Smartworks Coworking Spaces Limited has reported a remarkable turnaround in its Q3 FY26 financial performance, achieving profitability after several quarters of losses. The coworking space provider announced its quarterly results for the period ended December 31, 2025, showcasing strong operational improvements and revenue growth.

Financial Performance Highlights

The company's standalone financial results demonstrate a significant recovery with key metrics showing substantial improvement across multiple parameters.

The company's revenue from operations grew by 35.45% year-on-year to ₹4,609.85 crores in Q3 FY26, compared to ₹3,402.93 crores in the corresponding quarter of the previous year. Total income increased to ₹4,773.87 crores from ₹3,526.07 crores, marking a 35.38% growth.

Consolidated Performance Shows Stronger Results

On a consolidated basis, the company and its subsidiaries reported even stronger performance with a profit of ₹12.40 crores in Q3 FY26 compared to a loss of ₹160.25 crores in Q3 FY25. Consolidated revenue from operations reached ₹4,721.28 crores, up from ₹3,518.27 crores in the previous year.

Operational Efficiency and Cost Management

Smartworks demonstrated improved operational efficiency with better cost management across various expense categories. Operating expenses increased to ₹1,310.72 crores from ₹1,015.51 crores, while employee benefits expense rose to ₹230.99 crores from ₹148.05 crores, reflecting business expansion and workforce growth.

Nine-Month Performance Overview

For the nine months ended December 31, 2025, the company reported standalone revenue of ₹12,393.79 crores compared to ₹9,910.05 crores in the corresponding period of FY25, representing a 25.06% growth. However, the company recorded a net loss of ₹80.05 crores for the nine-month period, significantly lower than the ₹546.62 crores loss in the previous year.

IPO Proceeds Utilization

The company provided an update on the utilization of its IPO proceeds raised during the quarter ended September 30, 2025. Out of the total gross proceeds of ₹4,450.00 million from the fresh issue, ₹2,723.06 million has been utilized as of December 31, 2025.

The company has fully utilized the allocated amount for debt repayment while continuing to deploy funds for capital expenditure related to fit-outs in new centres and security deposits. The unutilized proceeds are temporarily invested in escrow accounts, monitoring accounts, and fixed deposits.

Regulatory and Operational Updates

The company noted the impact of new Labour Codes implemented by the Government of India effective November 21, 2025, which resulted in a one-time increase in employee benefit provisions of ₹5.34 million. The company continues to monitor developments related to the finalization of central and state rules under these codes.

The quarterly results were reviewed by the Audit Committee and approved by the Board of Directors at their respective meetings held on January 15, 2026, with limited review conducted by statutory auditors Deloitte Haskins & Sells LLP.

Smartworks Coworking Spaces Limited announced its unaudited financial results for the quarter ended December 31, 2025, showing a remarkable turnaround with the company posting its first profit in recent quarters. The coworking space provider demonstrated strong operational recovery with significant revenue growth and improved cost management.

Financial Performance Overview

The company's standalone financial performance for Q3 FY26 showed substantial improvement across key metrics:

The company achieved a profit before tax of ₹3.92 crores compared to a loss of ₹235.38 crores in the corresponding quarter of the previous year, marking a significant operational turnaround.

Consolidated Results Show Strong Performance

On a consolidated basis, Smartworks Coworking Spaces demonstrated even stronger performance with the group posting a profit of ₹12.40 crores for Q3 FY26:

Nine-Month Performance Analysis

For the nine months ended December 31, 2025, the company showed mixed results with improved revenue but continued losses on a year-to-date basis. Standalone revenue from operations reached ₹12,393.79 crores, representing a 25.06% increase from ₹9,910.05 crores in the corresponding period of FY25. However, the company reported a nine-month loss of ₹80.05 crores compared to ₹546.62 crores loss in the previous year, showing significant reduction in losses.

Expense Management and Operational Efficiency

The company demonstrated improved expense management during the quarter. Total expenses for Q3 FY26 stood at ₹4,769.95 crores compared to ₹3,761.45 crores in Q3 FY25. Key expense categories included:

• Operating expenses: ₹1,310.72 crores (vs ₹1,015.51 crores in Q3 FY25)
• Depreciation and amortisation: ₹2,168.63 crores (vs ₹1,610.68 crores in Q3 FY25)
• Finance costs: ₹956.89 crores (vs ₹846.14 crores in Q3 FY25)
• Employee benefits: ₹230.99 crores (vs ₹148.05 crores in Q3 FY25)

IPO Proceeds Utilization Update

The company provided an update on the utilization of its IPO proceeds of ₹4,450.00 million. As of December 31, 2025, the company had utilized ₹2,723.06 million, with ₹1,726.94 million remaining unutilized. The major utilizations included complete repayment of borrowings worth ₹1,140.00 million and capital expenditure of ₹645.06 million for fit-outs and security deposits for new centers.

Regulatory and Compliance Updates

The company noted the impact of new Labour Codes effective November 21, 2025, which resulted in a one-time increase in employee benefit provisions of ₹5.34 million. The financial results were reviewed by the Audit Committee and approved by the Board of Directors on January 15, 2026, with limited review conducted by statutory auditors Deloitte Haskins & Sells LLP.