WeWork Inc (NYSE:WE) shares tumbled after it reported a wider-than-expected fourth quarter loss despite the troubled company’s revenue beating Wall Street estimates.
For the period ended December 31, 2022, the New York based office-rental giant reported a loss of $0.59 per share, which was $0.16 cents less than analyst estimates of $0.43.
The company’s net loss for the 4Q amounted to $527 million, which included approximately $348 million related to non-cash expenses. WeWork said adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) was negative $26 million, a 75% improvement quarter-over-quarter, and a $257 million improvement from the 4Q in 2021.
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The company’s revenue for the quarter came in at $848 million, which was a little higher than Wall Street expectations of $847.34 million.
Investors reacted to the news, sending WeWork shares down 6.6% to $1.61 on the New York Stock Exchange after the market opened.
In a silver lining, the company, which went public in 2021, noted that for the "first time in WeWork’s history," it achieved an adjusted EBITDA profitability for December 2022.
Many of the same qualities that helped fuel WeWork’s breakneck growth are piling up as potential liabilities. In belt tightening, WeWork said last month that it planned to eliminate 300 roles across the countries. It will also exit from at least 40 US locations.
"Our 4Q results demonstrate that we accomplished what we set out to do in fiscal year 2022 by staying focused on reducing expenses, optimizing our portfolio, growing revenue, and increasing occupancy. As a result, we crossed a historic milestone of achieving adjusted EBITDA profitability in December," WeWork CEO Sandeep Mathrani said in a statement.
"As we move forward, we remain committed to building on this momentum while also enhancing our balance sheet."
WeWork forecasted current-quarter revenue to be between $830 million and $855 million and adjusted EBITDA to be in the range of a $25 million loss to breakeven.
Contact the author Uttara Choudhury at uttara@proactiveinvestors.com
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