WeWork Loses $4.4B in 2021 But Sees Better Days Ahead

Last year was a challenging one for WeWork, with $2.6 billion in revenue, which was a nearly 25% drop from the previous year’s $3.4 billion or 2019’s $3.5 billion. The net loss of $4.4 billion compares to $3.1 billion in 2020 and $3.3 billion for 2019. Loss from operations was $3.7 billion.

But WeWork offered guidance of between $3.35 billion and $3.5 billion in revenue for 2020, a 30% jump from last year. The expected increase is likely based on the movement of corporations to bring people back into offices, even if not full time, and the developing need for more flexible office options.

The company “ended the year with $1,974 million in cash and unfunded cash commitments, including approximately $924 million of available cash on hand, $550 million available under our senior secured note facility, and an additional $500 million in letter of credit facility capacity.”

WeWork hasn’t been the only flex office space company feeling headwinds. International Workplace Group saw a net loss of €269.7 million, or $295 million, on system-wide revenue of €2.499 billion ($2.73 billion).

Both companies are expecting improved conditions this year. IWG said that it saw “strong end to 2021 and excellent momentum into Q1, 2022” with a mix moving toward multi-site and enterprise clients. The corporation also said that the last quarter of 2021 showed the highest demand it had seen, “eclipsing pre-pandemic levels.”

WeWork claimed to represent 0.5% of all commercial office space in the U.S. in 2021 and “sold the equivalent of 9% of total traditional office square feet leased across the country in 2021,” although the company didn’t point to the source of the overall market figure

Site occupancy for WeWork’s locations has been improving, moving from 45% in December 2020 to 63% for December 2021. But there is a potential hitch, as the enterprise physical membership percentage dropped from 52% to 47% over the same period, suggesting that WeWork isn’t making the same gains in occupancy among enterprise clients, and they will be critical to ensuring a return to in-office work.

Also, WeWork operates across 757 locations in 38 countries and rolls up results, making it next to impossible from the outside to understand how different geographic areas are performing. So, there is no way to tell what the revenue expectations are in a given market like North America. And as the company did not mention earnings in its outlook, only adjusted EBIDTA, which has many caveats, it appears as though there may not be expectations of actual GAAP earnings in the coming year.