Asana, Inc. (NYSE:ASAN) Q3 2023 Earnings Call Transcript

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Sophie Lee: Thank you.

Operator: Our next question comes from line of Brent Bracelin with Piper Sandler. Please go ahead.

Brent Bracelin: Good afternoon. Maybe I’ll start here with a question for Anne or Tim here on the €“ the industry vertical breakout. We’ve seen several software companies that have gained popularity with digital natives and tech and Internet names that are really starting to see their growth being pressured. And so from an industry vertical perspective, what portion of the revenue today is by the tech Internet software and the pause that you’re talking about here? Is it predominantly in just tech, or are you seeing the pause in both the tech Internet space and other areas as well? Any color there would be helpful.

Anne Raimondi: Yeah. Brent, thanks for that question. We have been traditionally very strong in tech, but it’s the plurality, not necessarily the majority globally. So as we €“ and so certainly, some of what we’re seeing comes from was happening to our tech customers as they pause hiring or, in some cases, had layoff, but as we continue to broaden across industries. We’re definitely seeing strong fit with media, automotive, financial services, along with professional services, health care, consumer goods and retail. So, consistent themes in those verticals are the desire speed in their digital transformation initiative and being able to respond quickly in this macro. So we really feel like we have our value proposition well suited to these companies that are looking at transformation to better compete and drive efficiency.

So yes, tech, we’re seeing that. But as we diversify across verticals, really seeing some of those other industries actually embrace transformation more quickly.

Brent Bracelin: Got it. So it sounds like they’re clearly pause in tech, but in these other areas that you talked about, there is a pause that you’re flagging at this point?

Dustin Moskovitz: I guess, it’s really hard to answer that in a blanket way. I think when we were talking about our Q2 results. We were talking about some similar dynamics in Europe, which was a blend of industries. And then this time, like tech is a factor, but that is where a lot of these positives are. But again, in some cases, those customers are deploying more aggressively, and we’re still signing new multiyear deals or going wall-to-wall in those customers. And in some non-tech cases, there’s a pause. And my mental model on the economy is that, it’s sort of hitting the sectors and waves. And so I’m a little reluctant to say like the whole problem is tech. And then next quarter, it’s a different sector that’s kind of feeling the impact — and so it’s really a mix.

But that said, I think in America, it’s a larger plurality, still not the majority, and it’s more represented in our very largest customers. So, in terms of the strategic accounts, expanding a little more modestly, I think it’s fair to say that, that trend is more concentrated in tech, and it’s not something I expect to be ongoing. I think that there most sort of reacting in an acute sort of shocked way to what happened in the market and really in this particular time frame.

Operator: Thank you. Our next question comes from the line of Jackson Ader with SVB Securities MoffettNathanson. Please go ahead.

Jackson Ader: All right. Thanks for taking my questions guys. First, Dustin, maybe on the over-hiring of talent acquisition and new sales that you’re talking about. Outside of the macro environment, I’m just curious like do you feel like it was working? And when things start to maybe turn more positive in the macro environment, do you feel like you have a good playbook just to spin that motion back up, or is it more like you have some learnings that say, I’m not really sure if that was the way to go anyway.

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