With WeWork’s parent The We Company filing for an IPO, we thought it would be useful to compare WeWork to the leader in the burgeoning “coworking” industry.
WeWork claims to be the pioneer of space-as-a-service; however, Switzerland-based IWG (LSE: IWG) has been publicly traded for nearly 20 years. It provides similar short-term serviced office spaces to companies and individuals under its Regus and Spaces brands, but unlike WeWork, IWG is actually profitable.
WeWork has invested heavily in building out its portfolio and now has roughly the same number of workstations as IWG, but these investments have weighed heavily on profitability (-92% operating profit margin vs. 9% for IWG). WeWork’s redeeming quality is its growth; while IWG posted greater LTM revenue, WeWork demonstrated growth nearly 100 percentage points more than its European counterpart. Still, it remains to be seen how its private market valuation of nearly 10x IWG’s $3.7 billion market cap will hold up in the public markets.
The side-by-side comparison below highlights the stark differences between the two companies.
| WeWork vs. IWG | ||
|---|---|---|
| WeWork | IWG | |
| LTM Revenue (millions) | $2,593 | $3,256 |
| 2018 Revenue Growth | +106% | +8% |
| LTM Operating Profit (millions) | -$2,383 | $300 |
| Operating Margin | -92% | 9% |
| Locations (as of 6/30/19) | 528 | 3,334 |
| Workstations | 604,000 | 602,535 |
| Most Recent Valuation (millions) | $47,000 | $3,700 |
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