Alex Zukin : So maybe just a few for me. One kind of generative AI question, which is par for the course right now for most investors, and then one financial one. Dustin, I guess, long term, when we’ve kind of talked about visions for Asana, I think one of the visions you’ve always had is that ultimately, Asana, based on the corpus of knowledge and interactions and cross-functional data that you have — when an individual comes to work, they could kind of ask your platform, what’s the next — what should I do today, right? And it assigns — it could assign theoretically those next actions. What’s the right way to think about unlocking the value of generative AI in the Asana product platform vision? And how do you see this evolving — how do you monetize this? Is it just table stakes that every work management vendor has? Would love to kind of get your thoughts on that, and then I’ll ask a couple of math questions.
Dustin Moskovitz : Yes. Great question. Obviously, it’s a really exciting time in AI. We’ve been following really closely. I’d also like to point out, we’re really close to the OpenAI team in particular. We share a Board member in Adam D’Angelo. And the CEO, Sam Altman, actually led our Series C a few years back. So we’ve been able to talk to them about the best ways to leverage GPT and Asana and how they think about the future. And to your question, about leveraging the unique value of the work craft, just to step back, there is a sort of larger arc story AI for us that involves multiple kinds of technology, not just the ChatGPT style language models. And we’ve been working with machine learning for a while now. We actually have some data-driven experiences in the product today, and we’re continuing to build on that direction.
We are also prototyping things internally with the language models and have a lot of exciting ideas there. In terms of the generative stuff, I think the exact use case you gave I think you might be able to use language models for that. I think the other machine learning approaches may be better suited, and we’ll try both. But I do think that there’s a lot of other possibilities with generative models like summarizing long threads for you, rating up status updates, trying to just aggregate all the information in a project, and pull out the highlights, summarizing meeting transcripts. We’ve already seen a lot of that from other SaaS products already. And we’re students of the space, so we’ll incorporate the best ideas. But I think whether or not for the use case you suggested of really understanding the corpus of data, the structure of data, what’s important to that particular end user, I think whether you’re using a language model or another AI approach, the structure inherent in the Work Graph and just the information that users are putting into our system, just give us a leg up.
We have more data for those models to read and understand and create insights and help direct users to the most important work. So I think the Work Graph actually ends up being an advantage, but definitely expect to see AI used across a variety of products.
Alex Zukin : That’s awesome. I’ll put in the joke about no more TPS report…
Dustin Moskovitz : Exactly. No more handwritten ones anyway.
Operator: The next question comes from Andrew DeGasperi of Berenberg.
Andrew DeGasperi : Just maybe back to the sales reorganization or I guess the changes you’re making in the sales motion, can you maybe let us know what led you to do this kind of drastic shift? Was this — what did you learn, I guess, over the last year or two since you’ve kind of really ticked off on the enterprise side? And then generally, how is this reflected in the next few quarters in terms of the growth? I know you’re baking in some conservatism in the guidance? I am just wondering how should we think about this proceeding as we move through the year?
Anne Raimondi : Hi, Andrew. It’s Anne. Thanks so much for that question. So — the way we’re thinking about it is we’re really focused on building and scaling our enterprise selling infrastructure. So we really — we rapidly added to the sales team last fiscal year. And now we’re frankly ensuring that all the operational systems and enablement support is scaling to meet that investment. And really, what I’m laser-focused on is to make sure our enterprise sales reps time is focused on landing and expanding with the right customers and delivering fast, measurable business value. So — and that we’re doing that much more consistently and repeatedly in every market. So that’s the focus that you’ll see that we are committed to and that’s also the focus as we bring on great new sales leaders around the world. And then I think Tim will just share a little bit more about the second part of your question.
Tim Wan : Hey, Andrew. Just adding on to Anne, I think Dustin mentioned this in the script. We do have 15,000 enterprise customers. And when we look at the data, customers that are spending more than $100,000 with us, their net expansion rate this last quarter was 135%. And when we like peel back the onion and look at the data, those expansions aren’t through like just up-tiering. Many of those, the vast majority of that growth and expansion is through seats and getting more deployment in across the company. So that gives us a lot of confidence in terms of the strategy that we’re moving forward with. So that’s one. And then two, in terms of the guidance, I think — I mentioned this on the call a little bit, but just I think we’re still seeing kind of there’s a lot of macro uncertainty.
The Fed is still likely to raise rates. There’s geopolitical issues kind of about. So I think we’re trying to be really thoughtful in terms of kind of the first half being continuing to see challenges and that our customers, especially in the short term, we’ll be very mindful of their spend. We’ve also baked in some time, so for our leadership changes to ramp up and for their strategies for the strategies to take hold. So to the degree that there will be outperformance, I think it will come from the enterprise that businesses start releasing their budget and being much more thoughtful about investments. So my approach, I think, if you ask me about guidance is, I don’t think there’s a lot of downside to the guidance, and I would just not model or just be cautious on not having a lot of upside in the model this early in the year.
Andrew DeGasperi : That’s helpful. And just on the math question that Alex didn’t get to ask. I mean, just in terms of the OpEx rising low single digits in terms of — what should we think about should it? Should it be R&D really kind of growing a little bit faster overall and you’re just taking a cut to sales and marketing? How should we think about the moving parts on that?
Tim Wan : Yes. I think R&D as a percent of revenue will be relatively flat. And I wouldn’t say sales and marketing is a cut. I think the way to think about it is really a reallocation of where those resources were in prior years or even last year where we’re still focused kind of on the SMB and where we direct in many of those resources towards moving upmarket. So I think you’ll continue to see leverage like you saw this past this last quarter in sales and marketing, and you’ll continue to see leverage in G&A. And then I would expect R&D to be relatively flat on a year-over-year basis.
Operator: The next question comes from Rob Oliver of Baird.
