Rachel Stack joined Cologix, a Denver-based data center colocation services and interconnection company, as CFO during the pandemic. During this time, she faced the same challenges as many others, such as adjusting to a completely new work arrangement, but she also experienced something that many people don't: an unusual increase in demand for Cologix's services. was also faced.
Stack spoke to StrategicCFO360 about how he overcame these challenges, how financial strategies have adapted to inflation and other headwinds in the ensuing years, and why CFOs need to be the “glue” of their organizations. She talked about what she meant when she said it.
What challenges did you face when you joined Cologix as CFO?
I joined Cologix as CFO in July 2020 during the pandemic. The biggest challenge for all of us at Cologix was that demand exploded when companies did their bit to adapt to remote work models, despite the global crisis caused by the pandemic. think. Accommodates almost any organization's bandwidth and internet connectivity. This has created a huge market opportunity for Cologix as an edge data center provider.
However, it is important to remember that rapid growth also poses significant challenges for organizations. Rapid scaling requires the entire organization to come together in close collaboration and clear communication, starting with leadership and extending throughout the organization. And as always, we must maintain the same level of close collaboration with our customers and partners.
Unique to the CFO role is the importance of connecting all the dots between the C-suite, finance, human resources, sales, and marketing, all of which play a critical role in the health and growth of a company, especially in a volatile economy. . The CFO's role is to tie all of this together from a financial perspective. This is what I call “becoming the glue,” and I believe it's an effective way to tackle challenges head-on and maximize every opportunity.
What are the key fundamentals that are helping Cologix maintain a strong growth trajectory despite this challenging economic environment?
Cologix must build to expand data center capacity, power its facilities with economical and sustainable energy sources, and raise funds strategically to contain costs every step of the way. These three elements are the foundation for expanding the data center capacity our customers need while maintaining our strong growth trajectory.
How has the inflationary environment, rising interest rates, and looming recession concerns impacted Cologix and its financial strategy?
Economic headwinds, particularly rising interest rates, are a major blow to the data center industry, which is all about building new facilities and expanding existing capacity to meet market demand for increasing bandwidth and Internet connectivity. It's making an impact. To navigate these volatile economic conditions, organizations need to be agile in the short term, while always looking ahead to what's next to ensure they have the funding to adapt to changing conditions. there is.
For example, when I joined Cologix in 2020, our finance team and the entire organization were consistently focused on driving double-digit revenue growth through targeted acquisitions and new developments in existing and new markets. I did.
As inflation began to rise, prompting the Federal Reserve to raise interest rates, we strengthened Cologix's flexibility to sustain rapid growth and repositioned the company's finances to minimize the impact of rising costs. did.
Cologix accomplished this through a $3 billion equity restructuring transaction to support future expansion. The finance team also led a refinancing strategy that cut interest rates in half on company-wide debt. Closing of Cologix's $1.65 billion asset-backed securitization transaction reduces cost of capital while increasing access to additional capital for existing and new investors to accelerate our growth strategy it was done.
What lessons have you learned from your career that you would like to share with CFOs and finance leaders?
The “aha” moment for me was that while experience and knowledge as a finance leader are of course extremely important, I realized that soft skills were invaluable. Soft skills include many things, such as the ability to communicate clearly, be a good listener, be able to incorporate feedback and diverse perspectives into decision-making, patience, curiosity, teamwork, etc. .
I am fortunate to work with a management team that has diverse perspectives and experiences. Our CEO, Laura Ortman, has 25 years of experience in the software industry and IT business operations. Dawn Smith, president of Cologix, is also an attorney and former chief legal officer for various technology companies. Prior to her career in business and law in the technology industry, Dawn served in the United States Navy.
I will be working with our amazing talent to ensure everyone is on the same page about a financial strategy designed to keep Cologix on a strong growth trajectory while having the flexibility to adapt to changing circumstances. I'm excited to be a nexus for the leadership team at.
That's the adhesive. This is one of my favorite aspects of being a CFO and why I love it so much.
