Adam Neumann, co-founder as well as chief executive officer of WeWork.
Michael Nagle | Bloomberg | Getty Images
As newly public companies representing the sharing economy, Uber as well as Lyft stumbled out of the gate. WeWork is actually 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 as well as investing money,” Minson said Wednesday. “You can lose money or you can invest money. At the end of This specific quarter, we have these cash flow-generating assets.”
WeWork, which recently rebranded as the We Company, said in its first-quarter business update that will the item lost $264 million within the period, narrowing its deficit through the same period a year ago, when the item lost $274 million. Meanwhile, revenue more than doubled to $728.3 million (including $39 million through a program called Creator Awards), as the company expanded into brand-new international markets as well as 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 as well as Lyft for their billions in losses as well as uncertain path to profitability. Uber sold shares at the low end of its expected range last week as well as the stock is actually still trading well below its debut cost.
When asked if he was trying to differentiate WeWork’s losses through the capital the ride-hailing companies spend on subsidies as well as discounts, Minson said, “that will’s a fair differentiator.” Renting out work space is actually “a proven business type,” he said. Memberships climbed to 466,000 through 220,000 a year earlier.
Still, WeWork’s type continues to rely on heavy funding through private investors, namely SoftBank, which has poured more than $10 billion into the company, including $2 billion This specific year at a $47 billion valuation. WeWork has to plunge cash into real estate in some of the most expensive markets as well as the item makes money back over time as companies as well as 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, the item became only the fourth U.S. company which has a market cap of at least $50 billion that will lost money within the prior year. The various other three were CVS, General Electric as well as Qualcomm (the chipmaker only had a loss because the item took a one-time charge tied to a change within the tax code).
Last year, WeWork lost $1.9 billion, surpassing Uber’s losses, on revenue of $1.8 billion. Its cash as well as cash commitments stood at $5.9 billion as of March 31, down through $6.6 billion at the end of December.
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