Brent Thill: Quick follow-up for Tim. Is there a way to split SMB versus enterprise as a mix, just ballpark to think through that allocation of revenue to each of those buckets?
Operator: Our next question comes from the line of Josh Baer with Morgan Stanley. Please go ahead.
Sophie Lee: Hi. Thanks for taking my question. This is Sophie Lee on for Josh Baer. I guess my question is, when you say you expect NRR to be — continue to be pressured going forward, what kind of churn and expansion dynamics are you kind of thinking about? Are those more related to, I guess, less seat expansions, or are you implying more, I guess, lower dollar expansions as customers downgrade to cheaper plans? Just curious what you’re thinking about there.
Tim Wan: Yes. Let me try to answer Brent’s question first. I think I was on mute, and then I’ll jump back into this churn question. Brent, what I was — your question about how to think about the two segments of the business. I would look at our business like the sub-5,000 as one part of our business and the above 5,000 as another part of the business. And if you look at that, if you just kind of break that out, our sub-5,000 business grew at about 18% year-on-year. And our 5,000 cohort grew north of 50%. And that cohort also has much stronger NRR than the sub-5,000. And that’s kind of been the way we’ve been running the business and like how do we move these 5,000 customers up into 25,000, 50,000, 100,000. And that’s really been the motion that we’re focused on and we’ll continue to invest in.
Now back to the churn question or the net expansion rate question. I would probably prioritize it as one. We’re not seeing logo churn. Logo churn is actually quite stable. So customers are not churning off Asana. That’s one. Two, there’s probably some component, but I think it’s relatively small of downgrades, meaning customers may have — some customers have pre-bought into thinking that they would grow into a certain size. And given the macro environment, they’ve decided to downgrade during the renewal. So we see some of that. I think the bigger impact primarily has been kind of the expansion rates. And the expansion rate is just a combination of customers like taking a pause right now just given the macro to try to understand how fast they want to grow their headcount, how much hiring they want to do over the next 12 to 24 months, and just have a lot more certainty around their own business before making that investment.
So as I kind of mentioned earlier, like the pipeline hasn’t changed. The conversations are still happening. But I would say like we did see some noticeable pause in some deals where customers are trying to reflect on their own plans before moving forward.
Sophie Lee: Sounds good. And a quick follow-up, what are kind of like the incentives for customers to sign on to multiyear deals despite a more challenging budgetary environment?
Tim Wan: I would say, most of these €“ the larger deals are negotiated. So there’s some combination of pricing that gets discussed, if customers are willing to move into a multiyear deal. And then the other lever for customers, and especially in this environment, I think customers are looking for this, and it impacts billing is they’re asking for different payment terms, a different structure in terms of how the timing of which they’ll pay us. So those are generally the two things that I would say that, customers are kind of looking at. And we did actually have, we did actually saw a noticeable increase in our multiyear deals this quarter versus last quarter, which is really encouraging as well.
