Specimen 015 — WeWork: The Profit That Excluded the Rent

Community-adjusted EBITDA was the profitability measure WeWork devised for its investors. It counted profit before interest, taxes, depreciation and amortization, and also before the building- and community-level operating expenses WeWork called its largest. Those excluded costs were rent and tenancy, utilities, internet, the salaries of building staff, and amenities 1.

By the prospectus WeWork filed on August 14, 2019, the measure had been dropped and contribution margin printed in its place 2. That filing reported a 2018 net loss of $1.9 billion 2. It also printed 2018 contribution margin, excluding non-cash straight-line lease cost, of $467.1 million, and counted 527,000 memberships across 528 locations 2.

The leases behind those locations ran as long as fifteen years, and future lease payment obligations reached $47.2 billion as of June 30, 2019 3. SoftBank's investment in January 2019 valued the company at $47 billion 4. Adam Neumann stepped down as chief executive on September 24, 2019. The offering was withdrawn on September 30, 2019, after public investors had valued the company as low as $10 billion 5.

WeWork filed for Chapter 11 protection in New Jersey on November 6, 2023, listing $18.65 billion of debts against $15.06 billion of assets 6.