Great. Well, good morning. Thanks for joining us for day three of Baird's Global Consumer, Technology & Services Conference. I'm Rob Oliver. I follow the software sector here at Baird. It's my pleasure to have the CFO, Aziz Megji, from Asana. Aziz, great to see you. Congratulations on getting the CFO job. It's great to be here. Thanks for having us, excited to share more about the story this morning. Just so people know my background, I want to level set out Asana, first on you. You got the job, you were in-house. You knew the story. You bring a unique set of capabilities. Maybe talk about your background. Absolutely. I've been at Asana for about a year and a half. I joined to lead FP&A and strategic planning, also drive some of the corporate strategy elements, helped Sonali on IR, that was kind of a passion of mine, it's a pretty natural transition. I had driven the financial strategy, really being kind of the key partner for Sonali and Dan, and Dustin before that. A natural transition into the role. My background is strategy, financial operations, financial planning. 20 years in tech, NVIDIA, HPE, RingCentral. Got it. Great. For those who maybe haven't looked at Asana in a while, there's been a lot of changes happening at the organization. I wanted to start by making sure everyone's aware of the changes that have been going on. You guys have innovated a lot on the product side, on the AI side, internally. Maybe just highlight some of the changes, and we can use that as a point of departure to dive in on the story. Absolutely. I think if you haven't followed us recently, the story has really evolved over the past 12 months as we've transitioned from collaborative work management, human-to-human collaboration, to human-to-agent collaboration, and really repotting the company around this theme that we're not this application for productivity and collaboration. We're this operating system for human agent coordination. We've transitioned from a single product company that was licensed and seat-based to a multi-product company with multiple vectors of monetization that aren't all tied to seats, and that capitalize on that theme that work is going to be increasingly human and agent. The more agents and workflows that are built increases the need for coordination, and that layer is where we serve. The company's very much transitioned. We brought in Dan Rogers about almost a year ago, to be our new CEO. He's got a really strong background in go-to-market across salesforce.com, ServiceNow, and many other large companies. He's brought this operating velocity ethos and really ramped up the product innovation, and we've accomplished a lot over the past 12 months and happy to share more on that. Let's talk about Dan, because I think a lot of people will probably know this as sort of Dustin's company. Dan's now been around, I think, was it three quarters or four? Yeah. July will be his one-year anniversary. Okay. Coming in, what were the sort of biggest points that he pointed to that, hey, we need to change that operating velocity? Is it around go-to-market product? Maybe talk about where you are relative to that roadmap. Absolutely. When we were a single product company that went from 100% product-led growth, really deeply embedded in the tech vertical, because that's where Dustin had come from. Then transitioned to build this enterprise go-to-market and kind of had hyper growth. In doing so, there were some inefficiencies around that. We were a very horizontal company in terms of who we targeted. Our ICP focus was pretty sprawled. Dan really came in and drove that focus and the operating velocity around: How do we define and better target our ICPs? How do we transition into a multi-product company? How do we drive leverage and efficiency within our go-to-market to increase productivity, w hich has been a key driver of our operating efficiency, and margin expansion? Dustin was an incredible operator, product visionary. He's still very active in helping us define the product roadmap and the AI strategy. What's really needed is that rigor and experience around the go-to-market end of it, and Dan has really brought that. What's really surprised me is just how passionate he is about product and his ability to connect customer outcomes with building go-to-market leverage and doing that in a really efficient and effective way. Let's talk about the AI initiatives that you guys have had. You have Studio and Teammates. Studio's out. I think Teammates is still very early, if I'm right. Yeah. You guys are talking about some unlock in growth in these coming later in the year. Maybe talk about what Studio does, what Teammates does, how these interact with the kind of core of Asana. What's the right way to think about it? Absolutely. AI Studio was really our second product, and it came out about a year ago. If you think about Studio and Teammates, they're solving different jobs to be done. AI Studio is a workflow automation, simple drag- and- drop builder within the four walls of Asana. If you're driving high volume workflows like routing, ticket processing, anything with a data intake component, quality control and quality check use cases, tapping into the Work Graph, that knowledge store of who's doing what by when in an organization, the AI Studio is that tool for you. We've had a lot of success with AI Studio. We've scaled it fairly rapidly over the past 12 months. We shared in Q4 that it had eclipsed $6 million in ARR. Again, this quarter, we had really strong growth. Our AI products together with Studio and Teammates comprise about 17% of our net ARR in the quarter, which we had shared not guidance, but a target of 15% for the full year. The strength of AI Studio is helping us be ahead of that target after Q1. Teammates went into GA about two months ago. You can think of Teammates as shared agents for a team or an organization. These are agents that execute work alongside humans or execute work within the flow of a workflow. A lot of synergy with AI Studio, where you build these workflows and they're driving human-to-agent handoffs in a multi-step workflow. The Teammates can come in and drive and execute those actions within the workflow or execute, coordinate work outside of the workflow. We have over 20 out-of-the-box Teammates today. Some of the examples are a vendor onboarding Teammates or a campaign launch Teammates or a research Teammates. These really help you drive the flow of the work, and it's early, but we're seeing across customers who have adopted Teammates, they're executing actions and tasks nine times faster than they were without the Teammates. We're seeing real demonstrable ROI, and there's some good momentum there. We added a third leg of the stool just a week ago with StackAI, which is an evolution of AI Studio and brings AI Studio from high volume, more simple use cases to complex cross-system workflows across ERPs, CRMs, databases, custom infrastructure, reporting tools, CLMs, that really completes that three leg of the stool. It sounds like you guys, and from talking to you post quarter, that it was a quick thought on build versus buy, but then StackAI was showing up. You guys knew them, and I think Dustin knew them, and it just seemed to make sense. You mentioned some of the specific work areas. What was it about StackAI that was so compelling to you guys, showing an opportunity to really accelerate AI Studio? Absolutely. We've been organic for the past 17 years. This is our first acquisition. As we were pursuing opportunities with AI Studio, we were actually a couple of customers saying, hey, I like AI Studio and the idea of it, but we're using StackAI, and we're driving a lot of value. Again, the light bulb went off and said, well, what is this? We started looking into it and testing the product, and we're like, the interface and the experience is amazing. It's very simple to use. The drag-and-drop interface is extremely intuitive. The ability to hook up integrations is fairly seamless. As we got to know the company a little bit more and the customer use cases, we got more and more excited. We did a pilot with our marketing department where we agentified our search engine optimization process. We hooked up StackAI to five different core systems in marketing, and the reporting and the synthesis and the ability to take Teammates and then create actions against it really were like, oh my God, this is really eye-opening, and if we can take this to our customers, there's going to be a lot of demand and acceleration. We got to know them even more on the customer side and go- to- market. This is a company, it's not just a startup with a great product. It's had traction. One customer has 1,400 workflows running on the platform. They're in really highly- regulated industries. Hardened, proven, a really talented team, and these were things that were on the AI Studio roadmap. To get to where Stack was, we estimate it'll take us about a year, and the opportunities now, the demand is in our base, and to accelerate that a year, use our strong balance sheet to do that, be disciplined about the capital that we paid, and aligning incentives, it just made a lot of sense. Makes sense. Please shoot questions if you have them to the email address there, and I'll try to get to them. One of the four or five bear cases on software has been around the, well, these guys aren't going to be able to do any AI revenue. I think we're seeing that bear case is being chipped away at a little bit in the market now with the success that Salesforce has had early on and ServiceNow and others. You guys, obviously on a smaller scale, are there too. You're now at 17% of net ARR and $6 million in workflow. Maybe help us understand then the other part, which is another concern, which is that how does that trade-off look within your core when it comes up to a contract? You guys have a lot of large deployments within organizations. Are they thinking, is this additive right now to the platform? What do you see internally to help us understand that? It's early with both Studio and Teammates and obviously with StackAI, but we are seeing it contribute to our growth. It's a bit masked because we have tailwinds and we have headwinds, and we've called out a big headwind is on PLG, and it's about a two-point headwind to ARR. If you think about how that compounds into revenue, it becomes a bigger headwind on revenue as the year unfolds. It is becoming a bigger driver of our growth and our incremental growth. As we think about the biggest headwind and challenge we've had is really on NRR. As our growth has decelerated, it's really that expansion component of NRR that has contracted. We were a single product company that could only expand with seats and packages. You kind of top out a bit on packages and our core vertical a year ago, tech, is not expanding headcount, it's actually contracting in some cases. Not having an expansion driver with multiple products was a real inhibitor of growth. Now, having that with Studio and Teammates, it's one, creating our ACV at land, it's creating additional vectors to expand. It's a bit of a flywheel, especially with Teammates, where you land with a small set of Teammates, customer sees a lot of value, they expand with additional requests, packs on top of those existing Teammates, they add more Teammates, they come back for more seats because they want more people to experience this. That's just very early and it's forming, but we think that will be very powerful on expansion. Then in our renewal conversations, our downgrades are coming because of seats. They're not logo churn and they're not pricing downgrades. In those situations where someone says, hey, I've let go of X percent of my workforce and I don't need these seats, we now have multiple levers to mitigate that, and create either neutrality or incrementality in the process, and then over time have that expansion path within those customers. We are seeing it contribute to our growth in a positive way. It's not just kind of swapping. These products are separate monetizable SKUs. We expect that to grow over the course of this year and certainly into next. Those companies, particularly in the tech vertical, and we'll get to that as well, that are like, hey, we love you, but we overhired during COVID or whatever, and we wish we could do more with you, but this is just naturally what's happening to our business, and you guys are seat-based. Now, it's, we love you, and what else could you potentially do for us is the conversation obviously the salesperson's trying to have with them. These customers, they're for the most part very well utilized, and they're fans of Asana, and their employees are fans of Asana and driving a lot of value in. They're shifting to how can we kind of turbocharge them with additional tools to increase productivity. As these tools start to look and feel like applications in new buying centers and new personas, it just increases the value proposition for Asana within the enterprise. Got it. You guys have also moved heavy tech vertical, but you've also had some considerable success starting to diversify your customer base, and I know that's still an initiative for Dan. Maybe talk a little bit about where you've had that success and where you feel like you're going to be able to commit resources from a go-to-market perspective to really perhaps replicate that. Tech is about now 1/4 of our ARR. It's come down from high 3% last year. It had been a drag on our growth for two years. Actually, this was the first time in eight quarters where we saw positive growth in the tech vertical coming off of stabilization last quarter. Encouraged by the trends. We're not there to underwrite that in our future growth, need to see more. We're encouraged by the trends in tech. Part of the trends in tech are they are early adopters of Studio and Teammates, that is helping drive the improvement in that vertical. We're also seeing that those that are well adopted with AI Studio are expanding, not only with more AI Studio credits, but with seats, that's been benefiting tech as well. On the non-tech side, now it's 3/4 of our business. A big driver of that is how we've driven vertical go- to- market. When we speak the language of the customer and can present workflows that are aligned to verticals, our win rates are dramatically higher. We've built vertical teams that are specialized in healthcare, financial services, nonprofit, education, state, and local, where we are the strongest, and we're seeing really good productivity growth in those areas. Non-tech is growing faster than our overall growth rate, and in the international markets where we have a greater concentration of non-tech, we're also growing faster than our overall growth. We've made a lot of investments in places like Germany and Japan, and that has resulted in strong growth in consumer and manufacturing and logistics companies, which is really great to see. We highlighted FedEx and Costco this past quarter as great success stories of land with seats, expand with AI Studio, and then add on Teammates and the value that we're driving, and it's really exciting. That's great. I have a question that's come in already. I'll get to it in a second, please send a few more and we'll squeeze them in in a lightning round at the end. I just wanted to step back, Aziz, and ask about the collaborative work management space generally. This was a space that you're first onto the scene, kind of excitement, VC-backed. You guys, obviously Dustin, very high profile sponsor and innovator in the space, and companies like Monday and you guys and Smartsheet and stuff like that. First of all, how does the competitive landscape look today? Has it changed? I believe it has. Also how does AI for you guys, and you've been very aggressive on it, potentially further change that competitive landscape? In other words, hey, it's not just us going up in an engagement against Monday, but how does that change that? The LLMs and this intelligence layer have really driven the value proposition for work management and now agentic work management a lot higher. I think it's emerging into a— it was a nice-to-have category to a mission-critical category. Because as you drive more workflows, as you proliferate more agents, the need for coordination of that increases exponentially. The need for context that our Work Graph has been built around, the need for multiplayer. Our Teammates aren't just my Teammates or Eva's Teammates, they're actually Teammates that work in the context of a team. Each member of the team can train them, can derive value from them, can engage with them. They can execute work on behalf of any member of the team. That's super difficult to build and replicate, and it becomes so much more powerful on top of that intelligence layer. Then you layer the governance on top of that, which it's a must-have for enterprises. That also increases the competitive differentiation. We believe the CWM category is coming into its own with agents and AI, and it's transitioning into agentic work management, and we've built the architecture to be successful there. The architecture that has driven human-to-human collaboration is the architecture for human-to-agent collaboration. On the competitive landscape, it's evolving. We still see Monday at the low end of the market, some specialized players in the mid- and the high- end. If you're looking at a persona-based pursuit with something like dev, we'll see Jira. There's some newer entrants like Notion and Linear that are in specific use cases. The market is still very much greenfield. Now, with the ability to get more targeted with AI and AI personas, it really unlocks that opportunity and we think over time, leads to accelerated growth. What about Slack? Salesforce has kind of pivoted to make Slack kind of central to its strategy, and they've got an install base there. Is that burgeoning as a competitor to you guys, or is it still not viewed as one? We don't see that as a competitor. We see it as an ecosystem. Work is going to originate in many different places, and we want to be able to capture that work and integrate with it. We have integrations with Anthropic through MCP, where you can originate work in Anthropic, and then bring it into a multiplayer, multifunction environment into Asana seamlessly, and then get the power of the Work Graph and all that is Asana. Same thing with Slack, same thing with Zoom and Meetings. If your work is originating, whatever the point of origination, we want to integrate and be able to leverage the power of Asana to bring that to an organization and use the Work Graph to drive the benefits of productivity and shared context. Got it. Great. A question which sort of mirrors one I had, which is on the PLG end of the business. Any changes in that market? Any changes to your thought as to how committed you need to be to that low end of the market? We are 100% committed to PLG. It is how many of our customers and customers in this market want to procure. They want to start with exploring products, demo and trialing products in that digital environment, and experience them before they engage with sales. It's just how a lot of these customers originate. We have a really strong funnel of PLG moving to sales-led, and our largest customer started as a product-led customer. Very committed to that market. We saw green shoots this quarter in terms of sequential improvement and top of funnel, better conversion, strong product-led to sales-led lead flow and conversion. It's too early to kind of extrapolate that and say that trends are reversing. Still a headwind, but we very much are committed to that. One of the unlocks we're excited about is Teammates coming to the PLG base in the second half. Currently, Teammates is just with our sales-led base. In the second half, it will come to the PLG base. The ability to position Teammates vertically because they are persona, we feel will help us capture a larger share of that top of the funnel in terms of conversion and higher ACV and expansion paths there as well. We're excited about broadening the product portfolio for PLG alongside all we're doing on marketing mix and channel mix to improve the top of the funnel and create the right mix of customers in the top of the funnel. It's not just about volume, it's about the size. Those larger customers have stronger expansion paths and lifetime value, and become really successful sales-led customers over time. On that marketing and channel side, you guys are not the only company in my list that had built some tremendous expertise around SEO and was really very good at that. How people were discovering content has shifted a little bit in this world, and that's been a headwind for you guys. Maybe help us understand where you are in that, and sort of shifting to these new ways of building thought leadership so that you get found within the new agentic search. It's been a huge focus of ours over the last six plus months, and we're starting to see some of the improvement, but it takes some time for it to compound and it to build. I think we feel really good about our channels and where we are right now with those investments. We feel good about the paid media efficiencies and leverage improvements that we're seeing. It's early, and the landscape has evolved fairly dramatically. We feel like we're taking the right steps to unlock the top of the funnel. It's very early, and it takes time to compound. Got it. I wanted to pivot to some of the financials, just since we have you here, to touch on a couple of those things. Last year was really strong for margin expansion for you guys with some continued expansion this year. What are the key underlying drivers behind that? I assume you guys are finding ways to use AI internally, but others as well. This past quarter, we delivered 11.5% operating margin, which is an improvement of 720 basis points year-over-year, that's translating into free cash flow. Our free cash flow margin was about 17% in Q1. A bit elevated. We had some strong early collections activity, on a normalized basis, closer to 14%, still very strong in terms of that improvement. There's a few different reasons why we've seen that. I think the most basic is just operating leverage. If you look at our OpEx growth year-over-year, that declined about a couple percent. We're growing top -line. OpEx is declining. That's what's driving that operating leverage. How are we able to do that? One is, if you look at our headcount growth, we have grown headcount while OpEx has come down, the average cost of our headcount is coming down. We were very over-indexed to New York and San Francisco, high-cost markets. We made a concerted effort, really around the time I joined, to accelerate our hiring and as people attrited, to build back those capabilities in places like Warsaw, Poland, in lower cost North America locations like Vancouver. We're reshaping the workforce to a lower cost. That's been a key driver and will continue to be a key driver. I think number two is we're early in this, but we are seeing productivity gains from AI, that's allowed us to think differently about our backfill strategy. When people leave, how can we change the shape of a team, leverage our own AI tools, and best-in-class third party to drive the productivity and automation benefits to not have to hire those people back and get efficiencies and leverage there? That's number two. I think number three is just being really focused on sales productivity. Our sales productivity and efficiency has gone up quarter after quarter. Q1 productivity increased double- digits. If you're able to do more with the same kind of seller base, that's tremendous operating leverage for one of our largest expense item on our P&L. We came through that period, which you touched on, of that churn in some of your customers. You now have a product set which helps to address that. You're growing again in the tech vertical. The in-quarter NRR has been improving nicely over the last four quarters. With those things happening and the changes you guys have made, how should we think about that NRR shift, and what are the two to three biggest factors that are going to really improve the NRR over the next couple of years? NRR has improved four straight quarters now, the in-quarter NRR. This actual past quarter, Q1, the magnitude of improvement was actually the greatest of those four quarters, and it's both on the retention side, the GRR, and the expansion side. Expansion is the greater driver, GRR has actually improved four straight quarters. What's driving that is becoming a multi-product company and having additional expansion levers. Studio, most of that ARR is sold to our base because the best customers are those that have complex deployments of Asana, have built rules and built automations, and now want to supercharge them with AI, with AI Studio. Same thing with Teammates in the beginning as well. Although Teammates, there's a strong land and new logo motion attached there as well. That's really benefited that expansion. We've seen those cohorts that are using AI Studio and driving strong adoption are not only expanding with more AI Studio, so the customers we called out that are $100,000+ AI Studio customers, there were eight of them in Q4. We said that almost doubled in Q1. Most of those started as smaller packages and then graduated to $100,000+. That has helped that expansion path as well. Those customers are not only expanding with AI Studio, but we're seeing them expand with seats, which is helping NRR as well. As we think about going forward, there's a few different unlocks. One is the large customer downgrade that we had last year in Q2 rolls off, so there's kind of a natural tailwind there. As we sell Stack to our base, as this Teammates flywheel of kind of land small, expand within the Teammates, add more Teammates, add more seats, starts to build, that should benefit NRR as well. We feel there's a lot more to do because 97 four straight quarters of improvement is nice, but we need to get above 100. That expansion path coming back and AI driving better utilization in mission-critical workflows and improving GRR is also a nice lever over time. Great. We are at time. You guys did have a product announcement this morning coming out of your London event, maybe 20 seconds on that would be- We have our marquee customer event called the Work Innovation Summit. It probably just wrapped in London time. We're going to do a recap for investors on Monday, sharing the highlights. The event is really around repotting Asana as this operating system for human agent teams, and we've introduced some new products where we are getting a lot more persona focus around the developer persona and the IT persona, leveraging the Work Graph, leveraging Teammates, and leveraging Studio, and these are new products that are additional expansion drivers. Excited to unpack that more on Monday and show you the value of those. It just compounds this theme that we're becoming multi-product and much more akin to this coordination layer.