Asana (ASAN) risk factors, FY2025 10-K

Risks Related to Our Business and Industry

1. 01Our prior growth rates may not be indicative of our future growth
2. 02We 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
3. 03We have a history of losses, and we may not be able to achieve profitability or, if achieved, sustain profitability
4. 04We 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
5. 05Our quarterly results may fluctuate significantly and may not meet our expectations or those of investors or securities analysts
6. 06Any one or more of the factors above may result in significant fluctuations in our quarterly results of operations, which may negatively impact the trading price of our Class A common stock. You should not rely on our past results as an indicator of our future performance
7. 07We may not be able to effectively manage our growth
8. 08lengthened sales cycles, and diversion of our own sales and professional services resources to a smaller number of larger customers. If our efforts to sell to organizations of all sizes are not successful or do not generate additional revenues, our business, results of operations, and financial condition would suffer
9. 09One of our marketing strategies is to offer free and trial subscription plans, and we may not be able to continue to realize the benefits of this strategy
10. 10We derive substantially all of our revenues from a single software solution and products available as add-ons to that solution
11. 11If the market for work management solutions develops more slowly than we expect or declines, our business would be adversely affected
12. 12We operate in a highly competitive industry, and competition presents an ongoing threat to the success of our business. Our ability to compete and ensure our success requires developments in our technology, including the successful deployment of artificial intelligence in our products
13. 13companies specifically offering work management solutions, companies offering productivity suites, and companies specializing in vertical solutions that address a portion of our market
14. 14Failure to effectively develop and leverage our sales capabilities would harm our ability to expand usage of our platform within our customer base and achieve broader market acceptance of our platform
15. 15of our business. Threat actors may also gain access to other networks and systems after a compromise of our networks and systems
16. 16Our use of AI and machine learning technologies in our products and operations gives rise to legal, business, and operational risks. Legal, regulatory, social and ethical issues relating to the use of AI and machine learning technologies in our products and business may result in reputational harm and liability
17. 17If 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
18. 18Real or perceived errors, failures, vulnerabilities, or bugs in our platform would harm our business, results of operations, and financial condition
19. 19If 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
20. 20The loss of one or more of our key personnel could harm our business
21. 21We must continue to attract and retain highly qualified personnel in very competitive markets to continue to execute on our business strategy and growth plans
22. 22Our culture has contributed to our success, and if we cannot maintain this culture as we grow, we could lose the employee engagement fostered by our culture, which could harm our business
23. 23Issues and regulations related to human capital, and stakeholder responses thereto, may have an adverse effect on our business, financial condition, and results of operations and may damage our reputation
24. 24Our 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
25. 25If we fail to offer high-quality customer support, our business and reputation will suffer
26. 26We 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
27. 27We rely on traditional web search engines to direct traffic to our website. If our website fails to rank prominently in unpaid search results, traffic to our website could decline and our business would be adversely affected
28. 28Sales to customers outside the United States and our international operations expose us to risks inherent in international sales and operations
29. 29Sales to government entities, customers reliant on government funding, and other government contractors are subject to a number of additional challenges and risks
30. 30If we experience excessive fraudulent activity, we could incur substantial costs and lose the right to accept credit cards or other payment methods for payment, which could cause our customer base to decline significantly
31. 31We may engage in merger and acquisition activities, which would require significant management attention, disrupt our business, dilute stockholder value, and adversely affect our business, results of operations, and financial condition

Risks Related to Government Regulation and Legal Matters, including Taxation and Intellectual Property

1. 32We may become subject to intellectual property rights claims and other litigation that are expensive to support, and if resolved adversely, could have a material adverse effect on us
2. 33If we are unable to protect our intellectual property rights, the value of our brand and other intangible assets may be diminished, and our business may be adversely affected
3. 34Our failure to obtain or maintain the right to use certain of our intellectual property would negatively affect our business
4. 35Any future litigation against us could be costly and time-consuming to defend
5. 36Our use of “open source” and third-party software could impose unanticipated conditions or restrictions on our ability to commercialize our solutions and could subject us to possible litigation
6. 37various methods, including chatbot and session replay providers, or via third-party marketing pixels. Our inability or failure to obtain consent for these practices could result in adverse consequences, including class action litigation and mass arbitration demands
7. 38We are subject to anti-corruption, anti-bribery, and similar laws, and our failure to comply with these laws could subject us to criminal penalties or significant fines and harm our business and reputation
8. 39We are subject to various export, import, and trade and economic sanction laws and regulations that could impair our ability to compete in international markets and subject us to liability for noncompliance
9. 40Changes in tax laws or regulations could be enacted or existing tax laws or regulations could be applied to us or our customers in a manner that could increase the costs of our platform and harm our business
10. 41we are unsuccessful in collecting such taxes due from our customers, we would be held liable for such costs, thereby adversely affecting our results of operations and harming our business
11. 42Our business, results of operations, and financial condition may be harmed if we are required to collect sales, value added, or other related taxes for subscriptions to our platform in jurisdictions where we have not historically done so
12. 43Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited

Risks Related to Our Capital Allocation Strategy

1. 44We may need additional capital, and we cannot be sure that additional financing will be available

General Risks

1. 45Our reported financial results may be adversely affected by changes in accounting principles generally accepted in the United States
2. 46A failure to establish and maintain an effective system of disclosure controls and internal control over financial reporting, could adversely affect our ability to produce timely and accurate financial statements or comply with applicable regulations
3. 47We may face exposure to foreign currency exchange rate fluctuations
4. 48If our estimates or judgments relating to our critical accounting policies prove to be incorrect, our results of operations could be adversely affected
5. 49Catastrophic events, health epidemics, or geopolitical conflicts may disrupt our business

Risks Related To Ownership of Our Class A Common Stock

1. 50The trading price of our Class A common stock may be volatile and could decline significantly and rapidly
2. 51Our largest stockholder will have the ability to influence the outcome of director elections and other matters requiring stockholder approval
3. 52We cannot predict the effect our dual class structure may have on the trading price of our Class A common stock
4. 53Sales of substantial amounts of our Class A common stock in the public markets, or the perception that sales might occur, could cause the trading price of our Class A common stock to decline
5. 54Our business and financial performance may differ from any projections that we disclose or any information that may be attributed to us by third parties
6. 55We cannot guarantee that our share repurchase program will be fully implemented or that such program will enhance the long-term value of our share price
7. 56Our trading price and trading volume could decline if securities or industry analysts do not publish research about our business, or if they publish unfavorable research
8. 57The requirements of being a public company may strain our resources, divert management’s attention, and affect our ability to attract and retain executive management and qualified board members
9. 58We do not intend to pay dividends for the foreseeable future
10. 59Additional stock issuances could result in significant dilution to our stockholders
11. 60Certain provisions in our corporate charter documents and under Delaware law may prevent or hinder attempts by our stockholders to change our management or to acquire a controlling interest in us, and the trading price of our Class A common stock may be lower as a result