Navan CFO Aurélien Nolf on Resource Allocation, IR, and AI in Finance

Summary

Podcast Summary: Run the Numbers

Episode: Navan CFO Aurélien Nolf on Resource Allocation, IR, and AI in Finance
Host: CJ Gustafson
Guest: Aurélien Nolf (CFO, Navan)
Release Date: May 28, 2026

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Overview of the Episode

In this dynamic episode of Run the Numbers, host CJ Gustafson engages with Aurélien Nolf, CFO of Navan, to dive deep into the tactical and strategic heart of financial leadership in tech. They explore the art of resource allocation, the evolving role of investor relations, the importance of knowing your addressable market (TAM), and how artificial intelligence is reshaping finance team operations. Aurélien shares frameworks forged at EA and Lyft and pulled through to his current work at Navan, with candid, actionable insights and plenty of memorable real-life examples.

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Key Discussion Points & Insights

1. Resource Allocation as a Discipline

• Focus is Essential

  • “You cannot invest in everything at the same time, right? Like you have to make choices.” (B, 00:06, 05:01)
  • Drawing from his 15 years at Electronic Arts, Aurélien explains the need to bet on a mix of sure wins, high-potential projects, and risky moonshots — and the impossibility of spreading resources across all ideas.

• The 70/20/10 Framework for Investment (14:01)

  • 70% to the core business: proven products, greatest clarity on ROI.
  • 20% to high-potential and adjacent bets: informed but with calculated risk.
  • 10% to moonshots: ambitious, innovative ventures with outsized potential.
  • Common Pitfall: Companies often overcommit, acting as though “hundred, hundred, hundred.” (B, 15:25)

• Portfolio Construction and Organizational Focus

  • Refocusing businesses (example from Lyft) on true value drivers is critical for turning around financial performance:
    • “We got rid of a lot of adjacencies…refocused the company.” (B, 16:30)
    • Sacrifices or project terminations must be linked to broader priorities — sometimes it’s about postponing, not permanently killing ideas. (18:20)

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2. Pre-Alignment Before Budgeting

• Start with an exhaustive understanding of market and customer segments before budget meetings.
  • "Knowing the market and the audience for your product is number one." (B, 07:47)
• Align leadership on where the most attainable value and “right to win” exist.
• Achieving focus in a large organization means persistent prioritization and saying “no” to tempting distractions. (08:58)

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3. Sizing the TAM (Total Addressable Market)

• Role in Planning: “It’s everything. Knowing what your addressable market is, it’s the step one of any planning process.” (B, 19:33)
• Slicing the TAM: Navan splits the corporate travel TAM into:
  • Managed Segment — big enterprises with formal contracts ($30B market)
  • Unmanaged Segment — business travelers without contracts ($60B market); “nobody is serving that addressable market the way we are doing it.” (B, 25:59)
• Investment approaches, product strategies, and measurement of ROI differ between segments. (27:52; 27:57)
• Right to Win: Always evaluate if you are truly positioned to capture and retain share, not just chase large numbers. (28:42)

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4. Making and Communicating Hard Decisions

• Sunsetting Projects & Morale:
  • “CFOs, head of FP and As always have to play bad cop. The reason is the same. It's focus, focus, focus on things that really matter. ... Sometimes it's a perk.” (B, 18:20)
  • Often, cut projects eventually return if they're truly valuable—focus is about timing and prioritization.

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5. The Evolution of Investor Relations (IR)

• Blurring with FP&A:

  • IR is no longer just communications: depth in metrics and operational understanding is required, especially in tech.
  • “You have to know the business in and out… If you want to be credible.” (B, 30:45)

• Embedding IR within FP&A creates more transparency and unity between narrative and measurable company realities. (A, 31:26)

• Metric Disclosure Philosophy:

  • Share externally the same metrics used internally to drive the business.
  • “The best way is to observe what the management team is using to drive the business… those are the best metrics for IR to use.” (B, 32:30)
  • “If you don't drive a metric, at some point, it's going to derail...you have to backtrack.” (B, 34:23)

• On Guidance vs. Disclosure:

  • Guide to metrics you absolutely control and drive (revenue, non-GAAP op. income for Navan), and selectively disclose additional context metrics as needed. (37:45)

• Surprises are the Enemy:

  • “What's important is not the day of the bad news, it's all the quarters before educating on your business...” (B, 35:19)
  • Consistent, open communication ensures headwinds are expected by investors.

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6. AI in Finance

• Limits and Potential:

  • “We can Vibe code anything except what I'm working on right now.” (B, 40:14)
  • Regulatory and audit demands restrict the use of quick or unvetted AI in core finance processes, even if AI accelerates reporting and insights.

• Navan’s Approach:

  • AI powers customer support (Ava chatbot handles 55% of requests), booking, expense management, and more.
  • Significant investment in building proprietary, lower-cost, domain-specific AI models. (43:10)

• ROI-Driven Spend:

  • “For AI, any cost has to come up with a return. ...We are assessing the return on investment.” (B, 43:10)
  • Internal AI spend is justified the same way as external or product-facing expenditure.

• Why Finance/Law is Harder to Disrupt:

  • “The reason is probably compliance...there's a lot of requirements.” (B, 44:15)
  • Change is coming as solutions catch up to compliance needs.

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Notable Quotes & Moments

• On Resource Allocation:
  • “You cannot invest in everything at the same time, right? Like you have to make choices.” (B, 00:06, 05:01)
• On Killing Projects:
  • “CFOs, head of FP and As always have to play bad cop. Sometimes ...it’s about sometimes delaying and having the right priorities.” (B, 18:20)
• On TAM and Growth:
  • “Knowing what your addressable market is—it’s the step one of any planning process.” (B, 19:33)
• On IR Transparency:
  • “The best way is to just observe what the management team is using to drive the business...those are the best metrics for IR to use.” (B, 32:30)
• On Surprises in Finance:
  • "What people really hate is surprises. ...If investors understand what can go wrong in your business, then when that thing happens, they're not going to be surprised." (B, 35:19)
• On AI Hype:
  • “I’m not going to Vibe code my finance processes. I’m going to use leverage AI to help my team deliver more, being more efficient, deliver faster insights, faster reports, etc.” (B, 40:14)
• Wildest Expense Attempt:
  • "[A coworker] came from home with his curtains [to be laundered and expensed at the hotel]." (B, 48:59)

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Important Timestamps

• Resource Allocation Lessons from EA: 05:01
• Framework for Investment Buckets: 14:01
• Example of Lyft’s Financial Turnaround: 16:30
• Dealing with Project Termination: 18:20
• Role of TAM in Planning: 19:33
• Slicing and Targeting by TAM Segments: 20:57, 25:59
• Discussing “Right to Win”: 28:42
• The Evolving Role of IR: 29:37
• Choosing & Disclosing Metrics: 31:58–33:19
• Communicating Bad News & Surprise Mitigation: 35:12–36:56
• Guiding vs. Disclosing Metrics: 37:45
• Preparing Earnings Scripts: 39:22
• Reality of AI in Finance: 40:14–44:15
• Sunday Planning Routine: 45:23
• Advice to Younger Self: 46:46
• Finance Software Stack: 47:33
• Craziest Expense Attempt: 48:40

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Tone & Takeaways

CJ and Aurélien discuss high-level strategy with operational grit. Aurélien is candid, pragmatic, and focuses on frameworks that are adaptable to startups and scaled businesses alike. The conversation is a blend of tactical playbook, strategic narrative, and personal anecdotes—fully in the spirit of sharing lessons learned in the trenches.

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For ambitious finance leaders, this episode is a masterclass in discipline: aligning investment to opportunity, communicating with clarity, and not getting distracted by noise—AI or otherwise.

Transcript

[A]

You spent over 15 years at EA, the video game company. What did you learn about resource allocation that stuck with you?

[B]

You cannot invest in everything at the same time, right? Like you have to make choices. So in the case of ea, it was a lot of creative choices, like editorial choices, like what kind of genre we want to go in.

[A]

I think it's powerful what you said about using the exact same metrics that you're talking about internally.

[B]

If you don't drive a metric at some point it's going to derail and then you have to backtrack. Or even worse, you have to make unnatural choices in the business so that the metric goes back in the right direction.

[A]

How long does it take a good IR professional and now a CFO to come up with a locked and loaded earnings script?

[B]

I actually have a black book with me. I keep notes and ideas of what I want to disclose and discuss at the next earnings call.

[A]

Maybe take me through how you go about communicating bad news to the the market because unfortunately all good finance leaders have had to do this.

[B]

What's important is not the day of the bad news, it's all the quarters. Before educating on your business is this

[A]

thing on Yesterday's price is not today's price. Welcome back to Run the Numbers, the show where we talk with the world's top CFOs and finance leaders. I'm CJ, a tech CFO and my goal is to unpack the frameworks and operating principles that make you better at allocating capital and leading teams. On today's show I'm joined by Aurelian Nolf, the CFO of Navon. Before joining Navon, Aurelian spent years inside high growth global businesses like Lyft and Electronic Arts, building a reputation for disciplined capital allocation and bringing a capital markets lens into operating roles. In this episode we go deep on resource allocation as a discipline. What actually needs to be pre aligned before a budgeting process starts, how to think about portfolio construction across sizing bets and the traps companies fall into when deploying capital. Internally, we touch on driving efficiency at scale, how to make hard calls on what to fund and what to kill and how to do it without breaking morale of the people who built it. And we touch on the evolving role of investor relations, how IR is becoming more integrated with the FPA function, how to decide which metrics matter and what it takes to communicate clearly when things don't go to plan. Oh, and we also get into how he thinks about TAM and Pratis, why Navon is leaning into both managed and unmanaged segments where AI actually works inside finance teams and where it doesn't. He's pretty honest about this. And how to build a finance function that can keep up with the pace of change. If you like the show, please remember to like and subscribe. It helps us with the algorithmic overlords. If you're looking to hire the best finance and accounting talent, you, I'd love to help. I run a recruiting service that pairs you with thoughtful, qualified candidates from our community of finance leaders. People who, for better or worse, voluntarily research CAC payback period formulas on weekends. If that's of interest, shoot me an [e-mail] and we can talk on to today's episode with Aurelian. Aurelian, thank you so much for joining me on the podcast today.

[B]

Thank you for having me, cj. Great to be here.

[A]

Before we get into the meat and potatoes of today's episode and talk capital allocation and some of your frameworks here, I hear you're a huge endurance sports athlete.

[B]

I'm doing my best, but I'm very passionate about it. Yes. I actually just ran a race over the weekend last weekend. Lake Tahoe 100 mile race. I had a great time.

[A]

How long did it take you?

[B]

29 hours.

[A]

My goodness. And is this on terrain? Is it on pavement? What's it like?

[B]

Oh, no, it's. It's on the trail, so it's very steep, you know, going up and down.

[A]

How do you possibly train for something like this and also have a high pressure drive job? Because I'm a runner, but like My specialty is 5k, 10k half marathon. I can go out, bang out an hour, run, feel great about it. That is like a commitment to have the endurance to do a hundred miles.

[B]

Something I do to help me, you know, cope with the stress and everything, you know, I have to deal with in my job and in my personal life. When I train for a race like that, I would wake up like very, very early in the weekends. I go for like five, six hours in a row and then I come back refreshed.

[A]

Any tips for not getting injured and taking that much punishment?

[B]

I, I guess the easiest tip is go step by step. Like don't, don't try and jump to a hundred miles the first year. Like I've been doing this for like 15 years at this point. And so it took me time to just, you know, make my way up. The, the worst thing you could do is rush it and try to go to a long distance. Immediately.

[A]

I'm up to 50 miles a week running right now. And even that's like a huge time commitment. It took me probably over two years to go from 30 miles a week to 50 miles a week and not get hurt.

[B]

I mean, 50 miles is huge compared to.

[A]

Russ, let's talk some resource allocation because I believe this is your superpower. After going through your resume and you spent over 15 years at EA, the video game company that I think many of us are familiar with, what did you learn about resource allocation that stuck with you?

[B]

Yeah, EA is a fantastic business. One thing that is very specific there is that the company invests in the long term, right? Like you need any time between one and three years to develop a game. And so when you invest and you allocate resources to a given game, you don't even know what the game is going to look like at the end. And so it's a huge creative bet. And what I took away from that is you cannot invest in everything at the same time. Right? Like you have to make choices. So in the case of ea, it was a lot of creative choices, like editorial choices, like what kind of games, what kind of genre we want to go in. But for any company, I think it's kind of the same concept, which is, you know, you have to make bets and you know, you have to allocate your resources the best way you can based on deep belief you have in the product that is going to come out of that allocation of those resources.

[A]

What were some of the big hit games that came out when you were at ea?

[B]

You know, the game was named FIFA at the time. Like we was very, very big. EA Sports Football Club now, but that was very big. A lot of Sims game that, that worked well, like ea had top 10 blockbusters pretty much every year. So that was awesome.

[A]

I don't know a ton about how video games are made, but I grew up playing everything from Madden to Call of Duty. I was going back in time when I was writing something today and I remember need for Speed Underground, like all these, all these games that were a big part of my childhood. I'd imagine when it comes to capital allocation, you probably look at some of these games and some are unproven bets. Like this is a net new game we're launching that it's not like Madden where it comes out every year. Did you have to think through resource allocation in that way?

[B]

That's how actually I, you know, build my knowledge around, around this, which is bucketing the, the, the resources between different categories. You know, thinking about what you know is going to work like those recurring products that have proven, you know, there's an audience and so you invest most of your dollars there because it's safe. And then you have some of them where you have a very strong feeling that you know, you know the market, you have a strong feeling it's going to work. And so you can invest a little bit of money there. There's like some upside, but there's a little bit more risk. But you can, you can invest and then there's do a very, very innovative bet like new products that are completely different from anything that exists on the market. You absolutely want to invest there like it's very important. But you also want to control how much you invest in that specific category to make sure you're not, you know, overshooting.

[A]

Right. You don't want five different football games trying to go after the same demographic.

[B]

That's exactly right.

[A]

Well, you mentioned using a pre aligned framework for allocation. What has to be pre aligned on before the budgeting conversation even starts.

[B]

Knowing the market and you know, the audience for your product is number one. Right. So if I'm thinking about Navan, for example, like what we are doing today is really trying to understand the addressable market where what is up for grab, what is the market where we have the biggest opportunity, the right to win, where is the money, right? Like where can you just make some sort of profit over time if you invest in the, in the right thing. And believe it or not, this is actually very hard to do because as a company, as a management team, you have a lot of opportunities, right? Like everybody has ideas, the leaders are, you know, they have passions and they want to go in one direction or the other. And something that the finance executive need to do and guide is really like guide that conversation and make sure people really understand where is the value, where is the company needs to go. And that has a huge impact then on your resource allocation and where you invest as a company. But it's very hard to align an organization in large scale businesses to just go after one thing, two things, not the entire opportunity out there because it's endless.

[A]

We're going to talk about Navon in a bit and also how you size up. Tam, I'm curious, just reflecting on what you just said. Is the harder part identifying where the value is or is that pretty straightforward or is the hard part just getting people to agree how you get to that? I guess pot of gold at the end of the rainbow?

[B]

Yeah, I would say it's a little bit of both. You need to really understand your market, right? So you need to understand the customers at a very granular level. So you need to understand by cohort like what are the behaviors of those customers, how much money are they spending, how much money can you extract from that, those unit economics, right? So you need to really know the market very well. And then you know, for some products, the product doesn't even exist. So how do you estimate how much money you can make from that product is very challenging. So you know, the way you go about it is you develop assumptions and then you align the management team on the assumptions that you've been using to size the market and then you stick to those assumptions to really understand the value in each of those markets. So that's number one, really know your market, really know where you want to go. And then two, you have like endless conversations with, you know, in the, in the boardroom and with the management team around what's really the best market you want to go after. Because everything is not about the numbers, right? You need to know about the competition and you need to know about where this market is going to go down the road, what are the demographics. So there's a lot of inputs to the process and I would say both are challenging, but both are the foundation of a very good capital allocation strategy.

[A]

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[B]

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[A]

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[B]

There's a very good framework out there that, you know, many finance executives are using, which is you would typically allocate 70% of your resources, your core business, right? So core business means something you know is working. You know the audience very well, you have a very strong product, you always want to keep evolving your product, but you know exactly the audience, how to satisfy their needs, how to make money out of this. This needs to capture 70% roughly of your, of your investment. Then you have the second category that I mentioned, which is, well, you have a very good intuition that this is going to work. You know, the market, it's slightly different than the core product, but the risk is, the risk reward is pretty balanced, right? So you will likely allocate 20% of your resources there and then the last 10%. Well, that's what I call the moonshots. Right? So you have no idea this is going to work. That's where you unleash the creativity within an organization, is you give them the means, the budgets, the resources to just go after something crazy. And it's like a startup, most of the time it's not going to work. But then if you get one that works, it could be very, very big down the road and help you just capture more of the market.

[A]

So 70, 20, 10, just to play it back, which of those numbers do companies often have a foot fault and get it wrong?

[B]

What I've seen in my career, what is very, very typical is companies doing hundred, hundred, hundred. They just go after everything. You have this alignment process. Everybody, generally speaking, everybody is aligned that you need to invest in the core of the business. Then everybody's very convinced that you should go and go all in on those safe bets. But then nobody wants to give up on anything. Everybody wants to go after all the moonshots, right? That I would say is the typical trap because it's not just about the money, right? It's not just about how much money you can invest, it's also about focusing the organization, the management team, the business on those things that are really going to have a return. And if you're not focused, not only you're going to spend a lot of money, you also, you know, going to lose sight of what is really making money for, for the company.

[A]

Well, maybe we can make it real here, because when you join Lyft, I think I have this right, that the company was burning about a billion dollars a year and then when you left a few Years later, it was producing a billion dollars in profits. So what role did resource allocation play in that, in that swing?

[B]

That was the biggest part of what happened. I mean, it sounds easy, obviously when you have to execute, it's a bumpy road. But the first thing we've done is really refocusing the company on the markets where we knew there was value and an opportunity for us to make money and scale the business so grow at a profitable rate. Right. And so we got rid of a lot of adjacencies like, you know, side things that, you know, maybe could have been a good idea but were very, very expensive, very hard to scale and didn't have any return. Right. And so we refocused the company and I think that that's why Lyft is now a very, very successful business.

[A]

So the 70%, was that locking in on the traditional rideshare business?

[B]

That's right, yes. Your core business focus the organization and the investment and do it very, very, very well. Like nail your core business is something that's applicable to a startup, but also to very, very large companies that, you know, really need to master their core business.

[A]

And what type of stuff did you put in the 20% bucket?

[B]

In the 20%, we had things like partnerships. For example, Lyft was partnering with a lot of companies like United and, you know, Waymo and other things like that.

[A]

I was just at Disney World. Lyft is the exclusive partner at Disney World. I saw it's a Minnie Mouse Lyft.

[B]

That's right.

[A]

And then what was the 10%?

[B]

So the 10% were a lot of things you will never hear about because they were moonshots. So many of never happened. But the breakthrough from a fleet management perspective is coming from one of our

[A]

moonshots you mentioned it left and I'm sure this is true. At every company you've been at, you've had to kill something that, that the company loved. Take me through how you do something like that without crushing morale. Because people are personally linked to the things that they work on.

[B]

CFOs, head of FP and as always, have to play bad cop. Sometimes the reason is the same. It's focus, focus, focus on things that really matter. And sometimes you have to just let go of maybe something that would have been a great idea. And you know, some engineers were very passionate about. Sometimes it's a perk, right? Like, like, you know, the company got used to have breakfast, lunch and dinner for free. And then one day you have to rationalize and it's only going to be lunch. Right. And so people would be disappointed if you step back. Usually an idea that was a very, very good idea that that's been killed is usually making a comeback at some point. Because if it's a good idea, people are going to keep pressing and pushing and pushing. It's not about necessarily killing, it's about sometimes delaying and having the right priorities. And so yes, it can be a hit to the people that are leading those projects, but at the same time they are also seeing the company making a lot of progress, generally speaking. So people usually know that it's a good thing.

[A]

It sounds like there's an art in tying it back to the company's overall priorities.

[B]

Exactly.

[A]

I want to get into TAM because I know this is something that you're passionate about. And as a practitioner, what role does TAM play in your long term planning?

[B]

It's everything. So knowing what your addressable market is, it's the step one of any planning process. And I'm thinking about strategic planning, long term financial planning. That's step one is really understanding where the money is, where is the opportunity. At Navan, for example, the team spent a lot of time really trying to understand how much is the size of corporate travel. Right. How big is the opportunity. And then step by step, you start slicing that opportunity between different subcategories and that's where you plug in your strategy to just tap into those opportunities. As a CFO, knowing that our TAM for Navan is $185 billion and that my revenue, you know, we would just get it to roughly $800 million of revenue. We are growing very fast, but we are just scratching the surface. When I look at the tam, it's very interesting to know that at some point when we are going to scale that business very significantly, when you reach some sort of penetration of your tam, then you need to go after a new TAM and think about expansion and new opportunities.

[A]

It sounds like you're saying that TAM is incredibly important. However, it's only the starting point. So do you look at it like a tam Sam som not to go all acronym on you there, or is it going into segments by what type of user this is? Whether it's B2B, B2C. How do you start to slice something so big up?

[B]

The way we've been doing that is we sliced the TAM between what we call is the managed side of the tam. So think about all those companies that are signing a contract with a travel agency to manage their T and E. For us, that's 30 billion bucks, right? We know it's a huge TAM. Companies like, you know, big enterprise customers, mid market customers, they are signing a contract with the travel agency and then there's a huge part of the time that we call the unmanaged business, which is all those frequent business travelers that are going out there traveling, probably your case, and they don't have a signed contract with a company, they just go and they, you know, they book online. Their trip, it's very expensive, they don't get any super. They have to create logins for every single, you know, website where they want to, to book something. So it's very inconvenient. And that's a huge TAM, that's for us, that $60 billion opportunity. So we are going after both. And the reason why it's important for us to know those slices is because we are not investing the same way to attack both those tams. They have different characteristics, they have different margins. It's a different opportunity. And so we need different teams to go after those opportunities.

[A]

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[B]

So, as I said, the biggest part of the business is actually unmanaged. And the reason why it's a great opportunity is nobody is serving that addressable market the way we are doing it. Right. So we just released Navan Edge, which is kind of a travel agent in your pocket that is doing everything around your planning, your trip, your flights, your hotels. The system looks at your calendar to make sure they select the right hotel for you, give you the right. They know you. So the system knows that you know, you're United or Delta Flyer. They're going to make the best recommendations for you. And so this is a wide field for us and a huge opportunity as we have this, you know, tech advantage. Like, we are the best solution out there. We are going all in after that market. At the same time, enterprise customers are growing very, very significantly as well. We just shared that in the last quarter, the new sign bookings grew 50% year over year. Right. So there's a lot of momentum there with big companies that have very sizable T and E budgets. And so when we think about allocating our resources, that's the way we think about it. There's two different times. You know, one is going to be growing very fast with big customers that are very sticky. The other one is huge opportunity but with smaller customers that have, you know, lower spending on a per unique basis.

[A]

I love this because we're able to tie it back to the start of the conversation on resource allocation. So you probably sit down and you have to look at your headcount roster and even how you're deploying AI and how much you're investing there and say, well, which part of this is going to manage versus Unmanaged?

[B]

That's exactly right. And we do the same with our marketing budgets, right? Like, where do we get the best return? How do we want to allocate the dollars between those two markets? That's the conversation we are actually having every week as a management team.

[A]

And you probably have to have different expectations around ROI and time around CAC payback.

[B]

And like, some of our investments are going to have a very fast payback, but the customer are going to have less retention and some will have a longer payback, but the stickiness is longer. So again, different characteristics. Part of my job is to make sure we allocate our dollars to the right place and not just go all in on both sides. But we are very intentional in the way we allocate our resources between those two markets.

[A]

One more question on tam, if you'll humor me here, and then I promise I'll move on. But I find when you look at tam, not all TAM dollars are created equal in the sense of either how well they'll retain or if you have a right to win. I imagine that's part of the conversation. Like, are we uniquely qualified to capture this dollar and keep it?

[B]

Yes, absolutely. Like, knowing who's your competition? What are the products that they are, you know, working on? How do they address that market? You need to know that very, very well to be able to understand if you have the right to win. I mean, that's something our CEO is very big about. Like, every time we have a conversation, he's always asking, what is our right to win in this category? It's a very basic question, but sometimes you're like, oh, good point. Maybe it's not the easiest way for us to win that market.

[A]

On one hand, you don't want to have your decisions guided by any sort of competition in the market, whether that's legacy or new. But on the other hand, you have to know what others are doing in a sense to know if you can address that better than they can. I want to talk about the art and science of investor relations, because that's been a huge cornerstone of your career. Maybe we can just start with what was the old role of IR and what do you see it evolving into now?

[B]

IR professionals used to be only communication people, right? Like, they were really, really specialists of communication skills. How do you attack an audience? You know, press releases? I think we are seeing more and more of people with my profile, like more of a blend of the two, which is people that have a lot more depth in terms of knowledge of the business and the numbers and the metrics. And I think it's especially true in businesses like tech because there's a lot of data, a lot of metrics that you need to know and understand to be able to tell the right story in a very granular way. So I think the role is evolving a lot. There's still the foundation, like, we still need to put together an earnings call and have all those conversations with investors. Obviously, being able to do so in a data driven way is something that is evolving a lot.

[A]

On the data driven part, A trend that I'm seeing in the market is a lot of finance leaders who are holding both FP and A and IR roles. So dual FP and A and ir. What's your take on why those two positions go well together?

[B]

So this is the role I had at Lyft. I really enjoyed it. It's a lot because your scope is pretty big, but you are able to know everything from start to finish about the business and then you get to tell the story, right? And so I think it's a very, very powerful combination. That's probably why we are seeing more and more companies adopting that model, is because if you want to be credible, you have to know the business in and out. Unfortunately, sometimes teams are siloed a little bit and it's hard for an IR only team to know everything about the business. And so that's why the combination is very powerful. We are seeing more and more of that.

[A]

And I've worked in FP and A roles where the department both did and did not have IR underneath it. And in the instances where they were separate, something that I personally found is that the IR team would come to you with a narrative and then they'd look to fit the numbers into that after the fact. But if you have IR embedded within FP&A, you use the numbers to drive the narrative the other way around.

[B]

I think you're right, it's a risk. I mean, it's not always the case, but what you describe is absolutely a risk.

[A]

What's your philosophy on choosing which metrics to disclose and guide to?

[B]

One of the reason why the combination of the two roles is very powerful is because FPA knows all the metrics across the company. I guess you have two ways to think about it, right? You can be very like investor driven and just look at all the metrics and try to think very, very hard about. Is that what people want to hear? Is that what they're interested in? What are they going to do against me once my metric goes down next quarter? Is it a problem? Should I hide this number? That's one way to do it. I'm sure you guessed that's not the way I like to do it. I think the best way is to just observe what the management team is using to drive the business, right? If you are in the executive staff meeting and you listen to the way they discuss about the performance of the business, the issues they have, they're going to refer to some metrics, right? Those are the best metrics for IR to use. And the reason is because you want to develop a very transparent relationship with investors and bring them along the journey of the business. Now you can speak the same language, right? You can really give them an idea of what's going on in the business. And that's going to help you if your business goes well, if it doesn't go that well, because now you can articulate a very clear story that is fully aligned with what's going on in the company.

[A]

Maybe just to go a level deeper. So, so what's the problem with filtering the metrics that you share?

[B]

You don't want to give everything out there.

[A]

No, you can't give them everything. Right.

[B]

You, you cannot give everything. So you have to filter a little bit. I can give you an example. Like, the first week we share as a company is not a financial metric. It's our NPS and our csat. It's the satisfaction of our customers. And why are we doing that? That's because it's the first thing we discuss as a leadership team every week. At some point we're going to discuss did we make enough money or not. But the first thing is how satisfied our customers, how is our support, how do they enjoy our platform? And that's the first topic we discussed, and that's the first topic you would find in any of our communications about our performance.

[A]

I think it's powerful what you said about using the exact same metrics that you're talking about internally. Because I've seen this happen before companies where for a while, maybe a couple quarters, you can get away with kind of hiding the ball or shifting the narrative. But eventually, whatever you're using as a proxy, it shifts out from whatever the truth, the ground truth of the company

[B]

is if you don't drive a metric at some point, it's going to derail, it's going to go in a, in, in a direction that you, you don't want. And then you have to explain and then you have to backtrack, or even worse, you have to make unnatural choices in the business so that the metric goes back in the right directions, but it's not something good for your business. Right. And so I think many companies are, are falling into that trap. And so it's very important that as a man, the management team is aligned on what are the metrics we're going to communicate externally, where are we focusing? Because those metrics are going to, you know, go south at some point. Like, there's no business without an issue. But at least when that happens, you have a lot of knowledge about what's going on. And more importantly, you know what the team is doing to fix it, Maybe

[A]

Take me through how, how you go about communicating bad news to the market because unfortunately, all good finance leaders have had to do this.

[B]

I wish it was not the case, but there's always something that doesn't go according to plan. So you have to communicate about it. What's important is not the day of the bad news, it's all the quarters. Before educating on your business, if investors understand what can go wrong in your business, then when that thing happens, then they're not going to be surprised. Right. You know what, what people really hate is surprises. When they, when it comes to investing their money, they have like unlimited options to invest. Right. And so they need, but they, if they're going to select your company, they want to understand what are the risks, what are the opportunities. And so it's very important that you bring them along that journey and everybody's clear about the risks in the business. So that's, that's number one. Because when that event happens, then you can just, you know, say, hey, this risk is happening, but this is what we're doing about it. And so you are not going to avoid some pressure on your stock and, you know, pressure from investors. Like that doesn't happen. Watching today, great names, great companies that are go, you know, have a very tough day on the market because they had a, you know, a tough earning score, but they're going to bounce back. And the reason is none of those of what happened was a surprise. People, people know that this isn't possible. And so I, I think that's the key success.

[A]

It sounds like you want people to understand your business model, so then they can believe that whatever went wrong is fixable. But if they don't have the right metrics to understand what's in this black box, then they're going to make up their own narrative. And it's human nature. If you don't give somebody the tools to figure it out, they're probably going to make up a worse narrative in their head.

[B]

That's exactly right.

[A]

Lyft had its ups and downs, but when you left, it was on, on the upswing. Like we said, it swung to positive cash flow. Did you ever have to deliver a hard message to the market when you were there?

[B]

Yeah, obviously, like we had, you know, great quarters and not so great quarters. It's a journey. I think what we've done very successfully is helping people understand what's driving the business, what's driving growth, what's driving profitability. And so when something, you know, was derailing a Little bit at least. We had very candid conversations about how we were about to fix it.

[A]

Another question, just on the science of ir, we identified that you want to be using the metrics that you as a management team, prioritize internally to peel the onion back a bit. Then how do you decide which of those metrics you want to just purely disclose versus what you want to guide to?

[B]

The guidance has to be based on the numbers that you absolutely drive as a company. For Navan, we are guiding, you know, to our revenue and we're guiding to non GAAP operating income because that's what we are driving every day. Like as I mentioned, we focus on customer satisfaction. And then number two, we look at our revenue. And then number three, we look at how much money we made. The bottom line, like, are we making money today or not? Right. So that's what we guide to, because that's what we are actually driving day to day in and out on our business. And then the metrics you disclose, they are providing some color on the business. Right. So it's not something you want to commit to. But sharing those metrics help people understand the context of your business. What are the forces that are pushing the business in one direction or the other? That's why you want to disclose those additional metrics to investors.

[A]

And then as an IR professional, will you kind of broker with the CFO and CEO, like, hey, we're going through a business model shift right now. We should probably add another metric to disclose to take people along for the journey.

[B]

Yes, totally. I mean, companies are doing that all the time. There's like processes when you, you want to disclose a new guidance, that's heavy and you know, a lot of people are working on that. But giving new color on a business to share more context is something we do all the time. Every quarter I like to come up with, you know, something new and help people understand the way we think about our business.

[A]

We can strike this question if there isn't a good answer, but how long does it take a good IR professional and now a CFO to come up with, with a locked and loaded earnings script?

[B]

It's something I'm working on all the time. Yeah, I actually have, you know, a black book with me and I keep notes and ideas of what I want to disclose and discuss at the next earnings call.

[A]

So not just end of quarter, you're saying throughout the quarter you do this?

[B]

Exactly. And then, and then at the end of the quarter, once the, the books are being closed, then we have a formal process where you know, IR is going to draft a document and then there's going to be iterations and reviews and then, you know, we, we change. The messaging is changing a little bit, but the backbone of the story is being created. And you, throughout the quarter.

[A]

I love that you're an analog guy, that you write it down on a piece of paper.

[B]

Yes, I'm very old school.

[A]

Let's talk a bit about the role of AI, because you had a great line when we were preparing, preparing for this, that we can Vibe code anything except what I'm working on right now. What does that mean?

[B]

I'm on x and on LinkedIn and I see all those people that are, you know, vibe coding everything during the weekend. And what I meant by that is I, I'm the CFO of a public company. We have, you know, a lot of obligations and we need our books to be very accurate and, you know, we have, you know, legal obligations, etc. So there's like, those processes are very complex and they require something that is audited and something that is end to end, has a paper trail, et cetera. So it's not that easy that you're going to, you know, Vibe code anything. That's what I meant by that. We are very focused as a team on AI and how AI can accelerate those processes. So the way I'm thinking about it is I'm not going to Vibe code my finance processes. I'm going to use leverage AI to help my team deliver more, being more efficient, deliver faster insights, faster reports, et cetera. For now. You know, things are going to keep evolving. The technology is evolving very, very fast. I don't, I don't think my accounting process is going to be Vibe coded tomorrow. It's going to take a little bit of time.

[A]

You know, it's fascinating because there's how do you use AI for your product? And then it's how do you use AI within the guardrails of OPEX of how you go about doing your job? And Navon was a pioneer to game when it came to customer support. With Miles and Ava, I believe, are the chatbots. So you were early with that. And the CSAT scores in NPS were very high and the gross margin increased substantially ahead of your ipo. So that's great. But then you also have to think, like, as a practitioner within my own department, how am I going to apply this?

[B]

Like, the culture of the company is really like, take forward. And so the accountants and, you know, the FPNA team and the legal team, everybody's Thinking about how we can leverage tools to accelerate our business and be more efficient as a company. What the team has done with our platform is absolutely mind blowing. We started with this support agent, Ava, as you mentioned, she's now taking 55% of our interactions with our customers and people don't even realize they are talking to a bot. It's really, really good. But we are also using AI to accelerate our business. You can now book a flight or a hotel using native texting. In the app, we have this new expense tool that just take pictures and automate the entire expense system. And then we have Navan Edge, which is a great planner and, you know, travel agent in your pocket. I'm really excited about the technology, not only because we are going to save money, we will and we are. It's been very efficient, as you mentioned, but even more because it's going to accelerate our business.

[A]

As a cfo, you have costs come across your desk and some of those AI token costs are for what goes into the product. Some of it's for the engineering team and also your finance team if they're using stuff. Do you look at those two costs differently in your head?

[B]

For AI, any cost has to come up with a return. And it's true. If it's for finance, it's true. If it's for the R and D team, it's the same process we look at why would I spend now? What is going to be the return? How fast would I see a return? And so we do our best to estimate that. It's not always straightforward because you don't exactly know what you're going to get from that effort. But it's just like for any product, we are assessing the return on investment. What's really unique at Navan is our co founder and cto Elon Twigg has been developing our own models and they are way cheaper to operate, you know, than when we, when we buy. Now, up to 20% of the models we're using have been developed internally and they are faster, they give us more accurate results because they are focused on travel and they are cheaper.

[A]

Why do you think functions like finance, legal and accounting are harder to disrupt than most people would expect? I don't think finance has truly had its AI customer support moment or like a cursor or codex moment yet.

[B]

The reason is probably compliance, right? Like the compliance requirement when, when you are operating a business at scale, it's very rigorous, right. There's a lot of requirements. So that I think is, is what has been driving this in the past. But I'm seeing a lot of progress there. Like our ERP or new, you know, our financial forecasting system now leveraging more and more, machine learning and AI, et cetera. So I think finance is catching up for sure.

[A]

Arlen, I'm going to take you into what we call our long ass lightning round. So the first question I ask every successful financial professional on the show is give me an example of something you've messed up on the job before. Could be this role or any other.

[B]

I messed up many things, obviously. You know, I used to really, really quickly check my calendar every morning. I had misread my calendar, prepared for an investor meeting, a one on one with a specific investor. I turned on the zoom and I had a hundred hedge funds in front of me. No, I got to the wrong meeting and had to pivot pretty quickly. That's the reason why now I'm pretty big on planning my week on every Sunday.

[A]

Take me into that, that planning session on Sundays. What do you go through?

[B]

Always spending a couple hours on my priority lists on what I want my team to achieve. How do we win the week? You know, as a team, like what are the, the key things I would really want us to, to achieve during the week? And then I look at my calendar in details, you know, making sure everything is well organized. Usually a lot of travel as well. So making sure everything is coordinated. But I spend a lot of time on the priorities and I love to set two or three things that I really want to be done by by Friday afternoon. Like that's non negotiable. And then, you know, things happen during the week. It never goes according to the plan. But prepping the week on Sunday is, is a big thing that I really like to do.

[A]

Do you block off when you work out?

[B]

So I usually go very early in the morning so I don't have to do that.

[A]

Okay, that's good. Do you write down the notes to prepare for the week by hand or do you use some sort of productivity app?

[B]

I use a GDOC app on the left. I have all my priorities overall as a cfo, Everything I want to achieve in the coming months. And then on the right side, I have every day of the week and then I write everything I want to achieve on every single day and then

[A]

you can kind of match it up. Am I doing what I said I wanted to diff?

[B]

Exactly. And then I can copy and paste to the next week.

[A]

Next one I got for you. If you could give your younger self advice, knowing what you know today, what would you tell them?

[B]

Remind myself that a career takes a long time. I don't need to rush anything and don't need to be in a hurry to get to a level or to a job or to whatever and enjoy the process like it's, it's just a long journey. I've done many things in my, my career. Like I went to law school and then I, I started to be, you know, an auditor at PwC and then I did accounting, treasury tax, I did FP and a IR and none of that was on the plan. Like things happened. That's what I would, would have loved to know at the time. Cause I had a very precise idea of where I wanted to be by 30 by 35 and none of that happened.

[A]

You're a masochist, my friend. Saying hey, I don't really like this legal thing, let me do audit.

[B]

That's exactly what happened.

[A]

Well, you figured it out. Can you walk me through your finance software stack? What tools does your team use to get the job done?

[B]

It's going to be self bragging a little bit, but you know what we use a lot is Navan. I figured what I really love is the expense and payment functionalities. My FPA and my accounting teams are leveraging that a lot because we, we travel a lot as a company. Right. We have a sizable sales team that are visiting our customers. So that's cool per se. We use the platform, but then we use the expense and payment solutions and everything is automated. All the checks, all the approvals are automated, all the accounting, the reconciliation. So that's the number one software I would, I would mention. And then we have, you know, classic erp, FP and a planning system, et cetera. Some of those new tools around treasury managing, treasury online, et cetera. The team is deploying right now a very cool AI driven collection tool that is helping you with collecting your receivables at scale. And so that's something we are testing right now and I'm very excited about. So the point being those tools are changing quite a lot because there's so much innovation in the market right now.

[A]

Last question I got for you. In all your years as a finance professional, what's the craziest thing you've ever had someone try to expense?

[B]

In the company I was working at, we had this policy that when you were staying more than five days in a place, you know, you could comb your laundry and expense that at the hotel. And I saw a coworker on the last day, you know, I was checking out the hotel and I saw the guy was coming with his curtains. He came from home with his curtains.

[A]

The curtains from his windows at his house.

[B]

To be able to expense that at the laundry service at the hotel.

[A]

Can't imagine him walking through the hotel lobby with these people.

[B]

Get very creative sometime. That's why having a great TNE tool can be helpful.

[A]

Thank you so much for joining me on the podcast. This has been an absolute pleasure.

[B]

No, thank you for having me. I really enjoy the conversation.

[A]

CJ Run the Numbers is a mostly media production yelling an intro by Fat Joe. Artwork by Meg Delesandro. Show is executive produced by Ben Hillman. Nothing said on this podcast is intended to be business or investment advice. It's the sole opinion of me. A guy who feeds his dog way too much ice cream and has a history of net operating losses. Lol. If you like this podcast, hit subscribe and give us five stars. It will take like two seconds and our algorithm overlords love it. Drink water, call your mom and have a great day.

[B]

Peace.