“Yet as Asana is scaling, management anticipates year-over-year full-year revenue growth to decelerate to 47% to 49%, down from 86% last year.”
This guidance is based on revenues of $53.5- 54.5 million, which I interpreted as sand bagging.
Most recent 2nd Quarter revenue finished at $52 million or +57%. With the dollar based retention rates quoted below, their next quarter will show an increase sequentially, not remain flat.
Saul has pointed this out before with respect to guidance. Asana’s management would not guide to $54 million unless they were going to soundly beat that number. Especially for their first public conference call. My bet is they finish with at least $61 million in revenue for a 60% YOY growth rate.
Second Quarter Fiscal 2021 Business Highlights. https://investors.asana.com/news/news-details/2020/Asana-Ann…
Ended the quarter with over 82,000 paying customers.
The number of customers spending $5,000 or more with us on an annualized basis grew to 7,933, an increase of 65% year over year.
The number of customers spending $50,000 or more with us on an annualized basis grew to 283, an increase of 160% year over year.
Overall dollar-based net retention rate was over 115%.
Dollar-based net retention rate for customers with $5,000 or more in annualized spend was over 125%.
Dollar-based net retention rate for customers with $50,000 or more in annualized spend was over 140%.
To your point Pikatrain, once they land into a large organization, Asana seems to grab and expand rapidly.
Tomasz Tunguz of Redpoint Venture Capital did a nice analysis prior to the direct listing.
He compared Asana’s S-1 numbers with pre IPO Smartsheet. In a number of categories Asana looks superior.
At the time of IPO, Asana and Smartsheet had the same number of customers, about 75,000.
Asana records a contract size advantage of about 44%, with an ACV of $2165.
Each seat costs $118 per year or $9.83 per month on average.
At time of IPO, Asana generates more revenue, $162M in revenue to Smartsheet’s $111M.
Asana is also growing faster, 86% annual revenue growth vs. SmartSheet’s 66%.
The cost of higher growth appears in the Net Income Margin delta. Asana generates about 2x the loss of SmartSheet as a percentage of revenue.
However, Asana’s cash flow margin from operations is 13 percentage points better, meaning customer pre-payment terms from customers and cash collections may be superior.
Asana holds a 6 percentage point lead in gross margin, likely a benefit borne of modern software architecture and the cost advantages it brings.
The 2nd Quarter webinar gave a positive insight to their leadership and was helpful.
Asana recently announced a number of new initiatives that should grow business.
~Launched Asana Goals which allows teams to connect company goals with OKRs and the work to support them in one place.
(OKRs= objectives and key results. I had to google it.)
~Announced Asana for Microsoft Teams integration which enables conversations in Teams to be linked directly to Asana projects.
While there’s much to like about the company, I haven’t invested yet.
The direct listing seems, at least to me, to leave the door open for insiders to sell shares immediately, which may depress the stock price in the short term. (Flipside- maybe this is a buying opportunity?).
Once Asana is in play within large organizations usage does expand rapidly. During the economic downturn, I’m questioning if the software is a “nice to have” product vs a “need to have” product.
I think the pandemic has been a headwind to their growth vs other companies who have enjoyed tailwinds. My focus this year shifted to go “all in” with the beneficiaries of this environment.
As example, in September I sold out from OKTA. Okta is an impressive company with solid 45% growth rates. Until recently I would have held the stock, because no doubt Okta is a great company and long term winner. Right now I’ve chosen to deploy my money in the highest growers like PTON, CRWD, FSLY, DDOG and my 45% position Zoom.
Depending on the next month or so, I may buy Asana. $25 stocks are attractive to me because they’re easier to buy 1,000 shares.
This may be silly, but I like the idea of having 1,000 shares of a stock.
Yes, I know this isn’t logical.
My goal is to get to the level of you big money investors buying blocks of 2,000 and 5,000 then 10,000 shares.