WeWork’s losses narrow but are still huge

Shared workspace company expects revenue to surge 30% this year

National /
Mar.March 11, 2022 02:39 PM

WeWork’s Sandeep Mathrani (WeWork, iStock)

WeWork’s quarterly losses narrowed throughout 2021, but the year’s total was a sobering reminder of the flex office company’s struggle to regain its former glory.

WeWork’s stock tumbled around 3 percent Friday, then rebounded, after the company reported a $4.4 billion net loss for the year. That’s up from losses of $3.1 billion in 2020 and $3.3 billion in 2019.

As of midday the stock was trading at around $5, just off a record low earlier this month. It has given up more than half its value since going public at a $9 billion valuation via a SPAC merger with Menlo Park, Calif.-based BowX Acquisition Corp. in October.

On an earnings call Friday, CEO Sandeep Mathrani denied earlier reports that the company was in talks to raise new equity capital at the discounted valuation.

“We have no intent to issue equity,” Mathrani said. “We were never in the market to have a broader equity issuance.”

On a shorter time frame, the company’s results presented a more favorable picture of the flex office business, which came into question as former CEO Adam Neumann made an ignominious exit in 2019 and the company fumbled its first attempt to go public.

WeWork’s net losses totaled $803 million in the fourth quarter, down from $844 million in the third, as revenue climbed to $718 million from $661 million.

The company expects $4 billion in revenue in 2022 — a 30 percent gain year-over-year — with employers and workers looking to hybrid work models in the wake of pandemic office shutdowns.

“As companies recognize the need for purposeful engagement and intentional collaboration and design a strategy tailored to the unique needs of their people and businesses, we are seeing a greater shift to flex,” CEO Sandeep Mathrani said on an earnings call Friday.

The company’s flex office spaces were 63 percent occupied at quarter-end, up from 56 percent three months earlier. Occupancy is a function of gross and new desk sales, churn and capacity.

Consolidated gross desk sales, which include renewals, totaled 164,000 in the fourth quarter, up from 155,000 in the third.

WeWork has suspended its expansion plans in Russia in response to that nation’s invasion of Ukraine and is “executing on divesting operations in the region,” Mathrani said on the Friday call. Earlier this month the company had said it would continue to operate in Russia on a tentative basis.





    Related Articles

    arrow_forward_ios
    Wendy Silverstein (Credit: Getty Images)
    Wendy Silverstein, co-head of WeWork’s real-estate fund, is out
    Wendy Silverstein, co-head of WeWork’s real-estate fund, is out
    WeWork CEO Adam Neumann (Credit: Getty Images and iStock)
    WeWork’s side businesses are fizzling
    WeWork’s side businesses are fizzling
    Sarah Pontius (Credit: Union College)
    Another head rolls at WeWork
    Another head rolls at WeWork
    Vorea Principal's Peter Papamichael with 10-04 Borden Ave (Vorea Group, iStock)
    Skydiver lands first NYC location in Long Island City
    Skydiver lands first NYC location in Long Island City
    Two Trees Management's Jed Walentas and 50 West 23rd Street (Walentas/via Marc Skrivo, Google Maps, iStock)
    Trustpilot takes 34k sf at Two Trees’ Midtown South building
    Trustpilot takes 34k sf at Two Trees’ Midtown South building
    Bruce Brickman and 35-11 9th Street (Young Jewish Professionals, Google Maps)
    Astoria cigar factory converted to offices highlighted NYC i-sales last week
    Astoria cigar factory converted to offices highlighted NYC i-sales last week
    BlackRock's Larry Fink, with 98 Riverside Drive (BlackRock)
    BlackRock sells stabilized UWS rental for $90M after landmark designation
    BlackRock sells stabilized UWS rental for $90M after landmark designation
    Eli Elefant and 452 5th Avenue (IAVA, Property Building Corp)
    PBC nears $385M loan for HSBC tower after sale to Innovo collapses
    PBC nears $385M loan for HSBC tower after sale to Innovo collapses
    arrow_forward_ios

    The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

    Loading...