REG - Intnl Workplace Grp - Preliminary Results Announcement
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RNS Number : 0253V International Workplace Group PLC 03 March 2026
03 March 2026
PRELIMINARY RESULTS ANNOUNCEMENT
International Workplace Group plc, the world's largest hybrid workspace
platform with a network in over 120 countries through flexible workspace
brands such as Regus, Spaces, HQ, Signature, issues its preliminary results
for the twelve months ended 31 December 2025.
ACCELERATING GROWTH AND FURTHER SHARE BUYBACKS
Group performance: System-wide revenue growth, Adjusted EBITDA growth, record openings
• Highest-ever System-wide revenue with growth of 4% to $4.5bn
(FY2024: $4.3bn)
◦ Higher Group revenue vs 2024 at $3,762m
◦ 2.4x growth in recurring management fee revenue year-over-year to
$45m
◦ Company-owned pricing and occupancy strategy delivering in line with
expectations, with momentum into 2026
◦ 97bps increase in Company-owned adjusted gross profit margin
◦ Core overheads flat, demonstrating operational leverage as we
continue to invest in growth
• Highest-ever Adjusted EBITDA with 6% growth to $531m (FY2024: $501m)
• Highest-ever network growth with 1,132 new centre signings and 782
openings (FY2024: 899 / 624)
• Strong balance sheet: no refinancing requirements until 2029 and
leverage continues to fall ending 2025 at 1.35x net debt / Adjusted EBITDA
(FY2024: 1.46x)
• Cashflow before corporate activities growth of 60% to $162m in 2025
(FY2024: $101m)
• $144m of capital returned to shareholders in 2025 comprising $14m of
dividends and $130m of share buybacks
• 2026 buyback programme continuing and increased by a further $50m to
$100m
Summary financials and segment overview
$m, US GAAP basis FY2025 FY2024 % change
System-wide revenue(2, 3) 4,453 4,297 +3.6%
Group revenue 3,762 3,756 +0.2%
Adjusted EBITDA(1, 2, 3) 531 501 +6.0%
Operating profit 143 142 +0.7%
Adjusted Earnings per share (¢)(2, 3) 4.8 2.8 +76.4%
Cashflow before corporate activities 162 101 +60.4%
Net debt 715 729
1. EBITDA excluding adjusting items and depreciation of
landlord contributions (cost reimbursements) on leased properties
2. Refer to the Chief Financial Officer Reviews and the
Reconciliation for alternative performance measures schedules for the detailed
calculations
3. See the Glossary for the defined terms
At the Investor Day in December 2025 the segmental reporting was revised and
the Company announced that going forwards it would report in two divisions
which are presented below. A reconciliation between the new and historic
divisional reporting is shown on page 65.
Segmental Summary
$m, US GAAP basis System-wide revenue Segment revenue Adjusted gross profit Maintenance capex (net) Growth
capex (net)
Managed & Franchised 876 185 150 n/a 7
Company-owned 3,577 3,577 945 92 75
Total in FY 2025 4,453 3,762 1,095 92 82
Total in FY 2024 4,297 3,756 1,028 49 63
Managed & Franchised: Record network growth, RevPAR developing as expected
driving System-wide revenue and fee income
• 28% System-wide revenue growth year-over-year to $876m (2024: $682m) -
fastest-ever growth in absolute terms for this segment of $194m
• 60% growth in total fee income to $126m (2024: $79m)
◦ 140% growth of recurring management fees to $45m (2024: $19m)
• Previously-announced further investment in the partnership sales team
has accelerated the development of pipeline with 1,089 new locations signed in
2025 (2024: 853) - growth of 28%
• Record 731 openings in 2025 with almost 3 new centres opened every
working day
• At the end of 2025, 307k rooms were open with a further 227k rooms
that were signed not yet open. Once these rooms are all open and mature, they
are expected to produce system-wide revenue of $1.8bn per year
• Recurring management fees expected to grow to $80m in 2026 as
previously guided. Recurring fees include all of the fee-based income tied to
partner-operated and franchised centres
• The Managed and Franchised segment now comprises 20% of System-wide
revenue (2024: 16%), 41% of locations (2024: 28%) and 29% of rooms (2024: 19%)
$m FY2025 FY2024 Growth
System-wide revenue 876 682 28%
Gross profit 150 108 39%
Fee income 126 79 60%
RevPAR ($) 327 408 (19.9)%
RevPAR - Managed 211 256 (17.6)%
RevPAR - Managed - excluding 2024 openings 350 n/a n/a
RevPAR - Franchised & JVs 511 499 2.4%
Rooms open 307k 185k 66%
Centres open 1,891 1,116 69%
Rooms added in the period (net) 122k 62k 97%
Centres opened in the period 733 551 33%
Rooms in pipeline(1) 227k 182k 25%
New centre deals signed 1,089 853 28%
1. Signed rooms that have not been opened after 2 years have now been
removed from the pipeline
Company-owned: Increased occupancy drives revenue visibility into 2026. Margins continuing to expand
• Profitability continuing to improve with adjusted gross margin
increasing to 26% ($945m) in 2025 from 25% ($920m) in 2024
• Pricing and revenue trends are positive into 2026 benefiting from the
focus on improving occupancy during 2025
• RevPAR for 2025 of $340 (2024: $357)
• We continue to selectively add locations to our Company-owned network
with 49 new centres opened and 43 new locations signed
• Revenue growth expected to be at least 4% in 2026 as communicated at
our Investor Day in December
• The Company-owned segment now comprises 68% of System-wide revenue
(2024: 70%), 59% of locations (2024: 72%) and 71% of rooms (2024: 81%)
$m FY 2025 FY 2024 Change
Revenue 3,577 3,615 (1)%
Open Centre Revenue 3,028 3,025 0%
RevPAR ($) 340 357 (5)%
Rooms open 740k 775k (5)%
Centres open 2,718 2,873 (5)%
Centres opened in the period 49 73 (33)%
Adjusted gross profit 945 920 3%
Adjusted gross profit margin 26% 25% 97bps
Overhead: Continued disciplined control of overhead costs
• Total overheads increased from $514m to $546 driven by the increase in
discretionary overheads of $36m to $95m. These discretionary investment
overheads represent non‑capitalised spending undertaken at management's
discretion to support and accelerate growth. In 2025 these included:
o Increased investment in the Partnership Sales team to drive managed
partnership location signings
o Increased marketing investment to support new locations
o Project costs, including the Company's adoption of US GAAP accounting
standards
Financing and Net Debt
($m) FY2025 FY2024 Change
Cash & Cash equivalents (302) (137) (165)
2027 0.5% Convertible Bond(1) 6 199 (193)
2030 €625m 6.5% Corporate Bond(1) 658 648 10
2032 €300m 5.125% Corporate Bond(1) 333 - 333
Other 20 19 1
Net debt 715 729 (14)
1. Presented net of amounts related to the effective portion of forward
exchange contracts and cross-currency interest rate swaps that hedge the
principal component of the debt
Capital structure and allocation: Balance sheet strength enabling shareholder returns
• Following the exercise of the investor put on the 2027 Convertible
Bond, there is a residual $6m maturity in December 2027, and no other
financing maturities until 2029 (RCF), 2030 and 2032 (Eurobonds)
• In 2025, the Company returned $144m to shareholders via share
buybacks ($130m) and dividends ($14m)
• The Company announced the first tranche of the 2026 share buyback on 31
December, and today, announce an increase of another $50m to the buyback
programme
• The Board has recommended a final dividend for 2025 of 0.93¢
representing an increase of 3% in the final dividend per share and resulting
in a total dividend for 2025 of 1.38¢
• We maintain our commitment to a BBB credit rating
Mark Dixon, Chief Executive of International Workplace Group plc, said:
"We set out a clear strategy at our first Investor Day in New York in December
2023 for capital light growth to deliver cashflow and business simplification.
As we outlined in our Investor Day in December 2025 - this is what we have
been delivering on, and we will continue to do so.
We continue to have structural tailwinds and a business which is both prepared
for and delivering network growth. In the last twelve months, more locations
were opened than we had open after fifteen years of operating. We now have
over 1 million rooms in over 120 countries with a significant pipeline. This
is expected to drive our future growth in revenue, EBITDA and cash flow"
Outlook and guidance
2026 has started as expected and we maintain a cautiously optimistic outlook
for the year. We reiterate our full-year guidance as outlined at the Investor
Day on 4 December 2025:
* Adjusted EBITDA of $585m-$625m, on the assumption that this will be driven
predominantly by revenue growth rather than cost reduction
* Further share buybacks with a second tranche of $50m, taking the announced
programme to $100m for the year so far
* Continued medium-term guidance to deliver at least $1bn EBITDA.
Financial calendar
17 March 2026 Publication of 2025
Annual Report & Accounts
1 May 2026 Final 2025
dividend record date
12 May 2026 Q1 2026 trading
update
19 May 2026 Annual General
Meeting
29 May 2026 Final 2025
dividend payment date
11 August 2026 H1 2026 results
3 November 2026 Q3 2026 trading update
Results presentation
Mark Dixon, Chief Executive Officer, and Charlie Steel, Chief Financial
Officer, will be hosting a presentation of the results today for analysts and
investors at 9.00am UK time (SPACES, New Broad Street House, 35 New Broad St,
London, EC2M 1NH).
The presentation will be available via live webcast and will be available to
view at the following link IWG Analyst Presentation
(https://investorbrand.brunswickgroup.com/IWG-plc-2025-Full-Year-Results)
Further information
International Workplace Group plc Brunswick Tel: + 44 (0) 20 7404 5959
Mark Dixon, Chief Executive Officer Nick Cosgrove
Charlie Steel, Chief Financial Officer Peter Hesse
Richard Manning, Head of Investor Relations
Chairman's Review
Our performance
During 2025, IWG continued to deliver on the execution of its strategy,
strengthening our position as the world's leading platform for enabling work
where, when and how it is conducted. Our capital-light approach to growth
combined with strong operating results enabled a significant return of cash to
shareholders during 2025 through our share buyback and dividend programmes
while simultaneously adding a record number of new locations to our network.
We are entering 2026 with a strong pipeline for additional capital light
location openings alongside the continuation of our share buyback programme.
This momentum combined with operational discipline underpins both our growth
ambitions and our commitment to delivering sustainable shareholder returns.
Our strategy
IWG's rapid growth reflects our ability to anticipate and respond to constant
changes in how businesses across the world wish to manage and consume
workspace. Our achievements against a backdrop of ongoing macroeconomic and
geopolitical uncertainty reflects the resilience of our capital-light
operating model and sustained demand for flexible workspace solutions.
Our effective combination of technology with the world's largest network of
flexible workspace provides organisations with adaptable workspace solutions
that are conveniently located near their workforce and tailored to their
requirements. By addressing the wide-ranging needs of audiences that include
workers, local businesses, businesses in multiple markets, and building
owners, we deliver greater efficiency and choice for customers, attractive
returns for our partners and shareholders, and long-term opportunities for our
people.
Our people
Once again, the professionalism and commitment of our teams in markets across
the world have provided the cornerstone of our continued success and
accelerating growth. On behalf of the Board, I would like to recognise the
outstanding contribution of our colleagues globally, whose focus on
operational excellence and customer service continues to differentiate IWG in
competitive markets. IWG remains committed to fostering an engaging and
inclusive working environment that enables them to develop and build
successful careers.
Our sustainability journey
IWG is actively navigating the evolution of sustainability parameters,
technical and regulatory requirements, market developments and stakeholder
expectations. During 2025 we continued to make substantial progress on our
sustainability journey including the development of our Net Zero Transition
Plan that will guide our future activities. Sustainability considerations are
embedded in our governance and operating processes and we will issue our first
standalone Sustainability Report during the second half of 2026, further
enhancing transparency for our stakeholders
Our Board
We are focused on the execution of the strategy and managing succession at the
Board level. This was reflected in several appointments during 2025, with
Lázaro Campos joining the board as Senior Independent Director and Stephen
Jennings joining the board as Chair of the Nomination Committee. Both of these
individuals bring significant relevant business and board experience to IWG.
Their appointments increased the number of independent directors and depth of
expertise as Board composition, effectiveness and succession remain ongoing
priorities. I would like to thank all of the Board members for their
commitment and constructive input during 2025 contributing to the delivery of
value for all IWG stakeholders.
Looking ahead
We are at a moment when the world of work is changing faster and more
significantly than ever before. Technological advancements, including the
rapid evolution of AI are reshaping how and where work is undertaken. This
dynamic environment creates new possibilities that are very well served by the
IWG operating model. Flexibility remains central to success in such a
fast-changing environment, and this is precisely what IWG delivers to our
customers and partners.
As we look to 2026 and beyond, I am confident that IWG's unique position
within the world of work will continue to support its positive evolution,
driven by the effective execution of a strategy that meets the needs of
millions of workers, their employers, building owners, communities, our people
and our shareholders.
Douglas Sutherland
Chairman
3 March 2026
Chief Executive Officer's Review
In 2025, a significant milestone was achieved with more new locations signed
and opened in a single year than in the entire first two decades of our
operations. Our network now comprises more than one million rooms in over 120
countries and with a substantial pipeline in place, our growth will continue
to accelerate rapidly in the years ahead.
We remain laser-focused on rapidly expanding our coverage to create a truly
global network of buildings from the largest cities to smaller towns and the
provinces. Our capital-light expansion strategy, delivered through
partnerships with property owners and investors, enables companies of all
sizes to work productively in locations that are convenient to their people.
Increasingly, our solutions are helping companies move away from the expense
and inflexibility of long-term leases, replacing them with flexible,
cost-effective agreements for smaller fully equipped spaces in one of our
centres. At the same time, they retain the ability to access more than 5,000
locations worldwide.
The significant growth of platform and hybrid working has revolutionised how
and where people work, bringing significant productivity benefits and lower
costs to companies while transforming the working lives of their teams.
Over the past few years, these more flexible ways of working have become the
default model for a significant proportion of white-collar workers with
companies empowering their employees to work across multiple locations,
splitting their time between local workspaces, a central office and home.
This is not simply a change in how people work, rather a rebalancing of where
economic value is created. The days of needing to be tethered to a central HQ
are behind us. Technology has changed everything, effectively removing the
need for daily long and expensive commutes.
This long-term shift towards the hybrid model is one of the mega-trends of our
time and represents a substantial financial opportunity for IWG. 83% of CEOs
are already empowering their teams to work from multiple locations and with
1.2 billion white-collar workers globally, our industry has a total
addressable audience valued at more than $2 trillion. Platform working is set
to become the norm for many of these employees.
In 2025, we had the opportunity to partner with Arup to explore the
productivity gains of more localised working for businesses of all sizes, as
well as the economic advantages for them and their communities. This along
with the existing research by Professor Nicholas Bloom - a senior fellow at
the Stanford Institute for Economic Policy Research has contributed greatly to
our understanding of the productivity benefits of more flexible ways of
working.
This collective research confirms what we've long seen coming: working from
local offices and workspaces closer to where people live doesn't just improve
the quality of life for employees, it also delivers major productivity
benefits for businesses, cities and entire economies.
The Rise of Platform Working
Today, the remarkable advances in cloud technology and video conferencing
software - both vital to enabling effective hybrid working - mean workers no
longer need to travel long distances daily. As a result, we are seeing a
redistribution of the geography of work with teams able to spend a meaningful
amount of time in their local communities alongside the city centre.
Innovations in technology will continue to advance in years to come and will
radically underline and fuel the flexibility of location.
The rising demand for more localised working has led to a large number of our
new IWG centres opening in the heart of local communities, suburbs and rural
areas, enabling many people around the world to say farewell to long daily
commutes.
Small towns have seen a dramatic increase in new locations with signings in
the U.S. including Franklin, TX, Berwyn, PA and Bloomfield Hills, MI, all with
populations below 5,000, while at the same time our customers can access a
growing number of premium and flagship city centre locations ranging from the
Chrysler Building in New York to the upcoming Olympia development in London.
Strategy
At our most recent Investor Day in December 2025, I was pleased to update the
market that our strategy to grow the most extensive coverage and network in a
capital-light manner is working, and it has enabled us to return significant
capital to shareholders. We expect to continue to deliver both cashflow and
growth in the years ahead.
We are continuing to make ongoing investments into our world-class platform as
well as our marketing operations. These investments will enable us to deliver
on the rapid growth of our network coverage in partnership with the property
industry and investors using capital-light expansion methods such as
management agreements, partnering deals and franchising.
The shift towards hybrid and more localised working is propelling our business
forward with the fastest growth ever seen in our history. In 2025, we added a
record number of locations globally, signing 1,132 centres and achieved our
highest-ever revenues. We are the partner of choice for businesses of all
sizes including large enterprises with approximately 85% of the Fortune 500
amongst our customer base and an equally impressive 84% of our customers using
multiple products and services.
During the year, we accelerated our capital-light growth strategy allowing us
to capitalise on the growing number of property investors seeking to maximise
their returns by partnering with IWG. There are currently over 1,300 centres
in our rapidly expanding pipeline.
Focusing on growth through the capital-light business means that growth capex
requirements will be dramatically lower in the future, generating more free
cash flow for shareholders.
We are increasingly seeing partners sign multiple locations with IWG as they
grasp the scale of the opportunity in front of them. My greatest thanks go to
all our valued property owners and investors who have chosen to partner with
us and as a business we are resolutely committed to the long-term success of
these partnerships.
Market Leader in Innovation
As the market-leader in the structurally growing flexible and platform working
industry, we are exceptionally well positioned for the long term. Not only do
we lead the market on global reach, but also in a number of crucially
important areas for future growth such as our home work products.
IWG has created an outstanding Research and Development team to ensure we are
at the forefront of innovation. We will continue to add new concepts and
platforms to widen our offer further to our expanding customer base.
The Transformative Impact of Technology and AI
Hybrid working and digital technology have always had a symbiotic
relationship. Each wave of technological innovation enables more fluid
collaboration across geographies and teams, as well as between businesses,
fuelling the growth of hybrid. As a company, we are using AI more and more
across our business and it is improving our operations and making us more
efficient.
The ongoing rise and adoption of AI will be beneficial for IWG and we will
continue to be agile, adapting to new ways of working and harnessing its
benefits to significantly drive efficiency and increase the velocity of our
business. We expect even greater use of our network as companies grow their
adoption of AI.
Our Financial Performance
With such strong momentum globally behind the shift to platform and hybrid
working, confirmed by our financial results for 2025, our record system
revenue, EBITDA, and network growth have allowed us to increase and extend our
share buyback.
Our financial performance reinforces that we are successfully executing our
strategic goals and leave us well-positioned for 2026 and beyond.
I would like to take this opportunity to thank all our incredible team members
that were the driving force behind the rapid growth of our global network and
an excellent set of financial results. I would also like to acknowledge the
tireless hard work of our Finance department who were responsible for the
successful conversion of our reporting framework to US GAAP, the Group-wide
ERP implementation programme, and continued investment in AI and automation.
Looking ahead
The future for IWG and all our stakeholders remains bright. We continue to
grow our customer base, which is up 6% year-on-year, as well as our global
network and best-in-class portfolio of locations and brands, while delivering
on our capital-light expansion strategy.
2025 was a record year for both revenue and network expansion and provides the
foundations for continued growth in the year ahead. With 1.2 billion
white-collar workers globally and a potential audience valued at more than $2
trillion, there is substantial room for growth and as a company, we are
absolutely committed to capturing more of this market over the years ahead.
Mark Dixon
Chief Executive Officer
3 March 2026
Chief Financial Officer's Review
2025 delivered in line with guidance as we expected and outlined at the 2024
full-year results presentation in March 2025. We had the highest-ever network
growth at 782 openings, with System-wide revenue of $4.5bn, Adjusted EBITDA of
$531m, positive earnings for a second consecutive year and underlying cashflow
before shareholder returns of $162m. This enabled us to deliver capital
returns to investors of $144m, comprising dividends of $14m and share buybacks
of $130m. During 2025 we have also:
* Converted our reporting framework to US GAAP
* Completed the reorganisation of the Group's operating segments
* Undertaken a Group-wide ERP implementation and continued to invest in AI and
automation
* Strengthened our balance sheet further with no refinancing needs until 2029
through the issuance of a €300m
* Investment Grade bond in May, fully hedged into USD reducing FX volatility
These changes will enable us to capitalise on our scale as the business grows
while delivering further on our existing capital allocation policy with the
dividend and continued share buyback programme.
Group income statement
We again show strong system-wide revenue performance during 2025 which is
driving further capital-light income and therefore the business's transition
towards a fee-driven model.
$m, US GAAP basis 2025 2024
System-wide revenue 4,453 4,297
Revenue 3,762 3,756
Cost of Sales (2,731) (2,808)
Gross profit 1,031 948
Gross profit margin 27.4% 25.2%
Selling, general and administrative expenses (546) (514)
Allowance for credit losses (18) (13)
Depreciation & Amortisation before landlord contributions (357) (333)
Depreciation of landlord contributions (cost reimbursements) on leased 64 80
properties
Impairments, disposals and closures (31) (26)
Operating Income 143 142
Interest Expense (87) (64)
Other finance costs (13) (20)
Profit before tax 43 58
Taxation and equity method investments (28) (40)
Profit for the period 15 18
Net income (loss) attributable to non-controlling interests (3) -
Net income (loss) attributable to the Company 18 18
Basic EPS (¢)
From continuing operations 1.8 1.8
Attributable to shareholders 1.8 1.8
Adjusted EPS (¢)
From continuing operations 4.8 2.8
Attributable to shareholders 4.7 2.7
Segmental reporting
Up to 31 December 2025 the Company has been organised into three operating
segments based on the types of services provided, namely the IWG Network
(Company-owned and Managed & Franchised) and Digital & Professional
Services.
Company-owned comprises leased and owned properties, Managed & Franchised
comprises all centres that IWG operate on behalf of building owners or under
franchise agreements, and Digital & Professional Services comprises
enterprise managed real estate (where IWG manage space on behalf of an
enterprise customer with a back-to-back lease in place) and other activities
such as digital services, brokerage and consulting.
As announced at the Investor Day in December 2025, Digital & Professional
Services reporting will be integrated into the other two segments in 2026 as
follows:
* Enterprise Managed real estate business will be reported in the Company-owned
segment
* Virtual Office revenues associated with Company-owned locations reported in
Company-owned segment; and
* Digital, brokerage and consulting services will be reported in the Managed
& Franchised segment
The Managed & Franchised segment under both the old and new structure carries no lease liability as IWG does not hold the underlying property leases when it manages a site on behalf a third party.
The two segments are presented below with a reconciliation to the three segments in the APM section.
Revenue
Group system-wide revenue increased by 4% to $4,453m. Group revenue stayed
flat at $3,762m. This reflects the ongoing transition to a capital‑light
model, with the Managed & Franchised segment accounting for a growing
share of system‑wide revenue. While this segment remains smaller in absolute
revenue terms, the profitability of these revenues is significantly higher
than that of the Company‑owned segment, reinforcing the strategic value of
this shift.
Our Managed & Franchised business delivered 28% system-revenue growth
year-over-year to $876m (FY24: $682m) and $185m of segment revenue. Fee income
increased by 60% to $126m (2024: $79m), of which recurring management fees
grew 2.4x to $45m (2024: $19m). The growth in this segment is driven by the
unprecedented number of centre openings, 782 during 2025, where signings
continue to convert into openings at pace and therefore become revenue
generating
Company-owned remained stable, delivering segment revenue of $3,577m.
System-wide Revenue Segment Revenue
$m 2025 2024 % change 2025 2024 % change
Managed & Franchised 876 682 28% 185 141 31%
Company-owned 3,577 3,615 (1)% 3,577 3,615 (1)%
Group 4,453 4,297 4% 3,762 3,756 nm
Revenue per Available Room (RevPAR)
RevPAR is a monthly average KPI, defined as the system-wide revenue excluding
the Managed Real Estate business (where IWG manage space on behalf of an
enterprise customer with a back-to-back lease in place), and excluding centres
opened and closed during the year, divided by the number of available rooms,
which is defined as 7 square metres across all usable space. RevPAR is a well
understood measure used across many industries and is particularly relevant to
IWG as it incorporates all revenue received across IWG's expansive product
portfolio.
Given the scale of growth and room additions that the Company is adding to the
Network, RevPAR excluding centres opened in 2024 is presented below to show
RevPAR progression excluding the impact of centres not yet mature. It is
expected that the higher-growth segments will show a falling year-over-year
RevPAR because new locations that have opened but are not yet mature are
contained within the calculation.
Managed RevPAR is $211 (2024: $256) and excluding 2024 and 2025 openings is
$350, being driven by new centre revenue performing in line with our plans.
RevPAR in our franchised locations was $511 (2024: $499) which is higher than
in our Managed Partnerships locations due to: (a) franchise locations being
predominantly in high RevPAR countries, in particular Japan and Switzerland;
(b) the higher maturity of franchise locations which have been operating for
many years. As we have previously disclosed, RevPAR on these additional
Managed Partnerships rooms is targeted to be $250 at maturity.
RevPAR in Company-owned for 2025 was $340, down by ~5% (2024: $357). This is
due to price reductions to drive long-term occupancy. Higher occupancy also
drives more revenue capture opportunity through ancillary services.
System RevPAR ($, monthly average) 2025 2025 ex 2024 openings 2024 % change
Managed & Franchised 327 453 408 (19.9%)
Managed 211 350 256 (17.6%)
Franchised and JVs 511 527 499 2.4%
Company-owned 340 350 357 (4.6%)
IWG Network 338 363 367 (8.1%)
Adjusting items
The Group identified net adjusting items on gross profit of $64m (2024: $80m),
operating profit of $95m (2024: $106m) and net income of $(65)m (2024:
$(96)m).
These adjusting items refer to depreciation of landlord contributions (cost
reimbursements) on leased properties of $64m (2024: $80m), impairment of
long-lived assets and goodwill of $29m (2024: $83m), (gain) loss on disposal
of long-lived assets and other closure related (credits) costs of $2m (2024:
$(57)m) and gains on extinguishment of debt of $(1)m (2024: $(16)m).
Adjusting items impact ($m) 2025 2024
Depreciation of landlord contributions (cost reimbursements) on leased 64 80
properties
Adjusting items impact on Gross Profit 64 80
Impairment of long-lived assets and goodwill 29 83
Loss (gain) on disposal of long-lived assets and other closure related 2 (57)
(credits) costs
Adjusting items impact on Operating Profit 95 106
Adjusting items impact on EBITDA 95 106
(Gain) on extinguishment of debt (1) (16)
Depreciation of landlord contributions (cost reimbursements) on leased (64) (80)
properties included in EBITDA
Adjusting items impact on Net Income 30 10
Adjusted gross profit
Gross profit increased from $948m in 2024 to $1,031m in 2025 and adjusted
gross profit increased from $1,028m in 2024 to $1,095m in 2025.
Company-owned adjusted gross margin of 26.4% (2024: 25.4%), progression of
97bps as we continue to expect margins to trend towards our 30% target in the
medium term.
Adjusted gross profit ($m) 2025 Adjusting items(1) 2025 2024 Adjusting items(1) 2024
- Adjusted
- Adjusted
Managed & Franchised 150 - 150 108 - 108
Company-owned 881 64 945 840 80 920
Adjusted gross profit 1,031 64 1,095 948 80 1,028
1. Adjusting items refer to the impact of the depreciation of
landlord contributions (cost reimbursements) on leased properties on leases
included in Depreciation and Amortisation
Selling, general and administrative expenses
Group SG&A increased in 2025 to $546m (2024: $514m). Core overheads
remained flat as we continue to manage costs effectively, discretionary
overheads increased as we selectively invest in growth, specifically:
• $30m on the Partnership sales team, an additional investment of $5m
year-over-year, to ensure we maintain our market leading position. We signed
1,132 new deals in 2025 vs 899 in 2024, and whilst our partnership sales team
is an ongoing cost, we are expecting that the cost will be less than signings
growth, therefore margins should continue to grow
• $46m of marketing spend, an additional $33m year-over-year, to
support the brand and centre growth, in particular additional marketing spend
to increase the success of new centre openings
• $9m of project costs, $4m increase year-over-year, recognised on
one-off investments into the scalability of our sales and operating platform
as we continue to optimise and automate processes.
Operating Income
Operating Income increased to $143m. The increase in gross profit was offset
by year-over-year increases in SG&A of $32m, allowance for credit losses
of $5m, and impairments and gain / loss on disposals of long-lived assets of
$4m.
Net finance expense
The Group reported a net finance expense of $100m (2024: $84m). The increase
is predominantly due to higher interest rates on Group debt following
refinancing transactions completed in 2024 and the repayment of the
convertible bond. The Group did not believe a lower coupon on the convertible
bond merited additional dilution risk.
The net finance expense in 2025 includes cash interest of $87m related to
borrowing facilities (2024: $64m). All the Group's Eurobonds are hedged into
USD using cross-currency interest rate swaps. Under the swap agreements,
interest is paid semi-annually in Q2 and Q4. Other finance costs predominantly
include commitment fees and bank charges on facilities such as the $720m
revolving credit facility and guarantees.
As of 31 December 2025, the cross-currency interest rate swaps had a positive
fair value of $87m.
Finance expense $m 2025 2024
Interest expense (87) (64)
Foreign currency gain / (loss) 7 (17)
Gain on extinguishment of debt 1 16
Other finance costs( 1) (21) (19)
Net finance expense (100) (84)
1. Relates primarily to bank fees. Excludes financing fees on the issuance
of the Euro-bonds which are capitalised
Taxation
The estimated annual effective tax rate in 2025 is 74% (2024: 69%). The Group
has performed an assessment of its potential exposure to Pillar Two global
minimum income taxes and does not expect any material top-up taxes to arise in
any jurisdiction in which it operates. The majority of the Group's entities
benefit from transitional safe harbour rules which take them out of scope of
the full rules, and the remaining countries are not expected to give rise to
any material top-up tax. This position is unchanged from year end 2024.
Given the Group's global footprint across over 120 countries, it is not
possible to take advantage of tax grouping on a global basis. As a result, the
aggregation of tax paid in individual countries can lead to a high effective
tax rate on group profits in certain periods. Although it is difficult to
predict the impact of developments in global taxation, as profitability of the
Group increases it is expected that the effective tax rate will fall.
Earnings per share
Earnings per share attributable to ordinary shareholders in 2025 was a profit
of 1.8c (2024: profit of 1.8c). Adjusted earnings per share attributable to
ordinary shareholders in 2025 was a profit of 4.8c (2024: profit of 2.8c).
The weighted average number of shares in issue during the period was
1,007,813,563 (2024: 1,009,815,216). At 31 December 2025 the Group held
15,307,650 treasury shares (31 December 2024: 45,241,020). During the years
ended 31 December 2025 and 2024, share awards of 14,693,363 and 9,320,378,
respectively, had a dilutive effect with a negligible impact on the basic
earnings per share.
Adjusted EBITDA
The Group's Adjusted EBITDA increased to $531m (2024: $501m).
EBITDA ($m) Bridge 2025 Adjusting items(1) 2025 2024 Adjusting items(1) 2024
- Adjusted
- Adjusted
Managed & Franchised 150 - 150 108 - 108
Company-owned 881 64 945 840 80 920
Adjusted gross profit 1,031 64 1,095 948 80 1,028
SG&A (546) - (546) (514) - (514)
Allowance for credit losses (18) - (18) (13) - (13)
Depreciation & Amortisation (293) - (293) (253) - (253)
Impairments, disposals and closures (31) 31 - (26) 26 -
Operating profit/(loss) 143 95 238 142 106 248
Depreciation on property plant and equipment 238 - 238 199 - 199
Amortisation of intangible assets 55 - 55 54 - 54
Adjusted EBITDA 436 95 531 395 106 501
1 . Adjusting items as per table above.
Network growth
Unprecedented network expansion, increasing our footprint by 16% to 4,609
centres (2024: 3,989). We opened 782 new centres (2024: 624 centres) and
rationalised 162 centres (2024: 149 centres). Furthermore, 1,132 new centre
deals were signed in 2025. Out of the 1,132 new deals signed 99% of the deals
are capital-light which underpins our success of growing the network with
minimal capital expenditure.
Of the 782 centres opened in 2025, 769 centres were capital-light openings
which comprised managed partnership centres, variable rent centres, franchised
centres and joint-venture centres. Only 13 centre openings were on a fully
conventional basis.
Our estate of 4,609 centres as per the end of December 2025 is split into 41%
or 1,891 in Managed & Franchised, which increased by 69% year-on-year, and
2,718 centres in Company-owned, of which 756 have variable rents. Strong
growth in Managed partnership openings is expected to continue through 2026.
Key KPIs 2025 2024 YoY change YoY change %
Number of centres open 4,609 3,989 620 16%
Centre Openings 782 624 158 25%
Of which capital-light(1) 769 601 168 28%
In % 98% 96%
Total new centre deals signed 1,132 899 233 26%
Of which capital-light(1) 1,124 852 272 32%
In % 99% 95%
1. Includes locations signed/opened in Managed &
Franchised and Variable rent areas
System locations movement by type Dec-24 Centre openings Centre rationalisations Change 2025
Conventional 2,004 13 (60) 5 1,962
Variable rent (capital light) 869 36 (42) (107) 756
Company-owned 2,873 49 (102) (102) 2,718
Managed and Franchised (capital light) 1,116 733 (60) 102 1,891
Total 3,989 782 (162) 0 4,609
System rooms movement by type ('000) Dec-24 Centre openings Centre rationalisations Change 2025
Conventional 543 5 (14) (2) 532
Variable rent (capital light) 233 8 (9) (24) 208
Company-owned 776 13 (23) (26) 740
Managed and Franchised (capital light) 185 112 (11) 21 307
Total 961 125 (34) (5) 1,047
Cash flow
$m 2025 2024
Adjusted EBITDA 531 501
Working capital related to the depreciation of landlord contributions (cost (130) (117)
reimbursements) on leased properties
Working capital 45 (47)
Maintenance capital expenditure (net) (92) (49)
Funding of employee share awards(1) 15 -
Other items (9) (12)
Cash inflow from business activities(2) 360 276
Tax paid (34) (35)
Finance costs paid on bank & other facilities (82) (74)
Cash inflow before growth capex and corporate activities 244 167
Gross growth capital expenditure (123) (107)
Growth-related landlord contributions 41 44
Net growth capital expenditure (82) (63)
Purchase of subsidiary undertakings (net of cash) - (3)
Cash inflow before corporate activities 162 101
Proceeds from issue of loans, net of related transaction costs 2 808
Proceeds from issue of Eurobond, net of related transaction costs 337 669
Repayment of loans (6) (1,278)
Repayment of Convertible bond (195) (228)
Payment of ordinary dividend (14) (17)
Share buyback (130) -
Finance transaction costs (5) (30)
Other financing activities, net (incl. Contingent consideration payment on - (3)
acquisition of companies)
Net cash inflow for the year 151 22
Opening net cash 148 141
FX movements 5 (15)
Closing cash 304 148
The total proceeds from landlord contributions relating to the reimbursement
of costs and lease incentives of $49m (2024: $56m) are allocated between
maintenance landlord contributions of $41m (2024: $44m) and growth landlord
contributions of $8m (2024: $12m)
1. Expenses in relation to employee share awards are included
in Adjusted EBITDA
2. Cash flow before growth capex, tax, finance cost on bank
& other facilities, financing activities and dividends
We continued to grow our business and revenues whilst managing our cost base,
delivering a 60% increase in cash inflow before corporate activities in 2025
of $162m (2024: $101m). Cash flow was positively impacted by payments which
were scheduled in 2025, but were paid at the start of 2026. Working capital
relating the depreciation of landlord contributions (cost reimbursements) on
leased properties refers to historic cash contributions made by landlords for
growth capex in the Company-owned segment (shown as growth-related partner
contributions further down the cash flow statement) and is amortised over the
lifetime of the corresponding lease.
Cash tax paid was $(34)m in 2025 (2024: $(35)m) and primarily relates to
corporate income tax and withholding taxes paid in various countries in which
the Group operates. Finance costs paid on bank and other facilities was $(82)m
in 2025 vs. $(74)m in 2024, the increase of which is due to the refinancing
transactions completed in 2024 and 2025.
Cash inflow before growth capex, financing and dividends was $244m (2024:
$167m).
Total net capex was $174m in 2025 (2024: $112m). Maintenance capex was $92m in
2025 (2024: $49m) and has evolved as expected, and, as previously guided, is
expected to be around $100m and growing with inflation going forward. Net
growth capex was $82m in 2025 (2024: $63m but $88m as previously reported on a
pre-IFRS 16 basis). Net growth capex increased in 2025 primarily due to two
factors: firstly, timing differences in the enterprise managed real estate
business between when contributions were received and when the related capex
was spent and secondly, under US GAAP, capex is recognised when the cash is
actually paid. Some accrued (unpaid) capex from 2024 was settled in
mid‑2025, which has driven a higher year‑on‑year capex outflow on a US
GAAP basis. These two factors should be considered alongside the working
capital inflow for 2025.
Capital expenditure $m Managed & Franchised Company-owned 2025 Managed & Franchised Company-owned 2024
Growth capital expenditure - 110 110 - 89 89
Landlord contributions to Growth capital expenditure - (41) (41) - (44) (44)
Growth capital expenditure on Intangible Assets 7 6 13 14 4 18
Net Growth capital expenditure 7 75 82 14 49 63
Centre maintenance capital expenditure - 85 85 - 48 48
Landlord contributions to Maintenance capital expenditure - (8) (8) - (12) (12)
Maintenance capital expenditure on Intangible Assets - 15 15 - 13 13
Net Maintenance capital expenditure - 92 92 - 49 49
Financing
During 2025 the Group successfully completed an additional debt transaction,
extending the Group's debt maturity, and repurchased a further proportion of
the Convertible Bond:
* €300m Euro bonds at an issuance price of 99.369%, a fixed coupon rate of
5.125% and a bullet maturity of 14 May 2032. The bonds are traded on the
London Stock Exchange's International Securities Market and were fully hedged
into USD, along with the previously unhedged portion of the Group's €625m
Euro bonds.
* 2027 0.5% Convertible Bond:
o The Company repurchased £18m ($23m) face value of the Convertible Bond at
a weighted average price of £0.966, including accrued interest, representing
a consideration of £17m ($22m).
o On 9 December 2025, bondholders exercised their option to cash settle at
par and the Company repaid £136m ($183m) face value of the Convertible Bonds
at a weighted average price of £1, including accrued interest, representing
consideration of £136m ($183m).
o The Company also closed out all the remaining forward exchange contracts
relating to the Convertible Bond on 9 December 2025
o Following these transactions, £5m ($6m) in aggregate principal amount
of the Convertible Bond remains outstanding.
Net debt
Net financial debt was $(715)m at 31 December 2025 (31 December 2024:
$(729)m). Net debt came in below expectations this year, and we anticipate it
will rise through 2026 to slightly above 2024 levels. The Group's total debt
facilities, including details of drawings, is summarised below:
Net Financial Debt $m 31 Dec 2025 31 Dec 2024
2027 0.5% Convertible Bond 6 199
Euro Bond 991 648
RCF Drawn - -
Revolving Credit Facility (RCF) 720 720
RCF guarantee allocation 284 339
Cash RCF available 436 381
Other debt 20 19
Cash and cash equivalents (302) (137)
Net financial debt 715 729
At 31 December 2025 the Group complied with all facility covenants.
Dividends
In line with the Group's dividend policy, the Board has agreed to pay a final
dividend of 0.93¢ per share (2024: 0.90¢ per share). The dividend is
expected to be paid on 29 May 2026 to shareholders on the register at the
close of business on 1 May 2026. Dividends are declared in US dollars and paid
in pounds sterling with an option for shareholders to elect to receive payment
in US dollars. The foreign exchange rate at which the final dividend will be
converted into pounds sterling will be the New York closing rate on 1 May
2026.
Share buyback
IWG repurchased and cancelled 48,512,425 ordinary shares for $130m during
2025, equating to 4.5% of share capital outstanding. The programme average
purchase price was £2.0113, a 13.1% discount to the share price as at 31
December 2025. A $50m tranche of a new programme for 2026 was announced on 31
December 2025. All share buybacks have been carried out in accordance with the
authorisation granted by Shareholders.
Foreign Exchange
Per USD$ 2025 2024 % 2025 2024 %
Sterling £ 0.74 0.80 7% 0.76 0.78 3%
Euro € 0.85 0.96 12% 0.89 0.93 4%
Risk management
Effective management of risk is an ongoing concern for the Group, and
crucially, integral to our growth planning. A detailed assessment of the
principal risks and uncertainties which could impact the Group's long-term
performance and the risk management structure in place to identify, manage and
mitigate such risk will be included in the 2025 Annual Report and Accounts.
Related parties
There have been no changes to the type of related party transactions entered
into by the Group that had a material effect on the financial statements for
2025. Details of related party transactions that have taken place in the
period can be found in Note 23.
Going concern
The Group reported a profit after tax of $15m in 2025 (2024: profit of $18m).
Cashflow before growth capex and corporate activities but after interest and
tax was $244m (2024: $167m). Furthermore, net cash of $364m (2024: $272m) was
generated from operations during the same period. Although the Group's balance
sheet at 31 December 2025 reports a net current liability position of $2,068m
(31 December 2024: $2,277m), the Directors concluded after a comprehensive
review that no liquidity risk exists as:
1. The Group had funding available under the Group's $720m revolving
credit facility of $436m (31 December 2024: $381m) which was available and
undrawn at 31 December 2025. The facility's current maturity date is June
2029;
2. A significant proportion of the net current liability position is
due to lease liabilities which are held in non-recourse special purpose
vehicles but also with a corresponding right-of-use asset. A large proportion
of the net current liabilities comprise non-cash liabilities such as deferred
revenue of $334m (31 December 2024: $539m) is expected to be recognised in
future periods through the income statement. The Group holds short-term
customer deposits of $621m (31 December 2024: $584m) which are spread across a
large number of customers and no deposit held for an individual customer is
material;
3. The Group maintains a 12-month rolling forecast and a three-year
strategic outlook. It also monitors the covenants in its debt facilities to
manage the risk of potential breach. The Group expects to be able to refinance
external debt and/or renew committed facilities as they become due, which is
the assumption made in the viability scenario modelling, and to remain within
covenants throughout the forecast period. In reaching this conclusion, the
Directors have assessed:
· the potential cash generation of the Group against a range of
illustrative scenarios (including a severe but plausible outcome); and
· mitigating actions to reduce operating costs and optimise cash
flows during any ongoing global uncertainty.
4. Has ability to access further liquidity through the debt capital
markets as demonstrated through the bond issuance in 2024 and 2025
5. An external assessment from Fitch, a leading global credit rating
agency, which has rated the Group and its listed bonds as investment grade
with a BBB (Stable) rating and has continued to monitor the Group's financial
performance since the initial rating assessment.
Due to the above, the Group does not believe the net current liabilities
represents a liquidity risk. The Directors consider that the Group is well
placed to successfully manage the actual and potential risks faced by the
organisation including risks related to inflationary pressures and
geopolitical tensions.
On the basis of their assessment, the Directors have a reasonable expectation
that the Group has adequate resources to continue in operational existence for
a period of at least 12 months from the date of approval of these Group
consolidated financial statements and consider it appropriate to continue to
adopt the going concern basis in preparing the financial statements of the
Group.
Charlie Steel
Chief Financial Officer
3 March 2026
$m except per share amounts Notes FY2025 FY2024 FY2023
unaudited
Revenue 3 3,762 3,756 3,764
Cost of sales exclusive of items shown separately below 2,731 2,808 2,879
Gross profit 1,031 948 885
Selling, general and administrative expenses 2 546 514 496
Allowance for credit losses 3 18 13 19
Impairment of long-lived assets and goodwill 14/15/16 29 83 143
Loss (gain) on disposal of long-lived assets and other closure related
(credits) costs
14/15/16 2 (57) 32
Depreciation and amortisation before landlord contributions on leased
properties
14/16 357 333 386
Depreciation of landlord contributions (cost reimbursements) on leased
properties
16 (64) (80) (93)
Operating income (loss) 143 142 (98)
Interest expense (87) (64) (54)
Foreign currency gain (loss) 7 (17) 6
Gain on extinguishment of debt 17 1 16 -
Other finance costs (21) (19) (19)
Income (loss) before income taxes and share of income (loss) from equity 43 58 (165)
method investments
Income tax (expense) 6 (32) (40) (43)
Share of Income (loss) from equity method investments 4 - (1)
Net income (loss) 15 18 (209)
Net (loss) attributable to noncontrolling interests (3) - (2)
Net income (loss) attributable to the Company 18 18 (207)
Net income (loss) per common share:
Basic (¢) 1.8 1.8 (20.6)
Diluted (¢) 1.8 1.8 (20.6)
The accompanying notes are an integral part of these Consolidated Financial
Statements.
$m Notes FY2025 FY2024 FY2023
unaudited
Net income (loss) 15 18 (209)
Other comprehensive income (loss), net of tax: 20
Foreign currency translation adjustments 47 4 (8)
Changes in unrealised (losses) / gains on cash flow hedges, net of (41) 27 -
tax
Total other comprehensive income (loss) 6 31 (8)
Total comprehensive income (loss) 21 49 (217)
Net loss attributable to non-controlling interests 3 - 2
Foreign currency translation (gains) losses attributable to non-controlling (3) 1 (4)
interests
Comprehensive income (loss) attributable to non-controlling interests - 1 (2)
Comprehensive income (loss) attributable to the Company 21 50 (219)
The accompanying notes are an integral part of these Consolidated Financial
Statements.
$m except share and per share amounts Notes FY2025 FY2024
unaudited
Assets
Current assets:
Cash and cash equivalents 2 302 137
Accounts receivable, net 3 419 651
Prepaid expenses 9 165 152
Other current assets 8 390 391
Total current assets 1,276 1,331
Non-current assets:
Operating lease right-of-use assets 15 5,293 5,161
Property and equipment, net 16 778 784
Intangible assets, net 14 156 176
Deferred tax asset 6 362 357
Goodwill, net 14 1,245 1,173
Equity method investments 59 54
Other non-current assets 147 76
Total non-current assets 8,040 7,781
Total assets 9,316 9,112
Liabilities
Current liabilities:
Accounts payable 10 297 232
Short-term debt, net 17 17 212
Deferred revenue 3 334 539
Customer deposits 621 584
Operating lease liabilities 15 1,300 1,154
Accrued expenses and other current liabilities 11 775 887
Total current liabilities 3,344 3,608
Non-current liabilities:
Long-term debt, net 17 1,070 633
Long-term operating lease liabilities 15 5,022 4,989
Other non-current liabilities 12 185 91
Total non-current liabilities 6,277 5,713
Total liabilities 9,621 9,321
Shareholders' deficit
Common Shares; par value $0.0124; 8,000,000,000 shares authorised, 19 12 13
1,008,736,266 issued and outstanding as of 31 December 2025 and
1,057,248,651 issued and outstanding as of 31 December 2024
Treasury Shares at cost; 15,307,650 shares at 31 December 2025, 45,241,020 19 (67) (182)
shares at 31 December 2024
Additional paid-in capital 324 493
Accumulated deficit (264) (268)
Accumulated other comprehensive (loss) 20 (310) (313)
Total shareholders' deficit (305) (257)
Non-controlling interests - 48
Total shareholders' deficit (305) (209)
Total liabilities and shareholders' equity 9,316 9,112
The accompanying notes are an integral part of these Consolidated Financial
Statements.
Common Stock
$m except share amounts Notes Shares Amount Treasury Shares Additional paid-in capital Accumulated Deficit Accumulated other comprehensive income (loss) Total Shareholders' equity (deficit) - the Company Non-controlling interests Total Shareholders' equity (deficit)
Balance as of 1 January 2023 1,057,248,651 13 (194) 484 (61) (333) (91) 61 (30)
Net (loss) income - - - - (207) - (207) (2) (209)
Other comprehensive income (loss), net of tax - - - - - (12) (12) 4 (8)
Share-based compensation - - 1 7 (1) - 7 - 7
Treasury Share purchases - - (1) - - - (1) - (1)
Balance as of 31 December 2023 1,057,248,651 13 (194) 491 (269) (345) (304) 63 (241)
Net income - - - - 18 - 18 - 18
Other comprehensive income (loss), net of tax - - - - - 32 32 (1) 31
Share-based compensation - - - 2 - - 2 - 2
Dividends declared and paid - - - - (17) - (17) - (17)
Purchase of noncontrolling interests - - 12 - - - 12 (14) (2)
Balance as of 31 December 2024 1,057,248,651 13 (182) 493 (268) (313) (257) 48 (209)
Net income (loss) - - - - 18 - 18 (3) 15
Other comprehensive income, net of tax 20 - - - - - 3 3 3 6
Retirement of derivative liability on NCI repurchase - - 9 (3) - - 6 - 6
Share-based compensation 5/21 - - - 6 - - 6 - 6
Share buyback and cancellation 19 (48,512,425) (1) - (129) - - (130) - (130)
Issuance of shares under Share compensation plans - - 36 (21) - - 15 - 15
Dividends declared and paid 19 - - - - (14) - (14) - (14)
Purchase of noncontrolling interests - - 70 (22) - - 48 (48) -
Balance as of 31 December 2025 (unaudited) 1,008,736,226 12 (67) 324 (264) (310) (305) - (305)
The accompanying notes are an integral part of these Consolidated Financial Statements.
$m Notes FY2025 (unaudited) FY2024 FY2023
Cash Flow from Operating Activities:
Net income (loss) 15 18 (209)
Adjustments to reconcile net income (loss) to net cash provided by Operating
Activities:
Depreciation and amortisation before landlord contributions on leased 14/16 357 333 386
properties
Depreciation of landlord contributions (cost reimbursements) on leased 16 (64) (80) (93)
properties
Operating lease cost 15 1,419 1,394 1,444
Share-based compensation 5/21 6 2 7
Deferred income tax (benefit) expense 6 (9) (7) 12
Allowance for credit losses 18 13 19
Share of (income) loss from equity method investments (4) - 1
Impairment of long-lived assets and goodwill 15/16 29 83 143
(Gain) loss on disposal (24) (45) 18
Gain on extinguishment of debt (1) (16) -
Increase (decrease) in provision 1 2 (31)
Changes in operating assets and liabilities:
Accounts receivable and prepaid expenses 243 (58) (30)
Other current assets and non-current assets 8 (67) 27
Accounts payable, accrued expenses, and other liabilities 11 34 114
Deferred revenue (236) (10) (13)
Customer deposits 2 21 34
Operating lease liabilities (1,465) (1,424) (1,488)
Proceeds from landlord contributions on leased properties 1 (#_ftn1) 49 56 57
Other operating activities, net 9 23 1
Net cash provided by operating activities 364 272 399
Cash Flows from Investing Activities:
Purchases of property and equipment 16 (195) (137) (189)
Additions to intangible assets 14 (28) (31) (44)
Acquisition of companies, net of cash acquired 13 - (3) (7)
Other investing activities, net 6 - -
Net cash used for investing activities (217) (171) (240)
Cash Flows from Financing Activities:
Proceeds from issuance of long-term debt 17 2 808 1,237
Proceeds from issue of Euro bonds 17 337 669 -
Payment of debt issuance cost (5) (30) -
Repayment of long-term debt 17 (6) (1,278) (1,443)
Repayment of convertible bonds 17 (195) (228) -
Dividends paid 19 (14) (17) -
Share buybacks 19 (130) - -
Contingent consideration payment on acquisition of companies 13 - (1) (6)
Share issuance to fund exercise of employees share awards 21 15 - -
Other financing activities, net - (2) (3)
Net cash provided by (used for) financing activities 4 (79) (215)
Effects of exchange rate changes on cash, cash equivalents and restricted cash 5 (15) 3
Changes in cash, cash equivalents and restricted cash 151 22 (56)
Net increase (decrease) in cash, cash equivalents and restricted cash 156 7 (53)
Cash, cash equivalents and restricted cash at beginning of period 2 (#_ftn2) 148 141 194
Cash, cash equivalents and restricted cash at end of period(2) 304 148 141
1. During the years ended 31 December 2025, 2024, and 2023, the total cash
proceeds from landlord contributions on leased properties were $49 million,
$56 million, and $57 million, respectively. These amounts include cost
reimbursements of $7 million, $8 million, and $27 million, as well as lease
incentives of $42 million, $48 million, and $30 million. This is offset by the
non-cash amortisation of previous landlord contributions on leased properties
receivable of $130 million (2024: $117 million).
2. Restricted cash is presented within Other current assets and Other
non-current assets. Refer to Footnote 2, Description of the Business and
Summary of Significant Accounting Policies, for further details. All cash in
cash and cash equivalents is unrestricted.
Supplemental Disclosure of Cash Flow Information
$m FY2025 FY2024 FY2023
unaudited
Cash paid during the period for interest (net of amount capitalised) 82 74 70
Cash paid during the period for income taxes, net 34 35 43
Supplemental Disclosure of Non-cash Investing & Financing Activities
Non-cash purchase of property and equipment 28 43 25
Non-cash purchase of intangible assets - 10 1
Utilisation of treasury shares for acquisition of non-controlling interest 70 12 -
Additional ASC 842 Supplemental Disclosures
Cash paid for amounts included in the measurement of operating lease 1,465 1,424 1,488
liabilities
Cash received for operating lease incentives - landlord contributions (42) (48) (30)
Right-of-use assets obtained in exchange for operating lease obligations 290 276 286
Increase in right-of-use assets and operating lease liabilities for lease 897 714 670
reassessment
Reduction in right-of-use assets and operating lease liabilities for lease (242) (422) (327)
reassessment
The accompanying notes are an integral part of these Consolidated Financial
Statements
Note 1. Authorisation of financial statements
The financial information presented in this preliminary release does not
constitute full statutory financial statements. The Annual Report and
Financial Statements will be approved by the Board of Directors and reported
on by the Auditor in due course. Accordingly, the financial information is
unaudited. The Group financial statements for the year ended 31 December 2024
have been published. The audit report on those financial statements was
unqualified.
International Workplace Group plc ("IWG") is a public limited company
incorporated in Jersey and registered and domiciled in Switzerland. The
Company's ordinary shares are traded on the London Stock Exchange. The Group
and Company financial statements for the year ended 31 December 2025 were
authorised for issue by the Board of Directors on 3 March 2026 and the balance
sheets were signed on the Board's behalf by CEO Mark Dixon and CFO Charlie
Steel.
The Group financial statements have been prepared and approved by the
Directors in accordance with
Companies (Jersey) Law 1991 and accounting principles generally accepted in
the United States of America
("US GAAP"). The Company prepares its parent company annual accounts in
accordance with accounting policies based on the Swiss Code of Obligations.
Note 2. Description of the Business and Summary of Significant Accounting
Policies
Description of business
International Workplace Group plc, and its subsidiaries (collectively "the
Company"), is the world's largest hybrid workspace platform with a network in
over 120 countries through flexible workspace brands such as Regus, Spaces, HQ
and Signature. International Workplace Group plc owns, manages and is a
franchise operator of a network of business centres which are utilised by a
variety of business customers. As of 31 December 2025, the Company manages its
operations through three operating segments: Company-owned, Managed &
Franchised, and Digital and Professional Services. From 1 January 2026, the
Company has consolidated its Digital and Professional Services operating
segment into its other two operating segments.
All references to "we", "us", "our", "IWG", "Group" and the "Company" are
references to International Workplace Group plc and its subsidiaries on a
consolidated basis.
Basis of Presentation
The Directors are responsible for preparing the Company's consolidated
financial statements using applicable GAAP, as prescribed in the Companies
(Jersey) Law 1991. Since the 31 December 2024 Group financial statements were
authorised to be issued, the basis of preparation changed from International
Financial Reporting Standards as adopted by the European Union ('Adopted
IFRSs') to US GAAP. All values are in US dollars and rounded to millions,
except where indicated otherwise.
The financial statements have been prepared on a going concern basis, which
assumes that the Company will continue in operational existence for a period
of at least 12 months from the date of approval of these financial statements.
In assessing the appropriateness of adopting the going concern basis
consideration was given to forecast cash flows (including stress testing),
liquidity requirements and covenant compliance. The forecasts indicate that
the Company will remain within its existing facilities and comply with all
banking covenants throughout the assessment period under both base case and
reasonably possible downside scenarios.
Based on the assessment performed, there is a reasonable expectation that the
Company has adequate resources to continue in operational existence for the
foreseeable future. Accordingly, the Company continues to adopt the going
concern basis in preparing the financial statements.
Principles of Consolidation
Our consolidated financial statements include the accounts of our wholly owned
subsidiaries and other non-wholly owned entities in which we have a
controlling financial interest, including variable interest entities ("VIE")
for which we are the primary beneficiary.
The Company consolidates entities in which it has a controlling financial
interest based on either the variable interest entity (VIE) or voting interest
model. The Company is required to first apply the VIE model to determine
whether it holds a variable interest in an entity, and if so, whether the
entity is a VIE. If the Company determines it does not hold a variable
interest in a VIE, it then applies the voting interest model. Under the voting
interest model, the Company consolidates an entity when it holds a majority
voting interest in an entity.
The Company determines, at the inception of each arrangement, whether an
entity in which it has made an investment or in which it has other variable
interests in is to be considered a VIE. An entity is considered to be a VIE if
any of the following conditions exist: (a) the total equity investment at risk
is not sufficient to permit the entity to finance its activities without
additional subordinated financial support, (b) the holders of the equity
investment at risk, as a group, lack either the direct or indirect ability
through voting rights or similar rights to make decisions that have a
significant effect on the success of the entity or the obligation to absorb
the entity's expected losses or right to receive the entity's expected
residual returns, or (c) the voting rights of some equity investors are
disproportionate to their obligation to absorb losses of the entity, their
rights to receive returns from an entity, or both and substantially all of the
entity's activities either involve or are conducted on behalf of an investor
with disproportionately few voting rights. The Company consolidates a VIE when
it is deemed to be the primary beneficiary. The primary beneficiary of a VIE
is the party that meets both of the following criteria: (i) has the power to
direct the activities that most significantly affect the economic performance
of the VIE; and (ii) has the obligation to absorb losses or the right to
receive benefits that in either case could potentially be significant to the
VIE. Periodically, the Company determines whether any changes in its interest
or relationship with the entity impact the determination of whether the entity
is still a VIE and, if so, whether the Company is the primary beneficiary. If
the Company is not deemed to be the primary beneficiary in a VIE, the Company
accounts for the investment or other variable interest in a VIE in accordance
with the applicable requirements of US GAAP.
All material intercompany transactions and balances have been eliminated in
consolidation. References in these financial statements to net income (loss)
attributable to the Company and total shareholders' equity (deficit) - the
Company do not include noncontrolling interests, which represent the
third-party ownership interests of our consolidated non-wholly owned entities
and are reported separately in the Consolidated Balance Sheets, Consolidated
Statements of Operations, and Consolidated Statements of Comprehensive Income
(Loss) and Consolidated Statements of Changes in Equity.
Noncontrolling interests primarily related to The Instant Group. On 8 March
2022, the Company completed the acquisition of 100% equity interest in The
Instant Group (reference Note 13, Acquisitions, for further details). In a
separate transaction, the Company sold a 13.4% noncontrolling equity interest
in a subsidiary of the Digital and Professional Services structure for a
consideration of $69 million.
During the year ended 31 December 2024, the Company increased its equity
voting rights in a Digital and Professional Services subsidiary to 89.3% (from
86.6% as of 31 December 2023) for $14 million. The purchase was in accordance
with election agreements originally enacted during the establishment of
Digital and Professional Services in 2022.
On 30 April 2025, the Company completed the acquisition of the remaining
noncontrolling interests in the Digital and Professional Services reportable
segment in exchange for 23,095,239 common shares of International Workplace
Group plc. From May 2025 onward, the Company no longer has any material
non-controlling interests.
In 2020, Redox Plc was deconsolidated from the Company due to a loss of
control following bankruptcy proceedings. As a result of emergence from
bankruptcy on 25 April 2025, the Company reassessed its involvement with Redox
Plc in accordance with ASC 810, Consolidation, and determined it had regained
control of the entity. The criterion for applying fresh start accounting for
Redox Plc is not met as the Company held 100% of the voting shares before
commencement of the proceedings and upon emergence from bankruptcy. As part of
regaining control, the Company received $20 million in cash and recognised $6
million of accrued expenses and other current liabilities, which were recorded
on the Consolidated Balance Sheets, with the corresponding Consolidated
Statements of Operations impact included in Selling, general and
administrative expenses. The results of operations from Redox Plc are
included in the Company's Consolidated Financial Statements from 25 April
2025.
Reorganisation
Upon completion of the acquisition of the remaining non-controlling interests
in the Digital and Professional Services subsidiary on 30 April 2025, the
Company reorganised its reporting structure ("Reorganisation"), changing the
composition of operating segments within the Digital and Professional Services
reportable segment. To reflect the Reorganisation, assets and liabilities
(including goodwill) were reassigned between reportable segments. Please
reference Note 4, Segments, and Note 14, Goodwill and intangible assets, for
further information.
Use of Estimates
The preparation of the Consolidated Financial Statements, in accordance with
US GAAP, requires management to make estimates and assumptions that affect the
amounts reported, disclosed and, accordingly, actual results could differ from
those estimates. The Company bases its estimates on the information available
at the time and its experiences. The estimates underlying the Company's
Consolidated Financial Statements relate to, among other things, cash flows
used in the assessment of impairment of goodwill, intangibles, property and
equipment and right-of-use assets, reserves for uncertain tax positions,
valuation of derivatives, valuation allowances on deferred tax assets,
incremental borrowing rates on leases and the fair value of property and
equipment, intangibles and leasehold assets and liabilities acquired in
business combinations. Adjustments may be made in subsequent periods to
reflect more current estimates and assumptions about matters that are
inherently uncertain.
Revenue Recognition
The Company's primary activity is the provision of fully integrated,
end-to-end flexible global workspace solutions to customers. Revenue
represents the total amount receivable for services provided, excluding
sales-related taxes and intercompany transactions. The Company's primary
revenue categories, related performance obligations and associated revenue
recognition patterns are as follows:
Workspace
Within the Company-owned segment, the Company acts as principal in these
arrangements as it controls the workspace through direct ownership or a
leasing arrangement. Performance obligations are satisfied over time by
transferring services relating to the provision of the workspace through
contracts with customers which may take the form of sub-leases which are
classified as operating leases. These contracts include different forms of
workspace including coworking, meeting room, fixed, day and virtual
workspaces.
Invoices are issued monthly 30-60 days in advance and initially recognised as
deferred revenue (contract liability) with payments due from customers in
advance of the provision of the workspace or in accordance with a sub-lease
payment schedule. Customer deposits are billed and collected prior to services
being provided, enhancing customer collectability.
Customer contracts vary in length and typically include renewal options.
Revenue on these contracts is recognised over the initial contract period
only. Transaction price is predominantly fixed in customer contracts with any
variability in the transaction price relating to the volume of customer usage
of the workspace recognised in the period of usage or pricing escalators. When
the transaction price is discounted in the opening period of the term of the
contract, revenue recognised is constrained to the amount invoiced in the
appropriate period. Sub-lease income is typically accounted for on a
straight line basis over the term of the sub-lease.
Fee Income
The Company acts as an agent in these arrangements as it operates but does not
lease or control the workspace related to the services that are provided.
Performance obligations are satisfied over time by transferring services
relating to the provision of management and franchise services relating to the
use of physical and virtual workspace.
The Company generates revenue through a management fee model whereby the
Company enters into operational support arrangements for the respective centre
location on behalf of the partner. The Company also generates revenue through
a franchise model whereby the Company enters franchise arrangements licensing
its symbolic intellectual property (e.g., Regus, Spaces brands) and
proprietary methods / processes.
Fees received for the provision of initial set up fees are recognised at a
point-in time when they relate to separate and distinct performance
obligations. The contractual price for initial set up fees is typically
considered to reflect the attributable transaction price. Subsequent services
are recognised over time as the services are rendered. Fees charged for the
use of continuing rights granted by the agreement are typically measured based
on contractually agreed percentage of revenue generated by the operation.
Invoices are generally issued monthly and settled within 30-60 days with
invoiced amounts deducted from any amounts due to the partner.
Deposits received from customers against non-performance of contracts are held
on the Consolidated Balance Sheets either as customer deposits within current
liabilities or as other non-current liabilities until they are either returned
to the customer at the end of their relationship with the Company or released
to the Consolidated Statements of Operations.
Services and other income
The Company typically acts as principal in these arrangements as it controls
the technology and processes relating to the provision of workspace bookings,
membership programmes, consulting services, office starter kits and inventory
management. Services also include ancillary services provided within and
outside the Company's leased workspace such as virtual office services, day
offices and short-term meeting rooms. In some circumstances where the
Company acts as an agent for the sale and purchase of goods to customers, only
the agent fee earned is recognised as revenue.
Invoices are issued at point of sale or monthly depending on the nature of the
service being provided and recognised as revenue when the services are
rendered in the period that the invoices are raised with the exception of
memberships which are deferred and recognised over time within the period that
the benefits of the membership card are expected to be provided. Customer
payments may be collected at the point of sale or immediately upon receipt of
the invoice.
Transaction price is predominantly fixed in customer contracts with any
variability in the transaction price relating to the volume of customer
activity recognised in the period of the activity.
Contract Assets and Contract Liabilities
Contract Assets represent amounts due from customers in advance of collection
invoices being raised. These amounts include certain services provided
relating to office space sub-leased under the Digital and Professional
Services segment and amounts invoiced in a subsequent month relating to
variable revenue based upon the volume of customer usage in the prior month.
Contract liabilities represent collections from customers in advance of
services being provided in accordance with contractual arrangements with
customers. Contract liabilities are presented as deferred revenue and
classified as current liabilities as they are expected to be recognised as
revenue within the next twelve months.
Cost of Sales
Cost of sales includes expenses related to the operation of the Company's
business centres and provision of digital and professional services. These
include, but are not limited to, operating lease costs such as base rent and
tenancy costs including the Company's share of real estate and related taxes
and common area maintenance charges, employee and related expenses, building
operational costs such as utilities, maintenance and cleaning, insurance
costs, office expenses such as telephone, internet and printing costs,
security expenses, parking expense, credit card processing fees, building
events, food and other consumables, and other costs of operating the business
centre locations. Employee compensation costs included in location operating
expenses relate to the salaries, bonuses and benefits relating to the teams
managing the business centres on a daily basis including facilities
management.
Selling, General and Administrative Expenses
Selling, general and administrative expenses consist primarily of sales and
marketing expenses, advertising costs, personnel and related expenses for
corporate employees, technology, consulting, legal and other professional
services expenses, lease costs for our corporate offices, and various other
costs we incur to manage and support our business. General and administrative
expenses are expensed as incurred. The Company recorded external marketing
expenses of $168 million, $135 million and $136 million for the years ended 31
December 2025, 2024 and 2023, respectively.
Share-Based Compensation
The share awards programme entitles certain directors and employees to acquire
shares of the ultimate parent company (International Workplace Group plc);
these awards are granted by the ultimate parent company (International
Workplace Group plc) and are equity-settled. The fair value of the options and
awards granted under the Company's share-based payment plans outlined in Note
21 Stock-based Compensation are included in the same line item on the
Consolidated Statements of Operations as the underlying director and employee
expenses with a corresponding increase in equity. The fair value is measured
at grant date and spread over the period during which the employees become
unconditionally entitled to the options. The fair value of the options granted
are measured using either the Black-Scholes valuation model or the Monte Carlo
method, taking into account the terms and conditions upon which the options
were granted. The amount recognised as an expense is adjusted to reflect the
actual number of share options that vest in respect of non-market conditions
except where forfeiture is due to the expiry of the option.
Income Taxes
The Company accounts for income taxes under the asset and liability method.
Under this method, deferred tax assets and liabilities are recognised based
upon the estimated future tax consequences attributable to bases differences
between the financial statement carrying amount of existing assets and
liabilities and their respective tax basis, as well as operating loss and tax
credit carry forwards. Deferred tax assets and liabilities are measured using
enacted tax rates expected to apply to taxable income in the years in which
those temporary differences are expected to be recovered or settled. The
effect on deferred tax assets and liabilities of a change in tax rates is
recognised in income tax expense (benefit) in the period the tax rates are
enacted.
The Company's deferred tax assets are reduced by a valuation allowance if,
based on the weight of available evidence, it is more likely than not (a
likelihood of more than 50 percent) that some portion or all of the deferred
tax assets will not be realised. The Company evaluates the realisability of
deferred tax assets for each of the jurisdictions in which they operate by
assessing all positive and negative evidence. This includes historical
operating results, known or planned operating developments, the period of time
over which certain temporary differences will reverse, consideration of the
reversal of certain deferred tax liabilities, tax law carry back capability in
the particular country, and prudent and feasible tax planning strategies.
After evaluation of these factors, if the deferred tax assets are expected to
be realised within the tax carry forward period allowed for that specific
country, the Company would conclude that no valuation allowance would be
required. To the extent that the deferred tax assets exceed the amount that is
expected to be realised within the tax carry forward period for a particular
jurisdiction, the Company establishes a valuation allowance.
The Company recognises benefits from tax positions only if it is more likely
than not that the tax position will be sustained on examination by the taxing
authorities, based on the technical merits of the positions. The tax benefits
recognised in the combined financial statements from such positions are
measured as the largest amount of tax benefit that is greater than 50 percent
likely of being realised upon settlement. Judgement is required in evaluating
tax positions and determining unrecognised tax benefits. The Company
re-evaluates the technical merits of its tax positions and may recognise the
benefit of a tax position in certain circumstances, including when: (1) a tax
examination is completed; (2) applicable tax laws change, including through a
tax case ruling or legislative guidance; or (3) the applicable statute of
limitations expires. The Company recognises interest and penalties associated
with income taxes in income tax expense (benefit) in the Consolidated
Statements of Operations.
The Company is within the scope of the OECD Pillar Two model rules. Pillar Two
legislation has been enacted or substantively enacted in many of the
jurisdictions where IWG operates. In Switzerland, a domestic minimum tax rule
was introduced with effect from 1 January 2024 followed by an Income Inclusion
Rule (IIR) from 1 January 2025.
Earnings Per Share
Basic earnings per share is calculated by dividing net income attributable to
common shareholders by the weighted average number of common shares
outstanding for the period. Diluted earnings per share is computed by giving
effect to all potentially dilutive common shares outstanding during the
period. Potentially dilutive common shares include outstanding share options
calculated using the treasury share method and potentially issuable shares to
bondholders calculated using the if-converted method.
Cash and Cash Equivalents
Cash and cash equivalents consist of cash at bank and in hand, as well as all
highly liquid investments with a maturity of three months or less when
purchased.
Restricted Cash
The Company is required to maintain cash deposits with certain banks which
consist of deposits restricted under contractual agreements or legal disputes.
Deposits with landlords are presented separately as security deposits and are
not considered restricted cash.
The following represents a reconciliation of cash and cash equivalents in the
Consolidated Balance sheets to cash, cash equivalents and restricted cash in
the Consolidated Statements of Cash Flows:
$m FY2025 FY2024
Cash and cash equivalents 302 137
Restricted cash 3 (#_ftn3) 2 11
Cash, cash equivalents and restricted cash 304 148
Acquisitions
The Company allocates the fair value of purchase consideration to tangible
assets and intangible assets purchased and liabilities assumed on the basis of
their fair values at the date of acquisition. Any excess of fair value of net
tangible and intangible assets acquired is allocated to goodwill. In
determining the fair values of assets acquired and liabilities assumed, the
Company uses various recognised valuation methods when a market value is not
readily available. Further, assumptions are made within certain valuation
techniques, including discount rates and the amount and timing of future cash
flows. During the measurement period, which is up to one year from the
acquisition date, the Company may record adjustments to the fair value of the
purchase consideration and the allocation of the purchase consideration to all
tangible and intangible assets acquired and identified and liabilities assumed
if the Company obtains new information about facts and circumstances that
existed as of the acquisition date. Net assets and results of operations of an
acquired entity are recorded in the Financial Statements from the acquisition
date. Acquisition-related costs are expensed as they are incurred.
Goodwill and Indefinite-Lived Intangible Assets
Goodwill represents the excess of the purchase price over the fair value of
the assets acquired less liabilities assumed in business combinations.
Goodwill is assigned to reporting units, which are the business centres,
grouped by country/geographical region of operation and type (managed or
owned), and Digital and Professional Services. Acquired intangible assets are
recorded at fair value. The Company also carries the Regus brand of which the
value of is intrinsically linked to the continuing operation of the Company,
thus it has been determined to have an indefinite useful life. Goodwill and
indefinite-lived intangible assets are not amortised, but instead are tested
for impairment at least annually, or more frequently, if events or changes in
circumstances indicate that the carrying amount may be impaired and is
required to be written down when impaired. Impairment of goodwill and
indefinite-lived intangible assets is included in Impairment of long-lived
assets and goodwill and other assets on the Consolidated Statements of
Operations.
The Company tests goodwill for potential impairment at least annually in the
fourth quarter, or more frequently if an event or other circumstance indicates
that we may not be able to recover the carrying amount of the net assets of
the reporting unit. The guidance for impairment testing begins with an
optional qualitative assessment to determine whether it is more likely than
not that goodwill or the brand is impaired. The Company is not required to
perform a quantitative impairment test unless it is determined, based on the
results of the qualitative assessment, that it is more likely than not that
goodwill or the brand is impaired. The quantitative impairment test is
prepared at the reporting unit level for goodwill and qualitative factors
considered include but are not limited to general economic conditions, outlook
for the industry, and the Company's recent and forecasted financial
performance. In performing the goodwill impairment test, management compares
the estimated fair values of the applicable reporting units to their aggregate
carrying values, including goodwill. If the carrying amounts of a reporting
unit including goodwill were to exceed the fair value of the reporting unit,
an impairment loss is recognised within our Consolidated Statements of
Operations in an amount equal to that excess, limited to the total amount of
goodwill allocated to that reporting unit.
The determination of the fair value of the reporting units requires the
Company to make significant estimates and assumptions with respect to the
business and financial performance of the Company's reporting units. These
estimates and assumptions primarily include, but are not limited to, discount
rates, terminal growth rates, occupancy rates, forecasts of revenue, operating
income, working capital requirements and capital expenditure.
Impairment of Long-Lived Assets and Finite-Lived Intangible Assets
Long-lived assets, including right-of-use assets, property and equipment and
other finite-lived intangible assets are evaluated for recoverability when
events or changes in circumstances indicate that the asset may have been
impaired. In evaluating an asset for recoverability, the Company considers the
future cash flows expected to result from the continued use of the asset and
the eventual disposition of the asset. If the sum of the expected future cash
flows, on an undiscounted basis, is less than the carrying amount of the
asset, an impairment loss equal to the excess of the carrying amount over the
fair value of the asset is recognised. Impairment losses cannot be reversed in
subsequent periods.
We evaluate potential impairment at the asset group level. We allocate the
impairment loss related to an asset group among the various assets within the
asset group pro rata based on the relative carrying values of the respective
assets. Impairment of long-lived and finite-lived intangible assets, including
right-of-use assets, is included in Impairment of long-lived assets and
goodwill on the Consolidated Statements of Operations.
Leases
The Company primarily leases property for its collaborative workspaces and
other locations globally and determines if an arrangement contains a lease at
the inception of a contract. At the inception of each lease, the Company
determines if an arrangement is or contains a lease and classifies it as
operating or financing lease depending on the underlying nature of the
arrangement. Substantially all of the Company's leases are classified as
operating leases.
Right-of-use assets represent the Company's right to use an underlying asset
for the lease term and lease liabilities represent the Company's obligation to
make lease payments arising from the lease during the lease term. Right-of-use
assets and lease liabilities are recognised at the commencement date based on
the present value of the minimum lease payments to be made over the lease
term, adjusted for initial direct costs.
The lease term is the non-cancelable period of the lease adjusted for any
renewal or termination options which are reasonably certain to be exercised.
Management applies judgement in determining whether it is reasonably certain
that a renewal or termination option will be exercised, taking into account
the length of time remaining before the option is exercisable, macro-economic
environment, socio-political environment and other lease specific factors.
Where the lease term has been determined as the period from inception up to a
break clause and break penalties exist, these amounts are included in the
measurement of the lease liability. Short-term leases with an initial term of
12 months or less are not recorded on the Consolidated Balance Sheets and
expenses are recognised in the Consolidated Statements of Operations as
incurred.
In calculating the present value of lease payments, the Company utilises its
incremental borrowing rate to discount the lease payments as the interest rate
implicit in the lease is not readily determinable. The determination of
applicable incremental borrowing rates on leases at the commencement of lease
contracts also requires judgement. The Company determines its incremental
borrowing rates by obtaining interest rates from various external financing
sources and makes certain adjustments to reflect the terms of the lease. The
Company considers the relevant market interest rate, based on the weighted
average of the timing of the lease payments under the lease obligation. In
addition, a spread over the market rate is applied based on the cost of funds
to the Company, plus a spread that represents the risk differential of the
lessee entity compared to the Company funding cost.
Lease payments included in the measurement of the lease liability comprise the
following: Fixed payments, including in-substance fixed payments, owed over
the lease term (including termination penalties the Company would owe if the
lease term reflects the Company's exercise of a termination option) and
variable lease payments that depend on an index or rate, initially measured
using the index or rate at the lease commencement date;
For operating leases, the lease liability is measured at the present value of
the unpaid lease payments at the reporting date. Variable lease costs are not
included as lease payments in the calculation of the lease obligation and are
included in variable lease costs in the Consolidated Statements of Operations,
as incurred and when probable. Variable lease payments consist of escalation
terms on the amount of base rent which may vary by market due to changes in a
rate or index and of contingent rent payments based on percentages of revenue
or other profitability metrics as defined in the lease.
The right-of-use asset is measured as the amount of the lease liability with
adjustments, if applicable, for remaining balances of any lease prepayments
made prior to or at lease commencement, initial direct costs incurred by us,
and lease incentives, recorded net of impairment. Operating leases costs
relating to fixed lease payments are expensed on a straight-line basis over
the lease term in the Consolidated Statements of Operations. For operating
leases for which the right-of-use asset has been impaired, the lease expense
is determined as the sum of the amortisation of the right-of-use asset
remaining after impairment, if any, on a straight-line basis over the
remaining term of the lease and the accretion of the lease liability based on
the discount rate applied to the lease liability.
The Company monitors for events or changes in circumstances that require a
reassessment of one of its leases. When a reassessment results in the
remeasurement of a lease liability, a corresponding adjustment is made to the
carrying amount of the corresponding right-of-use asset unless doing so would
reduce the carrying amount of the right-of-use asset to an amount less than
zero. In that case, the right-of-use asset is reduced to zero and the
remainder of the adjustment is recorded in the Consolidated Statements of
Operations.
The Company expends cash for leasehold improvements and to build out and equip
its leased properties. Generally, a portion of the cost of leasehold
improvements is reimbursed to the Company by business partners (property
owners and landlords) as landlord contributions. Landlord contributions are
substantially received at or near the lease commencement date for commercial
reasons and, where the Company retains accounting ownership of the fit-out
assets, are accounted for as a lease incentive and recognised by reducing the
right-of-use asset. If accounting ownership is not retained, the landlord
contributions are recognised as cost reimbursements by reducing the related
leasehold improvements within property, plant and equipment.
(Gain) loss on disposal of long-lived assets and other closure related
(credits) costs
(Gain) loss on disposal of long-lived assets and other closure related
(credits) costs income statement financial statement line item includes the
derecognition of leases liabilities and right-of-use assets previously
recognised on early terminated leases and other closure costs relating to
closed centres, as well as the (gain) loss of the disposal of long-lived
assets, including property and equipment.
Finite-lived Intangible Assets, net
Acquired intangible assets are carried at cost and finite-lived intangible
assets are amortised on a straight-line basis over their estimated useful
lives. Intangible assets, net consists of purchased software, customer lists,
and the Regus corporate tradename. The Company capitalises purchased software
when the amounts have a useful life or contractual term greater than twelve
months. Purchased software consists of software products and licenses which
are amortised over the lesser of their estimated useful life or the
contractual term, generally up to five years.
Intangible assets are amortised on a straight-line basis over the estimated
useful life of the assets as follows:
Brand - Regus Brand indefinite Life
Brand - Other acquired brands 20 years
Computer and internal use software up to 5 years
Customer lists - service agreements 2 years
Customer lists - sub-lease agreements up to 5 years
Finite-lived intangible asset amortisation is included in Depreciation and
amortisation on the Consolidated Statements of Operations.
The Company capitalises costs incurred to develop internal-use software during
the application development and enhancement phase in Intangible assets, net on
the Consolidated Balance Sheets. Costs related to preliminary project and
post-implementation activities are expensed as incurred. Upgrades and
enhancements that result in additional functionality are also capitalised.
Costs are capitalised only when management has formally approved and funded
the project, and it is probable that the project will be completed and the
software will be used as intended. Once these criteria are met, costs incurred
during the application development or enhancement phase are capitalised within
Intangible assets net on the Consolidated Balance Sheets.
Amortisation is included in Depreciation and amortisation on the Consolidated
Statements of Operations once the software is substantially complete and ready
for its intended use. The estimated useful life is typically 5 years.
The Company capitalises all software implementation costs that meet the
criteria for capitalisation, including those that relate to a service contract
(e.g. hosting arrangements). All contracts which are hosting arrangements, or
which contain a hosting element are assessed to determine whether the contract
is a service arrangement. The capitalised implementation costs for contracts
which are not service arrangements are included in Intangible assets, net on
the Consolidated Balance Sheets and are amortised together with the costs of
the related software license through Depreciation and amortisation on the
Consolidated Statements of Operations. The implementation costs for service
contracts are treated as prepaid assets and are expensed through General and
administrative expenses on the Consolidated Statements of Operations over the
term of the arrangement. The implementation costs for hosting arrangements are
amortised over the life of the hosting arrangement, including reasonably
certain renewal periods.
Property and Equipment, net
Property and equipment are stated at cost, less accumulated depreciation and
impairment losses. Depreciation is provided on a straight-line basis over the
estimated useful lives of owned assets. The estimated useful lives of the
Company's property and equipment are as follows:
Buildings 50 years
Leasehold improvements Shorter of lease term or 10 years
Computer hardware 3 to 5 years
Furniture and equipment 5 to 10 years
The Company incurs a variety of costs to customise or enhance leased premises
to suit its operational needs in the construction of leasehold improvements.
These improvements may include structural modifications, installation of
fixtures, or interior enhancements made to the leased property. After a
determination is made to capitalise a cost, it is allocated to the specific
component of a project that is benefited. Leasehold improvements are
capitalised when they provide future economic benefits and are directly
attributable to preparing the leased space for its intended use. The Company
capitalises costs until a project is substantially completed. Subsequent
expenditures that extend the useful life of an asset are also capitalised.
The Company commonly undertakes leasehold improvements at the beginning of a
lease. Certain lease agreements contain provisions that require us to remove
leasehold improvements at the end of the lease term. When such an obligation
exists, we record an asset retirement obligation at the inception of the lease
at its estimated fair value, so long as a reasonable estimate of the fair
value can be made. These obligations are recorded within other non-current
liabilities on the Consolidated Balance Sheets. Accretion costs associated
with the obligations are recognised as depreciation expense.
Allowance for Credit Losses
Accounts receivable are stated at the amount the Company expects to collect,
which is net of an allowance for expected credit losses. The Company
calculates expected credit losses for trade accounts primarily based upon the
aging of the underlying receivable. Other factors such as the assumptions
related to the business prospects and financial condition of customers and
marketing affiliates, macroeconomic conditions, inflationary pressures,
potential recession, and the Company's ability to collect the receivable or
recover the receivable may also impact the allowance. Recorded liabilities
associated with customer deposits held are also considered when estimating the
allowance for credit losses as we have the contractual right to apply the
customer deposits to outstanding receivables.
Fair Value Measurement
The Company applies fair value accounting for financial assets and liabilities
and certain non-financial assets and liabilities that are recognised or
disclosed at fair value in the financial statements on a recurring and
non-recurring basis. Fair value is the price that would be received for an
asset or paid to transfer a liability in an orderly transaction between market
participants on the measurement date. The Company has not elected to apply a
fair value option to measure assets and liabilities at fair value.
When considering market participant assumptions in fair value measurements,
the following fair value hierarchy distinguishes between observable and
unobservable inputs, which are categorised in one of the following levels:
Level 1 - Unadjusted quoted prices in active markets that are accessible at
the measurement date for identical assets or liabilities in an active market.
The fair value hierarchy gives the highest priority to Level 1 inputs.
Level 2 - Observable inputs other than quoted prices in active markets, such
as quoted prices in less active markets or model-derived valuations, that are
observable either directly or indirectly for substantially the full term of
the asset or liability.
Level 3 - Unobservable inputs for which there is little or no market data
available that are significant to the fair value of the assets or liabilities
at the measurement date.
Transfers between the categories above are presented as occurring at the end
of the financial period.
Reference Note 18, Fair Value Measurements, for further discussion.
Interest-bearing borrowings and other financial liabilities
Financial liabilities, including interest-bearing borrowings such as the Euro
bonds, are recognised initially at fair value less attributable transaction
costs. Subsequent to initial recognition, financial liabilities are stated at
amortised cost with any difference between cost and redemption value being
recognised in the Consolidated Statements of Operations over the period of the
borrowings on an effective interest rate method.
Convertible bonds issued by the Company and convertible to ordinary shares or
cash at the option of the holder are recognised as debt at fair value and
subsequently at amortised cost using the effective interest rate method.
Directly attributable transaction costs are deducted from the fair value of
the debt.
Derivatives
From time to time the Company uses derivative financial instruments to manage
its transactional foreign exchange exposures where these exposures cannot be
eliminated through balancing the underlying risks. No transactions of a
speculative nature are undertaken.
All derivatives are recorded at fair value. On the date the derivative
contract is entered into, the Company may designate the derivative as a
hedging instrument, and, if so, all relationships between hedging activities
are formally documented. If a derivative is not specifically designated as a
cash flow hedge or another type of hedging instrument, changes in the fair
value of the undesignated derivative are reported in current period earnings.
Cash flows from undesignated derivatives are included as an investing activity
in the Consolidated Statements of Cash Flows.
Derivative Instruments Designated as Cash Flow Hedge
The Company uses derivative financial assets and liabilities as hedging
instruments to manage exposure to variability in cash flows arising from
changes in interest rates and foreign currency related to the Company's debt.
These derivatives are designated as cash flow hedges and are considered to be
highly effective. The Company does not use derivatives for trading or
speculative purposes. Changes in the unrealised fair value of these
derivatives are recognised in accumulated other comprehensive income/(loss) on
the Consolidated Balance Sheets and transferred to the Consolidated Statements
of Operations in the same period as the underlying hedged transaction.
If the hedge no longer meets the criteria for hedge accounting or the hedging
instrument is sold, expires, is terminated or is exercised, then hedge
accounting is discontinued prospectively. When hedge accounting for cash flow
hedges is discontinued, the amount that has been accumulated within
Accumulated other comprehensive income/(loss) on the Consolidated Balance
Sheets remains until it is reclassified to Consolidated Statements of
Operations in the same period or periods and same line item as the hedged
expected future cash flows affect profit or loss.
If the hedged future cash flows are no longer expected to occur, then the
amounts that have been recorded within Accumulated other comprehensive
income/(loss) on the Consolidated Balance Sheets and the corresponding cost
are immediately reclassified to Consolidated Statements of Operations.
Cash receipts or payments on settlement of a derivative contract are reported
in the Consolidated Statements of Cash Flows consistent with the nature of the
underlying hedged item.
Accounts payable
Accounts payable consist of amounts the Company owes to third parties, such as
suppliers or vendors, for goods and services that have been received but not
yet paid for.
Equity Investments
The Company's equity investments relate to individual business centres in
various locations that are accounted for using the equity method of
accounting, given each investment provides the ability to exercise significant
influence, but not control, over operating and financial policies of the
investee. Judgement regarding the level of influence over investment includes
considering key factors such as the Company's ownership interest, legal form
of the investee, representation on the board of directors, participation in
policy-making decisions and material intra-entity transactions. The
Company's equity investments are recorded at cost minus impairment, if any,
plus or minus the Company's share of the investees' income or loss included in
Share of (loss) income from equity method investments on the Consolidated
Statements of Operations. Losses in excess of the carrying amount of equity
investments are recognised even if the Company does not have a legal or
constructive obligation to fund such losses.
Dividends received from equity investments are recorded against the carrying
amount of the Company's investment. Equity investments are reviewed for
impairment whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable. Factors considered by the Company when
reviewing an equity investment for impairment include the length of time
(duration) and the extent (severity) to which the fair value of the equity
investment has been less than cost, the investee's financial condition and
near-term prospects and the intent and ability to hold the investment for a
period of time sufficient to allow for anticipated recovery. An impairment
that is other-than-temporary is recognised in the period identified.
Foreign Currency
The reporting currency of the Company is the U.S. dollar. Effective 1 January
2024, the Company's ultimate parent adopted the U.S. dollar as its functional
currency. Prior to 1 January 2024, the functional currency of the Company's
ultimate parent was the British pound sterling. The functional currency of the
Company's ultimate parent and each subsidiary is based on the currency of the
primary economic environment in which they operate, which is generally their
local currency.
The change in functional currency of the Company's ultimate parent is due to a
change in the economic facts and circumstances of the entity due to the
increased exposure to the U.S. dollar primarily as a result of the growth in
international operations, redenomination of its Revolving Credit Facility, the
issuance of Euro Bonds, the majority of the proceeds which were swapped into
US dollars, and the conversion of other arrangements to US dollars. The effect
of the change in functional currency for the Company's ultimate parent was
applied prospectively in the Consolidated Financial Statements effective 1
January 2024.
Assets and liabilities of non-USD functional currency operations are
translated into USD at the prevailing foreign currency exchange rates in
effect as of the financial statement date. Non-monetary assets and liabilities
that are measured in terms of historical cost in a foreign currency are
translated using the exchange rate at the date of the transaction. Revenues,
expenses and cash flows are translated at the average foreign currency
exchange rates for the period. Equity is translated primarily at historical
exchange rates and the resulting cumulative translation adjustments are
included as a component of Accumulated other comprehensive income (loss) in
the Consolidated Balance Sheets. Gains and losses from foreign currency
exchange rate changes related to transactions denominated in a currency other
than an entity's functional currency are included in Foreign currency gains
(loss) on the Consolidated Statements of Operations.
Contingencies
Commitments represent legally binding arrangements that obligate the Company
to future performance under contractual agreements. Commitments primarily
include non-cancelable operating and finance lease agreements, purchase
commitments, capital expenditure commitments, and other executory contracts.
Lease commitments, including related lease guarantees, are accounted for in
accordance with ASC 842, Leases. Purchase and other non-lease commitments are
not recognised as liabilities until goods or services are received or the
Company becomes otherwise obligated under the terms of the agreement.
Significant commitments are disclosed when material.
The Company assesses its liabilities and contingencies for outstanding legal
proceedings and reserves are established on a case-by-case basis for those
legal claims for which management concludes that it is probable that a loss
will be incurred and that the amount of such loss can be reasonably estimated.
The determination of whether a loss is probable and whether the amount of the
loss can be reasonably estimated requires significant judgement and evaluation
of all the underlying facts and circumstances including judgements about the
potential actions of third-party claimants, regulatory authorities, and
courts. If the amount of the loss cannot be reasonably estimated, information
about the contingency is disclosed in the financial statements. Legal costs
incurred in connection with loss contingencies are expensed as incurred.
The Company accounts for guarantees in accordance with ASC 460 Guarantees.
At inception, the Company recognises a liability for the fair value of an
obligation undertaken in issuing a guarantee, unless the guarantee is excluded
from the initial recognition and measurement provisions of ASC 460.
Recent Accounting Pronouncements Not Yet Adopted
The recently issued but not yet effective Accounting Standard Update ("ASU")
applicable to the Company during the year ended 31 December 2025 are disclosed
below. None of the Recent Accounting Pronouncements Not Yet Adopted disclosed
in Note 1, Description of the Business and Summary of Significant Accounting
Policies, of the audited consolidated US GAAP financial statements as of and
for the year ended 31 December 2024, were adopted during the year ended 31
December 2025.
Business Combinations and Consolidation
In May 2025, the Financial Accounting Standards Board issued ASU 2025-03
Business Combinations (Topic 805) and Consolidation (Topic 810): Determining
the Accounting Acquirer in the Acquisition of a Variable Interest Entity. The
amendments in the update require an entity involved in an acquisition
transaction primarily through the exchange of equity interests, where the
legal acquiree is a VIE that meets the definition of a business, to consider
specific factors outlined in paragraphs 805-10-55-12 through 55-15 to
determine which entity qualifies as the accounting acquirer. This ASU is
effective for fiscal years beginning after 15 December 2026, and interim
reporting periods within those annual reporting periods. The amendments are
applied prospectively. The Company will consider this guidance and assess the
likely impact when accounting for any future acquisitions.
Income Statement - Expense Disaggregation Disclosures
New guidance issued under ASU 2025-01 clarified that the amendments in ASU
2024-03 Expense Disaggregation Disclosures require the Company to provide
enhanced disaggregation of operating expense categories within the financial
statement footnotes for annual periods beginning after 15 December 2026 and
interim reporting periods within annual reporting periods beginning after 15
December 2027. The amendments introduce a standardised set of natural expense
categories, such as employee-related costs, depreciation and amortisation, and
other operating expenses. The amendments do not change the recognition,
measurement or presentation of expenses in the primary financial statements,
but instead expand the disclosures provided in the notes. The Company intends
to comply with the new requirements in the effective periods and expects them
to result in additional disclosures.
Income Taxes Disclosures
In December 2023, the FASB issued ASU 2023‑09, which enhances disclosure
requirements for income taxes by requiring greater disaggregation of the
effective tax rate reconciliation and income taxes paid. The standard does
not change the underlying recognition or measurement of income tax balances.
It is effective for public business entities for annual periods beginning on
or after 15 December 2024. The Company has adopted the requirements and
reflected in disclosures for the year ending 31 December 2025.
Note 3. Revenue from Contracts with Customers
The Company's primary activity is the provision of global workspace solutions.
Please reference Note 2, Description of the Business and Summary of
Significant Accounting Policies, for detailed discussion of the Company's
revenue recognition policies and Note 4, Segments, for revenue disaggregated
by product categories.
Receivables
A summary of the components of accounts receivable, net is as follows:
$m FY2025 FY2024
Receivables related to contracts with customers 4 (#_ftn4) 434 665
Allowance for current expected credit losses (15) (14)
Total accounts receivable, net 419 651
The following table presents the change in balance for expected credit losses:
$m FY2025 FY2024
Beginning balance 14 8
Additional provision 18 13
Write-offs (17) (7)
Ending balance 15 14
Contract Liabilities
The Company's contract liabilities, which are included in Deferred revenue on
the Consolidated Balance Sheets, were $334 million and $539 million as of 31
December 2025 and 2024, respectively and are based on the Company's billing
cycle which changed during 2025. Contract liabilities are classified as
current due to the nature of the Company's invoicing arrangements. All
contract liabilities as of 31 December 2024 were recognised as revenue during
the year ending 31 December 2025.
The Company elected the practical expedient as per ASC 606-10-50-14 and
does not disclose information related to remaining performance obligations due
to their original expected terms being one year or less. The Company also
elected the practical expedient as per ASC 340-40-25-4 and expenses costs of
obtaining contracts, which would otherwise have an amortisation period of one
year or less, as incurred.
Note 4. Segments
As at 31 December 2025, the Company is organised into three operating
segments. These operating segments reflect the service lines with the
business, which is how management monitors performance and makes decisions.
The segment composition, as further described below, reflects the
Reorganisation described in Note 2, Description of the Business and Summary of
Significant Accounting Policies which did not result in a change in the
identification of reportable business segments:
· Company-owned: Locations the Company operates directly and
recognises full revenue and costs of the centre.
· Managed & Franchised: Locations the Company receives a
franchise or management fee for providing services to centres. Managed centres
are operated by the Company; franchise locations are operated by the franchise
holder. The Company only recognises the fee income as revenue. The Company is
not responsible for capital expenditures in the centres and does not recognise
the related centre operating costs.
· Digital & Professional Services: Services and technology
provided to customers and landlords.
Company-owned and Managed & Franchised are aggregated into the Networks
reportable business segment. Digital and Professional Services meets the
criteria for separate disclosure as a reportable business segment at 31
December 2025. The Company has determined its Chief Executive Officer ("CEO")
is its Chief Operating Decision Maker ("CODM"). The CEO reviews the Company's
financial performance based on these segments, specifically using Gross profit
to assess performance and make resource allocation decisions. Adjusted gross
profit is also used by the CODM in assessing segmental performance and
determining how to allocate resources because landlord contributions on leased
properties are evaluated in totality in commercial negotiations, rather than
being dependent upon whether they are accounted for as lease incentives.
Adjusted gross profit (including landlord contributions on leases) has been
presented for the first time in 2025. The following table reflects results of
operations of the Company's reportable segments:
$m Company-Owned Managed & Franchised Digital and Professional Services FY2025
Total revenue 3,212 126 424 3,762
Workstation revenue 2,368 - - 2,368
Fee income - 126 - 126
Services and other income 844 - 424 1,268
Cost of sales 2,502 - 229 2,731
Gross profit 710 126 195 1,031
Selling, general and administrative expenses 546
Allowance for credit losses 18
Impairment of long-lived assets and goodwill 29
Loss on disposal of long-lived assets and other closure related credits 2
Depreciation and amortisation before landlord contributions on leased 357
properties
Depreciation of landlord contributions (cost reimbursements) on leased
properties (64)
Operating income 143
Interest expense (87)
Foreign currency gain 7
Gain on extinguishment of debt 1
Other finance costs (21)
Income before income taxes and share of (loss) income from equity method 43
investments
Gross profit 710 126 195 1,031
Landlord contributions on leased properties included in depreciation and 41 - 23 64
amortisation
Adjusted gross profit (non-GAAP measure) 751 126 218 1,095
$m Company-Owned Managed & Franchised Digital and Professional Services FY2024
Total revenue 3,222 79 455 3,756
Workstation revenue 2,398 - - 2,398
Fee income - 79 - 79
Services and other income 824 - 455 1,279
Cost of sales 2,575 - 233 2,808
Gross profit 647 79 222 948
Selling, general and administrative expenses 514
Allowance for credit losses 13
Impairment of long-lived assets and goodwill 83
Gain on disposal of long-lived assets and other closure related credits (57)
Depreciation and amortisation before landlord contributions on leased 333
properties
Depreciation of landlord contributions (cost reimbursements) on leased
properties (80)
Operating income 142
Interest expense (64)
Foreign currency loss (17)
Gain on extinguishment of debt 16
Other finance costs (19)
Income before income taxes and share of (loss) income from equity method 58
investments
Gross profit 647 79 222 948
Landlord contributions on leased properties included in depreciation and 80 - - 80
amortisation
Adjusted gross profit (non-GAAP measure) 727 79 222 1,028
$m Company-Owned Managed & Franchised Digital and Professional Services FY2023
Total revenue 3,230 61 473 3,764
Workstation revenue 2,364 - - 2,364
Fee income - 61 - 61
Services and other income 866 - 473 1,339
Cost of sales 2,634 - 245 2,879
Gross profit 596 61 228 885
Selling, general and administrative expenses 496
Allowance for credit losses 19
Impairment of long-lived assets and goodwill 143
Loss on disposal of long-lived assets and other closure related costs 32
Depreciation and amortisation before landlord contributions on leased 386
properties
Depreciation of landlord contributions (cost reimbursements) on leased
properties (93)
Operating loss (98)
Interest expense (54)
Foreign currency gain 6
Other finance costs (19)
Loss before income taxes and share of (loss) income from equity method (165)
investments
Gross profit 596 61 228 885
Landlord contributions on leased properties included in depreciation and 93 - - 93
amortisation
Adjusted gross profit (non-GAAP measure) 689 61 228 978
Asset information
Total assets by Segment as of 31 December 2025 and 2024 were:
$m FY2025 FY2024
Company-owned 8,517 8,386
Managed & Franchised 36 -
Digital and Professional Services 763 726
Total 9,316 9,112
Following the Reorganisation, assets and liabilities (including goodwill) were
reassigned between reportable segments resulting in total assets being
presented as part of the Managed & Franchised reportable segment.
Total capital expenditures by Segment for the years ended 31 December 2025 and
2024 were:
$m FY2025 FY2024
Company-owned 158 155
Managed & Franchised - -
Digital and Professional Services 65 13
Total capital expenditures 223 168
Geographic information
The table below disaggregates revenue by geographic region, determined by the
location of the entity providing the related services
$m FY2025 FY2024 FY2023
Americas 1,486 1,455 1,468
EMEA 1,923 1,920 1,931
Asia Pacific 353 381 365
Total Revenue 3,762 3,756 3,764
The table below disaggregates long-lived assets by geographic region:
$m FY2025 FY2024
Americas 2,567 2,633
EMEA 3,016 3,046
Asia Pacific 488 266
Total long-lived assets 6,071 5,945
The Company has a diversified customer base and no single customer accounts
for more than 5% of the Company's revenue for any of the periods presented.
All amounts relating to investments in equity method investees are part of the
Managed and Franchised segment.
Note 5. Staff Costs
The aggregate payroll costs were as follows:
$m FY2025 FY2024 FY2023
Wages and salaries 490 465 456
Social security 62 68 72
Pension costs 10 9 8
Share-based payments 6 2 8
Total payroll costs 568 544 544
The average number of persons employed by the Group (including Executive
Directors), analysed by category, was as follows:
FY2025 FY2024 FY2023
Centre staff 6,069 6,329 6,536
Sales and marketing staff 738 615 572
Finance and shared service centre staff 837 750 709
Other staff 1,581 1,313 1,238
Total 9,225 9,007 9,055
Details of the Directors' emoluments and interests are given in the Directors'
Remuneration report.
Note 6. Income Taxes
The components of Income (loss) before income taxes and share of income (loss)
from equity method investments are as follows:
$m FY2025 FY2024 FY2023
Switzerland 105 99 89
Other (62) (41) (254)
Total 43 58 (165)
The income tax (expense) on income (loss) from continuing operations is
comprised of:
$m FY2025 FY2024 FY2023
Current:
Switzerland - federal (8) (11) (11)
Switzerland - local (2) (3) -
Foreign (31) (33) (20)
Total current (expense) (41) (47) (31)
Deferred:
Switzerland - federal (8) (10) (2)
Switzerland - local (3) (4) -
Foreign - local 20 21 (10)
Total deferred benefit (expense) 9 7 (12)
Income tax (expense) (32) (40) (43)
The Company is domiciled in the canton of Zug in Switzerland. The difference
between the Swiss statutory rate of (8.5%) and the effective tax rate is as
follows, presented pursuant to the new disclosure requirements of ASU 2023-09:
FY2025 FY2024
$m % $m %
Profit before tax at the statutory rate (8.5%) (4) 8.5% (5) 8.5%
Domestic tax effects
Non-Taxable or non-deductible items (7) 15% (31) 53%
Effect of cross-border tax laws (3) 6% (7) 11%
Changes in unrecognised tax benefits (2) 4% 4 (7%)
Changes in valuation allowances (11) 25% 57 (99%)
State and local taxes (2) 4% (2) 4%
Prior year adjustment 5 (12%) - -
Other 10 (22%) (19) 33%
Foreign tax effects
Luxembourg
Statutory tax rate difference (3) 6% 32 (57%)
Changes in valuation allowance (4) 8% (51) 87%
Other 1 (3%) 1 1%
United Kingdom
Changes in valuation allowance (32) 72% 22 (38%)
Non-deductible interest - - (5) 9%
Other 2 (4%) - -
United States
Statutory tax rate difference (1) 3% 3 (5%)
Changes in valuation allowance 47 (106%) (3) 6%
Non-deductible fees (8) 18% (11) 19%
Other - 1% 3 (5%)
Germany
Changes in valuation allowance 3 (8%) (8) 15%
Prior year adjustment 5 (10%) (2) 3%
Other (6) 13% (2) 3%
France
Statutory tax rate difference 6 (14%) 3 (5%)
Changes in valuation allowance (10) 22% (4) 8%
Other - - (1) 2%
Other foreign jurisdictions
Changes in valuation allowances 1 (1%) (22) 36%
Other (19) 48% 8 (14%)
Income tax expense (32) 73% (40) 68%
The below comparison table is a rate reconciliation of the Swiss statutory
rate (8.5% federal and 3.35% cantonal) to the effective tax rate for the year
ended 31 December 2023.
FY2023
$m
Loss from continuing operations, before income taxes 165
Income tax benefit at the Swiss statutory rate 20
Foreign rate differential 23
Non-deductible expenses (33)
Income not taxable 2
Gain/loss on disposal (10)
Valuation allowance (51)
Prior year adjustment 10
Withholding and other taxes (5)
Uncertain tax positions (1)
Other 4
Local taxes (2)
Income tax (expense) (43)
The components of income taxes paid are as follows:
$m FY2025 FY2024
Switzerland - national 8 9
Switzerland - local 2 1
Foreign 24 25
Total 34 35
The deferred tax assets and liabilities included in the Consolidated Balance
Sheets consist of the following:
$m FY2025 FY2024
Deferred tax assets:
Property and equipment 223 218
Intangible assets 514 542
Leases 1,590 1,624
Tax losses 3,465 2,859
Prepaid expenses 24 20
Provisions 3 7
Allowance for credit losses 81 63
Interest 22 20
Other temporary differences 61 53
Less: Valuation allowance (4,188) (3,692)
Total deferred tax assets 1,795 1,714
Deferred tax liabilities:
Property and equipment (70) (55)
Intangible assets (75) (78)
Leases (1,253) (1,203)
Other temporary differences (35) (21)
Total deferred tax liabilities (1,433) (1,357)
Net deferred tax asset 362 357
Additional tax losses have been recorded since 31 December 2024, primarily
resulting from the impairment of investments held by holding entities in
Luxembourg. These losses are subject to recapture under certain conditions and
are included in the table above as part of the valuation allowance.
As of 31 December 2025, the Company has gross net operating loss carry
forwards of $1,952 million that can be carried forwarded indefinitely and
$12,551 million of gross net operating losses that will expire between 2026
and 2045. At 31 December 2024, the Company had gross net operating loss carry
forwards of $1,881 million that can be carried forwarded indefinitely and
$10,142 million of gross net operating losses that will expire between 2025
and 2044.
A valuation allowance has been provided where it is more likely than not that
the deferred tax assets related to those operating loss carry forwards and
other temporary differences will not be realised. The valuation allowance
increased by $496 million and $1,860 million in 2025 and 2024, respectively.
The Company is asserting indefinite reinvestment on foreign earnings. As of 31
December 2025 and 2024, the temporary difference arising from unremitted
earnings of overseas subsidiaries were $17 million and $15 million,
respectively. The only tax that would arise on these reserves if they were
remitted would be non-creditable withholding tax.
The Company conducts operations globally, and, as part of their global
business, files numerous tax returns. The Company is routinely examined by
various taxing authorities. The Company's global tax positions are reviewed by
management on a quarterly basis. Based on these reviews, the results of
discussions and resolutions of matters with certain tax authorities, tax
rulings and court decisions and the expiration of statute of limitations,
unrecognised tax benefits are adjusted as necessary.
The following table summarises tax years that remain subject to examination by
tax authorities as of 31 December 2025:
Jurisdiction Open Tax Years Based on Originally Filed Returns
Germany 2018-2025
Luxembourg 2021-2025
Switzerland 2020-2025
United States 2022-2025
United Kingdom 2022-2025
The Company recognises benefits from tax positions only if it is more likely
than not that the tax position will be sustained on examination by the taxing
authorities, based on the technical merits of the positions. The tax benefits
recognised in the consolidated financial statements from such positions are
measured as the largest amount of tax benefit that is greater than 50 percent
likely of being realised upon settlement.
The following table provides a reconciliation of the total amounts of
unrecognised tax benefits:
$m FY2025 FY2024 FY2023
Balance at beginning of year 25 28 26
Gross increases related to tax positions in a prior period 2 1 4
Gross decreases related to tax positions in a prior period (6) (3) (4)
Gross increases related to tax positions in the current period 2 4 1
Gross decreases related to expiration of statute of limitations - (3) -
Settlements with taxing authorities - (2) -
Foreign exchange and others - - 1
Balance at end of year 23 25 28
At 31 December 2025 and 2024, $23 million and $25 million, respectively, of
unrecognised tax benefits would favourably impact the effective tax rate if
recognised.
The Company recognises interest and penalties in income tax expense in the
Consolidated Statements of Operations. At 31 December 2025 and 31 December
2024, the Company had accrued interest and penalties of $1 million and $2
million, respectively. For the years ended 31 December 2025 and 2024, the
amount reported in income tax expense related to interest and penalties was
$(1) million and $(2) million, respectively.
Note 7. Earnings Per Share
The table below illustrates the calculation of basic and diluted earnings per
share:
$m FY2025 FY2024 FY2023
Income (loss) attributable to ordinary shareholders - basic and diluted
Net income (loss) 18 18 (207)
Weighted average shares outstanding used in computing earnings per share -
basic and diluted
Weighted average shares - basic 1,007,813,563 1,009,815,216 1,006,685,491
Weighted average shares - diluted 1,022,506,926 1,019,135,504 1,012,972,933
Basic income (loss) per common share (¢) 1.8 1.8 (20.6)
Diluted income (loss) per common share (¢) 1.8 1.8 (20.6)
Antidilutive securities
Weighted average number of share options 56,002,688 32,708,366 17,380,163
Weighted average number of share awards under the CIP, PSP, DSBP and One-off 3,268,467 2,824,696 2,210,401
Award
Weighted average number of shares that would have been issued at average (44,577,793) (26,212,684) (13,303,122)
market price
Potentially issuable shares on convertible bonds at 31 December 950,675 34,786,815 76,408,203
Options are considered dilutive when they would result in the issue of
ordinary shares for less than the market price of ordinary shares in the
period. The amount of the dilution is taken to be the average market price of
shares during the period minus the exercise price. During the years ended 31
December 2025 and 2024, share awards of 14,693,363 and 9,320,378,
respectively, had a dilutive effect with a negligible impact on the basic
earnings per share (2023: all awards were considered anti-dilutive).
Note 8. Other Current Assets
Other current assets consist of the following:
$m FY2025 FY2024
VAT receivable 155 206
Corporate tax receivable 30 34
Landlord contributions receivable 23 35
Contract assets 36 10
Receivable from payment processors 29 15
Security deposits 8 8
Other current assets 109 83
Total other current assets 390 391
Other current assets primarily include amounts due from managed centre
partners and our businesses that are accounted for using the equity method.
Contract Assets reflect amounts for services provided to customers in the
current period that are expected to be invoiced to customers within twelve
months. All contract assets at 31 December 2024 were invoiced in the year
ending 31 December 2025.
Note 9. Prepaid Expenses
Prepaid expenses consist of the following:
$m FY2025 FY2024
Other prepayments 80 57
Property Fees 49 71
Agents commission prepayment 21 18
Insurance and marketing prepayment 6 2
Legal and other professional fees 9 4
Total prepaid expenses 165 152
Other prepayments relate to the following types of expenses: centre operating,
credit cards, information technology, property & equipment, and utilities,
among others.
Note 10. Accounts Payable
Accounts payable consist of the following:
$m FY2025 FY2024
Trade payables 240 232
Obligations under PSA 57 -
Total accounts payable 297 232
In November 2025, the Company entered into a Payment Service Agreement
Contract ("PSA"). Under this PSA, a third party settles some trade creditor
invoices of IWG directly with their suppliers upon the contractual maturity of
the supplier invoices in exchange for a fixed payment fee. The Company repays
amounts due under the PSA monthly.
During the year ended 31 December 2025, obligations amounting to $57 million
were added to the programme and obligations amounting to $0 million were
settled. These obligations were settled in January 2026.
Note 11. Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities consist of the following:
$m FY2025 FY2024
Corporation tax liabilities 68 40
Other accruals 334 405
Other current liabilities 33 37
Other payables 258 228
Other tax and social security 31 34
VAT payable 51 143
Total Accrued expenses and other current liabilities 775 887
Other accruals relate to the following types of accrued expenses: utilities,
information technology, and insurance, among others. Other payables primarily
include amounts due to managed centre partners and our businesses that are
accounted for using the equity method.
Note 12. Other Non-Current Liabilities
Other non-current liabilities consist of the following:
$m FY2025 FY2024
Long-term provisions 86 77
Long-term customer deposits 87 -
Other long-term payables 12 14
Total Other non-current liabilities 185 91
As of 31 December 2025, the Company presented long-term customer deposits of
$87 million. As of 31 December 2024 all customer deposits were presented as
current liabilities.
Note 13. Acquisitions
2025 acquisitions
On 30 April 2025, the Company completed the acquisition of the remaining
noncontrolling interests in the Digital and Professional Services reportable
segment in exchange for 23,095,239 common shares of International Workplace
Group plc. From May 2025 onward, the Company no longer has material
non-controlling interests.
2024 acquisitions
During the year ended 31 December 2024, the Company made various individually
immaterial acquisitions for a total consideration of $16 million, of which $14
million related to the acquisition of the noncontrolling interest in the
Digital and Professional Services reportable segment and was satisfied
primarily through the utilisation of treasury shares and $2 million related to
other acquisitions.
2023 acquisitions
During the year ended 31 December 2023, the Company made various individually
immaterial acquisitions for a total consideration of $21 million.
Note 14. Goodwill and Intangible Assets
Goodwill, net
The following tables show the Company's goodwill balances as of 31 December
2025 and 2024:
FY2025
$m Gross Carrying Amount Accumulated Impairment Losses Net Carrying Amount
Company-owned 959 (16) 943
Managed & Franchised 28 - 28
Digital and Professional Services 274 - 274
Total goodwill 1,261 (16) 1,245
FY2024
$m Gross Carrying Amount Accumulated Impairment Losses Net Carrying Amount
Company-owned 882 (16) 866
Managed & Franchised - - -
Digital and Professional Services 307 - 307
Total goodwill 1,189 (16) 1,173
The following table shows changes in goodwill:
$m Company-Owned Managed & Franchised Digital and Professional Services Total
1 January 2024 885 - 312 1,197
Goodwill acquired 2 - - 2
Currency translation adjustment (21) - (5) (26)
31 December 2024 866 - 307 1,173
Currency translation adjustment 36 - 19 55
30 April 2025 (pre-reallocation) 902 - 326 1,228
30 April 2025 reallocation 26 26 (52) -
30 April 2025 (post-reallocation) 928 26 274 1,228
Currency translation adjustment 15 2 - 17
31 December 2025 943 28 274 1,245
The 30 April 2025 reallocation was a result of the Reorganisation. There was
no goodwill impairment recorded during the years ended 31 December 2025, 2024
and 2023. In assessing whether goodwill is subject to impairment, judgements
are made relating to the identification of reporting units, pre-tax discount
rates based on the underlying weighted average cost of capital (WACC) for the
Group adjusted for country specific market risk, assumptions relating to
future cash flows such as customer pricing, centre occupancy and maintenance
capital expenditure, methodology for the allocation of overhead costs between
reporting units and terminal value growth rate assumptions.
Intangible Assets
The carrying amount and accumulated amortisation of intangible assets consist
of the following:
$m FY2025 FY2024
Gross finite-lived intangible assets
Tradenames 111 102
Customer relationships 146 138
Capitalised software 270 232
Total gross finite-lived intangible assets 527 472
Accumulated amortisation
Tradenames 62 62
Customer relationships 146 118
Capitalised software 178 130
Total accumulated amortisation 386 310
Total finite-lived intangible assets, net 141 162
Indefinite-lived intangible assets
Tradenames - Regus brand 15 14
Total indefinite-lived intangible assets 15 14
Total intangible assets, net 156 176
Intangible asset amortisation expense was $55 million, $54 million and $61
million in the years ended 31 December 2025, 2024 and 2023, respectively.
The estimated future annual amortisation expense for the Company's intangible
assets at 31 December 2025 is as follows:
$m Total
For the years ending
2026 43
2027 29
2028 21
2029 16
2030 10
Thereafter 22
Total future amortisation expense 141
Note 15. Leases
The Company has operating leases for the rental of commercial office real
estate premises globally. The following table details the components of lease
cost recognised within the Consolidated Statements of Operations:
$m FY2025 FY2024 FY2023
Operating lease cost 5 (#_ftn5) 1,419 1,394 1,444
Short-term lease cost - - 1
Variable lease cost 129 162 107
Sub-lease income (66) (66) (75)
Total lease cost 1,482 1,490 1,477
The Company's weighted average remaining lease term and discount rate for
operating leases are as follows:
$m FY2025 FY2024
Weighted average remaining lease term (in years): 6.4 6.7
Weighted average discount rates: 6.0% 5.5%
Maturity of the Company's operating lease liabilities as of 31 December 2025
are as follows:
$m Operating lease payments
2026 1,475
2027 1,291
2028 1,121
2029 959
2030 772
Thereafter 1,826
Total minimum undiscounted lease payments 7,444
Less: imputed interest 1,122
Total lease liabilities 6,322
As of 31 December 2025, the Company had no significant rights and obligations
from lease agreements that have not yet commenced.
Impairment of right-of-use assets was $21 million, $54 million, and $100
million for the years ended 31 December 2025, 2024, and 2023, respectively.
The recorded impairment related to the Company-owned segment and was due to
underperforming business centres.
Of the impairment recorded during the year ended 31 December 2025, $0 million
related to the 31 March assessment, $11 million related to the 30 June
assessment, $1 million related to the 30 September assessment and $9 million
to the 31 December assessment. Of the impairment recorded during the year
ended 31 December 2024, $11 million related to the 31 March assessment, $9
million related to the 30 June assessment, $12 million related to the 30
September assessment and $22 million to the 31 December assessment. Please
reference Note 18, Fair Value Measurements, for more information regarding the
underlying impairment assessments.
Note 16. Property and Equipment, net
Property and equipment, net consisted of the following:
$m FY2025 FY2024
Land and buildings 214 202
Leasehold improvements 2,082 1,889
Furniture and equipment 1,050 973
Computer hardware 165 155
Total property and equipment, gross 3,511 3,219
Less: accumulated depreciation (2,733) (2,435)
Total property and equipment, net 778 784
Depreciation expense was $238 million, $199 million, and $232 million for the
years ended 31 December 2025, 2024, and 2023, respectively. These expenses
include the offset by the wind-down of previous landlord contributions on
leased properties recognised as reimbursements for costs of $64 million, $80
million, and $93 million, respectively.
Impairment of property and equipment was $8 million, $29 million, and $43
million for the years ended 31 December 2025, 2024, and 2023, respectively.
The recorded impairment related to Company-owned segment and was due to
underperforming business centres.
Of the impairment recorded during the year ended 31 December 2025, $0 million
related to the 31 March assessment, $3 million related to the 30 June
assessment, $1 million related to the 30 September assessment and $4 million
to the 31 December assessment. Of the impairment recorded during the year
ended 31 December 2024, $9 million related to the 31 March assessment, $5
million related to the 30 June assessment, $9 million related to the 30
September assessment and $6 million to the 31 December assessment. Please
reference Note 18, Fair Value Measurements, for more information regarding the
underlying impairment assessments.
For the years ended 31 December 2025, 2024 and 2023, the Company recognised
losses of $2 million, $14 million and $58 million, respectively, on the sale
of property and equipment related to network rationalisations that occurred,
including the write-off of the book value of assets and direct closure costs
related to these centres. The losses are recorded in Loss (gain) on disposal
of long-lived assets and other closure related (credits) costs in the
Consolidated Statements of Operations.
Asset Retirement Obligations
The following table presents the change in balance for asset retirement
obligations:
$m FY2025 FY2024
Beginning balance 27 26
Liabilities settled in the current period (1) (1)
Liabilities incurred in the current period 1 -
Accretion of liability 2 3
Revisions in estimated cash flows 1 (1)
Ending balance 30 27
Note 17. Debt
The carrying value of debt as of 31 December 2025 and 2024, is as follows:
$m FY2025 FY2024
Short-term debt:
Bank overdrafts 17 15
Convertible bonds - 197
Total short-term debt 17 212
As of 31 December 2025, the future maturities of long-term debt, excluding
debt issuance costs of $20 million consisted of the following:
$m
2026 3
2027 6
2028 -
2029 -
2030 731
Thereafter 350
Total long-term debt 1,090
Euro bonds
The Company issued a €575 million corporate bond on 28 June 2024 at a fixed
coupon rate of 6.5% and a bullet maturity of June 2030. An additional €50
million was issued on 10 September 2024. On 14 May 2025, the Company issued
€300 million Euro bonds at an issuance price of 99.369%, a fixed coupon rate
of 5.125% and a bullet maturity of 14 May 2032. These issuances on 28 June
2024, 10 September 2024 and 14 May 2025 resulted in the Company receiving cash
proceeds of $613 million, $56 million and $337 million respectively. The bonds
are traded on the London Share Exchange's International Securities Market.
Convertible bonds
The Company issued £350 million of convertible bonds on 9 December 2020. The
bondholders had the option to cash settle in December 2025 at par. As a
result, in December 2024, the convertible bonds were reclassed to short-term
debt.
During January 2024, the Company entered into a series of forward exchange
rate contracts related to its convertible
debt, contracting to purchase £350 million for $445 million in 2025.
During the year ended 31 December 2024, the Company repurchased £192 million
($244 million) face value of the convertible bonds at a weighted average price
of £0.926, including accrued interest, representing a consideration of £178
million ($228 million). The Company also closed out £192 million of the
forward exchange contracts relating to the repurchased convertible bonds. At
31 December 2024, amounts outstanding were presented as short-term debt
because of the option the bondholders have to cash settle at par in December
2025.
During the year ended 31 December 2025, prior to the bondholders exercising
their option to cash settle at par, the Company repurchased £18 million ($23
million) face value of the convertible bonds at a weighted average price of
£0.966, including accrued interest, representing a consideration of £17
million ($22 million). The Company also closed out £18 million of the
forward exchange contracts relating to the repurchased convertible bonds.
On 9 December 2025, bondholders exercised the option to cash settle at par and
the Company repurchased £136 million ($183 million) face value of the
convertible bonds at a weighted average price of £1, including accrued
interest, representing consideration of £136 million ($183 million).
Following expiration of this option, all amounts outstanding have been
presented as long-term debt.
The Company also closed out all of the remaining £141 million of the forward
exchange contracts entered into during January 2024. For the years ended 31
December 2025 and 2024, the repurchases of convertible bonds and settlement of
the foreign exchange rate contracts result in a gain on extinguishment of debt
of $1 million and $16 million, respectively.
$m FY2025 FY2024 FY2023
Contractual interest expense 1 3 2
Amortisation of premium, discount and issuance costs 1 - 2
Total Interest recognised during the period 2 3 4
Effective interest rate 3.8% 3.8% 3.8%
Revolving Credit Facility
The Company has a $720 million multi-currency Revolving Credit Facility
("RCF") through 17 June 2029. No cash amounts were drawn under the RCF at 31
December 2025 or 2024. The rate of interest on any cash amounts drawn under
the RCF is variable and based upon the period selected when a utilisation
request is made by the Company.
The amount available and undrawn on the RCF as of 31 December 2025 and 2024
was $436 million and $381 million, respectively because of ancillary facility
commitments relating to guarantees of $284 million and $339 million
respectively.
On 31 December 2025, the Group complied with all financial covenants related
to the Revolving Credit Facility.
Note 18. Fair Value Measurements
Fair value is defined as the amount that would be received to sell an asset or
paid to transfer a liability in an orderly transaction between market
participants at the measurement date.
Reference the Fair Value Measurement accounting policy included within Note 2,
Description of the Business and Summary of Significant Accounting Policies,
for the level of inputs outlined below to determine fair value. The carrying
amounts of cash and cash equivalents, restricted cash, accounts receivable,
accounts payable, and accrued liabilities approximate fair value because of
the short maturity of these instruments.
Recurring fair value measurements
The following table presents the carrying amounts and estimated fair values of
the Company's financial instruments as of 31 December 2025 and 31 December
2024. Fair value is defined as the amount that would be received to sell an
asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date.
$m FY2025
Carrying amount Level 1 Level 2 Level 3 Total
Assets:
Cross-currency swaps 87 - 87 - 87
Total assets 87 - 87 - 87
Liabilities:
Contingent consideration 2 - 2 - 2
Euro bonds 1,061 - 1,156 - 1,156
Convertible bonds 6 - 5 - 5
Forward exchange contracts - - - - -
Total liabilities 1,069 - 1,163 - 1,163
$m FY2024
Carrying amount Level 1 Level 2 Level 3 Total
Assets:
Cross-currency swaps 6 - - 6 6
Total assets 6 - - 6 6
Liabilities:
Contingent consideration 7 - - 7 7
Euro bonds 629 - 694 - 694
Convertible bonds 197 - 187 - 187
Forward exchange contracts 3 - - 3 3
Total liabilities 836 - 881 10 891
During the year ended 31 December 2025, the Company transferred the
Cross-currency swaps from Level 3 to Level 2 of the fair value hierarchy.
Following management's review of the valuation inputs, this was determined to
be market observable data and was determined to be the primary basis for
valuation. As such, the instruments no longer required significant
unobservable inputs, which is more indicative of a Level 2 classification.
The valuation techniques used in measuring level 2 and 3 fair values consist
of a combination of broker quotes, forward pricing and swap models with the
significant inputs into the valuations relating to interest rates and foreign
exchange rates.
Contingent consideration
The fair value of contingent consideration is based on contractually defined
targets of financial performance in connection with earn outs and other
considerations. The fair value of the convertible bonds is based on the
published price on the open market. There were no transfers between levels for
the years ending 31 December 2025 and 2024.
Forward exchange contracts
During January 2024, the Company entered into a series of forward exchange
rate contracts related to its convertible debt, contracting to purchase £350
million for $445 million in 2025. These contracts were designated as cash flow
hedges. The fair value of the foreign exchange contracts were based on a
combination of forward pricing and swap models. During 2025 and 2024, due to
the partial repurchase of the convertible bonds, £154 million and £192
million respectively of the forward exchange rate contracts entered into were
closed out.
As of 31 December 2025 and 2024, the fair value of the forward exchange
contract was a $0 million and $3 million liability respectively.
Cross-currency swaps
Simultaneous to the closing of the Euro bonds (reference Note 17, Debt) during
2024, the Company entered into a hedging arrangement to swap €400 million of
the issuance and the related interest into $428 million, with a weighted
average fixed coupon of 8.153%. On 12 September 2024, the Company entered into
arrangements to swap an additional €50 million and the related interest into
$55 million, with a weighted average fixed coupon of 7.820%. On 29 October
2024, the Company entered into hedging arrangements to swap an additional
€75 million Euro bonds notional plus interest into $81 million, with a
weighted average fixed coupon of 8.264%. At 31 December 2024, a total of
€525 million of the issuance was hedged, with arrangements to swap into $564
million with a weighted average fixed coupon of 8.137%.
As of 31 December 2024, the fair value of the swap contract was a $6 million
asset. The remaining of the €100 million issuance and the related interest
at a fixed coupon of 6.50% was maintained in euros as these amounts were
anticipated to be covered by a natural currency hedge due to the anticipated
geographic diversity of operations of the Company and have been designated as
net investment hedges.
On 11 April 2025, the Company entered into hedging arrangements to swap the
remaining €100 million of the Euro bonds notional plus interest into $110
million, with a weighted average fixed coupon of 8.265%. As of 31 December
2025, a total of €625 million of the 2024 issuance was hedged, with
arrangements to swap into $674 million with a weighted average fixed coupon of
8.158%. The hedges are expected to remain in place for the life of the bonds
and are designated as cash flow hedges. As of 31 December 2025, the fair value
of the swap contract was an $87 million asset.
As a result of this hedging arrangement, the Company discontinued its net
investment hedge over the Company's European subsidiaries' operations. Prior
to the discontinuation of the net investment hedge, its impact on other
comprehensive income for both the years ended 31 December 2025 and 2024, was
$0 million and $3 million, respectively.
Simultaneous to the closing of the Euro bonds issued during May 2025, the
Company entered into hedging arrangements to swap €300 million of the
issuance and the related interest into $341 million, with a weighted average
fixed coupon of 6.902%. The hedges will remain in place for the life of the
bonds and have been designated as a cash flow hedge.
Fair Value of Derivative Instruments
Derivative instruments were recorded at fair value in the Consolidated Balance
Sheets as follows:
$m FY2025
Other non-current assets
Cash flow hedges:
Cross-currency interest rate swaps - Euro bond €625 million 78
Cross-currency interest rate swaps - Euro bond €300 million 9
As of 31 December 2025 and 31 December 2024 respectively, $0 million
derivative asset (2024: $2 million derivative liability) relating to the
forward exchange contract - Convertible bond liability and $70 million
derivative asset (2024: $19 million derivative liability) relating to the
cross-currency interest rate swap - Euro bond liability hedge the principal
component of debt.
$m FY2024
Other non-current assets Other non-current liabilities
Cash flow hedges:
Forward exchange contracts - Convertible bonds £158 million - 3
Cross-currency interest rate swaps - Euro bond €525 million 6 -
Net investment hedges:
Euro bond €100 million - 111
Derivative Volume
The gross notional values of our derivative instruments were:
$m FY2025
Cross-currency interest rate swaps - Euro bond €625 million 674
Cross-currency interest rate swaps - Euro bond €300 million 341
FY2024
$m
Forward exchange contracts - Convertible bonds £158 million 201
Cross-currency interest rate swaps - Euro bond €525 million 564
Net investment hedge:
Euro bond €100 million 104
Cash Flow Hedges
Cash flow hedge activity, net of taxes, is recorded within accumulated other
comprehensive income/(losses). Amounts are then reclassified into interest
expense in the Consolidated Statements of Operations. Refer to Note
20, Accumulated Other Comprehensive Income/(loss), for further information.
Financial Instruments Not Measured at Fair Value on a Recurring Basis
The following table presents the carrying amounts and estimated fair values of
the Company's financial instruments not measured at fair value on a recurring
basis as of 31 December 2025 and 31 December 2024.
$m FY2025
Carrying amount Level 1 Level 2 Level 3 Total
Assets:
Cash 302 302 - - 302
Account receivable, net 419 - - - -
Total assets 721 302 - - 302
Liabilities:
Short-term borrowings (including overdraft) 17 17 - - 17
Total liabilities 17 17 - - 17
$m FY2024
Carrying amount Level 1 Level 2 Level 3 Total
Assets:
Cash 137 137 - - 137
Account receivable, net 651 - - - -
Total assets 788 137 - - 137
Liabilities:
Short-term borrowings (including overdraft) 15 15 - - 15
Total liabilities 15 15 - - 15
Non-recurring fair value measurements
During the years ended 31 December 2025 and 2024, the long-lived assets (which
include property & equipment held in centres and right-of-use assets)
warranted non-recurring fair value measurements due to the existence of
qualitative and quantitative impairment indicators. For the affected centres,
which are each considered an asset group for purposes of impairment testing,
the non-recurring fair value measurements recorded in 2025 were $0 million,
$27 million, $27 million and $86 million as of 31 March, 30 June, 30
September, and 31 December respectively. The corresponding non-recurring fair
value measurements in 2024 were $162 million, $200 million, $159 million and
$73 million as of 31 March, 30 June, 30 September, and 31 December
respectively.
The categorisation of the framework used to value these long-lived assets is
considered Level 3, due to the limited data and subjective nature of the
unobservable inputs used to determine the fair value. Such judgements and
estimates included within the cash flow forecasts include assessment of the
extent to which historical cash flows are indicative of future cash flows,
discount rate applied to the cash flows, location of the centre, the local
economic situation, competition, local environmental factors, status of
current discussions with the landlord and customers relating to matters such
as potential future customer contract terms, lease amendments or centre
closure, the management of the centre, and future changes in occupancy,
customer pricing and costs of the centre. As a result of the non-recurring
fair value measurements, the Company recognised property & equipment and
right-of-use assets impairment. Please reference Note 15, Leases, and Note 16,
Property and Equipment, net, for more detail.
Note 19. Equity
Cash Dividends
On 30 May 2025, the Company approved and paid out a dividend of $9 million
($0.009 per ordinary share). On 17 October 2025, the Company approved and paid
out a dividend of $5 million ($0.0045 per ordinary share). On 31 May 2024, the
Company approved and paid out a dividend of $13 million (£0.01 per ordinary
share). On 4 October 2024, the Company approved and paid out a dividend of $4
million ($0.0043 per ordinary share). No other dividends were declared or paid
during the other reporting periods presented in the consolidated financial
statements. The consolidated shareholders' deficit does not impact the
Company's ability to make dividend payments.
Treasury Shares
As at 3 March 2026, 14,591,563 treasury shares were held. The holders of
ordinary shares in International Workplace Group plc are entitled to receive
such dividends as are declared by the Company and are entitled to one vote per
share. Treasury shares do not carry such rights until they are reissued.
FY2024 FY2023
Number of shares $m Number of shares $m Number of shares $m
1 January 45,241,020 182 50,558,201 194 50,564,853 194
Net treasury shares purchased/(utilised) (29,933,370) (115) (5,317,181) (12) (6,652) -
31 December 15,307,650 67 45,241,020 182 50,558,201 194
During the year, 23,095,239 treasury shares (2024: 5,283,597, 2023: zero) were
utilised to increase the Group's equity voting rights in the non-controlling
interest. In addition, out of the share awards exercised by employees during
2025, 6,838,131 (2024: 33,584, 2023: 6,652) treasury shares were used to
satisfy the awards. Additionally, during the years 31 December 2025, 2024, and
2023 the Company purchased zero, 118,054 and 399,158 shares, respectively, of
its common Share to support the exercise of share awards by employees in the
open market for $0 million, $0 million and $1 million, respectively.
Common Shares
On 4 March 2025, the Company announced a $50 million share repurchase
programme, then on 6 May 2025, the Company extended the share repurchase
programme by an additional $50 million to a total of $100 million and further
increased to $130 million on 19 August 2025. Pursuant to the share repurchase
programme, during the year ended 31 December 2025, the Company repurchased
48,512,425 of its common shares for $130 million, all of which were
subsequently cancelled.
Note 20. Accumulated Other Comprehensive Income/(loss)
The changes in the components of accumulated other comprehensive
income/(loss), net of taxes, were as follows:
$m Foreign Currency Translation Adjustment Cash Flow Hedge Adjustment Net Investment Hedges, Adjustment Total Accumulated Other Comprehensive Income/(loss)
Balance as of 31 December 2022 (333) - - (333)
Current-period other comprehensive income (loss) (12) - - (12)
Amounts reclassified from accumulated other - - - -
comprehensive income (loss), net of taxes
Balance as of 31 December 2023 (345) - - (345)
Current-period other comprehensive income 6 44 3 53
Amounts reclassified from accumulated other - (21) - (21)
comprehensive income (loss), net of taxes
Balance as of 31 December 2024 (339) 23 3 (313)
Current-period other comprehensive income 44 61 - 105
Amounts reclassified from accumulated other - (99) (3) (102)
comprehensive income (loss), net of taxes
Balance as of 31 December 2025 (295) (15) - (310)
Note 21. Stock-based Compensation
The Company provides share-based compensation to certain of the Company's
directors, officers and employees under four plans: the IWG Group Share Option
Plan, the Performance Share Plan, Restricted Share Plan and the Deferred Bonus
Share Plan.
The Company recognised share-based compensation expense of $6 million, $2
million, and $8 million during the years ended 31 December 2025, 2024, and
2023, respectively, and the related tax benefit recognised was $1 million, $1
million and $1 million for the years ended 31 December 2025, 2024, and 2023,
respectively.
IWG Group Share Option Plan
The Company operates the IWG Group Share Option Plan that entitles eligible
employees to purchase shares in the Company. In accordance with this
programme, holders of vested options are entitled to purchase shares at the
mid-market closing price of the shares at the day before the date of grant.
The IWG Group also operates the IWG Group Share Option Plan (France) which is
included within the numbers for the IWG Share Option Plan (UK, Swiss, US and
other) disclosed above. The terms of the IWG Share Option Plan (France) are
materially the same as the IWG Group Share Option Plan with the exception that
they are only exercisable from the fourth anniversary of the date of grant
compare to the remainder of the plans are exercisable in part or in full
between 3 and 10 years from the grant date, assuming the performance
conditions have been met.
The IWG Group Share Option Plan grants share options to eligible employees and
entitles the grantee to receive shares of the Company at the end of a
performance period of three to seven years if the applicable performance goals
are achieved and generally subject to continued service through the applicable
performance period. These performance goals include profitability and KPI
targets specific to the recipient of the award. Personal performance targets
are subject to review, in line with changes to the Group's strategy, at the
discretion of the Remuneration Committee.
The share options subject to TSR targets are vested based on the Group ranking
at or above the median for TSR performance relative to a comparator group over
a period of three years with a minimum performance threshold of achieving a
ranking at the median TSR or above and the maximum award being given for
exceeding the comparator group median TSR performance by 10% or more.
The following table provides information about the IWG Group Share Option Plan grants:
FY2025 FY2024 FY2023
Number of options granted (in thousands) 14,686 9,341 3,986
Weighted average grant date fair value per share 178p 157p 151p
Aggregate intrinsic value of options exercised (in millions) £4.31 - £0.04
The weighted average grant date fair value per share of the option grants for
each year was determined using the Monte Carlo simulation or Black-Scholes
option-pricing model with the following weighted average assumptions:
FY2025 FY2024 FY2023
Expected volatility 6 (#_ftn6) 34.78% - 51.08% 38.28% - 51.43% 40.64% - 60.04%
Dividend yield 7 (#_ftn7) 0.58% 0.32% -
Risk-free rate 8 (#_ftn8) 3.85% - 4.26% 3.7% - 4.47% 3.12% - 4.61%
Expected term (in years) 9 (#_ftn9) 3 - 5 3 - 5 3 - 5
The following table summarises the activity for the IWG Group Share Option
Plan during the year ended 31 December 2025:
Number of Shares (in thousands) Weighted-average Exercise Price
Balance as of 31 December 2024 54,141 165p
Granted 14,686 178p
Exercised (6,671) 167p
Forfeited (5,762) 198p
Balance as of 31 December 2025 10 (#_ftn10) 56,394 165p
Exercisable as of 31 December 2025 11 (#_ftn11) 16,286 186p
Performance Share Plan ("PSP")
The Remuneration Committee of the Board has authority to grant standalone
awards, based on normal plan limits, up to a maximum of 250% of base salary.
The number of awards that vest is dependent upon the Company's achievement of
certain specified financial performance criteria over a three-year period.
Awards entitle the grantee to receive shares of the Company, which vest over a
five-year service period, subject to continued service over the performance
period. The awards are exercisable in part or in full, between 5 and 10 years
from the grant date.
Performance conditions vest based on measures assessed over a three‑year
performance period. These include earnings per share (EPS) depending on the
level of EPS improvement achieved, return on investment (ROI) based on ROI
performance over the period and TSR similar to the Group Share Option Plan.
FY2025
Grant 1 Grant 2
Number of shares granted (in thousands) 1,584 -
Weighted average grant date fair value per share 154.43p -
FY2024
Grant 1 Grant 2
Number of shares granted (in thousands) 1,826 91
Weighted average grant date fair value per share 159.01p 159.63
Aggregate intrinsic value of shares vested (in millions) £0.09
None of the shares vested during the year ended 31 December 2025, 2024, or
2023. The weighted average grant date fair value per share was determined
using the Monte Carlo simulation or the Black-Scholes pricing model with the
following weighted average assumptions:
FY2025 FY2024 FY2023
Expected volatility 12 (#_ftn12) 41.10% 51.90% 52.70%
Dividend yield 13 (#_ftn13) 0.54% - -
Risk-free rate 14 (#_ftn14) 4.20% 3.97% 3.12%
Expected term (in years) 15 (#_ftn15) 5 5 5
The following table summarises the activity for the Performance Share Plan
during the year ended 31 December 2025:
Number of Shares (in thousands) Weighted-average Grant Date Fair Value per Share
Balance as of 31 December 2024 4,580 176p
Granted 1,584 154p
Vested - -
Forfeited (859) 225p
Balance as of 31 December 2025 16 (#_ftn16) 5,305 165p
Exercisable as of 31 December 2025 17 (#_ftn17) 92 188p
Restricted Share Plan ("RSP")
The Restricted Share Plan enables the Board to award restricted shares to
selected employees on a discretionary basis that is subject to an underpin. In
assessing the underpin, the Committee will consider the Group's overall
performance, including financial and non-financial performance over the course
of the vesting period and any material factors identified. RSP awards, by
design, offer a more certain level of reward and provide immediate alignment
to shareholders. Share awards vest over a 5-year period and are subject to
continued service by the grantee. The scheme was adopted in 2025.
The following table provides information about the Restricted Share Plan
grants:
$m FY2025
Number of restricted shares granted (in thousands) 596
Weighted average grant date fair value per share 154p
The weighted average grant date fair value per share of the grants for each
year was determined using the Black-Scholes pricing model with the following
weighted average assumptions:
$m FY2025
Expected volatility 18 (#_ftn18) 41.10%
Dividend yield 19 (#_ftn19) 0.54%
Risk-free rate 20 (#_ftn20) 4.20%
Expected term (in years) 21 (#_ftn21) 5
The following table summarises the activity for the Restricted Share Plan
during the year ended 31 December 2025:
Number of Shares Weighted average Grant Date Fair Value per Share
Balance as of 31 December 2024 - -
Granted 596 154p
Exercised - -
Forfeited - -
Expired - -
Balance as of 31 December 2025 22 (#_ftn22) 596 154p
Exercisable as of 31 December 2025 -
Deferred Bonus Share Plan
The Deferred Bonus Share Plan enables the Board to award shares to selected
employees on a discretionary basis equal in value to the amount of annual
bonus deferred. There are no performance conditions linked to this plan. Share
awards vest over a three-year period and are subject to continued service by
the grantee.
The awards are exercisable in part or in full between 3 and 10 years from the
grant date.
The following table provides information about the Deferred Bonus Share Plan
grants:
FY2025 FY2024 FY2023
Number of shares granted (in thousands) 516 471 181
Weighted average grant date fair value per share 174p 179p 191p
Aggregate intrinsic value of shares exercised (in millions) £0.03 - £0.07
The weighted average grant date fair value per share of the award grants for
each year was determined using the Black-Scholes pricing model with the
following weighted average assumptions:
FY2025 FY2024 FY2023
Expected volatility 23 (#_ftn23) 39.10% 40.50% 60.00%
Dividend yield 24 (#_ftn24) 0.54% - -
Risk-free rate 25 (#_ftn25) 4.06% 4.08% 3.21%
Expected term (in years) 26 (#_ftn26) 3 3 3
The following table summarises the activity for the Deferred Bonus Share Plan
during the year ended 31 December 2025:
Number of Shares (in thousands) Weighted average Grant Date Fair Value per Share
Balance as of 31 December 2024 1,427 292p
Granted 516 174p
Exercised (128) 254p
Forfeited - -
Expired - -
Balance as of 31 December 2025 27 (#_ftn27) 1,815 172p
Exercisable as of 31 December 2025 28 (#_ftn28) 92
On 2 November 2022, the Chief Financial Officer received a conditional award
over 511,571 ordinary shares in the Company. This was granted as a one-off
award arrangement established under Listing Rule 9.4.2(2) in order to
facilitate his recruitment. This award vests 5 years after the date of grant
and has been included within the table above.
If all vesting and performance conditions are met, as of 31 December 2025 the
total compensation costs related to all unvested awards shown above not yet
recognised in the Statements of Operations is approximately $33 million which
is expected to be recognised over a weighted average period of 3 years.
Note 22. Commitments and Contingencies
Contingencies
From time to time, the Company is party to litigation and other legal
proceedings in the ordinary course of business. The Company accrues for loss
contingencies when it is both probable that it will incur the loss and when
the Company can reasonably estimate the amount of the loss or range of loss.
If an unfavourable outcome was to occur, there exists the possibility of a
material adverse impact on the results of operations in the period in which
the outcome occurs or in future periods. The Company expenses legal costs
relating to its lawsuits, claims and proceedings as incurred. Information
about material reasonably possible loss contingencies is also disclosed in the
financial statements.
Commitments
The Company has contractual obligations related to centre fit outs wherein the
Company has to finish or improve the interior space of a leased property.
Capital commitments in respect of centre fit-out obligations that are not
offset by contractually committed landlord contributions are immaterial at 31
December 2025.
The Company has bank guarantees and letters of credit held with certain banks,
predominantly in support of leasehold contracts with a variety of landlords.
As of 31 December 2025 and 2024, the guarantees were $344 million and $332
million, respectively.
During 2025, the Company maintains a guarantees and indemnities facility (the
"Sureties Facility"), that supports the issuance of guarantees related to rent
lease obligations. The amount available under the Sureties Facility is $120
million. $49 million under the Sureties Facility was utilised on 31 December
2025.
Note 23. Related Party Transactions
During the years ended 31 December 2025, 2024 and 2023, the Company acquired
goods and services from an entity indirectly controlled by a Director of the
Company amounting to $0.1 million, $0.1 million, and $0.1 million,
respectively. As of both 31 December 2025 and 2024, the Company had no
outstanding balance.
Equity Method Investments
As of 31 December 2025 and 2024, the Company had 87 and 78 equity method
investments, respectively, all of which relate to various leasing and
management operating centre.
The Company had the following related party balances on its Consolidated
Balance Sheets as of 31 December 2025 and 2024:
$m FY2025 FY2024
Accounts receivable, net: 51 48
Accounts payable: 52 45
During the years ended 31 December 2025, 2024 and 2023, the Company recorded
revenue transactions with related parties of:
$m FY2025 FY2024 FY2023
Revenue: 9 9 9
The Company had no expense transactions with equity method investees during
the periods presented.
Note 24. Principal Companies
As of 31 December 2025, the Company's principal subsidiary undertakings, their
principal activities and countries of incorporation are set out below:
Name of undertaking Country of incorporation % of ordinary shares and votes held
Trading companies
Regus Australia Management Pty Ltd Australia 100
Regus Belgium SA Belgium 100
Regus do Brasil Ltda Brazil 100
Regus Business Service (Shenzen) Ltd China 100
Regus Management ApS Denmark 100
Regus Management (Finland) Oy Finland 100
IWG France Management Sarl France 100
Regus Deutschland GmbH Germany 100
Regus Netherlands B.V Netherlands 100
Regus CME Ireland Limited Ireland 100
Regus Business Centres Limited Israel 100
Regus Business Centres Italia S.r.l. Italy 100
Regus Management Malaysia Sdn Bhd Malaysia 100
Regus Management de Mexico, SA de CV Mexico 100
IWG Management Services Morocco Morocco 100
Regus New Zealand Management Ltd New Zealand 100
Regus Business Centre Norge AS Norway 100
IWG Management Sp z.o.o. Poland 100
Regus Business Centre, Lda Portugal 100
Regus Management Singapore Pte Ltd Singapore 100
Regus Management España SL Spain 100
IWG Management (Sweden) AB Sweden 100
Avanta Managed Offices Ltd United Kingdom 100
Basepoint Centres Limited United Kingdom 100
Green (Topco) Limited United Kingdom 100
HQ Global Workplaces LLC United States 100
RGN National Business Centre LLC United States 100
RB Centres LLC United States 100
Regus Management Group LLC United States 100
Management companies
RGN Management Limited Partnership Canada 100
Regus Service Centre Philippines B.V. Philippines 100
Franchise International GmbH Switzerland 100
Pathway IP II GmbH Switzerland 100
Regus Global Management Centre SA Switzerland 100
Regus Group Services Ltd United Kingdom 100
IW Group Services (UK) Ltd United Kingdom 100
Regus Management Group LLC United States 100
Holding and finance companies
IWG Enterprise Sarl Luxembourg 100
IWG Group Holdings Sarl Luxembourg 100
IWG International Holdings Sarl Luxembourg 100
Ibiza Holdings Limited. Jersey 100
Global Platform Services GmbH Switzerland 100
Regus Group Limited United Kingdom 100
Regus Corporation United States 100
Ibiza Finance Limited. Jersey 100
Genesis Finance GmbH Switzerland 100
Pathway Finance GmbH Switzerland 100
Pathway Finance EUR 2 GmbH Switzerland 100
Pathway Finance USD 2 GmbH Switzerland 100
IWG US Finance LLC United States 100
Note 25. Subsequent Events
Proposed dividend
On 3 March 2026, the Board of Directors has recommended a final dividend for
2025 of 0.93c giving a total dividend for 2025 of 1.38c. It is expected that
the dividend will be paid on 29 May 2026 to shareholders on the register at
the close of business on 1 May 2026.
Share buyback programme
The Company announced the first tranche of the 2026 share buyback on 31
December 2025, and announced an increase of another $50 million to the buyback
programme.
Reconciliation for alternative performance measures
The Company reports certain alternative performance measures (APMs) that are
not required under US GAAP which represents the generally accepted accounting
principles (GAAP) under which the Company reports. The Company believes that
the presentation of these APMs provides useful supplemental information, when
viewed in conjunction with our US GAAP financial information as follows:
* To evaluate the historical and planned underlying results of our operations;
* To set Director and management remuneration; and
* To discuss and explain the Company's performance with the investment analyst
community.
None of the APMs should be considered as an alternative to financial measures
derived in accordance with GAAP. The APMs can have limitations as analytical
tools and should not be considered in isolation or as a substitute for an
analysis of our results as reported under GAAP. These performance measures may
not be calculated uniformly by all companies and therefore may not be directly
comparable with similarly titled measures and disclosures of other companies.
Adjusted EBITDA:
$m FY2025 FY2024 FY2023
Operating income (loss) 143 142 (98)
Add back: 357 333 386
Depreciation and amortisation before landlord contributions on leased 293 253 293
properties
Depreciation of landlord contributions (cost reimbursements) on leased 64 80 93
properties
Adjusting items: 31 26 175
Impairment of long-lived assets and goodwill 29 83 143
Loss (gain) on disposal of long-lived assets and other closure related 2 (57) 32
(credits) costs
Adjusted EBITDA 531 501 463
Net Debt:
$m FY2025 FY2024
Cash and cash equivalents 29 (#_ftn29) (302) (137)
Short-term debt, net(1) 17 212
Long-term debt, net(1) 1,070 633
Cash flow hedges 30 (#_ftn30) (70) 21
Net Debt 715 729
Adjusted gross profit:
$m Company-Owned Managed & Franchised Digital and Professional Services Total
31 December 2025
Gross profit 710 126 194 1,031
Landlord contributions on leased properties included in depreciation and 41 - 23 64
amortisation
Adjusted gross profit 751 126 217 1,095
31 December 2024
Gross profit 647 79 222 948
Landlord contributions on leased properties included in depreciation and 80 - - 80
amortisation
Adjusted gross profit 727 79 222 1,028
31 December 2023
Gross profit 596 61 228 885
Landlord contributions on leased properties included in depreciation and 93 - - 93
amortisation
Adjusted gross profit 689 61 228 978
Adjusted EPS:
$m FY2025 FY2024 FY2023
Net income (loss) 18 18 (207)
Impairment of long-lived assets 29 83 143
Loss (gain) on disposal of long-lived assets and other closure related 2 (57) 32
(credits) costs
(Gain) on extinguishment of debt (1) (16) -
Adjusted Net Income (Loss) 48 28 (32)
FY2025 FY2024 FY2023
Net income (loss) per common share
Basic (¢) 1.8 1.8 (20.6)
Diluted (¢) 1.8 1.8 (20.6)
FY2025 FY2024 FY2023
Adjusted net income (loss) per common share
Basic (¢) 4.8 2.8 (3.2)
Diluted (¢) 4.7 2.7 (3.2)
Capital Expenditure:
Year ended 31 December 2025
Analysed as: Reference FY2025
Net capital expenditure Landlord contributions Gross capital expenditure
Maintenance capital expenditure CFO review 92 (8) 100
Growth capital expenditure CFO review 82 (41) 123
Total 174 (49) 223
Year ended 31 December 2024
Analysed as: Reference FY2024
Net capital expenditure Landlord contributions Gross capital expenditure
Maintenance capital expenditure CFO review 49 (12) 61
Growth capital expenditure CFO review 63 (44) 107
Total 112 (56) 168
Segmental Reporting:
FY2025 FY2024
$m As reported Reclass from DPS Management Segmental As reported Reclass from DPS Management Segmental
Company-owned 3,212 365 3,577 3,222 393 3,615
Managed & Franchised 817 59 876 620 62 682
Digital & Professional Services 424 (424) - 455 (455) -
System-wide revenue 4,453 - 4,453 4,297 - 4,297
FY2025 FY2024
$m As reported Reclass from DPS Management Segmental As reported Reclass from DPS Management Segmental
Company-owned 3,212 365 3,577 3,222 393 3,615
Managed & Franchised 126 59 185 79 62 141
Digital & Professional Services 424 (424) - 455 (455) -
Group revenue 3,762 - 3,762 3,756 - 3,756
FY2025 FY2024
Adjusted Gross Profit ($m) As reported Reclass from DPS Management Segmental As reported Reclass from DPS Management Segmental
Company-owned 751 194 945 727 193 920
Managed & Franchised 126 24 150 79 29 108
Digital & Professional Services 218 (218) - 222 (222) -
Adjusted gross profit 1,095 - 1,095 1,028 - 1,028
Adjusted gross profit margin 29% 29% 27% 27%
Four-year Summary
$m except share and per share amounts FY2025 FY2024 FY2023 FY2022
unaudited
Income statement (full year ended)
Revenue 3,762 3,756 3,764 3,432
Cost of sales 2,731 2,808 2,879 2,804
Gross profit 1,031 948 885 628
Selling, general and administration expenses 546 514 496 489
Allowance for (recovery of) credit losses 18 13 19 (8)
Impairment of long-lived assets and goodwill 29 83 143 84
(Gain) loss on disposal of long-lived assets and other closure related 2 (57) 32 (33)
(credits) costs
Depreciation and amortisation before landlord contributions on leased 357 333 386 369
properties
Depreciation of landlord contributions (cost reimbursements) on leased (64) (80) (93) (104)
properties
Operating profit/(loss) 143 142 (98) (169)
Interest expense (87) (64) (54) (34)
Foreign currency gain (loss) 7 (17) 6 (6)
Gain on extinguishment of debt 1 16 - -
Other finance costs (21) (19) (19) (21)
Income (loss) before income taxes and share of (loss) income from equity 43 58 (165) (230)
method investments
Income tax (expense) benefit (32) (40) (43) 39
Share of income (loss) from equity method investments 4 - (1) (1)
Net income (loss) 15 18 (209) (192)
Net (loss) attributable to noncontrolling interests (3) - (2) (4)
Net income (loss) attributable to the Company 18 18 (207) (188)
Earnings / (loss) per ordinary share (EPS):
Attributable to ordinary shareholders
Basic (¢) 1.8 1.8 (20.6) (18.7)
Diluted (¢) 1.8 1.8 (20.6) (18.7)
Weighted average number of shares outstanding ('000s) 1,007,813 1,009,815 1,006,685 1,006,885
Balance sheet data (as at)
Current assets 1,276 1,331 1,308
Non-current assets 8,040 7,781 8,675
Total assets 9,316 9,112 9,983
Current liabilities 3,344 3,608 3,529
Non-current liabilities 6,277 5,713 6,695
Equity (305) (209) (241)
Total equity and liabilities 9,316 9,112 9,983
Glossary:
Adjusted EPS
EPS excluding adjusting items.
Adjusted EBITDA
EBITDA excluding adjusting items and depreciation on landlord contributions on
leased properties - cost re-imbursements.
Adjusted gross profit
Gross profit excluding adjusting items.
Adjusted Net Income
Net income excluding adjusting items.
Adjusting items
Adjusting items reflects the impact of adjustments, both incomes and costs not
indicative of the underlying performance, which are considered to be
significant in nature and/or size.
Ancillary services
Additional services provided alongside workspace solutions that include
virtual office services, day offices, short-term meeting rooms and other
on‑demand support services.
Capital-light
Business centres operating under a variable lease, joint-venture, managed and
franchised arrangements.
Company-owned ("CO")
Locations the Company operates directly and recognises full revenue and costs
of the centre.
Digital and Professional Services ("DPS")
Services and technology provided to customers and landlords.
EBIT
Earnings before interest and tax.
EBITDA
Earnings before interest, tax, depreciation and amortisation.
EPS
Earnings per share.
Expansions
A general term which includes new business centres established by IWG and
acquired centres in the year.
Fee income
Total fee income relating to the Managed & Franchised business.
Franchise and JV Fees
Fees in connection with centres not operated by IWG.
Growth capital expenditure
Capital expenditure in respect of centres which opened during the current or
prior financial period and technology spend supporting operational growth.
Growth-related landlord contributions (leased properties)
Landlord contributions received in respect of leased properties which opened
during the current or prior financial period.
IWG Network
Company-owned and Managed & Franchised comprises the IWG Network.
Maintenance capital expenditure (leased properties)
Capital expenditure in respect of centres owned for a full 12-month period
prior to the start of the financial year and operated throughout the current
financial year, which therefore have a full-year comparative.
Maintenance-related landlord contributions (leased properties)
Landlord contributions received in respect of properties leased for a full
12-month period prior to the start of the financial year and operated
throughout the current financial year, which therefore have a full
year‑ comparative.
Managed & Franchised ("M&F")
Locations the Company receives a franchise or management fee for providing
services to centres. Managed centres are operated by the Company; franchise
locations are operated by the franchise holder. The Company only recognises
the fee as revenue. The Company is not responsible for capital expenditures in
the centres and does not recognise the related centre operating costs.
Net debt
Operations cash and cash equivalents, adjusted for both short and long-term
debt, and the portion of derivatives that hedge the principal component of
debt. Net debt excludes lease liabilities.
Occupancy
Occupied square metres divided by total inventory square metres expressed as a
percentage where contracts are in place with a minimum term of one month.
Other fee income
Other fees received including those in connection with the set up and opening
of centres
Rooms
The yearly average total business centre square metres divided by a standard
room of seven square metres.
Recurring fee revenue
Ongoing monthly revenue earned from Managed & Franchised customers for the
continued use of workspaces, centres and related services.
RevPAR
Monthly average IWG Network revenue, divided by the average available number
of rooms, excluding rooms opened and closed in the period.
Share buyback programme
Refers to the programme that permits the Company to repurchase its own shares
in the open market.
System-wide revenue
Refers to the total revenue generated across IWG network, including revenue
from franchise, managed centre and joint-venture partners, but excluding
related fee income.
Tenant Incentive ('TI') amortisation
The amortisation of tenant improvements (often called leasehold improvements
allowances or landlord contributions) received from landlords on properties
that the company leases.
TSR
Total shareholder return.
Corporate directory
Legal advisors to the Company as to English law
Secretary and Registered Office
Slaughter and May
One Bunhill Row
Tim Regan, Company Secretary
London EC1Y 8YY
International Workplace Group plc
Legal advisors to the Company as to Jersey law
Mourant Ozannes
Registered Office: Registered Head Office:
22 Grenville Street
22 Grenville Street Baarerstrasse 52
St Helier
St Helier
Jersey JE4 8PX
CH-6300
Legal advisors to the Company as to Swiss law
Bär & Karrer Ltd
JE4 8PX Zug
Brandschenkestrasse 90
Jersey
CH-8027
Switzerland
Zurich
Switzerland
Registered number
Corporate Brokers
Investec Bank plc
Jersey
2 Gresham Street
122154
London EC2V 7QP
Registrars
Link Market Services (Jersey) Limited
12 Castle Street
St Helier Barclays Bank plc
Jersey JE2 3RT
5 The North Colonnade
Auditor
Canary Wharf
KPMG
London E14 4BB
1 Stokes Place
Financial PR advisors
St. Stephen's Green
Brunswick Group LLP
Dublin 2
16 Lincoln's Inn Fields
DO2 DE03
London WC2A 3ED
Ireland
[1 (#_ftnref1) ] (#_ftnref1) During the years ended 31 December 2025, 2024,
and 2023, the total cash proceeds from landlord contributions on leased
properties were $49 million, $56 million, and $57 million, respectively. These
amounts include cost reimbursements of $7 million, $8 million, and $27
million, as well as lease incentives of $42 million, $48 million, and $30
million. This is offset by the non-cash amortisation of previous landlord
contributions on leased properties receivable of $130 million (2024: $117
million).
2 (#_ftnref2) Restricted cash is presented within Other current assets and
Other non-current assets. Refer to Footnote 2, Description of the Business and
Summary of Significant Accounting Policies, for further details. All cash in
cash and cash equivalents is unrestricted.
3 (#_ftnref3) As of 31 December 2025 and 2024, the following amounts of
restricted cash were included in other current assets: $2 million and $8
million, respectively. Otherwise, all other restricted cash was included
within other non-current assets.
4 (#_ftnref4) Includes $51 million and $48 million, respectively of related
party receivables as of 31 December 2025 and 2024. See Note 23, Related Party
Transactions, for further information.
5 (#_ftnref5) During the years ended 31 December 2025, 2024, and 2023, the
total operating lease cost was offset by the wind-down of previously
capitalised lease incentives of $66 million, $37 million, and $34 million,
respectively.
6 (#_ftnref6) Expected volatility is based on the historic volatility,
adjusted for any abnormal movement in share prices.
7 (#_ftnref7) Based on the expected annualised dividend payment at the date
of grant.
8 (#_ftnref8) The risk-free interest rate was estimated based on U.K.
Treasury instruments with similar expected life.
9 (#_ftnref9) Expected term in years was calculated using vesting periods
and the contractual terms of the options as we do not have sufficient
historical share option exercise data to estimate the term of our option
grants.
10 (#_ftnref10) The aggregate intrinsic value was $37 million and the
weighted average remaining contractual term was 7 years.
11 (#_ftnref11) The aggregate intrinsic value was $7 million and the
weighted average remaining contractual term was 5 years.
12 (#_ftnref12) Expected volatility is based on the historic volatility,
adjusted for any abnormal movement in share prices.
13 (#_ftnref13) The expected dividend yield assumption is based on the
expected annualised dividend payment at the date of grant.
14 (#_ftnref14) The risk-free interest rate was estimated based on U.K.
Treasury instruments with similar expected life.
15 (#_ftnref15) Expected term in years was calculated using the contractual
terms of the awards.
16 (#_ftnref16) The weighted average remaining contractual term was 8 years.
17 (#_ftnref17) The weighted average remaining contractual term was 3 years
18 (#_ftnref18) Expected volatility is based on the historic volatility,
adjusted for any abnormal movement in share prices.
19 (#_ftnref19) The expected dividend yield assumption is based on the
expected annualised dividend payment at the date of grant.
20 (#_ftnref20) The risk-free interest rate was estimated based on U.K.
Treasury instruments with similar expected life.
21 (#_ftnref21) Expected term in years was calculated using vesting periods
and the contractual terms of the awards.
22 (#_ftnref22) The weighted average remaining contractual term was 9 years.
23 (#_ftnref23) Expected volatility is based on the historic volatility,
adjusted for any abnormal movement in share prices.
24 (#_ftnref24) The expected dividend yield assumption is based on the
expected annualised dividend payment at the date of grant.
25 (#_ftnref25) The risk-free interest rate was estimated based on U.K.
Treasury instruments with similar expected life.
26 (#_ftnref26) Expected term in years was calculated using vesting periods
and the contractual terms of the awards.
27 (#_ftnref27) The weighted average remaining contractual term was 9 years.
28 (#_ftnref28) The weighted average remaining contractual term was 5 years.
29 (#_ftnref29) Consolidated Balance Sheets
30 (#_ftnref30) Note 18, Fair Value Measurements
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