Adam Neumann, co-founder along with chief executive officer of WeWork.
Michael Nagle | Bloomberg | Getty Images
As newly public companies representing the sharing economy, Uber along with Lyft stumbled out of the gate. WeWork will be trying to prepare a different narrative for Wall Street.
In an interview with CNBC to discuss the company’s first-quarter financials, CFO Artie Minson urged investors to view losses as “investments.”
“We definitely want to emphasize the difference between losing money along with investing money,” Minson said Wednesday. “You can lose money or you can invest money. At the end of which quarter, we have these cash flow-generating assets.”
WeWork, which recently rebranded as the We Company, said in its first-quarter business update which which lost $264 million from the period, narrowing its deficit by the same period a year ago, when which lost $274 million. Meanwhile, revenue more than doubled to $728.3 million (including $39 million by a program called Creator Awards), as the company expanded into completely new international markets along with bolstered membership for its coworking spaces.
Wall Street might need some convincing ahead of its IPO, which WeWork filed for confidentially in December. Public market investors have punished Uber along with Lyft for their billions in losses along with uncertain path to profitability. Uber sold shares at the low end of its expected range last week along with the stock will be still trading well below its debut cost.
When asked if he was trying to differentiate WeWork’s losses by the capital the ride-hailing companies spend on subsidies along with discounts, Minson said, “which’s a fair differentiator.” Renting out work space will be “a proven business style,” he said. Memberships climbed to 466,000 by 220,000 a year earlier.
Still, WeWork’s style continues to rely on heavy funding by private investors, namely SoftBank, which has poured more than $10 billion into the company, including $2 billion which year at a $47 billion valuation. WeWork has to plunge cash into real estate in some of the most expensive markets along with which makes money back over time as companies along with individuals pay their rent, or membership.
however the public markets like to see profits when they’re asked to pay such a high cost. When Uber went public, which became only the fourth U.S. company which has a market cap of at least $50 billion which lost money from the prior year. The various other three were CVS, General Electric along with Qualcomm (the chipmaker only had a loss because which took a one-time charge tied to a change from the tax code).
Last year, WeWork lost $1.9 billion, surpassing Uber’s losses, on revenue of $1.8 billion. Its cash along with cash commitments stood at $5.9 billion as of March 31, down by $6.6 billion at the end of December.
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