VNET Reports Unaudited Fourth Quarter and Full Year 2024 Financial Results

BEIJING, March 12, 2025 /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 fourth quarter and full year ended December 31, 2024.

"We closed 2024 with a strong fourth quarter, highlighted by our wholesale IDC business's remarkable performance as we continued to capitalize on AI-driven demand," said Josh Sheng Chen, Founder, Executive Chairperson and interim Chief Executive Officer of VNET. "Our high-performance data centers, outstanding delivery capabilities, and premium services continued to attract quality orders. During the fourth quarter, we secured 32MW order from an internet customer in the Yangtze River Delta. One of our retail datacenters located in the Greater Bay Area won a 1.5MW order from a new customer in intelligent driving industry. Meanwhile, in Ulanqab, we signed a 100MW framework agreement with another internet customer, with 28MW to be delivered in the fourth quarter of 2025. In addition, recently we secured a 55MW order from a leading cloud computing customer in this region. Furthermore, we recently won a 64MW order for capacity operated with our strategic partner, Changzhou Gaoxin Group, allowing us to serve more customers."

"Moving into 2025, we remain confident in China market's growth potential. Recent AI breakthroughs are propelling AI development domestically, spurring inference demand, and reducing costs. This is boosting industrywide enthusiasm for investing in AI, unlocking greater demand for high-performance data centers and reliable IDC services. As a leading player with a clear expansion path for such advanced capacity, we are well-positioned to capture rising market opportunities, driving our sustainable growth."

Qiyu Wang, Chief Financial Officer of VNET, commented, "Our full-year 2024 results exceeded our expectations, capped by a robust fourth quarter. Revenues from our wholesale business remained the key growth driver, reaching a record high of RMB665.2 million with an accelerated year-over-year growth of 125.4% during the fourth quarter. Our adjusted EBITDA also increased by 63.8% year over year to RMB721.3 million during the quarter. Looking ahead, we will continue to execute our effective dual-core strategy while investing in future growth to propel our high-quality development and create long-term shareholder value."

Fourth Quarter 2024 Financial Highlights

• Total net revenues increased by 18.3% to RMB2.25 billion (US$307.8 million) from RMB1.90 billion in the same period of 2023.
  • Net revenues from the IDC business^[1] increased by 28.3% to RMB1.63 billion (US$223.3 million) from RMB1.27 billion in the same period of 2023.
    • Net revenues from the wholesale IDC business ("wholesale revenues") increased by 125.4% to RMB665.2 million (US$91.1million) from RMB295.1 million in the same period of 2023.
    • Net revenues from the retail IDC business ("retail revenues") decreased slightly by 1.1% to RMB964.8 million (US$132.2 million) from RMB975.2 million in the same period of 2023.
  • Net revenues from the non-IDC business^[2] decreased by 1.9% to RMB616.5 million (US$84.5 million) from RMB628.2 million in the same period of 2023.
• Adjusted cash gross profit (non-GAAP) increased by 24.6% to RMB923.9 million (US$126.6 million) from RMB741.7 million in the same period of 2023. Adjusted cash gross margin (non-GAAP) was 41.1%, compared with 39.1% in the same period of 2023.
• Adjusted EBITDA (non-GAAP) increased by 63.8% to RMB721.3 million (US$98.8 million), including RMB87.7 million (US$12.0 million) disposal gain of E-JS02 data center. Adjusted EBITDA margin (non-GAAP) was 32.1%, compared with 23.2% in the same period of 2023.
• Net income was RMB3.5 million compared with a net loss of RMB2.42 billion in the same period of 2023.

Full Year 2024 Financial Highlights

• Total net revenues increased by 11.4% to RMB8.26 billion (US$1.13 billion) from RMB7.41billion in the full year of 2023.
  • Net revenues from the IDC business increased by 16.1% to RMB5.78 billion (US$791.8 million) from RMB4.98 billion in the full year of 2023.
    • Net revenues from the wholesale IDC business ("wholesale revenues") increased by 90.4% to RMB1.95 billion (US$267.3 million) from RMB1.02 billion in the full year of 2023.
    • Net revenues from the retail IDC business ("retail revenues") decreased slightly by 3.1% to RMB3.83 billion (US$524.5 million) from RMB3.95 billion in the full year of 2023.
  • Net revenues from the non-IDC business increased by 1.7% to RMB2.48 billion (US$339.7 million) from RMB2.44 billion in the full year of 2023.
• Adjusted cash gross profit (non-GAAP) increased by 12.1% to RMB3.34 billion (US$457.2 million) from RMB2.98 billion in the full year of 2023. Adjusted cash gross margin (non-GAAP) was 40.4%, compared with 40.2% in the full year of 2023.
• Adjusted EBITDA (non-GAAP) increased by 19.1% to RMB2.43 billion (US$332.9 million), including RMB87.7 million (US$12.0 million) disposal gain of E-JS02 data center.
• Net income increased by RMB2.85 billion to RMB248.4 million (US$34.0 million) in the full year of 2024, compared with a net loss of RMB2.60 billion in the full year of 2023.

Fourth Quarter 2024 Operational Highlights

Wholesale IDC Business

• Capacity in service was 486MW as of December 31, 2024, compared with 358MW as of September 30, 2024, and 332MW as of December 31, 2023. Capacity under construction was 406MW as of December 31, 2024.
• Capacity utilized by customers reached 353MW as of December 31, 2024, compared with 279MW as of September 30, 2024, and 219MW as of December 31, 2023. The sequential increase during the fourth quarter of 2024 was 73MW, which was mainly contributed by the E-JS Campus 02 data center.
• Utilization rate^[3] of wholesale capacity was 72.6% as of December 31, 2024, compared with 78.0% as of September 30, 2024, and 65.8% as of December 31, 2023.
  • Utilization rate of mature wholesale capacity^[4] was 95.6% as of December 31, 2024, compared with 95.6% as of September 30, 2024, and 95.0% as of December 31, 2023.
  • Utilization rate of ramp-up wholesale capacity^[5] was 34.0% as of December 31, 2024, compared with 46.4% as of September 30, 2024, and 19.7% as of December 31, 2023.
• Total capacity committed^[6] was 479MW as of December 31, 2024, compared with 352MW as of September 30, 2024, and 326MW as of December 31, 2023.
• Commitment rate^[7] for capacity in service was 98.7% as of December 31, 2024, compared with 98.2% as of September 30, 2024, and 98.1% as of December 31, 2023.
• Total capacity pre-committed^[8] was 337MW and pre-commitment rate^[9] for capacity under construction was 82.9% as of December 31, 2024.

Retail IDC Business^[10]

• Capacity in service was 52,107 cabinets as of December 31, 2024, compared with 52,250 cabinets as of September 30, 2024, and 52,233 cabinets as of December 31, 2023.
• Capacity utilized by customers reached 33,068 cabinets as of December 31, 2024, compared with 32,950 cabinets as of September 30, 2024, and 33,450 cabinets as of December 31, 2023.
• Utilization rate of retail capacity was 63.5% as of December 31, 2024, compared with 63.1% as of September 30, 2024, and 64.0% as of December 31, 2023.
  • Utilization rate of mature retail capacity^[11] was 68.9% as of December 31, 2024, compared with 69.5% as of September 30, 2024, and 73.2% as of December 31, 2023.
  • Utilization rate of ramp-up retail capacity^[12] was 21.3% as of December 31, 2024, compared with 16.8% as of September 30, 2024, and 10.8% as of December 31, 2023.
• Monthly recurring revenue (MRR) per retail cabinet was RMB8,794 in the fourth quarter of 2024, compared with RMB8,788 in the third quarter of 2024 and RMB8,759 in the fourth quarter of 2023.

Fourth Quarter 2024 Financial Results

TOTAL NET REVENUES: Total net revenues in the fourth quarter of 2024 were RMB2.25 billion (US$307.8 million), representing an increase of 18.3% from RMB1.90 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 28.3% to RMB1.63 billion (US$223.3 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 125.4% to RMB665.2 million (US$91.1 million) from RMB295.1 million in the same period of 2023.
• Retail revenues decreased to RMB964.8 million (US$132.3 million) from RMB975.2 million in the same period of 2023.

Net revenues from non-IDC business decreased by 1.9% to RMB616.5 million (US$84.5 million) from RMB628.2 million in the same period of 2023.

GROSS PROFIT: Gross profit in the fourth quarter of 2024 was RMB504.9 million (US$69.2 million), representing an increase of 73.6% from RMB290.9 million in the same period of 2023. Gross margin in the fourth quarter of 2024 was 22.5%, compared with 15.3% 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 RMB923.9 million (US$126.6 million) in the fourth quarter of 2024, compared with RMB741.7 million in the same period of 2023. Adjusted cash gross margin (non-GAAP) in the fourth quarter of 2024 was 41.1%, compared with 39.1% in the same period of 2023.

OPERATING EXPENSES: Total operating expenses in the fourth quarter of 2024 were RMB267.9 million (US$36.7 million), compared with RMB2.50 billion in the same period of 2023.

Sales and marketing expenses were RMB73.1 million (US$10.0 million) in the fourth quarter of 2024, compared with RMB73.3 million in the same period of 2023.

Research and development expenses were RMB56.1 million (US$7.7 million) in the fourth quarter of 2024, compared with RMB80.7 million in the same period of 2023.

General and administrative expenses were RMB193.0 million (US$26.4 million) in the fourth quarter of 2024, compared with RMB148.5 million in the same period of 2023.

ADJUSTED OPERATING EXPENSES (non-GAAP), which exclude share-based compensation expenses, were RMB229.6 million (US$31.5 million) in the fourth quarter of 2024, compared with RMB334.2 million in the same period of 2023. As a percentage of total net revenues, adjusted operating expenses (non-GAAP) in the fourth quarter of 2024 were 10.2%, compared with 17.6% in the same period of 2023.

ADJUSTED EBITDA (non-GAAP): Adjusted EBITDA in the fourth quarter of 2024 was RMB721.3 million (US$98.8 million), including RMB87.7 million (US$12.0 million) disposal gain of E-JS02 data center, representing an increase of 63.8% from RMB440.2 million in the same period of 2023. Adjusted EBITDA margin (non-GAAP) in the fourth quarter of 2024 was 32.1%, compared with 23.2% in the same period of 2023.

NET LOSS ATTRIBUTABLE TO VNET GROUP, INC.: Net loss attributable to VNET Group, Inc. in the fourth quarter of 2024 was RMB11.1 million (US$1.5 million), compared with a net loss attributable to VNET Group, Inc. of RMB2.44 billion in the same period of 2023. The year-over-year increase was mainly due to the impairment of long-lived assets and goodwill in the same period of 2023.

LOSS PER SHARE: Basic and diluted loss per share in the fourth quarter of 2024 were both RMB0.01(US$0.001), which represents the equivalent to RMB0.06(US$0.01) per American depositary share ("ADS"), respectively. Each ADS represents six Class A ordinary shares. Diluted loss per share is calculated using adjusted net loss attributable to ordinary shareholders divided by the weighted average number of diluted shares outstanding.

LIQUIDITY: As of December 31, 2024, the aggregate amount of the Company's cash and cash equivalents and restricted cash was RMB2.08 billion (US$285.1 million).

Total short-term debt consisting of short-term bank borrowings and the current portion of long-term borrowings was RMB2.01 billion (US$275.3 million). Total long-term debt was RMB9.67 billion (US$1.32 billion), comprised of long-term borrowings of RMB7.77 billion (US$1.06 billion) and convertible promissory notes of RMB1.90 billion (US$260.0 million).

Net cash generated from operating activities in the fourth quarter of 2024 was RMB572.2 million (US$78.4 million), compared with RMB730.7 million in the same period of 2023. During the fourth quarter of 2024, the Company obtained new debt financing, refinancing facilities and other financings of RMB1.42 billion (US$194.6 million).

Full Year 2024 Financial Results

TOTAL NET REVENUES: Total net revenues in the full year of 2024 were RMB8.26 billion (US$1.13 billion), representing an increase of 11.4% from RMB7.41 billion in the full year of 2023.

Net revenues from IDC business increased by 16.1% to RMB5.78 billion (US$791.8 million) from RMB4.98 billion in the full year of 2023.

• Wholesale revenues increased by 90.4% to RMB1.95 billion (US$267.3 million) from RMB1.02 billion in the full year of 2023.
• Retail revenues decreased to RMB3.83 million (US$524.5 million) from RMB3.95 billion in the full year of 2023.

Net revenues from non-IDC business increased by 1.7% to RMB2.48 billion (US$339.7 million) from RMB2.44 billion in full year of 2023.

GROSS PROFIT: Gross profit in the full year of 2024 was RMB1.83 billion (US$251.0 million), representing an increase of 41.8% from RMB1.29 billion in the full year of 2023. Gross margin in the full year of 2024 was 22.2%, compared with 17.4% in the full year 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 RMB3.34 billion (US$457.2 million) in the full year of 2024, compared with RMB2.98 billion in the full year of 2023. Adjusted cash gross margin (non-GAAP) in the full year of 2024 was 40.4%, compared with 40.2% in the full year of 2023.

OPERATING EXPENSES: Total operating expenses in the full year of 2024 were RMB1.16 billion (US$159.3 million), compared with RMB3.26 billion in the full year of 2023.

Sales and marketing expenses were RMB263.8 million (US$36.1 million) in the full year of 2024, compared with RMB266.2 million in the full year of 2023.

Research and development expenses were RMB246.6 million (US$33.8 million) in the full year of 2024, compared with RMB322.2 million in the full year of 2023.

General and administrative expenses were RMB659.0 million (US$90.3 million) in the full year of 2024, compared with RMB541.9 million in the full year of 2023.

ADJUSTED OPERATING EXPENSES (non-GAAP), were RMB1.02 billion (US$139.6 million) in the full year of 2024, compared with RMB1.07 billion in the full year of 2023. As a percentage of total net revenues, adjusted operating expenses (non-GAAP) in the full year of 2024 were 12.3%, compared with 14.4% in the full year of 2023.

ADJUSTED EBITDA (non-GAAP): Adjusted EBITDA in the full year of 2024 was RMB2.43 billion (US$332.9 million), including RMB87.7 million (US$12.0 million) disposal gain of E-JS02 data center, representing an increase of 19.1% from RMB2.04 billion in the full year of 2023.

NET INCOME/LOSS ATTRIBUTABLE TO VNET GROUP, INC.: Net income attributable to VNET Group, Inc. in the full year of 2024 was RMB183.2 million (US$25.1 million), compared with a net loss attributable to VNET Group, Inc. of RMB2.64 billion in the full year of 2023. Net loss attributable to VNET Group, Inc. in the full year of 2023 included impairment of long-lived assets of RMB506.7 million and impairment of goodwill of RMB1.36 billion.

EARNINGS PER SHARE: Basic and diluted earnings per share in the full year of 2024 were RMB0.11(US$0.02) and RMB0.02(US$0.003), respectively, which represents the equivalent to RMB0.66(US$0.12) and RMB0.12(US$0.02) 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: Net cash generated from operating activities in the full year of 2024 was RMB2.01 billion (US$274.7 million), compared with RMB2.06 billion in the full year of 2023. During the full year of 2024, the Company obtained new debt financing, refinancing facilities and other financings of RMB5.68 billion (US$777.7 million).

Business Outlook

The Company expects total net revenues for 2025 to be between RMB9,100 million to RMB9,300 million, representing year-over-year growth of 10% to 13%, and adjusted EBITDA (non-GAAP) to be in the range of RMB2,700 million to RMB2,760 million, representing year-over-year growth of 11% to 14%. If the RMB87.7 million (US$12.0 million) disposal gain of E-JS02 data center were excluded from the adjusted EBITDA calculation for 2024, the year-over-year growth would be 15% to 18%.

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 AM U.S. Eastern Time on Wednesday, March 12, 2025, or 8:00 PM Beijing Time on Wednesday, March 12, 2025.

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/10045747-6dg8fh.html

Chinese line (listen-only mode):
https://s1.c-conf.com/diamondpass/10045749-w8ghr5.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 March 19, 2025, by dialing the following numbers:

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 RMB7.2993 to US$1.00, the noon buying rate in effect on December 31, 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 7,000 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

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SOURCE VNET Group, Inc.