The embattled co-working startup saw revenue increase and its losses improve while All Access memberships rose 60 percent from the previous quarter.
Embattled co-working startup WeWork reported an 11 percent increase in revenue during the third quarter of 2021 to a total revenue of $661 million, according to an earnings report released on Monday. Year over year, however, the company’s revenue was down 18.5 percent from $811 million.
The quarter marked WeWork’s first quarter releasing its earnings results as a publicly traded company, nearly two years after failing to produce an IPO. Its public debut was made on October 20, 2021 under the ticker “WE” and the company was valued at about $9 billion.
WeWork’s net loss during the third quarter was $802.4 million, which translates to $4.54 per share, an improvement from its previous loss of $941.3 million or $5.51 per share the year before.
By the end of the third quarter, WeWork had pro forma cash and unfunded cash commitments of $2.3 billion, which was made up of $1.2 billion in net proceeds from its business combination with special purpose acquisition company (SPAC) BowX, $550 million under the Senior Secured Notes facility, repayment of a $350 million secured commercial paper facility and $450 million under its $1.75 billion letter of credit facility.
Adjusted EBITDA loss was $356 million during the quarter, which included $262 million in non-cash and non-recurring expenses, the company noted, largely from Depreciation, Amortization and Impairments.
By the end of September, the company had 764 locations spanning 38 countries with about 932,000 workstations and 546,000 physical memberships. Overall, memberships saw improvement over the course of the quarter, with the company’s All Access memberships rising 60 percent from the previous quarter to 32,000.
The company expressed general optimism in its report, noting that it “continue[s] to take an outsized share of overall market leasing activity compared to traditional commercial office leasing activity.” Over the course of the third quarter, WeWork sold the equivalent of over 9 percent of U.S. office leasing activity, according to the company’s report.
As more companies embrace a hybrid work environment, the company’s earnings report also noted that WeWork has an opportunity to provide companies with management solutions across different markets.
“As companies increasingly embrace more flexible and hybrid work strategies, the WeWork Workplace experiential management offering provides a turnkey solution to manage how and where employees work across assets and markets,” the report stated. “Leveraging the software that the company has built over the past 10 years to manage its own spaces, power online booking, and optimize utilization through back-end data analysis, WeWork believes its proprietary technology can be used by third party organizations across their real estate portfolios.”
WeWork was founded by Adam Neumann in 2010, and quickly grew with substantial backing from big names like Softbank. But the company’s initial IPO filings in 2019 laid bare significant losses, which led to Neumann resigning (he remains a shareholder), the company pulling its IPO, and Sandeep Mathrani ultimately stepping in as CEO in February 2020.
At the New York Times DealBook Summit last Tuesday, Neumann spoke publicly for the first time in two years, admitting his mistakes and regrets, stating that the company’s one-time valuation of $47 billion “went to his head.”
Following the company’s earnings release, shares were up about 2 percent in premarket trading.
Update: This story was updated with additional earnings information after publishing.
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