BEIJING,
Nov. 20,
2024 /PRNewswire/ -- VNET Group, Inc. (Nasdaq: VNET)
("VNET" or the "Company"), a leading carrier- and cloud-neutral
internet data center services provider in China, today announced its unaudited financial
results for the third quarter ended September 30, 2024.
"We achieved strong third quarter results mainly
driven by our wholesale IDC business," said Josh Sheng Chen, Founder, Executive Chairperson
and interim Chief Executive Officer of VNET. "Our wholesale IDC
business maintained its strong growth momentum as we capitalized on
rising AI-driven demand. We also continued attracting high-quality
customers during the third quarter, with six new order wins
totaling 84MW. Notably, we won a new wholesale order from an
Internet customer for 32MW at our Huailai IDC Campus, one of our
green computing clusters in Hebei
province. Moving forward, we will continue to develop our
high-performance data centers and green business, providing
reliable, premium IDC services to meet market demand. Propelling
VNET's high-quality, sustainable development remains our priority
as we strive to deliver value to all of our
stakeholders."
Qiyu Wang, Chief
Financial Officer of VNET, commented, "In the third quarter, we
remained focused on high-quality revenue businesses with high
margins. Our total net revenues increased by 12.4% year over year
to RMB2.12 billion, mainly driven by
remarkable wholesale revenue growth of 86.4% year over year. Our
adjusted EBITDA also grew by 17.1% year over year to RMB594.8 million in the third quarter of 2024. We
previously reported adjusted EBITDA for the third quarter of 2023
at RMB507.9 million. Such figure
included VAT surplus deduction benefit of RMB13.3 million, which is now considered
non-continuable due to the termination of preferential tax policies
since January 1, 2024 (the
"Discontinued VAT Benefits"). The year-over-year growth in
adjusted EBITDA would be 20.2% if the Discontinued VAT Benefits
were excluded from the adjusted EBITDA calculation for the same
period last year. We also aim to enter a definitive agreement with
one of China's leading insurance
companies by the end of 2024 to form a pre-REITs fund. The fund
will feature the first and second phases of our Taicang IDC Campus
as the underlying assets, with us retaining approximately a 51%
interest in the fund. This will further strengthen our cash
reserves and support our sustainable development. Looking ahead, we
will continue strengthening our core capabilities and capitalizing
on AI-driven opportunities to create long-term shareholder
value."
Third Quarter 2024 Financial
Highlights
- Total net revenues increased by 12.4% to RMB2.12 billion (US$302.2
million) from RMB1.89 billion
in the same period of 2023.
- Net revenues from the IDC business[1] increased
by 18.4% to RMB1.50 billion
(US$213.5 million) from RMB1.27 billion in the same period of 2023.
- Net revenues from the wholesale IDC business ("wholesale
revenues") increased by 86.4% to RMB523.0
million (US$74.5 million) from
RMB280.6 million in the same period
of 2023.
- Net revenues from the retail IDC business ("retail
revenues") decreased slightly by 1.0% to RMB975.5 million (US$139.0
million) from RMB984.9 million
in the same period of 2023.
- Net revenues from the non-IDC business[2]
increased by 0.2% to RMB622.3 million
(US$88.7 million) from RMB621.4 million in the same period of 2023.
- Adjusted cash gross profit (non-GAAP) increased by 16.6% to
RMB860.7 million (US$122.6 million) from RMB738.4 million in the same period of 2023.
Adjusted cash gross margin (non-GAAP) was 40.6%, compared with
39.1% in the same period of 2023.
- Adjusted EBITDA (non-GAAP) increased by 17.1% to RMB594.8 million (US$84.8
million) from RMB507.9 million
in the same period of 2023. Such figure in the third quarter of
2023 included Discontinued VAT Benefits of RMB13.3 million. The year-over-year growth in
adjusted EBITDA would be 20.2% if the Discontinued VAT Benefits
were excluded from the adjusted EBITDA calculation for the same
period last year. Adjusted EBITDA margin (non-GAAP) was 28.0%,
compared with 26.9% in the same period of 2023.
- Net income increased by RMB372.0
million and RMB260.3 million
to RMB332.2 million (US$47.3 million) in the third quarter, compared
with a net loss of RMB39.9 million in
the same period of 2023 and a net income of RMB71.8 million in the second quarter of 2024,
respectively.
Third Quarter 2024 Operational
Highlights
Wholesale IDC Business[3]
- Capacity in service was 358MW as of September 30, 2024, compared with 332MW as of
June 30, 2024, and 290MW as of
September 30, 2023. Capacity under
construction was 297MW as of September 30,
2024.
- Capacity utilized by customers reached 279MW as of September 30, 2024, compared with 252MW as of
June 30, 2024, and 161MW as of
September 30, 2023. The sequential
increase during the third quarter of 2024 was 27MW, which was
mainly contributed by the E-JS Campus 02 C data center and the
N-OR06 data center.
- Utilization rate[4] of wholesale capacity was 78.0%
as of September 30, 2024, compared
with 75.9% as of June 30, 2024, and
55.4% as of September 30, 2023.
- Utilization rate of mature wholesale capacity[5] was
95.6% as of September 30, 2024,
compared with 94.9% as of June 30,
2024, and 94.4% as of September 30,
2023.
- Utilization rate of ramp-up wholesale capacity[6]
was 46.4% as of September 30, 2024,
compared with 45.7% as of June 30,
2024, and 18.4% as of September 30,
2023.
- Total capacity committed[7] was 352MW as of
September 30, 2024, compared with
326MW as of June 30, 2024, and 236MW
as of September 30, 2023.
- Commitment rate[8] for capacity in service was 98.2%
as of September 30, 2024, compared
with 98.1% as of June 30, 2024, and
81.3% as of September 30, 2023.
- Total capacity pre-committed[9] was 262MW and
pre-commitment rate[10] for capacity under construction
was 88.4% as of September 30,
2024.
Retail IDC Business[11]
- Capacity in service was 52,250 cabinets as of September 30, 2024, compared with 52,177 cabinets
as of June 30, 2024, and 52,200
cabinets as of September 30,
2023.
- Capacity utilized by customers reached 32,950 cabinets as of
September 30, 2024, compared with
33,253 cabinets as of June 30, 2024,
and 33,845 cabinets as of September 30,
2023.
- Utilization rate of retail capacity was 63.1% as of
September 30, 2024, compared with
63.7% as of June 30, 2024, and 64.8%
as of September 30, 2023.
- Utilization rate of mature retail capacity[12] was
69.5% as of September 30, 2024,
compared with 72.5% as of June 30,
2024, and 73.1% as of September 30,
2023.
- Utilization rate of ramp-up retail capacity[13] was
16.8% as of September 30, 2024,
compared with 12.7% as of June 30,
2024, and 18.7% as of September 30,
2023.
- Monthly recurring revenue (MRR) per retail cabinet was
RMB8,788 in the third quarter of
2024, compared with RMB8,753 in the
second quarter of 2024 and RMB8,845
in the third quarter of 2023.
|
|
[1] IDC
business refers to managed hosting services, consisting of the
wholesale IDC business and the retail IDC business. Beginning in
the first quarter of 2024, our IDC business was subdivided into
wholesale IDC business and retail IDC business according to the
nature and scale of our data center projects. Prior to 2024, the
subdivision was based on customer contract types.
|
|
[2] Non-IDC
business consists of cloud services and VPN services.
|
|
[3] For
wholesale IDC business, certain projects hosted in our E-JS02 data
center with an aggregate of 27MW capacity were excluded and are
expected to be continuously excluded from in-service wholesale due
to pending commercial discussion with the client. Such projects
were included as in-service wholesale from the first quarter of
2021 to the fourth quarter of 2023, given that such projects had
been delivered to the client based on the terms of the
MOU.
|
|
[4]
Utilization rate is calculated by dividing capacity utilized by
customers by the capacity in service.
|
|
[5] Mature
wholesale capacity refers to wholesale data centers in which
utilization rate is at or above 80%.
|
|
[6] Ramp-up
wholesale capacity refers to wholesale data centers in which
utilization rate is below 80%.
|
|
[7] Total
capacity committed is the capacity committed to customers pursuant
to customer agreements remaining in effect.
|
|
[8]
Commitment rate is calculated by total capacity committed divided
by total capacity in service.
|
|
[9] Total
capacity pre-committed is the capacity under construction which is
pre-committed to customers pursuant to customer agreements
remaining in effect.
|
|
[10]
Pre-commitment rate is calculated by total capacity pre-committed
divided by total capacity under construction.
|
|
[11] For
retail IDC business, since the first quarter of 2024, we have
excluded a certain number of reserved cabinets from the capacity in
service. Reserved cabinets refer to those that have not been
utilized on a large scale, those that are planned to be closed, or
those that are planned to be further upgraded. As of September 30,
2023, June 30, 2024, and September 30, 2024, 4,426, 4,150, and
4,150 reserved cabinets, respectively, were excluded from the
calculation of utilization rate of retail IDC business
capacity.
|
|
[12] Mature
retail capacity refers to retail data centers that came into
service prior to the past 24 months.
|
|
[13] Ramp-up
retail capacity refers to retail data centers that came into
service within the past 24 months, or mature retail data centers
that have undergone improvements within the past 24
months.
|
|
Third Quarter 2024 Financial Results
TOTAL NET REVENUES: Total net revenues in
the third quarter of 2024 were RMB2.12
billion (US$302.2 million),
representing an increase of 12.4% from RMB1.89 billion in the same period of 2023. The
year-over-year increase was mainly driven by the continued growth
of our wholesale IDC business.
Net revenues from IDC business
increased by 18.4% to RMB1.50 billion
(US$213.5 million) from RMB1.27 billion in the same period of 2023. The
year-over-year increase was mainly driven by an increase in
wholesale revenues.
- Wholesale revenues increased by 86.4% to
RMB523.0 million (US$74.5 million) from RMB280.6 million in the same period of 2023.
- Retail revenues decreased to RMB975.5 million (US$139.0
million) from RMB984.9 million
in the same period of 2023.
Net revenues from non-IDC business
increased by 0.2% to RMB622.3 million
(US$88.7 million) from RMB621.4 million in the same period of 2023.
GROSS PROFIT: Gross profit in the third
quarter of 2024 was RMB491.7 million
(US$70.1 million), representing an
increase of 60.4% from RMB306.5
million in the same period of 2023. Gross margin in the
third quarter of 2024 was 23.2%, compared with 16.2% in the same
period of 2023. The year-over-year increase was primarily
attributable to a reduction in depreciation expense due to the
change in the estimated useful lives of property and equipment
starting from January 1, 2024.
ADJUSTED CASH GROSS PROFIT (non-GAAP),
which excludes depreciation, amortization, and share-based
compensation expenses, was RMB860.7
million (US$122.6 million) in
the third quarter of 2024, compared with RMB738.4 million in the same period of 2023.
Adjusted cash gross margin (non-GAAP) in the third quarter of 2024
was 40.6%, compared with 39.1% in the same period of 2023.
OPERATING EXPENSES: Total operating
expenses in the third quarter of 2024 were RMB300.3 million (US$42.8
million), compared with RMB274.3
million in the same period of 2023.
Sales and marketing expenses were
RMB60.7 million (US$8.7 million) in the third quarter of 2024,
compared with RMB64.1 million in the
same period of 2023.
Research and development expenses
were RMB53.1 million (US$7.6 million) in the third quarter of 2024,
compared with RMB80.7 million in the
same period of 2023.
General and administrative expenses
were RMB132.5 million (US$18.9 million) in the third quarter of 2024,
compared with RMB137.9 million in the
same period of 2023.
ADJUSTED OPERATING EXPENSES (non-GAAP),
which exclude share-based compensation expenses, were RMB293.6 million (US$41.8
million) in the third quarter of 2024, compared with
RMB264.8 million in the same period
of 2023. As a percentage of total net revenues, adjusted operating
expenses (non-GAAP) in the third quarter of 2024 were 13.8%,
compared with 14.0% in the same period of 2023.
ADJUSTED EBITDA (non-GAAP): Adjusted
EBITDA in the third quarter of 2024 was RMB594.8 million (US$84.8
million), representing an increase of 17.1% from
RMB507.9 million in the same period
of 2023. Such figure in the third quarter of 2023 included
Discontinued VAT Benefits of RMB13.3
million. The year-over-year growth in adjusted EBITDA would
be 20.2% if the Discontinued VAT Benefits were excluded from the
adjusted EBITDA calculation for the same period last year).
Adjusted EBITDA margin (non-GAAP) in the third quarter of 2024 was
28.0%, compared with 26.9% in the same period of 2023.
NET INCOME/LOSS ATTRIBUTABLE TO VNET GROUP,
INC.: Net income attributable to VNET Group, Inc. in the third
quarter of 2024 was RMB317.6 million
(US$45.3 million), compared with a
net loss attributable to VNET Group, Inc. of RMB50.5 million in the same period of 2023. The
year-over-year increase was mainly due to a gain in debt
extinguishment.
EARNINGS PER SHARE: Basic and
diluted earnings per share in the third quarter of 2024 were
RMB0.20 (US$0.03) and RMB0.05 (US$0.01),
respectively, which represents the equivalent to RMB1.20 (US$0.18)
and RMB0.30 (US$0.06) per American depositary share ("ADS").
Each ADS represents six Class A ordinary shares. Diluted earnings
per share is calculated using adjusted net income attributable to
ordinary shareholders divided by the weighted average number of
diluted shares outstanding.
LIQUIDITY: As of September 30, 2024, the aggregate amount of the
Company's cash and cash equivalents, restricted cash and short-term
investments was RMB2.10 billion
(US$298.9 million).
Total short-term debt consisting of short-term
bank borrowings and the current portion of long-term borrowings was
RMB1.87 billion (US$266.4 million). Total long-term debt was
RMB8.88 billion (US$1.26 billion), comprised of long-term
borrowings of RMB7.08 billion
(US$1.0 billion) and convertible
promissory notes of RMB1.79 billion
(US$255.6 million).
Net cash generated from operating activities in
the third quarter of 2024 was RMB760.4
million (US$108.4 million),
compared with RMB454.3 million in the
same period of 2023. During the third quarter of 2024, the Company
obtained new debt financing, refinancing facilities and other
financings of RMB0.95 billion
(US$134.7 million).
Recent Development
The Company plans to sign a definitive agreement
by the end of 2024 on a pre-REITs project with one of China's leading insurance companies, under
which the Company will form a pre-REITs fund (the "Fund") to
feature the first and second phases of our Taicang IDC Campus as
the underlying assets with approximately 210MW total IT capacity
and RMB5.74 billion estimated
value.
The Company is expected to own approximately 51%
interest in the Fund and sell the remaining 49% interest to the
insurance company, the consideration of which would be
approximately RMB1.15 billion,
calculated based on the assets and liabilities of the fund at the
establishment date.
After the completion of this transaction, VNET
intends to consolidate the Fund for financial reporting purpose,
while operating the Taicang IDC project to offer stable and premium
infrastructure services. The financial results of the Fund's
underlying assets are expected to be consolidated into the
Company's financial statement.
Business Outlook
The Company increased its full year 2024 guidance
for total net revenues and adjusted EBITDA. Specifically, the
Company now expects total net revenues for 2024 to be between
RMB8,000 million to RMB8,100 million, representing year-over-year
growth of 7.9% to 9.3%, and adjusted EBITDA (non-GAAP) to be in the
range of RMB2,280 million to
RMB2,300 million, representing
year-over-year growth of 11.8% to 12.8%. Such figure in the third
quarter of 2023 adjusted EBITDA included Discontinued VAT Benefits
of RMB13.3 million. The
year-over-year growth in adjusted EBITDA would be 16.4% to 17.4% if
the Discontinued VAT Benefits were excluded from the adjusted
EBITDA calculation for the same period last year.
The forecast reflects the Company's current and
preliminary views on the market and its operational conditions and
is subject to change.
Conference Call
The Company's management will host an earnings
conference call at 8:00 PM U.S.
Eastern Time on Wednesday, November 20,
2024, or 9:00 AM Beijing Time
on Thursday, November 21, 2024.
For participants who wish to join the call,
please access the links provided below to complete the online
registration process.
English line:
https://s1.c-conf.com/diamondpass/10043189-1ej64l.html
Chinese line (listen-only mode):
https://s1.c-conf.com/diamondpass/10043190-a2lrfs.html
Participants can choose between the English and
Chinese options for pre-registration above. Please note that the
Chinese option will be in listen-only mode. Upon registration, each
participant will receive an email containing details for the
conference call, including dial-in numbers, a conference call
passcode and a unique access PIN, which will be used to join the
conference call.
Additionally, a live and archived webcast of the
conference call will be available on the Company's investor
relations website at http://ir.vnet.com.
A replay of the conference call will be
accessible through November 28, 2024,
by dialing the following numbers:
|
US/Canada:
|
1 855 883
1031
|
|
Mainland
China:
|
400 1209 216
|
|
Hong Kong,
China:
|
800 930 639
|
|
International:
|
+61 7 3107
6325
|
|
Reply PIN (English
line):
|
10043189
|
|
Reply PIN (Chinese
line):
|
10043190
|
Non-GAAP Disclosure
In evaluating its business, VNET considers and
uses the following non-GAAP measures defined as non-GAAP financial
measures by the U.S. Securities and Exchange Commission as a
supplemental measure to review and assess its operating
performance: adjusted cash gross profit, adjusted cash gross
margin, adjusted operating expenses, adjusted EBITDA and adjusted
EBITDA margin. The presentation of these non-GAAP financial
measures is not intended to be considered in isolation or as a
substitute for the financial information prepared and presented in
accordance with U.S. GAAP. For more information on these non-GAAP
financial measures, please see the table captioned "Reconciliations
of GAAP and non-GAAP results" set forth at the end of this press
release.
The non-GAAP financial measures are provided as
additional information to help investors compare business trends
among different reporting periods on a consistent basis and to
enhance investors' overall understanding of the Company's current
financial performance and prospects for the future. These non-GAAP
financial measures should be considered in addition to results
prepared in accordance with U.S. GAAP, but should not be considered
a substitute for, or superior to, U.S. GAAP results. In addition,
the Company's calculation of the non-GAAP financial measures may be
different from the calculation used by other companies, and
therefore comparability may be limited.
Exchange Rate
This announcement contains translations of
certain RMB amounts into U.S. dollars ("USD") at specified rates
solely for the convenience of the reader. Unless otherwise stated,
all translations from RMB to USD were made at the rate of
RMB7.0176 to US$1.00, the noon buying rate in effect on
September 30, 2024, in the H.10
statistical release of the Federal Reserve Board. The Company makes
no representation that the RMB or USD amounts referred could be
converted into USD or RMB, as the case may be, at any particular
rate or at all. For analytical presentation, all percentages are
calculated using the numbers presented in the financial statements
contained in this earnings release.
Statement Regarding Unaudited Condensed
Financial Information
The unaudited financial information set forth
above is preliminary and subject to potential adjustments.
Adjustments to the consolidated financial statements may be
identified when audit work has been performed for the Company's
year-end audit, which could result in significant differences from
this preliminary unaudited condensed financial information.
About VNET
VNET Group, Inc. is a leading carrier- and
cloud-neutral internet data center services provider in
China. VNET provides hosting and
related services, including IDC services, cloud services, and
business VPN services to improve the reliability, security, and
speed of its customers' internet infrastructure. Customers may
locate their servers and equipment in VNET's data centers and
connect to China's internet
backbone. VNET operates in more than 30 cities throughout
China, servicing a diversified and
loyal base of over 7,500 hosting and related enterprise customers
that span numerous industries ranging from internet companies to
government entities and blue-chip enterprises to small- to
mid-sized enterprises.
Safe Harbor Statement
This announcement contains forward-looking
statements. These forward-looking statements are made under the
"safe harbor" provisions of the U.S. Private Securities Litigation
Reform Act of 1995. These statements can be identified by
terminology such as "will," "expects," "anticipates," "future,"
"intends," "plans," "target," "believes," "estimates" and similar
statements. Among other things, quotations from management in this
announcement as well as VNET's strategic and operational plans,
including the plan to sign a definitive agreement on a pre-REITs
project, contain forward-looking statements. VNET may also make
written or oral forward-looking statements in its reports filed
with, or furnished to, the U.S. Securities and Exchange Commission,
in its annual reports to shareholders, in press releases and other
written materials and in oral statements made by its officers,
directors or employees to third parties. Statements that are not
historical facts, including statements about VNET's beliefs and
expectations, are forward-looking statements. Forward-looking
statements involve inherent risks and uncertainties. A number of
factors could cause actual results to differ materially from those
contained in any forward-looking statement, including but not
limited to the following: VNET's goals and strategies; VNET's
liquidity conditions; VNET's expansion plans; the expected growth
of the data center services market; expectations regarding demand
for, and market acceptance of, VNET's services; VNET's expectations
regarding keeping and strengthening its relationships with
customers; VNET's plans to invest in research and development to
enhance its solution and service offerings; and general economic
and business conditions in the regions where VNET provides
solutions and services. Further information regarding these and
other risks is included in VNET's reports filed with, or furnished
to, the U.S. Securities and Exchange Commission. All information
provided in this press release is as of the date of this press
release, and VNET undertakes no duty to update such information,
except as required under applicable law.
Investor Relations Contact:
Xinyuan Liu
Tel: +86 10 8456 2121
Email: ir@vnet.com
|
VNET GROUP,
INC.
|
|
CONSOLIDATED
BALANCE SHEETS
|
|
(Amount in
thousands of Renminbi ("RMB") and US dollars
("US$"))
|
|
As
of
|
|
As
of
|
|
December 31,
2023
|
|
September 30,
2024
|
|
RMB
|
|
RMB
|
|
US$
|
|
Assets
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
2,243,537
|
|
1,524,819
|
|
217,285
|
|
Restricted
cash
|
2,854,568
|
|
556,266
|
|
79,267
|
|
Accounts and
notes receivable, net
|
1,715,975
|
|
1,861,828
|
|
265,308
|
|
Short-term
Investments
|
356,820
|
|
15,879
|
|
2,263
|
|
Prepaid expenses
and other current assets
|
2,375,341
|
|
2,665,924
|
|
379,891
|
|
Amounts due from
related parties
|
277,237
|
|
317,619
|
|
45,260
|
|
Total current
assets
|
9,823,478
|
|
6,942,335
|
|
989,274
|
|
|
|
|
|
|
|
Non-current
assets:
|
|
|
|
|
|
|
Property and
equipment, net
|
13,024,393
|
|
15,153,253
|
|
2,159,321
|
|
Intangible
assets, net
|
1,383,406
|
|
1,347,751
|
|
192,053
|
|
Land use rights,
net
|
602,503
|
|
588,846
|
|
83,910
|
|
Operating lease
right-of-use assets, net
|
4,012,329
|
|
4,412,834
|
|
628,824
|
|
Restricted
cash
|
882
|
|
882
|
|
126
|
|
Deferred tax
assets, net
|
247,644
|
|
309,390
|
|
44,088
|
|
Long-term
investments, net
|
757,949
|
|
798,638
|
|
113,805
|
|
Other non-current
assets
|
533,319
|
|
371,501
|
|
52,938
|
|
Total
non-current assets
|
20,562,425
|
|
22,983,095
|
|
3,275,065
|
|
Total
assets
|
30,385,903
|
|
29,925,430
|
|
4,264,339
|
|
|
|
|
|
|
|
Liabilities
and Shareholders' Equity
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
Short-term bank
borrowings
|
30,000
|
|
552,270
|
|
78,698
|
|
Accounts and
notes payable
|
696,177
|
|
728,361
|
|
103,791
|
|
Accrued expenses
and other payables
|
2,783,102
|
|
2,527,584
|
|
360,178
|
|
Advances from
customers
|
1,605,247
|
|
1,752,935
|
|
249,791
|
|
Deferred
revenue
|
95,477
|
|
87,354
|
|
12,448
|
|
Income taxes
payable
|
35,197
|
|
51,554
|
|
7,346
|
|
Amounts due to
related parties
|
356,080
|
|
354,903
|
|
50,573
|
|
Current portion
of long-term borrowings
|
723,325
|
|
1,317,343
|
|
187,720
|
|
Current portion
of finance lease liabilities
|
115,806
|
|
107,785
|
|
15,359
|
|
Current portion
of deferred government grants
|
8,062
|
|
8,538
|
|
1,217
|
|
Current portion
of operating lease liabilities
|
780,164
|
|
874,957
|
|
124,680
|
|
Convertible
promissory notes
|
4,208,495
|
|
-
|
|
-
|
|
Total current
liabilities
|
11,437,132
|
|
8,363,584
|
|
1,191,801
|
|
|
|
|
|
|
|
Non-current
liabilities:
|
|
|
|
|
|
|
Long-term
borrowings
|
5,113,521
|
|
7,082,026
|
|
1,009,181
|
|
Convertible
promissory notes
|
1,769,946
|
|
1,793,894
|
|
255,628
|
|
Non-current
portion of finance lease liabilities
|
1,159,525
|
|
1,169,573
|
|
166,663
|
|
Unrecognized tax
benefits
|
98,457
|
|
98,457
|
|
14,030
|
|
Deferred tax
liabilities
|
688,362
|
|
703,390
|
|
100,232
|
|
Deferred
government grants
|
145,112
|
|
265,941
|
|
37,896
|
|
Non-current
portion of operating lease liabilities
|
3,270,759
|
|
3,587,701
|
|
511,243
|
|
Derivative
liability
|
188,706
|
|
-
|
|
-
|
|
Total
non-current liabilities
|
12,434,388
|
|
14,700,982
|
|
2,094,873
|
|
|
|
|
|
|
|
Shareholders'
equity
|
|
|
|
|
|
|
Ordinary
shares
|
107
|
|
109
|
|
16
|
|
Additional
paid-in capital
|
17,291,312
|
|
17,256,955
|
|
2,459,096
|
|
Accumulated other
comprehensive loss
|
(14,343)
|
|
(16,088)
|
|
(2,293)
|
|
Statutory
reserves
|
80,615
|
|
94,276
|
|
13,434
|
|
Accumulated
deficit
|
(11,016,323)
|
|
(10,835,688)
|
|
(1,544,073)
|
|
Treasury
stock
|
(326,953)
|
|
(163,073)
|
|
(23,238)
|
|
Total VNET
Group, Inc. shareholders'
equity
|
6,014,415
|
|
6,336,491
|
|
902,942
|
|
Noncontrolling
interest
|
499,968
|
|
524,373
|
|
74,723
|
|
Total
shareholders' equity
|
6,514,383
|
|
6,860,864
|
|
977,665
|
|
Total
liabilities and shareholders'
equity
|
30,385,903
|
|
29,925,430
|
|
4,264,339
|
|
VNET GROUP,
INC.
|
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
|
(Amount in
thousands of Renminbi ("RMB") and US dollars ("US$") except for
number of shares and per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
|
Nine months
ended
|
|
September 30,
2023
|
|
June 30,
2024
|
|
September 30,
2024
|
|
|
September 30,
2023
|
|
September 30,
2024
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
|
|
RMB
|
|
RMB
|
|
US$
|
|
Net
revenues
|
1,886,924
|
|
1,993,760
|
|
2,120,794
|
|
302,211
|
|
|
5,514,450
|
|
6,012,680
|
|
856,800
|
|
Cost of
revenues
|
(1,580,446)
|
|
(1,568,865)
|
|
(1,629,111)
|
|
(232,146)
|
|
|
(4,512,843)
|
|
(4,685,381)
|
|
(667,661)
|
|
Gross
profit
|
306,478
|
|
424,895
|
|
491,683
|
|
70,065
|
|
|
1,001,607
|
|
1,327,299
|
|
189,139
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income (expenses)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
26,706
|
|
-
|
|
11,767
|
|
1,677
|
|
|
73,980
|
|
15,716
|
|
2,240
|
|
Sales and
marketing expenses
|
(64,077)
|
|
(58,225)
|
|
(60,700)
|
|
(8,650)
|
|
|
(192,921)
|
|
(190,668)
|
|
(27,170)
|
|
Research and
development expenses
|
(80,673)
|
|
(61,998)
|
|
(53,127)
|
|
(7,571)
|
|
|
(241,549)
|
|
(190,514)
|
|
(27,148)
|
|
General and
administrative expenses
|
(137,931)
|
|
(107,297)
|
|
(132,482)
|
|
(18,879)
|
|
|
(393,395)
|
|
(466,076)
|
|
(66,415)
|
|
Allowance for
doubtful debt
|
(18,316)
|
|
(2,753)
|
|
(65,731)
|
|
(9,367)
|
|
|
(7,034)
|
|
(63,309)
|
|
(9,021)
|
|
Total
operating expenses
|
(274,291)
|
|
(230,273)
|
|
(300,273)
|
|
(42,790)
|
|
|
(760,919)
|
|
(894,851)
|
|
(127,514)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
profit
|
32,187
|
|
194,622
|
|
191,410
|
|
27,275
|
|
|
240,688
|
|
432,448
|
|
61,625
|
|
Interest
income
|
12,887
|
|
5,449
|
|
4,218
|
|
601
|
|
|
28,606
|
|
21,796
|
|
3,106
|
|
Interest
expense
|
(91,800)
|
|
(92,172)
|
|
(93,996)
|
|
(13,394)
|
|
|
(233,295)
|
|
(323,850)
|
|
(46,148)
|
|
Impairment of
long-term investments
|
(11,115)
|
|
-
|
|
-
|
|
-
|
|
|
(11,115)
|
|
-
|
|
-
|
|
Other
income
|
7,536
|
|
30,475
|
|
15,584
|
|
2,221
|
|
|
22,892
|
|
50,873
|
|
7,249
|
|
Other
expenses
|
(10,975)
|
|
(6,900)
|
|
(8,783)
|
|
(1,252)
|
|
|
(14,887)
|
|
(17,105)
|
|
(2,437)
|
|
Changes in the
fair value of financial liabilities
|
266
|
|
712
|
|
(7,107)
|
|
(1,013)
|
|
|
21,718
|
|
(2,537)
|
|
(362)
|
|
Gain on debt
extinguishment
|
-
|
|
-
|
|
246,175
|
|
35,080
|
|
|
-
|
|
246,175
|
|
35,080
|
|
Foreign exchange
gain (loss)
|
24,606
|
|
(4,387)
|
|
14,833
|
|
2,114
|
|
|
(168,391)
|
|
(17,915)
|
|
(2,553)
|
|
(Loss) income
before income taxes and
gain from equity
method investments
|
(36,408)
|
|
127,799
|
|
362,334
|
|
51,632
|
|
|
(113,784)
|
|
389,885
|
|
55,560
|
|
Income tax
expenses
|
(6,317)
|
|
(59,149)
|
|
(31,149)
|
|
(4,439)
|
|
|
(63,748)
|
|
(151,682)
|
|
(21,615)
|
|
Gain from equity
method investments
|
2,842
|
|
3,199
|
|
965
|
|
138
|
|
|
3,651
|
|
6,770
|
|
965
|
|
Net (loss)
income
|
(39,883)
|
|
71,849
|
|
332,150
|
|
47,331
|
|
|
(173,881)
|
|
244,973
|
|
34,910
|
|
Net income
attributable to noncontrolling
interest
|
(10,579)
|
|
(8,174)
|
|
(14,524)
|
|
(2,070)
|
|
|
(27,167)
|
|
(50,677)
|
|
(7,221)
|
|
Net (loss)
income attributable to the
VNET Group,
Inc.
|
(50,462)
|
|
63,675
|
|
317,626
|
|
45,261
|
|
|
(201,048)
|
|
194,296
|
|
27,689
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) earnings
per share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
(0.06)
|
|
0.04
|
|
0.20
|
|
0.03
|
|
|
(0.23)
|
|
0.12
|
|
0.02
|
|
Diluted
|
(0.06)
|
|
0.04
|
|
0.05
|
|
0.01
|
|
|
(0.24)
|
|
(0.02)
|
|
(0.00)
|
|
Shares used in
(loss) earnings per share
computation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic*
|
889,058,872
|
|
1,594,662,099
|
|
1,602,860,426
|
|
1,602,860,426
|
|
|
888,724,901
|
|
1,588,659,647
|
|
1,588,659,647
|
|
Diluted*
|
889,058,872
|
|
1,595,517,338
|
|
1,740,565,086
|
|
1,740,565,086
|
|
|
899,884,241
|
|
1,725,023,283
|
|
1,725,023,283
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) earnings per ADS
(6 ordinary shares equal to 1 ADS)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
(0.36)
|
|
0.24
|
|
1.20
|
|
0.18
|
|
|
(1.38)
|
|
0.72
|
|
0.12
|
|
Diluted
|
(0.36)
|
|
0.24
|
|
0.30
|
|
0.06
|
|
|
(1.44)
|
|
(0.12)
|
|
(0.02)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Shares used in
(loss) earnings per share/ADS computation were computed under
weighted average method.
|
|
|
|
|
|
|
|
|
|
|
VNET GROUP,
INC.
|
|
RECONCILIATIONS OF GAAP AND NON-GAAP
RESULTS
|
|
(Amount in
thousands of Renminbi ("RMB") and US dollars
("US$"))
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
|
Nine months
ended
|
|
September 30,
2023
|
|
June 30,
2024
|
|
September 30,
2024
|
|
|
September 30,
2023
|
|
September 30,
2024
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
|
|
RMB
|
|
RMB
|
|
US$
|
|
Gross
profit
|
306,478
|
|
424,895
|
|
491,683
|
|
70,065
|
|
|
1,001,607
|
|
1,327,299
|
|
189,139
|
|
Plus:
depreciation and amortization
|
431,933
|
|
364,616
|
|
368,764
|
|
52,548
|
|
|
1,233,983
|
|
1,085,984
|
|
154,751
|
|
Plus: share-based
compensation
expenses
|
-
|
|
(2,190)
|
|
234
|
|
33
|
|
|
-
|
|
234
|
|
33
|
|
Adjusted cash
gross profit
|
738,411
|
|
787,321
|
|
860,681
|
|
122,646
|
|
|
2,235,590
|
|
2,413,517
|
|
343,923
|
|
Adjusted
cash gross margin
|
39.1 %
|
|
39.5 %
|
|
40.6 %
|
|
40.6 %
|
|
|
40.5 %
|
|
40.1 %
|
|
40.1 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
(274,291)
|
|
(230,273)
|
|
(300,273)
|
|
(42,790)
|
|
|
(760,919)
|
|
(894,851)
|
|
(127,514)
|
|
Plus: share-based
compensation
expenses
|
9,475
|
|
(12,962)
|
|
6,709
|
|
956
|
|
|
25,817
|
|
105,428
|
|
15,023
|
|
Adjusted
operating expenses
|
(264,816)*
|
|
(243,235)
|
|
(293,564)
|
|
(41,834)
|
|
|
(735,102)
|
|
(789,423)
|
|
(112,491)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
profit
|
32,187*
|
|
194,622
|
|
191,410
|
|
27,275
|
|
|
240,688
|
|
432,448
|
|
61,625
|
|
Plus:
depreciation and amortization
|
466,285
|
|
394,334
|
|
396,428
|
|
56,491
|
|
|
1,332,649
|
|
1,170,313
|
|
166,768
|
|
Plus: share-based
compensation
expenses
|
9,475
|
|
(15,152)
|
|
6,943
|
|
989
|
|
|
25,817
|
|
105,662
|
|
15,057
|
|
Adjusted
EBITDA
|
507,947*
|
|
573,804
|
|
594,781
|
|
84,755
|
|
|
1,599,154
|
|
1,708,423
|
|
243,450
|
|
Adjusted
EBITDA margin
|
26.9 %
|
|
28.8 %
|
|
28.0 %
|
|
28.0 %
|
|
|
29.0 %
|
|
28.4 %
|
|
28.4 %
|
|
|
* Included VAT surplus
deduction benefit of RMB13.3 million, which is now considered
non-continuable due to the termination of preferential tax policies
since January 1, 2024.
|
|
VNET GROUP,
INC.
|
|
CONDENSED
CONSOLIDATED STATEMENT OF CASH FLOWS
|
|
(Amount in
thousands of Renminbi ("RMB") and US dollars
("US$"))
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
September 30,
2023
|
|
June 30,
2024
|
|
September 30,
2024
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
|
CASH FLOWS
FROM OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
Net (loss)
income
|
(39,883)
|
|
71,849
|
|
332,150
|
|
47,331
|
|
Adjustments to
reconcile net (loss) income to net cash generated from operating
activities:
|
|
|
|
Depreciation and
amortization
|
461,603
|
|
388,711
|
|
393,719
|
|
56,105
|
|
Share-based compensation
expenses
|
9,475
|
|
(15,152)
|
|
6,943
|
|
989
|
|
Others
|
130,633
|
|
101,890
|
|
(107,550)
|
|
(15,326)
|
|
Changes in
operating assets and liabilities
|
|
|
|
|
|
|
|
|
Accounts and notes
receivable
|
(70,896)
|
|
142,469
|
|
(138,968)
|
|
(19,803)
|
|
Prepaid expenses and other
current assets
|
(48,380)
|
|
(79,893)
|
|
116,055
|
|
16,538
|
|
Accounts and notes
payable
|
21,763
|
|
(47,018)
|
|
8,463
|
|
1,206
|
|
Accrued expenses and other
payables
|
(54,577)
|
|
(61,463)
|
|
65,481
|
|
9,329
|
|
Deferred
revenue
|
36,008
|
|
(14,000)
|
|
2,300
|
|
328
|
|
Advances from
customers
|
124,816
|
|
(63,305)
|
|
222,083
|
|
31,647
|
|
Others
|
(116,249)
|
|
(18,884)
|
|
(140,310)
|
|
(19,994)
|
|
Net cash
generated from operating activities
|
454,313
|
|
405,204
|
|
760,366
|
|
108,350
|
|
|
|
|
|
|
|
|
|
CASH FLOWS
FROM INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
Purchases of
property and equipment
|
(946,444)
|
|
(998,489)
|
|
(1,426,892)
|
|
(203,330)
|
|
Purchases of
intangible assets
|
(18,228)
|
|
(7,594)
|
|
(33,806)
|
|
(4,817)
|
|
Proceeds from
(payments for) investments
|
144,516
|
|
(138,224)
|
|
92,426
|
|
13,171
|
|
Proceeds from
other investing activities
|
70,010
|
|
117,209
|
|
31,762
|
|
4,526
|
|
Net cash used
in investing activities
|
(750,146)
|
|
(1,027,098)
|
|
(1,336,510)
|
|
(190,450)
|
|
|
|
|
|
|
|
|
|
CASH FLOWS
FROM FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
Proceeds from
bank borrowings
|
756,101
|
|
690,848
|
|
745,534
|
|
106,238
|
|
Repayments of
bank borrowings
|
(78,050)
|
|
(533,324)
|
|
(129,893)
|
|
(18,510)
|
|
Repayments of
2025 Convertible Notes
|
(148,842)
|
|
-
|
|
-
|
|
-
|
|
Payments for
finance leases
|
(30,366)
|
|
(9,586)
|
|
(27,669)
|
|
(3,943)
|
|
Proceeds from
(payments for) other financing activities
|
216,711
|
|
516,493
|
|
(59,645)
|
|
(8,499)
|
|
Net cash
generated from financing activities
|
715,554
|
|
664,431
|
|
528,327
|
|
75,286
|
|
|
|
|
|
|
|
|
|
Effect of
foreign exchange rate changes on
cash, cash
equivalents and restricted cash
|
(12,476)
|
|
3,370
|
|
(6,049)
|
|
(862)
|
|
Net increase
(decrease) in cash, cash
equivalents and
restricted cash
|
407,245
|
|
45,907
|
|
(53,866)
|
|
(7,676)
|
|
Cash, cash
equivalents and restricted cash at
beginning of
period
|
2,616,969
|
|
2,089,926
|
|
2,135,833
|
|
304,354
|
|
Cash, cash
equivalents and restricted cash at
end of
period
|
3,024,214
|
|
2,135,833
|
|
2,081,967
|
|
296,678
|
View original
content:https://www.prnewswire.com/news-releases/vnet-reports-unaudited-third-quarter-2024-financial-results-302311297.html
SOURCE VNET Group, Inc.
