By
Tolu Ajiboye
February 9th, 2024
The CEO of WeWork believes that the company’s Q4 2022 performance is a testament to employee efforts and product value.
Commercial real estate facilitator WeWork Inc (NYSE: WE) recently reported its Q4 and fiscal year 2022 results. For the period ended December 31st, the leading global flexible space provider reported revenue of $848 million. This income haul represents an increase of 18% from the year before as WeWork maximized cost-cutting efforts. For the fourth quarter, the New York-based company also realized revenue, using its budgeted foreign exchange rates, of $905 million. This figure came in 26% higher year-over-year (YoY) than WeWork’s previous revenue guidance of $870-890 million.
Commenting on the WeWork Q4 2022 outing, the company’s chairman and chief executive officer Sandeep Mathrani said:
“Our fourth quarter results demonstrate that we accomplished what we set out to do in fiscal year 2022 by staying focused on reducing expenses, optimizing our portfolio, growing revenue, and increasing occupancy. As a result, we crossed a historic milestone of achieving Adjusted EBITDA profitability in December – a testament to the hard work of our employees and the enduring value of our products.”
Furthermore, Mathrani also added, “As we move forward, we remain committed to building on this momentum while also enhancing our balance sheet.”
Other WeWork Q4 2022 Details
WeWork reported that physical memberships grew 17% YoY on a consolidated basis. Meanwhile, consolidated physical occupancy increased to 75% at the end of the last three months of last year. The company also identified a 56% YoY surge in All Access and On-Demand consolidated memberships for the fourth quarter. Memberships in the previously mentioned category currently sit at roughly 70,000 for the quarter.
In February, WeWork extended the maturity of its LC Facility’s Junior Tranche to March 2025 from November 2023. In addition, the physical and virtual coworking space provider also increased the facility from $350 million to $470 million.
WeWork’s net loss for the fourth quarter came in at $527 million, with the company also sustaining non-cash related expenses of $348 million inclusive. The latest quarterly report also gave Adjusted EBITDA as negative $26 million, marking a 75% improvement quarter-over-quarter. Nonetheless, the 75% quarterly improvement translates to a $257 million yearly improvement.
In addition to earning a systemwide revenue of $973 million in the fourth quarter, WeWork’s systemwide real estate portfolio also proved expansive. For instance, real estate portfolio as of December 31st last year comprised 779 locations in 39 countries. This portfolio supported roughly 906,000 workstations and 682,000 physical memberships, a 75% physical occupancy.
Meanwhile, WeWork’s consolidated real estate portfolio, as of December 31st, 2022, comprised 622 locations in 34 countries. In addition, this base supported nearly 731,000 workstations and 547,000 physical memberships, which also translates to a 75% physical occupancy.
WeWork’s systemwide physical membership increase was 16% YoY for the quarter, while its consolidated physical membership increased 17% YoY. Furthermore, the company has projected a Q1 2023 revenue outlook of between $830 million and $855 million.