We Company first-quarter loss narrows slightly as WeWork members grow

NEW YORK (Reuters) – The We Company, parent of flexible workspace operator WeWork, said on Wednesday losses narrowed slightly in the first quarter from a year earlier to $264 million as revenue continues to double annually and large customers doubled from two years ago. The New York-based company, which earlier on Wednesday said it created a $2.9 billion real estate investment platform that marks an evolution in its investing strategy, said interest and other expenses widened to $378 million from $19 million in the first quarter of 2018. Net losses declined by $10 million from $274 million a year earlier and cash on hand was $4 billion, and rose by $1 billion on April 15 from warrants due to SoftBank Corp, a major investor in WeWork. The company said it expected a further $1.5 billion from warrants due to SoftBank in April 2020, it said. Revenues rose to $728.3 million in the first three months of the year, while the company’s run-rate jumped to $3.02 billion on an annualized basis using March figures multiplied by 12. Memberships in the first quarter jumped to 466,000 from 219,000 a year ago, while memberships from enterprise clients representing companies with at least 1,000 employees rose to 175,000, or 40% of WeWork’s customer base. Adjusted operating earnings, or EBITDA, were a negative $220 million, roughly double the prior year’s negative $107 million. WeWork began publicly disclosing a limited set of its financial statements last year after raising $702 million in a sale of a high-yield bond. Ahead of the report, WeWork’s junk bond slipped fractionally in price on Wednesday, with its yield rising to a two-week high of 8.97%.

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