Sign up for our daily briefing
Make your busy days simpler with Axios AM/PM. Catch up on what's new and why it matters in just 5 minutes.
Catch up on the day's biggest business stories
Subscribe to Axios Closer for insights into the day’s business news and trends and why they matter
Stay on top of the latest market trends
Subscribe to Axios Markets for the latest market trends and economic insights. Sign up for free.
Sports news worthy of your time
Binge on the stats and stories that drive the sports world with Axios Sports. Sign up for free.
Tech news worthy of your time
Get our smart take on technology from the Valley and D.C. with Axios Login. Sign up for free.
Get the inside stories
Get an insider's guide to the new White House with Axios Sneak Peek. Sign up for free.
Catch up on coronavirus stories and special reports, curated by Mike Allen everyday
Catch up on coronavirus stories and special reports, curated by Mike Allen everyday
Want a daily digest of the top Denver news?
Get a daily digest of the most important stories affecting your hometown with Axios Denver
Want a daily digest of the top Des Moines news?
Get a daily digest of the most important stories affecting your hometown with Axios Des Moines
Want a daily digest of the top Twin Cities news?
Get a daily digest of the most important stories affecting your hometown with Axios Twin Cities
Want a daily digest of the top Tampa Bay news?
Get a daily digest of the most important stories affecting your hometown with Axios Tampa Bay
Want a daily digest of the top Charlotte news?
Get a daily digest of the most important stories affecting your hometown with Axios Charlotte
Sign up for Axios NW Arkansas
Stay up-to-date on the most important and interesting stories affecting NW Arkansas, authored by local reporters
Photo by Jackal Pan/VCG via Getty Images
Axios has spoken to WeWork president and COO Artie Minson about "community adjusted EBITDA," a controversial new financial metric that appeared in his company's first-ever bond offering (which yesterday was upsized from $500 million to $700 million).
Bottom line: WeWork's intention is to best quantify its unit economics, as it continues to prepare for an IPO.
The introduction of community adjusted EBITDA generated much snickering on finance Twitter, thanks to this WSJ description:
"It subtracted not only interest, taxes, depreciation and amortization, but also basic expenses like marketing, general and administrative, and development and design costs."
Axios has since learned that the metric includes costs and expenses specific to existing WeWork facilities. More:
- Community adjusted EBITDA includes all tenant fees, rent expense, staffing expense, facilities management expense, etc. for active WeWork buildings.
- The exclusions are company-wide expenditures, which do not get pro rated. Much of that relates to growth efforts, although not all of it (executive salaries, for example).
- One comp, and its not perfect, could be how Shake Shack reports "shack-level operating profit margins."
- So yes it's still kind of silly, but less silly than it at first appears. And obviously the ratings agencies and bond markets didn't seem put off.
Below is additional WeWork financial data from the bond offering documents:
- Revenue more than doubled between 2016 and 2017, from $436 million to $886 million. Nearly 93% of revenue is tied to membership.
- Net loss increased by 117.2% to $933 million. The largest expense increase was general/admin (+294%), followed by sales and marketing (+230%).
- $2.02 billion in cash at the end of 2017.