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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 April 30, 2021

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 Number 001-39495
___________________________________________________________________
Asana, Inc.
(Exact name of registrant as specified in its Charter)
___________________________________________________________________
Delaware
26-3912448
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
1550 Bryant Street, Suite 200
San Francisco, California 94103
(Address of principal executive offices and Zip Code)
(415) 525-3888
(Registrant’s telephone number, including area code)
___________________________________________________________________
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Class A Common Stock, $0.00001 par value per share
ASAN
New York Stock Exchange
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Accelerated filer
Non-accelerated filer
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No ☒
As of June 1, 2021, the number of shares of the registrant’s Class A common stock outstanding was 91,846,231 and the number of shares of the registrant’s Class B common stock outstanding was 71,785,101.




TABLE OF CONTENTS
Page





SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which statements involve substantial risk and uncertainties. In some cases, you can identify forward-looking statements because they contain words such as “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” or “would” or the negative of these words or other similar terms or expressions. Forward-looking statements contained in this Quarterly Report on Form 10-Q include, but are not limited to, statements about: our ability to grow or maintain our dollar-based net retention rate, expand usage of our platform within organizations, and sell subscriptions to our platform; our ability to convert individuals, teams, and organizations on our free and trial versions into paying customers; the timing and success of new features, integrations, capabilities, and enhancements by us, 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; growth in the work management market; 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; our focus on growth to drive long-term value; the timing of expenses and our expectations regarding our cost of revenues, gross margin, and operating expenses; the effect of uncertainties related to the global COVID-19 pandemic on our business, results of operations, and financial condition; expansion of our sales and marketing activities; our protections against security breaches, technical difficulties, or interruptions to our platform; our ability to successfully defend litigation brought against us, potential dispute-related settlement payments, or other litigation-related costs; our expectations about additional hiring; potential pricing pressure as a result of competition or otherwise; anticipated fluctuations in foreign currency exchange rates; potential costs and the anticipated timing of expenses related to the acquisition of businesses, talent, technologies, or intellectual property, including potentially significant amortization costs and possible write-downs; and general economic conditions in either domestic or international markets, including the societal and economic impact of the COVID-19 pandemic, including on the rate of global IT spending, and geopolitical uncertainty and instability.

You should not rely on forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this Quarterly Report on Form 10-Q primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, and operating results. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties, and other factors described in the section titled “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Quarterly Report on Form 10-Q. The results, events, and circumstances reflected in the forward-looking statements may not be achieved or occur, and actual results, events, or circumstances could differ materially from those described in the forward-looking statements.
In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based on information available to us as of the date of this Quarterly Report on Form 10-Q. While we believe that such information provides a reasonable basis for these statements, that information may be limited or incomplete. Our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely on these statements.
The forward-looking statements made in this Quarterly Report on Form 10-Q relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this Quarterly Report on Form 10-Q or to reflect new information or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures, or investments.
You should read this Quarterly Report on Form 10-Q and the documents that we reference in this Quarterly Report on Form 10-Q and have filed with the Securities and Exchange Commission (the “SEC”) as exhibits to this



Quarterly Report on Form 10-Q with the understanding that our actual future results, levels of activity, performance, and events and circumstances may be materially different from what we expect.

Additional Information
Unless the context otherwise requires, all references in this Quarterly Report on Form 10-Q to “we,” “us,” “our,” “our company,” and “Asana” refer to Asana, Inc. and its consolidated subsidiaries. The Asana design logo, “Asana,” and our other registered or common law trademarks, service marks, or trade names appearing in this Quarterly Report on Form 10-Q are the property of Asana, Inc. Other trade names, trademarks, and service marks used in this Quarterly Report on Form 10-Q are the property of their respective owners.



SELECT RISK FACTORS AFFECTING OUR BUSINESS
Investing in our common stock involves numerous risks, including the risks described in “Part II—Other Information, Item 1A. Risk Factors” of this Quarterly Report on Form 10-Q. Below are some of these risks, any one of which could materially adversely affect our business, financial condition, results of operations, and prospects.
We have experienced rapid growth in recent periods, and our recent growth rates may not be indicative of our future growth.
We have a limited operating history at our current scale, which makes it difficult to evaluate our future prospects and may increase the risk that we will not be successful.
We have a history of losses and may not be able to achieve profitability or, if achieved, sustain profitability.
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.
Our quarterly results may fluctuate significantly and may not meet our expectations or those of investors or securities analysts.
The COVID-19 pandemic has affected how we and our customers operate and has adversely affected the global economy, and the duration and extent to which this will affect our business, future results of operations, and financial condition remains uncertain.
If we are unable to attract new customers, convert individuals, teams, and organizations using our free and trial versions into paying customers, and expand usage within organizations or develop new features, integrations, capabilities, and enhancements that achieve market acceptance, our revenue growth would be harmed.
If the market for work management solutions develops more slowly than we expect or declines, our business would be adversely affected, and the estimates of market opportunity and forecasts of market growth may prove to be inaccurate.
We operate in a highly competitive industry, and competition presents an ongoing threat to the success of our business.
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.
The loss of one or more of our key personnel, in particular our co-founder, President, Chief Executive Officer, and Chair, Dustin Moskovitz, would harm our business.
We must continue to attract and retain highly qualified personnel in very competitive markets to continue to execute on our business strategy and growth plans.
Our failure to protect our sites, networks, and systems against security breaches, or otherwise to protect our confidential information or the confidential information of our users, customers, or other third parties, would damage our reputation and brand, and substantially harm our business and results of operations.
If we fail to manage our technical operations infrastructure, or experience service outages, interruptions, or delays in the deployment of our platform, our results of operations may be harmed.
If we are unable to ensure that our platform interoperates with a variety of software applications that are developed by others, including our integration partners, we may become less competitive and our results of operations may be harmed.
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.



Our business depends on a strong brand, and if we are not able to maintain and enhance our brand, our ability to expand our base of customers may be impaired, and our business and results of operations will be harmed.
We rely on third parties maintaining open marketplaces to distribute our mobile application. If such third parties interfere with the distribution of our platform, our business would be adversely affected.
We receive, process, store, and use business and personal information, which subjects us to governmental regulation and other legal obligations related to data protection and security, and our actual or perceived failure to comply with such obligations could harm our business and expose us to liability.
Sales to customers outside the United States and our international operations expose us to risks inherent in international sales and operations.
The trading price of our Class A common stock may be volatile and may decline regardless of our operating performance.
The dual class structure of our common stock has the effect of concentrating voting control with those stockholders who held our capital stock prior to the listing of our Class A common stock on the New York Stock Exchange (“NYSE”), including our founders, directors, executive officers, and their respective affiliates, limiting or precluding your ability to influence corporate matters.

Sales of substantial amounts of our Class A common stock in the public markets, or the perception that sales might occur, could cause the market price of our Class A common stock to decline.
If we are unable to adequately address these and other risks we face, our business may be harmed.





PART I—FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)
ASANA, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
April 30, 2021January 31, 2021
Assets
Current assets
Cash and cash equivalents$263,933 $259,878 
Marketable securities122,374 126,396 
Accounts receivable, net 37,344 32,194 
Prepaid expenses and other current assets25,904 27,295 
Total current assets449,555 445,763 
Property and equipment, net94,138 74,436 
Operating lease right-of-use assets181,093 182,924 
Investments, noncurrent12,099 19,125 
Other assets10,708 8,871 
Total assets$747,593 $731,119 
Liabilities and Stockholders’ Deficit
Current liabilities
Accounts payable$8,947 $9,599 
Accrued expenses and other current liabilities46,535 41,616 
Deferred revenue, current122,884 103,875 
Operating lease liabilities, current6,742 8,386 
Total current liabilities185,108 163,476 
Term loan, net37,599 29,508 
Convertible notes, net—related party361,337 351,161 
Operating lease liabilities, noncurrent207,511 196,802 
Other liabilities3,737 2,961 
Total liabilities795,292 743,908 
Commitments and contingencies (Note 8)
Stockholders' deficit
Common stock2 2 
Additional paid-in capital554,340 528,616 
Accumulated other comprehensive income63 39 
Accumulated deficit (602,104)(541,446)
Total stockholders’ deficit(47,699)(12,789)
Total liabilities and stockholders’ deficit$747,593 $731,119 

See accompanying Notes to Condensed Consolidated Financial Statements.




1


ASANA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)
Three Months Ended April 30,
20212020
Revenues$76,673 $47,706 
Cost of revenues 7,914 6,206 
Gross profit68,759 41,500 
Operating expenses:
Research and development 39,967 22,383 
Sales and marketing 56,784 36,091 
General and administrative 21,990 12,111 
Total operating expenses118,741 70,585 
Loss from operations(49,982)(29,085)
Interest income and other income (expense), net8 354 
Interest expense(10,374)(6,991)
Loss before provision for income taxes(60,348)(35,722)
Provision for income taxes310 123 
Net loss$(60,658)$(35,845)
Net loss per share:
Basic and diluted$(0.37)$(0.47)
Weighted-average shares used in calculating net loss per share:
Basic and diluted162,07975,641

See accompanying Notes to Condensed Consolidated Financial Statements.
2


ASANA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(in thousands)
(unaudited)
Three Months Ended April 30,
20212020
Net loss$(60,658)$(35,845)
Other comprehensive income (loss):
Net unrealized gains (losses) on marketable securities(11)17 
Change in foreign currency translation adjustments35 (58)
Comprehensive loss$(60,634)$(35,886)

See accompanying Notes to Condensed Consolidated Financial Statements.
3


ASANA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT
(in thousands)
(unaudited)

Redeemable Convertible Preferred StockCommon StockAdditional
Paid-In
Accumulated
Other
Comprehensive Income (Loss)
Accumulated DeficitTotal
Stockholders’ Deficit
SharesAmountSharesAmount
Balances at January 31, 2021 $ 161,480 $2 $528,616 $39 $(541,446)$(12,789)
Issuance of common stock upon the exercise of options— — 1,380 — 2,850 — — 2,850 
Vesting of early exercised stock options— — — — 642 — — 642 
Repurchases of common stock— — (6)— — — — — 
Issuance of common stock upon the vesting and settlement of restricted stock units, net of shares withheld for taxes— — 367 — — — — — 
Issuance of common stock for employee share purchase plan— — 250 — 6,127 — — 6,127 
Stock-based compensation expense— — — — 16,105 — — 16,105 
Net unrealized loss on marketable securities— — — — — (11)— (11)
Foreign currency translation adjustments— — — — — 35 — 35 
Net loss— — — — — — (60,658)(60,658)
Balances at April 30, 2021 $ 163,471 $2 $554,340 $63 $(602,104)$(47,699)

See accompanying Notes to Condensed Consolidated Financial Statements.

4



ASANA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT-CONTINUED
(in thousands)
(unaudited)

Redeemable Convertible Preferred StockCommon StockAdditional
Paid-In
Accumulated
Other
Comprehensive Income (Loss)
Accumulated DeficitTotal
Stockholders’ Deficit
SharesAmountSharesAmount
Balances at January 31, 202073,577 $250,581 76,688 $1 $184,522 $(102)$(329,736)$(145,315)
Issuance of common stock upon the exercise of options— — 465 — 746 — — 746 
Vesting of early exercised stock options— — — — 837 — — 837 
Issuance of common stock upon the vesting and settlement of restricted stock units, net of shares withheld for taxes— — 6 — (66)— — (66)
Stock-based compensation expense— — — — 4,073 — — 4,073 
Net unrealized gain on marketable securities— — — — — 17 — 17 
Foreign currency translation adjustments— — — — — (58)— (58)
Net loss— — — — — — (35,845)(35,845)
Balances at April 30, 202073,577 $250,581 77,159 $1 $190,112 $(143)$(365,581)$(175,611)


See accompanying Notes to Condensed Consolidated Financial Statements.




5


ASANA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Three Months Ended April 30,
20212020
Cash flows from operating activities
Net loss$(60,658)$(35,845)
Adjustments to reconcile net loss to net cash used in operating activities:
Allowance for doubtful accounts196 383 
Depreciation and amortization973 743 
Amortization of deferred contract acquisition costs1,629 711 
Stock-based compensation expense16,031 3,982 
Net accretion of discount on marketable securities336 (48)
Non-cash lease expense4,526 2,962 
Amortization of discount on convertible notes and term loan issuance costs6,251 4,402 
Non-cash interest expense3,930 2,589 
Changes in operating assets and liabilities:
Accounts receivable(3,182)(2,877)
Prepaid expenses and other current assets(2,383)(1,081)
Other assets(1,858)(528)
Accounts payable(2,451)3,135 
Accrued expenses and other current liabilities2,827 296 
Deferred revenue20,025 6,036 
Operating lease liabilities6,364 (3,014)
Net cash used in operating activities(7,444)(18,154)
Cash flows from investing activities
Purchases of marketable securities(34,002) 
Sales of marketable securities351  
Maturities of marketable securities44,352 29,399 
Purchases of property and equipment(16,969)(2,081)
Capitalized internal-use software (183)(461)
Net cash provided by (used in) investing activities(6,451)26,857 
Cash flows from financing activities
Proceeds from term loan, net of issuance costs9,000  
Repayment of term loan(167) 
Repurchases of common stock(13)(66)
Proceeds from exercise of stock options2,974 969 
Proceeds from employee stock purchase plan6,127  
Net cash provided by financing activities17,921 903 
Effect of foreign exchange rates on cash and cash equivalents and restricted cash29 (31)
Net increase in cash, cash equivalents, and restricted cash4,055 9,575 
Cash, cash equivalents, and restricted cash
Beginning of period259,878 310,677 
End of period$263,933 $320,252 
See accompanying Notes to Condensed Consolidated Financial Statements.
6


ASANA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
(in thousands)
(unaudited)
Three Months Ended April 30,
20212020
Reconciliation of cash, cash equivalents, and restricted cash to the consolidated balance sheets
Cash and cash equivalents$263,933 $315,609 
Restricted cash 4,643 
Total cash, cash equivalents, and restricted cash $263,933 $320,252 
Supplemental cash flow data
Cash paid for income taxes$480 $92 
Cash paid for interest$160 $ 
Supplemental non-cash investing and financing information
Purchase of property and equipment in accounts payable and accrued expenses$13,544 $3,262 
Vesting of early exercised stock options$642 $837 

See accompanying Notes to Condensed Consolidated Financial Statements.
7

ASANA, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
Note 1.    Organization
Organization and Description of Business
Asana, Inc. (“Asana” or the “Company”) was incorporated in the state of Delaware on December 16, 2008. Asana is a work management platform that helps teams orchestrate work, from daily tasks to cross-functional strategic initiatives. The Company is headquartered in San Francisco, California.
Note 2.    Basis of Presentation and Summary of Significant Accounting Policies
Principles of Consolidation
The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America (“GAAP”) and include the accounts of the Company’s wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated on consolidation.
The unaudited condensed consolidated balance sheet as of January 31, 2021 included herein was derived from the audited financial statements as of that date, but does not include all disclosures, including certain notes required by GAAP on an annual reporting basis. In management's opinion, the unaudited condensed consolidated financial statements reflect all normal recurring adjustments necessary to state fairly the balance sheet, statements of comprehensive loss, statements of redeemable convertible preferred stock and stockholders' deficit, and statements of cash flows for the interim periods, but are not necessarily indicative of the results of operations to be anticipated for the full fiscal year or any future period.
These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K filed with the SEC on March 30, 2021.
Direct Listing
On September 30, 2020, the Company completed a direct listing of its Class A common stock (the “Direct Listing”) on the NYSE. The Company incurred fees related to financial advisory service, audit, and legal expenses in connection with the Direct Listing and recorded general and administrative expenses of $1.2 million for the three months ended April 30, 2020. The Company recorded no general and administrative expenses in connection with the Direct Listing for the three months ended April 30, 2021. Prior to the Direct Listing, all 73.6 million outstanding shares of redeemable convertible preferred stock were converted into an equivalent number of shares of Class B common stock.
Use of Estimates
The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported and disclosed in the consolidated financial statements and accompanying notes. Estimates and assumptions reflected in the consolidated financial statements include, but are not limited to, revenue recognition, the useful lives and carrying values of long-lived assets, the fair value of the Convertible Notes (as defined in Note 4), the fair value of common stock for periods prior to the Direct Listing, stock-based compensation expense, the period of benefit for deferred contract acquisition costs, and income taxes. Actual results could differ from those estimates.
Risks and Uncertainties
As a result of the COVID-19 pandemic, the Company has temporarily closed its headquarters and other physical offices, required its employees and contractors to work remotely, and implemented travel restrictions, all of which represent a significant disruption in how the Company operates its business. The operations of its partners and customers have likewise been disrupted. 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 and the availability and widespread use of effective vaccines, it has already had an adverse effect on the global economy and the ultimate societal and economic impact of the COVID-19 pandemic remains unknown. In particular, the conditions caused by this pandemic could affect the rate of global IT spending and could adversely affect demand for the Company’s platform, lengthen the Company’s sales cycles, reduce the
8

ASANA, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
value or duration of subscriptions, negatively impact collections of accounts receivable, reduce expected spending from new customers, cause some of the Company’s paying customers to go out of business, limit the ability of the Company’s direct sales force to travel to customers and potential customers, and affect contraction or attrition rates of the Company’s customers, all of which could adversely affect the Company’s business, results of operations, and financial condition. As of the date of issuance of the financial statements, the Company is not aware of any specific event or circumstance related to COVID-19 that would require it to update its estimates or judgments or adjust the carrying value of its assets or liabilities. Actual results could differ from those estimates and any such differences may be material to the condensed consolidated financial statements. 
Concentration of Credit Risk
Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash, cash equivalents, and marketable securities. Substantially all the Company’s cash and cash equivalents are held by four financial institutions that management believes are of high credit quality. Such deposits may, at times, exceed federally insured limits. Cash equivalents are invested in highly rated money market funds.
A large portion of the Company’s customers authorize the Company to bill their credit card accounts through the Company’s third-party payment processing partners, presenting additional credit risk. For the three months ended April 30, 2021 and April 30, 2020, there was no individual customer that accounted for 10% or more of the Company’s revenues. The Company had one customer account for approximately 29% and 13% of accounts receivable as of April 30, 2021 and January 31, 2021, respectively.
Fair Value of Financial Instruments
The carrying amounts reflected in the condensed consolidated balance sheets for cash equivalents, accounts receivable, and accounts payable approximate their respective fair values due to the short maturities of those instruments. Available-for-sale marketable securities are recorded at fair value on the condensed consolidated balance sheets.
The Company accounts for certain of its financial assets at fair value. In determining and disclosing fair value, the Company uses a fair value hierarchy established by U.S. GAAP. The guidance defines fair value as an exit price, representing the amount that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the Company utilizes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:
Level 1—Observable inputs such as quoted prices in active markets.
Level 2—Inputs other than the quoted prices in active markets that are observable either directly or indirectly.
Level 3—Unobservable inputs in which there is little or no market data and that are significant to the fair value of the assets or liabilities.
In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as considers counterparty credit risk in its assessment of fair value.
Recently Issued Accounting Pronouncements Not Yet Adopted
In August 2020, the FASB issued ASU No. 2020-06, Accounting for Convertible Instruments and Contracts in an Entity's Own Equity, which simplifies the accounting for certain convertible instruments, amends the guidance on derivative scope exceptions for contracts in an entity's own equity, and modifies the guidance on diluted earnings per share calculations as a result of these changes. The guidance is effective for the Company’s fiscal years beginning after February 1, 2022, and earlier adoption is permitted. The Company is currently evaluating the impact of adopting ASU 2020-06.
9

ASANA, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
Recently Adopted Accounting Pronouncements
On February 1, 2021, the Company adopted ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which requires the measurement and recognition of expected credit losses for financial assets held at amortized costs, including accounts receivables. It also eliminates the concept of other-than-temporary impairment and requires credit losses related to available-for-sale debt securities to be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. These changes will result in more timely recognition of credit losses. The adoption of the guidance did not have a material impact on the Company’s condensed consolidated financial statements.
On February 1, 2021, the Company adopted ASU No. 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40), Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. The amendments in ASU No. 2018-15 amend the definition of a hosting arrangement and requires a customer in a hosting arrangement that is a service contract to capitalize certain costs as if the arrangement were an internal-use software project. The Company adopted ASU No. 2018-15 as of February 1, 2021 using a prospective transition approach.
Note 3.    Revenues
Deferred Revenue and Remaining Performance Obligations
Total deferred revenue was $125.9 million as of April 30, 2021, of which $3.0 million is presented within other liabilities, as a noncurrent liability, in the condensed consolidated balance sheet.
The Company recognized $45.1 million and $27.6 million of revenues during the three months ended April 30, 2021 and 2020, respectively, that were included in the deferred revenue balances at January 31, 2021 and 2020, respectively.
As of April 30, 2021, the Company's remaining performance obligations from subscription contracts was $145.8 million, of which the Company expects to recognize approximately 90% as revenues over the next 12 months and the remainder thereafter.
Deferred Contract Acquisition Costs
Deferred contract acquisition costs are amortized over a period of benefit of three years. The period of benefit was estimated by considering factors such as historical customer attrition rates, the useful life of the Company’s technology, and the impact of competition in the software-as-a-service industry.
The following table summarizes the activity of deferred contract acquisition costs (in thousands):
Three Months Ended April 30,
20212020
Beginning balance$12,093 $6,107 
Capitalization of contract acquisition costs4,122 1,251 
Amortization of deferred contract acquisition costs(1,629)(711)
Ending balance$14,586 $6,647 
Deferred contract acquisition costs, current$6,896 $3,073 
Deferred contract acquisition costs, noncurrent7,690 3,574 
Total deferred contract acquisition costs$14,586 $6,647 
Note 4.    Fair Value Measurements
The following table summarizes, for assets and liabilities measured at fair value, the respective fair value and classification by level of input within the fair value hierarchy (in thousands):
10

ASANA, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
April 30, 2021
Level 1Level 2Level 3Total
Current Assets
Cash equivalents
Money market funds$221,599 $ $ $221,599 
Total cash equivalents$221,599 $ $ $221,599 
Marketable securities
U.S. treasury bonds$30,138 $ $ $30,138 
Commercial paper 48,266  48,266 
Corporate bonds 41,265  41,265 
Certificate of deposit 2,705  2,705 
Total marketable securities$30,138 $92,236 $ $122,374 
Non-current Assets
Corporate bonds 12,099  12,099 
Total assets$251,737 $104,335 $ $356,072 
January 31, 2021
Level 1Level 2Level 3Total
Current Assets
Cash equivalents
Money market funds$207,187 $ $ $207,187 
Commercial paper 2,230  2,230 
Certificates of deposit 1,050  1,050 
Total cash equivalents$207,187 $3,280 $ $210,467 
Marketable securities
U.S. treasury bonds$40,245 $ $ $40,245 
Commercial paper 43,159 43,159 
Corporate bonds 40,286 40,286 
Certificate of deposit 2,706 2,706 
Total marketable securities$40,245 $86,151 $ $126,396 
Non-current Assets
Corporate bonds 19,125  19,125 
Total assets$247,432 $108,556 $ $355,988 
11

ASANA, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

The following table summarizes the Company's investments in marketable securities on the condensed consolidated balance sheets (in thousands):
April 30, 2021
Amortized
Cost
Gross
Unrealized
Gains
Gross Unrealized LossesEstimated
Fair Value
Current Assets
U.S. treasury bonds$30,131 $7 $ $30,138 
Commercial paper48,266 1 (1)48,266 
Corporate bonds41,266 4 (5)41,265 
Certificates of deposit2,704 1  2,705 
Total marketable securities$122,367 $13 $(6)$122,374 
Non-current Assets
Corporate bonds12,094 7 (2)12,099 
Total assets$134,461 $20 $(8)$134,473 

January 31, 2021
Amortized
Cost
Gross
Unrealized
Gains
Gross Unrealized Losses
Estimated
Fair Value
Current Assets
U.S. treasury bonds$40,236 $9 $ $40,245 
Commercial paper43,158 2 (1)43,159 
Corporate bonds40,278 9 (1)40,286 
Certificates of deposit2,705 1  2,706 
Total marketable securities$126,377 $21 $(2)$126,396 
Non-current Assets
Corporate bonds19,120 8 (3)19,125 
Total assets$145,497 $29 $(5)$145,521 
The Company periodically evaluates its investments for other-than-temporary declines in fair value. The unrealized losses on the available-for-sale securities were primarily due to unfavorable changes in interest rates subsequent to the initial purchase of these securities. Gross unrealized losses of the Company’s available-for-sale securities that have been in a continuous unrealized loss position for twelve months or longer were immaterial as of April 30, 2021 and January 31, 2021. The Company expects to recover the full carrying value of its available-for-sale securities in an unrealized loss position as it does not intend or anticipate a need to sell these securities prior to recovering the associated unrealized losses. The Company also expects any credit losses would be immaterial based on the high-grade credit rating for each of such available-for-sale securities. As a result, the Company does not consider any portion of the unrealized losses as of April 30, 2021 or January 31, 2021 to represent an other-than temporary impairment or credit losses.
In April 2020, the Company entered into a five-year $40.0 million term loan agreement with Silicon Valley Bank. As of April 30, 2021, $40.0 million was drawn and $39.8 million was outstanding under this term loan. The fair value of the term loan approximates its carrying value since the interest rate is at market.
In January 2020 and June 2020, the Company issued convertible notes to a trust affiliated with the Company’s CEO. The fair value of the convertible notes at issuance on January 30, 2020 and June 26, 2020 was $203.0 million
12

ASANA, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
and $112.0 million, respectively. There were no significant changes in fair value between January 30, 2020 and January 31, 2020. At April 30, 2021, the fair values of the convertible notes issued in January 2020 and in June 2020 were $375.9 million and $190.9 million, respectively. The Company considers the fair values of the convertible notes to be a Level 3 measurement as the fair value is estimated using significant unobservable inputs. The fair value of the convertible notes was measured using a binomial lattice model. Inputs used to determine the estimated fair value of the convertible notes include the equity volatility of comparable companies, the risk-free interest rate, and the estimated fair value of the Company’s common stock.
Note 5. Balance Sheet Components
Property and Equipment, Net
Property and equipment, net, consisted of the following (in thousands):
April 30, 2021January 31, 2021
Desktop and other computer equipment$2,281 $2,229 
Furniture and fixtures1,937 2,012 
Leasehold improvements13,760 13,686 
Capitalized internal-use software10,755 10,498 
Construction in progress1
88,699 68,409 
Total gross property and equipment117,432 96,834 
Less: Accumulated depreciation and amortization(23,294)(22,398)
Total property and equipment, net$94,138 $74,436 
__________________
1 Construction in progress is primarily related to the build-out of the Company's new corporate headquarters. Refer to Note 9. Leases for additional information.
Depreciation and amortization expense was $1.0 million and $0.7 million for the three months ended April 30, 2021 and 2020, respectively.
Prepaid Expenses and Other Current Assets
Prepaid expenses and other current assets consisted of the following (in thousands):
April 30, 2021January 31, 2021
Prepaid expenses$15,826 $16,696 
Deferred contract acquisition costs, current6,896 5,742 
Other current assets3,182 4,857 
Total prepaid expenses and other current assets$25,904 $27,295 
Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities consisted of the following (in thousands):
April 30, 2021January 31, 2021
Accrued payroll liabilities$7,834 $10,607 
Accrued taxes for fringe benefits2,266 2,963 
Accrued advertising expenses7,155 7,020 
Accrued property and equipment6,367 4,715 
Accrued consulting expenses3,833 2,393 
Accrued sales and value-added taxes6,050 3,704 
Other liabilities13,030 10,214 
Total accrued expenses and other current liabilities$46,535 $41,616 
13

ASANA, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

Note 6.    Convertible Notes—Related Party
The Company issued two 3.5% unsecured senior mandatory convertible promissory notes in January 2020 (“January 2020 Convertible Note”) and June 2020 (“June 2020 Convertible Note”) (collectively, the “Convertible Notes”) in principal amounts of $300.0 million and $150.0 million, respectively. The Convertible Notes are not transferable except to affiliates, contain no financial or restrictive covenants, and are expressly subordinated in right of payment to any of our existing or future secured indebtedness. Consistent with the terms of the Convertible Notes, in April and June 2020, the Dustin Moskovitz Trust entered into subordination agreements with Silicon Valley Bank to confirm the parties’ agreement that the Convertible Notes are subordinated to the five-year $40.0 million secured term loan facility.
The net carrying amount of the Convertible Notes was as follows (in thousands):
April 30, 2021January 31, 2021
Principal$450,000 $450,000 
Unamortized discount(106,303)(112,548)
Accrued interest expense17,640 13,709 
Net carrying amount$361,337 $351,161 

The principal amounts, maturity dates, range of shares potentially issuable at maturity, initial conversion price, and shares issuable at maturity for each of the 2020 Notes are presented below (in thousands, except share price):
Aggregate Principal AmountMaturity Date
Range of Shares Potentially Issuable at Maturity(1)
Initial Conversion Price(1)
January 2020 Convertible Note$300,000 1/30/2025
11,282 - 18,052
$31.58 
June 2020 Convertible Note150,000 6/26/2025
5,731 - 9,169
31.09 
Total$450,000 
17,013 - 27,221
__________________
1 Subject to customary anti-dilution and other adjustments.

Interest expense related to the Convertible Notes was as follows (in thousands):
Three Months Ended April 30,
20212020
Amortization of debt discount$6,246 $4,402 
Contractual interest expense3,930 2,589 
Total interest expense$10,176 $6,991 

Note 7. Debt
In April 2020, the Company entered into a five-year $40.0 million term loan agreement with Silicon Valley Bank. As of April 30, 2021, $40.0 million was drawn and $39.8 million was outstanding under this term loan. As of April 30, 2021, the Company was in compliance with all financial covenants related to the term loan.
The net carrying amount of the term loan was as follows (in thousands):
14

ASANA, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
April 30, 2021
Principal$39,833 
Accrued Interest75 
Unamortized loan issuance costs(67)
Net carrying amount$39,841 
Term loan, current $2,242 
Term loan, noncurrent$37,599 

Note 8. Commitments and Contingencies
Standby Letters of Credit
As of April 30, 2021, the Company had several letters of credit outstanding related to its operating leases totaling $21.7 million. The letters of credit expire at various dates between 2021 and 2034.
Purchase Commitments
In January 2021, the Company entered into a 60-month contract with Amazon Web Services for hosting-related services. Pursuant to the terms of the contract, the Company is required to spend a minimum of $103.5 million over the term of the agreement. The commitment may be offset by up to $7.3 million in additional credits subject to the Company meeting certain conditions of the agreement, which the Company has determined are probable to be met. As of April 30, 2021, the Company had payments of $94.4 million remaining on the commitment, of which $1.2 million has been recorded on the Company’s condensed consolidated balance sheet within accounts payable or accrued expenses and other liabilities.
Capital Commitments
During the year ended January 31, 2021, the Company entered into multiple agreements with a construction company related to the build-out of the Company’s new corporate headquarters (see Note 9. Leases). The cumulative contract value is $71.1 million, and as of April 30, 2021, $18.2 million remains unpaid under these agreements, of which $12.7 million has been recorded on the Company’s condensed consolidated balance sheet within accounts payable or accrued expenses and other liabilities.
Indemnification Agreements
The Company has entered into indemnification agreements with its directors and officers that may require the Company to indemnify its directors and officers against any liabilities that may arise by reason of their status or service as directors or officers, other than liabilities arising from willful misconduct of the individual.
Additionally, in the ordinary course of business, the Company enters into agreements of varying scope and terms pursuant to which it agrees to indemnify customers, vendors, lessors, business partners, and other parties with respect to certain matters, including, but not limited to, losses arising out of the breach of such agreements, services to be provided by the Company, or from intellectual property infringement claims made by third parties. For the three months ended April 30, 2021 and 2020, no demands have been made upon the Company to provide indemnification under such agreements, and there are no claims that the Company is aware of that could have a material adverse effect on its financial position, results of operations, or cash flows.
Contingencies
From time to time in the normal course of business, the Company may be subject to various claims and other legal matters arising in the ordinary course of business. As of April 30, 2021, the Company believes that none of its current legal proceedings would have a material adverse effect on its financial position, results of operations, or cash flows.
15

ASANA, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
Note 9. Leases
The Company leases real estate facilities under non-cancelable operating leases with various expiration dates through fiscal 2034. The Company has no lease agreements that are classified as finance leases.
The components of lease costs, lease term, and discount rate for operating leases are as follows:
Three Months Ended
April 30, 2021April 30, 2020
Operating lease costs (in thousands)$9,132 $3,056 
Short-term lease costs (in thousands)728 460 
Variable lease costs (in thousands)189 262 
Total lease costs (in thousands)$10,049 $3,778 
April 30, 2021April 30, 2020
Weighted-average remaining lease term (in years)12.01.9
Weighted-average discount rate9.5 %3.4 %
Supplemental cash flow information related to operating leases are as follows (in thousands):
Three Months Ended
April 30, 2021April 30, 2020
Cash paid for amounts included in the measurement of operating lease liabilities$2,532 $2,959 
Right-of-use assets obtained in exchange for new operating lease liabilities$2,710 $ 
Future minimum lease payments (net of tenant improvement receivables) under non-cancelable operating leases with initial lease terms in excess of one year included in the Company’s lease liabilities as of April 30, 2021 are as follows (in thousands):
Fiscal year ending January 31,Operating Lease Payments (Net)
2022 (9 months remaining)$12,435 
202329,586 
202427,974 
202528,032 
2026 and thereafter284,042 
Total undiscounted operating lease payments$382,069 
Less: imputed interest(167,816)
Total operating lease liabilities$214,253 
The Company has an operating lease arrangement for office space in San Francisco, which commenced in May 2020 and expires in October 2033. As part of the agreement, the Company was required to issue a $17.0 million letter of credit upon access to the office space, which occurred in the year ended January 31, 2021. The Company participated in the construction of the office space and has incurred construction costs to prepare the office space for its use, which will be partially reimbursed by the landlord. During the year ended January 31, 2021, all three phases of this lease commenced, and as a result, the Company recognized total ROU assets of $175.5 million, with corresponding operating lease liabilities of $173.4 million, on the consolidated balance sheet as of the respective commencement dates of these three phases. The Company expects to incur a total of approximately $392.4 million of future minimum payments and capital commitments, net of tenant improvement receivables, as of April 30, 2021, inclusive of $372.1 million of net lease payments included in the future minimum lease payments table above and the remaining capital commitments related to the build-out of the Company’s new corporate headquarters referenced in Note 8. Commitments and Contingencies. The lease arrangement also includes a fee for access to additional shared space, for which future payments total $3.9 million.
16

ASANA, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
Note 10. Net Loss per Share
The following table presents the calculation of basic and diluted net loss per share (in thousands, except per share data):
Three Months Ended April 30,
20212020
Numerator:
Net loss$(60,658)$(35,845)
Denominator:
Weighted-average shares used in calculating net loss per share, basic and diluted162,07975,641 
Net loss per share, basic and diluted$(0.37)$(0.47)
The potential shares of common stock that were excluded from the computation of diluted net loss per share for the period presented because including them would have been anti-dilutive are as follows (in thousands):
Three Months Ended April 30,
20212020
Redeemable convertible preferred stock 73,577 
Stock options20,691 33,796 
Restricted stock units8,185 1,984 
Early exercised stock options548 1,149 
Shares issuable pursuant to the 2020 Employee Stock Purchase Plan81  
Total29,505 110,506 
Additionally, 17,012,822 and 18,051,810 shares of the Company’s Class B common stock underlying the conversion option in the Convertible Notes are not considered in the calculation of diluted net loss per share as the effect would be anti-dilutive for the three months ended April 30, 2021 and 2020, respectively. As noted in Note 6. Convertible Notes—Related Party, the range of shares potentially issuable at maturity of the Convertible Notes is between 17,012,822 and 27,220,504 shares.
Note 11. Stockholders’ Deficit
Common Stock
There are two classes of common stock that total 1,500,000,000 authorized shares: 1,000,000,000 authorized shares of Class A common stock and 500,000,000 authorized shares of Class B common stock. There are 91,685,723 shares of Class A common stock and 71,785,101 shares of Class B common stock issued and outstanding as of April 30, 2021.
Stock Plans
The Company has a 2009 Stock Plan (the “2009 Plan”), a 2012 Amended and Restated Stock Plan (the “2012 Plan”), and a 2020 Equity Incentive Plan (the “2020 Plan”). Each plan was initially established to grant equity awards to employees and consultants of the Company to assist in attracting, retaining, and motivating employees and consultants and to provide incentives to promote the success of the Company’s business.
Options granted under each of the plans may be either incentive stock options (“ISOs”) or nonqualified stock options (“NSOs”). ISOs may be granted only to Company employees (including officers and directors who are also employees). NSOs may be granted to Company employees and consultants. Restricted stock units may also be granted under the 2012 Plan and the 2020 Plan. Options under the 2012 and 2020 Plans may be granted for periods of up to 10 years. The exercise price of ISOs and NSOs shall not be less than 100% of the estimated fair value of the shares on the date of grant as determined by the Company’s board of directors (the “Board of Directors”). Options
17

ASANA, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
granted generally vest over four years and vest at a rate of 25% upon the first anniversary of the vesting commencement date and 1/48 per month thereafter.
The Company has also issued RSUs pursuant to the 2012 Plan and 2020 Plan. RSUs granted generally vest on a predefined rate over a period of four years contingent upon continuous service.
Shares of common stock purchased under the 2012 Plan and the 2020 Plan plans are subject to certain restrictions and repurchase rights, including the right of first refusal by the Company for sale or transfer of shares to outside parties.
Stock Options
Option activity under the Company’s combined stock plans is set forth below (in thousands, except years and per share data):
Number of
Shares
Weighted-
Average
Exercise
Price
Weighted-
Average