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So the project management “plus” space is a broad one, and one with many leading players. So it gives us a chance to take a pulse check on many segments of SaaS.
What can we learn, right now?
- Monday.com sells mainly to folks outside of tech — and because of that, it’s on fire. It’s up to an $11 Billion (!) market cap and almost $900m in ARR, growing 34%
- Atlassian has overlap with Asana, but a broader product portfolio. At almost $5 Billion in ARR, it’s growing 30%.
- Asana has been hit the hardest. At $700m ARR, growing has bit hit the hardest, falling to 19% year-over-year and 13% quarter-over-quarter. That’s down from 34% at $600m in ARR. A big fall.
5 Interesting Learnings:
#1. NRR Way, Way Down. From 115% at $600m ARR to 102% Today.
This is most of the story right here. Customers are buying less, and cutting seats. Falling from 115% NRR to 102% in less than 24 months cuts growth by -13% a year alone. That’s selling to tech — in many cases — today.
Bigger customers aren’t really bailing out the NRR drop. While $100k+ customers do have higher NRR today at 108% … it was 135% at $600m ARR. Not that long ago, really.
#2. Net New Customer Count Holding Up, Still +12% Today
Not bad. Asana’s customers may be buy far less from them today than even 12 months ago, but folks are still buying. Customer count has crossed 22,000 overall, and $100k+ customers are growing much faster, at +19%.
#3. Losing Less, But Not Yet Operating Margin Positive
Unlike most of its public peers, Asana hasn’t been able to get operating margin positive on a non-GAAP basis. Wall Street still values growth 2x as much as profitability, but you really do need both today. Asana has cut its losses, but hasn’t made recent progress on its operating margins, which are stuck at -9%.
#4. Expecting NRR to Drop Further, to 100% or Below Later in Year
It takes time for downgrades to fully propogate into your ARR, and Asana is saying there is more to come. It expects NRR to drop further in the coming quarter or two, to 100% or lower, and then stabilize. They’re still lapping downgrades and churn, as are many of us.
#5. Projecting 9%-10% Growth Going Forward
Asana isn’t seeing any re-acceleration yet, and isn’t planning for it yet. It’s projecting potential single-digit growth next year, like Salesforce.
Asana seems to for now, at least, have the toughest hands of the leading public SaaS players in its broad space. In 2021, selling to “tech” was the hottest segment of all. Today? It’s the coldest.
Blending them together may be the way.
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Jason Lemkin, Khareem Sudlow
