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Building Financial Resilience Through Turbulent Times

Courtney Vien

Fast-growing tech companies typically aren’t known for their prudence—the motto “

But one tech company is experiencing hypergrowth while taking a different approach. IT software provider Kaseya—which is poised to become the nation’s sixth-largest software company by 2030, its CFO, Kathy Wagner, told CFO Brew—is staying profitable while pursuing growth through carefully considered acquisitions and thoughtful talent management.

“The one thing I say about being in a hypergrowth mode is it’s not a top-line game,” Wagner said. “We need to grow profitably.”

 Kaseya, founded in 2000, had revenues of $1.58 billion in 2023. It’s headquartered in Miami, with offices in more than 21 other countries, and employs more than 4,500 people. The company makes IT software for small and midsize businesses and managed service providers. Its signature product, IT Complete, is an integrated suite of IT applications, covering such functions as service desk, network management, compliance backup, and security.

The “secret sauce” behind Kaseya’s growth: 

IT Complete is tailored to the “multifunctional IT professional,” Wagner said, “the person who is backing up a dentist’s records and answering the phone because the guy at the restaurant can’t get into his computer.” The software is designed to make it easy for such customers to toggle between applications—all of which are integrated with one another, without having to switch between different platforms.

Kaseya acquires companies that produce solutions that are a good fit for its customer base, and that will add value to its current platform. For instance, it recently acquired Vonahi Security, a maker of penetration testing software. Penetration testing, Wagner said, can be labor intensive and too costly for some small businesses to afford. The software automates penetration testing, putting it within reach of more of Kaseya’s customers.

“We [ask] ‘Does it make IT Complete more complete?’” when evaluating potential acquisitions, Wagner said. “Integrations are the secret sauce of our platform.”

As Wagner noted, choosing the right companies to acquire has contributed to its growth strategy. “We’ve successfully made every acquired module more affordable than they were prior to the acquisition,” she told CFO Brew in a follow-up email, “and seen worthwhile returns on our investments.”

 When companies are in a growth phase, Wagner said, they may fall into a habit of spending too freely.

Wagner prefers to operate with more restraint. “I always take a consultative approach. ‘What are you trying to achieve? Is there another way to achieve it without throwing more resources at it, whether it’s money or people?’” she said. To accelerate profitable growth, “you have to be very strategic in how you allocate resources,” she said.

That mindful approach, she said, is one reason Kaseya, unlike many tech companies, was able to avoid widespread layoffs last year. “We have a lot of restraint in that we didn’t overhire over the pandemic,” she said. In turn, not being known for layoffs has helped Kaseya attract employees: “You’re not going to see anything like that in Kaseya’s history,” she said. “We have a much more stable environment to offer the workforce.”

 Which brings up another way Kaseya differs from many tech companies: The majority of its employees work on site. (In fact, Kaseya is leaning into physical offices at the same time other companies are leaning out; it’s begun expanding one of its four Miami offices to accommodate more than 400 people.) That choice hasn’t hurt it in terms of recruitment, Wagner said; in fact, its CEO has set an ambitious goal of hiring 3,000 people in the next few years.

The choice to have staff work on site complements Kaseya’s “grow-your-own” approach to developing leadership, Wagner said. On-site connections allow for “learning and mentorship and collaboration,” she said, which is especially important for early-career staff. Sales employees, she said, benefit from having solutions engineers “within arm’s reach” in case customers or leads have questions.

“Our investment in Kaseya’s talent is absolutely a huge driver of our growth,” she said.

And working on site makes her and other members of the C-suite feel more approachable, Wagner said. “I came in the other morning and there were three people standing in front of my office and they wanted to talk to me about deals they were doing,” she said. “You’re not going to get that when you’re at home and have to call the CFO on Zoom.”

Such in-person interaction can increase CFOs’ own understanding of the business, Wagner said.

“Understand how decisions get operationalized. Go spend time with people that are two and three levels below [your] peer group,” she advises CFOs. “Understand where the real needs are versus the wants. That’s only going to make you smarter about the business and more strategic when you’re making decisions about business allocation.”

The recipe for hypergrowth

How one company is moving fast and thinking things through.

Natasha Piñon

Let’s make a deal: We’ll use one (and only one) Amazon Prime pun, and then we’ll tell you what happened in the company’s 

Deal? Here goes. Based on the report, it’s clear the company is 

itself to take advantage of a new era of tech. The tech giant reported net sales of $170 billion, a 14% increase from $149.2 billion in Q4 2022.

There were a few main drivers behind the company’s solid report, the most obvious of which was Amazon’s massive holiday shopping effort.

“This Q4 was a record-breaking holiday shopping season and closed out a robust 2023 for Amazon,” Amazon CEO Andy Jassy said in a statement. Globally, customers bought more than one billion (yes, billion) items on Amazon during the company’s Black Friday and Cyber Monday shopping events, per the report. Taken together, it was record-breaking: Customers bought more on Amazon over the course of this holiday season than any other.

But other factors supercharging Amazon’s strong report provide a more concise glimpse into where the company is headed. Revenue for the tech giant’s cloud division, Amazon Web Services, grew 13% year over year. AWS reported $24.2 billion in Q4 revenue.

Some tech companies have tried to cut cloud spend amid rising interest rates, “but that trend has been receding,” CNBC reported. During the Amazon earnings call, Jassy noted that “while cost optimization continued to attenuate, larger new deals also accelerated.” In its earnings report, the company spotlighted some of its major cloud computing deals, including with Salesforce and pharmaceutical behemoth Merck.

 a new AI-powered shopping assistant, called Rufus. (We would’ve consulted for free on the name, but hey.) The AI chatbot, which, again, is 

 after a former employee’s corgi, can field customer queries and recommend products based on its training from Amazon’s product catalog and customer reviews.

“Gen AI is and will continue to be an area of pervasive focus and investment across Amazon, primarily because there are few initiatives, if any, that give us the chance to reinvent so many of our customer experiences and processes,” Jassy said on the earnings call. “We believe it will ultimately drive tens of billions of dollars of revenue for Amazon over the next several years.”

Amazon’s Q4 earnings pop on record holiday sales, cloud strength 

 The tech giant’s cloud computing unit grew 13% year over year. 

When it rains, it pours. And even though UPS packages get delivered in inclement weather, the same can’t be said for the company’s latest earnings report.

The shipping giant’s Q4 2023 earnings were a bad-weather doozy all the way around—from revenue to shipping volume to its workforce.

“2023 was a unique and quite candidly difficult and disappointing year,” UPS CEO Carol Tomé said in an earnings release. “We experienced declines in volume, revenue, and operating profit in all three of our business segments.”

UPS reported $24.9 billion in revenue, marking a 7.8% decrease from the same quarter in 2022.

A large driver for the revenue dip was a demand slowdown: The company reported a 7.4% domestic and 8.3% international decline in average daily volume. Weakness in the European market was a heavy drag internationally, according to Tomé, while conflict in the 

And then there’s the fraught labor situation: The company announced it would cut 12,000 jobs this year. On the earnings call, Tomé said the layoffs could produce around $1 billion in cost savings.

It’s not a great look—to say the least. Last year, UPS dealt with labor negotiations as Teamsters 

The financial impacts of last year’s labor deal didn’t come up this time around, but Tomé did include them as one contributor to company’s overall “disappointing” year, 

UPS announces job cuts, declining revenue 

UPS may deliver in rain and snow, but its Q4 2023 earnings report slipped. 

Graison Dangor

Procter & Gamble delivered stronger-than-expected earnings in its 

 the same way it did in the first: raising prices, yet still keeping its household staples moving through store check-outs. Now the consumer goods giant says it can keep sales growing for the next half-year even if it slows down the price hikes.

P&G, which makes everything from Dawn to Braun, posted 16% year over year earnings per share growth, beating analyst expectations 

, according to Zacks research. That’s after accounting for its $1.3 billion 

, which P&G bought in 2005—before cheaper competitors like Dollar Shave Club and Harry’s even existed. Throughout the 2010s, those competitors shaved away Gillette’s supermajority market share.

While it relied on price increases to drive a 4% jump in organic sales, P&G noted that sales volume grew in grooming, home care, and family care, which includes Bounty and Charmin. Fittingly, its hair care products also enjoyed higher volume.

To keep those sales up, P&G will need to keep pumping up the volume, because the company is considering slowing future price increases.

“More stable foreign exchange and commodity costs will ideally reduce the need for additional large price increases,” 

P&G is not the only consumer packaged goods maker talking about easing up on price hikes, according toJon Andersen, an analyst with investment bank and wealth manager William Blair.

“The entire CPG industry is going through a period of transition from what’s been a couple of years of price-led growth,” he said. Now, companies will need to focus on growing sales by actually selling more stuff, he added.

P&G appears confident it will, reiterating that it expects to hit 4% to 5% organic sales growth for the year, which is roughly what it did this quarter thanks to price increases.

After raising prices 7% and 4% in the first two quarters, P&G may be able to cut its price increases to about 3% over the second half of the fiscal year, Andersen predicted. Part of the reason he expects an increase at all is that P&G can charge a premium for some of its most unique products, such as Dawn Powerwash or Ultra Soft, Charmin’s wavy-edged toilet paper.

The long game in China: P&G’s growth was driven by stronger organic sales in North America (5%) and Europe (7%). But organic sales dropped 15% YoY in the country’s second-largest market, greater China. That’s worse than the 6% annual decline P&G reported in the first quarter, as the country suffers through slower-than-expected growth that has, as CFO Andre Schulten noted in Tuesday’s earnings call, made Chinese consumers even more pessimistic.

Schulten and Moeller refuse to take their eye off the long-term prize that’s the growing Chinese middle class, a group of consumers P&G believes will grow by 250 million people to reach 700 million over the next five years.

“We continue to be very optimistic” about the company’s future in China, Schulten said.

P&G mulls easing up on price hikes

Higher prices have driven the company's recent profits. 

Drew Adamek

We know two things for certain: 1) Our readers know waaaay more about corporate finance and accounting than we do. 2) While finance professionals have a broad range of practical knowledge, everyone can use a little refresher once in a while.

To help keep you up to date, or just to offer a little reminder of the basics, we’ve gathered some of the best finance, business, and accounting cheat sheets influencers and thought leaders are offering on LinkedIn.

However, it should be noted, like we did in our last 

, that you should always look for additional resources and expertise when doing complicated finance work, because it can be very difficult to accurately sum up sophisticated concepts in a short summary.

With that said, here are three recent cheat sheets that we’ve discovered to help busy finance professionals keep up.

 financial model, key ratio, and valuation. This cheat sheet from the CEO of Arcana, a financial data company, explains six financial topics including unit economics, income statements, operating ratios, valuations, corporate finance and discounted cash flows, and calculating terminal value. Wallace includes examples across a range of product types and margins, but cautions that the hard part is “filling in the numbers.” Wallace offers a downloadable Excel file of his cheat sheet.

. Liu-Lindberg, co-founder and chief commercial officer of the Copenhagen-based Business Partnering Institute, shares “100 KPIs to keep the company on track.” His fact sheet is a quick visual reminder, and covers 10 of what he calls the most important KPIs in ten different areas of CFO responsibility. Among the 100 KPIs listed are things like budget variance, risk exposure, effective tax rate, and financial reporting accuracy. Liu-Lindberg also offers a PDF with full explanations of each KPI upon request.

 data visualization tool for finance and accounting professionals. Wahba, an accountant based in Egypt, offers what he calls “the top 10 functional improvements you must master in Power BI to create professional dashboards.” His cheat sheet offers an overview of some of the program’s key concepts and features, including data modeling, power query, and data analysis expressions (DAX). The three-page cheat sheet includes definitions, examples, and charts.

Cheat sheet round-up: July 

More quick-reference guides for corporate finance.

Cheat sheet round up: July 

Steven I. Weiss

What do the latest venture investment numbers tell us about how startups are operating today? According to the 

 from Carta, an ownership and equity management platform, many companies beyond the seed stage are kicking the can down the road, often raising smaller bridge rounds instead of raising a full, new round.

“At least 40% of all investments in Series A and Series B companies were bridge rounds in Q1, the highest figures of the 2020s,” it announced in a new report. That trend is even more pronounced for later-stage companies, according to Peter Walker, head of insights at Carta.

“There are so few Series D rounds happening that the majority of the ones that are taking place are some form of extension bridge,” he told CFO Brew.

And for those that are raising a full round, nearly 20% are down rounds, “the highest proportion since at least 2018,” according to the report.

 This comes amid a trend in recent years in which more and more late-stage companies have opted to stay private rather than push for an IPO. In North America in recent years, there has been a 500% increase in the number of private companies that have reached unicorn status, according to 

 from the National Foundation for American Policy, a reflection of increasing startup valuations and companies staying private longer.

“We’ve seen this throughout our dataset, that companies are staying private longer and longer,” Walker said, “the reason they’re doing that is because they were pretty certain that they could continue to fundraise out of private cash instead of having to tap the public markets.”

That’s now changed: “The water has sort of gone out on that strategy, because the money in the private late-stage market has dried up,” Walker said, noting that many companies are taking a wait-and-see approach while the IPO market remains less active.

 At earlier stages, companies simply aren’t raising as often: “In terms of seed rounds, over time, Carta saw 857 seed rounds completed in Q4 of 2021,” Walker said, adding: “That was the peak quarter for us.” As to how things are now, Walker said, “In this most recent quarter, we saw 347 seed rounds,” noting “that’s a significant drop.”

Outside of the data, Walker said there are other indications companies are seeing new challenges raising funds: “We’ve heard anecdotally that the metrics required to achieve a Series A have increased,” such that “you need to show more traction, there needs to be better unit economics, or whatever the investor in question is looking for.” Nevertheless, Walker said, “The picture is still far more rosy in early stage than it is in late stage.”

 Ultimately, Walker said, these dynamics are changing how leadership is choosing to run their companies: “If you’re a Series D company and you grew up in the last five or six years, when the paradigm was radically different than it is today, shifting between growth at all costs and profitability is a really difficult changeover to make, and that’s partly why we see deep cost-cutting layoffs, those kinds of things.”

Walker reminded companies to be mindful of the changed fundraising environment: “As you go out to that next fundraise, your expectation should be different from the valuation and cash rate perspective that you might have wanted a year or two prior.”

But also worth watching, he said, are deal terms. “One of the biggest changes that we’re seeing within venture deals is some of them are coming along with pretty onerous terms or investor-friendly terms in a way that weren’t before.”—