Press Release Details

BEIJING, May 24, 2022 /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 three months ended March 31, 2022.

First Quarter 2022 Financial Highlights

• Net revenues increased by 18.6% to RMB1.65 billion (US$259.6 million) from RMB1.39 billion in the same period of 2021.
• Adjusted cash gross profit (non-GAAP) increased by 13.1% to RMB684.8 million (US$108.0 million) from RMB605.3 million in the same period of 2021. Adjusted cash gross margin (non-GAAP) was 41.6%, compared to 43.6% in the same period of 2021.
• Adjusted EBITDA (non-GAAP) increased by 21.9% to RMB506.2 million (US$79.8 million) from RMB415.1 million in the same period of 2021. Adjusted EBITDA margin (non-GAAP) was 30.8%, compared to 29.9% in the same period of 2021.

First Quarter 2022 Operational Highlights

• Total cabinets under management increased by 424 in the first quarter of 2022 to reach 78,964 as of March 31, 2022, compared to 55,926 as of March 31, 2021.
• Cabinets utilized by customers increased by 1,329 in the first quarter of 2022 to reach 43,032 as of March 31, 2022, compared to 33,582 as of March 31, 2021.
• Overall utilization rate of cabinets^[1] was 54.5% as of March 31, 2022, compared to 60.0% as of March 31, 2021.
• Retail IDC MRR^[2] per cabinet reached RMB9,236 in the first quarter of 2022, compared to RMB9,144 in the first quarter of 2021.

Samuel Shen, Chief Executive Officer and Executive Chairman of VNET's Retail IDC, stated, "Successful execution of our dual-core strategy led our solid operational and financial results across each of our businesses in the first quarter amid a complex macro environment. We maintained our healthy growth momentum, bolstered by the phenomenal rise of the digital economy and favorable policy landscape as well as our proven ability to execute our strategy. For our wholesale business, during the first quarter we signed contracts generating approximately 16MW of capacity. Additionally, our value-added service offerings fueled steady order growth in our retail business from both existing and new customers, while our cloud business continued to pave the way for more opportunities in the industry-specific IT service space. Looking ahead, we remain steadfast in our efforts to advance our position in the wholesale and retail IDC markets where we expect to capture growing digital demand across a wide range of verticals."

Tim Chen, Chief Financial Officer of VNET, commented, "For the first quarter, our revenues grew 18.6% year-over-year and adjusted EBITDA grew 21.9% year-over-year, both in line with our expectations. On top of the seasonal factors due to the Chinese New Year holidays during the first quarter, the COVID-19 resurgence in several tier-1 cities adversely affected our business. As we resolve through the market dynamics and cycles going forward, we will continue to advance our strategy to grow our business and increase shareholder value by further expanding our service offerings, diversifying our customer base and continuing to invest in our core capabilities."

First Quarter 2022 Financial Results

NET REVENUES: Net revenues in the first quarter of 2022 were RMB1.65 billion (US$259.6 million), representing an increase of 18.6% from RMB1.39 billion in the same period of 2021. The year-over-year increase was mainly due to the increased demand from both wholesale and retail IDC customers, as well as the growth of revenue from the cloud business.

GROSS PROFIT: Gross profit in the first quarter of 2022 was RMB355.5 million (US$56.1 million), representing an increase of 10.0% from RMB323.3 million in the same period of 2021. Gross margin in the first quarter of 2022 was 21.6%, compared to 23.3% in the same period of 2021.

ADJUSTED CASH GROSS PROFIT, which excludes depreciation, amortization, and share-based compensation expenses, was RMB684.8 million (US$108.0 million) in the first quarter of 2022, compared to RMB605.3 million in the same period of 2021. Adjusted cash gross margin in the first quarter of 2022 was 41.6%, compared to 43.6% in the same period of 2021.

OPERATING EXPENSES: Total operating expenses in the first quarter of 2022 were RMB259.5 million (US$40.9 million), compared to RMB243.2 million in the same period of 2021. As a percentage of net revenues, total operating expenses in the first quarter of 2022 were 15.8%, compared to 17.5% in the same period of 2021.

Sales and marketing expenses in the first quarter of 2022 were RMB74.9 million (US$11.8 million), compared to RMB74.0 million in the same period of 2021.

Research and development expenses in the first quarter of 2022 were RMB72.6 million (US$11.5 million), compared to RMB33.6 million in the same period of 2021.

General and administrative expenses in the first quarter of 2022 were RMB154.2 million (US$24.3 million), compared to RMB135.2 million in the same period of 2021.

ADJUSTED OPERATING EXPENSES, which exclude share-based compensation expenses and compensation for postcombination employment in an acquisition, were RMB200.8 million (US$31.7 million) in the first quarter of 2022, compared to RMB212.5 million in the same period of 2021. As a percentage of net revenues, adjusted operating expenses in the first quarter of 2022 were 12.2%, compared to 15.3% in the same period of 2021.

ADJUSTED EBITDA: Adjusted EBITDA in the first quarter of 2022 was RMB506.2 million (US$79.8 million), representing an increase of 21.9% from RMB415.1 million in the same period of 2021. Adjusted EBITDA in the first quarter of 2022 excluded share-based compensation expenses of RMB43.2 million (US$6.8 million). Adjusted EBITDA margin in the first quarter of 2022 was 30.8%, compared to 29.9% in the same period of 2021.

NET PROFIT/LOSS: Net profit attributable to ordinary shareholders in the first quarter of 2022 was RMB90.7 million (US$14.3 million), compared to a net loss attributable to ordinary shareholders of RMB84.7 million in the same period of 2021. Net profit attributable to ordinary shareholders in the first quarter of 2022 was mainly contributed by the gains from fair value changes of convertible promissory notes and other operating income.

PROFIT/LOSS PER SHARE: Basic and diluted profit per share in the first quarter of 2022 were RMB0.1 (US$0.02) and RMB0.03 (US$0.005), respectively, which represented the equivalent of RMB0.6 (US$0.12) and RMB0.18 (US$0.03) per American depositary share ("ADS"), respectively. Each ADS represents six Class A ordinary shares of the Company. Diluted profit/loss per share is calculated using adjusted net profit/loss attributable to ordinary shareholders divided by the weighted average number of diluted shares outstanding.

As of March 31, 2022, the aggregate amount of the Company's cash and cash equivalents, restricted cash, and short-term investments was RMB3.36 billion (US$530.8 million).

Net cash generated from operating activities, in the first quarter of 2022, was RMB482.6 million (US$76.1 million), compared to RMB274.5 million in the same period of 2021.

Business Outlook

For the full year of 2022, the Company expects net revenues to be in the range of RMB7,450 million to RMB7,750 million. Adjusted EBITDA is expected to be in the range of RMB1,975 million to RMB2,125 million. 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, which does not factor in any of the potential future impacts caused by the ongoing COVID-19 pandemic, 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, May 24, 2022, or 9:00 AM Beijing Time on Wednesday, May 25, 2022.

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

 

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.

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 RMB6.3393 to US$1.00, the noon buying rate in effect on March 31, 2022, 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 6,500 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 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 and in the attachments 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

 

 

 

 

 

 

 

 

 

 

 

 

 

View original content:https://www.prnewswire.com/news-releases/vnet-reports-first-quarter-2022-unaudited-financial-results-301554076.html

SOURCE VNET Group, Inc.