Earnings calls, loved by some CFOs and dreaded by others, provide an opportunity for 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, including statements about their company, analysis of financial data and answers to analysts’ questions.
For August, we highlight perspectives from CFOs at Dollar General, Affirm, Nvidia, Intuit, Zoom, Eli Lilly, Yeti, Dutch Bros and Bumble.
1. Dollar General
Market cap: $18.48 billion
Date of call: Aug. 29
Kelly Dilts, EVP and CFO of Dollar General, discussed how her company is overcoming shrink, a significant problem for the retailer whose missed earnings goals and cash-strapped customers have resulted in plunging consumer confidence ratings and a 32% drop in share price as of Aug. 29.
“Customers are increasingly seeking value in their purchasing behavior in addition to an overall increased promotional environment,” Dilts said. “Shrink was a year-over-year headwind of 21 basis points in Q2, which was in line with our expectations coming into the quarter. I want to note that while Shrink continues to be a significant headwind, we are pleased with the progress we’re making and believe our actions, including our self-checkout conversions, are having a positive impact.”
Also from Dilts: “While we expect Shrink to be a headwind for the full year, our results from the second quarter, as well as positive trends in other metrics that are highly correlative to Shrink, including inventory reductions, supporting our belief that we are moving in the right direction to continue mitigating this headwind. Looking ahead, we are cautiously optimistic that we will see Shrink begin to turn to a tailwind later in Q4 and then become a more material tailwind in 2025.”
2. Affirm
Market cap: $12.88 billion
Date of call: Aug. 28
Affirm had a “killer quarter” this time around. Outside of highlighting his company’s success, CFO Michael Linford gave an interesting perspective on how potential rate cuts will impact approval ratings, considering the macroeconomic environment in which significant rate cuts would take place.
“If the reason why rates are being cut is because we’re in a perfect economic scenario, then yes. But of course, I think we’re mindful of the fact that a thing [that] is probably happening in that scenario — is some pressure on the labor market, which has been very, very tight, it begins to loosen. We, of course, would need to take into account that as we think about where we set approvals,” said Linford.
3. Nvidia
Market cap: $2.88 trillion
Date of call: Aug. 28
After recently announcing a board approval of a $50 billion stock buyback, Nvidia is continuing to surpass expectations. Their success, although labeled to be occurring within a bubble by some, has resulted in unprecedented chip and computing development, wide-scale employee wealth and the ability to invest within their industry to perpetuate end-use and product development.
For the company itself, its CFO and EVP Colette Kress highlighted areas where the company sees a new avenue for growth.
“Regarding sovereign AI and our goals in terms of growth, in terms of revenue, it certainly is a unique and growing opportunity, something that surfaced with generative AI and the desires of countries around the world to have their own generative AI that would be able to incorporate their own language, incorporate their own culture, incorporate their own data in that country,” Kress said. “So, more and more excitement around these models and what they can be specific for those countries. So, yes, we are seeing some growth [opportunities] in front of us.”
4. Intuit
Market cap: $174.1 billion
Date of call: Aug. 22
Intuit, whose shift to AI and subsequent layoffs recently drew scrutiny, had its CFO Sandeep Aujla speaking highly of the company’s ability to leverage the “strategic” opportunity AI brings.
“The thing to keep in mind is [with] AI the name of the game is confidence and eliminating fear, uncertainty and doubt,” said Aujla. “And by using AI, by using our AI-powered experts, we’re actually doing that at scale. And the important thing to keep in mind is it’s actually helping us open up the aperture of the customers we can serve and really go after penetrating a [total addressable market]. That’s driving a lot of the success. … So, just something to keep in mind as you look at the strategic opportunities that this opens up for us as well.”
5. Zoom Video Communications
Market cap: $21.53 billion
Date of call: Aug. 21
Zoom has struggled to bounce back from its pandemic demand boom and its CFO Kelly Steckelberg made an interesting correlation between what they’re seeing from their consumers and its implications on the current macroeconomic environment. According to her, the reduction of small and medium-sized businesses from its customer base is impacting its forecasts around the economy moving forward.
“I would say the one area that we’ve seen some headwinds, which is consistent with peers, is in SMB and like the small customers,” Steckelberg said. We’ve certainly seen some I think some overall concern about the economy there. But be pretty close to being in line with what we were originally forecasting for the full year. So, we’re just keeping a very close watch on that.”
6. Eli Lilly
Market cap: $893.59 billion
Date of call: Aug. 8
Interim CFO Gordon Brooks of Eli Lilly, the legacy pharmaceutical developer who is currently in an attempted takeover of market share for GLP-1 drugs, provided a candid perspective on how research and development (R&D) within pharmaceutical companies impact financial statements. Brooks, who has been with the company for nearly 30 years, provides a timeline for when the organization’s R&D efforts will begin to churn positive financial results.
“It takes time to scale R&D thoughtfully. So it doesn’t always move exactly in sync quarter by quarter with revenue,” said Brooks. “That said, our guidance for the year does indicate we will stay in the upper 30% range for the full year with growth, first half, if you look at the first half, as the two quarters’ growth into the second half. And you should also expect to see within that mix, stronger sales, and marketing growth as we get to new launches in the second part of the year and the R&D [continues] to scale the growth from what we’ve seen thus far.”
7. Yeti
Market cap: $3.42 billion
Date of call: Aug. 8
Drinkware and cooler manufacturer Yeti, who most recently partnered with beverage company Liquid Death to create a one-of-a-kind casket cooler offering, isn’t keen on revealing what types of products they plan on bringing to market down the line. Its CFO Mike McMullen shared that despite their plans to keep new products under wraps, this is an area in which the company sees a tremendous opportunity for growth.
“We generally have not given too much detail in terms of the contribution of new products or the mix of new products as we’ve gone,” McMullen said. The only thing we’ve talked about, and we’ve been relatively consistent here is just the importance of newness, not only to overall growth, but it also creates excitement for the business that drives traffic that lifts the rest of the portfolio as well.”
8. Dutch Bros
Market cap: $4.71 billion
Date of call: Aug. 7
Josh Guenser, CFO of the coffee and beverage chain Dutch Bros, spoke about his finance team’s approach to expansion in the current economic environment. As of now, the company is approaching its 1,000th location.
“As we comment on driving down the capital or contributing to new shops is really a function of how we negotiate the lease and structure those leases. So we’re driving down the amount of capital that [the company] is contributing to the cost of the build. It’s less about the full redesign of a shop,” said Guenser.
Guenser continued, “Now as we think about this going forward and the factors that are going to lead to eventually getting to cash flow break-even are gonna be continuing to drive margin growth and strong EBITDA performance. And then, it’s [going to] be a function of the rate at which we can start shifting the reduction in our overall capital that we are contributing to these sites and the pace at which we’re opening in shops. So for now, we’re not commenting on when that is, as I spend some more time getting into the business and developing our longer-term model, it’s certainly something I’d like to be able to update with you guys here in the future.”
9. Bumble
Market cap: $840.21 million
Date of call: Aug. 7
As younger generations are reportedly dismissing dating apps, Bumble CFO Anu Subramanian said its company is confident that market expansion will help alleviate some of the stress of user dropoff in “mature markets”.
“Reengaged users continue to be strong for us. Where we are seeing weakness is on growth in new users. And like I said, again, the weakness is more predominantly felt in the U.S. and some of our mature markets,” said Subramanian. “Our newer markets continue to be strong in terms of growth there. So the new users [are] where we are seeing the most impact, which is having an impact on the deceleration that you’re seeing in terms of revenue.”
Also from Subramanian: “As you can imagine, we are keeping a pretty close eye on the impact of just consumer sentiment and whatever we are seeing in the overall macro environment. We’ve certainly heard that users, especially younger users are just more discerning with respect to their spend and are just keeping a closer eye on the amount of money that they’re spending on things. So we are baking in some assumptions from the impact of that into our second half outlook.”
