Welcome Back to This Week’s CFO Mailbag
This week we have the following finance leaders answering your reader questions:
Vanna Krantz, CFO @ GLG (former CFO of Disney+, Grindr, and Masterclass)
Mitzi Yue, SVP + Head of Finance @ Boulder Care (former CFO at Quilted Health, and VP of Finance at Brightline)
If your question is picked for the Mailbag, you’ll win a Mostly Metrics Yeti Rambler ($84 economic value, unlimited street cred).
Here’s what we’ll cover:
Adjusting Metrics Post RIF
Classifying LLM Costs on the P&L
Reporting Usage Based Contracts as ARR
Controller or FP&A? Sequencing Hiring of Finance Team
Monthly KPI Packets for Investors. Gross.
Let’s get into it!
Question #1: Adjusting Metrics Post RIF
We did a 15% RIF last quarter to get to default-alive.
Burn multiple looks great now, but the severance and real estate exit costs are distorting our Rule of 40 for the next two quarters.
Do you adjust the metric, footnote it, or just take the hit and let the trend speak for itself? Worried about setting a precedent for "adjusted" numbers we'll regret later.
Vanna from GLG:
I agree, I believe adjusting numbers is a less desirable approach as it gives the impression of less credibility. Hence, I would let the numbers flow and speak to it - especially if it is just 2 quarters.
Mitzi from Boulder Care:
My preference is to keep it simple. Report as-is, and then footnote what the adjusted number would be less the severance and RE costs.
Question #2: Classifying LLM Costs on the P&L
Our engineering team is burning through $180K/month on LLM API costs, and it's growing 20% MoM.
Right now it sits in R&D, but our CRO is arguing the customer-facing AI features should hit COGS since they scale with usage.
How are you thinking about where AI inference costs belong, and does the answer change how you talk about gross margin to the Street?
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