WeWork tells investors it lost $1.25 billion in the third quarter

CNBC
Corp. Chief Executive Officer Masayoshi Son CNBC | James Alexander Michie

Corp. Chief Executive Officer Masayoshi Son speaks during a joint announcement with Toyota Motor Corp. to make new venture to develop mobility services in Tokyo, Japan, 04 October 2018. Alessandro Di Ciommo | NurPhoto | Getty Images

KEY POINTS

  • In a slide deck shown to investors, WeWork said it lost $1.25 billion on revenue of $934 million.
  • Occupancy decreased to 79% as the company added a record 115,000 desks.
  • The company is currently paring back non-core businesses as it focuses on sustainable business practices rather than rapid growth.

WeWork’s losses continued to mount in the third quarter, reflecting a fast-growth strategy undertaken by ousted CEO Adam Neumann, according to a slide deck the company presented to investors.

The deck showed losses of $1.25 billion (unadjusted), up more than 150% from a loss of $497 million in the same period a year earlier. Revenue almost doubled to $934 million from $482 million. The company also said that occupancy rates had decreased to 79%, its lowest figure since mid-2017, as a result of a rapid buildout of new space.

WeWork added 115,000 new desks during the quarter, which the company called a record. According to a report last week from real estate firm CBRE, WeWork accounted for 69% of U.S. coworking space leases in the third quarter and was the top leaser in nine of the 10 biggest markets for flexible space growth.

WeWork, which withdrew its IPO in September and replaced Neumann before taking a $5 billion bailout from SoftBank, showed solid growth in enterprise memberships to 264,000 (up from 214,000 at the end of the prior period), and committed revenue of $4.3 billion. A big part of the strategy under the leadership of SoftBank, which now controls 80% of the company, is to focus on larger enterprise customers.

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Source: Matt Rosoff and Sally Shin | CNBC

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