- WeWork’s revenue totaled $1.1 billion last quarter, the office-space sharing company announced in an email to staff on Thursday.
- The revenue growth rate of 45% marked a sharp slowdown from the more than 100% growth rates that WeWork regularly generated a year ago.
- The company said its “free cash outflow” of $482 million was significantly less than during the final quarter of 2019.
- In the email, the company’s chief financial officer underscored flexibility as WeWork’s advantage, echoing the CEO’s comments on CNBC earlier this week.
- For more WeWork stories, click here.
WeWork’s revenue growth rate slowed sharply in the first three months of the year and the company burned through hundreds of millions of dollars amid a pandemic that has caused workers to avoid offices and stay home.
The office-sharing startup, which was already facing major challenges to its business before the coronavirus outbreak, said in an email sent to employees on Thursday that its Q1 revenue totaled $1.1 billion, up 45% year-over-year. That’s a significant slowdown from just one year ago, when WeWork was regularly doubling its topline each quarter.
“The world is navigating uncharted territory and this current climate is undoubtedly having an impact on every business,” Chief Financial Officer Kimberly Ross wrote in the email.
The company did not provide information on occupancy rates at its vast network of offices spread in cities across 38 countries. But it said that “memberships” increased 49% to 693,000.
The fact that WeWork’s revenue is still growing — albeit at a much slower pace — amid the worst economic crisis in years may in itself count as good news. WeWork’s Ross sought to portray the results as a positive, noting that quarterly revenue surpassed $1 billion for the first time.
While WeWork posted a “free cash outflow” of $482 million, Ross noted that the burn rate represented a 60% improvement from the fourth quarter of 2019.
“Our efforts to rightsize and refocus the business are beginning to show results — a significant milestone as we work towards becoming a leaner and efficient company,” Ross wrote.
Among the other select data included in WeWork’s Q1 email:
- Cash and unfunded cash commitments: $3.9 billion
- Overall footprint: 828 locations across 149 cities and 38 countries across the world.
- Total memberships: 693,000, a 49% year-over-year increase. Enterprise – companies with more than 500 employees – made up 45% of those memberships, versus 43% last quarter.
Large customers, including IBM and BlackRock, can write bigger and more consistent checks than the entrepreneurs and freelancers who made up WeWork’s original customer base.
WeWork, like other real estate and flexible-office providers, is grappling with the global effects of the pandemic on its business. The company has kept its US locations open and is reconfiguring spaces to include more sanitation and distance.
“Flexibility has become the most valuable currency as companies around the world rethink their workplace needs and are in search of safe, turnkey options at a global scale,” Ross said.
Like many of its peers, the office company is cutting hundreds of staff in global layoffs that new CEO Sandeep Mathrani has said would wrap up by the end of May. WeWork is reorganizing its building managers in a process that includes applying for new roles, Business Insider previously reported.
WeWork is also caught in the middle of an investor fight that’s led to two lawsuits, as early investors and founder Adam Neumann sue SoftBank, its largest investor, for walking away from a $3 billion stock purchase plan last month. On CNBC earlier this week, Mathrani said the fights are “noise in the background” and the company is focused on navigating through the pandemic.
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