IWG flags lower-end profit outcome, shares slide

International Workplace Group said it expects full-year adjusted EBITDA to come in toward the lower end of its 525 million to 565 million dollar guidance range, even as first-half profit rose and the company increased its 2025 share buyback target to at least 130 million dollars.

The shares fell about 15 percent in early London trade as investors digested the earnings mix of stronger operating momentum and heavier near-term investment.

The operator of the Regus and Spaces brands reported first-half adjusted core profit of 262 million dollars and said revenue growth in its managed and franchise segment reached 26 percent, helping lift total system revenue to 2.16 billion dollars in the six months to 30 June. The group reiterated guidance and stressed the drag from investment in platform and franchise expansion that is designed to fuel growth through capital-light agreements.

In an interim results presentation, founder and chief executive Mark Dixon underscored the structural demand tailwinds. “The shift towards hybrid and more localised working is propelling our business forward with the fastest growth that we have ever seen in history,” he said, highlighting a record number of signed locations in the first half and progress on management-agreement partnerships with property owners. The company said it remains on track for medium-term EBITDA of at least one billion dollars and confirmed cash returns to shareholders of at least 140 million dollars this year.

IWG also pointed to a stable balance sheet and investment-grade credit metrics, noting a BBB rating and a revolving credit facility that remains undrawn. Still, the market reaction reflected sensitivity to the near-term earnings skew. Hybrid working has transformed the office demand curve since the pandemic, but execution risk remains as networks are scaled, fees ramp, and occupancy normalises through cycles. Management framed the current investment step-up as critical to building annuity-like revenue streams from recurring management fees.

The shares have rallied over the past year as investors reassessed flexible workspace economics and as rivals retrenched. Tuesday’s update presented a classic growth-versus-profits trade-off. Analysts and shareholders will watch second-half opening cadence, fee-income traction and cash conversion closely, alongside any read-through for UK commercial property sentiment.

With more than one million rooms across 121 countries and a pipeline weighted to partnership models, IWG argues it can compound growth while moderating capital intensity. Delivery on that thesis, and on guidance clustered near the lower bound this year, will shape the stock’s trajectory into 2026.