Today Asana filed their initial S1 statement. A S1 is a document companies file with the SEC in preparation for listing their shares on an exchange like the NYSE or NASDAQ. The document contains a plethora of information on the company including a general overview, up to date financials, risk factors to the business, cap table highlights and much more. The purpose of the detailed information is to help investors (both institutional and retail) make investment decisions. There’s a lot of info to digest, so in the sections below I’ll try and pull out the relevant financial information and benchmark it against current cloud businesses. As far as an expected timeline - typically companies launch their roadshow ~3 weeks after filing their initial press release (this is where we get a price range). After the roadshow launch there’s typically ~2 weeks before the stock starts trading. So we’re looking at roughly 5 weeks before any retail investor can buy the stock. Asana, however, is not going public through a traditional IPO process. They are going public through a direct listing (and the timeline is different). I’m still researching the exact timeline
Hi Jamin, thanks for this analysis and insights. Just one question: I read the whole S-1 but couldn't find out how the data to calculate the CAC payback time. How did you figure out the Net new ARR of previous year? Cheers!
It's a good question. In all of my analysis it's an "implied" net new ARR number (I'm calculating). For businesses that are either all subscription revenue, or break out what the subscription revenue is, I calculate the "implied ARR" at any point in time by taking the quarterly subscription revenue and multiplying by 4. So in my payback analysis in this article (and all others), I calculated the implied net new ARR in a quarter by taking the implied ARR of the current quarter (subscription rev x 4), and subtracting the implied ARR of the previous quarter. This gets me the implied net new ARR added in a quarter
Hi Jamin, thanks for the answer. I thought there was a way to derive the new recurring revenue from the non-new (i.e. expansion) from those S-1 that I couldn't find :D Anyway, please keep up the good work, I stumbled upon your newsletter by Googling about those S-1. Super useful! Is there any other place where you publish your benchmarks and/or analysis? Would love to read more. Thanks
Jamin - would be curious your thoughts to this. As someone newer to workflow management (I work in finance...) I tend to agree. What's the competitive advantage here other than rate of growth that stops someone else developing these features, just like they copied some of Trello's?
Thanks, this is interesting! As it relates to valuation, why did you use 30-60% growth rates for NTM revenue growth to net out TEV? Additionally, couldn't you have done a DCF for the business to figure out what the fair value of the business may be?
Hi Jamin, this is really insightful. I am not clear about the formula that you have used for Gross Margin Adjusted CAC payback. Instead of multiplying it by 12 shouldn't we divide it by 12? The formula will be (Prior Q S&M Spend)/((Current Q Net New ARR * Gross Margin)/12). Let me know if it makes sense.
Before we multiply by 12 we have the number of years of payback. Multiplying by 12 makes the end result the number of months of payback. If you spend $1M in a period, and add $1M of net new ARR in the same length it will take you 1 year to pay it back. We multiply by 12 so we get to 12 months payback
Hi Jamin, thanks for this analysis and insights. Just one question: I read the whole S-1 but couldn't find out how the data to calculate the CAC payback time. How did you figure out the Net new ARR of previous year? Cheers!
It's a good question. In all of my analysis it's an "implied" net new ARR number (I'm calculating). For businesses that are either all subscription revenue, or break out what the subscription revenue is, I calculate the "implied ARR" at any point in time by taking the quarterly subscription revenue and multiplying by 4. So in my payback analysis in this article (and all others), I calculated the implied net new ARR in a quarter by taking the implied ARR of the current quarter (subscription rev x 4), and subtracting the implied ARR of the previous quarter. This gets me the implied net new ARR added in a quarter
Hi Jamin, thanks for the answer. I thought there was a way to derive the new recurring revenue from the non-new (i.e. expansion) from those S-1 that I couldn't find :D Anyway, please keep up the good work, I stumbled upon your newsletter by Googling about those S-1. Super useful! Is there any other place where you publish your benchmarks and/or analysis? Would love to read more. Thanks
Jamin - would be curious your thoughts to this. As someone newer to workflow management (I work in finance...) I tend to agree. What's the competitive advantage here other than rate of growth that stops someone else developing these features, just like they copied some of Trello's?
Thanks, this is interesting! As it relates to valuation, why did you use 30-60% growth rates for NTM revenue growth to net out TEV? Additionally, couldn't you have done a DCF for the business to figure out what the fair value of the business may be?
Hi Jamin, this is really insightful. I am not clear about the formula that you have used for Gross Margin Adjusted CAC payback. Instead of multiplying it by 12 shouldn't we divide it by 12? The formula will be (Prior Q S&M Spend)/((Current Q Net New ARR * Gross Margin)/12). Let me know if it makes sense.
Before we multiply by 12 we have the number of years of payback. Multiplying by 12 makes the end result the number of months of payback. If you spend $1M in a period, and add $1M of net new ARR in the same length it will take you 1 year to pay it back. We multiply by 12 so we get to 12 months payback
Got it. Both the formula essentially will give the same output. Missed that 12 is outside the bracket in your formula.
Snir - of course your opinion is credible, given that you work at monday.com..