Smartworks Coworking Spaces Limited has reported significant improvement in its Q3 financial performance, with EBITDA reaching ₹306 million compared to ₹218 million in the same quarter of the previous year. The managed office platform also demonstrated enhanced profitability with EBITDA margin expanding to 64.75% from 62.02% year-over-year.

Updated Financial Performance

The latest quarterly results show substantial improvement in the company's profitability metrics, reflecting the structural inflection in its growth trajectory that management had previously indicated.

Operational Excellence and Market Position

The company continues to maintain its strong operational footprint across 15 cities with over 15.30 million sq. ft. of managed space. The enhanced EBITDA performance reflects improved operational efficiency and the company's focus on high-quality enterprise clients.

Enterprise-Driven Growth Strategy

The improved EBITDA margin of 64.75% demonstrates the effectiveness of Smartworks' strategy to focus on large-format enterprise contracts. Multi-city enterprise clients continue to contribute approximately 30% of rental revenue, while the 1,000+ seat client cohort represents 35% of rental revenue, enhancing the predictability of income streams.

Capital Efficiency Improvements

The strong EBITDA performance supports the company's capital-efficient growth model. With a net-debt negative balance sheet position and committed rental revenue exceeding ₹4,700 crores, Smartworks maintains financial flexibility while delivering improved returns to stakeholders.

Market Outlook

The enhanced EBITDA margin expansion from 62.02% to 64.75% year-over-year indicates the company's ability to leverage its scale for improved profitability. With secured supply visibility through FY27 and continued focus on enterprise-led demand patterns, Smartworks appears well-positioned to sustain its profitability momentum in upcoming quarters.

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.