WeWork recently reported its first-quarter financial results. The report showed that the company’s losses before interest, tax, depreciation, and amortization had more than doubled year-over-year in the quarter.
In the first quarter, the company reported $220 million in losses (30% of its revenue) compared to $107 million (31% of revenue) in the first quarter of 2018. Thus, its losses per member came down marginally to $472 in the first quarter from $488 in the first quarter of 2018.
In the first quarter, the company’s net losses reduced marginally to $264 million from $274 million in the first quarter of 2018. However, the drop in its net losses was primarily the result of a $367 million one-time gain. Excluding that gain, the company’s net losses would be a whopping $631 million—a 130% rise!
In 2018, the company reported $1.9 billion in net losses.
Liquidity position continues to be strong
Even after burning $650 million in the first quarter alone, WeWork was left with ample cash at the beginning of the second quarter. The company reported $5.9 billion in cash as of March 31, 2019, down from December 31’s $6.6 billion. According to a Wall Street Journal article, the company is expected to burn $4 billion in 2019 and another $6 billion in 2020. With that in mind, the company seems to have enough liquidity to survive until around mid-2020 assuming no further fundraising. With profitability not in sight and funding from private investors tightening, raising public money through an IPO seems like the way to go for the unicorn.