International Workplace Group says heavy investment will drag full-year earnings to the bottom of its forecast range, even as the flex office giant expands at a record pace.

IWG, parent of Regus and Spaces, warned that 2025 adjusted earnings before interest, taxes, depreciation and amortization would likely land at the bottom of its $525M to $565M range. The guidance spooked investors, sending its shares down roughly 17% in early London trading.

The flex office giant added 338 centers in the first half of the year, stretching its footprint from the U.S. and Europe to Japan, China, India and West Africa.

“We set out a clear strategy at our investor day in December 2023 for capital light growth to deliver cashflow, and business simplification. We have been delivering against this strategy and will continue to do so,” IWG CEO Mark Dixon said in the stock market filing.

“In the last six months, more locations were opened than in the entire first decade of our existence. We now have around 1 million rooms in 121 countries with a significant pipeline. This is expected to drive our future growth.”

The company also posted its highest systemwide revenue, hitting $2.2B in the first half, a 2% annual increase. Group adjusted EBITDA climbed 6% to $262M, up from $247M in H1 2024.

The group forecast full-year 2025 cash flow of at least $140M, up 40% from last year, and pledged to boost its share buyback program to no less than $130M.

Dixon pointed to capital-light expansion — through management agreements, partnerships and franchising — as the driver of growth. IWG signed a record 496 centers worldwide in the first half, with all but two structured as partnerships.

The group now runs 4,260 centers globally — nearly all structured as capital-light deals.

Dixon said that partners are increasingly committing to multiple sites, saying they “grasp the scale of the opportunity in front of them.”