WeWork Is Still Losing Money, Just Not Quite as Much as Before
By Celia Young March 11, 2022 2:23 pm
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WeWork’s revenue increased in the fourth quarter of 2021, but it’s still losing millions of dollars, according to the company’s fourth-quarter earnings call on Friday.
The coworking giant’s fourth-quarter revenue increased to $718 million in the fourth quarter, a 9 percent improvement from the $661 million it posted in the previous quarter. Its revenue still remained lower than its pre-pandemic levels, with the company pulling in $881.7 million in the first quarter of 2020.
While its revenue has increased, its losses have steadily declined. WeWork had a net loss of $803 million in the fourth quarter, a 5 percent decrease from the $844 million it lost in the third quarter, according to its earnings report.
CEO Sandeep Mathrani was optimistic about the company’s future in its earnings call on Friday, as demand for flexible workspaces rises and about 140,000 WeWork members face increased rates to renew their memberships as pandemic deals expire.
“Looking forward to 2022, it’s important to call out the expected competitive growth in our market,” Mathrani said on the earnings call. “As discounted membership agreements we signed during the pandemic come up for renewal, we have been able to mark those renewing rates to market, creating a revenue tailwind in our existing membership base.”
WeWork saw a total number of 593,000 desk sales — the equivalent of 35.6 million square feet — in the 2021 fiscal year and 217,000 in the fourth quarter. As a spike in COVID-19 cases brought on by the more contagious omicron variant declined in February, WeWork saw its occupancy rates increase to 63 percent by the end of last year, up just slightly from 60 percent at the end of the third quarter of 2021.
The earnings call came after some major moves for the nascent public company. WeWork purchased Dallas-based Common Desk, a flexible workspace provider, in January for an undisclosed price, its first acquisition since Mathrani took over for the ousted former leader and WeWork co-founder, Adam Neumann. A spokesperson for WeWork declined to comment on the cost of the Common Desk acquisition.
At the same time, WeWork announced it would divest from its operations in Russia in a statement of solidarity with Ukraine, days after Mathrani told Bloomberg it would likely stay in the country because it does “incredibly well” in Russia. WeWork has just four buildings in Russia and none in Ukraine, according to a spokesperson for the company.
Celia Young can be reached at cyoung@commercialobserver.com.
