WeWork Forecasts 30% Minimum Revenue Growth In 2022
GLOBAL – Amid healthier demand for office space from firms changing to a hybrid work arrangement, WeWork said it is projecting that its revenue this year would increase by at least 30 percent, reported Reuters on Friday evening (11 March, SGT).
The major operator of coworking space across the world said it anticipates that its revenue for the whole of 2022 would increase by 30 to 65 percent year-on-year to US$3.35 billion to US$3.5 billion.
Notably, the COVID-19 pandemic has prompted businesses to allow their staff to work at places other than their offices. This trend has benefitted providers of flexible office space, like WeWork, which offers private offices, workstations, and bespoke floors.
After work-from-home (WFH) policies in 2021 negatively impacted the company by lowering occupancy and increased operating costs, WeWork’s commercial operation has now rebounded due to the relaxation of COVID-related restrictions.
The shift to a hybrid work arrangement also improved the financial results of WeWork’s competitor IWG, which announced a lower loss on Tuesday.
WeWork, which held its initial public offering (IPO) last October via a merger with a special-purpose acquisition company (SPAC), was aided further by CEO Sandeep Mathrani’s campaign to slash costs by terminating unprofitable leases and divesting non-core properties.
On Friday, the coworking space operator said it is forecasting to generate revenue of US$900 million to US$1 billion in Q3 and Q4 2022. At this range, it is expecting to be profitable on an adjusted EBITDA basis. The acronym stands for earnings before interest, taxes, depreciation, and amortization.
The Softbank-backed company also revealed that its long-term rental obligations declined by around 11 percent to $17.93 billion as of 31 December 2021. This is a closely-watched metric as the firm generally leases commercial properties or space within office buildings.
On the other hand, new desk sales in Q4 2021 increased to 87,000 from 84,000 during the preceding quarter, while revenue climbed by roughly 9 percent to US$718 million during the same period.