Q4 2021 Earnings Presentation VF
Q4 2021 Earnings Presentation VF
2021 Results
© 2022 WeWork.
Disclaimer
Forward-Looking Statements and its internal sources. This information involves many assumptions basis without reconciliations of such forward-looking non-GAAP
Certain statements made in this presentation may be deemed and limitations. There can be no guarantee as to the accuracy or measures due to the inherent difficulty in forecasting and quantifying
“forward-looking statements” within the meaning of the Private reliability of such assumptions and you are cautioned not to give undue certain amounts that are necessary for such reconciliations.
Securities Litigation Reform Act of 1995, as amended. These weight to this information. Further, no representation is made as to the
forward-looking statements generally are identified by the words reasonableness of the assumptions made by third parties or the India, China and Israel
“believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” accuracy or completeness of any projections or modeling or any other This presentation includes operating metrics (including number of
“strategy,” “future,” “opportunity,” “plan,” “pipeline,” “may,” “should,” information contained herein. Any data on past performance of WeWork locations, desks, and memberships) relating to WeWork's investments
“will,” “would,” “will be,” “will continue,” “will likely result,” and similar or modeling contained herein is not an indication as to future and operations in China and India, which are not consolidated.
expressions. Forward-looking statements are predictions, projections performance. WeWork has not independently verified any such Therefore, the results of WeWork's operations in China and India are not
and other statements about future events that are based on current third-party information. Similarly, other third-party survey data and reflected in the WeWork financial statements and projections set forth
expectations and assumptions and, as a result, are subject to risks and research reports commissioned by WeWork, while believed by WeWork to in this presentation on a line-by-line basis, as such operations are not
uncertainties. Although WeWork Inc. (“WeWork”) believes the be reliable, are based on limited sample sizes and have not been conducted through consolidated subsidiaries or controlling interests of
expectations reflected in any forward-looking statement are based on independently verified by WeWork. In addition, projections, WeWork. In June 2021, WeWork closed a franchise agreement and
reasonable assumptions, it can give no assurance that its expectations assumptions, estimates, goals, targets, plans and trends of the future transferred the building operations and obligations of its Israel
will be attained, and it is possible that actual results may differ performance of the industry in which WeWork operates, and WeWork’s locations to the franchisee. Israel results of operations have been
materially from those indicated by these forward-looking statements future performance, are necessarily subject to uncertainty and risk due included through May 2021, and excluded from subsequent projections.
due to a variety of risks, uncertainties and other factors. Such factors to a variety of factors, including those described above. These and other Unless otherwise explicitly specified in this presentation, India, China
include, but are not limited to, WeWork’s ability to refinance, extend, factors could cause results to differ materially from those expressed in and Israel related metrics are excluded from all calculations.
restructure or repay near and intermediate term debt; its indebtedness; the estimates made by independent parties and by WeWork. WeWork
its ability to raise capital through equity issuances, asset sales or the assumes no obligation to update the information in this presentation. Trademarks
incurrence of new debt; retail and credit market conditions; This presentation contains trademarks, service marks, trade names and
impairments; its liquidity demand; changes in general economic Use of Non-GAAP Financial Metrics copyrights of WeWork and other companies, which are the property of
conditions, including as a result of the COVID-19 pandemic; delays in This presentation includes certain financial measures not presented in their respective owners.
customers and prospective customers returning to the office and taking accordance with generally accepted accounting principles in the United
occupancy as a result of the COVID-19 pandemic and the emergence of States ("GAAP"), including Adjusted EBITDA and Building Margin Preliminary Financial Information
variants leading to a parallel delay in receiving the corresponding (including on a forward-looking basis). These financial measures are not We report our financial results in accordance with U.S. generally
revenue; and WeWork's inability to implement its business plan or meet measures of financial performance in accordance with GAAP and may accepted accounting principles. All projected financial information and
or exceed its financial projections. Forward-looking statements speak exclude items that are significant in understanding and assessing our metrics in this presentation are preliminary. These estimates are not a
only as of the date they are made. WeWork discusses these and other financial results. Therefore, these measures should not be considered in comprehensive statement of our financial position and results of
risks and uncertainties in its annual and quarterly periodic reports and isolation or as an alternative to net loss or other measures of operations. There is no assurance that we will achieve our forecasted
other documents filed with the U.S. Securities and Exchange profitability, liquidity or performance under GAAP. You should be aware results within the relevant period or otherwise. Actual results for Q4 2021
Commission. WeWork may update that discussion in its periodic reports that our presentation of these measures may not be comparable to may differ materially from these estimates as a result of actual year-end
or as otherwise required by law, but otherwise takes no duty or similarly titled measures used by other companies, which may be results, the completion of normal year-end accounting procedures and
obligation to update or revise these forward-looking statements, defined and calculated differently. WeWork believes that these non-GAAP adjustments, including the execution of our internal control over
whether as a result of new information, future developments, or measures of financial results (including on a forward-looking basis) financial reporting, the completion of the preparation and
otherwise. provide useful supplemental information to investors about WeWork. management’s review of our financial statements for the relevant period
WeWork's management uses forward-looking non-GAAP measures to and the subsequent occurrence or identification of events prior to the
Use of Data evaluate WeWork's projected financials and operating performance. filing of our financial results for the relevant period with the Securities
This presentation contains information concerning WeWork's solutions and Exchange Commission.
and WeWork's industry, including market size and growth rates of the Reconciliations of historical non-GAAP measures to their most directly
markets in which WeWork participates, that are based on industry comparable GAAP counterparts are included in the Appendix to this
surveys and publications or other publicly available information, other presentation. Additionally, to the extent that forward-looking non-GAAP
third-party survey data and research reports commissioned by WeWork financial measures are provided, they are presented on a non-GAAP
1 © 2022 WeWork.
Our mission is to empower tomorrow’s world at work
Be entrepreneurial. Shareholders
USC Japan
China
Pacific
Consolidated
Note: Metrics presented as of December 2021. Consolidated metrics include operations in the United States and Canada, Latin America, Europe, Japan, and Pacific
regions. Systemwide metrics include consolidated regions as well as India, China, and Israel, which are not consolidated.
3 © 2022 WeWork.
Flexible space is where retail was at the turn of the century
Like e-Commerce in the early 2000s, flexible space is expected to reach critical mass over the next decade
$105B revenue
opportunity
$77B revenue
opportunity
$45.5B revenue
opportunity
2019:
$7B revenue
opportunity
1. CBRE "Let's Talk About Flex" (2019). Reflects growth of U.S. Rentable Square Footage from year-end 2019 to 2030E.
2. JLL “The impact of COVID-19 on flexible space” (2020).
3. Digital Commerce 360 and U.S. Commerce Dept. In-store sales factor out the sale of items not normally purchased online, such as fuel, automobiles and sales in bars and restaurants.
2021-2030 projections based FTI Consulting “2021 Online Retail Forecast Report.”
4 © 2022 WeWork.
WeWork represents an outsized portion of demand
Based on Full-Year 2021 leasing activity
5 © 2022 WeWork.
Our turnkey solution
WeWork provides companies of all sizes a comprehensive and flexible
solution that saves money by minimizing up front costs and
maximizing the value our membership fee.
$ Property
$ Utilities
$ FF&E
$ Maintenance
$ Security
$ Pantry provisions
6 © 2022 WeWork.
The world’s top companies trust WeWork
%
63
of the Fortune 100 are
WeWork members
47%
of physical memberships are
enterprise
26k
SMB member organizations
2.3k
Enterprise member organizations
All figures as of December 31, 2021. Logos used herein are the property of third parties and for informational purposes only and do not
imply any endorsement by those companies of WeWork's company or products or vice versa.
7 © 2022 WeWork.
Our space as a service solutions
Dedicated desk Standard office Office suite Full-floor office / Collaboration Hub
building
Enjoy your own desk in a shared, Have a private office space with Utilize office space designed for larger Secure a fully dedicated workspace Collaboration Hubs are centered
private office with access to access to meeting rooms teams with available private with private amenities and add your around “active” and “focus” areas to
professional amenities and meeting and professional amenities. amenities via add-ons. personal branding. maximize efficiency while delivering
rooms. productive workspaces for your
teams.
Ideal size: 1-5 people Ideal size: 1-20 people Ideal size: 20-100+ people Ideal size: 100+ people Ideal size: 20-100+ people
Term: Monthly or Annually Term: Monthly or Annually Term: Monthly or Annually Term: Monthly or Annually Term: Monthly or Annually
8
FY 2021 market overview
Systemwide gross desk sales (SF sold)(1) 163k (9.8m SF) 202k (12.1m SF) 197k (11.8m SF) 217k (13.0m SF) 778k (46.7m SF)
Consolidated gross desk sales (SF sold)(1) 120k (7.2m SF) 156k (9.4m SF) 153k (9.3 SF) 164k (9.9m SF) 593k (35.6m SF)
Consolidated new desk sales (SF sold)(1) 60k (3.6m SF) 97k (5.8m SF) 84k (5.0m SF) 87k (5.2m SF) 329k (19.7m SF)
Note: See “Terms and Definitions” pages for definitions of gross desk sales, enterprise as % of physical memberships, physical occupancy including sold memberships, and All Access memberships.
1. Assuming 60 square feet per desk sold.
2. Includes an incremental 8k in Q1 2021, 21k in Q2 2021, 30k in Q3 2021 and 21k in Q4 2021 net memberships that have been sold and are under contract to move-in in a future period, or move out within the next two months. Q1 and Q2
occupancy represents physical only.
3. All Access memberships includes 4k other legacy memberships.
9 © 2022 WeWork.
WeWork is a separate channel of distribution
International
Consolidated Q4’19
US ARPM:
63% $542
$500
$485
$482 $484
45%
1/1 2/1 3/1 4/1 5/1 6/1 7/1 8/1 9/1 10/1 11/1 12/1 Q1’21 Q2’21 Q3’21 Q4’21
Note: See “Terms and Definitions” pages for definitions of Physical Occupancy, Physical Occupancy including SNO and Physical Membership Monthly ARPM
WeWork Access
WeWork WeWork
On Demand All Access 45k
20k
15k
Pay-as-you-go Monthly membership
Choose from over 320+ locations Book workspace through the
in 70+ major cities through the WeWork app, and unlock access to
WeWork app. over 500+ WeWork locations around
the world. Q1’21 Q2’21 Q3’21 Q4’21
11
Total Revenue
US$ millions
$988
$919
$869
$814 $718
$756 $741 $661 $29
$686 $598 $20
$666 $593
$9 $13
$689
$641
$589 $580
Q1’19 Q2’19 Q3’19 Q4’19 Q1’20 Q2’20 Q3’20 Q4’20 Q1’21 Q2’21 Q3’21 Q4’21
Note: Space-as-a-Service revenue calculated as total revenue less revenue attributable to All Access & On Demand memberships. Includes unconsolidated location management fee revenue and
revenue attributable to our legacy venture businesses
12 © 2022 WeWork.
2020 and 2021: Optimized cost structure and core business
~$1.5B ~$600M
SG&A Expense Savings(1) OpEx Savings(2)
$500M+
Savings from 210+ Lease Exits
and 420+ Amendments(3)
Exited Non-Core Businesses
1. As of Q4 2021 as compared to Q4 2019. Expenses reflect adjusted SG&A expense, excludes stock based compensation.
2. As of Q4 2021 as compared to Q4 2019 on a per square foot basis. Excludes stock based compensation, indirect location operating expenses and venture expenses.
3. Lease restructurings and renegotiations as of Q4 2021. Savings include rent and tenancy expenses.
13 © 2022 WeWork.
Building Margin
US$ millions
Building Margin(1)
Q1’19 Q2’19 Q3’19 Q4’19 Q1’20 Q2’20 Q3’20 Q4’20 Q1’21 Q2’21 Q3’21 Q4’21 • ARPM growth
% Building • Additional services revenue
Margin 21% 21% 20% 19% 13% (0%) (22%) (30%) (36%) (34%) (16%) (1%)
Note: See “Terms and Definitions” pages for definition of Building Margin, which is a Non-GAAP measure. See “GAAP to Non-GAAP reconciliations” page for reconciliation to • Operating cost discipline as
GAAP metrics. Excludes ChinaCo from all historical periods. occupancy continues to improve
1. Building Margin is a non-GAAP measure we define as membership and services revenue, excluding management fees earned at our Unconsolidated Locations,
less location operating expenses, before depreciation and amortization, stock-based compensation and certain indirect location operating overhead. Please
refer to the appendix for a reconciliation to the closest GAAP metric.
14 2. Consolidated physical occupancy was 63% as of December 2021. Consolidated physical occupancy including signed but not occupied memberships was 66%.
© 2022 WeWork.
3. WeWork was Building Margin positive on a consolidated basis for the first time since pre-pandemic, in Q1 2020
Building Margin by market
Distribution of Markets by Physical Occupancy (n=94)
17
16
14
9
7 7
1 0
>10% >20% >30% >40% >50% >60% >70% >80% 90%
Physical Desks 1k - 15k 117k 164k 250k 114k 65k 22k
% of Capacity n/m - 2% 16% 22% 33% 15% 9% 3%
% of Membership & Services Revenue 0% - 1% 12% 13% 41% 14% 13% 4%
Building Margin % n/m - (64%) (30%) (37%) (7%) 20% 33% 41%
Note: Building Margin is a non-GAAP measure we define as membership and services revenue, excluding management fees earned at our Unconsolidated Locations, less location operating expenses, before depreciation and amortization,
stock-based compensation and certain indirect location operating overhead. Please refer to the appendix for a reconciliation to the closest GAAP metric.
15 © 2022 WeWork.
Adj. EBITDA
US$ millions
Q1’19 Q2’19 Q3’19 Q4’19 Q1’20 Q2’20 Q3’20 Q4’20 Q1’21 Q2’21 Q3’21 Q4’21
($283)
($362) ($356)
($393) ($397)
($446) ($449)
($465) ($472)
($492)
($538)
($577)
Note: See “Terms and Definitions” pages for definition of Adj. EBITDA, which is a Non-GAAP measure. See “GAAP to Non-GAAP reconciliations” page for reconciliation to GAAP metrics
16 © 2022 WeWork.
Summary of key metrics
For the fourth quarter ended December 31, 2021
($9m)
66%
Building Margin
17 © 2022 WeWork.
Q4 2021 liquidity
US$ millions
$500M $1,974M
$550M $1,474M
$924M
18 © 2022 WeWork.
Capitalization table
As of December 31, 2021
1. On December 6, 2021, the Company executed the Third Amendment to the Credit Agreement. As amended, the 2020 LC Facility terminates on February 10, 2024 and reduces to $1.25 billion beginning on February 10, 2023.
2. As of December 31, 2021, $1.25B of standby letters of credit were outstanding under the 2020 LC Facility. The Company has also entered into various other letter of credit arrangements, the purpose of which is to guarantee payment under certain
leases entered into by JapanCo and PacificCo, totaling $8.1 million outstanding.
3. On December 16, 2021, the Company, WW Co-Obligor Inc. and the Note Purchaser entered into an amendment to the A&R NPA pursuant to which the Note Purchaser agreed to extend its commitment to purchase up to an aggregate principal amount
of $500.0 million of the Amended Senior Secured Notes that may be issued by the Company from February 12, 2023 to February 12, 2024. The Amended Senior Secured Notes will mature on February 12, 2024. The Company has the ability to draw until
February 12, 2024.
19 © 2022 WeWork.
Current lease security
As of December 31, 2021
2021A 2022E
Note: See “Terms and Definitions” pages for definition of Adj. EBITDA, which is a Non-GAAP measure. See “GAAP to Non-GAAP reconciliations” page for reconciliation to GAAP
metrics. Systemwide Location membership and service revenues represents the results of all locations regardless of ownership, including Consolidated and
Unconsolidated Locations.
21 © 2022 WeWork.
Appendix
22 © 2022 WeWork.
Key performance indicators
• As of Q4'21, Consolidated includes all regions with WeWork locations outside of China, India and Israel
• China was included in Consolidated KPIs through Q3'20
• Israel was included in Consolidated KPIs through Q1'21 China included in Israel included in
Consolidated Consolidated
through Q3’20 through Q1’21
23 © 2022 WeWork.
Quarterly financial results
US$ millions
Note: Financial information and metrics are excluding ChinaCo in all time periods.
See “Terms and Definitions” pages for definition of Building Margin and “GAAP to Non-GAAP reconciliations” page for reconciliation of Adj. EBITDA and Building Margin to the closest GAAP metrics
24 © 2022 WeWork.
GAAP to non-GAAP reconciliation
US$ millions
25 © 2022 WeWork.
Terms and definitions
26 © 2022 WeWork.
Terms and definitions (cont’d)
Financial Metrics:
- Systemwide Revenue: systemwide Location membership and service revenues represents the results of all locations regardless of ownership, including Consolidated and Unconsolidated
Locations.
- Location Operating Expenses: include the day-to-day costs of operating an open location and exclude pre-opening costs, depreciation and amortization and sales and marketing, which are
separately recorded.
○ Lease Cost: is recognized on a straight-line basis over the life of the lease term in accordance with GAAP and is the most significant component of location operating expenses
○ Direct Other Location Expenses: include utilities, ongoing repairs and maintenance, cleaning expenses, office expenses, security expenses, credit card processing fees and food and
beverage costs. Direct location operating expenses also include personnel and related costs for the teams managing our buildings.
○ Indirect Other Location Expenses: include certain expenses that are necessary to operate our buildings but not directly tied to an individual building. Examples of these expenses include
certain regional management and teams managing member relations, new member sales and facilities management.
- Pre-Opening Expense: consist of expenses (including all lease costs, which also include non-cash GAAP straight-line lease cost) incurred before a location opens for member operations.
Excludes depreciation and amortization expense and stock-based compensation expense.
- SG&A: consist of sales and marketing, general and administrative and sourcing, development and other expenses, and certain community support expenses that are necessary to operate our
buildings but not directly tied to an individual building. Excludes depreciation and amortization expense, stock-based compensation expense, expense related to stock-based payments for
services rendered by consultants, expense related to costs associated with mergers, acquisitions divestitures, and capital raising activities, legal, tax, and regulatory reserves or settlements,
and legal expenses related to regulatory investigations and litigations arising from the 2019 withdrawn IPO.
- Building Margin: is a non-GAAP measure we define as membership and services revenue, excluding management fees earned at our Unconsolidated Locations, less location operating expenses,
before depreciation and amortization, stock-based compensation and certain indirect location operating overhead expenses.
- Adj. EBITDA: is a non-GAAP measure we define as net loss before income tax (benefit) provision, interest and other (income) expenses, net, depreciation and amortization expense, restructuring
and other related cost, impairment /(gain on sale) of goodwill, intangibles and other assets, stock-based compensation expense, stock-based payments for services rendered by consultants,
change in fair value of contingent consideration liabilities, legal, tax and regulatory reserves and settlements, legal costs incurred by the Company in connection with regulatory investigations
and litigation, and expenses related to costs associated with mergers, acquisitions, divestitures and capital raising activities.
27 © 2022 WeWork.
Market share methodology and sources
Market % Market Stock Source as of Q4 2021 Market Square Feet Leased in FY 2021 Source
Total United States commercial office square footage of 4,333m United States leasing activity of 157m square feet per Jones Lang LaSalle
United States
per Jones Lang LaSalle estimate
Total Boston commercial office square footage of 67m per Jones Boston leasing activity of 4.3m square feet per Jones Lang LaSalle
Boston
Lang LaSalle estimate
Total Manhattan commercial office square footage of 408m per Manhattan leasing activity of 23.8m square feet per Cushman &
New York
Cushman & Wakefield estimate Wakefield estimate
Total Miami area commercial office inventory of 41m square feet Miami leasing activity of 2.9m square feet per Jones Lang LaSalle
Miami
per Jones Lang LaSalle estimate estimate
Total San Francisco, Silicon Valley, and Oakland commercial San Francisco, Silicon Valley, and Oakland estimated leasing activity of
San Francisco
office square footage of 200m per Jones Lang LaSalle estimate 9.5m square feet per Jones Lang LaSalle estimate
Total Europe Market stock based on the sum of 22 markets Total Europe leasing activity based on the sum of 22 markets where
Europe where WeWork operates, using Cushman and Wakefield, JLL, and WeWork operates, using Cushman and Wakefield, JLL, and Immostat
Immostat research totaling 2,560m square feet Research totaling 118m square feet leased
Total Central London commercial office square footage of 283m Central London leasing activity of 8.6m square feet per Cushman and
London
per Cushman and Wakefield Wakefield Estimate
Total Dublin commercial office square footage of 46m per Jones Dublin leasing activity of 1.60m square feet per Jones Lang LaSalle
Dublin
Lang LaSalle estimate
Total Paris CBD and La Defense commercial office square footage Paris CBD and La Defense estimated leasing activity of 14.9m square feet
Paris
of 226m estimate per Immostat
Total Berlin commercial office square footage of 227m per Jones Berlin leasing activity of 9.6m square feet per Jones Lang LaSalle
Berlin
Lang LaSalle estimate
28 © 2022 WeWork.