VNET Reports Unaudited Second Quarter 2024 Financial Results

BEIJING, Aug. 27, 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 second quarter ended June 30, 2024.

"We delivered another solid quarter through continued strong execution of our effective dual-core development strategy," said Josh Sheng Chen, Founder, Executive Chairperson and interim Chief Executive Officer of VNET. "The wholesale IDC business remained our key growth driver, highlighted by three new orders totaling 235MW for our Ulanqab IDC Campus in the Greater Beijing Area. Climbing utilization rates and a high pre-commitment rate for capacity under construction demonstrate our reliable, high-quality IDC services' enduring customer appeal in the competitive market. Furthermore, we advanced our AI data center development with steady progress on our green, high-tech Ulanqab IDC Campus, enabling us to seamlessly meet the increasing AI-driven demand. Going forward, we will continue to strengthen our innovative service offerings, vast high-power density resources and diverse AI-related capabilities to drive our healthy development and create value for all of our stakeholders." 

Qiyu Wang, Chief Financial Officer of VNET, commented, "In the second quarter, we remained focused on high-quality revenue businesses while enhancing efficiency and profitability, tactics that continued to yield positive outcomes. Our total net revenues increased by 9.4% year over year to RMB1.99 billion, mainly driven by wholesale revenue growth of 81% year over year, while operating expenses decreased by 7.7% year over year and 36.8% quarter over quarter. Our adjusted EBITDA also grew by 7.3% year over year to RMB573.8 million. In addition, we recorded a net income of RMB71.8 million in the second quarter, a significant improvement from the net loss of RMB159.0 million in the first quarter of 2024, representing a quarter over quarter increase of RMB230.9 million, thanks to our consistent operational improvements. Supported by our robust business fundamentals and healthy cash position, we will continue to invest in our core capabilities and AI-driven opportunities, propelling high-quality, sustainable growth."

Second Quarter 2024 Financial Highlights

  • Total net revenues increased by 9.4% to RMB1.99 billion (US$274.4 million) from RMB1.82 billion in the same period of 2023.
    • Net revenues from the IDC business[1] increased by 12.1% to RMB1.37 billion (US$188.1 million) from RMB1.22 billion in the same period of 2023.
      • Net revenues from the wholesale IDC business ("wholesale revenues") increased by 81.0% to RMB402.0 million (US$55.3 million) from RMB222.1 million in the same period of 2023.
      • Net revenues from the retail IDC business ("retail revenues") decreased by 3.2% to RMB964.8 million (US$132.8 million) from RMB996.6 million in the same period of 2023.
    • Net revenues from the non-IDC business[2] increased by 4.0% to RMB627.0 million (US$86.3 million) from RMB603.1 million in the same period of 2023.
  • Adjusted cash gross profit (non-GAAP) increased by 6.0% to RMB787.3 million (US$108.3 million) from RMB742.9 million in the same period of 2023. Adjusted cash gross margin (non-GAAP) was 39.5%, compared with 40.8% in the same period of 2023.
  • Adjusted EBITDA (non-GAAP) increased by 7.3% to RMB573.8 million (US$79.0 million) from RMB535.0 million in the same period of 2023. Adjusted EBITDA margin (non-GAAP) was 28.8%, compared with 29.4% in the same period of 2023.
  • Net income increased by RMB309.4 million and RMB230.9 million to RMB71.8 million (US$9.9 million) in the second quarter, compared with a net loss of RMB237.6 million in the same period of 2023 and a net loss of RMB159.0 million in the first quarter of 2024, respectively.

Second Quarter 2024 Operational Highlights

Wholesale IDC Business[3]

  • Capacity in service was 332MW as of June 30, 2024, compared with 332MW as of March 31, 2024, and 224MW as of June 30, 2023. Capacity under construction was 279MW as of June 30, 2024.
  • Capacity utilized by customers reached 252MW as of June 30, 2024, compared with 236MW as of March 31, 2024, and 142MW as of June 30, 2023. The sequential increase during the second quarter of 2024 was 16MW, which was mainly contributed by E-JS Campus 02 C data center.
  • Utilization rate[4] of wholesale capacity was 75.9% as of June 30, 2024, compared with 71.0% as of March 31, 2024, and 63.4% as of June 30, 2023.
    • Utilization rate of mature wholesale capacity[5] was 94.9% as of June 30, 2024, compared with 94.6% as of March 31, 2024, and 94.2% as of June 30, 2023.
    • Utilization rate of ramp-up wholesale capacity[6] was 45.7% as of June 30, 2024, compared with 33.6% as of March 31, 2024, and 39.9% as of June 30, 2023.
  • Total capacity committed[7] was 326MW as of June 30, 2024, compared with 326MW as of March 31, 2024, and 194MW as of June 30, 2023.
  • Commitment rate[8] for capacity in service was 98.1% as of June 30, 2024, compared with 98.1% as of March 31, 2024 and 86.7% as of June 30, 2023.
  • Total capacity pre-committed[9] was 238MW and pre-commitment rate[10] for capacity under construction was 85.5% as of June 30, 2024.

Retail IDC Business[11]

  • Capacity in service was 52,177 cabinets as of June 30, 2024, compared with 52,068 cabinets as of March 31, 2024, and 53,702 cabinets as of June 30, 2023.
  • Capacity utilized by customers reached 33,253 cabinets as of June 30, 2024, compared with 33,312 cabinets as of March 31, 2024, and 33,320 cabinets as of June 30, 2023.
  • Utilization rate of retail capacity was 63.7% as of June 30, 2024, compared with 64.0% as of March 31, 2024, and 62.0% as of June 30, 2023.
    • Utilization rate of mature retail capacity[12] was 72.5% as of June 30, 2024, compared with 72.8% as of March 31, 2024, and 73.5% as of June 30, 2023.
    • Utilization rate of ramp-up retail capacity[13] was 12.7% as of June 30, 2024, compared with 13.0% as of March 31, 2024, and 16.3% as of June 30, 2023.
  • Monthly recurring revenue (MRR) per retail cabinet was RMB8,753 in the second quarter of 2024, compared with RMB8,742 in the first quarter of 2024 and RMB8,931 in the second 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 June 30, 2023, March 31, 2024, and June 30, 2024, 4,426, 4,426, 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.

Second Quarter 2024 Financial Results

TOTAL NET REVENUES: Total net revenues in the second quarter of 2024 were RMB1.99 billion (US$274.4 million), representing an increase of 9.4% from RMB1.82 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 12.1% to RMB1.37 billion (US$188.1 million) from RMB1.22 billion in the same period of 2023. The year-over-year increase was mainly driven by an increase in wholesale revenues and partially offset by a decrease in retail revenues.

  • Wholesale revenues increased by 81.0% to RMB402.0 million (US$55.3 million) from RMB222.1 million in the same period of 2023.
  • Retail revenues decreased to RMB964.8 million (US$132.8 million) from RMB996.6 million in the same period of 2023.

Net revenues from non-IDC business increased by 4.0% to RMB627.0 million (US$86.3 million) from RMB603.1 million in the same period of 2023. The year-over-year increase was driven by cloud and VPN businesses.

GROSS PROFIT: Gross profit in the second quarter of 2024 was RMB424.9 million (US$58.5 million), representing an increase of 24.0% from RMB342.7 million in the same period of 2023. Gross margin in the second quarter of 2024 was 21.3%, compared with 18.8% 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 RMB787.3 million (US$108.3 million) in the second quarter of 2024, compared with RMB742.9 million in the same period of 2023. Adjusted cash gross margin (non-GAAP) in the second quarter of 2024 was 39.5%, compared with 40.8% in the same period of 2023.

OPERATING EXPENSES: Total operating expenses in the second quarter of 2024 were RMB230.3 million (US$31.7 million), compared with RMB249.5 million in the same period of 2023. The decrease in operating expenses was primarily due to a decrease in professional service fees and personnel costs.

Sales and marketing expenses were RMB58.2 million (US$8.0 million) in the second quarter of 2024, compared with RMB63.1 million in the same period of 2023.

Research and development expenses were RMB62.0 million (US$8.5 million) in the second quarter of 2024, compared with RMB81.1 million in the same period of 2023.

General and administrative expenses were RMB107.3 million (US$14.8 million) in the second quarter of 2024, compared with RMB128.0 million in the same period of 2023.

ADJUSTED OPERATING EXPENSES (non-GAAP), which exclude share-based compensation expenses, were RMB243.2 million (US$33.5 million) in the second quarter of 2024, compared with RMB241.5 million in the same period of 2023. As a percentage of total net revenues, adjusted operating expenses (non-GAAP) in the second quarter of 2024 were 12.2%, compared with 13.3% in the same period of 2023.

ADJUSTED EBITDA (non-GAAP): Adjusted EBITDA in the second quarter of 2024 was RMB573.8 million (US$79.0 million), representing an increase of 7.3% from RMB535.0 million in the same period of 2023. Adjusted EBITDA margin (non-GAAP) in the second quarter of 2024 was 28.8%, compared with 29.4% in the same period of 2023.

NET INCOME/LOSS ATTRIBUTABLE TO VNET GROUP, INC.: Net income attributable to VNET Group, Inc. in the second quarter of 2024 was RMB63.7 million (US$8.8 million), compared with a net loss attributable to VNET Group, Inc. of RMB232.9 million in the same period of 2023. The year-over-year increase was mainly due to our consistent operational improvement and decreases in sales and marketing expenses, research and development expenses, general and administrative expenses and foreign exchange loss.

EARNINGS PER SHARE: Basic and diluted earnings per share in the second quarter of 2024 were both RMB0.04 (US$0.01), equivalent to both RMB0.24 (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 June 30, 2024, the aggregate amount of the Company's cash and cash equivalents, restricted cash and short-term investments was RMB2.22 billion (US$306.0 million).

Total short-term debt consisting of short-term bank borrowings and the current portion of long-term borrowings was RMB1.67 billion (US$230.1 million). Total long-term debt was RMB8.45 billion (US$1.16 billion), comprised of long-term borrowings of RMB6.67 billion (US$917.7 million) and convertible promissory notes of RMB1.78 billion (US$245.1 million).

Net cash generated from operating activities in the second quarter of 2024 was RMB405.2 million (US$55.8 million), compared with RMB423.5 million in the same period of 2023. During the second quarter of 2024, the Company obtained new debt financing, refinancing facilities and other financings of RMB1.45 billion (US$199.3 million).

Business Outlook

The Company expects total net revenues for 2024 to be between RMB7,800 million to RMB8,000 million, representing year-over-year growth of 5.2% to 7.9%, and adjusted EBITDA (non-GAAP) to be in the range of RMB2,220 million to RMB2,280 million, representing year-over-year growth of 8.9% to 11.8%. The above outlook remains unchanged from the previously provided estimates.

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 9:00 PM U.S. Eastern Time on Tuesday, August 27, 2024, or 9:00 AM Beijing Time on Wednesday, August 28, 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/10041484-y4obcl.html

Chinese line (listen-only mode):
https://s1.c-conf.com/diamondpass/10041485-qdkvjp.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 September 4, 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

Replay PIN (English line):

10041484

Replay PIN (Chinese line): 

10041485

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 RMB7.2672 to US$1.00, the noon buying rate in effect on June 28, 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 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

  

June 30, 2024
   

 RMB 

  

 RMB 

  

 US$ 

 Assets 

            

 Current assets: 

            

 Cash and cash equivalents 

  

2,243,537

  

1,796,105

  

247,152

 Restricted cash 

  

2,854,568

  

338,846

  

46,627

 Accounts and notes receivable, net 

  

1,715,975

  

1,802,572

  

248,042

 Short-term investments 

  

356,820

  

87,871

  

12,091

 Prepaid expenses and other current assets 

  

2,375,341

  

2,673,585

  

367,898

 Amounts due from related parties 

  

277,237

  

345,408

  

47,530

 Total current assets 

  

9,823,478

  

7,044,387

  

969,340
             

 Non-current assets: 

            

 Property and equipment, net 

  

13,024,393

  

14,281,580

  

1,965,211

 Intangible assets, net 

  

1,383,406

  

1,340,625

  

184,476

 Land use rights, net 

  

602,503

  

593,309

  

81,642

 Operating lease right-of-use assets, net 

  

4,012,329

  

4,384,000

  

603,258

 Restricted cash 

  

882

  

882

  

121

 Deferred tax assets, net 

  

247,644

  

285,199

  

39,245

 Long-term investments, net 

  

757,949

  

816,423

  

112,344

 Other non-current assets 

  

533,319

  

372,144

  

51,209

 Total non-current assets 

  

20,562,425

  

22,074,162

  

3,037,506

 Total assets 

  

30,385,903

  

29,118,549

  

4,006,846
             

 Liabilities and Shareholders' Equity 

            

 Current liabilities: 

            

 Short-term bank borrowings 

  

30,000

  

562,270

  

77,371

 Accounts and notes payable 

  

696,177

  

726,827

  

100,015

 Accrued expenses and other payables 

  

2,783,102

  

2,717,898

  

373,995

 Advances from customers 

  

1,605,247

  

1,530,852

  

210,652

 Deferred revenue 

  

95,477

  

87,103

  

11,986

 Income taxes payable 

  

35,197

  

61,930

  

8,522

 Amounts due to related parties 

  

356,080

  

379,070

  

52,162

 Current portion of long-term borrowings 

  

723,325

  

1,110,202

  

152,769

 Current portion of finance lease liabilities  

  

115,806

  

95,687

  

13,167

 Current portion of deferred government grants 

  

8,062

  

10,311

  

1,419

 Current portion of operating lease liabilities  

  

780,164

  

860,446

  

118,401

 Convertible promissory notes 

  

4,208,495

  

-

  

-

 Total current liabilities 

  

11,437,132

  

8,142,596

  

1,120,459
             

 Non-current liabilities: 

            

 Long-term borrowings 

  

5,113,521

  

6,668,842

  

917,663

 Convertible promissory notes 

  

1,769,946

  

1,781,082

  

245,085

 Non-current portion of finance lease liabilities  

  

1,159,525

  

1,142,194

  

157,171

 Unrecognized tax benefits 

  

98,457

  

98,457

  

13,548

 Deferred tax liabilities 

  

688,362

  

698,162

  

96,070

 Deferred government grants 

  

145,112

  

260,876

  

35,898

 Non-current portion of operating lease liabilities 

  

3,270,759

  

3,596,438

  

494,886

 Derivative liability 

  

188,706

  

185,297

  

25,498

 Total non-current liabilities 

  

12,434,388

  

14,431,348

  

1,985,819
             

 Shareholders' equity 

            

 Ordinary shares  

  

107

  

109

  

15

 Additional paid-in capital 

  

17,291,312

  

17,260,924

  

2,375,182

 Accumulated other comprehensive loss 

  

(14,343)

  

(20,084)

  

(2,764)

 Statutory reserves 

  

80,615

  

80,615

  

11,093

 Accumulated deficit 

  

(11,016,323)

  

(11,139,653)

  

(1,532,867)

 Treasury stock 

  

(326,953)

  

(173,427)

  

(23,864)

 Total VNET Group, Inc. shareholders' equity 

  

6,014,415

  

6,008,484

  

826,795

 Noncontrolling interest 

  

499,968

  

536,121

  

73,773

 Total shareholders' equity 

  

6,514,383

  

6,544,605

  

900,568

 Total liabilities and shareholders' equity 

  

30,385,903

  

29,118,549

  

4,006,846

 

 

 

 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  

  

 Six months ended  
 

June 30, 2023

  

March 31, 2024

  

June 30, 2024

  

June 30, 2023

  

June 30, 2024
 

 RMB 

  

 RMB 

  

 RMB 

  

 US$ 

  

 RMB 

  

 RMB 

  

 US$ 

 Net revenues 

1,821,744

  

1,898,126

  

1,993,760

  

274,351

  

3,627,526

  

3,891,886

  

535,541

 Cost of revenues 

(1,478,995)

  

(1,487,405)

  

(1,568,865)

  

(215,883)

  

(2,932,397)

  

(3,056,270)

  

(420,557)

 Gross profit 

342,749

  

410,721

  

424,895

  

58,468

  

695,129

  

835,616

  

114,984
                           

 Operating income (expenses) 

                          

 Operating income 

13,895

  

3,949

  

-

  

-

  

47,274

  

3,949

  

543

 Sales and marketing expenses 

(63,068)

  

(71,743)

  

(58,225)

  

(8,012)

  

(128,844)

  

(129,968)

  

(17,884)

 Research and development expenses 

(81,126)

  

(75,389)

  

(61,998)

  

(8,531)

  

(160,876)

  

(137,387)

  

(18,905)

 General and administrative expenses 

(128,017)

  

(226,297)

  

(107,297)

  

(14,765)

  

(255,464)

  

(333,594)

  

(45,904)

 Reversal of (allowance for) doubtful debt 

8,833

  

5,175

  

(2,753)

  

(379)

  

11,282

  

2,422

  

333

 Total operating expenses 

(249,483)

  

(364,305)

  

(230,273)

  

(31,687)

  

(486,628)

  

(594,578)

  

(81,817)
                           

 Operating profit 

93,266

  

46,416

  

194,622

  

26,781

  

208,501

  

241,038

  

33,167

 Interest income 

10,038

  

12,129

  

5,449

  

750

  

15,719

  

17,578

  

2,419

 Interest expense 

(71,709)

  

(137,682)

  

(92,172)

  

(12,683)

  

(141,495)

  

(229,854)

  

(31,629)

 Other income 

14,192

  

4,814

  

30,475

  

4,193

  

15,356

  

35,289

  

4,856

 Other expenses 

(320)

  

(1,422)

  

(6,900)

  

(949)

  

(3,912)

  

(8,322)

  

(1,145)

 Changes in the fair value of financial liabilities 

154

  

3,858

  

712

  

98

  

21,452

  

4,570

  

629

 Foreign exchange loss 

(271,630)

  

(28,361)

  

(4,387)

  

(604)

  

(192,997)

  

(32,748)

  

(4,506)

 (Loss) income before income taxes
 and gain from equity method investments 

(226,009)

  

(100,248)

  

127,799

  

17,586

  

(77,376)

  

27,551

  

3,791

 Income tax expenses 

(12,545)

  

(61,384)

  

(59,149)

  

(8,139)

  

(57,431)

  

(120,533)

  

(16,586)

 Gain from equity method investments 

983

  

2,606

  

3,199

  

440

  

809

  

5,805

  

799

 Net (loss) income 

(237,571)

  

(159,026)

  

71,849

  

9,887

  

(133,998)

  

(87,177)

  

(11,996)

 Net loss (income) attributable to noncontrolling interest 

4,692

  

(27,979)

  

(8,174)

  

(1,125)

  

(16,588)

  

(36,153)

  

(4,975)

 Net (loss) income attributable to the VNET Group, Inc. 

(232,879)

  

(187,005)

  

63,675

  

8,762

  

(150,586)

  

(123,330)

  

(16,971)
                           

 (Loss) earnings per share 

                          

 Basic 

(0.26)

  

(0.12)

  

0.04

  

0.01

  

(0.17)

  

(0.08)

  

(0.01)

 Diluted 

(0.26)

  

(0.12)

  

0.04

  

0.01

  

(0.19)

  

(0.08)

  

(0.01)

 Shares used in (loss) earnings per share
computation 

                          

 Basic* 

888,705,981

  

1,568,300,360

  

1,594,662,099

  

1,594,662,099

  

888,555,145

  

1,581,481,229

  

1,581,481,229

 Diluted* 

888,705,981

  

1,568,300,360

  

1,595,517,338

  

1,595,517,338

  

905,386,636

  

1,581,481,229

  

1,581,481,229
                           

(Loss) earnings per ADS (6 ordinary shares equal to 1 ADS)

                          

Basic

(1.56)

  

(0.72)

  

0.24

  

0.06

  

(1.02)

  

(0.48)

  

(0.06)

Diluted

(1.56)

  

(0.72)

  

0.24

  

0.06

  

(1.14)

  

(0.48)

  

(0.06)
                           

 * 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  

  

 Six months ended 
 

June 30, 2023

  

March 31, 2024

  

June 30, 2024

  

June 30, 2023

  

June 30, 2024
 

 RMB 

  

 RMB 

  

 RMB 

  

 US$ 

  

 RMB 

  

 RMB 

  

 US$ 

 Gross profit 

342,749

  

410,721

  

424,895

  

58,468

  

695,129

  

835,616

  

114,985

 Plus: depreciation and amortization 

400,173

  

352,604

  

364,616

  

50,173

  

802,050

  

717,220

  

98,693

 Plus: share-based compensation expenses 

-

  

2,190

  

(2,190)

  

(301)

  

-

  

-

  

-

 Adjusted cash gross profit 

742,922

  

765,515

  

787,321

  

108,340

  

1,497,179

  

1,552,836

  

213,678

 Adjusted cash gross margin 

40.8 %

  

40.3 %

  

39.5 %

  

39.5 %

  

41.3 %

  

39.9 %

  

39.9 %
                           

 Operating expenses 

(249,483)

  

(364,305)

  

(230,273)

  

(31,687)

  

(486,628)

  

(594,578)

  

(81,817)

 Plus: share-based compensation expenses 

8,006

  

111,681

  

(12,962)

  

(1,784)

  

16,342

  

98,719

  

13,584

 Adjusted operating expenses 

(241,477)

  

(252,624)

  

(243,235)

  

(33,471)

  

(470,286)

  

(495,859)

  

(68,233)
                           

 Operating profit 

93,266

  

46,416

  

194,622

  

26,781

  

208,501

  

241,038

  

33,168

 Plus: depreciation and amortization 

433,735

  

379,551

  

394,334

  

54,262

  

866,364

  

773,885

  

106,490

 Plus: share-based compensation expenses 

8,006

  

113,871

  

(15,152)

  

(2,085)

  

16,342

  

98,719

  

13,584

 Adjusted EBITDA 

535,007

  

539,838

  

573,804

  

78,958

  

1,091,207

  

1,113,642

  

153,242

 Adjusted EBITDA margin 

29.4 %

  

28.4 %

  

28.8 %

  

28.8 %

  

30.1 %

  

28.6 %

  

28.6 %

 

 

 

 VNET GROUP, INC. 

 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS 

 (Amount in thousands of Renminbi ("RMB") and US dollars ("US$")) 
               
 

 Three months ended  
 

June 30, 2023

  

March 31, 2024

  

June 30, 2024
 

 RMB 

  

 RMB 

  

 RMB 

  

 US$ 

 CASH FLOWS FROM OPERATING ACTIVITIES 

              

 Net (loss) income 

(237,571)

  

(159,026)

  

71,849

  

9,887

 Adjustments to reconcile net (loss) income to net cash generated from operating activities: 

            

     Depreciation and amortization 

433,015

  

377,086

  

388,711

  

53,488

     Share-based compensation expenses 

8,006

  

113,871

  

(15,152)

  

(2,085)

     Others 

357,787

  

137,297

  

101,890

  

14,021

 Changes in operating assets and liabilities 

              

     Accounts and notes receivable 

8,388

  

(226,973)

  

142,469

  

19,604

     Prepaid expenses and other current assets 

70,627

  

(44,104)

  

(79,893)

  

(10,993)

     Accounts and notes payable 

33,434

  

77,668

  

(47,018)

  

(6,470)

     Accrued expenses and other payables 

(5,950)

  

56,105

  

(61,463)

  

(8,458)

     Deferred revenue 

(35,743)

  

5,626

  

(14,000)

  

(1,926)

     Advances from customers 

(114,977)

  

(11,090)

  

(63,305)

  

(8,711)

     Others 

(93,540)

  

(58,873)

  

(18,884)

  

(2,599)

 Net cash generated from operating activities 

423,476

  

267,587

  

405,204

  

55,758
               

 CASH FLOWS FROM INVESTING ACTIVITIES 

              

 Purchases of property and equipment 

(394,812)

  

(1,005,368)

  

(998,489)

  

(137,397)

 Purchases of intangible assets 

(10,178)

  

(5,965)

  

(7,594)

  

(1,045)

 (Payments for) proceeds from investments 

(655,815)

  

359,239

  

(138,224)

  

(19,020)

 Proceeds from other investing activities 

9,295

  

1,154

  

117,209

  

16,128

 Net cash used in investing activities 

(1,051,510)

  

(650,940)

  

(1,027,098)

  

(141,334)
               

 CASH FLOWS FROM FINANCING ACTIVITIES 

              

 Proceeds from bank borrowings 

169,204

  

1,156,279

  

690,848

  

95,064

 Repayments of bank borrowings 

(55,865)

  

(51,441)

  

(533,324)

  

(73,388)

 Repurchase of 2025 Convertible Notes 

(380,333)

  

-

  

-

  

-

 Repurchase of 2026 Convertible Notes 

-

  

(4,262,340)

  

-

  

-

 Payments for finance leases  

(67,172)

  

(39,602)

  

(9,586)

  

(1,319)

 Proceeds from other financing activities  

285,013

  

591,446

  

516,493

  

71,072

 Net cash (used in) generated from financing activities 

(49,153)

  

(2,605,658)

  

664,431

  

91,429
               

 Effect of foreign exchange rate changes on cash, cash
 equivalents and restricted cash  

51,314

  

(20,050)

  

3,370

  

464

 Net (decrease) increase in cash, cash equivalents and
 restricted cash 

(625,873)

  

(3,009,061)

  

45,907

  

6,317

 Cash, cash equivalents and restricted cash at

 beginning of period 

3,242,842

  

5,098,987

  

2,089,926

  

287,583

 Cash, cash equivalents and restricted cash at end of period 

2,616,969

  

2,089,926

  

2,135,833

  

293,900

 

Cision View original content:https://www.prnewswire.com/news-releases/vnet-reports-unaudited-second-quarter-2024-financial-results-302231598.html

SOURCE VNET Group, Inc.