IWG Q2 Earnings Call Highlights

IWG reported strong first-half growth , with system-wide revenue up 11% to $2.4 billion and company-owned revenue up 5%.

The company maintained its 2026 adjusted EBITDA guidance of $585 million to $625 million and its medium-term target of at least $1 billion.

The managed and franchised network continued to expand rapidly: revenue rose 36%, recurring management fees increased 84%, and more than 610,000 rooms are now open or contracted.

IWG expects recurring management fee income to reach $80 million in 2026 and $125 million in 2027.

IWG returned $109 million to shareholders in the first half while maintaining 2026 net capital expenditure guidance of $150 million.

Management expects second-half cash flow and overhead efficiency to improve, with year-end net debt-to-EBITDA projected below 1.5 times.

IWG LON: IWG reported first-half 2026 system-wide revenue growth of 11% to $2.4 billion, supported by expansion in its managed and franchised network and continued growth in company-owned locations.

The flexible-workspace operator reiterated its full-year adjusted EBITDA guidance of $585 million to $625 million and its medium-term target of at least $1 billion in adjusted EBITDA.

Christian Schmitz, who became chief executive in June, said the company is positioned to benefit from a structural shift toward flexible real estate arrangements, as businesses seek shorter commitments and the ability to scale their office use up or down.

He said IWG’s priorities are to expand margins in company-owned centers, increase fee income from managed and franchised locations, and broaden its network coverage.

Managed and franchised system-wide revenue rose 36% to $535 million in the first half, while gross profit increased 48% to $90 million.

Recurring management fees climbed 84% to $35 million.

Including franchise and joint-venture fees, total recurring fees were $57 million during the period.

IWG signed 728 new centers and opened 425 during the first half.

It ended June with about 358,000 managed and franchised rooms open, up by roughly 51,000 from December, alongside a signed pipeline of 257,000 rooms.

The company said this resulted in more than 610,000 rooms either open or contracted.

Charlie Steel, chief financial officer, said the current managed and franchised estate and signed pipeline have the potential to generate more than $2 billion of annual system-wide revenue once locations are opened and mature.

IWG continues to expect recurring management fee income of $80 million in 2026 and $125 million in 2027.

Schmitz said the company’s network and existing company-owned estate provide the brand recognition, customer base and coverage that attract third-party partners.

Managed and franchised operations accounted for 22% of system revenue, 46% of locations and 32% of rooms in the first half, compared with 12%, 19% and 14%, respectively, in the first half of 2023.

Company-owned revenue increased 5% to $1.9 billion, ahead of IWG’s full-year target of at least 4% growth.

Adjusted gross profit in the segment rose 4% to $479 million.

Revenue per available room, or RevPAR, increased 11%, which Steel attributed to pricing actions across centers of different maturity levels and the closure of low-RevPAR rooms.

Schmitz said IWG manages company-owned centers on an individual basis, monitoring occupancy, pricing, service revenue and local costs.

The company said 26% of its estate is now on variable rent.

It also completed bolt-on center acquisitions, which Steel said were purchased at attractive valuations and could provide margin opportunities as they are integrated into IWG’s operating platform.

Management said enter...