WeWork posts a smaller loss as its office occupancy grows.


WeWork reported a smaller quarterly loss on Thursday as it continued its effort to turn a profit after the coronavirus pandemic upended its office-centric co-working business.

The company said revenue increased 37 percent in the second quarter, to $815 million, from a year earlier, as workers continued to return to offices. WeWork’s net loss shrank 31 percent to $635 million in the quarter, which ended June 30, from the year-ago period.

“Simply put, it’s growing revenue and continuing to cut expenses,” said Alexander Goldfarb, a managing director and a senior research analyst at the investment bank Piper Sandler.

And in a sign that more people have outgrown working from their kitchen tables and living room couches, WeWork said its occupancy rate rose to 72 percent in the quarter, matching its rate in the fourth quarter of 2019. Memberships surpassed prepandemic levels, climbing 33 percent from a year earlier to 658,000, the highest to date. The company said it had 777 locations worldwide, supporting about 917,000 desks.

“As the world has adjusted to the global pandemic, we have been steadily selling desks and growing our membership base for well over a year, because companies have needed a way to quickly adapt to a new and unknown environment,” Sandeep Mathrani, WeWork’s chief executive, said on a conference call with analysts on Thursday.

As WeWork rebuilds its business, it has benefited from the easing of pandemic restrictions. The company, which leases many buildings in dense, urban areas, has expanded its footprint in an effort to attract workers looking to return to the office, and it has said it is exploring partnerships with developers to add co-working space to residential buildings.

WeWork can capitalize on a shift to hybrid work, which has become a challenge for companies that usually sign long-term leases on office space, said Vikram Malhotra, a senior equity research analyst at Mizuho Americas. That’s because WeWork’s offices are in central business districts, and the company can serve large and small tenants. “Their services are truly differentiating,” Mr. Malhotra said.

WeWork leases flexible office space, from dedicated desks to entire floors, to tenants that range from start-ups to Fortune 500 companies. In July, it introduced an app-based service intended to help companies manage their space needs and book its shared services like conference rooms.

“Not only does it help existing customers manage their WeWork footprint but their total footprint,” Mr. Malhotra said of the service.

The earnings statement released on Thursday was the second quarterly report for WeWork, which made its market debut in October through a merger with a publicly listed shell company known as a special purpose acquisition company.

WeWork shares fell 8.7 percent at market close on Thursday.



Source: https://www.nytimes.com/2022/08/04/business/wework-earnings-2q-2022.html