WeWork Announces Preliminary Q3 Business Updates, Says Total Q3 Revenue $658M, With $228M In Sept.; Says Merger On Track To Close On Or About Oct. 21, 2021, Subject To Stockholder Approval

Author: Michael Horton | October 07, 2021 12:22pm

• Webcast and presentation accessible on WeWork's investor relations website
• BowX merger on track to close on or about October 21, 2021, subject to BowX stockholder approval

WeWork, one of the leading global flexible space providers, today hosted a virtual Investor Day ahead of its planned combination with BowX Acquisition Corp. During the presentation, WeWork's Chief Executive Officer, Sandeep Mathrani, Chief Financial Officer, Ben Dunham, and VP, Investor Relations and Corporate Development, Chandler Salisbury, presented a detailed overview of WeWork's market position, strategy, and growth plans as companies around the world prepare for the future of work. Highlights of the presentation are included below. A full playback of the presentation and supporting materials are accessible at: investors.wework.com.

The presentation shared with investors today also included updates on WeWork's Q3 performance highlighted below:

• Preliminary total revenue for Q3 was $658 million, with $228 million in revenue in September, making it the fifth consecutive month of revenue growth and the highest monthly revenue recorded in 2021.
• Across consolidated operations, total occupancy continued to trend upwards at 60% as of the end of September, up from 52% at the end of Q2 2021. Including the incremental 30,000 net memberships that are already contracted to move in, total occupancy would increase to 64%.
• Consolidated gross desk sales totaled 154,000 in the third quarter, or 9.2 million square feet sold. Consolidated new desk sales totaled 84,000 in the third quarter, marking seven consecutive months of positive net desk sales.
• All Access and virtual memberships increased to 32,000 in Q3, up from 20,000 in Q2 2021.

Sandeep Mathrani, CEO of WeWork, said "In the pre-pandemic world, flex was part of an office offering. In a post-pandemic world, flex is its own channel of distribution, much like e-commerce is its own channel of distribution. The flexible workspace TAM [total addressable market] is one of the most exciting things to us and gives us confidence as to the growth potential of our business, even just looking at the traditional space-as-a-service business."

Mathrani further highlighted key indicators of WeWork's transformed business model. Over the last two years, the company has overhauled its business operations and cost structure, right-sized its real estate portfolio and refined its value proposition, including:

• Streamlined Operations and Expenses: As of Q2 2021, WeWork has reduced location operating expenses by $400 million on a per square foot basis compared to Q4 2019 and cut SG&A expenses by $1.1 billion compared to Q4 2019 on an annualized, run-rate basis. Additionally, the company has divested all non-core businesses.
• Optimized Portfolio: WeWork has completed over 150 full lease exits and 350 lease amendments from the beginning of 2020 through Q2 2021. To date, the company has also achieved an estimated $400 million in annualized rent savings as a result of our portfolio optimization efforts, and executed franchise and other management agreements in China, Israel and Latin America where local capital and expertise can strengthen WeWork's international business.
• Strengthened Value Proposition: In major markets around the world, the company has captured a larger percentage of leasing activity compared to the commercial office market. For example in New York City in Q3, WeWork represented approximately 1% of the total commercial office square footage, yet accounted for approximately 13% of all commercial office leasing activity. In London, in Q2, WeWork represented approximately 1% of the total commercial office square footage, yet accounted for approximately 37% of all commercial easing activity.

Preliminary Operating Results

The preliminary third quarter operating results set forth above are based solely on currently available information, which is subject to change. These preliminary operating results constitute forward looking statements.

Merger with BowX Acquisition Corp

As previously announced on March 25, 2021, WeWork and BowX Acquisition Corp. (NASDAQ:BOWX, BOWXU, and BOWXW))))) ("BowX"), a special purpose acquisition company, entered into a definitive merger agreement, providing for a business combination that will result in WeWork becoming a publicly listed company.

A special meeting for BowX stockholders to vote on the combination with WeWork will be held virtually on October 19, 2021 at 11:00 AM, Eastern Time. Subject to stockholder approval, the business combination is expected to close on or about October 21, 2021. Upon closing, WeWork will be listed on the New York Stock Exchange under the symbol "WE."

Posted In: BOWX