Just don't have one brand. Why is it you've got all these different brands? Well, these brands all have a purpose. They all have a different type of activity, or a different price point, or a different type of feel to the building. These go from budget to budget. We range in price from 100 to 2,000, same city. That's what these brands/labels are doing. They're allowing a customer to choose where they want to be, how much they want to spend. Whatever they want to spend, we've got something for them. Again, Fatima's going to talk to you more about this. You move up your conversion rate. If you're only expensive, that's all you're going to get. If you're expensive, mid-price, cheap, and super cheap, you pull everyone in. Think hotels.
That's why Wyndham, Marriott, and Hilton have so many brands, because they're all doing a slightly different thing. And it makes it easier for the customer to understand what's the offer. And they don't sort of walk into a place expecting it to be the Ritz-Carlton, and it's actually not the Ritz-Carlton. So very important to satisfy the customers in terms of what they're looking for, both price and feel. That's what these labels are doing. We've added on things like labs. These are biotech labs. Small part of our business, but very attractive to our property owner partners. We do medical centers. Very attractive to property owner partners, because they've got buildings. They need to fill them. So we've developed these things to create more revenue opportunities for our building owner partners. These you can see here.
And then at the bottom, these are, and Andre's going to talk more to this, a lot of digital brands, which if you look around the internet, you're seeing them. You don't know it's us, because these are all labels that are picking you out as a certain type of consumer and bringing you in. And really, really important. Again, very, very common in the hotel business. You've got all sorts of platforms that are feeding into getting room occupation and revenue per room. That's what it's about in hotels. Same for us. So we want to have as many channels open as possible. Now, I like this slide. It gives me hope that the work we're doing in terms of creating earnings, EBITDA earnings, most importantly, cash flow. At some point, we will start to get the right multiple on it.
If you look at this one, you can see the hotel companies, again, the amount of managed and franchised, or management in the hotel cases, there are. Now, we're talking about, we've put in here 70%. Okay, it could be more. Our aspiration would get the more we can move towards the 80%-90%, the better. So if you think of that previous graph, the more managed and franchised, the more fee income there is, the more reliable the cash flow, the less volatile the cash flow, in people's perceptions, investors' perceptions, they like that. You can comp against this group. The forward cash flow to adjusted EBITDA conversion rate, we're right in line there. They're about 50. We're 50. Okay, so we've got the right characteristic. If you look at the EBITDA multiple with six, the other guys are up here at 17-19, the good ones.
And I would put forward that we're very similar to, especially to a Marriott, in terms of the range of offer, the efficiency of the operation. And all we need to do is just keep the managed and franchised, rebalance it, and hopefully, we'll start to move towards that type of valuation. Cash is king. Now let's get the right multiple on it. Now, and we're better than the hotels. I can tell you, I own hotels. It's competitive. It's a tough, tough business, hotels. Okay, we are better than that. We've got a massive market position that helps us. A lot of efficiency that helps us. We have megatrends. We're going to talk to those. Absolutely behind demand. And it's starting to push the demand from customers. Again, Fatima will talk to that. We've got longer-term contracts with revenue. A hotel's got bookings three months ahead.
Has a wedding next summer. That's a hotel. We've got 10 months of contract with revenue, so it's much more reliable. Pretty unique, and you've got that sort of moat growing between you and the competition, so we're in a good place. We've just got to keep doing it, keep focusing on the basics of cash flow, cash conversion, and growth. All those three things together, and then we've got to move this valuation, this multiple gap, move IWG up to the peers, and we should be able to do that. We've got a good story. It's similar. It sort of makes sense. If it starts to become a REIT-like, it's an easier proposition for people to come into, and today's meeting is all about the sort of reliability of us delivering to our plan, which we are doing. We don't need to knock the ball out of the park.
We've just got to keep just deliver it. If we can do a bit better, that's fine. Just don't do any worse. Now, revenue drivers. Fatima will talk a bit more to it, but essentially, you've got a big move here that's common in other things that companies buy, but not in the real estate things that they buy. And that is, they want to buy products. They don't want to buy things they put together themselves. So if you look at things like tool rental, Ashtead, and other companies like that, people with very small tools requirements would rather rent it than buy it. Much more effective for them. It's capital light. They have it for the time they need it. They can budget it to a job. People rent cars, vans, everything that can be packaged and rented is being done.
We're doing the same with real estate. This is what CFOs and CEOs want. They say, "I don't want to be in the property business. I just don't want to be anywhere near it. It's been a problem for me in my business career. If I can not do it, I really want to use you. I want an understandable price. I want clear, transparent pricing. I want to have it for the time that I want it. And I don't mind paying a margin on it as long as it's what I want and for the time I want it." And that change, everyone wanted to be capital light, it permeates through the largest companies, the companies you think wouldn't bother about cash. Google. Got a lot of cash flow, but absolutely focused on being capital light. Because it's good discipline.
That's what CFOs are focused on these days. We're providing exactly what they want in that. The workforce. People are working. Companies are looking much more at how they're going to support their workforce. They're not sort of thinking about it in a sort of analog sort of way, which I'm going to rent some space, and then I'm going to build some, fit it out, and then I'm going to put some people in it. They're saying, "I've got a team of people, and I need to support them in this way," which makes a lot more sense to them than this sort of guesswork around where I need space, how much space I need, how long do I need it.
I would say that one of the megatrends that's really behind our growth is that if you're running a company today, in 2025 and looking at 2026, it's hard to budget. The world's moving quicker than ever. It's more volatile. It's less predictable. So you want flexibility. You want to be able to grow quickly when you need to, and you want to be able to contract when business isn't as good as you expected. You want to conserve cash. And you want to get the most productivity from your people. For most companies, it's either their first investment or the second. And it's pretty silly to sort of hire good people, pay them good money, and then not support them. So this, you'll see a lot of focus in what we're doing about getting the best out of people. You see it all around.
Having a great day at work, that's a productive day. Workers having a productive day are happier, and their employers are happier. It's a really simple equation, and that good day at work could be they're working from home or on the road, or they could be working from the Chrysler Building here. It's very much what companies and customers are thinking about as they move from 2025 to 2026 and beyond. CapEx to OpEx, productivity, platform working, flexibility, real estate valuations, this move away from NAV and onto cash flow, technology changes everything, and that is the thing when you get all these sort of dialogue, ridiculous dialogue about return to the office and all this junk that people are talking about, which is it's out there. Of course, not all companies aren't the same, but it's technology that's changing things.
I mean, the ability to work just about anywhere is obvious. It's, can you work productively? And there are times when you need an office. There are times when you need support. And when you need it, you should have it, because then you'll do your best work. But this sort of idea that the only place that people can work is in Grand Central Terminal, New York City, five days a week, that's not real. It is for some companies, especially if they're interacting with customers all the time, but not for most companies. So this sort of decentralized working. And technology will allow companies, and is allowing companies, to absolutely measure what they're doing. It doesn't matter where they are. That's how you measure productivity, not by attendance, where they're sitting in the corner, supposedly sort of absorbing by osmosis everyone's knowledge. It's curating it, doing it well.
Wherever people may be, that's what good companies are doing today, and that is what Fatima's hearing. You hear the people running companies talking about it. They understand. Work has changed. They understand that technology changes everything. They want to use technology to be more productive and efficient, and hopefully to have less costs and maybe less people. It's technology that's the big that is the elephant in the room. That is why when you hear from Andre, it's absolutely paramount that we are helping companies use solutions that are supported by great technology. You're going to see some of that also from Fatima. Now, flywheel. This is, and we can see this in action today. As we grow our network, Jeff's going to be talking about it, give you a few examples.
I've got some questions, Jeff, outside about sort of provinces, two cities, blah, blah, blah. The first thing that happens when you open more centers in a city is your marketing becomes much more effective. Because same marketing, more choice. You get much more value for your dollar spent. Economies of scale, better purchasing. We are bringing down the cost of opening a center. From when we were last here, 2023, we've taken about half the cost out for opening a new center. That's a total sea change. That's one of the things that makes us more confident we'll get even more growth in the years to come because we've got much more efficient supply chain. A lot of focus on it. Economies of scale there in everything that we buy. If you look at costs, we've kept the costs pretty flat now for two years.
The world is awash with inflation, reported or otherwise. We've managed to keep costs pretty flat. That is economies of scale coming through. It's not just scale. You're working on it every day. Teams of people get the cost down. This benefits customers. This is about our business is about the success of our partners. It's not about our success is reflected in their success. It's not just about getting revenue for them. It's about getting revenue and managing the cost so they get the most margin possible from their units that they do with us. They appreciate that because we're able to. I mean, some of the work we do, they say, "Look, next time I do a building, can I use your supply chain?" because you're a fraction of the cost we've been doing it at.
We are doing this well, a lot more to come. I think we could be better, but lots of progress. Bigger network, more products helps the customers, platform, and it's so it goes. And that sort of will lead to more cash flow and more investor returns. But this is absolutely happening today. And as we grow, get bigger, the flywheel sort of speeds up. Everything becomes more efficient with scale. So partners, just look to the right. It's a simple thing with partners. Now, they've got confidence in us to get the revenue because they diligence. They don't just sort of turn up and say, "Here's $500,000. See what you can do." They absolutely look at everything in the area. They diligence, talk to other partners, then they do it.
But the thing they're asking these partners are not, "Are they good operators?" How much are you getting out of it? It's a really simple equation. And so we look at these, and again, Tom will talk a bit to this, but it's about we look at it rent one, rent two, rent three, which means one times the rent, two times the rent, three times the rent. The best ones will do three times the rent. A difficult market, one times the rent. If you do one times the rent, that is you're paying the rent. The owners are ecstatic. They really are ecstatic because they couldn't get any revenue, and we get them the rent. Jeff was telling me the other day that he gets owners asking us to lower the price. They want the revenue more quickly.
So they want to have looser yield management than we would do because they really get behind it and want to do it. That's a good thing. We don't change it, by the way, because in the end, we know that it's the net returns that count. And bad discipline in price will sink you. You've got to get it right. So this is working well, and we're improving it all the time. Right. So just keep delivering. That's what today is about. We talked about it a couple of years back. We are delivering, continue to deliver. Future looks good. We have great momentum. Pace may increase. We're not saying that. We're saying it could increase. We're certainly investing behind it so we can start to get a pickup in the curve of growth. Absolutely focused on cash generation, but we're investing.
It's not a linear thing where you get more revenue, you get more cash. We are investing, and we will continue to make sensible investments. Because what's important is the end goal. If you spend a bit more money to get there, that's okay, as long as you get there at the right time. Okay? It's a fantastic prize, so don't underinvest. These sensible investments are things like AI, and these are things like more in the growth team. These are building up Fatima's enterprise team. They are things that invest and then give you a return. We're not investing sort of for legacy reasons. That's all business reasons, so sensible. By the way, that doesn't mean we're changing the numbers. Charlie's sweating down at the front here. But there will be investment. We'll keep investing behind it, and we'll keep you abreast of that.
So professional services and digital integration. So let me come back to the beginning. We bought Instant Offices, whatever, however many years ago. And we bought it because it's a collection of products and services that we can add into our mix and sell globally. And that is what we've done. So now it's fully synergized. Charlie's going to talk to you a bit about simplifying the reporting into two divisions. He'll explain how that works because we keep on getting confused about what it is. Two divisions and very exciting products. And we've added more things to it. It's not a static thing where we just did that and nothing else. So it's that, then we've added more pieces to it. And that is what's making up the whole product set that we go to customers with. Okay?
So that is working very well in terms of how it helps our business. It helps our business by diversifying the products that we sell to customers. But we sell them all with a single sales force. We operate them with a single operations team. We do that in 120 countries. It doesn't make sense to keep it in a separate division because it isn't really a separate thing. It was really from the beginning started to integrate. It's now fully integrated. No change to the core strategy. I've laid that out. So we just keep it. It won't vary that much, but it's one of growth and delivery. And that is what the next few years are about. And as I stand here today, and we, as parts of the management teams here, we've got good momentum coming out of 2025.
The sort of dip we took a dip on the price to get more market share. We got more market share. Now price comes back. That gives you a lot more revenue growth as you come into and through 2026. Right strategy. I think if we're now taking that and putting that more on steroids, it's all about yield management. There's certainly a lot more we can do, again, with technology and AI to get that more and more advanced. That's all about just maxing out price on each transaction without it being too complicated. Confident on outlook. With that, I will hand over to Tom to go through the next part. Yeah?
Yeah. Super. Thank you very much, Mark. Good morning, everyone. For those of us who've not met before, my name is Tom Sinclair.
I have the privilege of leading our Capital Light Growth Program through the Managed and Franchised Division. I last provided an update in this forum back in December 2023, where I outlined three really important points. The first was the very large market opportunity that we saw in front of us. The second point was our excellent position within that market. And thirdly, the sorts of opportunities we were seeing to invest in growth and to further accelerate our Capital Light growth. As I stand here today, the market opportunity remains very, very large and has, if anything, increased. Our position within this market, as Mark just showed us, has certainly improved, not least as we continue to build out that network, continue to build on that physical moat.
And we have been, and we continue to invest in these growth programs because those investments are paying off as expected. We are delivering on the plan, and we are delivering on that strategy. So if I just take you back through a brief timeline of the Capital Light Growth Program. So we worked to really set this up through the back end of 2022 and into 2023. 2023 was the year in which we first doubled the number of new locations signed. We executed in earnest, as you would have seen, through 2024. That was the year in which we doubled the number of new locations opening. And we have been very, very focused this year on continuing to deliver, continuing our delivery of those high-growth, high-margin fee income streams, which will underpin significant free cash flow conversion and ultimately shareholder returns into the future.
Our recurring fees have doubled this year. And as I stand here today, I'm seeing, and I'll show you later on in the presentation, a pretty broad-based acceleration in all my KPIs, all our KPIs, which makes me more confident than ever in the future, the potential of our growth program, and the future of our managed and franchised business. I alluded on the first slide to the fact that the market opportunity had, if anything, grown since I last updated. And this is in no small part down to the fact that we continue to add new brands, new formats, new concepts, which enables us to offer more products to more owners across more assets. If I come back kind of way back when to the beginning of this business, it was a single brand, single format, single location.
This, on the right-hand side of the chart, this is center number one in Brussels. Still there, still trading, still performing. It generates cash month in, month out. But the business looks quite different today. I have the luxury. We are in a unique position, to be honest, of being able to offer building owners multiple brands and multiple formats as we continue to accelerate the rollout of our network. And going forward, you can continue to expect more of the same. We will add brands and formats to our stable, which in the end simply enables us to capture more of that opportunity. And that opportunity really is to productize and operate real estate. And we do that on behalf of customers and on behalf of owners. Customers want convenience. They want flexibility. And businesses increasingly want agile solutions. This plays out in all the data points.
Flexible seats, up, fixed seats, down. On the supply side, owners want premium income, premium cash flow. They value having an amenity in their building. It helps them to attract new tenants, to retain existing tenants, and as Mark alluded to, increasingly owners are focused on cash flow valuation metrics, just as we saw play out in the hotel space and just as we expect to see play out here, so why are those owners choosing to work with IWG, well, to be honest, the overall shape of the value proposition isn't much changed, but I think it's worth recapping here nonetheless. We are able, with our networks, with our scale, with our platform, to drive more revenue over and through their assets.
We're able to deliver more revenue at lower costs, more revenue, less costs, higher, as Mark said, critically higher returns, premium income through and out of their assets. And of course, we have the platform to provide a fully outsourced solution. We do all the work. Premium income, we do the work. That is why these owners are choosing increasingly to partner with IWG. I wanted to just share an overview here of how the Managed and Franchised Model works. And beyond no illusion, underneath the relatively simple commercial model here is a very complicated operating model that we leverage to manage these sites. But just in this context here, so how does it work? So the landlord or investor provides the asset, the asset property or a portfolio that sits at the center of this ecosystem here. We provide the platform.
IWG provides the platform connecting the customers and suppliers to that asset. We then drive revenue, control costs, and report on the outcome. The outcome down the bottom, which is premium income as we productize, operate, and monetize their space. In return, we receive a management fee, so that's calculated very simply as a percentage of the revenues running over the asset, what we refer to as system revenues. That is the fee model, and the model is working. It's working because we're driving premium income to owners and fee income to IWG, and we are starting to see that virtuous circle of growth taking shape. We have the network. We have the scale. We've got distribution like no other. That enables us to drive maximum revenues at the lowest cost, best returns. That is why my team is managing to recruit so many new partners at the moment.
Of course, we're starting to see existing accounts grow. Those new accounts will continue to grow in the network and around and around we go. That, in a nutshell, is why this growth program is delivering. When I updated back in 2023, we talked about some of the opportunities we were seeing to invest to accelerate our growth. We made those investments. Those investments worked as expected. We saw quick returns, attractive returns on those investments. We announced further investments. We actioned them. Again, those investments are playing out exactly as planned and expected. For clarity, we are investing across the platform. Most particularly here, let me just give you some insight into some of what we're doing. We've made significant investments in people. Much of that, not surprisingly, is in the sales team, the field sales team.
These are the people that are out in market, prospecting, looking for new partners, recruiting new partners. That team, just to give you a feel for the shape of what we've done, was 23% bigger in the first half of 2025 than it would have been a year ago. We're making investments in the structures required to recruit, onboard, train, and productively manage that sales force. Productivity, very simplistically, can be measured by the number of partners, the number of new locations, and an individual is able to add on a monthly basis. I'm very pleased to be able to say that we have seen consistent improvements in the team's productivity year on year on year. We have continued to invest in logistics and the complexities of our global supply chains.
This is really important as we support and enable an ever-growing number of partners to open with us, and then finally, I would say in the partner support structure, so these are the structures designed to nurture and to grow these partner accounts. I also shared three metrics, three KPIs that we would be tracking and reporting on, which would help us understand, obviously, and you understand how we were delivering against strategy and against these plans, so the three KPIs were the number of new locations we were signing, so signatures, how those signatures were converting into new center openings, and how those openings were converting into fees, fee income, so let me take you through how we have performed over the last couple of years. Firstly, we are very clearly delivering an acceleration in the number of new locations signed.
So I've built out a slightly longer-term chart here, which I think provides interesting context in two respects. So firstly, you can see on the right-hand side, light blue, I've annualized the first half of the year and annualized September. So you can really see the pickup and the acceleration in the number of new locations being signed as we came out of 2024 into and through 2025. We reported a 43% year-on-year growth in signatures in the third quarter. And pleasingly, that momentum has continued into the fourth. The second thing that I think is interesting in the longer-term chart is if you look back pre this new program, so we started the program back in 2022, 2023. The previous peak signatures for this business was 482 new locations signed back in 2018. These were primarily leased locations, 482.
In September this year, we delivered a run rate of over 1,500 new locations, annualized run rate, I should say, of over 1,500 new locations, almost entirely Capital Light, so a complete step change in the shape and pace of the growth of this business. This chart's quite hard to read, but what it shows is between 2022 and 2025, the monthly performance and progression of new locations signed, and really what I wanted to demonstrate was the consistency with which this program has been delivering, month on month, year on year, delivering, if anything, ahead of our plans and benefiting from an improved breadth of performance as we've learned and iterated through the program. We've now got all regions, I'm pleased to say, contributing to that growth and many, many more countries, so very pleased with our progress in terms of new locations signed. Secondly, the openings.
So we have to deliver a very significant acceleration in the number of new centers we're opening. Same charts, same story. Let me take that back. So you can see again here with the annualized numbers on the right-hand side, a very nice pickup, acceleration in new center openings out of 2024 into 2025. We reported 41% growth in the third quarter. Same point, momentum has continued into the fourth. And in a similar vein, if I take us back, so 2017 happened to have been the year where we opened 340 new locations, the most we'd done pre this program. Annualized in September this year, we opened over 1,000 new locations. Again, same shape, mostly leased back in 2017, the very, very vast majority Capital Light today. So totally different shape of the program.
Actually, just to reiterate that point, if you look back 2017 to 2019, we opened an average of about 300 new locations each of those years, and we spent $1 billion doing it. In the first half of this year, we also opened about 300 new locations, a bit more actually, and we spent just $7 million. That for me is really the Capital Light program in action. That is what we're doing, and that is the shape of what we are now showing that we can and will deliver. I'll make exactly the same point with the shorter-term chart here. I mean, it just shows a very consistent, very confident delivery by the team. We're delivering ahead of plan at the moment on our openings. I'm pleased to say we have a very good pipeline to deliver into 2026 and beyond.
So pleased, very pleased too with the progress on openings. And importantly, of course, these new centers are trading up in line with expectations. That's testament, of course, to the demand for the products we're selling customers and also, of course, to our ability to drive revenues across these assets, as I've already shown. New centers are filling up in line with expectations. And the RevPAR, I know Charlie will share this chart again later, but it is important, RevPAR tracking up in line with expectations too. So new centers trading in line with expectations. And of course, it's those revenues. So if we just recap on the flow of signatures, openings, revenues, fees, those revenues are now converting into fees. So if you look at the chart on the top right-hand side here, that shows our managed system revenues, a very consistent pickup uptick in that managed system revenue.
That's what's dropping through into those recurring management fees, bottom left. Again, the shape of the chart's exactly the same, very consistent pickup in those management fees or those recurring fees. At the same time, we can and will continue to add additional fee income streams. And you can see the aggregate fee outturn, again, as previously reported, down in the bottom right-hand chart. So fees are now coming through in line with expectation, completing a confident delivery, I would say, of all our core KPIs. So very pleased there as well. I'm not, for obvious reasons, going to provide huge detail around our partners and who we're working with. But I would make a couple of observations. We have a very, very diverse base of partners.
We work with about 4,000 property partners across the world, everything from the biggest institutions, they're real household names, governments, and some of the smaller mom and pops. So very diverse base. Most of those partners own more than one building. So more than 80% of our partners own another property. Yet we only contract with partners on multiple sites on less than 20% of our estate. So there's clearly an opportunity to keep nurturing, working on, and building those accounts. That's something we're very, very focused on at the moment. And the final point I'd make here is that around 25% of our partners are what we might describe as institutions. That's a number that continues to grow, both absolute and relative.
And it clearly remains a very significant opportunity for us because we are unique in our ability to provide the brands, the formats, the network, and to be able to partner with these major institutions at the sort of scale that they need nationally and internationally in some instances. So that remains an opportunity, and we are very, very well set to take advantage of that. Just a couple of examples here of the sort of institutions we're working with. So this is a large asset manager in Europe. We started out with a single location. That account has now grown to 12 locations using four different brands across the portfolio, across the different assets. And with this institution here, we are adding multiple locations each and every year at the moment. Similar idea right in the US. Again, large investment manager, started with one location, built the account up.
We now have 13 trading across multiple brands and a very healthy pipeline of new opportunities, and finally, this is a slightly different example, actually, but it's a very large European insurance company, and they were working on a regeneration project of a large shopping mall, and they selected us to partner with them on that regeneration. We are now managing over 100,000 sq ft at that site alone on their behalf, managing it very successfully. We're delighted with the outcome. Partner as well. Very, very pleased. That's an account that we will see growing into the future. The focus of the presentation and of our growth strategy is on growing the managed and franchised fee income business. What I would say, though, is that we do continue to see opportunities to add very selectively to or to add Company-Owned assets very selectively, I should say.
The strategy here is entirely unchanged. We focus only on strategic assets. We ensure very limited risk and minimal capital deployed. Which brings me to my conclusion. Our growth strategy, our network growth strategy is entirely unchanged. The opportunity, as we laid out a couple of years back, remains and has continued to grow. And we're delivering on the plan and on the strategy to take advantage of that opportunity. We've made further investments, and we're very pleased with the way those investments have played out. We're seeing growth accelerating. All the leading indicators are showing a continued acceleration in this growth, growth that will drive fee income streams, will underpin free cash flow generation, and obviously shareholder returns into the future. Thank you very much. And with that, I'll hand over to Andre.
Thanks, Tom.
Good morning, everyone. I'm Andre Sharp. I'm delighted to be here with you today. I head up digital innovation at IWG. I joined the organization just over 20 years ago as part of a small acquisition. I was a founder and CEO of a tiny network of business centers out in Johannesburg, South Africa, where I'm from. I live in Geneva, Switzerland now. I mean, you've heard from Mark and Tom about the scale of the opportunity and our physical network is growing. Tom's been doing a fine job of that acceleration. What I'm going to try and do over the next 20 minutes is talk about how our digital and product engine fits on top of these locations and how we turn 4,000 plus locations in 120 countries into a single digital platform that can be accessed by companies large and small.
We've got currently well over eight million customers that use us on a daily, weekly, and monthly basis. When I started the business, this was almost by accident. I was in business school, and we had to come up with a business to come up with. And I'd recently returned from the U.S. I lived in Boston, Massachusetts. I was working in an HQ location out in Kendall Square next to MIT. And I always thought about the business in three dimensions. One way to make the pie bigger is to open more locations, and this is what Tom does, and he does very well. Another way to grow the business is to fill it up at the highest possible price, and that's what Fatima, Jeff, and the team does.
But another way to do it, of course, is to have more to offer, take a bigger share of wallet of unstrategic products and services that you can offer to customers. And this is what I do. So I sort of focus with Mark and others on how do we grow the share of wallet. On top of that, it'd be great if you could make money that's completely separate and independent from the physical network. Can you offer products and services to customers that come and go and retain that revenue? And we've been doing it for a number of years. Offer call answering services, business address services, representation services. And more recently, we offer corporates the ability to manage their own hybrid work programs in their own space for a subscription fee, which has got nothing to do with our own network.
My focus is also how do we grow that pool and pot of revenue that's sort of independent from the size and scale of the physical network. We sort of loosely organize ourselves into three sets of programs, the first being product development and product management. This team's responsibility is to come up with new, and I'll talk about how. They're also responsible for looking at the performance of the business strictly around product sort of streams. What do customers want to need? How are they using the network? Where does the opportunity lie? What does the benchmark look like? Where are we underperforming? How do we rectify that? In the second sort of section is services. This is sort of everything that we wrap around the core products.
This would be advanced technology services in the business center, food and beverage services, and a number of other things that we're currently doing. This houses our virtual service delivery team, people who answer calls for customers inside our own network and partner networks, and also the partnership team that is looking to bring value into the estate for customers, and then there's the digital platform teams that work with the technology teams to build out our apps, our websites, APIs, and work on our AI programs. We follow a very simple, very formal, very structured, but agile product development process. We've refined this over the years. It all starts with client needs. We gather this information through focus groups. We read the tickets that customers raise every month. There's a lot of opportunity in pain points and problems that you can pick out.
Mark's brain is a good source of good ideas. He's very good at that stuff. And then we also look at market insights and how markets are shifting and how technology drives that. We then take it into a sort of ideation process. We pick out the low-hanging, the things that we think have got the best chance of success. Then goes through a rapid design, build, and test cycle. This is very iterative. It's not one cycle. It's sort of like you're at the 25% mark. We typically then release this in a small market to a small number of customers and get immediate and instant feedback. We then continue to refine.
As it sort of passes the business case hurdle, we'll take it into the full deployment where we continue to turn this, learn, test, and refine, but also package it up in a way that's easy for our sales force to take to market and to sell online through our digital channels. We basically do product development for two main segments. It is the property owners, and Thomas covered that in a lot of detail. I'm not going to go through that again. But basically trying to develop formats that fit in buildings and make it easy for our property partners to productize their space. We also focus, obviously, on what clients want. They're small clients. They need different things than very large customers. There's this sort of in-between customers. There's a load of a segment that we call micro multinationals, which are small, big companies.
They've got very specific needs. And we sort of look, as I said, on a month-to-month basis. We work with the sales and other teams and look at what we can do to help them be more productive. For clients, Fatima is going to cover this in way more detail in her presentation. But we try to have a full set of solutions around the sort of concept of providing space to work, space to collaborate, and productivity tools. We've developed this year more specialized formats. We've developed outsourced solutions for teams, managed office solutions, which we've always done, but which we're turning on in more sort of steroids at the moment. And then also advisory services and productivity tools, helping big companies make the move and make the shift to more productivity.
We now probably have about three times the number of products and solutions to offer than we had a year ago, two years ago. Again, Fatima would give you some of the feedback that customers have been giving us on that. Our digital platform is unparalleled. We have more than three million customers who visit more than 27 digital properties that we run and operate. Our Android and iOS app receives 80,000 plus registrations and downloads, and these are legitimate registrations. People putting in their cell phone numbers and email addresses, multi-factor authentication, and start using the platform. And that number is growing quite steadily. It sounds like we've got 27 separate things, but this is one single simple digital platform that everything flows into. So it's one platform with multiple entry points.
It's a single gateway to search, to book, to access your accounts, to pay your bill, to do anything, any of the administrative interaction with us as an organization. It's a full secure API platform that allows partners to book and extend our reach into the market way beyond our own marketing and sales channels. It's an AI-optimized inventory and pricing platform. We've really made a huge investment in adding AI to our platforms in the last 12 months. There's a long way to go, but I think we're way ahead of the curve. And enterprise control and insight. Customers want to know who uses the space, who uses the network, how much do they use it, when do they use it, to what extent do they use it, how much do they spend on it, and they want more control and more visibility.
And we've added that to the platform over the last 12 months. The vision is to deliver any workspace, any service, anytime in the world in seconds. The proposition for landlords, Thomas covered that. We continue to build out the number of formats, the number of amenities that we've got to offer. I think there's a lot to do still in this space. I mean, we own a brand in the UK, Basepoint, that provides services to people who do beds, washing services, small industrial, light industrial work, etc. And I can see that there's major scope here for expansion as formats go. For landlords, they would like to have visibility. They would like to have control and insights.
We have got an unparalleled platform for providing information to landlords about how their assets are performing, what customers are searching for, what they're looking for in terms of product, how their property and their locations benchmark against the rest of the market, and we're looking to further improve this on an ongoing basis. I'm not going to go through this in detail, but these are some of the products and services that are either launched this year, partially launched this year, or in final stages of development. On the left-hand side, we're developing channels. We've always done, for instance, property portals. We're now getting hyper-local.
We've done all the big search engines, the big property portals, the big web brokers, but we're now growing our digital channels into all the small local partners and automating that just to make sure that we've got every possible search and inquiry on the platform. Another way that we leverage our scale and size is to partner with organizations to provide better, more value to our own customers. If you join us in the UK today, you and all your employees get free gym access for life, for as long as you're a customer. It's a huge benefit. I mean, it's very popular with customers. You get discounts on travel services. You get access to legal services, health, and welfare. And the bigger we grow, the more this sort of range of products and services and benefits grow.
Our customers can tell their new starts and employees that they've got access to these benefits, and it helps them recruit and find better talent. It's sort of a win-win-win. Customer wins, the partners win, and we win in terms of making that moat that we've been talking about even wider. AI is a huge opportunity. Everybody talks AI all day, every day. For us, it's an opportunity. Anytime something comes along that creates uncertainty in terms of people and hiring people and productivity, people sort of turns into flexibility. AI is good for our business in general. More importantly, if you look at the things on the left, we use it in every aspect of our business. It's early days, but Fatima uses it to engage with customers, to optimize contact with customers, to book tours, to sell.
So I mean, we really use it a lot in sales acceleration. She'll cover a bit of that. We use it extensively in yield management and price optimizations. And these are first-class AI models and machine learning models that we've developed ourselves. We use it for marketing. I mean, we now run 27 digital web properties with fewer than 10 people. I mean, that used to be a small army of people, 120-plus people who used to do that. And we've got more than a million articles on each of these websites in 52 languages. So it would have been impossible to do that even five years ago. We now deliver client services over our apps with a single account manager called Aurora.
She does everything from help you take up additional space, renew your space, moves and changes, pay your account, query a late fee, or whatever the situation is. Really, it's not just about cost savings. It's really about providing customers with 24/7 access to the answers that they need. On the other side, internally, we use it a lot for efficiency. Just like every other company, we use Copilot for personal productivity, for business intelligence. We use it to write code for our own apps and platforms.
We're starting to use it more and more for decision support, not only helping our people in the business centers and the country managers and the teams to know what to do, not just look at reports and dashboards all day, but to get a set list of actions and really become a Copilot for them to be doing the right thing to maximize business performance. I think we've got the critical pillars in place now. We've invested heavily in building up the right team, attracting the right people. We've got the right strategy. We know what we want to build and develop over the next 18 months. We're always looking at opportunities and prioritizing those in. We've got a good set of propositions, and I think we've got to settle some of these down, fine-tune them, and refine them.
And then I think we've got the best technology in the world in our space for doing what we do. So in conclusion, propositions have tripled in scale, and Fatima will cover more. The network is growing. Tom's covering that, and our digital platforms are delivering. Thank you very much. And now hand to Fatima Koning, who's the plutonium that powers the nuclear engine that is IWG.
See, that's how they think about revenue. Good morning, everyone. Very excited to be back here. Enjoyed the last time we met. Fatima Koning, Chief Commercial Officer, have been with IWG for over a decade. And as I said last year or last time we met, every day feels like that first day. That's how much I'm excited about the opportunity we have. My three colleagues previously just mentioned at the end, we have great momentum.
I'm not going to leave you to wait until my conclusion to tell you about that great momentum. I am 100% certain the momentum we have today is the greatest I have seen over the last 10 years I've been with the company, for two reasons, and I'll tell you more about them. But I think I am now in a luxury position, uniquely supported by the network coverage that Tom and his team have been delivering, and the product services and the range that the digital and the product team with Andre has been delivering. Those two combined are actually the dynamite because that's what commercial success in 2026 will be about. So let me tell you more about that great momentum. Since the last time we met, my mission hasn't changed. It's exactly the same as it was.
Sounds boring, but I think it's very good to have a consistent vision as to why my team are here. It's about growing the revenues. And that's a combination of four focus areas: accelerate the demand, getting more demand, or we should get more as the network is growing fast. It's about driving sales conversion, which I take a lot of passion in trying to do every single day with my team. It's growing the share of wallet of customers, which is becoming easier with a larger network, more choice, and a broader range of products, and accelerating the enterprise program. And that last one is going to be the transformational program for 2026 and beyond. So far, I think we've made great progress, enormous strides in transforming our commercial capabilities. Compared to where I was before, we were organized. It was okay.
But I think it's been absolutely transformational how we have invested in advancing our commercial capabilities this year. A team has been put in place, a commercial team spanning strategy, planning, looking ahead, thinking about the client's insights, ensuring they know what needs to happen and how we need to be transforming the capabilities of sales, the marketing, not just capturing demand. We're very good at capturing demand, but the game now has transformed this year into creating demand. How do we get that message out there of the network coverage and that range that has tripled, which is absolutely relevant for anyone who works and for any company out there? Performance management, analytics, and driving the drumbeat of performance every day. Sales happen every day. Capturing demand happens every single day. That's our sales cycle. It's every day.
And the sales capabilities of executing centrally with the commercial team and locally on the ground across 120 countries and all our colleagues in the field, all our colleagues in the contact centers looking after customers 24/7, 52 languages. This investment has definitely paid off. So it is translating this year in better commercial productivity. Our demand is up. The sales volume and the sales value is up, and the sales force effectiveness is higher than it's ever been before. And I can already see the revenues following that growth trend as we enter 2026, as Mark has mentioned, and it's coming up, and it's coming up exactly as we planned by design, not by coincidence. Additionally, we are adding more new clients.
I think the only way, the only proof point of a network working and a range working is how many more clients are being added to the network. And we have added materially more clients this year than we have done before. And those clients are happier. If you look back at 2023, our score on Trustpilot was 2.7, very sad. Today, it's over four points, four stars, and it's growing massively and rapidly towards the five stars. What that means for revenue is higher stickiness, better lifetime value, customers using more products, using more locations, and to mark points, they stay longer with us. And that all is a result as well of our investment in people. We are people business at the end. We serve customers, and we do it with a great team of people on the ground.
The way we have definitely focused more, we used to have the best training program of the industry. You can easily see it. Call us today, call now, and someone in the call center will be phoning you back immediately within two minutes. The conversation is consistent. The experience is consistent across the globe. We have even there made sure we are doing a better job in onboarding, hiring the right talent, onboarding the right talent, inducting them, developing them, and retaining them. That's paying off. A question I get very often, why do you think your model, your commercial model is winning? Think four things I'd like to cover today. Obviously, the first one is the depth and the growth of the coverage and the network we have. As Tom outlined, we're now speeding up the growth of our network everywhere.
That's definitely resonating with clients of every type, every segment, and every size. Our proposition and range, Andre mentioned, we have tripled the range. That's making me successful, more successful, because now I have a broader palette to be offering to clients. And I do a lot of client calls myself as well as meeting clients myself. This here is what they call in sales the classic yes and yes. Often when you have a very limited range and a limited number of locations, the customer either wants what you have, likes what you have, and it's a yes or no. In my experience, it's a yes or a yes. So our likelihood of converting more, of winning more clients is much higher than it's ever been before. Obviously, Mark mentioned more locations, better and more effective marketing. And we have a local market strategy, 120 countries.
We do have the scale to operate globally. We know how to do this. We've been doing this for 35 years. This is our bread and butter, operating a commercial function of this size. But we have been making huge improvements in localizing how we deliver in every country. So that product range, I know Andre and Mark said Fatima will cover. Let me cover this. And let me try to give you this in one sentence. This is not about space at all. I spend a fair amount of my time speaking to clients myself of all types and sizes. They're not buying a room. They're not buying a space. They're not buying an office. They are simply buying a platform. Even sole traders, even small businesses, not just an enterprise game. Everyone is buying a platform.
That platform is, on the one hand, solutions for them to work, and on the other hand, tools to help them be productive or make sure their employees are being more productive, have the data and the visibility, and make better decisions. So let me start with the range and give you a bit more color as to what it is. As Andre mentioned, we have added many, many specialty space, many configurations, and we have broadened and enriched that range we have today. When people think about flexible working, and that was the association I think clients had with us before, they talked about offices, a desk, and a chair. That's not what this is.
This is solutions packaged as a comprehensive offer that no one else has, absolutely no one, at a scale whereby we can deliver this to sole traders in Amsterdam, very large companies looking for something to cater for the need of 10,000 employees across four continents and everything in between. Those functional packages you see here are not just space. They are solutions packaged with a lot of tools and insights. So when I have a conversation or anyone else in my team has a conversation with a client, we're simply making it very easy for them to share with us what they're looking for, which problems and challenges they are trying to solve.
We're delivering just that, that right solution for a sales force who wants to have a bit more productivity, for a back office team who wants to work three days a week from home and two days a week, come together, collaborate, work somewhere where they actually have the ability to connect with each other and be productive while they feel part of a team. For VIPs and executives, C-level suite, who needs a completely different package of solutions and everything else in between, helping companies with market presence to hit the ground running very, very fast, market entry, expanding a business or starting a new business, and everything in between. My message here, as I hear from customers all the time, is this is the most comprehensive offer that anyone has.
This makes it very unique because we're not selling commodity, and the perception of what we're offering to clients has shifted completely from supplying space to delivering one integrated, fully supported by digital and technology platform that is helping companies to run their business and operate no matter the size. The other big change that I have noticed that I have been hearing often when I speak to clients is the need, as Andre mentioned, for them to understand who is working where, when, and how they're working because they're trying to not just save the cost. They're trying to enhance productivity. They're trying to build for the future. In a webinar I had two weeks ago with CFOs, 70 CFOs of the finest companies, enterprises out there, everyone was asking questions about two things. One, how do I find out?
How do I get the data and the insights to help me plan and make educated decisions? And the second was, you don't need to convince me about the need of your proposition. I'm convinced we're already bought in. But how do we start? How do I get operational with this proposition? How do we get it to work? So on the one hand, the first one is where the management tools and our enterprise portals and data and insights are working beautifully and being transformational for clients. And on the second one, this is where our consulting services are now adding value because what they do is simply help those clients map out that journey from insights to implementation and monitoring and managing and the entire end-to-end journey.
This proposition has been, as well as the network, transformational in the way I am speaking to customers, especially for the last six months when we have put this in place. And I have spent a lot of time testing it myself with many, many clients of all types and within multiple industries. This has completely, as I said, shifted the way customers are looking at us. It is truly being perceived as one platform to help them operate their business, reduce their costs, increase their employees' job satisfaction and happiness, as well as productivity. So now we need to get it out there, right? It sounds obvious. And as I said, it's coming to us. The demand is coming to us. We're very good at generating and capturing reactive demand.
What we've done so far this year is start testing ways to actually get more proactive about creation and capture of demand. And there is a simple way to do it. It's becoming the default choice when it comes to work and anyone who works as familiar in our category as McDonald's is for a burger. You don't need to think about it. You want a burger, your fancy burger, you go to a McDonald's. It's very, very convenient in the way you purchase. Like Amazon is a no-brainer. Simple, effortless, on demand. That's what customers are looking for. Ultimate flexibility, ease, frictionless processes to buy, find what they want to buy, and purchase it. And that's where we are. We're all of this. All we need to do is get the message out there.
And we have already seen the first signs of being successful in getting that message out there in every one of the 120 markets we serve. Some of it is already here. It's a global, well-organized, well-structured commercial engine delivering locally. We have the skill of the proposition, the network, the technology, the brand power, and a global platform. And what we're doing here is making sure it is being delivered locally in every single market. Our demand channels, including the websites and the apps, everything that Andre has just mentioned, as well as all the other demand channels that are offline, are localized. They're working properly at a country level. Our contact centers, 24/7, deliver 52 languages service, which means you can always have a localized person to engage the clients.
We have the most professional workforce, salesforce of this industry, both in the field and the enterprise team. They're local. They understand the nuances of every market, and they are capable of turning leads into sales and revenue. We do this 24/7. We never sleep. Thanks to Andre, it's absolutely possible with the injection of AI helping us and the technology helping us deliver this even better. Our salesforce, as I said, spans across contact center, field, enterprise sales, and now a whole new digital channel with AI doing a wonderful job and doing absolutely the job it's meant to do, which is supporting our salesforce, supporting the 24/7 client journey, and making sure we are enhancing our productivity and our salesforce effectiveness. It's an on-demand journey. We're more client-centric than we've ever been before.
There are preferences of when to reach out to us, how to speak to us, which channel, and we can cater for any preferences clients have, and that's unique. No one else out there has a model that works like this and a commercial engine that's as powerful as ours. What this means, back to show me the money and the revenue, this is highly consistently levels, delivering levels of sales and demand and doing it everywhere in every market, getting the revenue everywhere, filling up the centers everywhere, selling to customers everywhere. The proof points at the end, and probably this is the most important slide of my entire presentation, is that customer base. It didn't change. It's still very diverse.
From sole traders to small businesses and enterprises, we serve everyone who works within those companies anyhow they work, whether they're working from home, a combination of home and office on the road, collaborating, or in a hybrid fashion. Individuals are a very important segment to us. They represent 35% of the entire client base and 19% of the revenues. Very steady, high stickiness type of segment, which we do appreciate. We've always had this segment, and we continue winning with them. Small businesses, we have seen some growth in small businesses, more small businesses, as I said, benefits for their employees, the flexibility, the low costs. That's all been very, very helpful to attract more clients in this segment. I think the segments where we are actually seeing the massive growth.
We've heavily invested this year in the proposition for enterprise, in a professional team from business development, sales, to account management, to fulfillment, and customer service for enterprise is paying off. That segment is growing massively today. It's around 18% of the customer base, 45% of the revenues. If you do the math quickly, and we double the number of customers in that segment, we'll be in a completely different space commercially, and that's the focus we have. With the network and the range, we have seen not only the growth of the client base, we've seen as well more clients using multiple products. 84% of our clients today are using multiple products from the range and more clients using multiple locations.
All I am trying to do every single day is hound Tom to open faster, more locations, and get Andre and his team to give me more products. This will look completely different, more exciting next year. As I always do, I like to just have customers have you see a few examples of those clients, starting with Hannah, one of my favorite clients. She is a consultant based in the US. She enjoys working from Spaces, and she uses basically a complete package. It's not solutions or products. She uses a package we have put in place for individuals like her. Let's hear from her.
Working here has changed how I get things done because I'm really able to focus. If I need to make a call, I can go into one of the call rooms.
Or if I have a me eting and I need to present something, I can use one of the conference rooms and do that too. So it really makes everything accessible and convenient.
So for Hannah and many, many thousands of individuals like her we have in our client base, we're not just workspace. We are truly their headquarters. We're a professional base for them. We are their brand identity. And our support system, all our colleagues running centers and managing the centers are basically their extended teams. They don't have a team. Our team is their team. The next one I would like for you to meet is Cal from Uprise Solar.
Having the ability to come into a location that's central in D.C. and be here for as little as or as long as I need to be, it's been nice because in the midday, this is when I like to be in office, but by 2:00 P.M., I'm usually out of the office hitting doors with my team, but sometimes I spend the whole day here, and I think in both situations, this office provides a nice base of operations.
I think it just validated what I said. It's a base of operations. It's us helping them run and operate their business. For businesses like Uprise Solar, we are the infrastructure and critical to them growing their business, attracting talent, low cost, capital light, very flexible. So they can change, move, transfer, grow whenever is required. That's why we win massively in this segment.
And then the last one I'd like for you to meet is Simon from Nokia. Don't think I need to introduce Nokia. Very no.
The way we have used our real estate has substantially changed. A lot more people enjoy the flexibility of choosing where and when to work to get the type of work done that requires concentration or collaboration. It is clearly our objective to enable employees' workplace settings. We do find that we have more real estate today than we need to use. And we're looking at providing exactly the right amount of real estate for the people, the teams' needs, individuals' needs, team needs, and company needs, but also looking at providing flexibility and scalability going forward.
And as I said, our relationship with this segment has completely transformed. We always have done enterprise, but it did transform completely over the last 12 months with a growing network, 10 times the nearest competitor, with a range that has tripled and basically is answering every single one of the challenges enterprises are facing. We have moved completely away from being a commodity to enterprises. The perception is not a space supplier. We are being seen as a strategic partner, helping them achieve their sustainability goals, reduce costs, increase their people's productivity and job satisfaction, have healthier balance sheets. And it's a combination of everything. It's not one solution. It's the whole range that we have put together with product services, management tools, advisory services that is making that segment grow and will be growing much faster than we could imagine in 2026 and beyond.
So it's working. I think I've already mentioned a couple of times. There is great momentum. I'm more confident than ever before. We have great momentum. I'd like to show you again two cases I have shared with you back in 2023. And I made some promises back in the time telling you they're going to be growing. We have the proof points. I'm very pleased to show you those proof points. Kyndryl, as you recall, is when I spoke about this back in the time, it's an IBM spinoff. IBM has been a strategic partner of IWG for a long time. We're a trusted partner of IBM. And when they reached to us back in the time asking for help to set up their new venture, we were very happy to support with a combination of solutions from access plans to headquarters, regional headquarters, and hubs for their team.
So back in the time, 49 hubs over 20 countries. Today, we are delivering the solutions and helping their employees across 375 locations and hubs across 24 countries. And it will continue to grow. This is working for them. And we are truly being a strategic partner, helping them grow, expand further, and meet their objectives. The second one I shared back in the time was Ciena. Ciena's drivers were slightly different, very focused on people, very focused on increasing their people's satisfaction, job satisfaction, very focused on delivering solutions that are fit for purpose for the new world, the new working patterns, alongside streamlining their costs. So 50 hubs in 20 countries. If you look at what this looks like today, 230 hubs across the world covering 30 countries and a great outlook to be growing in 2026 even further than this and double this coverage.
So these are only two examples. There are so many more which actually are proof points of how the network, how the range, how the commercial model is working beautifully. We've done this, as I said, for 35 years. We know how to do this, but it doesn't mean we have stopped finding ways to do it better, smarter, and get to a greater level of delivering on commercial. Leads me to the conclusion. If you put all those pieces together and everything I said, you basically have a commercial model that's not only difficult to compete with, it's very difficult to replicate anywhere. That's one of our biggest advantages. We know how to do this. We've got a great team, talent, capabilities in place. We've got the network and the range and customers want it. I speak to them every day. They want it.
This is exactly what they want. A proposition, a sales process, a purchase journey that's becoming less frictionless every single day. That's my mission in life. Make it super easy, super convenient. The technology that's driving not only the salesforce capabilities and productivity, it's a digital platform that's adding value to customers and their employees. And our marketing strategy will be becoming the default, the default choice for anyone who works. With this, I think my team and I are very ready for 2026 and beyond. And I'm looking forward to seeing the revenues grow and, as planned, see the results of what we have done and invested in this year. Thank you so much.
Thank you, Jasmine. We're going to go to a 20-minute break. We're all back. All right.
Welcome back, everybody. Hopefully, everyone's fueled up. My name is Jeff Doughman. I'm the CEO for North America.
I've been with the company for over 24 years, the last four as CEO. Over the course of the next few minutes, I'm going to walk you through the growth objectives and how we're managing that growth, as well as managing the business in North America. So I'd like to start with, I think this is frozen again. I'd like to start with what our planning set is coming up with as a total opportunity for the size of the network in North America. We believe that we can get this business to 15,000 locations. All right? And that's just kind of the starting point when we look at today, right, where the North American business stands, as well as there's going to be continued building operators, new buildings being developed, new areas of cities being developed, as well as we have the new formats that Tom mentioned.
This 15,000, while it may seem aspirational, I think it's very doable. And actually, when we're back together two years from now, that number is going to have grown. All right? So a huge opportunity. And at scale, we'd be the same size as similar brands like McDonald's and Starbucks. And our planning methodology, I'll walk you through that, but very similar. This basically is getting an IWG branded location into every city, every ZIP code. Our plans are based on the ZIP code level, 5,000 population base and above. All right? And there's four tranches to that. And when I walk you through our medium-term plan, I'll walk you through how those tranches work and how we're working on those. Before I get into how we're going to accomplish this, I want to take you through what we've accomplished in 2025.
It's been a good year for us in North America. We will end with $1.5 billion in revenue. We're getting a 29% contribution out of that. We look over the near term to grow that, to see continued growth momentum in the margin. We doubled fee revenue, 2025 over 2024. We'll have an exit run rate in fees of actually a little bit over $30 million. We'll double that again, as Tom mentioned, in 2026. When you get to 2027 and beyond, it really starts to compound because we'll now have over 1,000 managed locations open in the business. When you have some of them open since 2022, you get a lot of momentum in that fee revenue because their occupancy and revenues compound. We've been able to keep costs flat, as Mark mentioned. We've been able to actually do that the last two years.
And I'll walk you through in the next slide how we've accomplished that. But we've done that even while making continued investments with Mark and Tom mentioned in growth, as well as in marketing. And we'll exit the year with 2,000 locations. We have a strong signing momentum, as Tom showed you, the back half of this year, month over month, which is increasing our signings, which will lead to strong openings in the first half of 2026. So I think overall, we've had strong growth since we've last met. We have good margin expansion. The flywheel has really been engaged. And we really have scale and momentum in the North American business. Good cost management. That's going to continue moving forward. Great runway for further margin and growth expansion. So I get asked all the time, how are you able to keep your costs flat?
And I think Andre and Tom mentioned a lot of this, as well as Fatima, but really three key points. One is leveraging the heck out of the supply chain. All right? So it is a global supply chain. And we are the most cost-effective platform right now to deliver the opening of a location, as well as the management of a location. All right? And we can manage them more adeptly. And we can get them open more expeditiously than anybody else in the marketplace. All right? So speed to market is really improving. It's a constant. I have a team in North America coupled with our global supply chain team. But as we grow, we just continue to get further leverage in terms of being able to manage that supply chain and our cost basis down. Andre walked you through leveraging technology.
And the app has really unleashed our business and allowed our teams and kind of transformed our teams from being more administrators. When you were a city manager or you were a community associate in one of our centers five years ago, you had to process the client. You had to sign the client up. You had to do all the steps in order to get the client contractually into the business. Now it's all done via the app, right? All of that administration is being taken out. And in addition to that, we have the new products and services. So our team members, we want them to be forward-facing. We want them to be in front of clients. It's increasingly a customer service business. And it's going to become a hospitality business, all right?
When you think of a typical center, they have what we say are our office clients. And we're taking care of them and their guests. But there's also all these non-residential clients that are coming in who are using virtual products, who are using our day offices, which are using meeting rooms. And so our team members have to be forward-facing. And they have to be able to deal with a lot of different client types throughout the day and throughout the week. So again, becoming more of a hospitality job. The other thing is just centralization. All the redundant costs that we've had in the business, all the redundant tasks, excuse me, in the business, we've centralized into our support centers.
So as you can see, that's really helped us free up capital, keep our cost base low, make continued investments where we want to put them, which is into growing the network. We've scaled quite efficiently over the last year and a half in terms of meeting this demand. And again, very similar to most major multi-unit businesses, but we have a regional team that are responsible for about 500 locations. We have state vice presidents who are responsible for growing the network at the state. And I'm going to walk you through an actual state plan and an area and a city plan and show you what the targets are and how each group, how each of these leaders is incentivized to do three things: drive the revenue, drive the margins, grow the network. That's the three KPIs for everybody that we have in the company, including myself.
So very scalable. And we want our team members, our leaders, to be close to our three main constituencies, those being our team members, our clients, and our partners. All right? And we have to have close interactions because our partners are many times operating in the same city that we are in, right? And so we have a close interaction with them. And as Tom said, we do one location, and then you'll see it build and build. And I'll show you an example of a city where we had no locations two years ago and how we built out a network in 18 months. And we've done that dozens of times over the last two years.
So our medium-term plan would have us taking our 2,000 locations, which will end today, and growing it quite rapidly, more than likely doubling the size of the network in the next two years. Tom walked you through how we're going to do that, all right? 98% of the growth that we've done over the course of the last two years has been on the managed agreements, okay? But we do have other ways we can do that. We're leveraging other formats, as Tom said. We are looking at multiple portfolio deals. We have a small group that works on institutional landlords, pension funds that are working to do deals across building owners' networks. And then we also will look at strategic acquisitions as they arrive.
I spend a big part of my week, along with our CFO and our CIO, on investment planning and looking at the expansion of the network. I look at a lot of net new locations. I'm also talking to existing partners and building owners that have done multiple locations with us, again, expanding them and working with them to add flex to their portfolio. Tom mentioned the different ways that we're doing that, and we have a team that is constantly working on our existing portfolio, all right? Our mature portfolio, we've been able to keep the lease cost base flat the last two years, which is a pretty phenomenal accomplishment when we all know that leases have escalation rates built into them, plus property service charges can fluctuate from year to year.
We've been able to do that because we have anywhere between 150 and 200 leases that are up every single year. So we work on those and we renew those, as well as any marketplace conditions that come in, any winds of change. We'll be on it and we'll be working on doing early recasts. Right now, we are working on over two-thirds of the portfolio, three to four years out, and working on early recasts of those leases. So we're constantly working on that. That's keeping our fixed costs low. And also, we make investments as we renew them to make sure they're center standard brand standards. But it delivers a lot of cash on a quarterly and annual basis back into the business. So let me take you through a state plan, okay? So you're the state vice president.
We chose Wisconsin because it's a very average-sized state, 6 million population base, so when we started in earnest in 2022, at the end of 2022, beginning of 2023, with the partnership growth, we had 10 Company-Owned locations. It took us 22 years to do 10 locations, okay? We were just starting to build a network. We had six locations in the Milwaukee metropolitan area, the southeast corner there, 1.7 million DMA. Dane County, which is the second largest, it's a 700,000 population base DMA where the city of Madison is, one of the fastest-growing cities in the Midwest. We had three locations, and we had no locations in Brown County, which is at the bottom of the peninsula there, which is where the city of Green Bay is, so a DMA of 275,000 people, we had no locations.
With a bit of investment in the last two years, we've added 40 more locations, okay, all on managed agreements, okay? So again, capital light and rapid expansion. So we've taken Milwaukee to 20. We need 20 more in Milwaukee. But we now have a nice network, okay? We have a city manager. We have actually two city managers that are managing the Milwaukee, plus an area manager running the east side of Wisconsin. They're incentivized to go out there and to complete the network, get 25 to 30 more locations, and manage those and grow that network. Dane County, we've taken it up four times. And we need another eight locations to complete the network there. But when you look at Dane County, we're on every, we now have an IWG branded location on the Beltline around Madison on every single off-ramp. And there's an IWG branded location.
Now we're working inwards and then working to fulfill the rest of the county. And the end state plan, our state vice president needs to go out there and get 300 locations, okay? And again, that would have us into every population base that has 5,000 or more. You can see when you get in northern Wisconsin, there's a lot of counties that only have 5,000 people in there. But we need an IWG branded location in those. And we're already working on opportunities there, okay? When you take it down to the city level and you're the city manager of Green Bay, Wisconsin, your plan and the area manager for the east side of Wisconsin is we need 13 locations in Brown County, okay? 275,000 people. Actually, 10 years ago was a very kind of brownfield. It's actually starting to really come back.
There's obviously a lot of people. There's a lot of people moving back because it's a super affordable place to live. If you look at U.S. News & World Report, they always cite it as one of the top 10 most attractive cities to move to because of cost affordability, right? There's a lot of people there that live there, work there. But they're working for companies in Milwaukee, in Madison, and in Chicago because they can work flexibly, all right? We had no locations 18 months ago. We now have five locations in the city of Green Bay. Does it mean the plan's complete because there's competitors there? There's other opportunities. There's new buildings being built as we speak. But we're there. We have a city manager that's there now. They're filling those centers. They're growing that.
Every brand we have, we have two Reguses, two HQs, and a Spaces. We have one owner who has two locations. The other three single locations, two of them already have second locations assigned, one in Denmark and one in Suamico. So that's how the network grows, right? That's how the relationships grow with our partners. They open one. They see the value. They add additional locations, all right? So hopefully that helps give you some context and contextualizes for you how we're both managing the network and also growing the network. And this example here in Green Bay, we've done that 13 or 14 times. We've done it in Boise, Idaho. We've done it in Bozeman, Montana. We've done it in Charleston, South Carolina. We've done it in Hartford, Connecticut, right? And so you imagine how vast and how big the opportunities in North America.
15,000 seems, like I said, a very doable end state proposition. So the path forward, we feel obviously very strongly about that there's good runway for continued margin and growth expansion, all being driven by, as Fatima mentioned, by just the continued adoption of flexible working. More businesses are moving to flex. More entrepreneurs are moving to working in a flexible environment. They want to have someone who has a platform, who has the network, and we have that network and that platform. Our building owner partners, our landlord partners, they see this shift. They're experiencing this shift themselves. They're increasingly turning to us to help engage flex into their portfolios and into their business. Increasingly, they're doing it multiple times, okay? We have some partners we've worked with in North America for 30 years that are on their sixth or seventh location.
We have new managed partners who are with us who have done 10 or more locations, all right, just in the last three years. And it's increasingly, the competitive landscape is super fragmented. Mark showed you that chart of where competition's relatively flat. We're here. We're 10 times bigger than our next two competitors, all right? And they don't have the network. They don't have the scale. They're not as focused on it. Hopefully, you can see the energy. We're focused on it. We have a team. And we have a platform to manage it. And I'm very pleased to say, as I was able to say two years ago, that we lead IWG from a regional perspective in both revenue growth in terms of margin achievement. And that's really because we have a super experienced team.
I believe we have the most experienced team in North America in the flex business. And I'm very, very bullish that the pathway forward is bright for us. 2026 is going to be a very good year. And the medium-term plan beyond that, continued growth, continued margin expansion, okay? So with that, I'm going to turn it over to Charlie.
Thanks, Jeff. I want to finish off by basically putting some numbers around the incredible momentum that you've heard from everybody here this morning. Thank you very much to many of you for coming back two years later, following on from when we initially produced our plan in December 2023. I'm really pleased to say we said these things in December 2023. You can go back and look at the presentation and see that we said these things, and we delivered against everything. We've increased the global coverage of the network. We've had the massive growth in management franchise, and that continues to accelerate. We've seen expansion in the Company-Owned business on the margin side. We've reduced the core overheads and investing selectively. CapEx continues to go down.
Medium-term EBITDA of $1 billion making good progress towards that and really good visibility towards that going forward into 2026 and beyond. We strengthened the balance sheet. We got a BBB flat investment-grade credit rating. The bonds are trading really, really well. We've issued a further bond this year that has a maturity of 2032 as well. Again, trading very well. And we've resumed shareholder returns with $130 million of returns this year alone in share buybacks and $152 million since 2023 investor day. And we've also made the financials clearer to understand. So we've now reporting in US dollars the second year we're doing that. And we've also converted into US GAAP in the way that we said that we would do. So where do we go from here? In reality, we're just continuing the plan. We're not making any changes.
We're continuing that journey towards our EBITDA target of $1 billion, continuing to see massive growth in the fee revenue, more center openings, and continuing that delivery towards the 30% gross margin in the Company-Owned business. And we will also continue to return capital to shareholders. We've announced today a continuation of our buyback program going into 2026. You'll remember we initially announced $50 million buyback program in March this year. We've massively exceeded that and will deliver $130 million this year. So how do we get to this billion dollars and where is it coming from? First of all, in the Company-Owned, it's a combination of revenue growth through new pricing, new revenue, and also some level of cost efficiency. And we see that overall, around 80% of that increase in the margin going to 30% will be coming from revenue growth rather than cost efficiency.
But we do still have some areas where we can improve cost on that. On the managed business, continuing to see that estate maturing and also continuing to see that massive growth. So great forward visibility on that managed business. We can see that in detail and talk to that in due course. We also, though, have some discretionary overhead investment that's required to support that growth. So, for example, we need to have more people in HR to support all the new employees we've got in the managed business and the like. And then we'll also continue to have our tight cost control with some administrative overheads expected to increase, such as sort of more people to help manage this massive center growth we've got. So it's worth bearing in mind at the moment, we're opening two new centers every single day. It's huge, huge growth.
We're also going to make further clarity in reporting. This is basically just an evolution as the business evolves and better reflects the operational realities of how we're actually operating the business at IWG. Needless to say, on a group basis, no change in cash and no other changes on a group basis. There's one small change on a group basis, which I'll come to, but it basically doesn't make very much difference. We have changed our functional and reporting currency to US dollars. We've done that very successfully. And actually, when you speak to people within the business, I was actually very surprised how quickly that transition happened internally. So we've reduced the volatility on FX. Now we're reporting dollars. Nearly half the business is in North America, as you've heard from Jeff, $1.5 billion system revenue for 2025.
Therefore, it's important that we reflect the earnings alongside that. Reduction in volatility in the balance sheet, cash flow, and P&L. As we progress more towards our capital light transition, we're making two further changes. The first one is this concept of managed lease agreements. These used to be very small. Total revenue in 2025, about $12 million. Because they are technically leases, they have been in the Company-Owned division. But in reality, though, they're managed contracts, but we have to have a lease in some countries for legal reasons. We're now going to recognize these on a net basis rather than a gross basis.
So what you'll see, and I'll come on to the numbers in a second, is that the revenue in the Company-Owned division will go down like for like $12 million, and the revenue in the managed business will go up by $3 million. So it's effectively 16% of that $12 million. We're also, as Mark mentioned earlier, integrating or we have integrated digital professional services into the rest of the business, so into the other two segments. So enterprise managed real estate leases will go into Company-Owned. So this is where we've got back-to-back leases with very large corporate customers, so big tech firms. That's historically been digital professional services because it's a lease that will go into Company-Owned. Even though they're back-to-back, there's no risk for us, but there is a lease. So therefore, we have to put that on the balance sheet.
The virtual office revenues associated with Company-Owned locations will also go into Company-Owned. So basically, everything Company-Owned revenues is to do with Company-Owned locations. And then all the digital brokerage and consulting services that you've heard about earlier will go into the managed business. And I'll come on to sort of how this will look in a second. And then sort of as we also announced in Q3 2025, the pre-launch packages are also now recognized on a gross basis rather than a net basis. But again, the impact of that is very small. So digital professional services. So first of all, this change is just a segmental change. So there's no change on a group level reporting either on cash or on P&L. And the acquisition of the Instant Group enabled our acceleration of our own capital light growth within the IWG network.
I think when we were standing here two years ago, we were talking about big growth and signings and openings, but we weren't talking about the growth that we've actually seen today, which is even bigger than that. And I think we've surpassed our own expectations on that as well. So you can see on the right-hand side the original as reported. So there's nothing leaving the group per se. It's just the split out of the Company-Owned side and the managed and franchised side. And just to be clear for anybody who sort of wants to be able to model this, the data book will be updated on the website to also reflect this. So you can see how it will translate through. How does the managed and franchised business now look? So we've reported these three income streams before. We'll continue to report these three income streams.
So the recurring management fees, these are on the managed partnership locations, so the ones that Tom's been talking about, capital-light openings, the drivers for this, a number of rooms, and the RevPAR goes with that. So again, no change there. Franchise and JV, no change here. Again, a number of rooms and RevPAR. And then the other services, which will now include the digital and brokerage services, but also all the services such as fit-out services and the like. That's driven by signings and openings. But what you'll see there is that it's a very, very stable, good income stream on the revenue side. So H1 2025, basically almost exactly half the full year 2024 numbers. On the recurring management fees, though, as you've heard from the team earlier, doubling in those numbers year- on- year. So H1 2025 equal to the whole year of 2024.
I mentioned the managed lease agreements. This is just the difference in the innovation of the managed lease agreements. As you'll see, it's sort of very small movement across from the Company-Owned into the managed business. And so that now means that we've got all of our capital-like and non-lease-like reporting in the single division. Company-Owned locations receive virtual office revenues and the cost of those locations as well. And we continue to make good progress here in expanding Company-Owned margins. Overall, though, no change in strategy, right? So the capital-like transition continues at pace, getting even faster. And you'll see more of these charts on the right-hand side each time we report. We'll basically sort of show how we're moving around that pie chart to becoming more capital-like as a group on these sort of three key drivers, so system revenue, locations, and rooms.
Managed and franchised, the unprecedented growth continues. The open rooms have doubled between December 2023 and June 2025. Continue to develop that pipeline, making more and more investment into that. And we spoke about that investment a little bit at the half year. That investment goes through OpEx. But that means that we do see the system-wide revenue continuing to grow with the current locations. This was my biggest concern, actually, I think, two years ago. You can open lots of locations, but can you fill them? Can you then get the revenue? And if you can't fill them, the partners get upset, then stops that flywheel from developing. And what we've seen is every single time that we continue to look at this, the cohorts just behave in basically exactly the same way. We'll continue to show this chart because it's a great chart to see.
You see the initial RevPAR, about $50 at inception. That goes up to about $250 after 24 months, slightly longer than our initial view that it's going to be 18 months. But what we are also seeing is that that line is going through the 250, so it's sort of almost ending up at around 300 after sort of around 30 months. So it's not as though sort of like once you get to the 250, it's capped out. That does continue to develop. And as those partner centers mature, we expect to see that continuing to happen. What I'd also say is we've provided some forward guidance previously on the management fees. We'll continue to provide forward guidance on management fees. And this is a very predictable revenue stream.
And so the reason why we've got the ticks here is because if you actually go back and look at previous presentations, we basically have delivered exactly according to this forecast. And therefore, that gives me a lot of confidence that I can stand here today and say, with all the new openings that we're doing, with all the new signings we're doing, that'll translate into new rooms, and that'll translate into more fees going forward because you see the RevPARs are behaving in the same way. We know what we're signing. We know what we're opening. And therefore, we can make a very good forward estimate on the fee.
I think it's worth noting that while this forecasting is very accurate, you'll see if you go back and look at Tom's slides, for example, the number of openings and signings happening during August every single year is much lower than other months. So you do get a little bit of volatility on a month-by-month basis. And partly, that's because people go away on holiday in August and sort of the practicalities of life. So if we're not exactly on these numbers sort of going forward, please forgive us. There'll be some sort of quarters where it's slightly higher, some slightly lower. But I really want to sort of put that expectation in today. But I think for the full year, we're seeing this again being exactly in line for the full year 2025. So no change in the expectations from where we've been.
How do we drive the margins to 30% in Company-Owned? So really, the first thing is the strategy to drive additional revenue that we've done to drive additional occupancy by lowering pricing. I'll come on to that, on exactly what's happened with this on the next slide, has been successful, and we're driving into 2026 with really good momentum around revenue and pricing. We also, though, on the other side, see a small increase in rent driven by variable leases that are linked to revenues. Jeff spoke earlier about how the fact we've managed to keep a lot of our U.S. rents flat year on year. That's been a great result, but we're assuming there'll be a small uptick in some of that going forwards, and then we also think whilst we can keep staff costs below inflation, there'll be some sort of movement in staff costs.
But we also see some further opportunities to drive efficiency in staff costs as the network expands. So once you've sort of got critical mass in various cities, you can be more efficient around kind of like use of staff. So, for example, if somebody's away sick or on holiday, you can supplement different people in. Rather than if you've got a standalone center in one city, it's harder to do things like that. This is the strategy around the pricing evolution. So this is the actual chart on the right-hand side. And what you'll see is the embedded price, which is the dark blue line, has come down over the course of 2024 and basically bottomed out around August, September 2025. And that embedded price is now going up.
So we've seen in November and December so far, and the forward contracted revenue as well, that price is slowly going back up again. But also, it has done exactly what we wanted it to do at the time, which is also increased occupancy. So the light blue line is the occupancy line where we've seen a 300 basis points increase in occupancy. And part of the advantage of also getting that occupancy up is it means we can capture more of those ancillary revenues going forward as well, which is an important additional revenue stream and all these products that Andre and team are developing and Fatima is selling. This gives us a lot of confidence into the revenue outlook for 2026. And that's the reason why we can issue the guidance today. We've got an assumption that we deliver 4% revenue increase in 2026.
We're seeing that momentum going into 2026 through the pricing in October and November and start of December. You'll see that really we sort of like bottomed that out in August. That's the reason why you saw the revenue impact that you saw for the first half of this year versus the first half of 2024 when we reported because you can see that revenue lines, the embedded price come off massively in the second half of 2024 and into 2025. Overheads, overall, we think about overheads in two ways. We've got core overheads, and then we've got discretionary overheads. Core overheads, things like sort of my salary, sort of core things we need to have to run the business. Growing at inflation is the expectation going forward.
But then discretionary overheads is where we deliberately want to make additional investment into the business, such as, for example, additional marketing spend, more people to sell locations that Tom has, more people to support all of this spend to be able to open more locations on things that we can't recharge back as part of the managed partnerships. And that will basically be very selective. We'll make sure we do that in a smart way. We increase that at the first half of this year. And that is enabling us to open even more centers than we originally had. So that exit rate that Tom showed you at the end of this year, 1,500 centers, that wasn't even in the forecast sort of a year, two years ago.
We've only been able to do that because we've had to obviously be able to spend in order to be able to do that growth. CapEx will continue to be controlled. So we get this question a lot. It's like, okay, your depreciation charge is significantly bigger than your CapEx. Why is that? Does that mean you're going to have a big CapEx tsunami coming down the pipe? What I want you to look at is the chart on the right-hand side. So this is a typical Company-Owned center, just to be very clear. So basically, everything that goes through the balance sheet and through the P&L and cash flow statement. The initial expenditure on CapEx is all upfront on that growth CapEx. And that goes through the growth CapEx chart. It's through the growth CapEx line in the cash flow statement.
Things like walls, partitions, HVAC rerouting, you need to do that once. You don't need to do all that partition again and again. That's the really expensive part. When you come to do the refreshes at the end of the life or sort of during the life, it's things like carpets, furniture, everything else. And that's the maintenance CapEx that you see going on here. The other thing that people say is, oh, don't these centers get old and tired because you're not maintaining them and therefore kind of like the revenue is going to drop. Well, that again is not true. So you see the RevPAR. That shows that the RevPAR basically stays constant through the life. So once you've got to that maturity point, the RevPAR basically stays pretty constant. So we keep the center fresh through the maintenance CapEx going here.
But what you then see is that the depreciation massively comes off after 10 years. The way we think about, or the way we do depreciation is you can only depreciate over the life of the lease. You can't say, for example, we think that 80% of our centers renew and therefore you can depreciate over 20 years for 80% of your depreciation. That's not the way the accounting works. You have to be fully depreciated on the initial growth CapEx at the end of the first 10 years. And therefore, we see that depreciation is going to fall off massively in 2007, 2008, 2009. You heard from Tom that in 2017, 2018, 2019, we spent $1 billion on CapEx, right? So just do the math. You can see that over 10 years, starts come off in 2027, 2028, and 2029, that $1 billion.
And therefore, even though this is non-cash, this is all incremental to earnings. And we're not then having to spend this CapEx again. So it's not as though in kind of like 2027, 2028, 2029, we're suddenly going to have to spend that $1 billion again. And I think that's sort of pretty clear on the reason why we don't need to do that. And CapEx will continue to be controlled. What we would say, though, is that maintenance CapEx, $100 million, and we'll go up with inflation. And that's the reason why you see the new depreciation come in is because that's that maintenance CapEx coming on an ongoing basis. Landlord contributions. So this is landlord contributions on leased properties.
So this is where Jeff mentioned it earlier, where we spend money and the landlord contributes, the landlord that we had the lease with contributes to some of that fit-out. The way that that works is that the landlord gives us some money, we take that cash upfront, and then we amortize the benefit of that again over the initial life of the lease. That's over 10 years. But that benefit benefits EBITDA because it's a credit to rent. And therefore, what you will see is over the next few years, we effectively have an EBITDA headwind, which converts into cash better because we receive this cash upfront on an ongoing basis, where these tenant incentives, as they're called, or landlord contributions come off. So sort of putting those together, basically, actually, we expect to see a $63 million hit on that.
But that improves cash conversion because, as I say, it's a non-cash item. You'll see this in the cash flow statement. It's very explicit. It says amortization of landlord contributions relating to leased assets. And that is a line within the working capital as we think about the cash conversion. And so when we think about the cash conversion going forward, $1 billion, as you saw from Mark's slide right at the start, about 50% cash conversion from the $1 billion into cash. And that, sort of for those of you who can't quite see, you'll see that, for example, the landlord contribution on the leased property goes from that big thing to sort of being about half the size at $1 billion. So what does the EBITDA convert to cash at $1 billion? So we've got $1 billion of EBITDA.
We'll have some closures, certainly some CapEx, have a very, very small amount of closures, so some closure costs that go through that. The landlord contributions, the rent across this, the difference between cash rent and P&L rent, some working capital benefit, which is currently a headwind in 2025. That basically gives us the operating cash. Then we've got the tax and interest depending on what we want to have as the capital structure at the time. Current share buyback program. So $130 million share buyback program. I have to say, it pleases me when we have the naysayers because it means I can buy back shares even cheaper. This has happened every single time. What it means for everybody in this room is that we've been buying back shares at a 15% discount overall so far this year to the current share price.
So each time that we get somebody who decides that actually our shares are worth less than they were the day before, we basically hit the buyback program really hard. So we've been really, really pleased with this. And we'll continue to do the buyback program. And we want to be able to increase that going forwards. But I go back to what I said when we first introduced the buyback program in March. We want to make sure we deliver what we say. And the reason why we started at $50 million, which some people said was too low, is because then that meant we could increase it. And we increased it during the year, and as I said, we'll do the full $130 million this year that we announced at the half year. So how do we think about the evolution in capital allocation going forwards?
So sort of old ideology, we had capital that was required for real estate leases, growth CapEx, and the like. So that sort of $1 billion in 2017, 2018, 2019, some debt pay down, some M&A activity. Now what we have is we have very disciplined capital expenditure. You saw that number on Tom's slide, which is very contrasting between where we were on CapEx and where we are now. Maintaining our financial resilience with our credit rating. The credit market really gets this story. We issued our debt 383 basis points over mid-swaps in 2024. And now that bond is now trading at 176 basis points over mid-swaps. So massive improvement in that trading. And that means that our cost of capital is just continuing to go down.
But we'll maintain that financial resilience, keeping that net debt to EBITDA ratio in a manageable way, well within the BBB flat headroom, is very important to us. And then we'll continue to make targeted investments for growth. So how do we think about our capital allocation going forwards? We want to return surplus capital to shareholders, but we'll do that in a responsible way that maintains financial resilience, allows us to continue to invest in the business, will continue to pay dividends, and will also continue to deliver that share buyback. So the dividend will stay roughly constant. Everything will come back through share buybacks. Maintain that BBB flat credit rating, very important to us because that gives us that strong balance sheet. We've also, by the way, seen a lot of benefits from that with customers, with landlords, with suppliers.
It just shows the strength of IWG's balance sheet and the strength of this business. Net debt to EBITDA expects to continue to decline a little bit as we continue to deliver, but that will be driven by EBITDA growth rather than net debt reduction. As I mentioned earlier, announced $50 million buyback in March, upsized it twice, and will continue the buyback program into 2026. What's the plan from here? Basically, it's more of the same. I want to be able to come back to you in two years' time and just present the same chart again like I did in the first chart. More growth of the network, more rapid growth in the managed and franchise with that margin expansion, continuing to control the costs, which delivers that EBITDA growth.
And that will deliver the growth in free cash flow and therefore the shareholder returns with continued buybacks. We issued an outlook statement today. So I think the first one is in the medium term, no change in that. It is worth sort of noting, though, that due to the U.S. GAAP movements that we've had, effectively a billion dollars is the equivalent of $1.1 billion on sort of like pre-IFRS numbers. So in some ways, we're actually seeing a bit of an acceleration in the delivery of that billion dollars of EBITDA. But the short-term outlook, we expect the EBITDA growth in 2026 to be delivered primarily by that revenue increase that I mentioned earlier. So 4% revenue increase going into 2026. We're very confident today about the delivery of that. We can see that increase in embedded price. But that is the key driver for this.
And therefore, the adjusted EBITDA guidance of $585-$625 million, which for what it's worth is bang in the middle of consensus numbers with consensus bang in the middle of that. So that's how we think about that. No change to expectations. And we're confident on that delivery in 2026. So really sort of as a conclusion, IWG has continued to deliver on its strategy. And I think you've heard from everybody today, with nearly everybody here also presented in 2023. Basically, they've done what they said they'd do. And we're just going to continue doing that. But that strategic pace is expected to increase, signing up more centers with that focus on cash generation alongside sensible investments. We've done the Digital and Professional Services integration. That will take effect from the 1st of January 2026 with no change to core strategy.
We're very confident in the outlook, just reiterating the guidance that we've had, reiterating our ability to grow this business and produce cash. With that, thank you very much. We're happy to take questions. Mark and I will take the questions and call on our colleagues if need be. Thank you.
Can I just ask you to repeat that quick question? Please wait until you've got the microphone so our colleagues online can hear somebody. Questions? Could you also say who you are, which is also helpful for people online?
Artem Fokin , Caro-Kann Capital . Thank you for the presentation, gentlemen. I have a question about your implied guidance of 30% margin on the Company-Owned and leased segment.
Now, with a good chunk of Digital and Professional Services business, including digital office, which is a fantastic product and a very high margin revenue stream, going into that segment, it should increase the EBITDA margin and gross profit margin due to the mix. So how should we be thinking about what you said about 30% margin, given that this high revenue stream will be added and should boost it automatically? In other words, how can we distinguish between improvements in the Company-Owned and leased, the way it was presented before, versus rearranging segments?
Yeah. Sure. So we see that the margin was, say, roughly at 30% because you've also got the other effect, which is the managed enterprise leases going into that segment as well. So you've got the virtual office stuff going from Digital and Professional Services back into the Company-Owned.
You've also got the managed enterprise solution going into the Company-Owned. And when you work through the mix, it basically ends up being about the same 30% margin. So the 30% margin target remains. That's also, by the way, now a gross profit target because it's on a U.S. GAAP basis. So we can use GAAP measures for that as well, which helps sort of explain exactly how we're developing that margin as well. Thank you, Trevor.
Thank you. Alex Smith from Berenberg. Just a question on the managed division and kind of the growth plans there and kind of maintaining that commercial traction. You mentioned you're opening two centers a day. You also spoke at the presentation on moving towards clients with multiple portfolios, kind of increasing kind of the institutional level. Got a plan on how to do that.
And then kind of as you make this transition, are there any potential bottlenecks from this structural shift to the managed model? And are there any way you could kind of mitigate that or potential headwinds from those kind of bottlenecks? Thank you.
I think if you it's about focus. So the institutional approach is about Tom and his team developing more focus. You heard it from Jeff here in the U.S. So this is about it happens if you focus on it and you measure it. The offer's good. It takes longer with institutional clients for them to make the change. They're slower. But when they change, and you can see some of them, as Tom showed, you've got multiple contracts coming through when the institution sort of understands it and we perform.
That's going to be a huge reservoir of future growth in the places that we want it because these companies own hundreds of properties that we're not dealing with someone that's got five or 10 properties. That's one. I think two, again, as Tom said, the ability to have other concepts that we can supply to the same owners. And very much when we had this in mind, we can see owners where we may have four or five buildings. But that's all the problem. They have business parks or something. That's all of their business parks done. But they have more buildings. They don't want to put another co-work. They will put a medical center. They may put a labs. So you've got more choice and diversity that on the same site, you can have alternative offers. And again, the other one is price point.
I think next year, we'll see a lot more budget offers coming through. That accelerates the number of openings. They're a lower revenue, but that will also help. So I think we're anticipating this with a greater scope on brands, more focus on the owners. I think really it's fair to say, Tom, we've done very little marketing so far. We're adding in more marketing next year. Now, that may seem sort of strange and counterintuitive. But so far, we can't keep up almost without marketing. Now, Tom's built up the team with more marketing. We can get more signings and more openings. I think the other important thing is to say we're very focused not just on signings, but it's getting them open more quickly.
So we didn't cover it in detail today, but the shortening down the time between a signature and an opening is very much a focus for the team doing that. That's our measure. We've cut down the cost. Now, it's cut down the time. And that's all about the supply chain organization, how we manage that, and so on. So I think, as Tom said, and I reiterate really, we're confident this will continue to happen. I think we'd like it to happen at a faster pace. And the final part I'd add in is planning. And you saw a little bit of that from Jeff, but it's about planning. It's not just opening sites. It's about where you open them, how you open them. And more investment in planning, more tools, data tools. We're adding more data people in on the planning of this.
So you're hitting the bull's eye more often. The RevPAW we're getting is with some planning, we can get that RevPAW much better, much quicker with even better planning because you're just hitting the bull's eye on more occasions.
Great. Thank you.
Thank you. It's Tim Ramskill from Bank of America. Maybe if we just continue with that sort of topic around planning, maybe the Wisconsin example might be a good one to sort of focus on. So we've gone from 10 to 50, and we think we can get to 300. So I'm not so much concerned about your ability to access the supply of locations, but how do you sort of tackle the confidence that underpins that from a demand point of view? So what work do you do at that local level to be confident that those 300 sites will work?
That's sort of built into the planning. So we know we're looking at the characteristics of the people in Wisconsin and those towns in Wisconsin. So we know we can look at the makeup of the town to decide which brand we might put in and how many centers we would put in. This is coming from a number of databases. Principal one, Geolytix. Geolytix is what McDonald's and every retailer uses to pinpoint where they're going to put a store. So you don't want to open a store if you don't have the right customer base around it. But there's a lot more things layered onto that to have a higher hit rate. And also, it's about picking the brand.
So look, there isn't a place I can think of, Jeff, that we've opened these, as Jeff said, Bozeman, Montana, some pretty remote places, and even remoter than Bozeman we've done. These are places you say, "Well, I've got to look that up on the map." I'm good at the geography of these things, by the way. I was like, "I've never heard of that place. Where is it?" And even if you know where it is, you say, "Well, I still can't understand it." These places do pretty well because they're just the place that people are working from today in a new, flexible way. They couldn't have done that five or 10 years ago. They're doing it today.
I think I ask a question around how the real estate valuers sort of think about flex versus sort of traditional lease, and to the extent that that's a challenge or something that you need to educate.
It's a challenge. Yeah.
Educate that kind of population around. How do you go about that? Or is that just a tough ask?
You need a sort of fairly large hammer and tools. These guys are, by their very nature, they're conservative. Look, we have shed loads of data that can back up future cash flows based on historical cash flows, and we're working on them, and it will come, and it won't be us that make it happen. It will be the institutions.
If you look at that huge thing we've done in Madrid, that's going to make a difference to the way that 50-60 billion AUM pension fund think about things, and they will say, "Look, I've got to have this valued." Okay, I've got a building. We're the exclusive. We're in that, all of it. We've been very successful on opening. I think within two months, we're 50% on that one. Brilliant. They love it, by the way, because they've never seen that before, and we'll get more buildings from that institution, but they're going to have to get it valued, and that will create value as these are JLL, CBRE, etc. These are the guys that will come under pressure from the owners to say, "Look, this is just a hotel, but better than a hotel," and we'll supply the data to back that up, and it will come.
Next couple of years, we are working on it now, but there's not enough of them to make it worth their while to get out of it. They don't want to change. They get money from doing the same thing every day.
And last one, if I can. I guess you talked about only adding to the Company-Owned estate where it was strategically important. So we sort of flip that on its head, and we say, "Well, of all the Company-Owned locations today, how many are strategic? Are there many at the sort of more tertiary locations, the lower end, that are sort of critical? Or can you convert some of those into management contracts?"
We don't want to. We don't want to. We don't want to convert cash flow into less cash flow. So occasionally we do, but it's not the priority.
So this sort of whole thing about Company-Owned, blah, blah, blah, we're in the business of investment and making high returns on our investment. Now, with managed and franchised, that's a very, very good return. Okay, so I invest in people. I make future fees like that. But Company-Owned, there's very good opportunities. And we're opportunist people. So if we can take no cash and make it into a lot of cash at low risk, as Tom said, we'll do that. On some very few strategic locations, these are the crown jewels of the world. Yeah, maybe we'll take a little bit of risk on that because we're confident overall. The issue is it's all about the margin. Some of those, they're very high cost. The margin is return on capital would be good, but margin. And margin is room for error, the way I see it.
So you have to be quite careful at how you approach them. But that Company-Owned group will grow, likely to grow, not hugely, but it's a very good. We look at everything on return on cash. That's it. And risk. We just don't like risk. More institutions, by the way. You get there a different direction. And this company in Madrid wouldn't have been. I've come to remember them because I've spoken to them over the years. One of the biggest property owners in Spain. I don't know, five years ago, wouldn't even talk to us about anything. They wouldn't even lease us properties. Now, they believe. So it's a sea change. So we need that institutional, very important to get. They're the people owning sort of the class A properties in the bigger cities. That's what they like to own typically. Yeah.
I have a question on Company-Owned, if I may. If I look at Company-Owned as it is today, you already have virtual office in there. There's more virtual office coming starting in 2026. How much would you say of that division does not involve initial or ongoing CapEx? It's not real estate-based. How much is asset-light as of now and in your guidance for the medium term?
So nearly all of it is sorry, all of it is associated with a building that has a lease on it. But there are lots of ancillary services that come off on that in addition. So about 27% of our revenues are ancillary services. But that division is 100% leased buildings. And that's basically how we do that differentiation. So if there's a lease and the lease is on the balance sheet, it's in Company-Owned.
If there's a lease like a managed lease agreement and the lease is not on the balance sheet because effectively the lease liability is zero, it's in managed.
I think the key difference, Charlie, and correct me if I'm wrong. So managed contracts are what you're going to that will make I think that's what you're saying. That segment will grow because of that. Now, these are very low cash, but they're leases, and they have a margin. Margin on that stuff, 20%, 25%, but very low cash and no risk. They're back to back. So overall, as that grows, we may have to disclose that and make that a bit clearer. It's small at the moment compared to the whole of Company-Owned. As it gets bigger, we'll have to show that separately. So that does look as if you have sort of CapEx.
But the CapEx is always covered with sort of deposits and upfront payments, things like that. So we're still trying to go low cash. That's fixed margin over term, great credits. It's back to back, and we can step out of them. So we don't want to have any residual risk. So that is good business. You'll see more of that. And we may have to separate it out. Because otherwise, you become your worst enemy because your margin's not hitting. You've got more margin, but it's not hitting the percentage because you've got something diluted.
Which is happening with the managed lease agreements because they had 16% margin. So as the managed leases were growing, it was effectively diluting down the Company-Owned. Even though it's very, very small at this stage, that's the reason why we decided to make it.
But in the end, it's only cash.
So whatever the percentage, what Charlie and I are focused on, and we are all, as a team, focused on, it is the amount of cash you make, not the percentage of margin is sort of quite secondary compared to the real cash coming out.
Andy Brooke from RBC. Charlie, how do we think about the buyback going forward? You think you're just sort of keeping the debt level the same and all the free cash generation or effectively come back to shareholders. Is that a fair assumption?
So yes, it is, albeit though we want to make sure we can selectively invest sort of as and where it makes sense. So for example, if we find something that actually makes sense for us to do, then we'd adjust the buyback accordingly. But we want to keep the buyback going as it's going at the moment. It's been very successful.
When we can, we'll buy shares cheaper in the market. So it's a beautiful buyback program, thanks to the Freedom Day. We bought a lot around then.
I think, Charlie, you put it out.
Yeah, and we'll just keep going at it, basically. But basically, if we can find the right things, then we'll buy them. And it's all about return on that capital. If we can't, share buybacks. Otherwise, you're just going to build up a lot of cash, and we want to make the cash work. But the priority is the investment in the business always because that just brings that future goal forward because if you can do things that make a material difference and the cash return on that investment is good, we have the cash to do it. We should be doing all of them.
Thanks.
No more questions.
There's a bit of lunch available outside. I just want to thank Mark and Charlie and the team, and thank you all for coming.
Yeah, thank you very much for coming.
Thank you.