IWG reported stronger-than-expected third-quarter trading, with systemwide revenue rising 12% year over year to $1.26 billion as its flexible workspace network expanded beyond 5,000 centers.
Group revenue increased 9% to $1.03 billion, while the company said its annual systemwide revenue run rate had exceeded $5 billion. Growth was supported by expansion in managed and franchised locations, which are becoming a larger part of IWG’s business, according to Yahoo Finance.
Managed And Franchised Revenue Grows 27%
Systemwide revenue from managed and franchised operations increased 27% to $287 million. Recurring management-fee revenue rose 72% to $19 million for the quarter and was up 80% to $54 million over the first nine months of the year.
The segment had 380,000 rooms open across nearly 2,400 centers at the end of September, 37% more than a year earlier. Its contracted pipeline also expanded, reaching 287,000 rooms compared with 219,000 a year ago.
IWG signed 324 new centers during the quarter, matching the number signed in the same period last year. Room openings were lower during the quarter because more of the new properties were smaller, although year-to-date room openings increased 9% and center openings rose 16%.
During its recent earnings call, the company maintained its target of opening up to 1,000 centers annually through 2027. Open and contracted rooms in the managed and franchised segment now total 667,000.
Mature Centers And Company-Owned Locations Support Revenue
IWG said newly opened centers were weighing on managed revenue per available room (RevPAR) because they need time to reach maturity. Excluding centers opened in 2025, managed RevPAR was $237, compared with $199 in the same period last year.
In its company-owned locations, revenue increased 8% to $969 million and RevPAR rose 2% to $388. Management reported stable pricing and occupancy entering the fourth quarter.
The company attributed its ability to grow revenue without increasing its existing cost base to operating efficiencies, including technology investments, automation, and artificial intelligence. Management expects further efficiencies and continued revenue growth to support performance into 2027.
