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