NEW YORK (Reuters) - The We Company, parent of flexible workspace operator WeWork, said on Wednesday losses narrowed slightly in the first quarter from a year earlier to $264 million as revenue continues to double annually and its customer base surged.
The New York-based company, which earlier on Wednesday said it created a $2.9 billion real estate investment platform that marks an evolution in its investing strategy, said interest and other expenses widened to $378 million from $19 million in the first quarter of 2018.
Money-losing We Company in April filed paperwork for an initial public offering that could encounter a cool reception after the struggles of Lyft Inc and the underwhelming debut by Uber Technologies Inc.
We Company’s net losses declined by $10 million from $274 million a year earlier. Cash on hand was $4 billion and rose by $1 billion on April 15 from warrants due to SoftBank Corp, a major investor in WeWork. The company said it expected a further $1.5 billion from warrants due to SoftBank in April 2020.
Revenues rose to $728.3 million in the first three months of the year and, based on the pace in March, the company estimated yearly revenue of $3.02 billion.
Memberships in the first quarter climbed to 466,000 from 219,000 a year ago as enterprise clients representing companies with at least 1,000 employees rose to 175,000, or 40% of WeWork’s customer base.
Enterprise clients have doubled from the first quarter of 2017, when they represented 21% of WeWork memberships.
The number of WeWork locations rose to 485 as its international operations grew to 46% of revenue, up from 38% in the first quarter of 2018.
Adjusted operating earnings, or EBITDA, were a negative $220 million, roughly double the prior year’s negative $107 million.
WeWork began publicly disclosing a limited set of its financial statements last year after raising $702 million in a sale of a high-yield bond. Ahead of the report, WeWork’s junk bond slipped fractionally in price on Wednesday, with its yield rising to a two-week high of 8.97%.
We Company earlier said it created investment platform ARK with Canada’s Ivanhoe Cambridge, the property arm of Caisse de dépôt et placement du Québec, which provided $1 billion in funding.
The platform builds on a venture WeWork has with private equity firm the Rhone Group, which spearheaded the purchase of the former Lord & Taylor building on Manhattan’s Fifth Avenue.
Reporting by Herbert Lash; Editing by Lisa Shumaker