Asana: All Pain, No Gains – C-Suite Transitions

Asana is the Sanskrit word for the sitting meditation pose. Over the centuries the meaning of the word evolved to imply various yoga poses. Asana (ASAN), the project management software company founded by Facebook’s Co-founder Dustin Moskovitz, also evolved by expanding its product offering much like Datadog (DDOG) did by entering adjacent markets.

When I first came across the company in 2021 on account of Mr. Moskovitz’s insider purchases, Asana was growing revenue more than 60% year-over-year and was trading at 31 times sales. The stock is now trading at less than four times sales and revenue growth last quarter was 10% with a net customer retention rate of just 98%.

Investors were patient with companies as long as revenue growth provided a path to eventual GAAP profitability and as long as the company was free cash flow positive. That paradigm shifted in 2022 and as discussed in our May 2022 article Capitulation or Forced Selling, Uber’s new CEO Dara Khosrowshahi got the message loud and clear that growth at all costs was no longer going to work.

Last week Asana appointed Sonalee Parekh as its new CFO following the departure of long-serving CFO Tim Wan. Hopefully Ms. Parekh, with her investment banking background, helps Asana rise from its sitting pose.

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