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

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Robert Simmons: Got it. That makes sense. And then on the HIPAA compliance, can you talk to — you mentioned it again helped you close some deals. Was that important for Norton? And then any color on that would be helpful.

Anne Raimondi: Yes, we’re excited about because we’re early in it, right? We’ve only had it for a couple of months, and it was important in Norton and a number of other deals. We had a nice expansion with a global healthcare customer as a result. So there’s been a number of call it, smaller deployments within healthcare and healthcare technology organizations who’ve been excited for us to become HIPAA compliant to really unlock more opportunities. So I think we feel like we’re early on that, but it’s been really helpful, both including Norton as well as a number of other global healthcare customers.

Operator: Thank you. Our next question comes from the line of Fred Lee with Credit Suisse. Please go ahead.

Unidentified Analyst: Hi. This is Tim Ashton on for Fred Lee. Thank you for taking my questions. To what degree do you see achieving your calendar 2024 free cash flow target entirely within your control versus dependent on the macroeconomic environment, or asked differently, how broad is the range of macroeconomic scenarios under which you will achieve the target?

Dustin Moskovitz: It is Dustin. I think that, we feel comfortable given the current macro context that we can achieve free cash flow on the time line we laid out and that we’re fully funded to achieve it importantly. But it’s been a really volatile year, and there have been a lot of surprises, and there could be new things that happen in the future. And so it’s really hard to promise that we have complete control over things, because there’s a lot that were at the effect of. I’ve been saying that, I’m CEO of the Asana Company, but lately, Jay Powell has been CEO of the stock price and a lot of the sort of business inputs. And €“ but that doesn’t mean, we can’t react to things that change. And so we’re always behind the wheel in some sense. So if new surprises show up, then we may have to make new decisions in reaction. But I think that, we still feel pretty good about being able to achieve that time line.

Unidentified Analyst: Thank you.

Operator: Thank you. Our next question comes from the line of Patrick Walravens with JMP Securities. Please go ahead.

Patrick Walravens: Great. Thanks. So look, very big picture, maybe for Dustin, but if anyone else wants to chime in, if you take a current stockholder today, and we look forward three years, how do we win and what would make us lose?

Dustin Moskovitz: So from a from a stockholder perspective, it’s the business succeeding, obviously achieving the free cash flow milestone, but also achieving a lot of top line growth. And the way we win is by moving up market and being the category leader, especially in enterprises. And again, we’re talking a lot about sort of blended overall growth rates for the business. But when you look underneath the hood, there are a lot of signs of strength in the larger categories €“ sorry, the larger segments. So we still have 140% net dollar retention, across our very largest customers. We have very large individual deployments, including the 150,000 seats. We have the €“ we’re in the leader circle from Forrester. What €“ oh, yeah, 2.5 million seats.

So we see that we’re deploying very quickly these organizations into the greenfield opportunity that is the work management category. And so that continuing, I think, is the way to success. There’s a lot of ways that competitors might monetize differently in the short run or specialize into different niches. But the Asana strategy is to be the leading work €“ pure-play work management platform for enterprises. And I think we’re on a great path there, and that’s how we win. Yeah, I’ll leave it at that.

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