Twilio's (TWLO) new CFO shows the company is getting serious about operating profits as its valuation climbs.
The San Francisco-based cloud communications king's over 30% run on Wednesday after a better than expected earnings release will be a welcome sight for incoming chief financial officer Khozema Shipchandler.
Shipchandler, a career General Electric (GE) employee, will replace Lee Kirkpatrick on Monday, November 12.
Kirkpatrick has been with the company since 2012 and led the company through its IPO in 2016, up to the 300% gains achieved this year.
Kirkpatrick, who first notified investors of his pending departure in February, came to his role at Twilio through a number of San Francisco startups and media companies like SAY media, iOwn, and Hyperparallel. You can be forgiven if these do not sound familiar.
New CFO Shipchandler brings a more traditional finance background, suggesting a heightened business-first mindset for the company that has yet to be profitable despite its surging valuation.
"The primary attribute we have been looking for was someone with a track record of operational excellence at scale to take us to the next phase of our growth," CEO Jeff Lawson told analysts on Tuesday's earnings call. "Khozema has spent more than 20 years at GE in a number of financial leadership roles across several multibillion dollar businesses."
Shipchandler joined GE in 1996 in its management development program shortly after graduating from the Indiana University Bloomington.
He worked his way up from that program to be chief financial officer of GE Aviation, GE Middle East, Turkey and North Africa, finally CFO and chief commercial officer of GE digital.
The move from staid GE to an ambitious Silicon Valley company may prove to be an interesting transition for Shipchandler.
His departure from GE comes shortly after the accession of Larry Culp to GE's new CEO. Given the contrasting trajectory that GE has had in relation to Twilio, it does appear to be a leap from a sinking ship of sorts to a rocket ship.
The company that Shipchandler is coming to is about three times larger than where it stood when Kirkpatrick announced his resignation and Twilio began its search process.
Shipchandler looks like CEO Lawson's key piece to achieving profitability and chasing down the company's out-sized PE ratio.
Investors should keep an eye on profitability as it will be a key metric to measure the former GE company man by as Twilio matures as a business.
"I am incredibly proud to leave the company in such great shape and hand the reins over to Khozema for the next stage of Twilio's journey," Kirkpatrick told analysts during his farewell earnings call. "It's still day one."