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What changed in Asana, Inc.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Asana, Inc.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+389 added−515 removedSource: 10-K (2023-03-24) vs 10-K (2022-03-24)

Top changes in Asana, Inc.'s 2023 10-K

389 paragraphs added · 515 removed · 244 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

99 edited+25 added−10 removed76 unchanged
Biggest changeOur focus on building an inclusive, dynamic, and engaging company culture has led to global recognition, as evidenced by the following awards: • Great Place to Work and FORTUNE 2021 #1 workplace in three separate categories: #1 Best Workplaces in Technology (Small and Medium), #1 Best Workplaces for Millennials (Small and Medium), and the fourth consecutive year as #1 Best Workplace in the Bay Area (Small and Medium); • Great Place to Work and FORTUNE 2021 #3 Best Small & Medium Workplaces; • Great Place to Work and FORTUNE 2021 #9 Best Workplaces for Women and for the third year in a row in the top 15; • A Great Place to Work Best Workplace for Parents in 2021; • One of Fast Company’s Best Workplaces for Innovators; and • An Inc.
Biggest changeOur focus on building an inclusive, dynamic, and engaging company culture has led to global recognition, as evidenced by the following awards: • Great Place to Work and Fortune Best Workplaces in the Bay Area 2022 for the sixth year in a row, debuting at #18 for our first year in the large company category; • Great Place to Work and Fortune Best Workplaces for Millennials 2022 #9 for the fifth year in a row; • Great Place to Work and Fortune Best Workplaces in Technology 2022 for the fifth year in a row, debuting at #21 for our first year in the large company category; • Great Place to Work and Fortune Best Workplaces 2022 #9 for Women for the fifth year in a row; • Great Place to Work and Fortune Best Workplaces for Parents 2022 for the third year in a row, #22 out of 70 and for the first time in the large company category; • Inc.
Individuals and teams need to be empowered to make autonomous decisions aligned with organizational goals to ensure business agility in rapidly changing markets. 7 Table of Contents Communication overload hurts productivity Businesses have adopted a number of applica tions to improve communication such as Skype, WeChat, WhatsApp, Microsoft Teams, and Slack, among others.
Individuals and teams need to be 7 Table of Contents empowered to make autonomous decisions aligned with organizational goals to ensure business agility in rapidly changing markets. Communication overload hurts productivity Businesses have adopted a number of applica tions to improve communication such as Skype, WeChat, WhatsApp, Microsoft Teams, and Slack, among others.
They can see their own tasks, how their dependencies owned by teammates are tracking, and how their work contributes to the overall team and organization-wide goals. Individuals can collaborate with teammates and have visibility into each team member’s responsibilities and progress.
They can see their own tasks, how dependencies owned by teammates are tracking, and how their work contributes to the overall team and organization-wide goals. Individuals can collaborate with teammates and have visibility into each team member’s responsibilities and progress.
Our direct sales force has a global presence, and consists of sales teams focused primarily on strategic accounts with expansion opportunities including department-specific and organization-wide use cases such as strategic planning, employee onboarding, and goal setting.
Our direct sales force has a global presence, and consists of sales teams focused primarily on accounts with expansion opportunities including department-specific and organization-wide use cases such as strategic planning, employee onboarding, and goal setting.
Apps built on Asana use App Components, which enable developers to display customized widgets, forms, and rules within Asana's user interface that empower teams to work more efficiently. 11 Table of Contents Asana Work Graph Hierarchy The Asana Work Graph captures the relationships, information, and people connected to units of work—tasks, projects, portfolios, goals, and more—to enable a complete, connected, and up-to-date map of work in an organization.
Apps built on Asana may use App Components, which enable developers to display customized widgets, forms, and rules within Asana's user interface that empower teams to work more efficiently. 11 Table of Contents Asana Work Graph Hierarchy The Asana Work Graph captures the relationships, information, and people connected to units of work—tasks, projects, portfolios, goals, and more—to enable a complete, connected, and up-to-date map of work in an organization.
Industry Background Teams must be coordinated and move quickly to be successful Teams today must navigate work that is increasingly cross-functional, matrixed, and distributed, while also moving quickly to meet the objectives of their organizations. With product lifecycles now shorter than ever, organizations cannot afford to be slowed down by inefficient processes.
Industry Background Organizations must be coordinated and move quickly to be successful Organizations today must navigate work that is increasingly cross-functional, matrixed, and distributed, while also moving quickly to meet the objectives of their organizations. With product lifecycles now shorter than ever, organizations cannot afford to be slowed down by inefficient processes.
Powered by a proprietary, multi-dimensional data model called the Asana Work Graph, our platform captures the relationship between the work (e.g. tasks, goals, ideas, agenda items), the information about that work (e.g. custom fields, messages, files, dependencies, status), and the people doing the work (e.g. roles, teams, divisions).
Powered by a proprietary, multi-dimensional data model called the Asana Work Graph, our platform captures the relationship between the work (e.g. tasks, goals, ideas, agenda items), the information about that work (e.g. custom fields, messages, files, dependencies, status), and the people doing the work (e.g. assignees, roles, teams, divisions).
The Asana Work Graph captures and associates units of work (tasks, projects, milestones, goals, and portfolios), the people responsible for executing those units of work, the processes in which work gets done (rules and templates), information about that work (files, comments, status, and metadata), and the relationships across and within this data.
The Asana Work Graph captures and associates units of work (tasks, projects, milestones, goals, and portfolios), the people responsible for executing those units of work, the processes in which work gets done (rules, templates, and workflows), information about that work (files, comments, status, and metadata), and the relationships across and within this data.
Some examples of how we have taken on some of that responsibility here at Asana are detailed below. • Establishing representation goals related to race/ethnicity and gender, across our functions 20 Table of Contents • Auditing and building equitable hiring processes • Dedicated outreach to candidates from underrepresented communities • Partnering with organizations aligned with underrepresented communities in the technology space including Techqueria, AfroTech, Year Up, and The Marcy Lab School • Developing individual careers through AsanaUp, our apprenticeship program focused on providing pathways to roles at Asana for individuals from historically marginalized communities • Inclusivity, Diversity, and Equity for Asana Leadership (“IDEAL”) Interviewing Policy, which ensures we interview at least one candidate from an underrepresented group and one non-male candidate for every leadership role Thrive: Our goal is to create an environment so inclusive that every employee of Asana feels confident bringing the parts of themselves to work that they need to in order to thrive in their role.
Some examples of how we have taken on some of that responsibility here at Asana are detailed below. • Establishing representation goals related to race/ethnicity and gender, across our functions • Auditing and building equitable hiring processes • Dedicated outreach to candidates from underrepresented communities • Partnering with organizations aligned with underrepresented communities in the technology space including Techqueria, AfroTech, Year Up, and The Marcy Lab School • Developing individual careers through AsanaUp, our apprenticeship program focused on providing pathways to roles at Asana for individuals from historically marginalized communities • Inclusivity, Diversity, and Equity for Asana Leadership (“IDEAL”) Interviewing Policy, which ensures we interview at least one candidate from an underrepresented group and one non-male candidate for every leadership role Thrive: Our goal is to create an environment so inclusive that every employee of Asana feels confident bringing the parts of themselves to work that they need to in order to thrive in their role.
Most important work requires coordination across teams and geographies, for example, a product launch with product, marketing and sales all working together. Without a system of record, teams move slowly, miss deadlines, and fail to live up to their full potential.
Most important work requires coordination across teams and geographies, for example, a product launch with product, marketing and sales all working together. Without a system of record, organizations move slowly, miss deadlines, and fail to live up to their full potential.
People have become prisoners to email and messaging applications, using their inboxes as makeshift to-do lists. Teams spend more time coordinating work than actually doing work Productivity gains can occur when individuals and teams have the opportunity to focus uninterrupted.
People have become prisoners to email and messaging applications, using their inboxes as makeshift to-do lists. Organizations spend more time coordinating work than actually doing work Productivity gains can occur when individuals and teams have the opportunity to focus uninterrupted.
We use these channels, as well as social media, including our Twitter account (@asana), our blog (blog.asana.com), our LinkedIn page (www.linkedin.com/company/asana), our Instagram account (@asana), and our Facebook page (www.facebook.com/asana/), to communicate with investors and the public about our company, our products and services and other matters.
We use these channels, as well as social media, including our Twitter account (@asana), our blog (blog.asana.com), our LinkedIn page (www.linkedin.com/company/asana), our Instagram account (@asana), our TikTok account (@asana), and our Facebook page (www.facebook.com/asana/), to communicate with investors and the public about our company, our products and services and other matters.
It is one of our biggest differentiators and the reason we support deployments with more than 50,000 users and win large cross-functional deals. Asana is flexible and applicable to virtually any use case across departments and organizations of all sizes. We designed our platform to be easy to use and intuitive to all users, regardless of role or technical proficiency.
It is one of our biggest differentiators and the reason we support deployments with more than 150,000 users and win large cross-functional deals. Asana is flexible and applicable to virtually any use case across departments and organizations of all sizes. We designed our platform to be easy to use and intuitive to all users, regardless of role or technical proficiency.
Yet there were no products in the market that adequately addressed this pain. As a result of that frustration, they were inspired to create Asana to solve this problem for the world’s teams. Since our inception, over 35 million users have registered on Asana and millions of teams in virtually every country around the world have used Asana.
Yet there were no products in the market that adequately addressed this pain. As a result of that frustration, they were inspired to create Asana to solve this problem for the world’s teams. Since our inception, over 42 million users have registered on Asana and millions of teams in virtually every country around the world have used Asana.
Tasks in the project are represented as cards within the columns and individuals commonly use the columns to represent stages in a workflow. As a task makes its way through the workflow, it moves from the left to the right. The tasks display due dates, assignee, custom fields, and previews of the latest attached files.
Tasks in the project are represented as cards within the columns and individuals commonly use the columns to represent stages in a workflow. As a task makes its way through the workflow, it moves from the left to the right. The tasks display due dates, assignee, custom fields, subtasks, comments, and previews of the latest attached files.
Instead of spending time on work that generated results, they were spending time in status meetings and long email threads trying to figure out who was responsible for what. They recognized the pain of work about work was universal to teams that need to coordinate their work effectively to achieve their objectives.
Instead of spending time on work that generated results, they were spending time in status meetings and long email threads trying to figure out who was responsible for what. They recognized the pain of work about work was universal to organizations that need to coordinate their work effectively to achieve their objectives.
Response to COVID-19 Pandemic Since the onset of the COVID-19 pandemic, we have prioritized the safety, health, and wellbeing of all our employees globally. We have a cross-functional task force that meets twice weekly to assess current conditions and ensure we continue to maintain a safe working environment for all.
Response to COVID-19 Pandemic Since the onset of the COVID-19 pandemic, we have prioritized the safety, health, and wellbeing of all our employees globally. We have a cross-functional task force that meets bi-weekly to assess current conditions and ensure we continue to maintain a safe working environment for all.
We provide our employees with competitive cash compensation, opportunities for equity ownership at all levels of the organization, development programs that enable continued learning and growth (including access to 21 Table of Contents 1:1 professional coaching for every employee) and a robust employment package that promotes well-being across all aspects of their lives, including health care, retirement savings vehicles, and paid time off.
We provide our employees with competitive cash compensation, opportunities for equity ownership at all levels of the organization, development programs that enable continued learning and growth (including access to 1:1 professional coaching for every employee) and a robust employment package that promotes well-being across all aspects of their lives, including health care, retirement savings vehicles, and paid time off.
It enables organizations to align work to goals, coordinate cross-team work, gain visibility into progress, and scale work securely.
It enables organizations to align work to goals, coordinate intra and cross-team work, gain visibility into progress, and scale work securely.
Item 1. Business Overview Our mission is to help humanity thrive by enabling the world’s teams to work together effortlessly. Asana is a work management platform that helps teams orchestrate work, from daily tasks to cross-functional strategic initia tives. Over 119,000 paying customers us e Asana to manage everything from product launches to marketing campaigns to organization-wide goal setting.
Item 1. Business Overview Our mission is to help humanity thrive by enabling the world’s teams to work together effortlessly. Asana is a work management platform that helps organizations orchestrate work, from daily tasks to cross-functional strategic initia tives. Over 139,000 paying customers us e Asana to manage everything from product launches to marketing campaigns to organization-wide goal setting.
Teams need more effective tools to orchestrate work The primary methods for managing work today—across any department, any sized team, and any project—consist of a combination of spreadsheets and email, in addition to handwritten notes, calls, and meetings.
Organizations need more effective tools to orchestrate work The primary methods for managing work today—across any department, any sized team, and any project—consist of a combination of spreadsheets and email, in addition to handwritten notes, calls, and meetings.
Copies of our reports on Form 10-K, Forms 10-Q, Forms 8-K, and amendments to those reports may also be obtained, free of charge, electronically through our investor relations website located at investors.asana.com as soon as reasonably practical after we file such material with, or furnish it to, the SEC.
Copies of our reports on Form 10-K, Forms 10-Q, Forms 8-K, and amendments to those reports may also be obtained, free of charge, electronically through our investor relations 23 Table of Contents website located at investors.asana.com as soon as reasonably practical after we file such material with, or furnish it to, the SEC.
The work management solutions market is rapidly evolving and highly competitive, with relatively low barriers to entry, and in the future there will likely be an increasing number of similar solutions offered by additional competitors. Our competition addresses the project management and work management categories, including, but not limited to, solutions around email, messaging, and spreadsheets.
The work management solutions market is rapidly evolving and highly competitive, with relatively low barriers to entry, and in the future there will likely be an increasing number of 19 Table of Contents similar solutions offered by additional competitors. Our competition addresses the project management and work management categories, including, but not limited to, solutions around email, messaging, and spreadsheets.
Individuals can track their action items across projects and manage their time more effectively. Benefits of Our Solution Our platform provides the following benefits for our customers: Teams get work done faster Asana is a leading platform for cross-functional work thanks to our ability to serve as a system of record across different teams and different projects.
Individuals can track their action items across projects and manage their time more effectively. 9 Table of Contents Benefits of Our Solution Our platform provides the following benefits for our customers: Teams get work done faster Asana is a leading platform for cross-functional work thanks to our ability to serve as a system of record across different teams and different projects.
The solution also needs to scale across every level of the organization so individuals, team leads, and executives can understand and take actions to move work forward in real time. Our Solution While others are building suites of collaboration products for small teams, our strategy is broader.
The solution also needs to scale across every level of the organization so individuals, team leads, and executives can understand and take actions to move work forward in real time. 8 Table of Contents Our Solution While others are building suites of collaboration products for small teams, our strategy is broader.
How Asana Helps Teams The problem we aim to solve is that teams are organized functionally but work gets done cross-functionally. Asana is a system of record and leading platform for cross-team work. We provide an always up-to-date record of who is doing what by when across teams.
How Asana Helps Organizations The problem we aim to solve is that teams are organized functionally but work gets done cross-functionally. Asana is a system of record and leading platform for cross-functional work. We provide an always up-to-date record of who is doing what by when across teams.
We obtain many components from software developed and released by contributors to independent open source components of our platform. Open source licenses grant licensees broad permissions to use, copy, modify, and redistribute our platform. As a result, open source development and licensing practices can limit the value of our software copyright assets.
We obtain many components from software developed and released by contributors to independent open source components of our platform. Open source licenses grant licensees broad permissions to use, copy, modify, and redistribute certain parts of our service. As a result, open source development and licensing practices can limit the value of our software copyright assets.
This includes facilitating discussions on issues that are important to our communities, including race, sexuality, mental health and allyship, promoting belonging and psychological safety. • Supporting and funding six Employee Resource Groups (“ERGs”) each supported by a sponsor ERG Lead (a senior member of our leadership team): AsanaWomen, AsanaWomen EMEA, Asanapac, Blacsana, Gradient, and Team Rainbow.
This includes facilitating discussions on issues that are important to our communities, including race, sexuality, mental health and allyship, promoting belonging and psychological safety. • Supporting and funding seven Employee Resource Groups (“ERGs”) each supported by a sponsor ERG Lead (a senior member of our leadership team): AsanaWomen, AsanaWomen EMEA, Asanapac, Blacsana, Gradient, Raíz, and Team Rainbow.
Information on or that can be accessed through our websites or these social media channels is not part of this Annual Report on Form 10-K, and the inclusion of our website addresses and social media channels are inactive textual references only. 22 Table of Contents
Information on or that can be accessed through our websites or these social media channels is not part of this Annual Report on Form 10-K, and the inclusion of our website addresses and social media channels are inactive textual references only.
This means that independent third parties have both validated our processes and practices with respect to these standards, and confirmed our ability to maintain compliance with controls we have implemented. 16 Table of Contents We have built our platform with security features, integrations, and infrastructure that are designed to be scalable as we develop and introduce new functionality.
This means that independent third parties have both validated our processes and practices with respect to these standards, and confirmed our ability to maintain compliance with controls we have implemented. We have built our platform with security features, integrations, and infrastructure that are designed to be scalable as we develop and introduce new functionality.
The Asana Work Graph captures and associates: • units of work—tasks, projects, milestones, portfolios, and goals; 6 Table of Contents • the people responsible for executing those units of work; • the processes in which work gets done—rules, workflows, and templates; • information about that work—files, comments, status, and metadata; and • relationships across and within this data.
The Asana Work Graph captures and associates: • units of work—tasks, projects, milestones, portfolios, and goals; • the people responsible for executing those units of work; • the processes in which work gets done—rules, workflows, and templates; • information about that work—files, comments, status, messages, and metadata; and • relationships across and within this data.
All ERG Leads also participate in an ERG Leadership Development program designed to strengthen leadership skills. • In addition to our ERGs, we support employee driven communities for parents and caregivers, mental health and wellness, and people with disabilities. • Providing robust mental health and wellness benefits, including free therapy and mental health coaching sessions for all employees • Establishing a DIB Council, an internal group of cross-functional stakeholders including executive leaders that weigh in on and provide perspectives on various initiatives undertaken by the DIB team • Signing amicus briefs that support inclusion and equity, including: opposing anti-transgender laws, supporting the Voting Rights Act of 1965, opposing restricting access to reproductive healthcare, supporting the Deferred Action for Childhood Arrivals program, supporting non-discrimination rights for LGBTQ+ Americans, supporting protection for sanctuary cities in the United States.
In addition to our ERGs, we support employee driven communities for parents and caregivers, mental health and wellness, and people with disabilities. • Providing robust mental health and wellness benefits, including free therapy and mental health coaching sessions for all employees. • Establishing a DIB Council, an internal group of cross-functional stakeholders including executive leaders that weigh in on and provide perspectives on various initiatives undertaken by the DIB team. • Signing amicus briefs that support inclusion and equity, including: opposing anti-transgender laws, supporting the Voting Rights Act of 1965, opposing restricting access to reproductive healthcare, supporting the Deferred Action for Childhood Arrivals program, supporting non-discrimination rights for LGBTQ+ Americans, and supporting protection for sanctuary cities in the United States.
Asana employed 1,666 people as of January 31, 2022, of which approximately 78% were located in the United States and approximately 22% were located internationally. Diversity, Inclusion, and Belonging We believe the best teams are diverse in identity, background, and perspectives. In 2015, we created a dedicated diversity, inclusion, and belonging (“DIB”) function.
Asana employed 1,782 people as of January 31, 2023, of which approximately 78% were located in the United States and approximately 22% were located internationally. Diversity, Inclusion, and Belonging We believe the best teams are diverse in identity, background, and perspectives. In 2015, we created a dedicated diversity, inclusion, and belonging (“DIB”) function.
To demonstrate the value of our platform to potential paying customers, we provide free trials of our paid Asana Premium and Business offerings in addition to our free Basic offering for teams of up to 15 people.
To demonstrate the value of our platform to potential paying customers, we provide free trials of our paid Asana Business offering, in addition to our free Basic offering, for teams of up to 15 people.
This is one of our major differentiators and the key to supporting large, complex organizations. 9 Table of Contents Streamlined processes Our horizontal application allows individuals to easily customize projects across a breadth of specific use cases. Once a process is defined, it can be templatized and scaled across an organization for consistent, repeatable process management.
This is one of our major differentiators and the key to supporting large, complex organizations. Streamlined processes Our horizontal application allows individuals, teams, and admins to easily customize projects and workflows across a breadth of specific use cases. Once a process is defined, it can be templatized and scaled across an organization for consistent, repeatable process management.
We have established a comprehensive privacy compliance program, aligning our practices with regulations such as the General Data Protection Regulation (“GDPR”) and the California Consumer Privacy Act, including by delivering periodic training to our employees on privacy best practices, reviewing and mapping the data we collect, use, and share, and creating a customer rights program and response process to honor the requests of our customers exercising their privacy rights.
We have established a comprehensive privacy and data protection compliance program, aligning our practices with regulations such as the General Data Protection Regulation (“GDPR”) and the California Consumer Privacy Act (“CCPA”) and privacy certifications such as ISO/IEC 27701:2019 and ISO 27018:2019, including by delivering periodic training to our employees on privacy best practices, reviewing and mapping the data we collect, use, and share, and creating a customer rights program and response process to honor the requests of our customers exercising their privacy rights.
With Asana, users experience higher productivity and engagement, which has led to rapid adoption across teams, departments, and organizations. As of January 31, 2022, we had over 2.0 million paid users.
With Asana, users experience higher productivity and engagement, which has led to rapid adoption across teams, departments, and organizations. As of January 31, 2023, we had over 2.5 million paid users.
We also certify and support Asana Ambassadors (go-to enthusiasts who assist with and promote adoption within their networks) and Certified Pros (independent third-party Asana consultants who offer their services for a discretionary fee to help teams make the most of their experience on our platform). Through Asana Together, we have hosted multiple in-person events on five different continents.
We also support Asana Ambassadors (go-to enthusiasts who assist with and promote adoption within their networks) and Asana Partners (independent third-party Asana consultants, resellers, and system integrators who offer their services for a discretionary fee to help teams make the most of their experience on our platform). Through Asana Together, we have hosted multiple in-person events on five different continents.
Our security program is aligned to the American Institute of Certified Public Accountants (“AICPA”) Trust Services Criteria for Security, Availability, and Confidentiality as well as the ISO 27001:2013 standards. We issue a SOC 2 Type II report on an annual basis and are certified against ISO 27001:2013.
Our security program is aligned to the American Institute of Certified Public Accountants (“AICPA”) Trust Services Criteria for Security, Availability, and Confidentiality as well as the ISO 27001:2013 standards. We issue a SOC 2 Type II report on an annual basis and are certified against ISO 27001:2013, ISO 27017:2015, ISO 27018:2019, and ISO/IEC 27701:2019.
Individuals also have the option to create private tasks, which are only visible to themselves and the people they have explicitly added as collaborators. 13 Table of Contents Inbox Inbox is the notification center for Asana.
Individuals also have the option to create private tasks, which are only visible to themselves and the people they have explicitly added as collaborators. Inbox Inbox is the notification center for Asana.
Once adopted, customers can expand through self-service or with the assistance of our direct sales team, which is focused on promoting new use cases of Asana and ensuring customers are well supported to grow with Asana.
Once adopted, customers can expand through product-led channels or with the assistance of our direct sales team, which is focused on promoting new use cases of Asana and ensuring customers are well supported to grow with Asana.
Our current customer base spans numerous industry categories, including technology, retail, education, non-profit, government, healthcare, media, and financial services, and includes many category leaders across these diverse industries. Sales and Marketing We employ a hybrid go-to-market approach, combining a self-service model with direct sales efforts.
Our current customer base spans numerous industry categories, including technology, retail, education, non-profit, government, healthcare, hospitality, media, manufacturing, professional services, and financial services, and includes many category leaders across these diverse industries. Sales and Marketing We employ a hybrid go-to-market approach, combining a product-led model with direct sales efforts.
As individuals, teams and their guests realize the productivity benefits we provide, Asana becomes an increasingly integral part of their day-to-day work and critical to helping them achieve their objectives. 17 Table of Contents Direct Sales In conjunction with our self-service model, we have a targeted direct sales team focused on promoting new use cases and expanding our footprint within our existing customer base.
As individuals, teams, and their guests realize the productivity benefits we provide, Asana becomes an integral part of their day-to-day work and critical to helping them achieve their objectives. Direct Sales In conjunction with our product-led model, we have a targeted direct sales team focused on promoting new use cases and expanding our footprint within our existing customer base.
We are a pure play work management company, committed to building the most comprehensive platform capable of serving organizations of all sizes around the world. 8 Table of Contents With Asana: • Individuals can manage and prioritize across each of their projects to maximize their effectiveness and reduce distractions.
We are a pure play work management company, committed to building the best platform capable of serving organizations of all sizes around the world. With Asana: • Individuals can manage and prioritize across each of their projects to maximize their effectiveness and reduce distractions.
We shard customer data in our distributed datastore to scale horizontally and provide high performance, and redundancy across multiple third-party data centers in several locations in the United States and Europe to protect against data loss and provide high availability.
We shard customer data in our distributed datastore to scale horizontally and provide high performance, and redundancy across multiple third-party data centers in several locations around the world to protect against data loss and provide high availability.
Portfolios Portfolio lets users organize projects into one centralized location, acting as the mission control so that team leads and executives have real-time visibility into how work is progressing across projects. Users can add or remove projects, check the status and progress of each project, view priorities, and assign relevant project owners.
Portfolios Portfolios let users organize projects into a centralized location, acting as the mission control so that team leads and executives have real-time visibility into how work is progressing across projects. Users can add or remove projects from the Portfolio, check the status and progress of each project, view priorities, assign relevant project owners, and manage custom fields.
The technology that makes this possible is the Asana Work Graph, our proprietary data model built by the same people who created the social graph.
The technology that makes this possible is the Asana Work Graph, our 6 Table of Contents proprietary data model built by the same people who created the social graph.
Build: We’re intentional about laying a foundation of support and resources for our employees to be successful including: • Comprehensive DIB onboarding curriculum for new employees • Mandatory anti-harassment training • Bias awareness training • Allyship workshops for managers and individual contributors • Inclusive leadership training for managers • 16 weeks of parental leave, regardless of gender Recruit: We believe hiring and developing talent from underrepresented groups and backgrounds is a shared responsibility.
Build: We’re intentional about laying a foundation of support and resources for our employees to be successful including: • Comprehensive DIB onboarding curriculum for new employees • Mandatory anti-harassment training • Bias awareness training • Psychological safety workshops for managers and their teams • Inclusive leadership workshops for managers 21 Table of Contents • 16 weeks of parental leave, regardless of gender Recruit: We believe hiring and developing talent from underrepresented groups and backgrounds is a shared responsibility.
Additionally, of our global workforce, as of January 31, 2022, approximately 40% of our employees identify as female, 44% identify as male, and 1% identify as TGNC, which includes the categories of agender, gender non-conforming, genderqueer, transgender, and non-binary. Additional information regarding our commitment to diversity and inclusion can be found on our website at https://asana.com/diversity-and-inclusion .
Additionally, of our global workforce, as of January 31, 2023, approximately 45% of our employees identify as female, 54% identify as male, and 1% identify as TGNC, which includes the categories of agender, gender non-conforming, genderqueer, transgender, and non-binary. 22 Table of Contents Additional information regarding our commitment to diversity and inclusion can be found on our website at https://asana.com/diversity-and-inclusion .
In contrast, others approach the problem of work management with a container model, relating tables of data which forces units of work into singular constructs; for example, a task can only live in one project or a message can only live in one channel. As a result, tasks and other work often get duplicated.
In contrast, others approach the problem of work management with a container model, relating tables of data which forces units of work into singular constructs; for example, a task can only live in one project or a message can only live in one channel.
As of January 31, 2022, of our global workforce approximately 31% identify as Caucasian, 28% identify as Asian, 6% identify as Hispanic or Latinx, 5% identify as Black or African American, 2% identify as Middle Eastern, 1% identify as Pacific Islander, and 1% identify as Native American, Alaskan, Indigenous.
As of January 31, 2023, of our global workforce approximately 44% identify as Caucasian, 40% identify as Asian, 7% identify as Hispanic or Latinx, 5% identify as Black or African American, 2% identify as Middle Eastern, 1% identify as Pacific Islander, and 1% identify as Native American, Alaskan, Indigenous.
Asana is a secure, cloud-based service that is accessible via internet browsers and a mobile application so that team members can manage their work from home, office, cafe, or other workspace. Our Culture Our company culture is a core driver of our business success and enables us to work towards achieving our mission.
Asana is a secure, cloud-based service that is accessible via internet browsers, a desktop application, and a mobile application so that team members can manage their work from wherever they are. Our Culture Our company culture is a core driver of our business success and enables us to work towards achieving our mission.
Our compensation programs are designed to align employee interests with the long-term success of the company and to foster cross-business collaboration. As part of our promotion and retention efforts, we invest in ongoing leadership development through programs such as our Conscious Leadership training program and Outstanding Manager Bootcamp curriculum.
Our compensation programs are designed to align employee interests with the long-term success of the company and to foster cross-business collaboration. As part of our promotion and retention efforts, we invest in ongoing leadership development through programs such as our Conscious Leadership training program, and encourage managers to utilize development offerings in our learning and development platform.
The Asana platform integrates with over 200 third-party applications including: • Microsoft apps such as Teams, Outlook, OneDrive, SharePoint, Power Automate, Power Bi, and Azure Active Directory; • Google apps such as Gmail, Drive, Calendar, Chrome, Looker, and Sheets; • Enterprise IT apps such as Splunk, ServiceNow, Okta, Azure Active Directory, Mulesoft, BetterCloud, and Workato; • Marketing and Design apps such as Adobe Creative Cloud, Canva, Figma, Lucidchart, and InVision; 15 Table of Contents • Communication apps such as Microsoft Teams, Slack, Zoom, Vimeo, Wistia, and Loom; • File sharing apps such as Google Drive, Microsoft OneDrive, Box, and Dropbox; • Sales and service apps such as Salesforce, ServiceNow, Zendesk, HubSpot, Freshdesk, and Zoho; • Development apps such as GitHub and Jira; • Reporting apps such as Tableau, Microsoft PowerBI, Looker, and Google Sheets; and • Connector apps such as Mulesoft, Zapier, Workato, Microsoft Power Automate, and tray.io.
The Asana platform integrates with over 260 third-party applications including: • Microsoft 365 apps such as Teams, Outlook, OneDrive, SharePoint, Power Automate, Power Bi, and Azure Active Directory; • Google Workspace apps such as Gmail, Drive, Chat, Calendar, Chrome, Looker, and Sheets; • Enterprise IT apps such as Splunk, ServiceNow, Okta, Azure Active Directory, MuleSoft, BetterCloud, Workato, and Exterro; • Marketing and Design apps such as Adobe Creative Cloud, Canva, Figma, HubSpot, Mailchimp, Lucidchart, and InVision; • Communication apps such as Microsoft Teams, Gmail, Slack, Zoom, Google Chat, Vimeo, Wistia, Intercom, and Loom; • File sharing apps such as Google Drive, Microsoft OneDrive, Box, Bynder, and Dropbox; • Sales and service apps such as Salesforce, ServiceNow, Zendesk, HubSpot, Freshdesk, and Zoho; • Development apps such as GitHub, Jira, PagerDuty, and ServiceNow; • Reporting apps such as Tableau, Microsoft Power BI, Looker, and Google Sheets; • Security, Privacy, and Compliance apps such as Exterro, Netskope, Splunk, Nightfall, and OneTrust; and • Connector apps such as MuleSoft, Zapier, Workato, Microsoft Power Automate, and tray.io.
As of January 31, 2022, we had been granted 22 U.S. patents, had 50 U.S. patent applications pending, and four notices of allowance. Our issued patents expire between January 2031 and November 2040. We have not applied for patents in foreign jurisdictions. We continually review our development efforts to assess the existence and patentability of new intellectual property.
As of January 31, 2023, we had been granted 41 U.S. patents, had 73 U.S. patent applications pending, and four notices of allowance. Our issued patents expire between January 2030 and March 2042. We have not applied for patents in foreign jurisdictions. We continually review our development efforts to assess the existence and patentability of new intellectual property.
Our competitors fall into the following groups: companies specifically offering work management solutions; companies offering productivity suites; and companies specializing in vertical solutions. 18 Table of Contents We believe we compete favorably based on the following competitive factors: • adaptability to a broad range of use cases; • features and functionality of platform capabilities; • developments and enhancements of work management solutions; • customer service and support efforts; • efficient hybrid go-to-market model; • ease of use, performance, price, and reliability of solutions; • scalability and security; • brand strength; and • ability to create easy to use integrations for, and robust, effective partnerships with, other larger enterprise software solutions and tools.
We believe we compete favorably based on the following competitive factors: • adaptability to a broad range of use cases; • features and functionality of platform capabilities; • developments and enhancements of work management solutions; • customer service and support efforts; • hybrid go-to-market model; • ease of use, performance, price, and reliability of solutions; • scalability and security; • brand strength; and • ability to create easy to use integrations for, and robust, effective partnerships with, other larger enterprise software solutions and tools.
Tasks Tasks are the atomic unit of work within the Asana Work Graph. Within tasks, users can assign owners, set due dates and times, attach documents, and define custom fields for information about the task so that everyone knows who is doing what by when and has the information needed to complete the work.
Within tasks, users can assign owners, set due dates and times, attach documents, break the work into subtasks, and define custom fields for information about the 12 Table of Contents task so that everyone knows who is doing what by when and has the information needed to complete the work.
We define a paying customer as a customer on a paid subscription plan. As of January 31, 2022, we had over 119,000 paying customers globally, representing an increase of approximately 26,000 paying customers from January 31, 2021 and an increase of approximately 44,000 from January 31, 2020.
We define a paying customer as a customer on a paid subscription plan. As of January 31, 2023, we had over 139,000 paying customers globally, representing an increase of approximately 20,000 paying customers from January 31, 2022 and an increase of approximately 46,000 from January 31, 2021.
Teams Spend Too Much Time on Work About Work Work continues to get harder to manage as organizations try to move faster to accomplish ambitious goals and respond to changing market demands. Today, 60% of knowledge workers’ time is spent on work about work.
Teams Spend Too Much Time on Work About Work Work continues to get harder to manage as organizations try to move faster to accomplish ambitious goals and respond to changing market demands. According to Asana’s most recent Anatomy of Work Index report, 58% of knowledge workers’ time is spent on work about work.
Our Business Model Our hybrid self-service and direct sales model allows us to efficiently reach teams everywhere and then rapidly expand the use of our platform within their organizations. A majority of our paying customers initially adopt our platform through self-service and free trials.
Our Business Model Our hybrid product-led and direct sales model allows us to reach teams everywhere and then rapidly expand the use of our platform within their organizations. A majority of our paying customers initially adopt our platform through product-led channels, like signing up on our website, and free trials.
Nevertheless, compliance with existing or future governmental regulations, including, but not limited to, those pertaining to global trade, business acquisitions, consumer and data protection, and taxes, could have a material impact on our business in subsequent periods.
Nevertheless, compliance with existing or future governmental regulations, including, but not limited to, those pertaining to global trade, business acquisitions, consumer and data protection, and taxes, could have a material impact on our business in subsequent periods. For more information on the potential impacts of government regulations affecting our business, see Item 1A.
Best Workplaces for the fourth consecutive year. In our most recent global employee engagement survey, 95% of our employees indicated they would recommend Asana as a great place to work and 84% reported feeling an overall sense of belonging and voice.
Best Workplaces 2022 for the fifth year in a row; and • Glassdoor Best Places to Work 2023 #63. In our most recent global employee engagement survey, 80% of our employees indicated they would recommend Asana as a great place to work and 80% reported feeling an overall sense of belonging.
Individuals can also create rules to automate moving tasks into the right categories. All individuals have their own My Tasks and can customize it in a way that works best for them by viewing their tasks in List, Board, or Weekly Calendar View. Team members can view other team members’ tasks to see what they are working on.
All individuals have their own My Tasks and can customize it in a way that works best for them by viewing their tasks in List, Board, or Weekly Calendar View. Team members can view other team members’ tasks to see what they are working on, subject to permissions associated with that task or individual.
They can also see all projects within the Portfolio on a Timeline to get a bird’s-eye view of when initiatives are kicking off and when they will be completed. Like many of the views in Asana, the layout of Portfolio can be customized based on individual preference.
They can also see all projects within a Portfolio on the Portfolio’s Timeline to get a bird’s-eye view of when initiatives are kicking off and when they will be completed.
In addition, we regularly conduct an employee survey to gauge employee engagement and identify areas of focus. Pay Equity We run a regression-based analysis of our pay by gender identity globally and our pay by race/ethnicity in the United States to ensure our compensation practices are equitable.
In addition, we regularly conduct employee surveys to gauge employee engagement and identify areas of focus. Pay Equity We run a regression-based analysis of our pay by gender identity globally (where we are legally allowed to collect this data) and our pay by race/ethnicity in North America to ensure our compensation practices are equitable.
Custom fields are metadata that 12 Table of Contents help users plan, sort, and organize work. Collaboration including comments, sharing, @-mentions, and image markup are natively built into tasks, ensuring that relevant updates and context stay with the work at hand.
Custom fields are metadata that help users organize and track their work. Collaboration including comments, @-mentions, image markup, and text-to-subtask creation are natively built into tasks, ensuring that relevant updates and context stay with the work at hand.
The trendline is generated by number of tasks or numerical custom field values such as estimated hours or effort. Team leads can set capacity and be notified when team members are overloaded.
Workload Workload visualizes the work, capacity, and trendline of each team member so that team leads have accurate and up-to-date information into the workload of their team members. The trendline is generated by number of tasks or numerical custom field values such as estimated hours or effort. Team leads can set capacity and be notified when team members are overloaded.
Increased employee engagement Our users love Asana because they gain clarity into what they need to do and how their contribution is connected to broader organizational goals. This clarity is particularly important for distributed teams and remote employees.
Rules and Workflows provide scalable automation for business and project processes, and completion options like approval facilitate clear accountability. Increased employee engagement Our users love Asana because they gain clarity into what they need to do by when and how their contribution is connected to broader organizational goals. This clarity is particularly important for distributed teams and remote employees.
As of January 31, 2022, our dollar-based net retention rate within organizations spending $5,000 or more with us on an annualized basis was over 130%, consisting of 15,437 customers. Our dollar-based net retention rate within organizations spending $50,000 or more with us on an annualized basis was over 145%, consisting of 894 customers.
As of January 31, 2023, our dollar-based net retention rate within organizations spending $5,000 or more with us on an annualized basis was over 120%, consisting of 19,432 customers. Our dollar-based net retention rate within organizations spending $100,000 or more with us on an annualized basis was over 135%, consisting of 506 customers.
We will continue to invest in expanding our product offerings and enhancing the features and functionality of our platform, particularly in the areas of integrations, automation, functional workflows, security, and organization-wide use cases. We leverage the breadth of our customer base, and the diverse ways in which they use our platform, to recognize their needs quickly and guide future innovation.
We will continue to invest in expanding our product offerings and enhancing the features and functionality of our platform, particularly in the areas of integrations, automation, functional workflows, security, and organization-wide use cases.
Users can set and view goals at the organization or team level and can create goal hierarchies to drive alignment across teams. Goals are connected to the underlying work (Portfolios, Projects, and Tasks) needed to achieve them, giving executives and team leads a single system to set goals and track progress.
Goals are connected to the underlying work (Portfolios, Projects, and Tasks) needed to achieve them, giving executives and team leads a single system to set goals and track progress.
With Asana Work Graph's differentiated ability to construct a single source of truth for individuals, teams, and organizations, Asana powers clarity at every level of an organization, regardless of size, structure, and complexity.
As a result, tasks and other work often get duplicated which means there is no single source of truth about that particular piece of work. With the Asana Work Graph's differentiated ability to construct a single source of truth for individuals, teams, and organizations, Asana powers clarity at every level of an organization, regardless of size, structure, and complexity.
When a deadline shifts, all subsequent deadlines can shift accordingly. Timeline helps ensure work stays on track and all team members have clear visibility over the steps involved and progress towards the end goal. Timeline is particularly relevant for time-bounded initiatives which have timing and sequencing dependencies.
Timeline helps ensure work stays on track and all team members have clear visibility over the steps involved and progress towards the end goal. Timeline is particularly relevant for time-bounded initiatives which have timing and sequencing dependencies. Timeline also provides executives and project stakeholders an at-a-glance view of the critical path.
List View The List view of a project lets individuals sort, organize into sections, and filter a list of tasks. Tasks can be dragged and dropped, and filtered and sorted according to what matters most so project teams can see all the work needed to complete a project and easily drill down into details.
Tasks can be dragged and dropped, and filtered and sorted according to what matters most so project teams can see all the work needed to complete a project and easily drill down into details. Keyboard shortcuts can be used to move tasks up or down the list, and a project toolbar allows users to adjust their project view.
W hile these applications help teams communicate, they were not designed to provide a system of record to track and coordinate units of work or to set up processes for rapid execution. The average knowledge worker receives 121 emails per day—70% of which are opened within six seconds.
W hile these applications help teams communicate, they were not designed to provide a system of record to track and coordinate units of work or to set up processes for rapid execution. The average knowledge worker spends the majority — 58% — of their day on work coordination rather than skilled, strategic work.
Of those paying customers, 15,437 spent $5,000 or more with us on an annualized basis, representing an increase of 5,263 paying customers from January 31, 2021. Additionally, 894 of those paying customers spent $50,000 or more with us on an annualized basis, representing an increase of 497 paying customers from January 31, 2021.
Additionally, 506 of those paying customers spent $100,000 or more with us on an annualized basis, representing an increase of 166 paying customers from January 31, 2022 and an increase of 358 paying customers from January 31, 2021.
We were also named a Great Place to Work Best Workplace for Parents, one of Fast Company’s Best Workplaces for Innovators, and an Inc. Best Workplaces for the fourth consecutive year. Features of our Platform Asana is a single unified platform that provides clarity at every level of an organization for individuals, team leads, and executives.
Best Workplaces for the fifth consecutive year and Glassdoor Best Places to Work 2023 #63. Features of our Platform Asana is a single unified platform that provides clarity at every level of an organization for individuals, team leads, and executives.
After opening our headquarters and other physical offices to employees on a voluntary basis, we provided personal protective equipment and COVID-19 test kits to all employees, required proof of full vaccination to work in the office (for those locations where we are legally able to do so) and have robust procedures and policies in place in the event of a positive COVID-19 case in our offices.
After opening our headquarters and other physical offices to employees and shifting to an office-centric hybrid model, we provided personal protective equipment and COVID-19 test kits to all employees, required proof of full vaccination or proof of negative COVID-19 test result to work in the office (for those locations where we are legally able to do so), and have set parameters to make in-office collaboration voluntary in times of increased community spread.
We also use Asana ourselves, providing our employees with clarity into how their work contributes to our mission and enabling them to do their most impactful work. 10 Table of Contents On Glassdoor, we have a 4.8 out of 5.0 score, a 100% CEO approval rating, and a 98% "Recommend to a Friend" rating.
We also use Asana ourselves, providing our employees with clarity into how their work contributes to our mission and enabling them to do their most impactful work. 10 Table of Contents On Glassdoor, we’ve consistently had an overall score of greater than 4.5 out of 5.0 and greater than 90% for our ratings of “CEO approval” and “Recommend to a Friend”.
Commitment to Security and Privacy Upholding the trust that we have established with our customers and gaining the trust of new customers remains a priority for us and as a result, we have implemented robust safeguards to protect the security of customer data.
We provide our software as a service to customers, so the technology we build includes deployment tools to ensure we can publish software updates rapidly and safely, as well as monitoring and automation tools. 16 Table of Contents Commitment to Security and Privacy Upholding the trust that we have established with our customers and gaining the trust of new customers remains a priority for us and as a result, we have implemented robust safeguards to protect the security of customer data.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeWhile we have implemented controls designed to promote and achieve compliance with applicable Trade Controls, in the past we may have inadvertently provided certain services to some customers in apparent violation of U.S. sanctions laws and exported software and source code prior to submitting required filings and obtaining authorization from BIS regarding exports of our software.
Biggest changeIn addition, various other countries regulate the import and export of certain encryption and other technology, including through import permitting and licensing requirements, and have enacted laws that could limit our ability to distribute our platform or could limit the ability of organizations to use our platform in those countries. 44 Table of Contents While we have implemented controls designed to promote and achieve compliance with applicable Trade Controls, in the past we may have inadvertently provided certain services to some customers in apparent violation of U.S. sanctions laws and exported software and source code prior to submitting required filings and obtaining authorization from BIS regarding exports of our software.
We derive, and expect to continue to derive, substantially all of our revenues from a single solution. We derive, and expect to continue to derive, substantially all of our revenues from a single solution. As such, the continued growth in market demand for and market acceptance, including international market acceptance, of our platform is critical to our continued success.
We derive, and expect to continue to derive, substantially all of our revenues from a single solution. As such, the continued growth in market demand for and market acceptance, including international market acceptance, of our platform is critical to our continued success.
The GDPR generally restricts the transfer of personal information to countries outside of the EEA, such as the United States, which are not considered by the European Commission to provide an adequate level of privacy, data protection, and data security. In addition, Swiss and UK law contain similar data transfer restrictions as the GDPR.
The EU GDPR generally restricts the transfer of personal information to countries outside of the EEA, such as the United States, which are not considered by the European Commission to provide an adequate level of privacy, data protection, and data security. In addition, Swiss and UK law contain similar data transfer restrictions as the EU GDPR.
We expect to continue making significant expenditures on sales and marketing efforts, and expenditures to grow our platform and develop new features, integrations, capabilities, and enhancements to our platform. Such expenditures may not result in improved business results or profitability over the long term.
We expect to continue making expenditures on sales and marketing efforts, and expenditures to grow our platform and develop new features, integrations, capabilities, and enhancements to our platform. Such expenditures may not result in improved business results or profitability over the long term.
Additionally, we rely on or partner with third-party vendors and systems who have made representations as to their security measures but there can be no assurance that they will maintain their own security measures appropriately.
Additionally, we rely on or partner with third-party vendors and systems that have made representations as to their security measures but there can be no assurance that they will maintain their own security measures appropriately.
Our culture has contributed to our success, and if we cannot maintain this culture as we grow, we could lose the high employee engagement fostered by our culture, which could harm our business. We believe that a critical component of our success has been our culture.
Our culture has contributed to our success, and if we cannot maintain this culture as we grow, we could lose the employee engagement fostered by our culture, which could harm our business. We believe that a critical component of our success has been our culture.
Furthermore, the Federal Trade Commission and many state attorneys general continue to enforce federal and state consumer protection laws against companies for online collection, use, dissemination, and security practices that appear to be unfair or deceptive.
Furthermore, the Federal Trade Commission and many state attorneys general continue to enforce federal and state consumer protection laws against companies and individuals for online collection, use, dissemination, and security practices that appear to be unfair or deceptive.
Additionally, we seek to expand within enterprises by adding new customers, having organizations upgrade to our Business or Enterprise plans, or expanding their use of our platform into other departments within an organization.
Additionally, we seek to expand within organizations by adding new customers, having organizations upgrade to our Business or Enterprise plans, or expanding their use of our platform into other departments within an organization.
We believe that our ability to compete depends upon many factors both within and beyond our control, including the following: • adaptability of our platform to a broad range of use cases; • continued market acceptance of our platform and the timing and market acceptance of new features and enhancements to our platform or the offerings of our competitors; • ease of use, performance, price, security, and reliability of solutions developed either by us or our competitors; • our brand strength; • selling and marketing efforts, including our ability to grow our market share domestically and internationally; • the size and diversity of our customer base; • customer support efforts; and • our ability to continue to create easy to use integrations for, and robust, effective partnerships with, other larger enterprise software solutions and tools.
We believe that our ability to compete depends upon many factors both within and beyond our control, including the following: • adaptability of our platform to a broad range of use cases; • continued market acceptance of our platform and the timing and market acceptance of new features and enhancements to our platform or the offerings of our competitors; • ease of use, performance, price, security, and reliability of solutions developed either by us or our competitors; 30 Table of Contents • our brand strength; • selling and marketing efforts, including our ability to grow our market share domestically and internationally; • the size and diversity of our customer base; • customer support efforts; and • our ability to continue to create easy to use integrations for, and robust, effective partnerships with, other larger enterprise software solutions and tools.
Failure to effectively develop and expand our direct sales capabilities would harm our ability to expand usage of our platform within our customer base and achieve broader market acceptance of our platform.
Failure to effectively develop and leverage our direct sales capabilities would harm our ability to expand usage of our platform within our customer base and achieve broader market acceptance of our platform.
Although we have only been required to pay income taxes in certain foreign jurisdictions to date, the amount of taxes we pay in these jurisdictions could increase substantially as a result of changes in the applicable tax principles, including increased tax rates, new tax laws, or revised interpretations of existing tax laws and precedents, which could harm our liquidity and results of operations.
Although we have only been required to pay income and value-added taxes in certain foreign jurisdictions to date, the amount of taxes we pay in these jurisdictions could increase substantially as a result of changes in the applicable tax principles, including increased tax rates, new tax laws, or revised interpretations of existing tax laws and precedents, which could harm our liquidity and results of operations.
We have in the past and may in the future become subject to legal proceedings and claims that arise in the ordinary course of business.
We have in the past and may in the future become subject to legal proceedings, demands, and claims that arise in the ordinary course of business.
Moreover, Amazon Web Services, or AWS, provides the cloud computing infrastructure that we use to host our platform, mobile application, and many of the internal tools we use to operate our business. We have a long-term commitment with AWS, and our platform, mobile application, and internal tools use computing, storage capabilities, bandwidth, and other services provided by AWS.
Moreover, Amazon Web Services (“AWS”) provides the cloud computing infrastructure that we use to host our platform, mobile application, and many of the internal tools we use to operate our business. We have a long-term commitment with AWS, and our platform, mobile application, and internal tools use computing, storage capabilities, bandwidth, and other services provided by AWS.
Some of these laws, such as the General Data Protection Law in Brazil, or the Act on the Protection of Personal Information in Japan, impose similar obligations as those under the GDPR. Domestic privacy, data protection, and data security legislation is also becoming increasingly common in the United States.
Some of these laws, such as the General Data Protection Law in Brazil, or the Act on the Protection of Personal Information in Japan, impose similar obligations as those under the EU GDPR. Domestic privacy, data protection, data security, and consumer protection legislation is also becoming increasingly common in the United States.
We are continuing to develop and refine our disclosure controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we will file with the SEC is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms and that information required to be disclosed in reports under the Securities Exchange Act of 1934, as amended, or the Exchange Act, is accumulated and communicated to our principal executive and financial officers.
We are continuing to develop and refine our disclosure controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we will file with the SEC is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms and that information required to be disclosed in reports under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is accumulated and communicated to our principal executive and financial officers.
Income, sales, use, valued added, or other tax laws, statutes, rules, regulations, or ordinances could be enacted or amended at any time (possibly with retroactive effect), and could be applied solely or disproportionately to products and services provided over the internet.
Income, sales, use, value added, or other tax laws, statutes, rules, regulations, or ordinances could be enacted or amended at any time (possibly with retroactive effect), and could be applied solely or disproportionately to products and services provided over the internet.
If customers do not renew their subscriptions, renew on less favorable terms, or fail to add more individuals, teams, and organizations, or if we fail to upgrade individuals, teams, 27 Table of Contents and organizations from our free or trial plans to our paid subscription plans, or expand the adoption of our platform within organizations, our revenues may decline or grow less quickly than anticipated, which would harm our business, results of operations, and financial condition.
If customers do not renew their subscriptions, renew on less favorable terms, or fail to add more individuals, teams, and organizations, or if we fail to upgrade individuals, teams, and organizations from our free or trial plans to our paid subscription plans, or expand the adoption of our platform within organizations, our revenues may decline or grow less quickly than anticipated, which would harm our business, results of operations, and financial condition.
Should any of our competitors modify their products or standards in a manner that degrades the functionality of our platform or gives preferential treatment to competitive 32 Table of Contents products or services, whether to enhance their competitive position or for any other reason, the interoperability of our platform with these products could decrease and our business, results of operations, and financial condition would be harmed.
Should any of our competitors modify their products or standards in a manner that degrades the functionality of our platform or gives preferential treatment to competitive products or services, whether to enhance their competitive position or for any other reason, the interoperability of our platform with these products could decrease and our business, results of operations, and financial condition would be harmed.
Additionally, we maintain a policy requiring our employees, consultants, independent contractors, and third parties who are engaged to develop any material intellectual property for us to enter into confidentiality and invention assignment agreements to control 37 Table of Contents access to and use of our proprietary information and to ensure that any intellectual property developed by such employees, contractors, consultants, and other third parties are assigned to us.
Additionally, we maintain a policy requiring our employees, consultants, independent contractors, and third parties who are engaged to develop any material intellectual property for us to enter into confidentiality and invention assignment agreements to control access to and use of our proprietary information and to ensure that any intellectual property developed by such employees, contractors, consultants, and other third parties are assigned to us.
Any failure by us to achieve and sustain profitability would cause the trading price of our Class A common stock to decline. We believe our long-term value as a company will be greater if we focus on growth, which may negatively impact our profitability in the near and medium term.
Any failure by us to achieve and sustain profitability would cause the trading price of our Class A common stock to decline. 25 Table of Contents We believe our long-term value as a company will be greater if we focus on growth, which may negatively impact our profitability in the near and medium term.
If we are ultimately unable to achieve or improve profitability at the level or during the time frame anticipated by securities or industry analysts and our stockholders, the trading price of our Class A common stock may decline. 24 Table of Contents Our quarterly results may fluctuate significantly and may not meet our expectations or those of investors or securities analysts.
If we are ultimately unable to achieve or improve profitability at the level or during the time frame anticipated by securities or industry analysts and our stockholders, the trading price of our Class A common stock may decline. Our quarterly results may fluctuate significantly and may not meet our expectations or those of investors or securities analysts.
There can also be no assurance 38 Table of Contents that pending or future U.S. or foreign trademark applications will be approved in a timely manner or at all, or that such registrations will effectively protect our brand names and trademarks. Third parties may also oppose our trademark applications, or otherwise challenge our use of the trademarks.
There can also be no assurance that pending or future U.S. or foreign trademark applications will be approved in a timely manner or at all, or that such registrations will effectively protect our brand names and trademarks. Third parties may also oppose our trademark applications, or otherwise challenge our use of the trademarks.
Furthermore, we operate in an industry that is characterized by rapid technological 23 Table of Contents innovation, intense competition, changing customer needs, and frequent introductions of new products, technologies, and services. We have encountered, and will continue to encounter, risks and uncertainties frequently experienced by growing companies in evolving industries.
Furthermore, we operate in an industry that is characterized by rapid technological innovation, intense competition, changing customer needs, and frequent introductions of new products, technologies, and services. We have encountered, and will continue to encounter, risks and uncertainties frequently experienced by growing companies in evolving industries.
We are subject to requirements imposed by marketplaces such as Apple and Google, who may change their technical requirements or policies in a manner that adversely impacts the way in which we or our partners collect, use and share data from users through our mobile application.
We are subject to requirements imposed by marketplaces such as Apple and Google, who may change their technical requirements or policies in a manner that adversely impacts, among other things, the way in which we or our partners collect, use and share data from users through our mobile application.
In addition, Apple and Google, among others, for competitive or other reasons, could stop allowing or supporting access to our mobile application through their products, could allow access for us only at an 34 Table of Contents unsustainable cost, or could make changes to the terms of access in order to make our mobile application less desirable or harder to access.
In addition, Apple and Google, among others, for competitive or other reasons, could stop allowing or supporting access to our mobile application through their products, could allow access for us only at an unsustainable cost, or could make changes to the terms of access in order to make our mobile application less desirable or harder to access.
Any failure to 45 Table of Contents maintain effective disclosure controls and internal control over financial reporting could harm our business, results of operations, and financial condition and could cause a decline in the trading price of our Class A common stock. We may face exposure to foreign currency exchange rate fluctuations.
Any failure to maintain effective disclosure controls and internal control over financial reporting could harm our business, results of operations, and financial condition and could cause a decline in the trading price of our Class A common stock. We may face exposure to foreign currency exchange rate fluctuations.
Any loss of the right to use any third-party software required 39 Table of Contents for the development and maintenance of our platform or mobile application could result in loss of functionality or availability of our platform or mobile application until equivalent technology is either developed by us, or, if available, is identified, obtained, and integrated.
Any loss of the right to use any third-party software required for the development and maintenance of our platform or mobile application could result in loss of functionality or availability of our platform or mobile application until equivalent technology is either developed by us, or, if available, is identified, obtained, and integrated.
Because some patent applications may not be public for a period of time, there is also a risk that we could adopt a technology without knowledge of a pending patent application, which technology would infringe a third-party patent once that patent is issued. We also rely on unpatented proprietary technology.
Because some patent applications may 40 Table of Contents not be public for a period of time, there is also a risk that we could adopt a technology without knowledge of a pending patent application, which technology would infringe a third-party patent once that patent is issued. We also rely on unpatented proprietary technology.
Ransomware attacks, including those perpetrated by organized criminal threat actors, nation-states, and nation-state-supported actors, are becoming increasingly prevalent and severe and can lead to significant interruptions in our operations, loss of data and income, reputational harm, and diversion of funds.
Ransomware attacks, including those perpetrated by organized criminal threat actors, nation-states, and nation-state-supported actors, are becoming increasingly prevalent and severe and can lead to significant interruptions in our operations, loss of confidential, proprietary, and sensitive data and income, reputational harm, and diversion of funds.
If our mobile application does not perform well, our business will suffer. In addition, our platform interoperates with servers, mobile devices, and software applications predominantly through the use of protocols, many of which are created and maintained by third parties.
If either our mobile or desktop application does not perform well, our business will suffer. In addition, our platform interoperates with servers, mobile devices, and software applications predominantly through the use of protocols, many of which are created and maintained by third parties.
Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited. We do not expect to become profitable in the near future, may never achieve profitability, and have incurred substantial net operating losses, or NOLs, during our history.
Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited. We do not expect to become profitable in the near future, may never achieve profitability, and have incurred substantial net operating losses (“NOLs”) during our history.
In order to maintain and improve the effectiveness of our disclosure controls and procedures and internal control over financial reporting, we have expended, and anticipate that we will continue to expend, significant resources, including accounting-related costs and investments to strengthen our accounting systems.
We are also continuing to improve our internal control over financial reporting. In order to maintain and improve the effectiveness of our disclosure controls and procedures and internal control over financial reporting, we have expended, and anticipate that we will continue to expend, significant resources, including accounting-related costs and investments to strengthen our accounting systems.
Generally accepted accounting principles in the United States are subject to interpretation by the Financial Accounting Standards Board, or FASB, the American Institute of Certified Public Accountants, the Securities and Exchange Commission, or the SEC, and various bodies formed to promulgate and interpret appropriate accounting principles.
Generally accepted accounting principles in the United States (“GAAP”) are subject to interpretation by the Financial Accounting Standards Board (“FASB”), the American Institute of Certified Public Accountants, the Securities and Exchange Commission, or the SEC, and various bodies formed to promulgate and interpret appropriate accounting principles.
Our operating activities may be restricted as a result of covenants related to the indebtedness under our loan and security agreement, and we may be required to repay the outstanding indebtedness in an event of default, which would have an adverse effect on our business.
Our operating activities may be restricted as a result of covenants related to the indebtedness under our Credit Agreement, and we may be required to repay the outstanding indebtedness in an event of default, which would have an adverse effect on our business.
In particular, we have developed our platform to be able to easily integrate with third-party applications, including the applications of software providers that compete with us as well as our partners, through the interaction of application programming interfaces, or APIs.
In particular, we have developed our platform to be able to easily integrate with third-party applications, including the applications of software providers that compete with us as well as our partners, through the interaction of application programming interfaces (“APIs”).
If we fail to predict customer demands, fail to sufficiently account for the impact of COVID-19 on our sales projections, or fail to attract new customers and maintain and expand new and existing customer relationships, our revenues may grow more slowly than expected, may not grow at all, or may decline, and our business may be harmed.
If we fail to predict customer demands, fail to sufficiently account for the impact of macroeconomic conditions on our sales projections, or fail to attract new customers and maintain and expand new and existing customer relationships, our revenues may grow more slowly than expected, may not grow at all, or may decline, and our business may be harmed.
Individuals and organizations may be reluctant or unwilling to migrate to work management solutions from spreadsheets, email, messaging, and legacy project management tools. It is difficult to predict adoption rates and demand for our platform, the future growth rate and size of the market for work management solutions, or the entry of competitive 28 Table of Contents offerings.
Individuals, teams, and organizations may be reluctant or unwilling to migrate to work management solutions from spreadsheets, email, messaging, and legacy project management tools. It is difficult to predict adoption rates and demand for our platform, the future growth rate and size of the market for work management solutions, or the entry of competitive offerings.
In addition, if we are unable to continue to meet these requirements, we may not be able to remain listed on the NYSE or the Long-Term Stock Exchange (“LTSE”). We are required to provide an annual management report on the effectiveness of our internal control over financial reporting.
In addition, if we are unable to continue to meet these requirements, we may not be able to remain listed on the New York Stock Exchange (“NYSE”) or the Long-Term Stock Exchange (“LTSE”). We are required to provide an annual management report on the effectiveness of our internal control over financial reporting.
Additionally, if a third-party software provider has incorporated open source software into software that we license from such provider, we could be required to disclose source code that incorporates or is a modification of such licensed software.
Additionally, if a third-party software provider has incorporated open source software into software that we license from such provider, we could be required to disclose source code that incorporates or is a 41 Table of Contents modification of such licensed software.
Further, our potential and existing competitors may make acquisitions or enter into strategic relationships 29 Table of Contents and rapidly acquire significant market share due to a larger customer base, superior product offering, more effective sales and marketing operations, or greater financial, technical, and other resources.
Further, our potential and existing competitors may make acquisitions or enter into strategic relationships and rapidly acquire significant market share due to a larger customer base, superior product offering, more effective sales and marketing operations, or greater financial, technical, and other resources.
The level of service provided by AWS could affect the availability or speed of our platform, which may also impact the usage of, and our customers’ satisfaction with, our 31 Table of Contents platform and could seriously harm our business and reputation.
The level of service provided by AWS could affect the availability or speed of our platform, which may also impact the usage of, and our customers’ satisfaction with, our platform and could seriously harm our business and reputation.
In addition, we will face risks in doing business internationally that could adversely affect our business and results of operations, including: • the need to localize and adapt our platform for specific countries, including translation into foreign languages and associated expenses; • data privacy laws that impose different and potentially conflicting obligations with respect to how personal data is processed or require that customer data be stored in a designated territory; • difficulties in staffing and managing foreign operations; • regulatory and other delays and difficulties in setting up foreign operations; • different pricing environments, longer sales cycles, longer accounts receivable payment cycles, and collections issues; • new and different sources of competition; • weaker protection for intellectual property and other legal rights than in the United States and practical difficulties in enforcing intellectual property and other rights outside of the United States; • laws and business practices favoring local competitors; • compliance challenges related to the complexity of multiple, conflicting, and changing governmental laws and regulations, including employment, tax, privacy, and data protection laws and regulations; • increased financial accounting and reporting burdens and complexities; • declines in the values of foreign currencies relative to the U.S. dollar; • restrictions on the transfer of funds; • potentially adverse tax consequences; • the cost of and potential outcomes of any claims or litigation; 35 Table of Contents • future accounting pronouncements and changes in accounting policies; • changes in tax laws or tax regulations; • health or similar issues, such as a pandemic or epidemic; and • regional and local economic and political conditions.
In addition, we will face risks in doing business internationally that could adversely affect our business and results of operations, including: • the need to localize and adapt our platform for specific countries, including translation into foreign languages and associated expenses; • data privacy laws that impose different and potentially conflicting obligations with respect to how personal data is processed or require that customer data be stored in a designated territory; • difficulties in staffing and managing foreign operations; • regulatory and other delays and difficulties in setting up foreign operations; • different pricing environments, longer sales cycles, longer accounts receivable payment cycles, and collections issues; • new and different sources of competition; • weaker protection for intellectual property and other legal rights than in the United States and practical difficulties in enforcing intellectual property and other rights outside of the United States; • laws and business practices favoring local competitors; • compliance challenges related to the complexity of multiple, conflicting, and changing governmental laws and regulations, including employment, tax, privacy, and data protection laws and regulations; 37 Table of Contents • increased financial accounting and reporting burdens and complexities; • declines in the values of foreign currencies relative to the U.S. dollar; • restrictions on the transfer of funds; • potentially adverse tax consequences; • the cost of and potential outcomes of any claims or litigation; • future accounting pronouncements and changes in accounting policies; • changes in tax laws or tax regulations; • health or similar issues, such as a pandemic or epidemic; and • regional and local economic and political conditions, such as global economic downturns or recessions in the regions in which we do business, bank failures, as well as macroeconomic and policy impacts of political instability and armed conflicts.
If our efforts to sell to organizations of all sizes are not successful or do not generate additional revenues, our business, results of operations, and financial condition would suffer.
If our efforts to sell to 28 Table of Contents organizations of all sizes are not successful or do not generate additional revenues, our business, results of operations, and financial condition would suffer.
If we cannot implement a valid compliance mechanism for cross- 40 Table of Contents border personal information transfers, we may face increased exposure to regulatory actions, substantial fines, and injunctions against processing or transferring personal information from the EEA or elsewhere.
If we cannot implement a valid compliance mechanism for cross-border personal information transfers, we may face increased exposure to regulatory actions, substantial fines, and injunctions against processing or transferring personal information from the EEA or elsewhere.
Demand for our platform is affected by a number of factors, some of which are beyond our control, such as the rate of market adoption of work management solutions; the timing of development and release of competing new products; the development and acceptance of new features, integrations, and capabilities for our platform; price, product, and service changes by us or our competitors; technological changes and developments within the markets we serve; growth, contraction, and rapid evolution of our market; and general economic conditions and trends.
Demand for our platform is affected by a number of factors, some of which are beyond our control, such as the rate of market adoption of work management solutions; the timing of development and release of competing new products; the development and acceptance of new features, integrations, and capabilities for our platform; price, product, and service changes by us or our competitors; technological changes and developments within the markets we serve; growth, contraction, and rapid evolution of our market; and general economic conditions and trends including a downturn or recession, rising inflation and rising interest rates.
We may not achieve anticipated revenue growth from expanding our direct sales force if we are unable to hire and develop talented direct sales personnel, if our new direct sales personnel are unable to achieve desired productivity levels in a reasonable period of time, or if we are unable to retain our existing direct sales personnel.
We may not achieve anticipated revenue growth from our direct sales force if we are unable to leverage and develop talented direct sales personnel, if direct sales personnel are unable to achieve desired productivity levels in a reasonable period of time, or if we are unable to retain our existing direct sales personnel.
Any failure to preserve our culture could negatively affect our future success, including our ability to retain and recruit personnel 33 Table of Contents and to effectively focus on and pursue our mission to help humanity by enabling the world’s teams to work together effortlessly.
Any failure to preserve our culture could negatively affect our future success, including our ability to retain and recruit personnel and to effectively focus on and pursue our mission to help humanity by enabling the world’s teams to work together effortlessly.
Our quarterly financial results may fluctuate due to a variety of factors, many of which are outside of our control and may be difficult to predict, including, but not limited to: • the level of demand for our platform; • our ability to grow or maintain our dollar-based net retention rate, expand usage within organizations, and sell subscriptions; • our ability to convert individuals, teams, and organizations using our free and trial versions into paying customers; • the timing and success of new features, integrations, capabilities, and enhancements by us to our platform, or by our competitors to their products, or any other changes in the competitive landscape of our market; • our ability to achieve widespread acceptance and use of our platform; • errors in our forecasting of the demand for our platform, which would lead to lower revenues, increased costs, or both; • the amount and timing of operating expenses and capital expenditures, as well as entry into operating leases, that we may incur to maintain and expand our business and operations and to remain competitive; • the timing of expenses and recognition of revenues; • security breaches, technical difficulties, or interruptions to our platform; • pricing pressure as a result of competition or otherwise; • adverse litigation judgments, other dispute-related settlement payments, or other litigation-related costs; • the number of new employees hired; • the timing of the grant or vesting of equity awards to employees, directors, or consultants; • seasonal buying patterns for software spending; • declines in the values of foreign currencies relative to the U.S. dollar; • changes in, and continuing uncertainty in relation to, the legislative or regulatory environment; • legal and regulatory compliance costs in new and existing markets; • costs and timing of expenses related to the potential acquisition of businesses, talent, technologies, or intellectual property, including potentially significant amortization costs and possible write-downs; • health epidemics, such as the COVID-19 pandemic, influenza, and other highly communicable diseases or viruses; and • general economic conditions in either domestic or international markets, including geopolitical uncertainty and instability and their effects on software spending.
Our quarterly financial results may fluctuate due to a variety of factors, many of which are outside of our control and may be difficult to predict, including, but not limited to: • the level of demand for our platform; • our ability to grow or maintain our dollar-based net retention rate, expand usage within organizations, and sell subscriptions; • the timing and success of new features, integrations, capabilities, and enhancements by us to our platform, or by our competitors to their products, or any other changes in the competitive landscape of our market; • our ability to achieve widespread acceptance and use of our platform; • errors in our forecasting of the demand for our platform, which would lead to lower revenues, increased costs, or both; • the amount and timing of operating expenses and capital expenditures, as well as entry into operating leases, that we may incur to maintain and expand our business and operations and to remain competitive; • the timing of expenses and recognition of revenues; • security breaches, technical difficulties, or interruptions to our platform; • pricing pressure as a result of competition or otherwise; • adverse litigation judgments, other dispute-related settlement payments, or other litigation-related costs; • the number of new employees hired; • the timing of the grant or vesting of equity awards to employees, directors, or consultants; • seasonal buying patterns for software spending; • declines in the values of foreign currencies relative to the U.S. dollar; • rising global interest rates, which may affect our customers’ spending patterns and our return on investments; 26 Table of Contents • impact of inflation on our costs and on customer spending; • changes in, and continuing uncertainty in relation to, the legislative or regulatory environment; • legal and regulatory compliance costs in new and existing markets; • costs and timing of expenses related to the potential acquisition of businesses, talent, technologies, or intellectual property, including potentially significant amortization costs and possible write-downs; • health epidemics, such as the COVID-19 pandemic, influenza, and other highly communicable diseases or viruses; and • general economic conditions in either domestic or international markets, including geopolitical uncertainty and instability and their effects on software spending.
We believe our revenue growth depends on a number of factors, including, but not limited to, our ability to: • attract new individuals, teams, and organizations as customers; • grow or maintain our dollar-based net retention rate, expand usage within organizations, and sell subscriptions; • price our subscription plans effectively; • convert individuals, teams, and organizations on our free and trial versions into paying customers; • achieve widespread acceptance and use of our platform, including in markets outside of the United States; • continue to successfully expand our sales force; • expand the features and capabilities of our platform; • provide excellent customer experience and customer support; • maintain the security and reliability of our platform; • successfully compete against established companies and new market entrants, as well as existing software tools; • increase awareness of our brand on a global basis; and • comply with existing and new applicable laws and regulations.
We believe our revenue growth depends on a number of factors, including, but not limited to, our ability to: • attract new individuals, teams, and organizations as customers; • grow or maintain our dollar-based net retention rate, expand usage within organizations, and sell subscriptions; • price our subscription plans effectively; • convert individuals, teams, and organizations on our free and trial versions into paying customers; • achieve widespread acceptance and use of our platform, including in markets outside of the United States; • strategically expand our sales force and leverage our existing sales capacity; • expand the features and capabilities of our platform; • provide excellent customer experience and customer support; • maintain the security and reliability of our platform; • successfully compete against established companies and new market entrants, as well as existing software tools; and 24 Table of Contents • increase awareness of our brand on a global basis.
While we believe our revenues are relatively predictable in the near-term as a result of our subscription-based business model, the effect of the COVID-19 pandemic may not be fully reflected in our operating results and overall financial performance until future periods.
While we believe our revenues are relatively predictable in the near-term as a result of our subscription-based business model, the effect of macroeconomic uncertainties may not be fully reflected in our operating results and overall financial performance until future periods.
We cannot assure you that the marketplaces through which we distribute our mobile application will maintain their current structures or that such marketplaces will not charge us fees to list our application for download.
We cannot assure you that the marketplaces through which we distribute our mobile application will maintain their current structures or that such marketplaces will not charge us 36 Table of Contents fees to list our application for download.
A significant part of our business strategy and culture is to focus on long-term growth and customer success over short-term financial results. For example, in the fiscal year ended January 31, 2022, we increased our operating expenses to $604.7 million as compared to $373.8 million in the fiscal year ended January 31, 2021.
A significant part of our business strategy and culture is to focus on long-term growth and customer success over short-term financial results. For example, in the fiscal year ended January 31, 2023, we increased our operating expenses to $898.5 million as compared to $604.7 million in the fiscal year ended January 31, 2022.
Breaches of our security measures or those of our third-party service providers, or other cyber security incidents, could result in unauthorized access to our sites, networks, systems, and accounts; unauthorized access to, and misappropriation of, individuals’ personal information or other confidential or proprietary information of ourselves, our customers, or other third parties; viruses, worms, spyware, or other malware being served from our platform, mobile application, networks, or systems; deletion or modification of content or the display of unauthorized content on our platform; interruption, disruption, or malfunction of operations; costs relating to breach remediation, deployment of additional personnel and protection technologies, and response to governmental investigations and media inquiries and 30 Table of Contents coverage; engagement of third-party experts and consultants; or litigation, regulatory action, and other potential liabilities.
Breaches of our security measures or those of our third-party service providers, including supply chain attacks or other threats to our business operations, could result in unauthorized access to our sites, networks, systems, and accounts; unauthorized access to, and misappropriation of, individuals’ personal information or other confidential or proprietary information of ourselves, our customers, or other third parties; viruses, worms, spyware, or other malware being served from our platform, mobile application, networks, or systems; deletion or modification of content or the display of unauthorized content on our platform; interruption, disruption, or malfunction of operations; costs relating to breach remediation, deployment of additional personnel and protection technologies, and response to governmental investigations and media inquiries and coverage; engagement of third-party experts and consultants; or litigation, regulatory action, and other potential liabilities.
We encourage customers on our free and trial versions to upgrade to paid subscriptions plans and customers of our Premium plan to 26 Table of Contents upgrade to our Business or Enterprise plans.
We encourage customers on our free and trial versions to upgrade to paid subscriptions plans and customers of our Premium plan to upgrade to our Business or Enterprise plans.
We have a history of losses, and we may not be able to achieve profitability or, if achieved, sustain profitability. We have incurred net losses in each fiscal year since our founding. We generated net losses of $288.3 million and $211.7 million for the fiscal years ended January 31, 2022 and January 31, 2021, respectively.
We have a history of losses, and we may not be able to achieve profitability or, if achieved, sustain profitability. We have incurred net losses in each fiscal year since our founding. We generated net losses of $407.8 million and $288.3 million for the fiscal years ended January 31, 2023 and January 31, 2022, respectively.
If we do not succeed in attracting excellent personnel or retaining or motivating existing personnel, we may be unable to innovate quickly enough to support our business model or grow effectively.
If we do not succeed in attracting 35 Table of Contents excellent personnel or retaining or motivating existing personnel, we may be unable to innovate quickly enough to support our business model or grow effectively.
Customers may or may not renew their subscription plans as a result of a number of factors, including their satisfaction or dissatisfaction with our platform, our pricing or pricing structure, the pricing or capabilities of the products and services offered by our competitors, the effects of general economic conditions, or customers’ budgetary constraints.
Customers may or may not renew their subscription plans as a result of a number of factors, including their satisfaction or dissatisfaction with our platform, our pricing or pricing structure, the pricing or capabilities of the products and services offered by our competitors, the effects of general economic conditions including a downturn or recession, rising inflation and rising interest rates, or customers’ budgetary constraints.
The expansion of our existing international operations and entry into additional international markets will require significant management attention and financial resources. Our failure to successfully manage our international operations and the associated risks effectively could limit the future growth of our business.
Continuing to leverage our existing international operations and any potential entry into additional international markets will require significant management attention and financial resources. Our failure to successfully manage our international operations and the associated risks effectively could limit the future growth of our business.
As of January 31, 2022, we had an accumulated deficit of $829.8 million. We do not expect to be profitable in the near future, and we cannot assure you that we will achieve profitability in t he future or that, if we do become profitable, we will sustain profitability.
As of January 31, 2023, we had an accumulated deficit of $1,237.6 million. We do not expect to be profitable in the near future, and we cannot assure you that we will achieve profitability in t he future or that, if we do become profitable, we will sustain profitability.
While we have historically transacted in U.S. dollars with the majority of our customers and vendors, we have transacted in some foreign currencies with such parties and for our payroll in those foreign jurisdictions where we have operations, and expect to continue to transact in more foreign currencies in the future.
While we have historically transacted in U.S. dollars with the majority of our customers and vendors, we have also transacted in foreign currencies and for foreign jurisdictions where we have operations, and expect to continue to transact in more foreign currencies in the future.
If we are not permitted or able to integrate with these and other third-party applications in the future, our business, results of operations, and financial condition would be harmed. Further, our platform includes a mobile application to enable individuals, teams, and organizations to access our platform through their mobile devices.
If we are not permitted or able to integrate with these and other third-party applications in the future, our business, results of operations, and financial condition would be harmed. Further, our platform includes both a mobile and a desktop application to enable individuals, teams, and organizations to access our platform on multiple device types.
We expect to continue to make substantial future investments and expenditures related to the growth of our business, including: • expansion of our sales and marketing activities; • continued investments in research and development to introduce new features and enhancements to our platform; • hiring additional employees; • investments in infrastructure; • expansion of our operations across our multiple geographies; and • increasing costs associated with our general and administrative organization.
We expect to continue to make future investments and expenditures related to the growth of our business, including: • strategic investment in our sales and marketing activities; • continued investments in research and development to introduce new features and enhancements to our platform; • hiring employees necessary to support our goals; • investments in infrastructure; • leveraging our operations across our multiple geographies; and • costs associated with our general and administrative organization.
To the extent that increasing numbers of these individuals, teams, and organizations do not become, or lead others to become, paying customers, we will not realize the intended benefits of this marketing strategy, we will continue to pay the costs associated with hosting such free and trial versions, our ability to grow our business will be harmed, and our business, results of operations, and financial condition will suffer.
To the extent that increasing numbers of these individuals, teams, and organizations do not become, or lead others to become, paying customers, we will not realize the intended benefits of this marketing strategy, we will continue to pay the costs associated with hosting such free and trial versions, our ability to grow our business will be harmed, and our business, results of operations, and financial condition will suffer. 29 Table of Contents We derive, and expect to continue to derive, substantially all of our revenues from a single solution.
In addition, larger enterprises may demand more customization, integration and support services, and features.
In addition, larger enterprise organizations may demand more customization, integration and support services, and features.
Restrictions on travel and in-person meetings have interrupted and could continue to interrupt our sales activity, and though we plan to return to normal operations in fiscal 2023, we cannot fully predict whether, for how long, or the extent to which the COVID-19 pandemic and related precautionary measures may continue to have an impact.
Limitations on travel and in-person meetings have interrupted and could continue to interrupt our sales activity, and though we have largely returned to normal operations in the second half of fiscal 2023, we cannot fully predict whether, for how long, or the extent to which the COVID-19 pandemic and related precautionary measures may impact our sales activity.
Our competitors may also offer their products and services at a lower price, or, particularly during the ongoing COVID-19 pandemic, may offer price concessions, delayed payment terms, financing terms, or other terms and conditions that are more enticing to potential customers.
Our competitors may also offer their products and services at a lower price, may offer price concessions, delayed payment terms, financing terms, or other terms and conditions that are more enticing to potential customers.
Additionally, the California Privacy Rights Act (“CPRA”) was approved by voters in California in November 2020, and beginning in January 2023 will impose additional privacy, data protection, and data security obligations on companies doing business in California and is expected to increase enforcement activity.
Additionally, the California Privacy Rights Act (“CPRA”) approved by voters in California in November 2020, went into effect in January 2023. It imposes additional privacy, data protection, and data security obligations on companies doing business in California and is expected to increase enforcement activity.
Sales to customers outside the United States and our international operations expose us to risks inherent in international sales and operations. For the fiscal year ended January 31, 2022, 42% of our revenues were generated from customers outside the United States.
Sales to customers outside the United States and our international operations expose us to risks inherent in international sales and operations. For the fiscal year ended January 31, 2023, 40% of our revenues were generated from customers outside the United States. We have operations in multiple cities globally.
In the fiscal year ended January 31, 2022, our net loss increased to $288.3 million from $211.7 million in the fiscal year ended January 31, 2021.
In the fiscal year ended January 31, 2023, our net loss increased to $407.8 million from $288.3 million in the fiscal year ended January 31, 2022.
Additionally, there can be no assurance that the limitations of liability in our contracts would protect us from liabilities or damages if we fail to comply with applicable obligations related to privacy, data protection, data security.
Additionally, our contracts may not contain limitations of liability, and even when they do, there can be no assurance that the limitations of liability in our contracts are sufficient to protect us from liabilities, claims, or damages if we fail to comply with applicable obligations related to privacy, data protection, or data security.
Our business will be harmed if any provider of such software systems: • discontinues or limits our access to its software or APIs; • modifies its terms of service or other policies, including fees charged to, or other restrictions on us, or other application developers; • changes how information is accessed by us or our customers; • establishes more favorable relationships with one or more of our competitors; or • develops or otherwise favors its own competitive offerings over our platform.
Our business will be harmed if any provider of such software systems: • discontinues or limits our access to its software or APIs; • modifies its terms of service or other policies, including fees charged to, or other restrictions on us, or other application developers; • changes how information is accessed by us or our customers; • establishes more favorable relationships with one or more of our competitors; or • develops or otherwise favors its own competitive offerings over our platform. 34 Table of Contents Third-party services and products are constantly evolving, and we may not be able to modify our platform to assure its compatibility with that of other third parties.
In the event of further growth of our operations or in the number of our third-party relationships, our systems, procedures, or internal controls may not be adequate to support our operations, and our management may not be able to manage such growth effectively.
We are required to manage multiple relationships with various strategic partners, customers, and other third parties. In the event of further growth of our operations or in the number of our third-party relationships, our systems, procedures, or internal controls may not be adequate to support our operations, and our management may not be able to manage such growth effectively.
Department of the Treasury’s Office of Foreign Assets Control, or OFAC, which we refer to collectively as Trade Controls. Trade Controls may prohibit or restrict the sale or supply of certain products, including encryption items and other technology, and services to certain governments, persons, entities, countries, and territories, including those that are the target of comprehensive sanctions.
Trade Controls may prohibit or restrict the sale or supply of certain products, including encryption items and other technology, and services to certain governments, persons, entities, countries, and territories, including those that are the target of comprehensive sanctions.
For example, the California Consumer Privacy Act of 2018, or the CCPA, came into effect on January 1, 2020 and final CCPA regulations were issued in August 2020.
For example, the CCPA came into effect on January 1, 2020 and final CCPA regulations were issued in August 2020.
If we fail to meet or exceed such expectations for these or any other reasons, the trading price of our Class A common stock would fall, and we would face costly litigation, including securities class action lawsuits. We may not be able to effectively manage our growth. We have experienced rapid growth and increased demand for our platform.
If we fail to meet or exceed such expectations for these or any other reasons, the trading price of our Class A common stock would fall, and we would face costly litigation, including securities class action lawsuits.
We are also frequently required to indemnify our reseller partners and customers in the event of any third-party infringement claims against our customers and third parties who offer our platform, and such indemnification obligations may be excluded from contractual limitation of liability provisions that limit our exposure.
Any of these events would cause our business and results of operations to be materially and adversely affected as a result. 39 Table of Contents We are also frequently required to indemnify our reseller partners and customers in the event of any third-party infringement claims against our customers and third parties who offer our platform, and such indemnification obligations may be excluded from contractual limitation of liability provisions that limit our exposure.
Anti-corruption and anti-bribery laws have been enforced aggressively in recent years and are interpreted broadly and prohibit companies and their employees and 41 Table of Contents agents from promising, authorizing, making, or offering improper payments or other benefits to government officials and others in the private sector.
Anti-corruption and anti-bribery laws have been enforced aggressively in recent years and are interpreted broadly and prohibit companies and their employees and agents from promising, authorizing, making, or offering improper payments or other benefits to government officials and others in the private sector. As we increase our international sales and business, our risks under these laws may increase.
We present certain non-GAAP financial measures in this report and intend to continue to present certain non-GAAP financial measures in future filings with the SEC and other public statements.
We present certain non-GAAP financial measures in this 47 Table of Contents Annual Report on Form 10-K and intend to continue to present certain non-GAAP financial measures in future filings with the SEC and other public statements.
Any one or more of the factors above may result in significant fluctuations in our quarterly results of operations, which may negatively impact the trading price of our Class A common stock.
Any one or more of the factors above may result in significant fluctuations in our quarterly results of operations, which may negatively impact the trading price of our Class A common stock. You should not rely on our past results as an indicator of our future performance.
As we increase our international sales and business, our risks under these laws may increase. Noncompliance with these laws could subject us to investigations, sanctions, settlements, prosecution, other enforcement actions, disgorgement of profits, significant fines, damages, other civil and criminal penalties or injunctions, adverse media coverage, and other consequences.
Noncompliance with these laws could subject us to investigations, sanctions, settlements, prosecution, other enforcement actions, disgorgement of profits, significant fines, damages, other civil and criminal penalties or injunctions, adverse media coverage, and other consequences. Any investigations, actions, or sanctions could harm our business, results of operations, and financial condition.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe intend to procure additional space in the future as we continue to add employees and expand geographically. We believe our facilities are adequate and suitable for our current needs and that, should it be needed, suitable additional or alternative space will be available to accommodate our operations. 52 Table of Contents
Biggest changeWe may procure additional space in the future if we add employees or expand geographically. We believe our facilities are adequate and suitable for our current needs and that, should it be needed, suitable additional or alternative space will be available to accommodate our operations. 54 Table of Contents
Item 2. Properties Our corporate headquarters is located in San Francisco, California, where we lease approximately 266,000 square feet of office space pursuant to a lease that expires in October 2033. We began occupying this space during fiscal 2022 as our new corporate headquarters. In addition, we maintain additional offices in the United States and internationally in APAC and EMEA.
Item 2. Properties Our corporate headquarters is located in San Francisco, California, where we lease approximately 266,000 square feet of office space pursuant to a lease that expires in October 2033. We began occupying this space during fiscal 2022 as our new corporate headquarters. In addition, we maintain additional offices in North America and internationally in APAC and EMEA.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeWe are not presently a party to any litigation the outcome of which, we believe, if determined adversely to us, would individually or taken together have a material adverse effect on our business, operating results, cash flows or financial condition. Item 4. Mine Safety Disclosures Not applicable. 53 Table of Contents PART II
Biggest changeWe are not presently a party to any litigation the outcome of which, we believe, if determined adversely to us, would individually or taken together have a material adverse effect on our business, operating results, cash flows or financial condition. Item 4. Mine Safety Disclosures Not applicable. 55 Table of Contents PART II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures 53 Part II 54 Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 54 Item 6. Reserved 55 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 56 Item 7A. Quantitative and Qualitative Disclosures about Market Risk 71 Item 8.
Biggest changeItem 4. Mine Safety Disclosures 55 Part II 56 Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 56 Item 6. Reserved 57 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 58 Item 7A. Quantitative and Qualitative Disclosures about Market Risk 73 Item 8.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changePeriod Total Number of Shares Purchased 1 Average Price Paid per Share November 1 - November 30, 2021 1,350 $ 3.70 December 1 - December 31, 2021 — $ — January 1 - January 31, 2022 — $ — Total 1,350 $ 3.70 __________________ 1 Represents shares of unvested Class A common stock that were repurchased by us from former employees upon termination of employment in accordance with the terms of the employees’ stock option agreements.
Biggest changePeriod Total Number of Shares Purchased 1 Average Price Paid per Share November 1 - November 30, 2022 960 $ 6.34 December 1 - December 31, 2022 86 $ 3.70 January 1 - January 31, 2023 84 $ 3.70 Total 1,130 $ 5.95 __________________ 1 Represents shares of unvested Class A common stock that were repurchased by us from former employees upon termination of employment in accordance with the terms of the employees’ stock option agreements.
The following graph compares (i) the cumulative total stockholder return on our Class A common stock from September 30, 2020 (the date our Class A common stock commenced trading on the NYSE) through January 31, 2022 with (ii) the cumulative total return of the Standard & Poor's (S&P) 500 Index and the Standard & Poor’s Information Technology Index over the same period, assuming the investment of $100 in our Class A common stock and in both of the other indices on September 30, 2020 and the reinvestment of dividends.
The following graph compares (i) the cumulative total stockholder return on our Class A common stock from September 30, 2020 (the date our Class A common stock commenced trading on the NYSE) through January 31, 2023 with (ii) the cumulative total return of the Standard & Poor's (S&P) 500 Index and the Standard & Poor’s Information Technology Index over the same period, assuming the investment of $100 in our Class A common stock and in both of the other indices on September 30, 2020 and the reinvestment of dividends.
As discussed above, we have never declared or paid a cash dividend on our Class A common stock and do not anticipate declaring or paying a cash dividend in the foreseeable future. 54 Table of Contents Unregistered Sales of Equity Securities None.
As discussed above, we have never declared or paid a cash dividend on our Class A common stock and do not anticipate declaring or paying a cash dividend in the foreseeable future. 56 Table of Contents Unregistered Sales of Equity Securities None.
Issuer Purchase of Equity Securities The following table contains information relating to the repurchases of our common stock made by us in the three months ended January 31, 2022.
Issuer Purchase of Equity Securities The following table contains information relating to the repurchases of our common stock made by us in the three months ended January 31, 2023.
Securities Authorized for Issuance under Equity Compensation Plans See the section titled “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” for information regarding securities authorized for issuance.
Securities Authorized for Issuance under Equity Compensation Plans See the section titled Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters for information regarding securities authorized for issuance.
Since August 26, 2021, our Class A common stock has also been listed on the LTSE under the symbol “ASAN.” Holders of Record As of March 17, 2022, we had 131 holders of record of our Class A common stock and 16 holders of record of our Class B common stock.
Since August 26, 2021, our Class A common stock has also been listed on the LTSE under the symbol “ASAN.” Holders of Record As of March 1, 2023, we had 126 holders of record of our Class A common stock and 14 holders of record of our Class B common stock.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeInterest expense consists of contractual interest expense and amortization of the debt discount on the senior mandatory convertible promissory notes we issued in January and June 2020 to a trust affiliated with our CEO, and interest expense from our term loan.
Biggest changeFor example, in January and June 2020, we issued and sold convertible notes to the Dustin Moskovitz Trust, an affiliated trust of Mr.
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Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the consolidated financial statements and related notes appearing elsewhere in this Annual Report on Form 10-K.
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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations . The results of these estimates form the basis for making judgments about the carrying values of assets, liabilities, and equity, and the amount of revenues and expenses that are not readily apparent from other sources.
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As described in the section titled “Special Note Regarding Forward-Looking Statements,” the following discussion and analysis contains forward ‑ looking statements that involve risks and uncertainties, as well as assumptions that, if they never materialize or prove correct, could cause our results to differ materially from those expressed or implied by such forward-looking statements.
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Significant assumptions and estimates used in preparing our consolidated financial statements include those related to the useful lives and carrying values of long-lived assets, the fair value of the convertible note, the fair value of common stock, stock-based compensation expense, the period of benefit for deferred contract acquisition costs, and income taxes.
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Factors that could cause or contribute to such differences include, but are not limited to, those identified below and those discussed in the section titled “Risk Factors” included above in this report. Our fiscal year ends on January 31. Overview Asana is a work management platform that helps teams orchestrate work, from daily tasks to cross-functional strategic initiatives.
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Our results of operations may be adversely affected if our assumptions change or if actual circumstances differ from those in our assumptions, which could cause our results of operations to fall below the expectations of securities analysts and investors, resulting in a decline in the trading price of our Class A common stock. Catastrophic events may disrupt our business.
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Over 119,000 paying customers use Asana to manage everything from product launches to marketing campaigns to organization-wide goal setting. Our platform adds structure to unstructured work, creating clarity, transparency, and accountability to everyone within an organization—individuals, team leads, and executives—so they understand exactly who is doing what, by when.
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Natural disasters or other catastrophic events may cause damage or disruption to our operations, international commerce, and the global economy, and thus could harm our business.
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Asana is flexible and applicable to virtually any use case across departments and organizations of all sizes. We designed our platform to be easy to use and intuitive to all users, regardless of role or technical proficiency. Users can start a project within minutes and onboard team members seamlessly without outside support.
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In particular, health crises, such as the 48 Table of Contents COVID-19 pandemic, and international conflicts, such as the invasion of Ukraine by Russia and related economic sanctions, including the reactions of governments, markets, and the general public, may result in a number of adverse consequences for our business, operations, and results of operations, many of which are beyond our control.
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We allow users to work the way they want with the interface that is right for them, using lists, calendars, boards, timelines, and workload. We have experienced rapid growth in recent periods.
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We have our headquarters and a large employee presence in San Francisco, California, and the west coast of the United States contains active earthquake zones.
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Our revenues were $378.4 million, $227.0 million, and $142.6 million for fiscal 2022, fiscal 2021, and fiscal 2020, respectively, representing growth of 67% and 59% for fiscal 2022 and f iscal 2021, respectively . As of January 31, 2022, we had 1,666 employees, representing growth of 54% since January 31, 2021.
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In the event of a major earthquake, hurricane, or catastrophic event such as fire, power loss, telecommunications failure, cyber-attack, war, or terrorist attack, we may be unable to continue our operations and may endure system interruptions, reputational harm, delays in our platform development, lengthy interruptions in our platform, breaches of data security, and loss of critical data, all of which would harm our business, results of operations, and financial condition.
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We had a net loss of $288.3 million, $211.7 million, and $118.6 million for fiscal 2022, fiscal 2021, and fiscal 2020, respectively . Since our inception, over 35 million users have registered on Asana and millions of teams in virtually every country around the world have used Asana. As of January 31, 2022, we had over 2.0 million paid users.
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Acts of terrorism would also cause disruptions to the internet or the economy as a whole. In addition, the insurance we maintain would likely not be adequate to cover our losses resulting from disasters or other business interruptions.
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Key Business Metrics We believe that our growth and financial performance are dependent upon many factors, including the key factors described below. Paying Customers We are focused on continuing to grow the number of customers that use our platform. Our operating results and growth opportunity depend, in part, on our ability to attract new customers.
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Our disaster recovery plan may not be sufficient to address all aspects or any unanticipated consequence or incident, and our insurance may not be sufficient to compensate us for the losses that could occur.
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We believe we have significant greenfield opportunities among addressable customers worldwide and we will continue to invest in our research and development and our sales and marketing organizations to address this opportunity. As of January 31, 2022, we had over 119,000 paying customers, compared to over 93,000 as of January 31, 2021.
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Risks Related To Ownership of Our Class A Common Stock The trading price of our Class A common stock may be volatile and could decline significantly and rapidly.
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We define a customer as a distinct account, which could include a team, company, educational or government institution, organization, or distinct business unit of a company, that is on a paid subscription plan, a free version, or a free trial of one of our paid subscription plans. A single organization may have multiple customers.
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The trading price of our Class A common stock has been and could continue to be subject to wide fluctuations in response to numerous factors in addition to the ones described in the preceding Risk Factors, many of which are beyond our control, including: • actual or anticipated fluctuations in our results of operations; • overall performance of the equity markets, the economy as a whole, and macroeconomic factors such as inflationary pressures; • changes in the financial projections we may provide to the public or our failure to meet these projections; • failure of securities analysts to initiate or maintain coverage of us, changes in financial estimates by any securities analysts who follow our company, or our failure to meet these estimates or the expectations of investors; • changes in pricing of subscription plans to our platform; • actual or anticipated changes in our growth rate relative to that of our competitors; • changes in the anticipated future size or growth rate of our addressable markets; • announcements of new products, or of acquisitions, strategic partnerships, joint ventures, or capital-raising activities or commitments, by us or by our competitors; • additions or departures of board members, management, or key personnel; • rumors and market speculation involving us or other companies in our industry; • new laws or regulations or new interpretations of existing laws or regulations applicable to our business, including those related to data privacy and cyber security in the United States or globally; • lawsuits threatened or filed against us; • other events or factors, including bank failures, war, incidents of terrorism, or responses to these events; • health epidemics, such as the COVID-19 pandemic, influenza, and other highly communicable diseases or viruses; and • sales, purchases, or expectations with respect to such transactions, of shares of our Class A common stock by us or our security holders, particularly by our founders, directors, executive officers, and principal 49 Table of Contents stockholders, none of whom are subject to any contractual lock-up agreement or other contractual restrictions on transfer.
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We define a paying customer as a customer on a paid subscription plan. Customers Spending Over $5,000 and $50,000 We focus on growing the number of customers spending over $5,000 and $50,000 on an annualized basis as a measure of our ability to scale within organizations.
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In addition, stock markets with respect to newly public companies, particularly companies in the technology industry, have experienced significant price and volume fluctuations that have affected and continue to affect the stock prices of these companies. Stock prices of many companies, including technology companies, have fluctuated in a manner often unrelated to the operating performance of those companies.
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We define customers spending over $5,000 and $50,000 as 56 Table of Contents those organizations on a paid subscription plan that had $5,000 or more or $50,000 or more in annualized GAAP revenues in a given quarter, respectively, inclusive of discounts.
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For example, despite our revenue growing year over year, our stock price has experienced significant volatility in the past year due to general downturns and increased instability in the equity markets. In the past, companies that have experienced volatility in the trading price for their stock have been subject to securities class action litigation.
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As customers realize the productivity benefits we provide, our platform often becomes critical to managing their work and achieving their objectives, which drives further adoption and expansion opportunities, and results in higher annualized contract values.
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If we were to become involved in securities litigation, it could subject us to substantial costs, divert resources and the attention of management from our business, and adversely affect our business, results of operations, and financial condition. Our largest stockholder will have the ability to influence the outcome of director elections and other matters requiring stockholder approval.
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We believe that our ability to increase the number of these customers is an important indicator of the components of our business, including: the continued acquisition of new customers, retaining and expanding our user base within existing customers, our continued investment in product development and functionality required by larger organizations, and the growth of our direct sales force.
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Dustin Moskovitz, our co-founder, President, Chief Executive Officer, Chair, and largest stockholder, beneficially owns a significant percentage of our outstanding Class A common stock and Class B common stock, together, representing a majority of the voting power of our capital stock as of January 31, 2023. Mr. Moskovitz could exert substantial influence over matters requiring approval by our stockholders.
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As of January 31, 2022, we had 15,437 customers spending over $5,000 on an annualized basis contributing approximately 66% of revenues for the fiscal year then ended. As of January 31, 2021, we had 10,174 customers spending over $5,000 who contributed approximately 58% of revenue for the fiscal year then ended.
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This concentration of ownership may limit or preclude your ability to influence corporate matters for the foreseeable future, including the election of directors, amendments of our organizational documents, and any merger, consolidation, sale of all or substantially all of our assets, or other major corporate transaction requiring stockholder approval.
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As of January 31, 2022 and 2021, we had 894 and 397 customers spending over $50,000 on an annualized basis, respectively. Dollar-based Net Retention Rate We expect to derive a significant portion of our revenue growth from expansion within our customer base, where we have an opportunity to expand adoption of Asana across teams, departments, and organizations.
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In addition, this may prevent or discourage unsolicited acquisition proposals or offers for our capital stock that you may believe are in your best interest as one of our stockholders. The dual class structure of our common stock has the effect of concentrating voting control with our founders, directors, executive officers, and their respective affiliates.
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We believe that our dollar-based net retention rate demonstrates our opportunity to further expand within our customer base, particularly those that generate higher levels of annual revenues. Our reported dollar-based net retention rate equals the simple arithmetic average of our quarterly dollar-based net retention rate for the four quarters ending with the most recent fiscal quarter.
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This ownership will limit or preclude your ability to influence corporate matters, including the election of directors, amendments of our organizational documents, and any merger, consolidation, sale of all or substantially all of our assets, or other major corporate transaction requiring stockholder approval.
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We calculate our dollar-based net retention rate by comparing our revenues from the same set of customers in a given quarter, relative to the comparable prior-year period. To calculate our dollar-based net retention rate for a given quarter, we start with the revenues in that quarter from customers that generated revenues in the same quarter of the prior year.
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Our Class B common stock has 10 votes per share, and our Class A common stock, which is the stock listed on the NYSE and the LTSE has one vote per share. Our founders, directors, executive officers, and their affiliates hold a majority of the voting power of our capital stock.
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We then divide that amount by the revenues attributable to that same group of customers in the prior-year quarter. Current period revenues include any upsells and are net of contraction or attrition over the trailing 12 months, but exclude revenues from new customers in the current period.
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Because of the 10-to-one voting ratio between our Class B and Class A common stock, the holders of our Class B common stock collectively could continue to control a significant percentage of the combined voting power of our common stock and therefore be able to control all matters submitted to our stockholders for approval until the date of automatic conversion described below, when all outstanding shares of Class B common stock and Class A common stock will convert automatically into shares of a single class of common stock.
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We expect our dollar-based net retention rate to fluctuate in future periods due to a number of factors, including the expected growth of our revenue base, the level of penetration within our customer base, and our ability to retain our customers. As of January 31, 2022 and 2021, our dollar-based net retention rate was over 120% and over 115%, respectively.
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This concentrated control may limit or preclude your ability to influence corporate matters for the foreseeable future, including the election of directors, amendments of our organizational documents, and any merger, consolidation, sale of all or substantially all of our assets, or other major corporate transaction requiring stockholder approval.
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As of January 31, 2022 and 2021, our dollar-based net retention rate for customers spending over $5,000 with us on an annualized basis was over 130% and 125%, respectively. Our dollar-based net retention rate for customers spending over $50,000 with us on an annualized basis for the same periods was over 145% and over 140%, respectively.
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In addition, this may prevent or discourage unsolicited acquisition proposals or offers for our capital stock that you may believe are in your best interest as one of our stockholders.
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Impact of COVID-19 As a result of the COVID-19 pandemic, we temporarily closed our headquarters and other physical offices, required our employees and contractors to work remotely, and implemented travel restrictions, all of which represent a significant disruption in how we operate our business.
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Future transfers by holders of Class B common stock will generally result in those shares converting to Class A common stock, subject to limited exceptions, such as certain transfers effected for estate planning purposes.
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The operations of our partners and customers have likewise been disrupted, with a disproportionate impact on smaller businesses that were particularly affected by the pandemic.
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In addition, each share of Class B common stock will convert automatically into one share of Class A common stock upon the date that is the earlier of (i) the date that is specified by the affirmative vote of the holders of two-thirds of the then-outstanding shares of Class B common stock, (ii) one year after the death or permanent disability of Mr.
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This impact was most evident in our overall dollar-based net retention rate, which declined early in the pandemic but has since returned to pre-pandemic levels, whereas the dollar-based net retention rates for customers who spent over $5,000 and over $50,000 has remained relatively consistent and increased throughout the pandemic .
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Moskovitz, or (iii) the later of the date that is (x) September 21, 2030 and (y) the date that Mr. Moskovitz no longer serves as our Chief Executive Officer or as a member of our board of directors.
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While the duration and extent of the COVID-19 pandemic depends on future developments that cannot be accurately predicted at this time, such as the extent and effectiveness of containment and mitigation actions the emergence of variant strains of the virus, and the availability and widespread use of effective vaccines, it continues to have adverse effects on the global economy and the ultimate societal and economic impact of the COVID-19 pandemic remains unknown.
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The conversion of Class B common stock to Class A common stock will have the effect, over time, of increasing the relative voting power of those holders of Class B common stock who retain their shares over the long term. As a result, it is possible that, in addition to Mr.
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In particular, the conditions caused by this pandemic could affect the rate of global IT spending and could 57 Table of Contents adversely affect demand for our platform, lengthen our sales cycles, reduce the value or duration of subscriptions, negatively impact collections of accounts receivable, reduce expected spending from new customers, cause some of our paying customers to go out of business, limit the ability of our direct sales force to travel to customers and potential customers, and affect contraction or attrition rates of our customers, all of which could adversely affect our business, results of operations, and financial condition during future periods.
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Moskovitz, one or more of the persons or entities holding our Class B common stock could gain 50 Table of Contents significant voting control as other holders of Class B common stock sell or otherwise convert their shares into Class A common stock.
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Components of Results of Operations Revenues We generate subscription revenues from paying customers accessing our cloud-based platform. Subscription revenues are driven primarily by the number of paying customers, the number of paying users within the customer base, and the level of subscription plan.
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We cannot predict the effect our dual class structure may have on the trading price of our Class A common stock. We cannot predict whether our dual class structure will result in a lower or more volatile trading price of our Class A common stock on the NYSE and the LTSE, in adverse publicity, or other adverse consequences.
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We recognize revenues ratably over the related contractual term beginning on the date that the platform is made available to a customer. Due to the ease of implementation of our platform, revenues from professional services have been immaterial to date.
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For example, certain index providers have announced restrictions on including companies with multiple-class share structures in certain of their indices.
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Cost of Revenues Cost of revenues consists primarily of the cost of providing our platform to free users and paying customers and is comprised of third-party hosting fees, personnel-related expenses for our operations and support personnel, credit card processing fees, and amortization of our capitalized internal-use software costs.
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In July 2017, FTSE Russell announced that it plans to require new constituents of its indices to have greater than 5% of the company’s voting rights in the hands of public stockholders, and S&P Dow Jones announced that it will no longer admit companies with multiple-class share structures to certain of its indices.
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As we acquire new customers and existing customers increase their use of our cloud-based platform, we expect that our cost of revenues will continue to increase in dollar amount.
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Affected indices include the Russell 2000 and the S&P 500, S&P MidCap 400, and S&P SmallCap 600, which together make up the S&P Composite 1500.
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Gross Profit and Gross Margin Gross profit, or revenues less cost of revenues, and gross margin, or gross profit as a percentage of revenues, has been and will continue to be affected by various factors, including the timing of our acquisition of new customers, renewals of and follow-on sales to existing customers, costs associated with operating our cloud-based platform, and the extent to which we expand our operations and customer support organizations.
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Also in 2017, MSCI, a leading stock index provider, opened public consultations on their treatment of no-vote and multi-class structures and temporarily barred new multi-class listings from certain of its indices; however, in October 2018, MSCI announced its decision to include equity securities “with unequal voting structures” in its indices and to launch a new index that specifically includes voting rights in its eligibility criteria.
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We expect our gross profit to increase in dollar amount and our subscription gross margin to remain relatively consistent over the long term. Operating Expenses Our operating expenses consist of research and development, sales and marketing, and general and administrative expenses.
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Under such announced policies, the dual class structure of our common stock would make us ineligible for inclusion in certain indices and, as a result, mutual funds, exchange-traded funds, and other investment vehicles that attempt to passively track those indices would not invest in our Class A common stock.
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Personnel-related expenses are the most significant component of operating expenses and consist of salaries, benefits, stock-based compensation expense, and, in the case of sales and marketing expenses, sales commissions. Operating expenses also include an allocation of overhead costs for facilities and shared IT-related expenses, including depreciation expense.
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These policies are relatively new and it is unclear what effect, if any, they will have on the valuations of publicly-traded companies excluded from such indices, but it is possible that they may depress valuations, as compared to similar companies that are included.
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In the fiscal year ended January 31, 2020, our personnel-related expenses was significantly impacted by stock-based compensation expense associated with a tender offer.
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Because of the dual class structure of our common stock, we will likely be excluded from certain indices, and we cannot assure you that other stock indices will not take similar actions.
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In October 2019, certain of our stockholders conducted a tender offer for shares of our outstanding Class A and Class B common stock and purchased an aggregate of 4,647,127 shares of our outstanding Class A and Class B common stock from certain other stockholders at a purchase price of $15.82 per share, for an aggregate purchase price of $73.5 million, resulting in stock-based compensation expense of $38.7 million for the excess of the selling price per share over the fair value of the tendered shares.
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Given the sustained flow of investment funds into passive strategies that seek to track certain indices, exclusion from certain stock indices would likely preclude investment by many of these funds and would make our Class A common stock less attractive to other investors. As a result, the trading price of our Class A common stock could be adversely affected.
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Research and Development Research and development expenses consist primarily of personnel-related expenses. These expenses also include product design costs, third-party services and consulting expenses, software subscriptions and expensed computer equipment used in research and development activities, and allocated overhead costs.
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Sales of substantial amounts of our Class A common stock in the public markets, or the perception that sales might occur, could cause the trading price of our Class A common stock to decline.
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A substantial portion 58 Table of Contents of our research and development efforts are focused on enhancing our software architecture and adding new features and functionality to our platform.
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Sales of a substantial number of shares of our Class A common stock into the public market, particularly sales by our founders, directors, executive officers, and principal stockholders, or the perception that these sales might occur in large quantities, could cause the trading price of our Class A common stock to decline.
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We anticipate continuing to invest in innovation and technology development, and as a result, we expect research and development expenses to continue to increase in dollar amount but to decrease as a percentage of revenues over time.
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In addition, certain of our securityholders have rights, subject to some conditions, to require us to file registration statements for the public resale of the Class A common stock or to include such shares in registration statements that we may file for us or other stockholders.
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Sales and Marketing Sales and marketing expenses consist primarily of personnel-related expenses and expenses for performance marketing and lead generation, brand marketing, pipeline generation, and sponsorship activities. These expenses also include allocated overhead costs and travel-related expenses.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeAs a result, any increase in the value of the U.S. dollar against these foreign currencies could cause our revenue to decline relative to our costs, thereby decreasing our margins. We recorded a net loss of $1.7 million and a net gain of $1.0 million in net foreign currency transactions in the years ended January 31, 2022 and 2021, respectively.
Biggest changeIn the year ended January 31, 2023, 21% of our sales were denominated in currencies other than U.S. dollars. Our expenses, by contrast, are primarily denominated in U.S. dollars. As a result, any increase in the value of the U.S. dollar against these foreign currencies could cause our revenue to decline relative to our costs, thereby decreasing our margins.
A portion of our operating expenses are incurred outside the United States, denominated in foreign currencies, and subject to fluctuations due to changes in foreign currency exchange rates, particularly changes in the Euro, British Pound, Canadian Dollar, Australian Dollar, Japanese Yen, Icelandic Krona, and Singapore Dollar.
A portion of our operating expenses are incurred outside the United States, denominated in foreign currencies, and subject to fluctuations due to changes in foreign currency exchange rates, particularly changes in the Euro, British Pound, Canadian Dollar, Australian Dollar, Japanese Yen, Icelandic Krona, Singapore Dollar, and Swiss Franc.
As the impact of foreign currency exchange rates are not projected to be material to our operating results, we have not entered into derivative or hedging transactions, but we may do so in the future if our exposure to foreign currency becomes more significant. 72
As the impact of foreign currency exchange rates are not projected to be material to our operating results, we have not entered into derivative or hedging transactions, but we may do so in the future if our exposure to foreign currency becomes more significant. 74
Item 7A. Quantitative and Qualitative Disclosures About Market Risk We have operations in the United States and internationally, and we are exposed to market risk in the ordinary course of our business.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk We have operations in the United States and internationally, and we are exposed to certain market risks in the ordinary course of our business.
Foreign Currency Risk The majority of our subscription agreements are denominated in U.S. dollars, with the remainder generated in Euros, British Pounds, Australian Dollars, and Japanese Yen.
Foreign Currency Risk The majority of our subscription agreements are denominated in U.S. dollars, with the remainder generated in Euros, British Pounds, Australian Dollars, Japanese Yen, Mexican Pesos, Brazilian Reais, Canadian Dollars, and Korean Won.
As of January 31, 2022 and January 31, 2021, we had cash and cash equivalents of $240.4 million and $259.9 million, respectively, and marketable securities of $74.4 million and $145.5 million, respectively. We do not enter into investments for trading or speculative purposes.
As of January 31, 2023 and January 31, 2022, we had cash and cash equivalents of $526.6 million and $240.4 million, respectively, and marketable securities including non-current investments of $2.7 million and $74.4 million, respectively. We do not enter into investments for trading or speculative purposes.
A hypothetical 10% change in foreign currency rates would not have resulted in material gains or losses for the years ended January 31, 2022 and 2021.
We disclose the impact of realized foreign currency gains and losses within Note 13. Interest Income and Other Income (Expense), Net . A hypothetical 10% change in foreign currency rates would not have resulted in material gains or losses for the years ended January 31, 2023 and 2022.
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In the year ended January 31, 2022, 22% of our sales were denominated in currencies other than U.S. dollars. Our expenses, by contrast, are primarily 71 Table of Contents denominated in U.S. dollars.
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The uncertainty that exists with respect to the global economic impact of the 73 Table of Contents COVID-19 pandemic and the macroeconomic environment has introduced significant volatility in the financial markets.

Other ASAN 10-K year-over-year comparisons