WeWork Inc. missed analysts’ expectations for profit in the fourth quarter, but showed a glimmer of potential for future profitability.
(Bloomberg) — WeWork Inc. missed analysts’ expectations for profit in the fourth quarter, but showed a glimmer of potential for future profitability.
The co-working company said it had positive adjusted EBITDA for the month of December — a notable change from its famously cash-burning history, especially under former Chief Executive Officer Adam Neumann. After a failed attempt at an initial public offering in 2019 and a gut punch from the global pandemic, CEO Sandeep Mathrani has been cutting expenses and inching toward turning a profit, though it remains far off.
New York-based WeWork lost $527 million in the fourth quarter, a greater loss than the $328 million analysts had predicted, according to data compiled by Bloomberg. The company reported revenue of $848 million for the quarter, less than analyst estimates of $859 million.
Ever since Mathrani took over as CEO in 2020, he’s been projecting that profitability is coming soon. In 2020 Mathrani said the company was on track to be profitable by the end of 2021. In an earnings call last quarter, he said that the company “should have a path to cash flow positive by 2023.”
Getting to this point has already required cutting back on expenses. WeWork has been ending leases for dozens of buildings that no longer make financial sense. The company is also growing new sources of revenue like on-demand memberships. Overall, occupancy for buildings has slowly been rising after hitting a nadir in the early months of the pandemic. Occupancy reached 75% in the December quarter, up from 71% in the previous three months.
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