WeWork (WEWKQ) 10 Nov 222022 Q3 Earnings call transcript

Good morning. My name is Dennis and I will be your conference operator today. At this time, I would like to welcome everyone to the WeWork Third Quarter 2022 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. [Operator Instructions] I would now like to turn the conference over to Kevin Berry, Senior Vice President of Investor Relations. ahead. go Please

Good XXXX Dennis. welcome our to Thank call. morning, quarter earnings third you, and

During will with to actual call, discussion to presentation, can this risks we accessed differ will which and earnings be that that have materially. investor include release and forward-looking been are investors.wework.com. uncertainties results furnished at the statements and refer SEC This to subject our cause may

annual contained and could cause quarterly actual to in Additional our filed concerning is latest reports factors that periodic information SEC. subsequent defer and results the materially with

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

Additional disclosures let WeWork; included and quarterly Chairman Officer. report. earnings non-GAAP our press of to regarding release introduce Financial With and that I and CEO it like to in GAAP our to turn and these Sandeep be measures, a supplemental Mathrani, Andre are also in Sandeep. including reconciliation, Chief over included presentation me Fernandez, non-GAAP will

you continued thank was $XXX and our million. in solution budget across our able quarter, Consensus exchange. and we consensus the call foreign Access, Throughout memberships, Consensus our All growth demonstrate was have Kevin revenue $X our million. beat WeWork Workplace. all to at million, came by Thanks, momentum third morning. in in WeWork this joining $XXX revenue, been for occupancy, software newest

office space office marketing a to with see business from for level, and making flex demand model flexible line falls macro working more meet traditional At share in trend our the consistently strengthen growing are increased we the world solutions this of a with sector. We for ongoing new work. the

for physical and In we and our last increased XX% respectively. XXX was the exchange budget XX% office sold of X% XX% XX% of the sold and quarter from basis mature points the the occupy London, the to third Consolidated XX% traditional equivalent of staff City up feet continues foreign York up to occupancy Our quarter, revenue square New in using approximately and year-over-year buildings. quarter rates. grow

Over differentiated of enabled we macro challenging we the to flexibility headwinds spoken [indiscernible] evolving sector. the have face the how and about has the conditions. capitalize model across uncertain is transforming on key and past environment, In us an have traditional proved lever and year, our a our evolving office business to

third of million February capital to The been commitment to with me XXX Let cash million cash secured structure. balance and the our want XXX the and million notes senior secured to of the our available senior XXX on and start secured have equivalents, the March from to debt conditions. turn terms to at us, certain drawn, continued subject covenant unissued was quarter and to I sheet. fully We least for, focus of with majority XXXX ended XXX XXXX, notes capacity. commitment amount if and updated the extended million

tranche has When X.XX Turning provide was of XXXX. in to $X.XX this of February historical to senior our our billion since lease perspective credit serving like early through joined tranche, this obligations. and how I I'd collateral XXXX, billion, as letter evolved some

an credit will earlier As up tranche new recently of by incremental putting steady a February this lease a This of launched of close, incremental of down $XXX XXXX. support provide of amended occur to the XXXX credit, letter will an be million affiliate banks of the million. participating process] an result burn of majority further we reduced XXXX. reduced to extend SoftBank tranche. our obligations We XXX reduction and X.XX [formal letters of million. $XXX burn the not net [ph] billion the year, aggregate by will then, credit of million March for continue March our At for an By early XXX down reduction to Group with to to from XXXX

by progress the pleased continued are date grateful are and WeWork support of to the We to SoftBank with Group. of affiliates very our

locations Turning portfolio to underperforming our new the exiting locations. portfolio, our strategy has at the quality continually opening improved by of

is into to to approach pruned whereby fleet, from a their retailer's stores portfolio are Our performing lower are investments high the stores store similar strategy performing portfolio. and made

for continued new efforts share XX,XXX and workstations we by globally, have We our this our comprising and locations revenue into traditional System of to new optimize estate agreements, wide, enhance well and real as executing entered deals others. management ongoing portfolio over leases XX global year. approximately as exiting

continued with the joined we've United locations. you As have design approximately in there's the planned I those locations these States are earnest don't know, These of oversupply portfolio in after XXXX, in workstations in exit comprising are XX our the and meet criteria market. believe early a that we and all an or obsolescence efforts XX,XXX pruned significantly approximately

January. portfolio, we adjusted exits implemented have million planned will been majority the we also locations relocated assets. these of are planned make pay in to already they future payments of cash of notified exited more portfolio into connection expenses account these our plan. our payments we don't and occurred to or affect that overall be to obligations further However, support Most outlook will the represent will quality fully be Taking to are as operating are tenancy, locations positive. we locations end corporate be all revenue even of higher line expect reduce expect to exits at early and couple The XX% with they expected and not supported. expected do The our occupancy year. the straggle is portfolio quarter, approximately comprised members will to expected XXXX workstations. contribute expected November WeWork effect XX% the expenses if Our Since business these our top December These exits XXX landlords. and for WeWork these these this XXX,XXX a consolidated most to on rent, With end by forecast. streamlined into termination higher over EBITDA. buildings efficiently quality time, to and once of mature materially of from payments will versus reduce have our been building In these rental aligned these since liquidity A be exits, impact as XXXX and our the $XXX into of annual essentially to

XXX this During call, run fourth of we quarter first our the estimated be rate will SG&A million quarter to by XXX year. million

to revised more path efficiently. rate million closer approximately believe and operate a we is even annual to Our XXX have run now

our was Turning to our third with in-line expectation, was impacted by quarter for the strong quarter quarter. but Revenue results. the

was million. a foreign on million, year-over-year. XX% quarter will better negative this second than and reported basis, rates, XX versus be revenue XX% quarter an for year-over-year. a improvement million XXX At budget of the up million EBITDA our the million consensus increase XXX quarter, Adjusted in-line XXX expectations, was revenue XXX As million with of year-over-year exchange GAAP our XXX

would physical as XX Francisco XX% Approximately account Our were some XX consolidated was Consolidated and the better exits] continued have America, non-controlling into occupancy York and San Mature mature have account [ph] taking the to account in for XX%. now X,XXX in and occupancy into physical investments, XX%. been the Latin is and XX% New than for Canada and XX% planned with China. planned asked and for at million in we've taking were our Taking include unconsolidated to in negative metric a million region Footfall during results the the the financial Occupancy at U.S. or improve. and attributable XX% ownership quarter-end interest this India exits would Accounting Japan been stake, excludes stakes, in exits growing. investors increased [planned primarily into to quarter. memberships quarter added WeWork at X,XXX reported. primarily by EBITDA and buildings, workstations reached adjusted steadily XX%.

occupancy and the for XX%, Ireland, at by were Consolidated commitment London Singapore average Milan, quarter. Kingdom, the ARPM XX% and Seoul sales the the buildings be feet square in year. XXX,XXX, our at expected, markets but at pre-pandemic was XX%. at United at in year-over-year Sydney System-wide of above mature with pre-pandemic for and $XXX, XX%, an workstation was workstations Paris in increase this trending to quarter, which feet at strong The Dublin X% ARPM region EMEA, levels very is XX.X or actually Paris Footfall FX, above XX%, levels. to reached Turning at reached Budget million On and expectations square actually regions, flat. XXX,XXX XX%, XX%, the in third would million Berlin the quarter. and original XXX dollar. it's impacted as X.X equivalent has term in and we certain like XX%, Pacific remained

We and revenue end memberships Access with XX and All Access grew plan generate All our Access to revenue. in established memberships million We XX,XXX approximately the XX,XXX XXX XXXX we quarter On-Demand on launched annual an the to expect business. Moving products, our third has and of XXX to become it to All product million. and growing year approximately and to was in million

me to let turn Now, WeWork Workplace.

launched with Workplace office of companies manage space July use and actually locations. we within late licenses optimize the to over using that and our to their locations within Turning we XX,XXX solution in own have year, signed product that of XXX this are over WeWork their

negative adjusted to WeWork is XX XXX million, we negative million to which operations, negative million million attributable quarter million, defined fourth EBITDA to adjusted our unconsolidated XX and Turning to to negative of to stakes accounting as to EBITDA be ownership consolidated for revenue guidance, XX expect XXX million. EBITDA be adjusted be and XX to

X.XX adjusted be to million. rate. to currency XXX XXX excludes between impact negative X.XX the of expect attributable negative be guidance fluctuations be to foreign WeWork billion in million to billion, full-year budget exchange our to original and to million, XXX to XXX from We negative adjusted The revenue million EBITDA revenue EBITDA of negative

EBITDA on currency for However, rates. exchange our adjusted guidance spot is foreign based

exits the impacted fourth growth slower in by the operations further expected exchange. in foreign than guidance in Andre primarily fluctuations will Our provide United planned impact was quarter financial and States of Japan regions, and results. our

financial morning on I'll Thanks, of Sandeep, and remarks, provide quickly touched number the additional here. everyone. his good some in so Sandeep highlights color a

First, XX% was million, slightly $XXX up up total revenue company sequentially year-over-year. and

our Foreign original had negative greater million, this compared primarily and on euro, budgeted Japanese rates. foreign $XX the exchange an approximately to by even sterling, in yen revenue reducing exchange quarter, headwinds, impact pound revenue weakness

profit mentioned, million, improvement $XXX margin year-over-year. level excluding As measure $XX of in gross and revenue quarter, up would up from and $XXX million sequentially was total third million a a that building the we million, quarter been for have the year-over-year. the XX% $XXX at Building impact,

we've reduce seen the have And reduce we inflation been increase, operating our expenses diligent despite quarter-over-quarter, were favorable operating our while helped expenses. building the foreign occupancy. reported our location Europe, expenses, managing impact exchange our costs operating operating building A to also overall in rate Within margin expenses. particularly able energy of in we higher in has

third adjusted million $XXX improvement second over sequential year, EBITDA the higher a a revenue SG&A, is million, XX% location and versus note which operating pre-opening last was million our expenses. our Next, $XX despite quarter expenses in A occupancy. and quarter dropped by $XXX or from and driven combined loss the million and particular fell X% and lower year-over-year overall year-over-year, higher $XX improvement

loss $XXX approximately depreciation line our non-cash million amortization. FX the includes unrealized of quarter. $XXX net in the net Our losses, Recall, items, and was including loss and below third million

Moving flow. cash on and liquidity to now

quarter, the sequential million for with in and $XX $XXX liquidity, improvement and questions. ended expectations. debt from consolidated Our third million On for quarter the capital concludes second billion prepared lines $XXX was and We we lower as by free in-line the with million, covenant of of that, the quarter $XX operator, Net Sandeep improved quarter. remarks. cash please driven cash million, expenditures third down cash mentioned, capital the approximately open operating for ended second performance quarter and working $XX of our That CapEx. the the you. $X.X $XXX at as the negative capacity quarter million Thank quarter-end. second of was with commitments million, down from And was quarter which with from end the flow a

first Please the go ahead. line Your question Instructions] with [Operator is of Alex from Kramm UBS.

Hey, everyone. good Yes. morning,

be you said, think know, Sandeep, a detail? but but Just will little on I November. I some be I you bit said, give will done that be, all cost, the that exiting don't there think will think you're doing can immaterial, you you in here, you more there this mentioned

the So, us maybe by quarters, with help bit cash? that clearly cash a burning decent the over you're outlays a couple driven of because next still little amount of

Alex. morning, Good

rent XXXX paying and course for accounted XXXX. over have we of So, the

to included is cost exit according our the rent to essentially payments rental be So, will monthly paid the and schedule. it

no or our impact, impact further So, liquidity no cash our to have position. we

that some how really that's that gears, talk of what maybe agreements. also Okay. you. the little share prepared and about agreements? the you're forward said shifting – just revenue touched Can you don't you you And bit your upon going more then remarks. exactly impact doing to the think a going Thank I changing you're on

as have they new about are management management XX,XXX signed remarks, management we So, and mentioned fee. agreements my share for essentially I in virtually good agreements will be at and desks, all revenue

a are share revenue Some revenue on of share agreement. like them agreements [indiscernible]

detail, of So, online I XXXX. till the any come don't effectively, collect in management you provide essentially don't about and revenue the they should that agreement. XX% further XXXX know but we

it one, decent the last year-over-year last over but basis, seems side, few may? All right. bit the a Access if a on here one I little the And quick All it's remain months. like On trends then just slowed

So, color little maybe And the quarter. think for also you bit been All I happening Thanks. that give don't what's a you gave just please ARPM this more it end? then Access? can on provide

the in members. XX,XXX side our few All about mentioned capacity I Access, quarters, last XX,XXX, as cap for of So,

are XXX,XXX. the to of process in that one in increasing capacity We XXXX

we about So, we've said, about our effectively we thousand month or a a trend also are we quarter. I continue year-end mentioned XX,XXX probably And by about and near this as capacity, in we'll to members and reach capacity XX,XXX. that grow

or and the is, common we're lounge [under Access the can some [ph]. All capacity we increase of our doing ARPM the got area is increase members. about to about the of process areas get $XXX XXXX] to in way so in locations, so that the the So, capacity for The you've same

jump right. Thanks. All I'll in back the queue.

from Please question of go the next Malhotra ahead. line Vikram with Your comes Mizuho.

the taking for Thanks question.

is starting revenue a So, I fourth just off, visibility how guess, of maybe have have you usually is mostly Sandeep sense us quarters can two I but you least give quarter guess into, revenue you visibility at covered, much going now out.

over next and revenue the what's two what's of the visibility terms expectation? in quarters So, occupancy embedded

– QX we in our expenses. will Again, to growth in with to call – well QX to with as see we projections, we and continue occupancy as QX revenue but you provide continue see we and continue revenue, in see reduction

at increase with year to continue quarter. in X per towards ended about or We guide XX%. And points so, occupancy so this we the exits

QX think last again and be increase we've closer sequential will revenue occupancy, we as to in XX% in So, seen the few quarters.

Okay.

the, a us you quarter? there look add We've Just firms there, color specifically maybe some as know, you specifically impacts side? laying back you on if leases, at you just on with can what give you other the layoffs, giving any portfolio, there Are technology could Meta Were few is people, third sense any a are the heard, list? there impact? a watch in of tech seeing off smaller Meta obviously the you're know,

the had on in before highest comment part in region. enterprise of the the over of the has that the almost we've our really U.S., said decisions And XX% don't business EMEA We XX% Yes. occupancy, our members.

growth locations for our actually continue in space In we back space. portfolio. our in the call, of I successfully enterprise base I most do continued the to we've gotten enterprise So, been see pointed we've our see enterprise we able for space. the think release demand to And last in and client the out

of increase the ability the point again, So flexibility you get occupancy. our to is,

been space actually far. we've we’ve back that So, to refill we've done, able gotten so our

with million. it's just adjusted then to last or restructuring, XXX boost the the this mentioned I EBITDA, so Okay. you And think EBITDA one,

from to when right. you at sitting still or of there liquidity at have think million just quarters, XX%, in this – here the you capacity to you you're you generate that till include Can start I I actually So, unused is cash on EBITDA. here few is including some you've know, through look on burn for and portfolio are sources on are you over a in cash, past, capital, on? the walk think us roughly needs the this, mentioned break-even least XXX need at So, next as other from you effects of you the The restructuring? draw XX%,

to mid-XXs. do know, get adjusted You get EBITDA. to we We the break-even

all obviously on are the now. secured during way hand at senior the don't that senior of or additional do the need to of quarter the end the the precipitous so we draw $XXX anticipate we on So, million cash to beyond of We but next anticipate the the liquidity and XXXX. secured, of

Thank you.

with ahead. line question next of Your Please go Sandler. Piper from Alexander Goldfarb the is

Good morning. morning, Sandeep. Good

over that, sort term positive question the flow. year, think Alex's corner year-end still fees, the you've saying, the pretty along you've EBITDA year positive negative to positive cash. turn on EBITDA lease and been on I continuing would past of by cash saying, consistent paying mid-XXXX response you this just you're then been on from So, of the flipping December, In to

that together, all year the XXX that entire Vikram, So, secured, put this these middle when big start senior cash million it's senior you that with or you're going out unsecured for still December have flow EBITDA year? the picture, on elements going door. In by you've answering you – cash are but WeWork all in to it we said drawing still company of positive the discussed? next positive to on-track And of

Alex. hi, So,

revenue opening million is revenue, So, month. [consensus] for The December, revenue, an million. $XX XX% is members This to is on-demand about committed. and of $XX of balance our the created revenue

EBITDA in $XX achieve If to several XX $XX break-even gap. the be we in-line December. adjusted past month the last months, of the Over with million we've months, to able December million is been at that will

well to expenses. reduction occupancy and earlier, growth in in mentioned as I the we as continue see revenue, As

of it’s EBITDA In will flow XXXX, year – to In cash addition, should month spend $XXX to for $XXX the us XXXX positive be to half in In about going be a and This have of adjusted XXXX. allow XXXX, it's the CapEx by in positive XXXX. be million. million. path

we're Okay. – profitability, we're – so everyone's break-even first continue that you'll be in continues should page. view, into hopefully guys, cash still is say, going we should to view, December, to all middle and but like of going we're on buildings, some sounds exiting quarter, XXXX But into still based just on be just what be the or we thinking but in focused hey, have on you based positive back the the be because it that so, your to Sandeep, same pay about would flow on that doing, It rents.

So, revenue, but still cash tail the that end back, rents we're to the not flow is going XXXX. to get positivity have the pay is of

a will be I comment. XXXX. think of Alex, that's it tail-end the fair in

is revenues continue that to – And there rents exiting, because not on that pay the mostly or Okay. cash were you the…? you other that reason because some those that is but getting is

is the of as the be matter just positive. that $XXX to a we said million fact, As adjusted of going EBITDA

to exchange it foreign embedded actually a reason has rates. be it impact with The EBITDA. think actually positive tail-end it's will the So, we

and to what happens you So, is cross you up know, occupancy, the continues XX% of markets, mid-XX, to over occupied go in up. once the the profitability we're revenue continues above grow European obviously, mid-XXs and

mid-XXs money euros making of occupancy, or expensing pound. you're in in or euros pounds, and So, you're it till

the – expect converting you're EBITDA. the because markets, impact repatriating or dollars be or exchange of the small very territory actually in Above into European you're we we quite and large early and to markets, it the year. international in it mid-XXs now in next so, adjusted foreign occupancy flow by is okay, to impact cash XXXX a in has mid-XXs, And profit

XX got of you’ve points now so occupancy. And

ARPM FX almost some And at impact whatever on FX. so, budget The at spot did is to from $XXX about $XX. It's almost is that we $XXX math.

XX So, to points you apply that occupancy. $XX okay, of

to that's flow. and exchange impact about debt] know, see cash to XX, the foreign [ph] So, to or you that XX,XXX start has [XX,XXX you

exchange So, driven. mainly that's foreign really,

Okay.

like, are us XX a rent of you Is So, million payments XX leases the it, give the the on what can XXXX? by exiting you're sense cost? and cost, a million of that remaining end

just get will me that you. I'm having someone do just to I let back quick math. Alex, question. answer a

Okay.

continue out, Is Let occupancy XX% final occupancy these XX%, what's U.S. international, that a total preventing the me approaching these Meaning, really get your ask to of last are U.S. or know, was, XX to to grow? to XX%, are the leases that sort that just Occupancy occupancy was is is sole level? XX% portfolio you're leases, other above portfolio there really getting flattening these sort quarter, drags are is the it of are question. needed so it that real, you the on in exiting? headwinds the the

think two I it’s questions.

the The X,XXX sort would sit we've they've that of members U.S. by quarter. added been consistent has lagged. I back say, predominantly about actually three or Right? this and We've So, two U.S. And in quarters. been in

Labor Demand the to And U.S. thought. starting locations. we of in are pickup we as Day rid tremendous see wanted We our after obsolete swiftly a since effective get didn't to come as is, back the

that decided locations that profitable, we so, close sustainably And we obsolete. are profitable should be and to

are as fit know, much they to usually same of the relocate, our members much to We able out. locations in into it XX% and are better and better remaining located market, XX% the you

into mid-XXs, drive, now drive you experience we've drive actually to [indiscernible] like it that can experience. occupancy And know, And we and better I rate, better rate. the would think to, now so, us we drive important any obsolete and retailer for gotten our drives continue locations member was it to that believe of

have actually now we've New next occupancy the So, XX% profitability. to can it's occupancy, it's months. we just we your million believe over sustainable – rate XX the and think at to $XXX we answer and about back go on think York the question continue that XX% I that's driving to And now is and drive and factor rent, about gotten

That goes you'll that pay away. and then

Yes.

much. you very Thank Great.

ahead. go is question next of Your the BTIG. from line with Catherwood Please Tom

Thanks morning and everybody. good

in consistent of that's try me one a kind up were, couple thing for on desk up not And system the pieces occupancy, lining Following kind portfolio, of I kind or between of deals churn the volume see were gap something was kind more of you you up on picked of a here. doing and on didn't sales what would at to it activity. on there given consolidated what but triangulate basis occupancy much pick this quarter kind ended is, during the on question this else the end wide a of up that, we up expect as the as and that Sandeep, Did quarter quarter? of Alex's bit occupancy driving

So, we I if increase do in think we X,XXX So, point. new right? – actually also you you quarter, denominator, that's appreciate, the the also the desk you and added if and – another numerator

that the I denominator, if a So, XX% X closer be added the without gain. to occupancy XX%, would desk be X,XXX of would which points just increasing

point as So, out that point of I a just reference.

Totally fair.

though, as far the was this churn up quarter? that in As

closer churn was little Actually, to U.S. international the what we and was X%, same. was about X% the about low No. churn Churn It actually in markets mid-Xs. – the X%, model. was in which is

So, X% overall maybe pretty was X%. consistent, mean, I modeling into account pretty consistent. churn remain but at points higher, and it our took XX basis

pickup you Got the Have fourth mid-November to so sales Labor continue that seen membership post that specifically as quarter, States? you it. or alluded far how in kind United activity of the obviously has headed leasing comment, And you activity progressed we're in here, into Day? then can

a years. October best probably of month consistent. was In the the in remained pretty first quarter the fourth quarter, few deals much a new

States in the the new international markets. So, United and in continued activity the

continued. Although say, I U.S. will the also churn

effectively, is X%, of like slightly we churn because has, quite with you know, the activity the at So, stayed, ahead X.X%. I and the the large. said, are pipeline new that churn And also

up or to a that to so in was X markets, in So, growing is effectively, quarter. and pace. substantial the it fears, seeing the we probably though maybe or a UKI are continued international us there markets and And recessionary International you even activity. fourth occupancy slowdown interesting know, in no be we'll point thrive at

more Last mentioned pickup kind on the then, leasing. expected Appreciate And portion the one quarter, SMB Got that had portfolio. Sandeep. you it. of in of an

strength a enterprise of level, you the through that of you trend to the that the the kind with see continuing is operators? did smaller alluded obviously the You at pickup year? still expected that, And balance but see

activity, been and month the Absolutely. success months. look leasing has look the at is at business business. the our and pushing business. And October, is actually, And of of highs activity our now for sit leasing I is the is case know, XX% driving SMB They've in our U.S. in SMB to the only if XX would about I almost really growth at, say, U.S. XX% to and continued QX all-time occupancy What's our business was XX, and in and that It you occupancy. back of I it been actually accelerated the the

And strength so, we continue to see tremendous in the sector. SMB

the On then mentioned early the And in part of an you it's side just the expectation can? from this one could or your the platform, what of for term? but do be this for days obviously, last the it. either I have I the XX,XXX earnings medium you, you contribution quick WeWork term near business if Sandeep. know Workplace, Thank licenses, Got still one

business. You All and WeWork Access sit $XXX billion. I Workplace XX globally, like was back is and about know, of you in billion, Workplace million say, always know, The to is year it's you $X almost WeWork know, you where months for now the is WeWork a All TAM now, $X about can U.S. Access ago, a see

Yardi. property good very customer for largest enterprise a software have the We partner, management

we better thought. really – in than much we revenue And but haven't we XXXX, so, factored the been much don't in take has up

system to back sales how in the the so months. leaders just us to largest us that on that but we as visibility get, also wide the almost speculate flex And fair the don't in market almost which individual being XX can I makes was can XX,XXX workplace, would provider sit we our want of is over and I TAM capture or to QX, million, the hope members. $XXX gives revenue flex, in we of world. say XX much that So, share do next our share leaders in actually now

go [job we Workplace product. So, the to a funnel] tremendous of have WeWork [ph] market at

Thanks Appreciate everyone. color. the

of Your ahead. Please is with Suisse. next from Omotayo question Okusanya the Credit line go

Good morning, impact of Yes. to strong suggests that focus me to if to that has the a maturities. extending everyone. dollar, Sandeep, of there given could FX, just outsizing about debt have more your on be some potential continue you much comments

the credit? So, the on progress a some made about senior talk to the of bit potentially could JV you little again letters and that, of the tranches being of

Yes.

the that to $XXX launched for with letter the On I the to March effectively of senior Tranches. XX of XXXX you group has officially million been this both from we and to XXXX our bank junior senior March As extended mentioned LC extend XXXX. credit October to year, of secured February

Softbank, of to letter Softbank Group credit the be support the for affiliate credit. continues of the

extension we XX to credit So, XX be able close next are, days letter know, you hopeful to, over the the of to you on the know, March of XXXX. to

around, at be up, of the from then [expiration] just with the the potentially Okay. helpful. That's any what commentary they doing again, this [ph] point lock And SoftBank, could shares?

and secured confidence of with evident extending But commentary to the support have pretty them. the LC of and continued support providing their XXX any it senior We and senior the the really Tranches their I is don't WeWork. credit million the think support majority WeWork of from of in junior

slowing look if the versus that million EBITDA full-year, $XX us for take of at adjusted about can more the One much kind you million of Again, exit help the a closing much like in really it Japan change of of better the U.S. versus costs understand associated how old cost, FX, of the Andre. and get of know, midpoint new lower, is, to Just restructuring? how is or so guidance, is expectations? the for sense much what it you a the caused with That's helpful. you guidance, How change? $XX

don't pin it I Yeah. particular. we one think to want on

affiliates remarks, the you how attributing of our those the there the that at or we attributions I in mentioned. So, And EBITDA was consolidated for think of said company. attribution, a ownership percentage the sort items we various non-consolidated right? did know mix to of you Sandeep's and that

So, just get mix more variables his December, I it the also added still a between that's he more that really why what EBITDA But little And more think that. Sandeep of, range, I was mentioned. range bit again point okay, to and that to have think profitability sort we in we you that of those I mentioned, believe on go a also provided in to do a here, then remarks.

license, the is Okay. ago, know still from economics a idea? this you could trying of, I point, more of to the was going business just, business, At the forward? revenues just Workplace, per kind because you mind. month while generate I was behind kind suggested that One of of $XX gauge like don't per it that if what, kind

Yeah. right That's the pricing.

was it $XX the You and UK business country-by-country. Again, user to the £XX different be other of be vary be, States. then when per stabilizes, it's know, That's to per pricing world. month. just to in in it's pricing it's regions the going the the just different to in It's going fair, United

Correct. Thank you. That's helpful.

go Your of is next from Knoblauch Please question Cantor ahead. Brett with Fitzgerald. line the

my for everyone taking Thanks team. question. Hi,

reduction’s net cost, from the those for add guess, how On to a I fourth to effectively, of of locations many member other [indiscernible]. replace able be we XX,XXX quarter-over-quarter expect what you be think exiting capacity How of and quarter? we into the, guess, I should growth? membership kind should expecting

do fitted the is in generally end end been what your at them happened experience So, QX. because like expect? the of, And said, of, we we to that QX, locations reason is end it's XX% these, of to closures able generally, locations. at I the if at are all move other members I XX% these of our into a member And we've better think better relocate the out. question into good

I think we basically up said will our to go XX%. about XX%, occupancy

ended look at members at And have to answer forma, no, to number to XXX,XXX I'm at, to of trying second. QX, is question we the so, it [ph] end over. We forma because call the I'll back XXX,XXX you. the [didn’t members. for let We just I just look leased math] give a it. going me before the pro get your somewhere. ended I'll of me question so we the some get members. do I'm pro forward on

Perfect. I appreciate it, guys.

with Vikram next Please Mizuho. Malhotra is from Your question ahead. line follow-up the of go a

Hi.

on the quick the million to exiting, revenue how Just low, remaining with on much just impact XX the from the two to know, you on exiting? expense, million, maybe you're impact buildings? the in is ones. some exiting us buildings you And what the of can the links I those follow-up that of it and color, just with just wanted range doing XX give first, those is term was just revenue, math the sort EBITDA

term those a large we that quite cost increase EBITDA. the is chose So, about still years. because exit on guarantee remaining the course of the is average arbitrage obviously XX and them year months. The and average And the between four is the was in leases about

– million, So, is remarks. if we it's million XXX my you month, get a about XXX said think in about it XXX $XX it, you

at call so So, $XXX it, of, a exit. million of increase EBITDA in to or adjusted cost $XXX million

locations arbitrage you Those is the about occupied. were So, obviously, quite positive. XX% can see

And No, the so was or month. to Speakers] $X memberships. that previous was say, answer so was million going was I going [Multiple the revenue asked I question the a to about about

had end accounting XXX,XXX the ended XXX,XXX QX, at had consolidated compares a And we for members. still forma exits. an it end with QX, it a X,XXX the is QX XXX,XXX the loss accounting pro basis, XXX,XXX increase so on So, It's XXX. we is for the where of members, exit of members, desk, members. XXX,XXX we just into of to as members, At

that’s just have the drawing to million extended said Okay, so will I clarify, wanted XXXX, start over you that you you – commitment know, make to few on then you sure quarters? is great. that the And next, XXX you just

Yes, is Andre. this – hi, is this

cash guidance of we for quarter. there's, go million and a for then working don't Remember our And around we of the million year we still cash. want said Remember, below, below. requirements XXX then to sort capital it point think just half I second So, $XXX about is which during a the really the with the of last closing going sort was of quarter. have low said points be to the what burn year – range of we're in we

I possible yes, the again, balance, draw low having cash get it absolute trends, through too the to could how take which is an draw. fourth me wouldn't without first cash might to on but we see on the go then So, require to cash, want but quarter we'll just generally

quarter? actually So, also it's we cash favorable draw and it to have the again, is Yes, might we able possible fourth possible be be that in it might defer might is QX. to to

And great. just picture. then Okay, bigger last Sandeep, one

losses, tenants deck As can know, holdings. sort this models you you between, look at we're long-term on with are real – any the seeing, or know, job of us maybe enterprise estate anecdotes flex recession concerns their versus as they how about on thinking own, share you

to Just any specific anecdotes can the you on from share here exposure on? flex

consolidate I as the moving to tenants, more see the I to we in headwinds of rollover see is as And of the they're sector Flex what larger benefiting positive into seeing spaces, flex. coming shifting model. Vikram we're is because mentioned, and office rents tighter really

we look of we you the XX%. New market advantage. And So, if it actually in of control look in In mentioned or as so we're I actually my and X% York, we seeing London, took XX% remarks at the an demand. and

make And to of to drive in model. So, sustainable want. Boston, very we right? everywhere, you San that So, at if we we we actually get in another way, adjusted sure have that an effectively, and price York, to for the, select New is a we to XX% office the can start by EBITDA proactive occupancy members flex you're kind continuing to Francisco see we traditional closures, XX%. And leases and by bend XX%, and doing movement were took office tenants our look

in our our X.Xx to need. is demand we markets continue see pipeline So, international of

So, In there. comfortable we pretty the X.Xx. U.S. it's about feel

so, And in demand we us coming those see to markets. to continue

So, X% to said, quarter. or so we actually, are we a feeling I guided like growing about

amount We activity space because moderate continue you you're as available to you going higher occupancy, to do the And get to leasing lease. that. have of less

continue in points So, like said, quarter-over-quarter. I occupancy to about X gain see, points we to X

Thank you.

follow-up your Your next ahead. question Please go from is Omotayo line if see on open. mute? Omotayo, a Suisse. are of Check line is Okusanya to Credit with the you

Apologize for that. hi. Oh,

to the for kind that in, whatever you've reason? or it seems sense signed Just to where decided there bit you're markets you were And sense? share talk make could were that where this follow-on, doing of either a quarter kind contracts revenue of were what doesn't about agreement, if management that markets little fees that conceptually make any

Germany, again, in we've Antonio, you you locations, done in are few Dallas, Munich, in San we've in a Texas; opened few So the we predominantly know, done Irving, know, Texas; a quite even maybe XX% whole positive India. in And almost or in EBITDA India, is cash India. our year. India, flow positive occupancy well. It's been we've through performing the so. incredibly It's

the U.S. we, enterprise is you the India, in India has business enterprise, And about by Singapore, We've way. enterprise the almost market India, versus going slowdown In predominantly to in and XX% of done in back the actually few in fees. locations. XX% conversation a created and market. a an India we acceleration the we So, SMB know, own collect to quite franchise

occupied Israel see So, about EBITDA again, XX% and we is positive.

which few So, basically, locations Portugal, member. backed a Lisbon, Israel. We a by is in location in we've opened opened a was

we So, opened will. pre-leased, you it if

so in a we've done in being it's obviously well. markets United international Kong, those Singapore. market have mainly Singapore States Europe, lot from few shown obviously a of – as to Hong relocations India, in from By and the the very in And the those is way, benefiting them down incredibly locations of tremendously Israel, because

I the policy. one] And so, in, it, plus [China benefiting are [ph] call we

mean, the above obviously the been and occupied above think being XX% and time part XX% the margin provide when talked is that locations, we would our margins about good many Southeast you're above have numbers in XX% occupied, to we occupied. be? I what margins And as we've at XX% margin, talked which always about XX% those segment, markets I and have and had last in high. mid-XXs about, it we've all in asked Asian the XX% So, bar of are demonstrated occupied are guys locations many to you this very how that the chart if goes

for which So, ones the has consolidated effectively, XX%, talked grown that Andre now the occupied the building I than about margin, including is, whole think, XX% business, lower large. building is margin are the quite which at

shift continued see building. has So, occupancy the again, to to as higher the trend

So, those feedback. are the sort of of – the that some

Alright. [Technical Difficulty]

Omotayo. you, hear couldn't We

[Technical Thank you. Difficulty].

no Sandeep time, now for this call there to are at further will questions. the closing remarks. And over turn I any

you this for our morning. call joining Thank earnings

are continue of make continuing to increasing to cognizant our revenues drive sure expenses. our we down As we our have achieved we profitability, that and

possible not would base that, I'm please the work here the world. internally the our be throughout the progress without world. grateful With a good hard have Goodbye. day. for employee my Our colleagues many of of contributions around

joining conference for you all call. Thank today's

may now disconnect. You