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Investing.com - International Workplace Group Plc (LON:IWG) on Tuesday reported third quarter system-wide revenue of $1.13 billion, up 4% YoY but slightly below analyst expectations, as the company continues to expand its global network of flexible workspaces.
The world’s largest hybrid workspace platform saw its shares fall 2.6% following the announcement as investors reacted to mixed results across its business segments.
The company’s managed and franchised segment showed strong performance with system-wide revenue growth of 36% and an impressive 83% increase in recurring management fees compared to the same period last year. However, company-owned revenue of $806 million came in below analyst expectations of $833 million, remaining flat year-over-year.
"I am pleased with the financial results in the third quarter of 2025," said Mark Dixon, Chief Executive of IWG. "The incremental investment we have made in our Managed & Franchised segment has already led to an acceleration in the number of locations we have opened and added to the pipeline as we continue to expand our network and coverage."
The company reported significant network expansion with 335 new signings in Q3, a 43% increase from the previous year, and 215 new location openings, up 41% YoY. This growth aligns with IWG’s capital-light strategy, which has been a key focus for the company.
RevPAR (revenue per available room) for the company-owned segment was $354, down 3% YoY but showing sequential improvement from the first half of the year. The company indicated that its strategy to grow occupancy is working and should drive revenue growth throughout Q4 and into 2026.
Digital and Professional Services revenue was $106 million, down 8% YoY, though underlying revenue was flat when excluding an exited contract.
Net financial debt increased to $813 million from $754 million at the end of June, partly due to an acceleration of the company’s share buyback program, with $47 million spent repurchasing shares during the quarter.
IWG confirmed its full-year 2025 guidance, maintaining its adjusted EBITDA target and reiterating its commitment to delivering EBITDA of at least $1 billion in the medium term. The company plans to return at least $140 million to shareholders in 2025.