International Workplace Group (LSE:IWG) reported a 9% increase in third-quarter revenue to $1.03 billion, supported by growth across its flexible workspace operations and continued expansion of its managed and franchised business.
The company, which operates a global network of flexible workspaces, also narrowed its full-year 2026 adjusted EBITDA guidance to between $585 million and $625 million, with the midpoint exceeding current analyst expectations.
System-wide revenue increased 12% year on year to $1.26 billion, taking the annualised revenue run-rate above $5 billion as IWG’s global network surpassed 5,000 locations.
Management said the performance reflected continued demand for flexible workspace solutions, alongside growth in its managed and franchised operations.
Third-Quarter Revenue Growth Accelerates
IWG generated group revenue of $1.03 billion during the third quarter, representing a 9% increase compared with the corresponding period in 2025.
System-wide revenue, which includes activity across the wider managed and franchised network, reached $1.26 billion, up 12% year on year.
The performance lifted the company’s annualised system-wide revenue run-rate beyond $5 billion.
Company-owned operations recorded revenue growth of 8%, while revenue per available room increased 2%.
The company said the improvement reflected continued growth across its operating businesses, with company-owned locations contributing to the stronger quarterly performance.
The results also demonstrated the increasing scale of IWG’s global workspace network, which now comprises more than 5,000 centres.
Managed and Franchised Revenue Rises 28%
IWG’s managed and franchised division continued to expand during the quarter, with fee revenue increasing 28% year on year to $45 million.
The business forms an important part of the company’s strategy to expand its global network through agreements with property owners and franchise partners.
IWG signed agreements for 332 new locations during the third quarter, compared with 335 in the same period last year.
The company also opened 211 centres, slightly below the 215 openings recorded in the third quarter of 2025.
Despite the modest year-on-year decline in new signings and openings, the wider network continued to grow.
Chief Executive Officer Christian Schmitz highlighted the performance of the managed and franchised business as a contributor to the group’s overall revenue growth.
“This has been another strong quarter, with revenue growth across the business and continued momentum in our Managed & Franchised operations,” Schmitz said.
Full-Year Adjusted EBITDA Guidance Narrowed
Following the third-quarter performance, IWG revised its adjusted EBITDA guidance range for 2026 to between $585 million and $625 million.
The midpoint of the updated range is $605 million, approximately 1% above the current analyst consensus estimate of $599 million.
Management indicated that it expects full-year adjusted EBITDA to exceed the prevailing consensus forecast.
The revised guidance reflects the company’s assessment of trading performance and its expectations for the remainder of the financial year.
IWG also maintained its existing operating targets for 2026, including company-owned revenue growth of at least 4%.
The company continues to expect recurring managed fee revenue of approximately $80 million for the full year.
Its target for net debt to adjusted EBITDA leverage remains approximately 1.4 to 1.5 times.
Net Debt Declines to $874 Million
IWG reported a modest reduction in net debt during the third quarter, with the balance declining to $874 million from $880 million at the end of the first half of 2026.
The improvement came as the company continued investing in its workspace network and returning capital to shareholders.
Management maintained its existing leverage expectations, indicating that it continues to focus on balancing business expansion with financial discipline.
The company also reiterated its full-year financial targets, including its expectations for debt and cash performance.
Share Buybacks Reach $139 Million
IWG returned $39 million to shareholders through share repurchases during the third quarter.
This brought the total amount spent on buybacks during the first nine months of 2026 to $139 million.
The company confirmed that it remains committed to its previously announced objective of repurchasing up to $200 million of shares during the full financial year.
The programme forms part of IWG’s capital allocation strategy alongside investment in its operating network and managed and franchised expansion.
The remaining capacity under the annual target is approximately $61 million, although the final amount repurchased will depend on the company’s capital allocation decisions.
Analysts Respond Positively to Trading Update
Analysts at Jefferies described IWG’s third-quarter trading statement as reassuring, highlighting the stronger revenue performance and updated earnings guidance.
The investment bank noted that the revised full-year adjusted EBITDA outlook now points to a result above market consensus.
Jefferies also highlighted accelerating group revenue growth, improved performance in company-owned operations and the company’s commentary on cash flow and debt.
The analysts viewed these developments as supportive of confidence in IWG’s financial outlook.
Medium-Term EBITDA Target Remains at $1 Billion
Beyond the current financial year, IWG reiterated its medium-term ambition to generate at least $1 billion in adjusted EBITDA.
The company expects continued expansion of its global network and growth in managed and franchised operations to support progress towards this objective.
Its strategy combines the development of additional workspace locations with efforts to increase revenue and profitability across existing centres.
The managed and franchised model remains a key element of the group’s expansion plans, allowing IWG to increase its global presence through partnerships with property owners and other operators.
Management has not provided a specific timetable for achieving the $1 billion adjusted EBITDA target.
Outlook
IWG enters the final quarter of 2026 following stronger revenue growth and continued expansion of its global flexible workspace network.
The company now expects adjusted EBITDA of between $585 million and $625 million for the full year, with the midpoint of $605 million above the current market consensus of $599 million.
Its existing targets for company-owned revenue growth, recurring managed fee revenue and leverage remain unchanged.
The group also continues to target up to $200 million in share repurchases during 2026, having completed $139 million in the first nine months.
Looking further ahead, IWG remains focused on expanding its managed and franchised operations and progressing towards its medium-term adjusted EBITDA target of at least $1 billion.
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