WeWork Inc. (NYSE: WE) released its FY22 Q1 earnings results on Thursday before the market opened. The WE stock jumped after the earnings exceeded analysts’ estimates, and the company upgraded its second-quarter revenue guidance from $775 – 825 million to $800 – 825 million.
At the time of writing, WE stock was trading at $5.55, a gain of 8.8%.
Reported vs. Estimated
EPS – -$0.57 vs. -$0.88 expected
Revenue – $765Milllion vs. $768 Million expected
Financial Highlights
- Revenue in the first quarter of 2022 was $765 million, an increase of 7% quarter-over-quarter and 28% year-over-year, exceeding the Company’s previous revenue guidance of $740 – 760 million.
- Net Loss was $504 million in the first quarter of 2022, a 37% improvement relative to the fourth quarter of 2021.
- Net Loss includes $147 million of interest and other (income) expenses, a gain of $130 million driven primarily by lease terminations, impairment of $91 million driven primarily by building exits, depreciation and amortization of $171 million, and stock-based compensation of $13 million, which are excluded from Adjusted EBITDA.
- Adjusted EBITDA was negative $212 million, a $71 million improvement from the fourth quarter of 2021 and a $234 million improvement relative to the first quarter of 2021.
- First-quarter 2022 Operating Cash Flow was negative $338 million, and Free Cash Flow was negative $412 million.
- The Company enhanced its liquidity profile through a $350 million Junior LC Tranche backed by Brookfield Asset Management and its affiliates as part of the amended LC facility.
CEO’s quote
“Our first quarter results underscore the long-term value of WeWork’s holistic offerings that are tailored to a new era for the office market. Having built a more sound and disciplined operating model, WeWork is well-positioned to capture demand, grow occupancy, and achieve revenue goals established at the beginning of 2022.ˮ
Sandeep Mathrani, CEO and Chairman of WeWork
Earnings History
- For the fiscal year 2021, consolidated gross desk sales totaled 593,000, the equivalent of 35.6 million square feet.
- Total revenue for the fourth quarter of 2021 was $718 million, an increase of $57 million quarter-over-quarter.
- Occupancy in the fourth quarter of 2021 increased 6 points quarter-over-quarter to 66%, including sold but not yet occupied memberships.
- The average revenue per member (ARPM) for physical memberships was $484 in the fourth quarter, roughly flat quarter-over-quarter as compared to the third quarter ARPM of $485.
- All-Access memberships increased to 45,000 by the close of the fourth quarter, an increase of 41% quarter-over-quarter. These All Access memberships represent an incremental 6 percentage points in occupancy.
- Fourth-quarter 2021 revenue was $718 million, representing a 9% increase from $661 million in the third quarter and the second consecutive quarter of sequential revenue growth.
- Fourth-quarter 2021 Operating Cash Flow was negative $373 million, and Free Cash Flow was negative $467 million.
- Net Loss was $803 million in the fourth quarter of 2021, a 5% improvement relative to the third quarter of 2021.
Company Profile
WeWork Inc. offers flexible workspace solutions to individuals and businesses around the world. Workstations, private offices, and customized floor solutions are available, as well as a variety of amenities and services such as private phone booths, internet, high-speed business printers and copiers, mail and package handling, front desk services, off-peak building access, common areas, and daily enhanced cleaning solutions.
