IWG (LON:IWG) used its 2025 results call to emphasize what management views as a strengthening demand backdrop for flexible workspace, alongside growing momentum in its capital-light managed and franchised model. Founder and CEO Mark Dixon said the company is seeing higher inquiries and sales activity amid uncertainty around AI, geopolitics, and workforce planning, arguing that the need for flexibility is rising as companies struggle to predict staffing requirements years in advance.
Dixon also pushed back on concerns that AI could reduce demand for workspace, saying the company has observed “a very straight correlation” between AI-related publicity and increased inbound inquiries. He framed IWG’s offering as aligned with customer priorities to “rent, not own” and remain capital-light, citing conversations with large technology customers who want to preserve capital for core investments such as data centers and AI rather than long-term office commitments.
2025 results delivered in line with guidance
Net debt ended the year at $715 million on a U.S. GAAP basis, which Steel described as roughly flat compared to the prior year expectation. Leverage (net debt to EBITDA) decreased to 1.35x from 1.45x, even after $144 million of capital returned to shareholders through dividends and share buybacks.
- Adjusted EBITDA: $531 million (2025)
- System-wide revenue: up 4% to a record $4.5 billion, driven by managed and franchised
- Cash available to shareholders: $162 million, up 60% year-over-year
- Capital returns: $144 million ($14 million dividends; $130 million buybacks)
- Net debt: $715 million (U.S. GAAP basis)
- Leverage: reduced to 1.35x
Steel noted that 2025 cash flow benefited from some payments that were scheduled for 2025 but were ultimately paid in 2026, but said the overall cash performance was still strong and in line with guidance.
Managed and franchised momentum and network expansion
Management repeatedly highlighted the pace of network expansion, particularly in managed and franchised. Steel said IWG signed more than 1,100 new center locations in 2025 and opened 782 centers—more than three centers per working day. Compared with 2024, the company opened 25% more and signed 26% more locations.
In the managed and franchised division specifically, Steel reported system revenue growth of almost 30% in 2025, translating to 60% fee income growth and a 140% increase in recurring management fees within the managed partnerships business. Recurring management fees totaled $45 million in 2025, up from $19 million in 2024, meeting prior guidance.
On overall scale, Dixon cited a network of more than 1 million rooms open across 4,600 centers in over 120 countries, with close to 1,000 more centers under construction. He also referenced a signed pipeline of about 230,000 rooms, before any additional signings in the new year.
Steel added detail on the managed footprint, saying the company started 2025 with 185,000 rooms and added 122,000 over the year, resulting in a footprint including signed but unopened rooms of over half a million. He said REVPAR performance for these rooms was in line with expectations across cohorts and that, once open and mature, this universe could generate $1.8 billion of annual system revenue.
Strategy: capital-light model, brands, and “flywheel” growth
Dixon underscored the shift toward a capital-light structure, arguing it remains underappreciated by parts of the market. He said managed and franchised represented about 15% of the network when the company began pursuing capital-light deals and has since increased to 33%. Including the pipeline, he said the figure is already around 50%—before signing new locations in the current year—and that managed and franchised is the fastest-growing component of the business.
Dixon also stressed IWG’s breadth of brands, describing the company as able to serve “pretty much any building” from budget offerings to “6-star centers,” including laboratories and medical suites. He said competitors are fragmented and largely single-brand operators, while IWG’s suite of brands provides a differentiator for property owners and investors seeking to reposition buildings as operational real estate products.
Steel said the company is balancing expansion in managed and franchised system revenue with margin expansion in its company-owned division. He reported company-owned margin expansion of 97 basis points in 2025 and reiterated a goal of moving toward 30% margins over time. He also described price investment made over the last year, with expectations that as discounts roll off for new customers, blended pricing at higher occupancy should rise rather than fall, providing visibility into 2026 pricing.
AI, cost discipline, and investments in growth
Both Dixon and Steel addressed AI’s impact, with Dixon calling it a driver of customer demand for flexibility and Steel pointing to operational benefits. Dixon said IWG has doubled its AI investments each year for the past three years, noting the company had been deploying automation before it was commonly labeled AI. He attributed relatively flat costs in recent years—despite inflation—partly to these investments, and said AI should enable better decision-making from IWG’s data, including enhanced yield management, planning, and customer service tools.
Steel said IWG kept core overheads slightly lower year-over-year, but deliberately increased discretionary investment to drive growth. Those investments included Partnership Sales Managers to support new center signings, logistics resources intended to speed openings, and additional marketing spend aimed at filling new centers more quickly. In Q&A, management said these costs are necessary to sustain the higher pace of center signings and openings, while the company’s scale allows core back-office overhead to remain controlled.
On potential bottlenecks in opening new centers, Dixon said the company is continuously improving logistics and has made progress reducing the cost of opening centers, while also citing complicating factors such as tariffs and shipping costs.
Capital returns, balance sheet, 2026 guidance, and M&A
Steel said IWG’s transition to capital-light has supported shareholder returns and balance sheet flexibility. The company bought back almost 50 million shares for cancellation at an average price of 201p, which Steel said was a 13% discount to the year-end share price. For 2026, IWG has announced $100 million of buybacks, comprising $50 million announced on December 31 and an additional $50 million announced alongside the results.
Management also discussed Mark Dixon’s ownership stake, noting it increased as a result of the buyback. Steel said the company would like Dixon’s percentage stake to stabilize over time, potentially through selling into buybacks, but characterized that as Dixon’s decision.
For 2026, Steel reiterated guidance unchanged from updates given in November and at the December investor day. Adjusted EBITDA is expected to be $585 million to $625 million, with growth driven by revenue rather than cost reduction. Net debt is expected to rise slightly in 2026 after declining in 2025, and management reiterated its medium-term target of at least $1 billion of EBITDA while maintaining an investment-grade credit rating.
On cash returns relative to free cash flow, Steel said buybacks are constrained primarily by maintaining adequate headroom for the company’s credit rating, but indicated that a buyback slightly higher than free cash flow for a single year would not necessarily be an issue.
Finally, Dixon said investors should expect more M&A activity, describing it as an increasingly important part of the growth story. He said the company is not generally buying brands, but would consider transactions where IWG can apply scale benefits and where the economics support cash generation and progress toward the company’s stated EBITDA and cash flow objectives.
About IWG (LON:IWG)
IWG plc, together with its subsidiaries, provides workspace solutions in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. The company offers office, coworking and collaboration, flexible and scalable, meeting, and lounges spaces; workplace recovery; memberships workspaces; and reception services and conference products. It provides its services franchise partners, landlords, and property owners under the Regus, Spaces, HQ, Signature, Basepoint, Stop & Work, The Office Operators, BizDojo, Open Office, No18, The Clubhouse, Central Working, and Copernico brands.
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