Good morning.
Successfully growing a company amid economic uncertainty, geopolitics, and pandemic recovery is no small feat. But there are 100 businesses that have risen to the occasion.
Fortune’s annual Fastest-Growing Companies list, released this week, highlights 100 organizations worth a combined $4 trillion in market capitalization. On average, they delivered an annual 42% return to shareholders over the past three years.
In the 38th year for the annual list, industrials led all sectors with a 108% three-year average annual earnings growth rate. Here’s a look at the top three companies on the list and the CFOs behind their strategies. These companies are in the industrials sector—and they all happen to be based in the state of Texas.
Builders Firstsource, Inc.
The average age of a company on this year's ranking is 63 years old. But Builders Firstsource, founded in 1998 and headquartered in Irving, earned the No. 1 spot. The supplier of structural building materials and services to homebuilders brought in $20.9 billion in revenue in the four quarters before April 2023 and has a three-year average annual revenue growth rate of 55%. And the company averaged an average annual total return to shareholders of 87% over those three years.
Peter Jackson has been CFO of Builders FirstSource for the past seven years. Jackson came to Builders FirstSource from Lennox International, Inc., where he served as the Global Refrigeration Segment CFO. Before joining Lennox, Jackson held multiple financial leadership positions at SPX Corporation, General Electric, and Gerber Scientific.
“For the full year 2023, we expect total company net sales to be $16.8 billion to $17.8 billion,” Jackson said on the company’s Q2 2023 earnings call in August. “As we continue to reap the benefits of our transformed business, we are positioned to achieve an upwardly revised long-term normalized gross margin of 29% or higher.” Builders Firstsource, No. 172 on the Fortune 500, will report its Q3 earnings on Nov. 1.
Tesla
Elon Musk’s EV company Tesla, based in Austin, makes its list debut this year, in the No. 2 spot. Among the factors propelling it to the top: Tesla’s earnings per share grew at a three-year average rate of 285%—the third-highest rate of any company on this list.
Zachary Kirkhorn joined Tesla in March 2010 as a senior analyst in finance and was promoted to finance chief in 2019. At the time, Tesla was valued at $50 billion, and today, it’s worth about $773 billion. He stepped down as CFO in August and was succeeded by Vaibhav Taneja. Taneja previously served as Tesla’s chief accounting officer since March 2019, and before that he was corporate controller and assistant corporate controller. Prior to joining Tesla, No. 50 on the Fortune 500, Taneja served in various finance and accounting roles at SolarCity Corporation.
Taneja will have some work to do to maintain Tesla’s growth. On Oct. 18, the company posted its lowest quarterly earnings per share in two years at 66 cents, a figure that lagged consensus estimates by 10%, Fortune reported.
Encore Wire
McKinney-based Encore Wire earned the No. 3 spot on Fortune's list. The electrical equipment company saw nearly $3 billion in revenue in the four quarters before April 2023.
Encore Wire CFO Bret J. Eckert joined the company in September 2019 as VP of finance and formally assumed the role of CFO in January 2020. Eckert spent the first 22 years of his career with Ernst & Young LLP, where he was a partner for 10 years.
"Since the first quarter of 2020, we have distributed just under $700 million to shareholders through share repurchases and dividends,” Eckert said on the company’s Q3 earnings call on Oct. 24. “And we believe that the outlook for our business positions us well to continue to build long-term value for our shareholders.” The company has an “organic growth strategy, one-location business model, historic and recent reinvestments in the business, and our hardworking employees, all driven by a culture of relentless attention to detail,” he said.
You can read the complete list of Fortune’s 100 Fastest-Growing Companies here.
Have a good weekend.
Sheryl Estrada
sheryl.estrada@fortune.com
