The Evolution of FP&A in SaaS - with Philip Watson, CFO Paddle

**Ray Rike** (0:00)
Hello, I'm Ray Wright, Founder and CEO of BenchMarket, and your host of the Metrics that Measure Up podcast. We talked to a wide variety of the top B2B SaaS and Cloud thought leaders, CEOs, executives, investors, and people just like you to discuss the metrics and benchmarks they use to make metrics-informed and benchmark validated decisions. Now, on to today's show.
Welcome to the Metrics that Measure Up podcast. Today, we are joined by Philip Watson, the Chief Financial Officer at Paddle. Today, we'll be covering three primary topic areas with Philip. First, the evolution of FP&A and B2B SaaS as a company scales.
Second, the first 90 days of being the Chief Financial Officer at a new company. And third, the role of the CFO in finance in 2024 and beyond. How has it and how will it continue to evolve? So with that as a backdrop, Philip, please take a moment to give a brief overview of your journey to becoming a guest on the Metrics that Measure Up podcast.

**Philip Watson** (1:20)
Hi Ray, thanks so much for having me on. This is actually my very first podcast I've ever done, so I'm super excited. Really appreciate the opportunity. So I'm CFO at a company called Paddle and I'm based in London. Paddle is a provider of services to people who sell digital goods. We step in between the buyers and the sellers and we handle tax liability for you as well as check out and billing. How I got here. So I started my career as an investment banker many years ago and eventually went and got my MBA. After business school, I did my first job in both FPA and in software and that was at a company called BMC Software in Houston, Texas. I did a few different roles there, including finance roles, including being chief of staff to the chief technology officer, a few different things.
I ultimately made my way to a company up in the Pacific Northwest called Discover Work, which has since been renamed ZoomInfo, but I actually founded FP&A there and stayed there for about seven, seven to eight years.
And in that time, we actually went from about $30 million of ARR to 1.2 billion and went public. So that was my real, I think, kind of post-grad education in FP&A and in the SaaS world.
ZoomInfo actually sent me to London to come open up the office over here and then I subsequently took a job at Paddle after a brief stint in private equity to become Paddle's CFO. And that was about three months ago. So I'm about 90 days in, 100 days into my CFO journey here.

**Ray Rike** (2:37)
So almost eight years at ZoomInfo. And I knew Henry Shuck back when, you know, number one, he's associated with the high state where I went to undergrad, but when he first started Discover Org, the acquisition of ranking there, I'll call it reverse integration of ZoomInfo. So I would love to get your perspective.
What was the journey like in an FP&A leadership role over that meteoric rise? Did it change from 38 million to billion plus in IPO?

**Philip Watson** (3:11)
Yeah, it was incredible. It was, you know, I'm going to go on record and say it's probably the best education I ever could have received in both how to work and help grow a hyperscaling company and how to do FP&A. And then both of those things put together, it was incredible. So, like I said, I founded FP&A when I got there in 2015 We're about $38 million of ARR. When I say founded, meaning I was employee number one and ultimately built a team when I left that was double digits in size and it had scaled that whole time.
It really was evolution, but it was evolution every day, right? So one of Henry's big things he says all the time is let's get 1% better every day. And we really took that to heart and tried to evolve ourselves at that speed every day and then had all those benefits compound.
So we went from, when I got there on day one, no team, no tools. We were in Excel, which is great. I love Excel. We'll never give it up, but no forecasting tools.
No budget had been built and we didn't even have departments.
So you're kind of running a P&L out of QuickBooks because we were on QuickBooks when I got there and trying to help the business think through things there. There were no segmentation models. We weren't really even looking at retention at that time. There were just so many things. When you look back on it nine years ago now, you're like, wow, doesn't seem that long ago, but it was that long ago and we did a lot of stuff. So we went from that, Ray, to helping the company IPO, to doing two acquisitions that were equivalent to our size and doing worldwide integrations, doing 13 acquisitions overall, and to getting to a place where my team actually got invited to speak at the Adaptive Insights Conference live on stage because we had built our Adaptive Instance so well that Adaptive wanted to show it off, basically. So that's just a sense of the evolution we did, going from no tools to a tool, to being up on stage speaking about our use of that tool and in that period of time. And all of those things are things I'm super, super proud of.