Earnings calls, loved by some CFOs and dreaded by others, allow finance leaders and their fellow executives to verbalize their organization’s progress. Each month, CFO.com compiles interesting insights shared by CFOs during these calls for The CFO Earnings Dispatch series. These insights include statements about their company, analysis of financial data and answers to analysts’ questions.
For October, we highlight CFOs from Apple, Uber, Starbucks, Meta, Alphabet, ServiceNow, Boeing, Coca-Cola, Lockheed Martin, Philip Morris and Nike.
1. Apple
Market cap: $3.38 trillion
Date of call: October 31
In his final earnings call, Luca Maestri, the outgoing finance chief at Apple, highlighted his successor’s ability to take over his position once he leaves. Kevan Parekh, currently the company’s vice president of FP&A, will take over as CFO in 2025. On his way out, Maestri also noted significant wins for the company, including a service revenue all-time record of $25 billion (up 12% YoY) and the international success of the iPhone 15, especially in markets like the Middle East and Asia, where Apple has faced more competition in the smartphone space.
“Serving as Apple’s CFO has been a real privilege and an amazing journey, and I’ve greatly appreciated the support from our investors and the analyst community over the years. Kevan is exceptional, and I know you will enjoy interacting with him going forward.”
2. Uber
Market cap: $155.23 billion
Date of call: October 31
Uber CFO Prashanth Mahendra-Rajah spoke candidly about his company’s lack of interest in inorganic growth given their current financial trajectory, citing a capital allocation framework focused on growing the business internally. His description of the best type of M&A deal is notable.
“To quickly touch on M&A, we remain extraordinarily disciplined, and I want to emphasize that all opportunities are reviewed with a rigorous value-creation mindset and Uber’s bar for M&A has never been higher…The best deal is not having to do a deal at all, and we are in that enviable position today. So we are excited to continue on our exceptional path of organic growth while sticking to our firm commitment to you, our shareholder, of capital returns.”
3. Starbucks
Market cap: $109.90 billion
Date of call: October 30
With the company’s new CEO Brian Niccols vowing to bring Starbucks back to its roots, longtime company finance veteran and now CFO Rachel Ruggeri gave another underwhelming performance update in Niccols’ first earnings call with the company. Starbucks is seeing revenue declines quarter after quarter, declining traffic across all time slots, and double-digit sales drops in China, where competition is increasing dramatically. While Niccols was outspoken about the company’s finances in his remarks, Ruggeri outlined the finance team’s approach to executing her new boss’s plan.
“Given the company’s CEO transition, coupled with the current state of the business, our guidance is suspended for the full fiscal year 2025. This allows ample opportunity to assess the business and solidify key strategies as we refocus our efforts on the turnaround. [However], I would like to still briefly touch on our capital allocation priorities.
“One of our top priorities includes reestablishing Starbucks as the community coffee house. To do so, we plan to reduce the number of our new stores and renovations in fiscal year 2025 to accommodate a redesign while also unlocking capital to support our broader turnaround… In summary, our results do not reflect the strength of our brand and what we’re capable of. As a 20-plus-year partner, I’ve seen what Starbucks is capable of when we focus on what we do best. It’s because of that that I have confidence in our ability to turn around our business.”
4. Meta
Market cap: $1.44 trillion
Date of call: October 30
Susan Li, CFO of Meta, highlighted several challenges her company is facing despite 19% revenue growth YoY in Q3. Although the company is growing revenues and cutting costs where possible, the push on non-priority cost-cutting is minimal if other areas of the business continue to burn cash. The company faces increased CapEx costs of $9.3 billion due to its AI push and is still investing heavily in Reality Labs, Meta’s virtual reality arm, which lost $4.4 billion in Q3 after similarly large losses in Q2 and Q1.
“We continue to take a long-term view in running the business, which involves investing in a portfolio of opportunities that we expect will generate returns over different time periods. We are very optimistic about the set of opportunities in front of us and believe that investing now in both infrastructure and talent will not only accelerate our progress but increase the likelihood of maximizing returns within each area.
“This includes investing in both near-term initiatives to deliver continued healthy revenue growth within our core business as well as longer-term opportunities that have the scale to deliver compelling returns over time. Given the lead time of our longer-term investments, we also continue to maximize our flexibility so that we can react to market developments.”
5. Alphabet
Market cap: $2.08 trillion
Date of call: October 29
In her first earnings call, Alphabet’s CFO Anat Ashkenazi discussed her initial goal of cutting costs where possible throughout the business. After her aggressive tactics began to spook employees, Ashkenazi and CEO Sundar Pichai addressed employee concerns on Halloween during a virtual call, where they discussed the company’s cost-cutting efforts and hiring tactics while wearing Halloween costumes.
“Overall, for the business, one of my key priorities is to look across the organization to see what we can do in terms of driving further efficiencies. There’s really good work that was done by Ruth, Sundar and the rest of the lead team to re-engineer the cost base. But I think any organization can always push a little further. And I’ll be looking at additional opportunities really across all the elements that I’ve mentioned in my prepared remarks, thinking not just about the size of the organization, but mostly how we operate and how we run the business.”
6. ServiceNow
Market cap: $199.07 billion
Date of call: October 23
ServiceNow CFO Gina Mastantuono made an interesting remark about AI and the C-suite during her company’s earnings call. She boasted about her organization’s $2.7 billion in revenues and growth numbers of 22.5% YoY, highlighting how this growth is sustainable due to the C-suite’s desire to implement technology, a notion that when looking at survey data yields varying conclusions.
“Q3 was another stellar quarter for ServiceNow with substantial outperformance across all of our growth and profitability metrics as digital transformation and Gen AI remain top priorities for C-suites…I’m excited about the opportunities created by our latest innovations as they fuel our durable top-line growth and margin expansion on our journey to becoming the defining enterprise software company of the 21st century.”
7. Boeing
Market cap: $114.80 billion
Date of call: October 23
Boeing CFO Brian West mentioned his company’s initial plan once the (International Association of Machinists) IAM work stoppage was settled. Now that an agreement has been reached, the company’s first move is to reestablish its supply chain.
“As noted in mid-September, we had been making good progress on stabilizing production and preparing for 38 [model 737s] per month by year-end, but those objectives will now take longer due to the IAM work stoppage. Given the strike and our need to conserve cash, we’ve made near-term adjustments to broadly stop supplier shipments. We continue to manage supplier by supplier based on inventory levels and for certain suppliers, this will allow them to catch up. We maintain our objective to position the supply chain to support our ramp post-strike.”
8. Coca-Cola
Market cap: $280.14 billion
Date of call: October 23
Coca-Cola and its CFO John Murphy are facing multiple “headwinds.” The company is currently in a tax dispute with the IRS. Murphy noted a $6 billion IRS deposit the company made in Q3. However, despite this payment, he reassured that the balance sheet remains strong, with a leverage ratio well below their target range.
“During the quarter, we made a $6 billion deposit with the IRS related to our ongoing tax dispute. We’ve also filed our appeal with the 11th Circuit Court. We’re pleased to move forward with the process. We will vigorously defend our position. We believe we will prevail, and we will continue to keep you updated. Free cash flow, excluding the IRS tax litigation deposit, was approximately $7.6 billion, which is down approximately $290 million versus the prior year due to higher other tax payments, higher capital expenditures, and cycling some working capital benefits from the prior year.
“Our balance sheet is strong, and our net debt leverage of 1.7 times EBITDA is below our targeted range of two to 2.5 times. If you include our latest estimate of $6.1 billion related to our fairlife contingent consideration payment, which we expect to make in the first half of 2025, our expected net debt leverage would be at the low end of our target range.”
9. Lockheed Martin
Market cap: $129.12 billion
Date of call: October 22
Lockheed Martin’s CFO, Jesus Malave Jr., mentioned his company’s most likely growth sector is within the missile and fire control (MFC) section. While he said the company is looking to get classified production contracts with military contractors as a significant source of growth in this area, he clarified that the challenge is meeting demand.
“The leader of growth will be MFC over this time period through 2027. And I would put them at the high single-digit clip very comfortably based on the backlog that they have today and the visibility we have to incremental orders. The other three business areas in this framework, at least starting off with this low single digit, the rest of them will be in this low single-digit framework [pretty consistently]. Now, how do we go from a low single digit to a high single digit? Quite frankly, a lot of that opportunity is already sitting in the backlog. If the system can convert, and I’d say the entire enterprise, so it’s not just the supply chain, it’s our operations as well, that can convert on that backlog quicker.”
10. Philip Morris
Market cap: $204.69 billion
Date of call: October 22
Shortly after Juul Labs’ recent class action lawsuit payout made headlines, tobacco and nicotine conglomerate Philip Morris, which owned a minority stake of Juul Labs, and its CFO Emmanuel Babeu highlighted how smokeless tobacco, primarily in the form of pouches like ZYN, is the company’s new cash cow as they look to guide users towards a completely smokeless nicotine product.
“The combination of this positive top-line performance with the additional favorable smoke-free mix impact on profit and ongoing cost efficiencies enable us to achieve growth of plus 13.8% in organic operating income and plus 18% in currency-neutral adjusted diluted earnings per share.
“Smoke-free net revenue and gross profit grew organically by plus 16.8% and plus 20.2%, respectively, driving 200 basis points of gross margin expansion. This reflects a robust IQOS performance in the quarter, including manufacturing productivities, as well as the continued accretion of ZYN and a small but growing contribution from VEEV. Smoke-free gross margins were more than 450 basis points higher than combustible in Q3 and more than 200 basis points higher year to date. Combustible net revenue and gross profit growth accelerated to almost plus 9% organically.”
Also from Babeu: “Notwithstanding the incredible growth and success of the brand over [the past year], there is a very substantial growth runway over the coming years as more of the world’s one billion legal-age smokers switch to better alternatives.”
11. Nike
Market cap: $114.72 billion
Date of call: October 1
Matthew Friend, CFO of Nike, took a moment to acknowledge the retirement of CEO John Donahoe, who took the position in January 2020. His predecessor, longtime executive Elliott Hill, is returning to the company to replace Donahoe. During Donahoe’s time, the company seemingly lost market share and appeal among younger demographics. Though Hill is expected to make significant changes, Friend spoke highly of both Donahoe’s efforts and the company’s trajectory with Hill back at the helm.
“Before we get into a review of the first quarter, let me acknowledge that we are reporting our results in a transitional moment as John retires as president and CEO and Elliott Hill joins us as our new president and CEO on October 14. First, we deeply appreciate John’s contributions to Nike. He has served on our board, led our company through a global pandemic and meaningful supply chain disruption, accelerated our digital transformation, and initiated new Nike community investments around the world.
“We thank him for all he has done to move Nike forward. As we look ahead, we’re excited to welcome Elliott back to Nike. Elliott is a beloved Nike veteran who brings a powerful connection to our employees and culture, a deep love for our brands, and a passion for sport. Over his 32 years with the company, he built a proven track record of leading our global teams, brands, and businesses with significant expertise in delivering growth by bringing product and storytelling with impact into an integrated marketplace.”
