Financial Data and Key Metrics Changes - Revenues for Q2 reached $89.5 million, representing a 72% year-over-year growth, with an acceleration of 11 percentage points compared to Q1 [8][16] - The company raised its full-year revenue guidance to a range of $357 million to $359 million, indicating a growth rate of 57% to 58% [9][27] - The dollar-based net retention rate increased to over 118%, with specific cohorts showing even higher rates of 125% and 145% for customers spending $5,000 and $50,000 or more annually, respectively [9][24] Business Line Data and Key Metrics Changes - The number of customers spending over $5,000 annually grew by 97% year-over-year, while those spending over $50,000 increased by 111% [9][23] - The company added over 7,000 net new paying customers, bringing the total to over 107,000 [9][16] - Revenue from customers spending $5,000 or more represented 66% of total revenues in Q2, up from 58% in the same quarter last year [24] Market Data and Key Metrics Changes - Asana is now available in 13 languages, expanding its reach to 4.2 billion people globally [12][62] - The company reported strong growth across global markets, with significant wins in various regions [62] Company Strategy and Development Direction - The company is focusing on three major growth drivers: acquiring new customers, expanding the existing customer base, and maintaining enterprise momentum [21] - Asana's product roadmap includes new features aimed at enhancing customer experience and operational efficiency, such as deep integration with Zoom and Universal Reporting [12][13] - The company is committed to long-term strategies, including ESG reporting and partnerships with organizations like the Long-Term Stock Exchange [14][15] Management's Comments on Operating Environment and Future Outlook - Management highlighted the ongoing workplace transformation and the need for clarity and alignment in organizations, which Asana aims to address [11][31] - The company is optimistic about future growth, citing strong demand and the effectiveness of its product strategy [9][27] Other Important Information - Asana was officially listed on the Long-Term Stock Exchange, marking a significant milestone for the company [14] - The company has been recognized as one of the Best Small and Medium Workplaces for 2021 by Fortune and Great Places to Work [15] Q&A Session Summary Question: What is resonating most with enterprise customers for broader deployments? - Management noted that the need for clarity and alignment has been accentuated by the pandemic, leading to increased enterprise adoption [34] Question: What is driving the increased net retention rate? - The increase is attributed to improved adoption and expansion on a cohort basis, along with a growing demand for coordination tools in the new normal [38][39] Question: How is the adoption curve for new products like Universal Reporting? - There has been significant excitement around Universal Reporting, with many dashboards being created and shared among large customers [41] Question: Can you provide more color on the scale of larger deployments? - Management expressed excitement about large deployments, noting that they are seeing more wall-to-wall adoption across organizations [44] Question: How is the international expansion plan trending? - The company reported strong growth across global markets and highlighted the importance of its channel program in driving this growth [62]

Financial Performance - The company incurred net losses of $211.7 million and $118.6 million for the fiscal years ended January 31, 2021, and January 31, 2020, respectively, with an accumulated deficit of $541.4 million as of January 31, 2021[107]. - Operating expenses increased to $373.8 million in the fiscal year ended January 31, 2021, compared to $242.4 million in the previous fiscal year[110]. - Future profitability remains uncertain, as the company prioritizes long-term growth over short-term financial results[110]. - The company has incurred substantial net operating losses (NOLs) and may face limitations on utilizing these NOLs due to ownership changes[230]. - The company may need additional capital in the future, and its ability to obtain financing will depend on factors such as operating performance and market conditions[214]. Market Challenges - The company expects revenue growth rates to decline in future periods, indicating potential challenges in maintaining customer acquisition and retention[102]. - The COVID-19 pandemic has adversely affected global economic conditions, potentially impacting demand for the company's platform and leading to longer sales cycles[118]. - The ongoing COVID-19 pandemic has impacted sales activities, with remote work and travel restrictions affecting customer engagement[120]. - The company may experience reduced renewal rates and customer spending due to economic conditions and the ongoing effects of the COVID-19 pandemic[123]. - The company faces intense competition in the work management solutions market, which is rapidly evolving and characterized by low barriers to entry[130]. Growth Strategy - The company plans to continue making substantial investments in sales and marketing, research and development, and infrastructure to support growth[109]. - The company aims to achieve widespread acceptance of its platform, including in international markets, which is critical for future growth[102]. - The company aims to increase its customer base by converting users of free and trial versions into paying customers and expanding usage within organizations[120]. - The company plans to expand its direct sales force to increase platform usage within existing customers and reach larger organizations[137]. - The company has experienced significant growth in customer numbers but is uncertain about future growth rates due to various potential challenges[120]. Operational Risks - The company may face challenges in managing growth effectively, which could strain operational and financial resources[114]. - The company continues to face significant risks related to security breaches, which could lead to unauthorized access to personal information and substantial remediation costs[142]. - The ongoing COVID-19 pandemic has increased the risk of cybersecurity incidents due to remote work arrangements, potentially leading to higher operational costs[143]. - The company relies heavily on Amazon Web Services (AWS) for cloud computing infrastructure, and any disruption in this service could severely impact operations and customer satisfaction[147]. - There is a need for continuous upgrades to technology and infrastructure to accommodate the growing customer base, which may not be projected accurately[146]. Compliance and Legal Risks - The company is subject to evolving data protection regulations, including GDPR, which imposes fines of up to €20 million or 4% of global revenues for non-compliance[185]. - The company may face significant costs related to legal claims, which could adversely affect its business and financial condition[177]. - The company has submitted voluntary self-disclosures regarding past inadvertent violations of U.S. export regulations, which were resolved without civil penalties[201]. - The company is exposed to regulatory, economic, and political risks that differ from those in the United States as it expands internationally[204]. - The company faces increased compliance costs and operational risks due to evolving data protection laws globally, including the GDPR and CCPA, which could result in fines up to $7,500 per violation[195]. Intellectual Property - The company relies on a combination of trademark, copyright, patent, and trade secret protections to safeguard its intellectual property rights[168]. - Future success depends on maintaining certain intellectual property rights, with pending patent applications in the U.S. and no foreign applications filed[171]. - The company faces increasing competition and potential intellectual property claims, which could significantly harm its business and financial condition[165]. Stock and Corporate Governance - The company is classified as an emerging growth company, allowing it to rely on exemptions from certain disclosure requirements, which may affect investor attractiveness[238]. - The dual class structure of the company's common stock concentrates voting control with founders and executives, potentially limiting the influence of other shareholders on corporate matters[245]. - The Class B common stock has 10 votes per share compared to 1 vote per share for Class A common stock, allowing significant control by Class B shareholders[246]. - The company does not intend to pay dividends for the foreseeable future, expecting to retain earnings to fund business development and growth[259]. - The company acknowledges that its actual business and financial performance may differ from projections, influenced by various unpredictable factors[254]. Financial Position - As of January 31, 2021, the company had cash and cash equivalents of $259.9 million and marketable securities of $145.5 million, compared to $306.0 million and $45.3 million, respectively, as of January 31, 2020[397]. - The company is exposed to interest rate risk, but due to the short-term nature of its investment portfolio, a 10% change in interest rates is not expected to materially affect the fair value of its portfolio[397]. - The company has not entered into derivative or hedging transactions for foreign currency risk, as historical impacts have not been material, but may consider such actions if exposure increases[400]. - The company’s operations are subject to market risks, including fluctuations in interest rates and foreign currency exchange rates, which could impact financial performance[396]. - The company has a fixed annual interest rate of 3.5% on the 2020 Notes, eliminating financial exposure to interest rate changes, although fair values may fluctuate[399].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ___________________________________________________________________ FORM 10-Q ___________________________________________________________________ (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended October 31, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO Commission File N ...