Can WOTSO Sustain Growth Amid Rising Costs and Market Competition?

A Strategic Pivot to FlexSpace Growth

WOTSO has marked FY25 with a decisive shift toward scaling its flexible workspace operations, a move that is clearly paying dividends. The company now operates 31 locations across Australia and New Zealand, with three additional sites confirmed for FY26. This expansion is part of a broader strategy to grow recurring, higher-margin revenue streams through a month-to-month subscription model, which now accounts for 68% of total revenue; a significant increase from 43% in 2021.

Owning property valued at $301 million, WOTSO leverages its real estate holdings to maintain control over its locations, ensuring long-term stability and the ability to capture both property value appreciation and operational income. This integrated approach aligns property performance closely with business growth, a synergy that underpins the company’s financial resilience.

Financial Performance and Operational Highlights

FY25 saw WOTSO’s underlying EBITDA rise 14% to $9.79 million, supported by a 6% increase in flexspace sales to $31.9 million and a steady real estate income of $14.8 million. Occupancy rates remain robust at 97%, reflecting strong demand and effective space utilisation. The company added over 500 new desks, bringing its total inventory to 7,800, and achieved a 4% same-location revenue per available desk (revPAD) growth to $367.

Capital expenditure included $8.8 million invested in property acquisitions and enhancements, alongside $3.8 million spent on fitting out new WOTSO locations. This investment was funded through a combination of operating cash flow, debt drawdowns, and asset sales, maintaining net gearing at a manageable 30.5%. Adjusted net asset value (NAV) increased 2% to $290 million, underscoring the company’s solid balance sheet.

Innovative Partnerships and Technology Investments

WOTSO continues to differentiate itself through strategic partnerships. The collaboration with BubbaDesk introduces co-located childcare services within select locations, a unique offering in the flexible workspace sector that supports workforce participation and enhances community appeal. The pilot in Neutral Bay has seen strong uptake, with a second site confirmed in Canberra and further opportunities identified.

On the technology front, WOTSO holds a 43% stake in Hamlet, a platform powering over 60 flexible workspaces across the region. Investments in Hamlet’s capabilities, including enterprise billing and a dedicated member app, are accelerating operational efficiencies and positioning WOTSO at the forefront of flextech innovation.

Looking Ahead – Confident Growth Trajectory

WOTSO’s outlook is optimistic, projecting revenue growth to $58 million by FY30. This forecast is supported by the maturation of recently opened locations, plans to add approximately six new sites annually, and a focus on expanding ancillary services. The company anticipates organic revPAD growth at mature locations and aims to contain overhead growth, leveraging sustainable cost structures established in recent years.

With a large and growing addressable coworking market in Australia and New Zealand, WOTSO’s relationships with national landlords and its integrated property and operational model position it well to capture ongoing demand. The company’s commitment to sustainability, community engagement, and innovative service offerings further enhances its competitive edge.