WeWork's Earnings Get Investor Appreciation But With a Quarterly Loss

At the end of Monday, WeWork stock was up 3.4% from Friday’s close after today’s earnings report—its first as a public company. The good news was that third quarter revenue of $661 million was up from the second quarter’s $593 million. Not so good news was that revenue the year before was $810.8 million. Also, there was a net loss of $844 million, even with $262 million reported as non-cash and non-recurring expenses, though down from $999.5 million from the year before.

To some that weren’t bidding up share prices, it wasn’t impressive.

“I personally thought their earnings announcement was a disaster,” Thomas Jepsen, CEO of architect company Passion Plans and a real estate investor with a master’s in finance, tells GlobeSt.com. “We’ll be coming up on two years of pandemic, and their earnings simply show that they have not figured out a model that works in an environment with more work-from-home. Despite them getting leaner and getting rid of Neumann, it’s still a company that has a long way to go.”

John Worth, head of research at Nareit, points out that WeWork CEO Sandeep Mathrani is a formidable executive. Bloomberg has referred to him as a “turnaround artist.”

“I wouldn’t bet against him,” Worth says.

Marketing consultant Baruch Labunski says, still, the company needs to improve its communication. “WeWork needs to own up to the fact that it’s hemorrhaging money at a slightly slower rate than they were last year,” he tells GlobeSt.com. “They need to address their abysmal plight and develop better plans to move forward.”

There are also larger issues. “The whole question for the space is how does it map to a world with more work from home,” Worth says. “You can imagine a world where people say, ‘I’m going to work from home a larger percentage of time.’ It depends on how the future workplace sorts itself out.”

Peter Zabierek, co-founder and CEO of Sugi Capital Management, thinks there’s some good news for the broader co-working sector in WeWork’s recent numbers.

“Tenants, not knowing what their space needs will be, are showing a willingness to pay up for smaller footprints and shorter time commitments,” he tells GlobeSt.com. “WeWork’s occupancy was up 900 basis points since last year and memberships were up too. Today I think employees appreciate working in a professionally managed space where they can feel safe. That news is not enough for me to consider investing in WeWork, but it is a nice print for co-working broadly.”