WeWork (WEWKQ) 6 Aug 222022 Q2 Earnings call transcript

Good morning, and welcome to WeWork's Q2 2022 Earnings Call. [Operator Instructions] I would now like to turn the call over to Kevin Berry, Senior Vice President, Investor Relations. Please go ahead.

Thank you, Julianne, and good morning, and welcome, everyone, to our second quarter 2022 earnings call. With me this morning is Sandeep Mathrani, our Chairman and CEO; and Andre Fernandez, our Chief Financial Officer.

will have our SEC been be at we supplemental release and presentation, accessed which presentation filed investor.wework.com. today's refer earnings to and can During with the and that differ to subject statements actual materially. forward-looking includes may cause presentation to Today's risks uncertainties that results are

in also meaningful certain believe discuss performance. company's will financial measures, the We we which non-GAAP are evaluating

will in press Additional are included reconciliation, quarterly disclosures to release supplemental that, pleasure GAAP and non-GAAP it's regarding included these to a non-GAAP also presentation With report. introduce and our our measures, earnings be including my in Sandeep.

Thanks, Kevin.

the I'd of to get we key some to members Before team. results, like welcome the

know First perspective. the Investor of he Relations and a has I is community. great our the lead ground in pleasure will Financial Officer. working had introduce Berry, want Kevin going hit with a May, forward. formally brought I running the fresh Chief will to the analyst partner investor who be to has valuable he Since and I've Andre Fernandez, Kevin and past, also and

Kevin great We welcome want to first Andre call. to and the I a team WeWork here, earnings have and

improvement negative quarter $XXX second relative quarter, QX negative within and million the million, and Now $XXX to our XXXX momentum $XX quarter the actual an exchange guidance our improvement million. to of EBITDA XX% report $XXX to the million increase XX% guidance million, million. quarter-over-quarter pleased our million I'm X% of year-over-year. $XXX an positive $XXX exchange increase in The $XXX of our rates, Adjusted from million continued At $XXX second and foreign year-over-year. X% $XXX results, was our business. Revenue to using was first budgeted million million, system-wide above to in and across quarter quarter-over-quarter a revenue reflects the a foreign second was where rates of was revenue $XXX

we versatility what in the requirements. XXXX. products model e-commerce office in with designed analogy XXXXs ecosystem today represents continue see is and Today, retail With interesting durability to retail towards and of to that footprint to Flex. WeWork's of the demonstrate commercial early transformational U.S. e-commerce of workplace symbiotic, represented of office and Our shift happening to our In of space the the our is to sales results grew lean U.S. the flexible be commercial their the An our and in XX% companies continue XXXX, are in operating adapt offerings product. approximately X.X% X% and the between continually to in WeWork's

what economic uncertainty. last the of flexibility times global for the that speed, to during over However, companies evolve. convenience on space our Today, sales was same an in sales to convenience trend quarter WeWork QX continues represents Flex what Flex its office was and business which X like value of confidence underscore considered previous capturing of faster our with e-commerce, and This as the to little in months, way XX% strategy. is month a X% In of X and took of the than within quarters. the us leasing. occupancy world, direct-to-consumer the pre-pandemic years much Flex speed demand learned rely part continues were within by X of own landscape In channel the equivalent new solutions. membership this occupancy of traditional and distribution. the proposition Approximately disrupted brick-and-mortar and is We e-commerce, is of office look XX% gives

to have a unknown to a environment. year to because needed adjusted dynamic, has and we well way world quickly desks selling steadily have the member the base for global been and a our companies adapt As growing new over

that, of need that and face workplace reduce of on the solution future-proof companies can need that recessionary still strategies. a pressures, not does in only exist, inflation costs top Now help but and

XXX,XXX as core we the the tailor illustrates products, to of to ended office One is the This more a physical or dynamic in pass. the of continued example was three supports in pre-pandemic commute that of channel ultimately, can levels XX.X and were productivity, globally, needs various XX,XXX, quarter. meeting workforce. the through our The momentum analysis that, our now mitigating company's and demand were leveraging connectivity our System-wide it's the the disruptors membership. Space business product, offerings and a needs the differently. to multipronged security U.S. be we I'll able developed of their XXX for new company's positive are quarter an blends priority a square with illustrated cost-effective industry the XXX,XXX locations the million sales industry. speed utilization spaces as Having XXX,XXX increased We a By the iterate is XXX,XXX operating across XX.X with want second a square memberships, first far quick seen in position we above the threefold the their have deal XXXX workstations every quarter across cloud as highest dedicated turn But markets. business result of impact and QX in today economic Europe We date. of year across the QX at scale total rapidly a renewals separate With increased executed which time, and that X,XXX I million approach diverse A grown Across expanding and seek six All leading flexibility and employee and collaboration Service, base risk to from platform. outcome distribution a Flex's connectivity. employers system feet. growing Access to also results. solution desk the that reports, locations exceeds while with while the feet. culture

and year-over-year. and committed XXXX memberships. quarter of Manhattan quarter-over-quarter total up XX% physical XX% gross as accounted of WeWork consolidated for for desk million the X.X memberships sales traditional X% foot for square XX% in XXX market a were including leasing across new and of a XX% basis. end, level, operations and locations were Our renewals when equivalent to Consolidated XXX,XXX were the XX,XXX, climbed XXX,XXX workstations XXX,XXX to sales market office square XX,XXX At or on Occupancy feet.

leasing. base. some San of projection three the Our X% total exchange approximately average using where X% WeWork's and portfolio WeWork's average was markets. we or XXX, of X on In is focus office rate revenue XX% reached of despite million feet that market or we foreign occupancy, markets of the leading the for have X% months. XX clients international XX% XX% to each provide X% WeWork's occupancy. we total near quarter-over-quarter accounts on and was in gross higher below year-end. medium London Miami's generally our commitment and less the existing a leasing ARPM Internationally, ARPM, enterprise or XX% budget's member, represented the Dublin's of for the our our despite quarter of leasing, of than Berlin's of term per pricing those. membership stock in Boston's rates, of total XX% leasing on Where shift Flex, approximately is businesses of we of square signed to the office office color small region, in XXX representing XX% by office each X% less this was are equated representing activity average the quarter, where or X% for for in leasing, we occupancy, growing to leasing was where To stock. are focus pricing months, market. traditional contracts The commitment XX% approximately sales generally our leasing stock of over XX% XXX. an X% London's occupancy XX term increase in the physical pushing or WeWork Francisco reported of in of Paris

For the pricing X%. contracts USC, increased also signed in the quarter for

ARPM continue budget As FX higher-priced expect embraced these we previous growing. the new reported and our to contracts contracts,

providing offerings. revenue. leveraged a Access deliver underscores to From working solutions holistic amidst to on-demand of Improvements enabling become All dedicated rate to volatility, quarter, to $XX of companies in WeWork additional million represents Memberships Access includes points monthly yielded growth to $XXX XX,XXX $XXX to nature -- rapid stand-alone and to an complement adoption from the ARPM our cost-effective QX. or second market and product the up Moving of business on Whether about All of as X an All subscription membership million product. was which Revenue occupancy. solution Access which has to foster space, grew XX% experiment annual new access, pay-as-you-go of of with in collaboration. as a XX% for our ways million, tool flexibility the our essential percentage and an

building retailers passes For dedicated needed. at first example, flexibility wanted a Seattle. and to to complement outdoor company, one come the Kelly remote leading Access to gear of office with apparel Springfield into Despite they as All in their being employees the provide spaces acquired the our

to passes minimizing provider space employees work company collaborate while the and remote the optionality at deliver employees to pandemic. moved at However, ensure All have X,XXX software scale, of enough fully to to acquired Xerox Access accounting fixed to start the costs.

with as true And our company, of weeks meet extension the expressed officially X positioning sales provided decisions in management global of company network solution. distributed software, Workplace in the the from with as week forward. armed with come utilization together, locations insights strategy to ago, U.K. set a proprietary see teams X debuted All workforce We for the access workspace Xerox, lastly, its across WeWork and up However, to to in a Workplace, as employees the Xerox's contracting WeWork We interest national of informed our access space to and order With events workday sign. cities business, of hundred different our company's U.S. a Access, hubs within moving end-to-end host data the core make evolved we customers.

types, space platform. combine products, into through view employees people in to which that's space one our desk, enhance physical with bring single WeWork marrying purpose is colleagues universal space providing a privately space, way teams. when enable can the the within asset navigate that experience. In this space is are world now manage product spaces, are At leased only owned, Workplace space for best can and a help office Employees their all and WeWork space or fragmented, time intentionality, the management use and beyond to offering. designed book the Workplace back WeWork coordinate coming options, and market by WeWork-affiliated Going for WeWork one software see capabilities seamlessly highly work and companies they searching companies can of to ways new

with member strategies and organizations, of enterprise WeWork medium the date, already companies pipeline space end, data To the see comes utilization Many Flex providing companies accretive includes estate workplace future-proof managing their platform, value company global channel. back and in comprising locations. to our X,XXX platform of already these signed comprising to XXX manage approximately more an real XX the customer has insights leveraging the the with universal in access a to to in non-WeWork workforce. spaces portfolio their On over them can companies organizations licenses power employee X,XXX sales WeWork's on The unique management and of licenses. to memberships XX,XXX to are than work base large for with established XXX,XXX its strategies hybrid and preferences.

the leading WeWork provider is venture have a Yardi, we world. Workplace stated As in a before, of software joint with

an our on portfolio or XX% like update is joint I'd asset-light For strategy, out ventures in our of franchise either held that point to agreements. go-forward

We Andre. asset-light to it on opportunities hand continue as focusing markets Southeast such now noncore pursue With primarily Asia. I'll over that, our to

Thanks, Sandeep.

of review top more I want his the thank at months. I look all Before about of financials, community the you of the and I our the in to words excited couldn't meeting forward our investor potential Sandeep business the in for call. coming to just kind be

moving to second quarter Now on a our summary financials. of

pound and revenue in original XX% and physical $XXX increases FX compared primarily our All unfavorably the by rates. Access fluctuations, million, up memberships memberships. First, total driven to year-over-year by sterling, revenue in million FX approximately $XX budgeted impacted euro was

at Total As a presentation, Sandeep as Building would lower level, company quarter, approaching was measure range. of cost total pre-pandemic expenses in levels guidance profit of on revenue from base. and, location million, been also this million margin our mentioned, of above unprofitable $XXX second can impact, reduction revenue see operating million of a will been $XX a have up building efforts operating you excluding and through significantly an locations $XXX overall the is that supplemental $XX cost in first compared be profitability. our our reduce and gross our revenue. the future leverage in sequentially last important million able and driver to year. while combination loss quarter rigorous a We've growing Maintaining with exiting the

Next, better than $XXX million, loss careful the EBITDA higher second quarter million our million over due and our sequential a $XXX management adjusted expenses, impact to of from QX adjusted revenue improvement in last our was $XX budgeted declined on with including and adjusted compared year-over-year. and EBITDA range. our was the which rates our The was end of higher guidance our the FX SG&A, at FX XX% immaterial, year EBITDA

was the quarter. second loss million in net Our $XXX

deferred and items. below our primarily costs to reconciliation our by it's of important These in line intercompany million net Now be that can amortization. FX a write-off EBITDA noncash. as adjusted and this as of depreciation earnings note with May in This and was noncash loans, well included to release. the approximately on losses the $XXX financing And our driven unrealized connection a LC were found in loss amending items facility of partial

a about foreign as word how are think we a business. Now global we exchange quick about

negligible FX the and quarter, an impact revenue adjusted a EBITDA. you unfavorable on had impact see As in on

the actual in the will foreign filed constant will have both in FX as you impact to be operating on will XX-Q currency effort However, results, we margin as that currency. profitable business subject our Beginning quarter, of gross an to results becomes non-U.S. exchange highlight in this our well earnings see will increasingly dollar we an at report the as that level, to be movements. greater our

profitability, projected EBITDA portion net both flows, we easily as primarily sterling, trapped a their into the FX approach fund pound non-U.S. overseas in flows closely primarily our Additionally, cash functional euros in XXXX. an of to line, eye cash subs we minimizes analyzing as enables profitable. we're cash potentially become repatriate non-U.S. our cash Below and going with subsidiaries hedging loans our exposures which us intercompany to as and relate our our our currencies, our towards

below are our line we'll exposures the year hedging noncash, going these flexibility. opportunities preserving next While and also into while evaluate

Now to liquidity moving and flow. now on cash

of cash and cash $XXX including by secured first billion, with $XXX access partially million by quarter the was senior a quarter million higher CapEx. free and to improvement least of available of liquidity the second for debt performance, and $X.X negative driven million, $XXX sequential improved of cash, the flow cash quarter $XXX ended at restructuring offset select notes lower Our unissued operating sales from we liquidity, commitments On nearly secured $XXX million million capacity. covenant asset

on annual We continue guidance to FX excluding billion we be our basis $XXX impact that year-end affirming $X.X as of approximately our adjusted guidance our to million on EBITDA expect said And to to our FX negative finally, billion same liquidity we've XXXX rates, revenue $X.X $X.X are both previously. billion. million, of and of $XXX at budgeted the

revenue to meet are we believe we on focus our forward, visibility cost well-positioned rationalizing targets continued our look structure. we and As given our

our the year, revenue XX% XX% remainder and quarter the for committed. approximately to revenue the please open With planned approximately third outlook revenue our operator, of quarter terms that, of is planned line our of of questions. In fourth

Instructions] first Our from Mizuho. comes [Operator Vikram question from Malhotra

Andre, both congratulations call. your forward of Look on you. first meeting and, to Kevin,

slowdown with you view risk. year-end, seeing, just a your or on for breakeven One, you planning of on are can comments that building from EBITDA? in on scenarios perhaps can two comment things? you on further assuming recession here turns of also And still potential marrying but the that revenue the are you this visibility terms downside by economy Just we're what

we in X see mode in streamline SG&A. years, down to a X.X know had well, to our turnaround we the how ability streamlining question. know path about operating previous for continue on to the our Obviously, going answer day me again, towards levers the as run $XXX and the side we're down of capital. we've to calls, that million we've been already equation, working said as We've of trim And do costs. expense side We We pull see organization. rate. the room control equation. expense been we Let and to there a The

spent in $XXX we first the million half, budget you As was million. X. for CapEx $XX saw day

be CapEx. the can day And said we million. CapEx. X million day can We last be $XXX of mindful call, is, So of X we as previous the $XXX mindful lever on about to

be XX Our an guarantees assistance get months, it. us gives rent and some opportunity tenancy of to and in we less reductions to than rent have should able need it

we we've pull. we the they cost. can last levers And X.X So $X.X X.X got put that the the all last that full Again, over same billion these over we've are years, are levers demonstrated of years.

will of recession. side, be the on a in light the So continue expense we foreseeable to mindful

you Andre know, side, our our for XX basically month-to-month. business where from and committed business business so very again, What for remind months, XX% of on as pre-pandemic. revenue revenue be revenue of today we maintaining numbers. of the business is being XX% a that you, XX% in -- And On very and and was our have said, we is as signed mindful the QX. focused the important, is our XXXX, was in we'll occupancy, occupancy for We're enterprise as the cry SMB I months is this which terms far is XX QX

to to quarter. churn minimizes ourselves months, transformed of business at are an that's us it. mindful that business, very fourth have the of that ahead apartment XX and aware in terms risks than risk least we which of the of working we're which a So longer And

the other markets between, as say, of the of obviously Okay. occupancy than and Miami, as higher pricing were both occupancy. But and Great. swings dig in Maybe for you committed some can Europe, Europe well lower example, see big just you the relative so U.S.? is occupancy in next there physical, the markets. some power into terms one, swings

give So us and going more market on what's color by maybe just power. pricing relative

think my previous levels, comments. I pre-pandemic and Europe higher it's in above X% than it the and reached has quarter. is XX%, Well, Both pricing now is

So pricing focused power continues. XX%. drive we XX%, also there occupancy But are to XX% to about

And the space have European we of market. so in mindful we're the

U.S., XX%, power, what space you when And though just power markets. here. U.S., go got U.S. But obviously of even occupancy to in still you not that last very X% the -- are with European occupancy, in also have at again, is healthy prime. look went do you're XX% up. are some prime in, pricing we're cognizant left the So pricing is we market on depending quarter. pricing up see, But versus we're been now we approaching rents above call we even spaces We which the going and But the it's markets power.

is Now rates the you rates. if mentioned, are we you have the committed we get to at Miami, is out level churning you may members of doing XX% occupancy higher as in versus XX%. But seen doing look is market what what higher pandemic that are

naturally doing We're and market gone in It the we're obviously, members pandemic new that in Israel is taking up. level world. pay to was rents. the in mid-XXs, Israel. out Occupancy XX%. So you'll it's about it's have that across see the members Revenues in because, putting

function markets, occupancy. other of you when you churn could is a look actually, And is we we're large Boston. occupancy that's and XX I San occurred. XX% pricing did Francisco, balancing because, quite is as And see of churn variability and no And renewal, some take market calculate other when days prime occupancy, driving really, of -- we're the we date,and And the that it if we only is the see cognizant way really if think pricing. So at variability any their about the there member within of well. a I you revenue obviously,

the that recaptured So one two those leaving, which the same the us enterprise actually, client. by to that we the sitting floors with are at in two cost by that variability, they're caused that's it's floors the that it the -- in case quarter, are at actually And landlord. coincidentally, end the space no is being aware -- of are person

reality, next the in there'll It is off be no So In in will not the off in the -- numerator, in denominator. it's numerator, it's quarter. change. the numerator denominator, the the space and the but be

It's look momentum, July, which see, you again, days a same So activity. was the few very, as the we leasing as ago, strong the at of level first see add we see of month our leasing activity might the at strong. in been can even you quite I strength was quarter. when completed that very

required seem pipeline. pipeline, about the August, need a quite mentioned in the in the as We to be we we our of to have pipeline X.Xx I achieve And Now to heading X.X strong, past, that targets. occupancy. into

things then -- And your for Great. year? last not with fair do, guide Okay. today are going and where the if is highlight, off position, to this need capital one, assuming stock the given then not you where additional you to maintained fall cash raise to the are what just obviously, you adjusted contemplating? sources just you it the in the maybe cash where are say And Is you've position, do EBITDA. cliff,

Yes, for have should that sources I liquidity than sufficient in we that additional more need raise you're don't of the the be We to year. existing think right. capital next

prepared So billion use cash the my is half billion in implies million of liquidity, the end is about today, second be if That I by of which that a remarks, $XXX recall $X.X in year. expected to the $X.X you said year. of the

here we've of the cash on balance see You million sheet. $XXX got sitting over

that sitting balance at year. million the on around the $XXX sheet just So the end of would imply

looking then into year, -- we is the So be EBITDA on positive hopefully, next that from second again, we'll got by we cash And time. operations just funding forward, half truly hand.

refine be that for second positive, next sometime our we're the to in guidance. flow Obviously, milestone we'll will get hoping Now be year-end will in to which the of cash year. half us next

we have well million to cash SoftBank, out available line, we the those line of bond a have sufficient senior that, to us capacity put actually senior granted sources than $XXX we go we is -- X under with secured the undrawn believe, capacity on carry think next now our as $XXX between between as issue million indenture, for hand, a the would more we under again, year. the So between and

just again, add, XX% you QX just And to I'll XX% reemphasize, into for Vikram, have take revenue committed QX. of for that I'll and the account is

So falls reason the even delta you for math, apart, okay, world $XX of if do back the some talking envelope about we're and million in whatever million revenue. to $XXX

million million Andre you'll to of by year-end As loss, and said, if that have $XX the year-end, the a million $XXX year we cash cash end plus of money. $XXX so it's $XXX $XXX million of by with SoftBank still million

you've the there's to all to to $XXX we enough going of so got million way market, have us through the even So think to quite liquidity end the honestly. before about carry XXXX,

Our from next Alexander question Piper Sandler. comes Goldfarb from

want you him. Andre, come back limelight, that back. believe I public the to so can't to Kevin, meeting look to forward welcome

can the of guidance just I that just question and page line -- go So changed. lot everyone's about folks that -- of needs. that to capital just Vikram's your continuing on want the same hasn't we're on a ask questioning, we a it's make sure because

cash of this positive. flow And by beginning EBITDA you've of I middle end would by you you be said I next. adjusted the to think previously, -- of before, guess, next year, positive expect said year, you guys be

comments, want back? or in pushed So to those correct? that make is been guidepost sure, your Or metrics I have Andre, just still

of the been None back. have guideposts pushed

of when and but He just the at I I of did was He thing. second asked None think say changed. the we Andre the exactly. would the beginning said half, the my just I was exact question. last be that's said in same cash QX, QX, same end of said flow positive call, guide

additional to push the Okay. of let's view then interest that far that's the Or back the need mean, capital, you did as delay gap" if "funding that And you right? not funding the say, to amount enough money million positive from is flow the be drew materially interest expense that -- would that relative additional flow theoretically tap would would $XXX cash then you really cash the which investment? for positiveness, as to material I your SoftBank,

Yes, I the it's think latter.

it's would line, cash were we believe assumed think into additional on that's positive. we expense have factored I draw we've XXXX, we we'll and be to in that -- flow that interest when

do the if doing did math, I'm but just let's you you which not so of the to right, so going mean, million you $XX $XXX head, I the top interest you’re done say right, again, just about that, the do my of if million, $XX not we've drew entire just And it's year, material. million, for

grew what was on hand first Okay. And then in through -- walk walk the quarter? from there CapEx million So it next, you which quarter? balance the that second quarter sales, as just but did some think can cash $XXX cash I asset versus especially, about you can I think you just through said, you the said in you in through increase increase was balance

Yes.

$XXX seeing I million not is actually actually might the LC, think cash which increased the we you be part the drew on balance. junior

balance, you're we that additional looking an remember So on drawing the of source from liquidity in just cash pure May at have LC. if

prepared that the The -- draw I remarks QX. a cash. think is a big from big additional in overall albeit mentioned cash I improvement flow just still source of the my QX negative, was sequentially to

the we as if the improvement, of just predict And -- the that again, in actually have free year. improved factored also but overall -- we do we have balance sales I the performance. lease at think buyout was then asset for our our that cash giving like, look the So I did into timing the these, we're you the some did second operating quarter. I from mentioned, which And believe, and can't is we cash cash of guidance also, flow

can is Tier it is obviously the One easily I for CapEx X million, down $XXX -- you. the for break the So pretty CapEx down substantially.

our I interest had As recap entity. interest $XX an about Bay I think of million, million. in cash for -- the million. Two is spent to through it's we had $XXX -- an in budgeted $XX Hudson we close sold over in we interest We Bay said, Hudson

So our $XX we institutional in XXX our part were real that a was liquidity. with investors. to estate we a and able of in an is that the and that million. asset lease provided had additional increase an Miami, was sublease us And cash balance last that two And we as where monetize monetized, had done Brickel,

mentioned of there are call the a couple think levers. in I I last that other

Square, contract we asset a $XX-ish asset. closes liquidity again, firm where provide and have asset hopefully, QX. And million. sale in Devonshire buyer, we have institutional XX% the U.K. transaction called should, the that an of of And in to an that So we that own of

just did And final, Why draw quarter? you Andre, the of hand. guys cash on credit in the plenty you line Okay. of on have

was access think to believe, I I an from there been as done had liquidity that the trend. opportunity, previously, LCs

liquidity opportunistically done that think on going was I So knowing liquidity draw to the need future. in that to very we're

for to So I there wasn't and us it. was It was advantage need do necessarily and think favorable but gave It think, it a was of a that, rate an liquidity, took at opportunistic. opportunity very I liquidity. done, we

interest $XXX way the the the due If know, you time. Alex, add period million that, for the deal would tranche, was the be I can as of structured, to LC

going the was have I interest, since on well might So the I to pay hand. as cash

question Tayo from from comes next Credit Suisse. Okusanya Our

less there's from the on of about few around sales kind quarters. kind your enterprise little net the what's in of average the XQ kind is So bit of also curious side. a mix And desk down seems enterprise past like the kind in sales as it a contribution of quick the with side, from question happening desk

first. the me answer second Let question

happening, what's actually is of you look really is XX%, is a function function SMB enterprise obviously, desk down, desk So and a SMB the now at higher. not enterprise It of if going going enterprise up. it's

about As by If fact, desk if it year-over-year, a it by matter look up went desks. XX% at X,XXX enterprise actually of almost XX,XXX I up it at went you look quarter-over-quarter, members.

desk desks. XX% almost point look mix at and gone to ratio you it the is business about of -- clients. our at gone amount lease And which amount increased, last quarter side went has you on SKU if SMB enterprise desks if So year-over-year,went clients effectively, SMB the the of will more the like is, at SMB, headroom in the the sort because of the side, I'll occupancy point, has And if each the because -- so up not I there's XX,XXX and in look enterprise actually versus, has make average second up you SMB of SMB the SKU enterprise And said, look mix, category and XXX,XXX ratio up I is down. XX%, about mix, of the occupancy.

business And so for will see that SMB you next the elevated two. quarter or

QX. sales flat. look a We the consolidated that's we between one, basis, it's pretty system-wide, XXX,XXX QX I If it and XXX,XXX in QX. had did QX. desks in So driving desk the desks question at gone it. what's XXX,XXX We XXX,XXX have XXX,XXX about in in did about your year-over-year. up substantially actually and But year-over-year; other on to XX,XXX by both And answer

at look pretty to flat. I So that be

new sales, about not talking just I'm overall. No desk

right? that's Yes, increasing rates, the we about renewal renewal a because occupancy. rates function what rate XX%, the total care up of which was So retention went to is higher, -- are

do ultimately of how I line forward? that about just is -- the the bottom your it's contribute guess, to congrats product some And again, kind you that Workplace pretty think us X growing That's interest going launched. to next Okay. promising kind over sounds expect X, on there. getting Could you initial helpful. to years? Like walk X like It of whether then, business how you through,

the two -- second. said, All Access, challenged range. $XXX it's as about $XXX I've team things, a high-margin We've the talk about million taken businesses million both right? to to we I'll of for Look, do

have about members. We XX,XXX

on previously, All you the sort and XXX,XXX we between to $XXX said revenue so in I capacity, to to ways Access because of members As to we members challenged and out of out we or over can I've increase take capacity, to tap XX,XXX figure team so can XX,XXX increase that million. so

So product. on we're bullish very that

United we of the is we It's billion. that in very to is game project you States the $X.X what of the will be in partnership start with to that launched Yardi, we What As and that can be. promising. revenue business again, see TAM know, business just Workplace, say in early just to it the about

meaningful could our one be And so a it that can depending of on capture, to what line. impact percentage bottom business

again, a can So $X.X I billion, is and billion. I think but projection, want don't TAM I $X to make U.S. say TAM approaches global

for are it's license having So discussions only for it, which a X fees XX,XXX of companies license in is weeks a over fees. launched XXX very fragmented ago, it industry. over with need There's we why tremendous

be two, numbers impact to bottom don't or see our but XXXX. have meaningful a can to we in Again, So able project time, line a quarter be that a this want better project. to by handle at I I'll to

just helpful. we side, sense number. the was And in there on give quarter? Access that a ARPM then That's have us business you All think this what don't of can Okay. the that I

think I $XXX, pretty I'm it's sure.

a tell was you If ARPM $XXX. you. Yes, second, you will give I

again, the end, this again, again, curious, of kind on possible any But just the that of things if kind offset Like I kind do kind Okay. it to kind of offset just can of operationally minimize other one apart impact from of can Europe I'm And I things FX? are then impact. reprice to there of of lastly understand my from do FX? kind one numbers curious FX of in FX hedging, to mean quarter. other is to kind any

world. essentially the and of I accounting, sit So back revenue right? accounts in business, is would accounting sort this GAAP Again, our for say GAAP throughout

back never it your in. money bring the into really have You cash America, flow doesn't

international to forward positive business. that course, the cash is flow we as incredibly comes So capital And growth is, European the we from better of going business U.S. the business versus our of get think strong. utilization

off of to FX capital So effect the you're better real your minimize company. in-country investing the on

have Yes. that. And but currency to I to more expenses of have one already be can we I say try offset, in where my get an going was I local would thought

expenses, we've already where what doing so got position revenue and in we're and we're So a we there. can already

question Karru from Jefferies. from comes Our next Martinson

feel the XXX And fourth to call get look those at per year-end. mean you third you desk, that number? you're Ex at you have levels? XX% terms targeting, guys XXX. still can at you committed when In for of XXX that for are for that you revenue it, quarter, FX, do quarter, I average XX% been

I would say at sort we're of and just back XXX. sit That's awfully close.

It is awfully close.

get XXX. I numbers lie, be know think so closer. the even do But can We to where QX it do will we

look many U.S., you Okay. of above occupancy percentage are occupancy? -- when for that the look how where drive rate you're to that markets where where you can do feel what have markets that where you them XX%, of XX% at end are you rate? And your driving at trying And when still you drive above

occupancies you're selective. it's driving into Like you to rates those the the York, A-quality rates Again, going Raleigh-Durham, generalize right? is, appreciate, assets. of be it's you are the to ones question the because we Nashville, try one where can Alto, are Austin, obvious again, XXs. So driving the locations, better well the New assets, in all But always obvious are Palo Miami, at

upon to look building, to at it on. way better for and the so of working And slice dice quality we based which are is us data this

bit there So awfully leasing $X,XXX. assets have power. Palo more occupied. ARPM. price XX% two tower, little are XX% over Palo tale And in now a driven. is up San Alto And occupied. If is B a Francisco, ARPM quickly, right? think, assets is it's of the Salesforce close cities, of at I quite look pricing I are to or they XXX% is the XXX% but or A $X,XXX Alto pricing an occupied So occupied

dice so talk said, about we quality it of we So like I to asset can slice bit, ARPM. a need and to

XX% I XXX increase. increases ARPM. occupied, XXth increase; Street, XX% over even where at If are XX% So in we look XX%, XX%, buildings in Broadway, York, XX% New are seeing XX%,

all it So location. and building by on depends occupancy

So and it's I we location on not a but can will that provide, also building. say general of depends it answer quality

look And soon seeing customer base, see look and just of -- then early into recent too laying off translate that? some Or are any any you when Okay. to of the stages, that any your of that headlines, realizing fintechs you it's it the people, occupancy? at you your is but seeing of at translate

I back sit think early it's and would sort say see that. to of of a tale I cities. two it's Again,

expensive down calls on we the As into space I with I matter building are QX I have out optimizing didn't on call, mention inflation smaller call, medium of issues real a QX in And less SMB, mentioned examples us. even I doubling moving the investor the in I've some locations, in basis, the think -- definitely I as they're estate. spaces. call, my and if had. the today fact, I consolidating, the on of mentioned, businesses And said WeWork per-head gave people because earnings their in are that new a actually

of as Again, think needs. of name encouraging pan clients bit their little they I a signs the to to MLB, flexibility seeing, the game. are the we're when to of enterprise seeing continued tell large evaluating SMB accelerate. M more part So early It's who we're at least it's out, space where the and is it comes the has the the demand but sort of

up place now? we step at do lastly, just you it Or your a to as when see rather But XXXX, continue look footprint the CapEx year. do keeping you right we CapEx, go that growth? And you into certainly this have Okay. feel need in tight to

as next XX,XXX signed guided it basis. No, bringing which we on were that XXXX, this but about have to XX,XXX desks XX,XXX we're I pre-pandemic again, so some coming online year leases for we've increment mean, year, a -- online, total was were,

And capital build spaces spending don't on 'XX. obviously We them we've got to where going heads. those for the that forward can bring and allocated capital on additional put for online. see halt need the depending again, out a we So economy

free for -- the on because flow numbers So cash put half we've Obviously, fact, earlier it of the of second as cap in a spending the us for accounted a gives of we spoke about we issues. matter XXXX.

obviously could in the flow accelerate the You cash free business.

it will guarantees said, have XXXX, desks that 'XX. right? levers but to for need at XX,XXX in come as growth do we're our 'XX, we a to deals 'XX of be any CapEx. scale looking So we new anticipate pull, effectively, and And at for we've online now have for don't because anything So the growth signing for

Vikram question Mizuho. Our comes next from Malhotra from

wrong, to there can the just the of think sense is XX% question give what makeup, one list watch given I'm on them So might tech a or communication base. maybe any a on of I your customer not do are if on space? related fintech, is you especially about side, your sort you're coin-based, And the to headlines you technology -- anecdotally going us monitoring? back customer their just larger they the tenants, maybe with and How anecdotes with of

half our half That's appreciate clients, revenue revenues and than from have approximately single financials term. in is comes revenue. I clients, X.X% X,XXX our not good which with of obviously a got XX-month have clients. client -- enterprise our a about we XX,XXX SMB greater So enterprise

call. at the So clients. X matter it's servicing investor -- I the and and specifically, you as what very a coin-based we've about But hubs, this QX/QX, of the of And fact, meeting always an speak talked needs as in diversified. about, I said collaboration investor I they if we think said forget took actually or

any of So with today, them had have discussion about space. not contracting we as

just I That's the number, think XX%. up. but And the just retention, And split of then in differences versus you between I'm churn that -- said baking retention helpful. sense half just Can retention are what up quarter, at enterprise in you are of there for a on mentioned, the -- I looking how think, second Okay. SMB? is retention? terms you give went forgetting you like us between the

number. haven't but -- enterprise, It's and be SMB to to the I broken between again, I perfectly -- down, don't seems be honest, blended it XX% really

that in SMB, would that So higher be have a don't of me. intuitively. Again, will rate than tell front enterprises I retention it intuitively, me

XX%. baked in think I we've

will Our last Credit come question Okusanya from from Tayo Suisse.

kind had an you that downturn. actually in analysis on quickly just things and just, the of of kind just about wanted asked like that way I how clamp kind go to kind a that. actually I of economic scenario Vikram question liquidity down much about CapEx if of again, a you recession. some could could wondering think, again, actually some how take protect And guys quantify and to could talked But how a OpEx bit in you and you of to little back out

we to down I of would be will say year, for buckle to million $XXX the had $XX second the half million.

no to call Sandeep have I'd further We questions. to back for Mathrani closing remarks. over the turn like

Thank this you all for joining call morning. our earnings

possible if would it was a day. contributions not of not around progress the great be for Our our Have world. employees the

your for this today's Ladies call. you concludes participation. gentlemen, and Thank conference

may You now disconnect.