Rob Oliver : So a question, Dustin, for you or for Anne. It sounds as if the consolidation play is a nice change for you guys relative to last quarter. And I know that, Anne, you had mentioned last quarter that you guys were engaging more at the C level. So can you talk a little bit more about those vendor consolidation wins you guys have had? Are they seat expansion that’s coming at the expense of other vendors as people kind of do the same thing that Tim mentioned he’s doing, which is rationalizing vendors? And are these C-level decisions? Are they influenced by sort of the bottoms-up strength that you guys have with users? Talk a little bit more about those consolidation wins? And then I just had a quick follow-up.
Anne Raimondi : Hi, Rob. Thanks so much for your question. So, yes, we’re seeing consolidation wins for Asana, especially as CIOs are looking to drive consistency across our organizations and reduce the total number of applications that they’re supporting. So a couple of factors in our favor, specifically are our proven ability to scale to over 150,000 seats and growing and then the power of our Work Graph architecture, which really allows these organizations to consolidate multiple divisions or functions. And to your point, it’s really driven by the strong usage and the love for the product that exists in the organization. A few other things that we’ve been seeing our Goals product enables executives to connect the company’s top priorities to all the work that’s necessary to achieve those priorities.
And so they can do that all in Asana. The majority of our $100,000 plus customers are using Goals and 90-plus percent of those are using Goals connected to the underlying work. So we’re seeing that in this environment be especially valuable and impactful.
Rob Oliver : Great. That’s helpful. I appreciate that. And then, Tim, just one for you. I really appreciate the color around your thoughts relative to the cadence of the guidance through the year with Q1 obviously being strong, but it sounds like you’re giving yourself some room there on the ramp with some of the new managers. Is headcount — how is headcount relative to where you think it needs to be on that guidance, both sales headcount and sort of general headcount within the firm?
Tim Wan : Yes. I would say just from a headcount perspective, we’re pretty comfortable with where we’re at right now. To the degree that as we get through — as we look throughout the year, we’ll be looking for signs where we can invest. So to the degree that pipeline is stronger than our expectation, productivity is increasing, deal cycle time is decreasing. So all those things will kind of inform us on how fast we want to grow our heads. But at this point, I think we’re fairly comfortable with what we have. We want to demonstrate leverage in the business. Even if you look at our guidance, our operating margins are going to improve by about 50% year-on-year. So I think it’s — those are all progress that we want to make sure that we’re delivering and we’ll be very mindful of kind of throughout the year.
Operator: The next question comes from Brent Bracelin of Piper Sandler.
Brent Bracelin : I guess, love to see the focus on the enterprise and some of these multiyear deals. Maybe for Anne or Tim, on the NRR, even with some of the multiyear deals that NRR rate did downtick. It’s a little bit lagging because it’s trailing 12 months, but it did downtick. How much of that is — and the slowdown there is tied to just the macro slowing the pace of expansions across the base of it? Sounds like 15,000 enterprises? Or are you also seeing a drag or seat contraction with some of the broader layoffs that we’re seeing in the tech space? Just trying to parse out what those drags are you’re seeing? I understand it’s still very healthy, but in period certainly down-ticked and I’d love to have a better explanation on what’s contributing to those — that downtick in NRR.
Tim Wan : Yes, sure. This is Tim, Brent. So I would say — the color I would add to that is the NRR downtick is driven really by two things. It’s really driven by expansions being lower than historic, primarily because companies aren’t hiring us fast. And then the other piece is some downgrades within the — some of our customers, particularly in tech, who many of you know, have had layoffs. But when I look at the logo churn, those remain healthy, especially around our $50,000 and $100,000 customers, there’s virtually zero churn or logo churn within those customer base. So I think like in the short term, companies are kind of essentially kind of hunkering down a bit in terms of their spend, but they’re still deploying more seats.
And to the degree that some of the companies that may have overhired and have and have had layoffs. We do see downgrades with that customer cohort. But when we like look at the data, the logo churn is healthy. And for those companies that haven’t had layoff some of these consolidation plays, those are all seat expansions.
Brent Bracelin : Great. My last follow-up here is for Dustin. Now that ChatGPT has an API released, how quickly do you plan to test and trial and embrace some of these LOMs — transformers out there?
Dustin Moskovitz : Yes, this is Dustin. Definitely intend to test them right away. We’ve been prototyping things, but I don’t have anything to announce in terms of when we’ll have customer availability on any of that.
Operator: The next question is from Alex Zukin of Wolfe Research.
Alex Zukin : So on those math questions I promised, I guess, first, around the NRR, Tim, with the commentary about customers in tech verticals kind of downshifting or rightsizing, how long do you expect those trends to last? And I guess the key question being, given it’s a trailing four-quarter metric, it’s exiting the year clearly lower than 115 in aggregate. Where do you — where kind of is the confidence interval around where it troughs? And when do you feel like you’re going to be through the anniversarying of the primary cohorts that are down shifting? And then I’ve got a quick follow-up on just the revenue breakout for $5,000 up and $5,000 below.
Tim Wan : Yes. Sure, Alex. I think like when I — when you kind of look at the NRR, I would say we will see some continued compression because it is a four-quarter trailing number. But I would expect kind of Q3 and Q4 of this year to be — to provide some better comps for us on that NRR because it’s kind of — Q3 and Q4 was when we started to see a lot more of the tech verticals start rightsizing and having more layoffs. So that’s kind of the timing in terms of the NRR, Alex.
