WeWork doubled its revenue, net loss and membership between 2017 and 2018, according to an investor presentation provided by the company.
Why it matters: The co-working space operator continues to push toward an IPO, but has plenty of cash if it wants to wait longer.
Financials
Revenue: 2018 revenue was $1.82 billion, up 105% from 2017. Of that, 88% is considered membership revenue — down from 93% in 2017.
- "We have a global membership network that sits on top of this global physical platform that we have the opportunity to further monetize," WeWork Vice Chairman Michael Gross tells Axios.
- Gross adds that WeWork's compound annual growth rate (CAGR) has been over 100% for each of the past eight years.
Losses: Net loss was $1.9 billion for 2018, larger than the revenue figure and up 103% from 2017.
- Included was $372 million for sales and marketing (+162% from 2017) and $237 million of interest related to 2018 bond issues.
- WeWork President and CFO Artie Minson says to expect both revenue and net loss figures to continue growing, as the latter relates largely to upfront construction and long-term rental contract costs. "I was previously at [Time Warner Cable] and it took decades for cable companies to show profits, but that doesn't mean they weren't creating lots of value."
Alt measure: WeWork prefers investors focus on a novel metric called "community-adjusted EBITDA, which more than doubled to $467.1 million in 2018.
- Go deeper on community-adjusted EBITDA, which Minson likens to unit economics of a restaurant or retail chain.
Membership
Total memberships climbed 116% in 2018 to 401,000. It now has a presence in 425 facilities in 100 cities in 27 countries.
- 32% of members come via enterprise customers, while total occupancy climbed to 90%.
- WeWork reports a $2.2 billion "committed backlog" of new membership contracts.
- It also says that one out of every 8 first-time entrepreneurs in major U.S. cities are WeWork members.
- The company now has a presence in 425 facilities in 100 cities in 27 countries.
- When asked about the impact of slowed economic growth, Gross said: "We've lived through some level of economic pullback in regions like Latin America and China, but have only seen our growth accelerate."
Balance Sheet
WeWork had $2.2 billion of cash on hand at year-end, which is the same amount it had at the time of its public bond offering last April.
This does not include $400 million of committed capital from SoftBank, nor $4 billion of convertible note warrants from SoftBank ($1.5 billion of which was received in January). ...