despite the good news about it lately debt reorganizationWeWork again said it was taking longer than expected for the company to become profitable.
WeWork plans to become cash flow positive sometime in the second half of 2024, CEO Sandeep Mathrani said on the company’s earnings call Tuesday. Earlier this year, he said WeWork would be profitable by December.
The delayed target date comes after the company said it had realized savings from a $1 billion debt restructuring in March.
The update frustrated PiperSandler analyst Alex Goldfarb, who pressed executives on the earnings call to ask why the company changed its forecast.
Mathrani said WeWork expects to be cash flow positive in the short term by the end of this year, but to return to deficit before turning around more permanently sometime in the second half of 2024.
“Will 2024 be the year of free cash flow?” he asked. “The answer is yes.”
To be sure, having positive cash flow doesn’t equate to profitability, but it’s a critical step toward getting there.
Analysts questioned WeWork on Tuesday for the first time since it announced it had reached a deal with its main investor, SoftBank, to reduce its debt from $3.6 billion to $2.4 billion and delay maturities from 2025 to 2027.
The company reported a first-quarter loss of $299 million, an improvement from a loss of nearly $500 million a year earlier.
The NYSE notified WeWork last month that it may hold its stock delist Because the stock closed below $1 on average during the 30-day trading period.
WeWork responded that it was considering a reverse stock split to return to compliance.
Mathrani said on Tuesday that he would monitor the share price over the next three months.
“I can assure you that we will ensure that the stock is not delisted,” he said. “We’ll see how the stock reacts based on how we perform next quarter.”
WeWork shares closed at 39 cents, down 9% on Wednesday, after falling to an all-time low of 38 cents in late afternoon. Shares traded at 48 cents after hours on Monday night before reporting earnings the following morning.
