Yeah. Awesome. Thanks, everyone, for joining. My name is Billy Fitzsimmons. I cover application software here at Piper Sandler. I cover everything from the hyperscalers, mid-cap software, vertical software. Really excited to have Aziz Megji, the CFO of Asana. Thank you for joining us today. Yeah, thanks for having us. I think maybe a great place to start is just a quick overview of Asana and the problem it solves for customers. A lot's changed in the past year to year and a half. Dan's come in as CEO, you've joined as CFO, and it seems like the product innovation has accelerated. Yeah, absolutely. For those who don't know Asana or don't know it well, we were founded about 18 years ago, and really the mission was to help drive better coordination and management of work. Dustin Moskovitz, who's the founder of Facebook, founded Asana, really on the premise of this idea of the Enterprise Work Graph. I'm going to connect the who, what, where, why of work and be the really living brain and context source of work. As we fast-forward today, in an agentic world, in an agentic enterprise, that same architecture is exactly what agents and humans need to coordinate and execute work in this next era of work, and it's really all around context. The Work Graph providing the context, that living brain of an organization, it enables the right governance, the persistence memory, multiplayer environments, and that is where we are really driving the product roadmap. We have been a company that has really been focused on seats and subscriptions, and now the new Asana is really around both seats and subscriptions and consumption and outcomes. Just this week, we will release Agentic Work Management, where we will bring together collaborative work management with our AI products, Asana AI Studio, our workflow automation tool, Asana AI Teammates, our agents that work alongside humans in workflows, and then Asana Dash, our chief of staff. Super excited about that, as well as rolling out additional agentic apps, which are bringing us into new buying centers and personas and really expanding the aperture of who we serve and our TAM. I have a lot of questions on AI and the product roadmap. I want to start on the financials, because you guys reported just a couple of weeks ago, 10% revenue growth, some of the ARR metrics, or sorry, I should say NRR metrics, both for all customers and your largest customers, improved. Metrics are pointing in the right direction. Can you unpack the drivers of that between retention, cross-sells, AI, contrasted with some of the factors you called out as modest headwinds like the PLG motion? Yeah. Q2 was a strong quarter. I think the headline for us was really improving health of the business, and you called that out. We report three cohorts for our net retention rate. All three improved, with the most dramatic increase occurring with our largest customers, who went from 96% net retention to 98%, and that is a four-quarter average. If you back into actually what the quarter was, it is much better than that. We also see that same trend with our 5K plus customers. What we attribute that improving health and improving net retention with our largest customers is really the adoption of AI. Now, 25% of our 100K plus customers have an AI product, and we see when they engage with those AI products, better retention and expansion trends from those customers. Our up-market continues to perform well. America's returned to double-digit growth for the first time in two years. We look at the balance sheet metrics as a leading indicator and good proxy for up-market growth. CRPO accelerated to 11% in the quarter, from 7% last quarter. Really encouraged what we are seeing up market. A lot of it is driven by better AI expansion, but also seat expansion and much better gross retention as well. Then you contrast that with some of that goodness is being masked by what is happening down market. If we look at our PLG business, which is mostly comprised of sub 5K, that continues to be a drag on both overall growth and NRR. Our 5K plus cohort and our 100K cohort in the quarter are trending or at or above 100%. What's dragging that down to 97% overall, which is still improved five straight quarters, is that sub 5K. What we've seen there is the ICP mix has shifted a bit to smaller customers outside of our target industries, which tend to be a little bit more churny and have lower expansion, and we're all over tackling that problem. Then you add on, as we shift to this AWM and new packaging model, there's a little bit of rev rec timing that's being pushed out at Q3 and Q4 into next year, and so we called that out as well. We beat the quarter on the top line by $2.4 million, 10% growth, $2.4 million beat on our guidance. We rolled about 1.5, and then if you factor in that push out from a rev rec perspective, about 1.2, we would've rolled the whole thing. It's a little bit complex this quarter, but there's a lot changing, and we think it's the right strategy for the long term. One of the other things I want to ask you about is if I rewind the clock and think about the start of this year, I think one of the biggest questions I got, not just for Asana, but all the seat-based names I cover, is the potential for AI to lead to muted seat growth or AI layoffs to impact companies and hurt seat-based businesses. I think the fear was that that would hit the tech vertical, which is a large customer base for you guys. It actually seemed like on the 2Q print, that the metrics were pointing in the right direction there. Can you talk about your progression of conversations with the tech vertical specifically? Yeah. The tech vertical, it's the third quarter of improvement in the tech vertical, so second straight quarter of growth. Improving not only growth, but improving growth. A lot of that is attributed to they've been early adopters of our AI products. So 25% of our net new ARR last quarter was from our AI products. That's up from 17% in Q1. They've been a heavy adopter of that, both what we call new tech, kind of AI modern, AI native companies that we called out last quarter. CoreWeave is expanding with us. We've got both the labs we count as customers. They continue to expand with us as they grow headcount, not only just with the subscription, but also with Asana AI Studio and Asana AI Teammates as well. Our traditional tech customers have been strong adopters of Asana AI Studio and are seeing the benefits there. It is really having more to expand and to mitigate contraction with those customers that is really leading to better outcomes from the tech vertical. If you think about one of the examples we called out, it was not in the tech vertical, it was more in the broader TMT space. This was a customer that three years ago expanded with us. Three years later, when they come up for renewal, they have less headcount. A year and a half ago, we would be facing a $1 million churn event because we would have nothing to offset less headcount other than raising prices. Raising prices to offset churn is not really the best kind of lever to be pulling. We seeded them with Asana AI Studio and Asana AI Teammates. We found a killer workflow in marketing. We saved them 30% on a campaign cycle time. When it came up for renewal, they were comfortable making a big bet on Asana AI Teammates and Asana AI Studio. They did a $1 million-plus TCV deal with us. So instead of contracting $1 million, we actually expanded that account. Over time, as they see the benefits and continue to see the benefits of those products, we have a consumption and expansion vector that is not tied to headcount and seed. Those types of examples really excite me now with five different products to drive a much more robust deal strategy to not only mitigate churn, but create expansion. As we think about NRR coming off from 100%-plus several years ago to where it is today, a lot of that has become because of expansion coming down, not because of retention coming off. I think that is a great segue to a bunch of questions I have on AI. You kind of teed this up nicely, which is walk us through kind of your AI product portfolio and how that is kind of evolved. Because there is Asana AI Studio, there is Asana AI Teammates. You acquired a company called StackAI, and then you talked about this before, but this pivot to this AWM Yeah piece. Talk about each of those things and how we should think about the opportunity. Yeah, absolutely. We are expanded into basically five product families, and actually this week's a big week for us because we launch four of those product families. The birthday of AWM will be tomorrow, where AWM is really bringing together CWM, Asana AI Studio, and Asana AI Teammates into the core experience. We no longer will view Asana AI Studio and Asana AI Teammates as an add-on to CWM. It's part of the core experience. What does that mean? It's really two things. One, it's a pricing and packaging shift, where you will now, when you procure Asana, or every Asana customer, when they open up Asana and AWM, they will have Asana AI Teammates requests and Asana AI Studio credits. We're able to get them to adoption quicker. Second, it's a different approach in the product experience. We're going to identify teammates in the flow of work. As you're working in Asana, and you're building projects, you're building tasks, our Asana Dash chief of staff will help recommend, "Hey, this is a teammate that we think can accelerate your work and drive value." You have requests built into your package to help go drive and leverage that. We think that will get them to adoption of our AI faster, that will lead to an accelerated rate when they move to consumption and expansion with AI, and improve the underlying seed economics. We're super excited about the move to AWM, especially as we bring that to our smaller customers who today, one, they don't have that with Asana AI Teammates, and two, having those in-product nudges, that in-product experience will get them to value faster because they don't have the human that larger customers have with AEs and CSMs and other support. The second big piece is three additional agentic apps. We've seen our customers use us in IT services use cases, in engineering development management use cases, in Asana Client Management use cases. We are basically coming out with bespoke apps that actually address with workflows and teammates the problem statements and the opportunities with those ICPs, with those verticals. We're excited about Command by Asana, focused on the dev persona, our ITSM product focused on Asana Service Management, and Asana Client Management focused on professional services and agencies. Then lastly, StackAI. We acquired it last quarter. Super exciting, kind of cross-workflow, cross-system orchestration. It really brings third-party agents, third-party systems back into Asana, and this is all around strengthening the context of the Work Graph. Each of these products will sit on the same common architecture that is the Enterprise Work Graph, and the Work Graph and that content and that context will be strengthened now with new object types, with tickets, with client information, with PRs from an engineering perspective, with other system data, and that really improves the context and ultimately the performance of our AI products, and the ROI that they're able to drive. Understanding that AWM launches tomorrow, so there might not be a ton of takes there, and there will be, I'm sure, over time. But for Asana AI Studio and Asana AI Teammates, and anything you can kind of share on how the initial cohort of customers are using those tools, how it's increased usage of the platform. I say all this given, if I just rewind the clock, I think one of the interesting things about the industry as a whole is that I think when Dan talked about this kind of Work Graph piece at the start of the year, frankly, there was some skepticism from investors there. I actually think now there's less skepticism, and some of it is also like you've seen a couple vendors in the space pitch this idea of humans working alongside agents. Again, it was this idea that that could disintermediate certain vendors, but you are seeing increased usage. Yeah. Now it's, hey, there's actually a lot of value in providing that knowledge graph. Yeah, absolutely. It's not only just the knowledge graph, because I think you'll hear a lot of people using team graph, people graph, different types. Yes of graph, right? That is becoming the new kind of nomenclature in marketing in AI. It is not just the context graph and that it is built over 18 years, it is actually how it is architected as well for an organization. We start what we call from this pyramid of clarity. It starts with the top level goals of an organization and how those flow down to the work at different levels of the organization. That really creates this system of work, the living brain, we call it, of work that is so important to drive the, not only context in general, but the right context, the right governance that really maximize that cost per performance of our AI products. We are seeing strong traction. We had a 15% target of net new ARR from AI products to start the year. We did one better and did 17% in Q1. We did even better with 25% in Q2. We have raised it to 20% for the full year. We are seeing from the data that when our customers engage deeply with Studio and teammates, that when that renewal cycle comes up, that they are more prone to renew at 100% and also expand. That is what was really the driver bringing AWM to our full customer base. Some of the use cases we are seeing the most value out of anything, especially with Studio in particular, anything that has a heavy data intake component, anything that has a routing component cross-function. You think about a marketing campaign or hiring a new employee or onboarding a new vendor. There is a lot of handoffs from department to department, and sign-offs, and checking against brand guidelines for our content release, or a knowledge base for an employee onboarding use case. Studio is helping drive that cross-functional handoff. Teammates, in the process, are doing what humans could be doing and checking and moving things along and following up. It is a really powerful kind of dynamic. With teammates, we now have 30 out-of-the-box teammates. When I say AWM, surfacing those teammates in the flow of the work, identifying what you are doing and saying, "Hey, we have a teammate for that." If I am doing a project for a new product introduction, my Dash will recognize it and say, "Hey, I have a teammate for new product introduction. It can help you do this, this. This is the best practice. It could help you set up and help you drive. Why don't you experience this?" Now I have credits to do that. There is no friction barrier to do that. We are super excited how it is being used. We are super excited about, in the small core, because it is still a very small part of our base, the value that is driving and what that is doing to the underlying economics of seeds. Getting that to our broader customer base is really the purpose of why we are launching AWM. I also want to make sure I ask about, when you hosted your AI event a couple of months ago now, when you specifically talked about Command by Asana Service Management, Asana Client Management. I think initially some investors thought, hey, those are different personas, but aren't you going up against- Yeah established incumbents in some of those spaces, and how do you ultimately compete there? Can you just frame the opportunity and who you're selling it to and why you think you can win? Yeah. The genesis of it wasn't like we want to create a whole new product and a whole new architecture going to a whole new set of customers, competing against a whole new set of competitors. We've seen our customers with these use cases on Asana. So we've seen our customers take a ticket from an ITSM platform, move it back into Asana because they want to leverage the context in the Work Graph to better resolve that ticket. We've seen people move engineering project management work into Asana to carry out additional steps. We have 25% of our base, our agencies and professional services firms, who are using us in kind of a clunky way as this client management, client deliverable platform. We wanted to bring those customers first and foremost a bespoke experience that was tailored to their ICP, to the outcomes they were looking to drive with the right teammates, the right workflows, the right look and feel of the UI and the interface and how they engage. That was really the core genesis. There is a monetization opportunity today in our base with how our customers use Asana to bring these things in a more tailored way with a common architecture that is the Work Graph. Now, if that leads to them saying, "Hey, I can have my system that I love for these things and Asana together," great. If that leads to them consolidating, there will be customers that are consolidating, and we've already heard from that. So there's a high barrier to introducing this. We've went through a pretty extensive process where we identified design partners, which are existing customers, and they help us design it. Part of the exit criteria of actually launching these products is having those design partners sign up and say, "I'm willing to buy it." Many of these are very large enterprises who are saying, "What I'm seeing is differentiated, it's AI native, and I love how you're tying in the Work Graph and work management and Agentic Work Management with the jobs to be done for these specific categories. For these newer personas, is there anything different you'll have to do going forward in terms of your go-to-market motion? I know Dan's made a lot of changes to the sales force. Since he joined. Yeah. I think, again, with our customers using it in these ways, our sales force at the core has already been trained to drive and sell these types of use cases. Now they have a much better engine to do that with. There's investment in enablement. We're augmenting our sales force with specialists. For some of the areas, like Command by Asana, it does take an incubation sales force because it's a newer motion and maybe not as, a little bit of a greater leap for our core to sell that and sell that with velocity. We're building incubation. Part of the plan this year, part of our guide includes investments in specialists and incubation teams to help drive that. But vast majority can be sold from our core teams because they've already been selling these use cases. Now we're just giving them something a lot more relevant to their end buyers, and that should increase the level of conversation to CIOs and increase the conversion rate of those conversations. Changing gears, want to get your thoughts on capital allocation, margins. I know prior to you becoming CFO, there was a shift in hiring more in geos outside of Silicon Valley, in San Fran. Just talk about how we should think about capital allocation. Yeah. So I mean, one of the things that I think we're fairly proud of this year is, when you report Q4 in March and you set a guide and a plan in March, the world was very different. Six months later, your priorities change, the velocity changes, your perspective and the opportunity gets bigger. We've been able to invest in things like StackAI and absorb the dilution from a high-growth team, ahead of the benefits of revenue that will drive longer term. We've been able to seed our base with Asana AI Studio and Asana AI Teammate requests ahead of the benefits on retention and expansion. We've been able to invest in these AI go-to-market teams while continuing to expand gross margin, sorry, expand operating margin. So we started the year with a 9.5% target on operating margin. We raised it in Q1 to 9.75%. We raised it again to 10% while absorbing all these additional investment areas, which are really going to help drive that next layer and wave of growth. So for us, it's really about continuing to expand margins and accelerate growth. We think we can do both given the significant operating leverage that we get from our seat base and will get from our AI consumption products, which aren't as high as gross margin on seat base, but are still attractive. Secondly, we've been doing this. We have the most robust product roadmap in our history. We've been doing this while keeping our R&D expense relatively flat, but our R&D headcount has been growing because we've been shrinking the cost per head, arming them with the right AI tools to increase productivity, and it's been really an effective formula. I think, just over a year ago, 60% of our employees were in high-cost locations. Fast-forward to a year, less than 50% are in high-cost locations. A lot of that is we're building strong presence, strong teams in places like Warsaw, Poland, Vancouver, Canada, giving us the capacity to innovate, but at a lower cost point, and that also flows into SBC because they have lower expectations on equity. Can you talk a little bit about, this is something we're asking every company at this conference, how Asana is using AI internally to be more efficient. That could be across the different organizations, but either to kind of defend gross margins or on your R&D. Yeah. We're using it across the board, both our internal products, teammates in studio, and best-in-class third party. It's a mandate. We govern it. We track the ROI. It's a weekly thing and with a lot of rigor. Obviously, in R&D, I think there's probably the greatest propensity of use and value being driven. It's helped augment our teams to do much more and move at a much quicker rate. We're using our own Command by Asana product kind of as a harness around things like Cursor and Cloud Code and Codex to do that, and we're seeing a lot of value. Seeing a lot in go to market as well. We use I've been piloting AI SDRs and seeing really good results there and are actually making bigger investments there. The way that we're using tools like Clay to enrich our data so that we can make better sense of it and prospect and have greater propensity scoring and next best actions for our sales teams is improving velocity and sales cycles there. In finance, my finance team is using Claude to help do reconciliations and improve our capitalized software process and create chatbots around payroll, which is allowing us to support and scale growth without adding commensurate head count. It's really an ethos. There's more to do. I think we're in the early innings. But it's allowed us to invest in our ambitions to be this agentic enterprise leader, this operating system for human agent teams without having to scale head count and scale expenses at the same rate. And just because we have a couple of minutes left, zooming out, as we think about the business, there is some new products here, metrics seem to be pointing in the right direction. How should investors kind of think about the building blocks of growth from here for Asana? Yeah. So I think there is a few things. One, the first building block is that core enterprise mid-market customers are getting healthy. It is important for us to drive that to NR above 100%, five straight quarters of NR improvement, and then within those cohorts, 5K+, 100K+, the trend is our friend towards 100%. So continuing to drive AI adoption or AI product adoption, better retention of the underlying seats, cross-sell of these new products is a key driver there. Then we have an intense focus on that sub 5K because if we can get that back to where it needs to be, that is the catalyst for the whole thing to get above 100%. So ideal customer profiles. 100% of our marketing is now focused on ideal customer profiles, from our campaigns, from our brand to our content, to the channels that we use. Also having more surface areas to procure in PLG is a key catalyst there. So really re-accelerating, reinvigorating the NRR and growth in PLG is a key part of that growth algorithm. Scaling these agentic apps in StackAI, that is an expansion lever with multiple products that we have never had. It is so critical. Then lastly, our growth has been tied to headcount. It has been tied to headcount since the beginning of our company 17 years ago. Now we can grow with both headcount and consumption and outcomes. We are not tied to headcount anymore, and I think that is going to be important as we drive more outcomes with our teammates, with our agentic products, with StackAI, with these new agentic apps. It is a growth lever we have never had, and we are already starting to see that with the example that I shared on that churn mitigation and creating a million-dollar outcome in consumption-based mitigation to a seat downgrade. So excited about that. Obviously, I think we have got the strategy, we have got the pieces in place. It is now about execution, but we are super focused and looking forward to sharing next year at the conference kind of our progress. Awesome. Well, we're just about at time here, so we'll wrap it there. Aziz, thank you for joining us. We really appreciate it. Thanks. Great to be here. Appreciate it. Perfect.