Wework reveals rapid growth, big losses before IPO

NEW YORK — Wework’s parent company gave investors the most detailed look yet at its finances Wednesday, revealing breakneck growth on the back of massive losses as the officesharing company prepares for a highly anticipated debut on the stock market.

Founded as a co-working space in Manhattan in 2010, Wework now has 527,000 members in 111 cities worldwide, according to the regulatory filing by its parent firm, The We Company. That’s nearly double the 268,000 members it had a year ago.

But the company’s losses have grown nearly as quickly as its revenue, roughly doubling annually over the last few years. Wework lost $1.61 billion in 2018, up from $884 million in 2017 and $429.7 million in 2016.

Wework had a net loss of $689.7 million on revenue of $1.54 billion for the six months ended in June. That compares with a net loss of $628.1 million on revenue of $763.8 million in the prioryear period.

Total expenses, meanwhile, grew from $1.44 billion in the first six months of 2018 to $2.9 billion in same period this year.

The company has rapidly grown to become among the biggest corporate landlords in some cities, while casting itself as a transformational force changing the way people work and live. Wework said it expects to expand aggressively in its existing cities and to launch in up to 169 additional cities. It warned that because it has been spending so heavily to grow its business, the company may be unable to achieve profitability.

Investors are looking for a clearer picture of how the venture capital darling plans to chart a path toward profitability and whether its business model can withstand an economic downturn.

The company, whose initial public offering is expected in September, will be the latest in a string of large money-losing enterprises to test its luck on the stock market this year, following Uber and Lyft.

At $47 billion, Wework is one of the most valuable privately held companies in the world. It mostly makes money by renting buildings and dividing them into trendy office space that rents out to members. But the company has branched widely, from acquiring a sales platform to launching a business-focused school for children and buying a large stake in a wave pool company.

“One of the things the company will have to do is to really position itself as more than just a landlord,” said Alejandro Ortiz, principal analyst at Sharepost.