organizations, and the strategic expansion of our direct sales force.
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.
22


As of April 30, 2024 and 2023, we had 607 and 510 customers spending over $100,000, on an annualized basis, respectively.
Dollar-based Net Retention Rate
We expect to derive a portion of our revenue growth from expansion within our existing customer base, where we have an opportunity to expand adoption of Asana across teams, departments, and organizations. We believe that our dollar-based net retention rate demonstrates our opportunity to further expand within our existing customer base, particularly those that generate higher levels of annual revenues.
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.
As of April 30, 2024 and 2023, our dollar-based net retention rate was 100% and over 110%, respectively.
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 Economic Conditions
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.
Components of Results of Operations
Revenues
We generate subscription revenues from paying customers accessing our cloud-based platform. Subscription revenues are driven primarily by the number of paying customers, the number of paying users within the customer base, and the level of subscription plan. We recognize revenues ratably over the related contractual term beginning on the date that the platform is made available to a customer.
Due to the ease of implementation of our platform, revenues from professional services have been immaterial to date.
Cost of Revenues
Cost of revenues consists primarily of the cost of providing our platform to free users and paying customers and is comprised of third-party hosting fees, personnel-related expenses for our operations and support personnel including allocated overhead costs for facilities and shared IT-related expenses, third-party implementation services partner fees, credit card processing fees, and amortization of our capitalized internal-use software costs.
As we acquire new customers and existing customers increase their use of our cloud-based platform, we expect that our cost of revenues will continue to increase.
23


Gross Profit and Gross Margin
Gross profit, or revenues less cost of revenues, and gross margin, or gross profit as a percentage of revenues, has been and will continue to be affected by various factors, including the timing of our acquisition of new customers, renewals of and follow-on sales to existing customers, costs associated with operating our cloud-based platform, and the extent to which we expand our operations and customer support organizations. We expect our gross profit to increase in dollar amount and our subscription gross margin to remain relatively consistent over the long term.
Operating Expenses
Our operating expenses consist of research and development, sales and marketing, and general and administrative expenses. Personnel-related expenses are the most significant component of operating expenses and consist of salaries, employer payroll taxes, benefits, stock-based compensation expense, and, in the case of sales and marketing expenses, sales commissions. Operating expenses also include an allocation of overhead costs for facilities and shared IT-related expenses, including depreciation expense.
Research and Development
Research and development expenses consist primarily of personnel-related expenses. These expenses also include product design costs, third-party services and consulting expenses, software subscriptions and computer equipment used in research and development activities, and allocated overhead costs. A substantial portion of our research and development efforts are focused on enhancing our software architecture and adding new features and functionality to our platform. We anticipate continuing to invest in innovation and technology development, including the integration of AI in our product, and as a result, we expect research and development expenses to continue to increase in dollar amount, but to decrease as a percentage of revenues over time.
Sales and Marketing
Sales and marketing expenses consist primarily of personnel-related expenses and expenses for performance marketing, brand marketing, pipeline generation, and sponsorship activities. These expenses also include allocated overhead costs and travel-related expenses. Sales commissions earned by our sales force that are considered incremental and recoverable costs of obtaining a subscription with a customer are deferred and amortized on a straight-line basis over the expected period of benefit of three years.
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.
General and Administrative
General and administrative expenses consist primarily of personnel-related expenses for our finance, human resources, information technology, and legal organizations. These expenses also include non-personnel costs, such as outside legal, accounting, and other professional fees, software subscriptions and expensed computer equipment, certain tax, license, and insurance-related expenses, and allocated overhead costs.
We have recognized and will continue to recognize certain expenses as part of being a publicly traded company, consisting of professional fees and other expenses. As a public company, we incur additional costs associated with accounting, compliance, insurance, and investor relations. We expect our general and administrative expenses to continue to increase in dollar amount for the foreseeable future but to generally decrease as a percentage of our revenues, although the percentage may fluctuate from period to period depending on the timing and amount of our general and administrative expenses.
Interest Income and Other Income (Expense), Net and Interest Expense
Interest income and other income (expense), net consists of income earned on our marketable securities and investments, in addition to foreign currency transaction gains and losses.
24


Interest expense consists of interest expense from our credit facilities.
Provision for Income Taxes
Provision for income taxes consists primarily of income taxes in certain foreign jurisdictions in which we conduct business. To date, we have not recorded a material provision for income taxes for any of the periods presented other than for foreign income tax. We have recorded deferred tax assets for which we provide a full valuation allowance, which primarily include net operating loss carryforwards and research and development tax credit carryforwards. We expect to maintain this full valuation allowance for the foreseeable future as it is more likely than not the deferred tax assets will not be realized based on our history of losses.
Results of Operations
The following tables set forth our results of operations for the periods presented and as a percentage of our revenues for those periods. The period-to-period comparison of financial results is not necessarily indicative of financial results to be achieved in future periods.
Three Months Ended April 30,
20242023
(in thousands)
Revenues$172,448 $152,411 
Cost of revenues (1)
17,804 14,847 
Gross profit154,644 137,564 
Operating expenses:
Research and development (1)
82,791 76,316 
Sales and marketing (1)
104,332 93,237 
General and administrative (1)
33,690 33,256 
Total operating expenses220,813 202,809 
Loss from operations(66,169)(65,245)
Interest income and other income (expense), net4,360 5,666 
Interest expense(942)(967)
Loss before provision for income taxes(62,751)(60,546)
Provision for income taxes971 922 
Net loss$(63,722)$(61,468)
__________________
(1)Amounts include stock-based compensation expense as follows:
Three Months Ended April 30,
20242023
(in thousands)
Cost of revenues$283 $322 
Research and development26,740 23,497 
Sales and marketing15,248 11,533 
General and administrative6,369 6,146 
Total stock-based compensation expense$48,640 $41,498 
25




The following table sets forth the components of our statements of operations data, for each of the periods presented, as a percentage of revenues.
Three Months Ended April 30,
20242023
(percent of revenues)
Revenues100 %100 %
Cost of revenues 10 10 
Gross margin90 90 
Operating expenses:
Research and development 48 50 
Sales and marketing 61 61 
General and administrative 20 22 
Total operating expenses128 133 
Loss from operations(38)(43)
Interest income and other income (expense), net
Interest expense**
Loss before provision for income taxes(36)(40)
Provision for income taxes**
Net loss(37)%(40)%
_______________
* Less than 1%
Note: Certain figures may not sum due to rounding.
Comparison of Three Months Ended April 30, 2024 to Three Months Ended April 30, 2023
Revenues
Three Months Ended April 30,
20242023$ Change% Change
(dollars in thousands)
Revenues$172,448 $152,411 $20,037 13 %

Revenues increased $20.0 million, or 13%, during the three months ended April 30, 2024 compared to the three months ended April 30, 2023. The increase in revenues was due to the addition of new paying customers, a continued shift in our sales mix toward our higher priced subscription plans, such as Advanced, Enterprise and Enterprise+ plans.
Cost of Revenues and Gross Margin
Three Months Ended April 30,
20242023$ Change% Change
(dollars in thousands)
Cost of revenues $17,804 $14,847 $2,957 20 %
Gross margin90 %90 %

26


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 to an 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 $0.2 million in fees to third-party support vendors.
Our gross margin remained consistent during the three months ended April 30, 2024 compared to the three months ended April 30, 2023.
Operating Expenses
Three Months Ended April 30,
20242023$ Change% Change
(dollars in thousands)
Research and development$82,791 $76,316 $6,475 %
Sales and marketing104,332 93,237 11,095 12 %
General and administrative33,690 33,256 434 %
Total operating expenses$220,813 $202,809 $18,004 %
Research and Development
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.
Sales and Marketing
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.
General and Administrative
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 $0.4 million in insurance expenses.
Interest Income, Interest Expense, and Other Income (Expense), Net
Three Months Ended April 30,
20242023$ Change% Change
(dollars in thousands)
Interest income and other income (expense), net$4,360 $5,666 $(1,306)(23)%
Interest expense(942)(967)25 (3)%

Interest income and other income (expense), net decreased by $1.3 million during the three 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.
27


Non-GAAP Financial Measures
The following tables present certain non-GAAP financial measures for each period presented below. In addition to our results determined in accordance with GAAP, we believe these non-GAAP financial measures are useful in evaluating our operating performance. See below for a description of the non-GAAP financial measures and their limitations as an analytical tool.
Three Months Ended April 30,
20242023
(in thousands)
Non-GAAP loss from operations$(15,770)$(22,274)
Non-GAAP net loss$(13,323)$(18,497)
Free cash flow$(4,275)$(16,573)
Non-GAAP Loss From Operations and Non-GAAP Net Loss
We define non-GAAP loss from operations as loss from operations plus stock-based compensation expense and the related employer payroll tax associated with RSUs, impairment of long-lived assets, as well as non-recurring costs, such as restructuring costs. The amount of employer payroll tax-related items on employee stock transactions is dependent on our stock price and other factors that are beyond our control and that do not correlate to the operation of the business. When evaluating the performance of our business and making operating plans, we do not consider these items (for example, when considering the impact of equity award grants, we place a greater emphasis on overall stockholder dilution rather than the accounting charges associated with such grants). We believe it is useful to exclude these expenses in order to better understand the long-term performance of our core business, to facilitate comparison of our results to those of peer companies, and to facilitate comparison over multiple periods.
We define non-GAAP net loss as net loss plus stock-based compensation expense and the related employer payroll tax associated with RSUs, impairment of long-lived assets and non-recurring costs such as restructuring costs.
We use non-GAAP loss from operations and non-GAAP net loss in conjunction with traditional GAAP measures to evaluate our financial performance. We believe that non-GAAP loss from operations and non-GAAP net loss provide our management and investors consistency and comparability with our past financial performance and facilitates period-to-period comparisons of operations.
Free Cash Flow
We define free cash flow as net cash from operating activities less cash used for purchases of property and equipment and capitalized internal-use software costs, plus non-recurring expenditures such as capital expenditures from the purchases of property and equipment associated with the build-out of our corporate headquarters in San Francisco, and restructuring costs. We believe that free cash flow is a useful indicator of liquidity that provides information to management and investors, even if negative, about the amount of cash used in our operations other than that used for investments in property and equipment and capitalized internal-use software costs, adjusted for non-recurring expenditures.
Limitations and Reconciliations of Non-GAAP Financial Measures
Non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation or as substitutes for financial information presented under GAAP. There are a number of limitations related to the use of non-GAAP financial measures versus comparable financial measures determined under GAAP. For example, other companies in our industry may calculate these non-GAAP financial measures differently or may use other measures to evaluate their performance. In addition, free cash flow does not reflect our future contractual commitments and the total increase or decrease of our cash balance for a given period. All of these limitations could reduce the usefulness of these non-GAAP financial measures as analytical tools. Investors are encouraged to review the related GAAP financial measures and the reconciliations of these non-GAAP financial measures to their most directly comparable GAAP financial measures and to not rely on any single financial measure to evaluate our business.
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The following tables reconcile the most directly comparable GAAP financial measure to each of these non-GAAP financial measures.
Non-GAAP Loss From Operations
Three Months Ended April 30,
20242023
(in thousands)
Loss from operations$(66,169)$(65,245)
Add:
Stock-based compensation and related employer payroll tax associated with RSUs50,399 43,118 
Restructuring costs— (147)
Non-GAAP loss from operations$(15,770)$(22,274)

Non-GAAP Net Loss
Three Months Ended April 30,
20242023
(in thousands)
Net loss$(63,722)$(61,468)
Add:
Stock-based compensation and related employer payroll tax associated with RSUs50,399 43,118 
Restructuring costs— (147)
Non-GAAP net loss$(13,323)$(18,497)

Free Cash Flow
Three Months Ended April 30,
20242023
(in thousands)
Net cash used in investing activities$(21,361)$(140,366)
Net cash provided by financing activities$9,947 $9,731 
Net cash used in operating activities$(1,898)$(14,593)
Less:
Purchases of property and equipment(1,002)(1,866)
Capitalized internal-use software costs(1,375)(821)
Add:
Restructuring costs paid— 707 
Free cash flow$(4,275)$(16,573)
Liquidity and Capital Resources
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.
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As of April 30, 2024, our principal sources of liquidity were cash, cash equivalents, and marketable securities of $524.3 million.
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.
Borrowings under the November 2022 Senior Secured Credit Facility may be designated as ABR Loans or SOFR Loans, subject to certain terms and conditions under the agreement. Interest will accrue on any outstanding balance at a floating rate tied to the adjusted term SOFR, the prime rate or the federal funds effective rate. Interest is payable monthly in arrears. Pursuant to the terms of the revolving credit facility, we are required to pay an annual commitment fee that accrues at a rate of 0.15% per annum on the unused portion of the borrowing commitments under the revolving credit facility. Refer to Note 6. Debt for further details.
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.
On March 27, 2023, First Citizens BancShares, Inc. (“First Citizens”) announced that it had entered into an agreement to purchase assets and liabilities of SVB, inclusive of our November 2022 Senior Secured Credit Facility. We continue to have the ability to make additional borrowings under the November 2022 Senior Secured Credit Facility which is now held by SVB as a division of First Citizens.
In September 2022, we issued and sold 19,273,127 shares of our Class A common stock to our CEO in a private placement transaction at a purchase price of $18.16 per share, based on the closing trading price of our Class A common stock on September 2, 2022, for aggregate proceeds of approximately $350 million. Refer to Note 10. Stockholders’ Deficit for details.
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.
We assess our liquidity primarily through our cash on hand as well as the projected timing of billings under contract with our paying customers and related collection cycles. We believe our current cash, cash equivalents, marketable securities, and amounts available under our November 2022 Senior Secured Credit Facility will be sufficient to meet our working capital and capital expenditure requirements for at least the next 12 months. Our future capital requirements will depend on many factors, including our revenue growth rate, subscription renewal activity, billing frequency, our dollar-based-net-retention rate, the timing and extent of spending to support our research and development efforts, particularly for the introduction of new and enhanced products and features, including the integration of AI in our product, the performance of sales and marketing activities, costs associated with international expansion, additional capital expenditures to invest in existing and new office spaces, as well as increased general and administrative expenses to support being a publicly traded company. We may, in the future, enter into arrangements to acquire or invest in complementary businesses, services, and technologies, including intellectual property rights. We may seek to raise additional funds at any time through equity, equity-linked arrangements, and debt. If we are unable to raise additional capital when desired and at reasonable rates, our business, results of operations, and financial condition would be adversely affected. Additionally, cash from operations could also be affected by various risks and uncertainties in connection with the impact of an economic downturn or recession, significant market volatility in the global economy, timing and ability to collect payments from our customers and other risks detailed in Part II—Other Information, Item 1A. Risk Factors.
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Cash Flows
The following table shows a summary of our cash flows for the periods presented:
Three Months Ended April 30,
20242023
(in thousands)
Net cash used in operating activities$(1,898)$(14,593)
Net cash used in investing activities(21,361)(140,366)
Net cash provided by financing activities9,947 9,731 
Operating Activities
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.
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.
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, and net 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 by a $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.
Investing Activities
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.
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.
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Financing Activities
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.
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.
Contractual Obligations and Commitments
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.
For further information on our commitments and contingencies, refer to Note 7. Commitments and Contingencies in the condensed consolidated financial statements contained within this Quarterly Report on Form 10-Q.
In November 2022, we entered into the November 2022 Senior Secured Credit Facility with SVB, as discussed in Liquidity and Capital Resources above.
Indemnification Agreements
In the ordinary course of business, we enter into agreements of varying scope and terms pursuant to which we agree to indemnify customers, vendors, lessors, business partners, and other parties with respect to certain matters, including, but not limited to, losses arising out of the breach of such agreements, services to be provided by us, or from intellectual property infringement claims made by third parties. Additionally, in connection with the listing of our Class A common stock on the NYSE, we have entered into indemnification agreements with our directors and certain officers and employees that will require us, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors, officers, or employees. No demands have been made upon us to provide indemnification under such agreements, and there are no claims that we are aware of that could have a material effect on our financial position, results of operations, or cash flows.
Critical Accounting Estimates
Our unaudited condensed consolidated financial statements are prepared in accordance with GAAP. The preparation of these unaudited condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses and related disclosures. We evaluate our estimates and assumptions on an ongoing basis. Our estimates are based on historical experience and various other assumptions that we believe to be reasonable under the circumstances. Our actual results could differ from these estimates.
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.
Recent Accounting Pronouncements
See Note 2. Basis of Presentation and Summary of Significant Accounting Policies to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for more information regarding recent accounting pronouncements.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Quantitative and Qualitative Disclosures About Market Risk
We have operations in the United States and internationally, and we are exposed to certain market risks in the ordinary course of our business.
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Interest Rate Risk
Our cash, cash equivalents, and marketable securities primarily consist of cash on hand and highly liquid investments in money market funds, U.S. government securities, corporate bonds, and commercial paper. As of April 30, 2024 and January 31, 2024, we had cash and cash equivalents of $222.0 million and $236.7 million, respectively, and marketable securities of $302.2 million and $282.8 million, respectively. We do not enter into investments for trading or speculative purposes. Our investments are exposed to market risk due to fluctuations in interest rates, which may affect our interest income and the fair value of our investments. As of April 30, 2024, a hypothetical increase in interest rates for our investments by 100 basis points would not have a material impact on our condensed consolidated financial statements.
Any borrowings under the revolving credit facility bear interest at a variable rate tied to the adjusted term SOFR, the prime rate, or the federal funds effective rate. As of April 30, 2024, we had $46.9 million outstanding under the credit facility. We do not have any other long-term debt or financial liabilities with floating interest rates that would subject us to interest rate fluctuations. As of April 30, 2024, a hypothetical increase of 100 basis points in interest rates for our revolving credit facility would not have a material impact on our condensed consolidated financial statements.
Foreign Currency Risk
The majority of our subscription agreements are denominated in U.S. dollars, with the remainder generated in Euros, British Pounds, Australian Dollars, Japanese Yen, Mexican Pesos, Brazilian Reais, Canadian Dollars, and South Korean Won. A portion of our operating expenses are incurred outside the United States, denominated in foreign currencies, and subject to fluctuations due to changes in foreign currency exchange rates, particularly changes in the Euro, British Pound, Canadian Dollar, Australian Dollar, Japanese Yen, Icelandic Krona, Singapore Dollar, Swiss Franc, and Polish Zloty. Our results of operations and cash flows are, therefore, subject to fluctuations in foreign currency exchange rates that are unrelated to our operating performance.
As exchange rates may fluctuate significantly between periods, our non-U.S. dollar denominated revenue and operating expenses may also experience significant fluctuations between periods as we convert these to U.S. dollars. Volatile market conditions arising from the macro environment have and may in the future result in significant changes in exchange rates, and in particular a weakening of foreign currencies relative to the U.S. dollar has and may in the future negatively affect our revenue expressed in U.S. dollars. In the three months ended April 30, 2024, 25% of our sales were denominated in currencies other than U.S. dollars. Our expenses, by contrast, are primarily denominated in U.S. dollars. As a result, any increase in the value of the U.S. dollar against these foreign currencies could cause our revenue to decline relative to our costs, thereby decreasing our margins. We disclose the impact of realized foreign currency gains and losses within Note 11. Interest Income and Other Income (Expense), Net. A hypothetical 10% change in foreign currency rates would not have resulted in material gains or losses for the three months ended April 30, 2024 and 2023.
As the impact of foreign currency exchange rates are not projected to be material to our operating results, we have not entered into derivative or hedging transactions, but we may do so in the future if our exposure to foreign currency becomes more significant.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of April 30, 2024. In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives, and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of April 30, 2024, our disclosure controls and procedures were effective to provide reasonable assurance that information we are required to disclose in reports we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the Commission’s rules and forms, and that such
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information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting identified in connection with the evaluation required by Rules 13a-15(d) and 15d-15(d) of the Exchange Act during the quarter ended April 30, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II—OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
We are not a party to any material pending legal proceedings. From time to time, we may be subject to legal proceedings and claims arising in the ordinary course of business.
ITEM 1A. RISK FACTORS
Investing in our Class A common stock involves a high degree of risk. You should carefully consider the risks described below, together with the other information in this Quarterly Report on Form 10-Q, including our condensed consolidated financial statements and related notes and the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” before deciding whether to invest in our Class A common stock. The occurrence of any of the events or developments described below could materially and adversely affect our business, financial condition, results of operations, and growth prospects. In such an event, the market price of our Class A common stock could decline, and you may lose all or part of your investment. Additional risks and uncertainties not presently known to us or that we currently believe are not material may also impair our business, financial condition, results of operations, and growth prospects.
Risks Related to Our Business and Industry
We have experienced rapid growth in prior periods, and our prior growth rates may not be indicative of our future growth.
We have experienced rapid growth in prior periods and we may not be able to achieve similar revenue growth rates in the future. Further, as we continue to operate in a new and rapidly changing category of work management software, widespread acceptance and use of our platform is critical to our future growth and success. We believe our revenue growth depends on a number of factors, including, but not limited to, our ability to:
attract new individuals, teams, and organizations as customers;
grow or maintain our dollar-based net retention rate, expand usage within organizations, and sell subscriptions;
price and package our subscription plans effectively;
convert individuals, teams, and organizations on our free and trial versions into paying customers;
achieve widespread acceptance and use of our platform, including in markets outside of the United States;
strategically expand our direct sales force and leverage our existing sales capacity;
expand the features and capabilities of our platform, including the successful deployment of AI features in our product;
provide excellent customer experience and customer support;
maintain the security, privacy, and reliability of our platform or systems that process confidential data;
successfully compete against established companies and new market entrants, as well as existing software tools; and
increase awareness of our brand on a global basis.
If we are unable to accomplish these tasks, our revenue growth would be harmed. We also expect our operating expenses to increase in future periods, and if our revenue growth does not increase to offset these anticipated increases in our operating expenses, our business, results of operations, and financial condition will be harmed, and we may not be able to achieve or maintain profitability.
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We have a limited operating history at our current scale, which makes it difficult to evaluate our future prospects and may increase the risk that we will not be successful.
We have grown rapidly in prior periods and, as a result, have a relatively short history operating our business at its current scale. Furthermore, we operate in an industry that is characterized by rapid technological innovation, intense competition, changing customer needs, and frequent introductions of new products, technologies, and services. In particular, advancements in technology such as AI and machine learning are changing the way people work by automating tasks, enhancing communication, and improving decision-making processes, and businesses that are slow to adopt these new technologies may face a competitive disadvantage. We have encountered, and will continue to encounter, risks and uncertainties frequently experienced by growing companies in evolving industries. In addition, our future growth rate is subject to a number of uncertainties, such as general macroeconomic and market conditions, including rising interest rates, inflation, actual or anticipated bank failures, instability in financial markets, and economic downturns or recessions in the regions in which we do business. If our assumptions regarding these risks and uncertainties, which we use to plan our business, are incorrect or change in reaction to changes in the market, or if we do not address these risks successfully, our results of operations could differ materially from our expectations, and our business, results of operations, and financial condition would suffer.
We have a history of losses, and we may not be able to achieve profitability or, if achieved, sustain profitability.
We have incurred net losses in each fiscal year since our founding. We generated net losses of $63.7 million and $61.5 million for the three months ended April 30, 2024 and 2023, respectively. As of April 30, 2024, we had an accumulated deficit of $1,558.3 million. We do not expect to be profitable in the near future, and we cannot assure you that we will achieve profitability in the future or that, if we do become profitable, we will sustain profitability. These losses reflect, among other things, the significant investments we made to develop and commercialize our platform, serve our existing customers, and broaden our customer base.
We expect to continue to make future investments and expenditures related to the growth of our business, including:
strategic investment in our sales and marketing activities;
continued investments in research and development to introduce new features and enhancements to our platform, including integration of AI in our product;
hiring employees necessary to support our goals;
investments in infrastructure;
leveraging our operations across our multiple geographies; and
costs associated with our general and administrative organization.
As a result of these investments and expenditures, we may experience losses in future periods that may increase significantly. Therefore, our losses in future periods may be significantly greater than the losses we would incur if we developed our business more slowly. In addition, we may find that these efforts are more expensive than we currently anticipate or that they may not result in increases in our revenues. We cannot be certain that we will be able to achieve, sustain, or increase profitability on a quarterly or annual basis. Any failure by us to achieve and sustain profitability would cause the trading price of our Class A common stock to decline.
We believe our long-term value as a company will be greater if we focus on growth, which may negatively impact our profitability in the near and medium term.
A significant part of our business strategy and culture is to focus on long-term growth and customer success over short-term financial results. As a result, in the near and medium term, we may continue to operate at a loss, or our near- and medium-term profitability may be lower than it would be if our strategy were to maximize near- and medium-term profitability. We expect to continue making expenditures on sales and marketing efforts, and expenditures to grow our platform and develop new features, integrations, capabilities, and enhancements to our platform. Such expenditures may not result in improved business results or profitability over the long term. If we are
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ultimately unable to achieve or improve profitability at the level or during the time frame anticipated by securities or industry analysts and our stockholders, the trading price of our Class A common stock may decline.
Our quarterly results may fluctuate significantly and may not meet our expectations or those of investors or securities analysts.
Our quarterly results of operations, including the levels of our revenues, deferred revenue, working capital, and cash flows, may vary significantly in the future, such that period-to-period comparisons of our results of operations may not be meaningful. Our quarterly financial results may fluctuate due to a variety of factors, many of which are outside of our control and may be difficult to predict, including, but not limited to:
the level of demand for our platform;
our ability to grow or maintain our dollar-based net retention rate, expand usage within organizations, and sell subscriptions;
the timing and success of new features, integrations, capabilities, and enhancements by us to our platform, or by our competitors to their products, including the development and deployment of AI driven features, or any other changes in the competitive landscape of our market;
our ability to achieve widespread acceptance and use of our platform;
errors in our forecasting of the demand for our platform, which would lead to lower revenues, increased costs, or both;
the amount and timing of operating expenses and capital expenditures, as well as entry into operating leases, that we may incur to maintain and expand our business and operations and to remain competitive;
the timing of expenses and recognition of revenues;
security breaches, technical difficulties, or interruptions to our platform;
pricing pressure as a result of competition or otherwise;
adverse litigation judgments, other dispute-related settlement payments, or other litigation-related costs;
the number of new employees hired;
the timing of the grant or vesting of equity awards to employees, directors, or consultants;
seasonal buying patterns for software spending;
declines in the values of foreign currencies relative to the U.S. dollar;
rising global interest rates, which may affect our customers’ spending patterns and our return on investments;

impact of inflation on our costs and on customer spending;

changes in, and continuing uncertainty in relation to, the legislative or regulatory environment;
legal and regulatory compliance costs in new and existing markets;
costs and timing of expenses related to the potential acquisition of businesses, talent, technologies, or intellectual property, including potentially significant amortization costs and possible write-downs;
health epidemics, such as influenza, and other highly communicable diseases or viruses; and
general economic conditions in either domestic or international markets, including geopolitical uncertainty and instability and their effects on software spending.
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Any one or more of the factors above may result in significant fluctuations in our quarterly results of operations, which may negatively impact the trading price of our Class A common stock. You should not rely on our past results as an indicator of our future performance.
The variability and unpredictability of our quarterly results of operations or other operating metrics could result in our failure to meet our expectations or those of investors or analysts with respect to revenues or other metrics for a particular period. If we fail to meet or exceed such expectations for these or any other reasons, the trading price of our Class A common stock would fall, and we would face costly litigation, including securities class action lawsuits.
We may not be able to effectively manage our growth.
We have historically experienced rapid growth and increasing demand for our platform. The growth and expansion of our business and platform may place a significant strain on our management, operational, and financial resources. We are required to manage multiple relationships with various strategic partners, customers, and other third parties. In the event of further growth of our operations or in the number of our third-party relationships, our systems, procedures, or internal controls may not be adequate to support our operations, and our management may not be able to manage such growth effectively. To effectively manage our growth, we must continue to implement and improve our operational, financial, and management information systems and expand, train, and manage our employee base.
If we are unable to attract new customers, convert individuals, teams, and organizations using our free and trial versions into paying customers, and expand usage within organizations or develop new features, integrations, capabilities, and enhancements that achieve market acceptance, our revenue growth would be harmed.
To increase our revenues and achieve profitability, we must increase our customer base through various methods, including but not limited to, adding new customers, converting individuals, teams, and organizations using our free and trial versions into paying customers, and expanding usage within organizations. We encourage customers on our free and trial versions to upgrade to paid subscription plans. Additionally, we seek to expand within organizations by adding new customers, having organizations upgrade to our Advanced, Enterprise, or Enterprise+ plans, or expanding their use of our platform into other departments within an organization. While we have experienced significant growth in the number of customers, we do not know whether we will continue to achieve similar customer growth rates in the future. Numerous factors may impede our ability to add new customers, convert individuals, teams, and organizations using our free and trial versions into paying customers, expand usage within organizations, and sell subscriptions to our platform, including but not limited to, our failure to attract and effectively train new sales and marketing personnel, failure to retain and motivate our current sales and marketing personnel, failure to develop or expand relationships with partners, failure to compete effectively against alternative products or services, failure to successfully deploy new features and integrations, failure to provide a quality customer experience and customer support, or failure to ensure the effectiveness of our marketing programs. Additionally, as we focus on increasing our sales to larger organizations, we will be required to deploy sophisticated and costly sales