WeWork’s losses continued to mount in the third quarter, reflecting a fast-growth strategy undertaken by ousted CEO Adam Neumann, according to a slide deck the company presented to investors.
The deck showed losses of $1.25 billion (unadjusted), up more than 150% from a loss of $497 million in the same period a year earlier. Revenue almost doubled to $934 million from $482 million. The company also said that occupancy rates had decreased to 79%, its lowest figure since mid-2017, as a result of a rapid buildout of new space.
WeWork added 115,000 new desks during the quarter, which the company called a record. According to a report last week from real estate firm CBRE, WeWork accounted for 69% of U.S. coworking space leases in the third quarter and was the top leaser in nine of the 10 biggest markets for flexible space growth.
WeWork, which withdrew its IPO in September and replaced Neumann before taking a $5 billion bailout from SoftBank, showed solid growth in enterprise memberships to 264,000 (up from 214,000 at the end of the prior period), and committed revenue of $4.3 billion. A big part of the strategy under the leadership of SoftBank, which now controls 80% of the company, is to focus on larger enterprise customers.
The company would have run out of cash by the end of October if it hadn’t received the new financing from SoftBank, CNBC previously reported. WeWork was in a scramble for fresh capital after pulling its IPO when investors balked at its massive losses and unusual accounting and business arrangements undertaken by Neumann and his lieutenants.
Since then, the company has been jettisoning non-core businesses and is reportedly talking to a range of candidates to replace Neumann permanently, including T-Mobile CEO John Legere.
