Mar 25, 2019

WeWork doubled revenue and loss in 2018

WeWork doubled its revenue, net loss and membership between 2017 and 2018, according to an investor presentation provided by the company.

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Data: WeWork; Chart: Axios Visuals

Why it matters: The co-working space operator continues to push toward an IPO, but has plenty of cash if it wants to wait longer.

Financials

Revenue: 2018 revenue was $1.82 billion, up 105% from 2017. Of that, 88% is considered membership revenue — down from 93% in 2017.

  • "We have a global membership network that sits on top of this global physical platform that we have the opportunity to further monetize," WeWork Vice Chairman Michael Gross tells Axios.
  • Gross adds that WeWork's compound annual growth rate (CAGR) has been over 100% for each of the past eight years.

Losses: Net loss was $1.9 billion for 2018, larger than the revenue figure and up 103% from 2017.

  • Included was $372 million for sales and marketing (+162% from 2017) and $237 million of interest related to 2018 bond issues.
  • WeWork President and CFO Artie Minson says to expect both revenue and net loss figures to continue growing, as the latter relates largely to upfront construction and long-term rental contract costs. "I was previously at [Time Warner Cable] and it took decades for cable companies to show profits, but that doesn't mean they weren't creating lots of value."

Alt measure: WeWork prefers investors focus on a novel metric called "community-adjusted EBITDA, which more than doubled to $467.1 million in 2018.

Membership

Total memberships climbed 116% in 2018 to 401,000. It now has a presence in 425 facilities in 100 cities in 27 countries.

  • 32% of members come via enterprise customers, while total occupancy climbed to 90%.
  • WeWork reports a $2.2 billion "committed backlog" of new membership contracts.
  • It also says that one out of every 8 first-time entrepreneurs in major U.S. cities are WeWork members.
  • The company now has a presence in 425 facilities in 100 cities in 27 countries.
  • When asked about the impact of slowed economic growth, Gross said: "We've lived through some level of economic pullback in regions like Latin America and China, but have only seen our growth accelerate."
Balance Sheet

WeWork had $2.2 billion of cash on hand at year-end, which is the same amount it had at the time of its public bond offering last April.

This does not include $400 million of committed capital from SoftBank, nor $4 billion of convertible note warrants from SoftBank ($1.5 billion of which was received in January).

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