VNET Reports Unaudited First Quarter 2024 Financial Results

BEIJING, May 29, 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 first quarter ended March 31, 2024.

"2024 is off to a promising start thanks to continued strong execution of our dual-core, high-quality development strategy during the first quarter," said Josh Sheng Chen, Founder, Co-chairperson and interim Chief Executive Officer of VNET. "Our IDC business gained momentum as we won bids from new and existing customers and captured increasing AI-driven demand from a wide variety of industries. Notably, we secured a new order from one of our esteemed existing clients for approximately 15MW, scheduled to be completed within 2024. For our wholesale IDC business, capacity in service reached 332MW as of the end of the first quarter with the utilization rate increasing to 71.0%. Looking ahead, we will continue to leverage our reliable IDC services, high power density deployment capabilities, and loyal and expanding customer base to drive quality growth while advancing the development of China's digital economy."

Qiyu Wang, Chief Financial Officer of VNET, commented, "We kicked off 2024 with solid first quarter results. Our total revenues for the first quarter increased by 5.1% year-over-year to RMB1.9 billion, driven by the 59.1% year-over-year increase in wholesale revenues. As we move through 2024, our focus will remain on high-quality growth and seizing market opportunities arising from the AI boom, while delivering sustainable, long-term value to our stakeholders."

First Quarter 2024 Financial Highlights

    --  Net revenues increased by 5.1% to RMB1.90 billion (US$262.9 million)
        from RMB1.81 billion in the same period of 2023.
        --  Net revenues from the IDC business([1]) increased by 5.2% to RMB1.28
            billion (US$177.9 million) from RMB1.22 billion in the same period
            of 2023.
            --  Net revenues from the wholesale IDC business ("wholesale
                revenues") increased by 59.1% to RMB361.0 million (US$50.0
                million) from RMB226.9 million in the same period of 2023.
            --  Net revenues from the retail IDC business ("retail revenues")
                decreased by 7.1% to RMB923.7 million (US$127.9 million) from
                RMB994.8 million in the same period of 2023.
        --  Net revenues from the non-IDC business([2]) increased by 5.0% to
            RMB613.5 million (US$85.0 million) from RMB584.1 million in the same
            period of 2023.
    --  Adjusted cash gross profit (non-GAAP) increased by 1.5% to RMB765.5
        million (US$106.0 million) from RMB754.3 million in the same period of
        2023. Adjusted cash gross margin (non-GAAP) was 40.3%, compared with
        41.8% in the same period of 2023.
    --  Adjusted EBITDA (non-GAAP) decreased by 2.9% to RMB539.8 million
        (US$74.8 million) from RMB556.2 million in the same period of 2023.
        Adjusted EBITDA margin (non-GAAP) was 28.4%, compared with 30.8% in the
        same period of 2023.

First Quarter 2024 Operational Highlights

Wholesale IDC Business([3] )

    --  Capacity in service was 332MW as of March 31, 2024, compared with 332MW
        as of December 31, 2023, and 224MW as of March 31, 2023. Capacity under
        construction was 139MW as of March 31, 2024.
    --  Capacity utilized by customers reached 236MW as of March 31, 2024,
        compared with 219MW as of December 31, 2023, and 116MW as of March 31,
        2023. The sequential increase during the first quarter of 2024 was 17MW,
        which was mainly contributed by N-OR06, N-HB03 and E-JS03 data centers.
    --  Utilization rate([4]) of wholesale capacity was 71.0% as of March 31,
        2024, compared with 65.8% as of December 31, 2023, and 51.7% as of March
        31, 2023.
        --  Utilization rate of mature wholesale capacity([5]) was 94.6% as of
            March 31, 2024, compared with 95.0% as of December 31, 2023, and
            96.0% as of March 31, 2023.
        --  Utilization rate of ramp-up wholesale capacity([6]) was 33.6% as of
            March 31, 2024, compared with 19.7% as of December 31, 2023, and
            25.8% as of March 31, 2023.
    --  Total capacity committed([7]) was 326MW as of March 31, 2024, compared
        with 326MW as of December 31, 2023, and 180MW as of March 31, 2023.
    --  Commitment rate([8]) for capacity in service was 98.1% as of March 31,
        2024, compared with 98.1% as of December 31, 2023 and 80.0% as of March
        31, 2023.
    --  Total capacity pre-committed([9]) was 104MW and pre-commitment
        rate([10]) for capacity under construction was 74.5% as of March 31,
        2024.

Retail IDC Business([11])

    --  Capacity in service was 52,068 cabinets as of March 31, 2024, compared
        with 52,233 cabinets as of December 31, 2023, and 54,105 cabinets as of
        March 31, 2023.
    --  Capacity utilized by customers reached 33,312 cabinets as of March 31,
        2024, compared with 33,450 cabinets as of December 31, 2023, and 33,671
        cabinets as of March 31, 2023.
    --  Utilization rate of retail capacity was 64.0% as of March 31, 2024,
        compared with 64.0% as of December 31, 2023, and 62.2% as of March 31,
        2023.
        --  Utilization rate of mature retail capacity([12]) was 72.8% as of
            March 31, 2024, compared with 73.2% as of December 31, 2023, and
            74.1% as of March 31, 2023.
        --  Utilization rate of ramp-up retail capacity([13]) was 13.0% as of
            March 31, 2024, compared with 10.8% as of December 31, 2023, and
            14.4% as of March 31, 2023.
    --  Monthly recurring revenue (MRR) per retail cabinet was RMB8,742 in the
        first quarter of 2024, compared with RMB8,759 in the fourth quarter of
        2023 and RMB8,874 in the first 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 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 such projects
       had been delivered to the client based on the terms of MOU.


     [4] Utilization rate is calculated by dividing utilized capacity 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 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 March 31, 2023, December 31, 2023, and March 31, 2024, 4,406, 4,426, and
       4,426 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.

First Quarter 2024 Financial Results

NET REVENUES: Net revenues in the first quarter of 2024 were RMB1.90 billion (US$262.9 million), representing an increase of 5.1% from RMB1.81 billion in the same period of 2023. The year-over-year increase was mainly driven by the continued growth of our core businesses.

Net revenues from IDC business increased by 5.2% to RMB1.28 billion (US$177.9 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 59.1% to RMB361.0 million (US$50.0
        million) from RMB226.9 million in the same period of 2023.
    --  Retail revenues decreased to RMB923.7 million (US$127.9 million) from
        RMB994.8 million in the same period of 2023.

Net revenues from non-IDC business increased by 5.0% to RMB613.5 million (US$85.0 million) from RMB584.1 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 first quarter of 2024 was RMB410.7 million (US$56.9 million), representing an increase of 16.6% from RMB352.4 million in the same period of 2023. Gross margin in the first quarter of 2024 was 21.6%, compared with 19.5% 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 RMB765.5 million (US$106.0 million) in the first quarter of 2024, compared with RMB754.3 million in the same period of 2023. Adjusted cash gross margin (non-GAAP) in the first quarter of 2024 was 40.3%, compared with 41.8% in the same period of 2023, mainly due to higher utility costs.

OPERATING EXPENSES: Total operating expenses in the first quarter of 2024 were RMB364.3 million (US$50.5 million), compared with RMB237.1 million in the same period of 2023. The increase in operating expenses was primarily due to an increase in share-based compensation resulted from the newly granted RSUs, an increase in professional fees, and partially offset by a decrease in staff cost.

Sales and marketing expenses were RMB71.7 million (US$9.9 million) in the first quarter of 2024, compared with RMB65.8 million in the same period of 2023.

Research and development expenses were RMB75.4 million (US$10.4 million) in the first quarter of 2024, compared with RMB79.8 million in the same period of 2023.

General and administrative expenses were RMB226.3 million (US$31.3 million) in the first quarter of 2024, compared with RMB127.4 million in the same period of 2023.

ADJUSTED OPERATING EXPENSES (non-GAAP), which exclude depreciation, amortization, and share-based compensation expenses, were RMB252.6 million (US$35.0 million) in the first quarter of 2024, compared with RMB228.8 million in the same period of 2023. As a percentage of net revenues, adjusted operating expenses (non-GAAP) in the first quarter of 2024 were 13.3%, compared with 12.7% in the same period of 2023.

ADJUSTED EBITDA (non-GAAP): Adjusted EBITDA in the first quarter of 2024 was RMB539.8 million (US$74.8 million), representing a decrease of 2.9% from RMB556.2 million in the same period of 2023. Adjusted EBITDA margin (non-GAAP) in the first quarter of 2024 was 28.4%, compared with 30.8% in the same period of 2023.

NET INCOME/LOSS ATTRIBUTABLE TO VNET GROUP, INC.: Net loss attributable to VNET Group, Inc. in the first quarter of 2024 was RMB187.0 million (US$25.9 million), compared with a net income attributable to VNET Group, Inc. of RMB82.3 million in the same period of 2023. The year-over-year decrease was mainly due to a one-off recognition of the 2026 Convertible Notes transaction costs due to early redemption, as well as an increase in share-based compensation.

LOSS PER SHARE: Basic and diluted loss per share in the first quarter of 2024 were both RMB2.65 (US$0.12), equivalent to both RMB15.88 (US$0.72) per American depositary share ("ADS"). 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 March 31, 2024, the aggregate amount of the Company's cash and cash equivalents as well as restricted cash was RMB2.09 billion (US$289.5 million).

Total short-term debt consisting of short-term bank borrowings and the current portion of long-term borrowings was RMB1.32 billion (US$183.3 million). Total long-term debt was RMB8.04 billion (US$1.11 billion), comprised of long-term borrowings of RMB6.27 billion (US$868.0 million) and convertible promissory notes of RMB1.77 billion (US$245.6 million).

Net cash generated from operating activities in the first quarter of 2024 was RMB267.6 million (US$37.1 million), compared with RMB455.0 million in the same period of 2023. During the first quarter of 2024, the Company obtained new debt financing, refinancing facilities and other financings of RMB1.86 billion (US$258.0 million). On February 1, 2024, the Company completed the repurchase of the Convertible Senior Notes due 2026, in the aggregate principal amount of US$600 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 Wednesday, May 29, 2024, or 9:00 AM Beijing Time on Thursday, May 30, 2024.

For participants who wish to join the call, please access the link provided below to complete the online registration process and dial in 5 minutes prior to the scheduled call start time.

Event Title: VNET First Quarter 2024 Earnings Conference Call
Registration Link: https://register.vevent.com/register/BI823805f3c9104a07a8ce0fba728fff87

Upon registration, each participant will receive a set of dial-in numbers by location, a personal PIN and an email with further detailed instructions, which will be used to join the conference call.

A simultaneous audio webcast and replay of the conference call will be accessible on the Company's investor relations website at http://ir.vnet.com.

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 RMB7.2203 to US$1.00, the noon buying rate in effect on March 29, 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                                                                                       March 31, 2024


                                                                                                                             RMB                   RMB                US$



     
                 Assets



     
                 Current assets:



      Cash and cash equivalents                                                                                        2,243,537             1,782,732             246,906



      Restricted cash                                                                                                  2,854,568               306,312              42,424



      Accounts and notes receivable, net                                                                               1,715,975             1,948,129             269,813



      Short-term Investments                                                                                             356,820



      Prepaid expenses and other current assets                                                                        2,375,341             2,481,588             343,695



      Amounts due from related parties                                                                                   277,237               317,717              44,003



     
                 Total current assets                                                                                9,823,478             6,836,478             946,841





     
                 Non-current assets:



      Property and equipment, net                                                                                     13,024,393            13,778,444           1,908,292



      Intangible assets, net                                                                                           1,383,406             1,361,055             188,504



      Land use rights, net                                                                                               602,503               597,906              82,809



      Operating lease right-of-use assets, net                                                                         4,012,329             4,042,957             559,943



      Restricted cash                                                                                                        882                   882                 122



      Deferred tax assets, net                                                                                           247,644               254,358              35,228



      Long-term investments, net                                                                                         757,949               760,552             105,335



      Other non-current assets                                                                                           533,319               516,582              71,546



     
                 Total non-current assets                                                                           20,562,425            21,312,736           2,951,779



     
                 Total assets                                                                                       30,385,903            28,149,214           3,898,620





     
                 Liabilities and Shareholders' Equity



     
                 Current liabilities:



      Short-term bank borrowings                                                                                          30,000               477,749              66,167



      Accounts and notes payable                                                                                         696,177               773,845             107,176



      Accrued expenses and other payables                                                                              2,783,102             2,928,158             405,545



      Advances from customers                                                                                          1,605,247             1,594,157             220,788



      Deferred revenue                                                                                                    95,477               101,103              14,003



      Income taxes payable                                                                                                35,197                54,071               7,489



      Amounts due to related parties                                                                                     356,080               381,524              52,840



      Current portion of long-term borrowings                                                                            723,325               845,831             117,146



      Current portion of finance lease liabilities                                                                       115,806                95,668              13,250



      Current portion of deferred government grants                                                                        8,062                11,328               1,569



      Current portion of operating lease liabilities                                                                     780,164               821,000             113,707



      Convertible promissory notes                                                                                     4,208,495



     
                 Total current liabilities                                                                          11,437,132             8,084,434           1,119,680





     
                 Non-current liabilities:



      Long-term borrowings                                                                                             5,113,521             6,266,916             867,958



      Convertible promissory notes                                                                                     1,769,946             1,773,055             245,565



      Non-current portion of finance lease liabilities                                                                 1,159,525             1,147,268             158,895



      Unrecognized tax benefits                                                                                           98,457                98,457              13,636



      Deferred tax liabilities                                                                                           688,362               693,898              96,104



      Deferred government grants                                                                                         145,112               143,862              19,925



      Non-current portion of operating lease liabilities                                                               3,270,759             3,292,955             456,069



      Derivative liability                                                                                               188,706               185,180              25,647



     
                 Total non-current liabilities                                                                      12,434,388            13,601,591           1,883,799





     
                 Shareholders' equity



      Ordinary shares                                                                                                        107                   109                  15



      Additional paid-in capital                                                                                      17,291,312            17,403,894           2,410,411



      Accumulated other comprehensive loss                                                                              (14,343)             (20,623)            (2,856)



      Statutory reserves                                                                                                  80,615                80,615              11,165



      Accumulated deficit                                                                                           (11,016,323)         (11,203,328)        (1,551,643)



      Treasury stock                                                                                                   (326,953)            (325,425)           (45,071)



     
                 Total VNET Group, Inc. shareholders' equity                                                         6,014,415             5,935,242             822,021



      Noncontrolling interest                                                                                            499,968               527,947              73,120



     
                 Total shareholders' equity                                                                          6,514,383             6,463,189             895,141



     
                 Total liabilities and shareholders' equity                                                         30,385,903            28,149,214           3,898,620


                                                                                        
              
                 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


                                                                                                                                     March 31, 2023                               December 31, 2023                       March 31, 2024


                                                                                                                                           RMB                                            RMB                       RMB                         US$



      Net revenues                                                                                                                       1,805,782                                        1,898,480            1,898,126                      262,887



      Cost of revenues                                                                                                                 (1,453,402)                                     (1,607,602)         (1,487,405)                   (206,003)



     
                 Gross profit                                                                                                            352,380                                          290,878              410,721                       56,884





     
                 Operating income (expenses)



      Operating income                                                                                                                      33,379                                           32,293                3,949                          547



      Sales and marketing expenses                                                                                                        (65,776)                                        (73,286)            (71,743)                     (9,936)



      Research and development expenses                                                                                                   (79,750)                                        (80,671)            (75,389)                    (10,441)



      General and administrative expenses                                                                                                (127,447)                                       (148,455)           (226,297)                    (31,342)



      Reversal of (allowance for) doubtful debt                                                                                              2,449                                        (361,471)               5,175                          717



      Impairment of long-lived assets                                                                                                            -                                       (506,686)



      Impairment of goodwill                                                                                                                     -                                     (1,364,191)



     
                 Total operating expenses                                                                                              (237,145)                                     (2,502,467)           (364,305)                    (50,455)





     
                 Operating profit (loss)                                                                                                 115,235                                      (2,211,589)              46,416                        6,429



      Interest income                                                                                                                        5,681                                           13,196               12,129                        1,680



      Interest expense                                                                                                                    (69,786)                                        (78,877)           (137,682)                    (19,069)



      Impairment of long-term investments                                                                                                        -                                            (51)



      Other income                                                                                                                           1,164                                            4,452                4,814                          667



      Other expenses                                                                                                                       (3,592)                                         (1,199)             (1,422)                       (197)



      Changes in the fair value of financial liabilities                                                                                    21,298                                        (187,648)               3,858                          534



      Foreign exchange gain (loss)                                                                                                          78,633                                           89,426             (28,361)                     (3,928)



     
                 Income (loss) before income taxes and (loss) gain                                                                       148,633                                      (2,372,290)           (100,248)                    (13,884)


     
                   from equity method investments



      Income tax expenses                                                                                                                 (44,886)                                        (50,626)            (61,384)                     (8,502)



      (Loss) gain from equity method investments                                                                                             (174)                                           (372)               2,606                          361



     
                 Net income (loss)                                                                                                       103,573                                      (2,423,288)           (159,026)                    (22,025)



      Net profit attributable to noncontrolling interest                                                                                  (21,280)                                        (19,500)            (27,979)                     (3,875)



     
                 Net income (loss) attributable to VNET Group, Inc.                                                                       82,293                                      (2,442,788)           (187,005)                    (25,900)





      Earnings (loss) per share



      Basic                                                                                                                                   0.09                                           (2.65)              (0.12)                      (0.02)



      Diluted                                                                                                                                 0.07                                           (2.65)              (0.12)                      (0.02)



      Shares used in earnings (loss) per share computation



      Basic*                                                                                                                           888,383,240                                      923,034,050        1,568,300,360                1,568,300,360



      Diluted*                                                                                                                       1,056,829,494                                      923,034,050        1,568,300,360                1,568,300,360





     Earnings (loss) per ADS (6 ordinary shares equal to 1 ADS)



     Basic                                                                                                                                    0.54                                          (15.88)              (0.72)                      (0.12)



     Diluted                                                                                                                                  0.42                                          (15.88)              (0.72)                      (0.12)





      * Shares used in earnings (loss) 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


                                                                                                       March 31,
                                                                                                          2023                         December 31, 2023                       March 31, 2024


                                                                                                           RMB                                RMB                        RMB                       US$



      Gross profit                                                                                      352,380                                 290,878               410,721                     56,884



      Plus: depreciation and amortization                                                               401,877                                 450,859               352,604                     48,835



      Plus: share-based compensation expenses                                                                 -                                                    2,190.00                        303



     
                 Adjusted cash gross profit                                                           754,257                                 741,737               765,515                    106,022



     
                
                   Adjusted cash gross margin                                             41.8 %                                 39.1 %               40.3 %                    40.3 %





      Operating expenses                                                                              (237,145)                            (2,502,467)            (364,305)                  (50,456)



      Plus: share-based compensation expenses                                                             8,336                                   9,479               111,681                     15,468



      Plus: allowance of loan receivables                                                                     -                                287,900



      Plus: impairment of long-lived assets                                                                   -                                506,686



      Plus: impairment of goodwill                                                                            -                              1,364,191



     
                 Adjusted operating expenses                                                        (228,809)                              (334,211)            (252,624)                  (34,988)





      Operating (loss) profit                                                                           115,235                             (2,211,589)               46,416                      6,429



      Plus: depreciation and amortization                                                               432,629                                 483,579               379,551                     52,567



      Plus: share-based compensation expenses                                                             8,336                                   9,479               113,871                     15,771



      Plus: allowance of loan receivables                                                                     -                                287,900



      Plus: impairment of long-lived assets                                                                   -                                506,686



      Plus: impairment of goodwill                                                                            -                              1,364,191



     
                 Adjusted EBITDA                                                                      556,200                                 440,246               539,838                     74,767



     
                
                   Adjusted EBITDA margin                                                 30.8 %                                 23.2 %               28.4 %                    28.4 %


                                                                                                      
              
                 VNET GROUP, INC.


                                                                                       
              
                 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS


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




                                                                                                                                                                          
     
             Three months ended


                                                                                                                                                                March 31,
                                                                                                                                                                   2023       December 31, 2023                        March 31, 2024


                                                                                                                                                                    RMB              RMB                         RMB                        US$



           
                 CASH FLOWS FROM OPERATING ACTIVITIES



            Net income (loss)                                                                                                                                    103,573           (2,423,288)             (159,026)                   (22,025)



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



                Depreciation and amortization                                                                                                                    431,654               481,067                377,086                      52,226



                Share-based compensation expenses                                                                                                                  8,336                 9,479                113,871                      15,771



                Others                                                                                                                                            62,631             2,333,785                137,297                      19,015



           
                 Changes in operating assets and liabilities



                Accounts and notes receivable                                                                                                                  (254,293)              311,035              (226,973)                   (31,435)



                Prepaid expenses and other current assets                                                                                                      (378,933)              (9,076)              (44,104)                    (6,108)



                Accounts and notes payable                                                                                                                       (3,377)             (76,250)                77,668                      10,757



                Accrued expenses and other payables                                                                                                              192,063                68,523                 56,105                       7,770



                Deferred revenue                                                                                                                                  24,139              (24,005)                 5,626                         779



                Advances from customers                                                                                                                          405,945                31,500               (11,090)                    (1,536)



                Others                                                                                                                                         (136,727)               27,910               (58,873)                    (8,154)



           
                 Net cash generated from operating activities                                                                                            455,011               730,680                267,587                      37,060





           
                 CASH FLOWS FROM INVESTING ACTIVITIES



            Purchases of property and equipment                                                                                                                (608,717)          (1,017,474)           (1,005,368)                  (139,242)



            Purchases of intangible assets                                                                                                                       (2,312)             (20,188)               (5,965)                      (826)



            (Payments for) proceeds from investments                                                                                                                   -            (346,056)               359,239                      49,754



            (Payments for) proceeds from other investing activities                                                                                             (90,489)             (18,217)                 1,154                         160



           
                 Net cash used in investing activities                                                                                                 (701,518)          (1,401,935)             (650,940)                   (90,154)





           
                 CASH FLOWS FROM FINANCING ACTIVITIES



            Proceeds from borrowings                                                                                                                             279,916               638,706              1,156,279                     160,143



            Repayments of borrowings                                                                                                                            (73,070)             (85,640)              (51,441)                    (7,124)



            Proceeds from issuance of ordinary shares                                                                                                                  -            2,122,123



            Repurchase of 2026 Convertible Notes                                                                                                                       -                                (4,262,340)                  (590,327)



            Payment for finance leases                                                                                                                          (84,882)             (28,482)              (39,602)                    (5,485)



            Proceeds from other financing activities                                                                                                             395,096               110,967                591,446                      81,914



           
                 Net cash generated from (used in) financing activities                                                                                  517,060             2,757,674            (2,605,658)                  (360,879)





           
                 Effect of foreign exchange rate changes on cash, cash                                                                                  (17,205)             (11,645)              (20,050)                    (2,777)
      equivalents and restricted cash



           
                 Net increase (decrease) in cash, cash equivalents and                                                                                   253,348             2,074,774            (3,009,061)                  (416,750)
      restricted cash



           
                 Cash, cash equivalents and restricted cash at beginning of                                                                            2,989,494             3,024,214              5,098,987                     706,202


           
                     period



           
                 Cash, cash equivalents and restricted cash at end of period                                                                           3,242,842             5,098,988              2,089,926                     289,452

View original content:https://www.prnewswire.com/news-releases/vnet-reports-unaudited-first-quarter-2024-financial-results-302158594.html

SOURCE VNET Group, Inc.