WeWork, the company whose co-working spaces are populating many of the world’s biggest cities, said that revenue last year more than doubled, though its losses are growing just as fast.
In a presentation sent to CNBC on Monday, WeWork said revenue in 2018 climbed to $1.8 billion from $886 million a year earlier. Members, or the people who pay for monthly use of WeWork’s facilities, jumped to 401,000 from 186,000, accounting for 88 percent of revenue. CEO Adam Neumann said in January that the company reached annualized revenue of $2.5 billion in the fourth quarter, though that number was reported as $2.43 billion in the latest presentation.
WeWork’s business model continues to rely on heavy funding from private investors, namely SoftBank, which has poured over $10 billion into the company, including $2 billion this year. WeWork has to plunge cash into real estate in some of the most expensive markets and makes money back over time as companies and individuals pay their rent, or membership.
Those investments left WeWork with a net loss in 2018 of $1.9 billion, up from $933 million in 2017. By one metric, which WeWork calls “community adjusted” earnings before interest, taxes, depreciation and amortization, the company is becoming more profitable. That margin was 28 percent last year up from 27 percent a year earlier.
In January, WeWorks said that it’s rebranding as the We Company as it intends to expand beyond just work spaces. The company has touted its move into residential living communities, dubbed WeLive, and early education schools called WeGrow. Each of those business segments will run as stand-alone units under the new We Company umbrella.
Within the WeWork business, enterprise members account for 32 percent of the total, up from 23 percent a year earlier. Those customer have longer commitments, generally three to five years, said Artie Minson, WeWork’s finance chief.
WeWork’s financials are hitting the market at a time when the company’s peers in the broader sharing economy space are preparing to hit the public markets. Lyft is expected to debut later this week at a valuation north of $20 billion. Its larger ride-hailing rival, Uber, is reportedly not far behind, while room-sharing company Airbnb is also gearing up to go public.
“We’re rooting for everyone’s success,” said Michael Gross, WeWork’s vice chairman, in an interview. “We’re watching it obviously, but it’s not going to dictate our timeline. We have an incredibly strong hand.”