Maximizing Enterprise Value: Lessons From the Vista Portfolio

Business leaders often talk about the economy facing either headwinds or tailwinds. In reality, these forces exist concurrently, creating a dynamic and often challenging environment. No matter the operating environment, it is crucial that software leaders manage their businesses with efficiency and strategic focus. Enterprise software executives must understand the macroeconomic factors at play and examine which levers they can pull to maximize enterprise value.

Here are some foundational strategies Vista portfolio companies are enacting to ensure they are positioned for success:

EBITDA Margin Expansion

Many companies are focusing on EBITDA margin expansion by reducing costs while retaining customers to continue to grow. Central controls such as rigorous cash forecasting, cost discipline and vendor renegotiations are crucial.

One Vista company is working to lower operating expenses by consolidating software tools and investing in new technologies that reduce technical debt. Additionally, they are optimizing their real estate strategy to prioritize centralized hubs, which has resulted in significant cost savings. This company has also implemented performance management systems and span of control improvements to ensure their teams are aligned with the business’s goals. This includes developing high-potential entry-level talent through boot camps and pipeline programs and ensuring that every employee is the best fit for their role.

As a result, this company has been able to grow EBITDA margins into the +60% range, dramatically exceeding targets and creating value for equity holders.

Pricing Optimization

Effective pricing strategies are essential for capturing a fair share of the market. Vista portfolio companies focus on understanding their customer segments and tailoring pricing models accordingly. This involves detailed account planning, opportunity mapping and leveraging data to articulate and defend pricing positions.

One company has tiered its customer segments to focus on the customers which represent the most significant portion of their ARR. By tailoring their pricing approach to the market, product and customers, and leveraging an enhanced, proactive renewal motion, they have been able to unlock £440 million of additional value in 2024 and created a path to a projected £1.2 billion of additional value by 2027.¹

Strategic Mergers and Acquisitions (M&A)

M&A remains a powerful lever for value creation. Strategic acquisitions combined with the thoughtful integration of acquired companies is key. By focusing on acquiring businesses that complement existing operations, some Vista companies have achieved substantial EBITDA growth, operational efficiencies and economies of scale.

One company, for example, has delivered $1.8 billion in incremental value over eight years through its M&A approach.² By acquiring and integrating multiple businesses, this company has been able to build a comprehensive platform which serves their vertical end to end. This company has achieved its results by starting M&A efforts early, focusing on becoming the clear best home for early-stage business targets and creating a detailed post-merger integration plan.

Customer and Sales Health Prioritization

Maintaining a healthy sales organization and customer base is critical for long-term success. On the customer front, accurate health scores and specialized customer success teams are essential for managing churn and enhancing customer satisfaction.

For example, one Vista portfolio company has created a specialized renewals team and implemented a detailed health scoring system to proactively manage customer relationships and reduce churn. They also analyzed and evaluated churn drivers by segment and cohort and established a function to proactively address risk. By focusing on building a repeatable sales engine through specialized sales training and performance management, they have been able to increase ARR 31% over the last year while maintaining customer satisfaction, as evidenced by a +71 Net Promoter Score.³

Building a Healthy Organization

Data shows that improvements in team health can correlate with better EBITDA performance.⁴ Our portfolio companies are investing in employee satisfaction and career development to ensure a motivated and capable workforce.

One company has developed a framework to improve organizational health and executive alignment by:

• Clarifying roles among leadership teams and ensuring they are aligned with the company’s vision and values.
• Establishing a culture of performance balanced with employee wellbeing. It is important to have clear measures of success to attract and retain the right talent to move the business forward. Regular employee surveys and career pathing initiatives can help to retain top talent.
• Investing in middle management development to establish trust and carry high-priority initiatives forward.

The Role of Generative AI (GenAI)

GenAI is playing an increasingly important role in value creation. From enhancing engineering efficacy and product development to optimizing sales and marketing efforts, GenAI is enabling companies to operate more efficiently and effectively, reducing costs and ultimately driving enterprise value. Vista portfolio companies are actively integrating AI across their products, code generation and operations to capitalize on the benefits of this technology.

At Vista, we partner closely with our portfolio companies to synthesize and incorporate learnings like these into our proprietary best practices, while developing a unique value creation plan to support each company. Vista portfolio companies are employing a range of strategies to maximize their enterprise value and working to control what they can with pace, precision and ruthless prioritization. By focusing on EBITDA margin expansion, effective pricing, strategic M&A, and maintaining organizational and customer health, enterprise software companies are well-positioned to navigate the complexities of today’s market. The integration of GenAI further enhances their ability to drive value and achieve sustainable, profitable growth.