WeWork Meets Q1 Earnings Expectations, Guides Q2 Revenues Below Consensus

WeWork Inc WE reported Q1 2023 revenue growth of 11% Y/Y to $894 million Tuesday, slightly missing the consensus estimate.

An EPS loss of 34 cents came in line with analyst consensus.

Physical occupancy stood at 73% at the end of Q1 vs. 67% in the prior-year quarter.

Systemwide gross workstation sales totaled 177,000 and consolidated gross desk sales stood at 137,000, equating to 8.2 million square feet sold. Consolidated new workstation sales totaled 51,000.

The average revenue per physical member was $490, up 1% Y/Y. All-Access memberships grew to around 75,000, up 36% Y/Y.

Adjusted EBITDA stood at negative $29 million, a $183-million improvement Y/Y.

Cash and cash equivalents stood at $224 million at the end of the quarter.

Outlook: WeWork expects Q2 2023 revenue to be $840 million-$865 million (consensus: $872.05 million) and adjusted EBITDA to be a $10 million to $15-million loss. 

"Over the past quarter, we've continued to improve the fundamentals of our business while working to meet the needs of current and future members who seek turnkey, cost-efficient solutions for their office needs. The slight decline in memberships was a function of known enterprise client churn, the closure of some of our locations and the franchising of our South Africa business. April saw a reversal in enterprise demand resulting in USC's first positive net sales month in twelve months." said Sandeep Mathrani, CEO and chairman. 

Also Read: WeWork Receives Listing Non-Compliance Notice From NYSE

WE Price Action: WE shares are trading lower by 6.45% to 43 cents Tuesday. 

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