WeWork on Tuesday brought forward its target of becoming free cash flow positive by a year to 2022 as chairman Marcelo Claure pushes ahead with his five-year turnaround plan aimed at boosting valuation and winning back investor trust.
The office-sharing start-up, which has gone through a meltdown as its public offering imploded last year, also said it expects to record its first ever US$1-billion revenue quarter this year.
The company aims to achieve free cash flow of more than US$1 billion by 2024.
As part of its overall plan, the company named real estate veteran Sandeep Mathrani as chief executive officer earlier this month to put the company on a profit-making trajectory.
The company is also reshuffling its board and said on Tuesday that three directors – Mark Schwartz, Steve Langman and Lew Frankfurt – stepped down.
Mr. Schwartz is a former Goldman Sachs executive and has been a board member at WeWork since August, 2017. Mr. Langman is a co-founder of private equity Rhone Group, which backed a US$2.9-billion real estate investment fund created in May, 2019, with Canadian property investor Ivanhoe Cambridge.
WeWork’s board also includes Bruce Dunlevie of Benchmark Capital and Mr. Claure, who was parachuted into WeWork from SoftBank Group Corp. last year.
WeWork said Kirthiga Reddy, who was named to the board last week, will replace Ron Fisher as a representative of SoftBank Vision Fund.
WeWork also said it expects to reach 1,000 locations worldwide by 2021 and one million memberships by 2023.
As of the end of 2019, WeWork was present in 739 locations across 140 cities.
WeWork said it expects to have US$2.5-billion-US$3.0-billion of additional liquidity for future growth, provided it successfully meets the target on cash-flow break-even in 2022.
The company said in December that it arranged a US$1.75-billion letter of credit with Goldman Sachs that was in the process of being syndicated and whose funds were expected to be available in January.
Under the new credit facility, WeWork is not required to post any cash collateral and will have access to US$800-million in working capital, which was restricted under the previous credit facility.
The credit line is part of SoftBank’s US$9.5-billion bailout that was announced in October when money-losing WeWork was on the brink of running out of cash.