Nov 13, 2019

WeWork reports $1.25 billion net loss for Q3

Dan Primack, author of Pro Rata

Illustration: Sarah Grillo/Axios

WeWork reported a $1.25 billion net loss for the third quarter during a call on Wednesday with the embattled company's bondholders, more than doubling its year-earlier number.

Why it matters: These results represent WeWork's final quarter under the leadership of Adam Neumann, who was ousted after a failed IPO.

Axios obtained a copy of the slide deck presentation. Some highlights:

  • Annual revenue run rate is nearly $4.2 billion. That's up 24.6% from Q2, and just more than double the $2 billion figure from Q3 2018.
  • Net loss increased from $497 million in Q3 2018 to $1.25 billion in Q3 2019, bringing the year-to-date loss to $2.16 billion. Quarterly adjusted EBITDA loss grew from $306 million to $651 million.
  • Total desks are now at 719,000, which is an increase of 115,000 in the quarter and a 109% increase over Q3 2018.
  • Total locations now stands at 625, representing 127 cities in 33 countries.
  • Occupancy fell slightly from its early 2018 peak, and went down from 91% to 88% for "mature" locations.
  • Enterprise membership as a percentage of total membership rose to 43%, compared to 40% in the prior quarter and 34% in the year-earlier period. Total membership is now 264,000.

What they're saying: WeWork did not provide any forward-looking guidance on layoffs or senior management changes.

The bottom line: The real reporting challenge will come in three months, when WeWork's quarterly results will reflect its new, slower-growth strategy.

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