Technology

VNET Reports Unaudited Second Quarter 2024 Financial Results

Published

2 years ago

August 27, 2024

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

December 31, 2023

June 30, 2024

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

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

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

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

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

US$

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

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

888,555,145

1,581,481,229

Diluted*

888,705,981

1,568,300,360

1,595,517,338

905,386,636

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

US$

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 %

41.3 %

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 %

30.1 %

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

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

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

SOURCE VNET Group, Inc.

Technology

Innowise Named to 2026 CRN Tech Elite 250 List By The Channel Company

Published

2 hours ago

April 26, 2026

WARSAW, Poland, April 26, 2026 /PRNewswire-PRWeb/ — Innowise has officially secured a position on CRN’s 2026 Tech Elite 250. This annual ranking identifies IT solution providers across the US and Canada that have achieved top-tier status within the partner programs of the industry’s leading technology vendors. The inclusion follows a period of verified growth in technical proficiency and a focus on high-impact engineering.

“Innowise concentrates on creating scalable, resilient architectures that produce measurable benefits for our clients. The honor of being recognized by CRN highlights the commitment of our experts to maintain high standards in highly competitive markets,” said Dmitry Nazarevich, CTO at Innowise.

About the Tech Elite 250

The Tech Elite 250 is a directory of companies recognized as having the highest level of partnership and certifications within the global IT ecosystem. In order to reach the final list, the provider must hold the most advanced technical credentials from vendors like AWS, Cisco, Dell, HPE, IBM, Intel, Nutanix, and Nvidia.

This directory serves as a verified ledger for enterprise clients who need to orchestrate complex hardware and software stacks without letting legacy environments rot. Holding these certifications is mandatory to stop the cash bleed caused by inefficient infrastructure and unoptimized cloud usage.

About Innowise

Founded in 2007, Innowise is a global software engineering and IT consulting center. The company is focused on developing high-value technologies, including artificial intelligence, data engineering, and cloud computing. Innowise crafts technological solutions for companies across 40+ domains in order to assist them in updating, creating, and modernizing their digital ecosystems.

Innowise specializes in using established technologies and modular approaches to enable organizations to expand or shift their operations while retaining complete control over all their physical and intangible assets.

Media Contact

Lizaveta Piaskova, Innowise, 48 48 787 027 706, lizaveta.piaskova@innowise.com, innowise.com

View original content to download multimedia:https://www.prweb.com/releases/innowise-named-to-2026-crn-tech-elite-250-list-by-the-channel-company-302751951.html

SOURCE Innowise

Technology

Neusoft Showcases Full-Stack & Global Innovations at Auto China 2026

Published

5 hours ago

April 26, 2026

BEIJING, April 26, 2026 /PRNewswire/ — At Auto China 2026, Neusoft Corporation hosted a press conference on April 25th and announced three key strategic moves: the iteration of Neusoft OneCoreGo® Global In-Vehicle Intelligent Mobility Solution 7.0, the launch of Neusoft NAGIC.AI Cockpit Software Platform, and the strategic upgrade of its subsidiary, Neusoft Smart Go. By leveraging full-stack technology and a global ecosystem to drive innovation and empowerment, Neusoft is transforming vehicles into proactive, connected and collaborative mobile intelligent spaces.

OneCoreGo® Global In-Vehicle Intelligent Mobility Solution 7.0: An Evolved AI Companion for Global Intelligent Mobility

Intelligent mobility requires proactive perception, scenario integration, and global connectivity to meet personalized user needs and complex driving scenarios. Neusoft, whose products cover over 130 countries and regions worldwide, addresses these challenges with its OneCoreGo® Global In-Vehicle Intelligent Mobility Solution 7.0 through AI-driven innovation and global ecosystem collaboration. Powered by One Mate’s cross-agent collaboration and a sub-product matrix including One Map, One Sight, One Cloud, One Pay, One Store, One Link, and One Guard, the solution delivers full-link global mobility services spanning navigation, in-cabin AR, payment, app ecosystem services, connectivity and security. By breaking down functional silos, it streamlines multi-step operations into a single “depart” command, leveraging full-stack AI technology across perception, decision-making, interaction, and execution processes.

Guan Xin, Vice President of Neusoft and General Manager of Neusoft Automotive Innovative Solutions Division, said, “Adhering to the core principles of AI and globalization, OneCoreGo® 7.0 keeps innovating, evolving into a globally intelligent mobility companion that truly understands user needs.”

To enhance driving safety and mobility efficiency, OneCoreGo® 7.0 has also comprehensively upgraded its sub-products: One Map Global Navigation newly introduces 3D city effects, 3D lane-level maps, and traffic light guidance, offering dedicated solutions for two-wheelers and commercial vehicles as well. One Sight AR For Car improves navigation display effects, reducing instances of taking wrong routes. One Pay In-Vehicle Payment achieves over 90% payment coverage for parking services across core European cities. Combined with One Cloud’s global compliance cloud monitoring platform and One Guard’s full-stack vehicle networking security services, it creates a truly comprehensive OneCoreGo® Global In-Vehicle Intelligent Mobility Solution.

Neusoft NAGIC.AI Cockpit Software Platform: Dual-track Architecture for AI Integration in Every Vehicle

Amid the AI-driven transformation of the automotive industry, the market faces two challenges: limited computing power in legacy vehicles and high adaptation difficulties for next-gen models. Neusoft’s NAGIC.AI Cockpit Software Platform adopts a flexible “distributed + centralized” dual-track architecture approach. For existing vehicle models, it introduces the AI BOX solution, rapidly boosting computing power via external AI computing units, significantly reducing upgrade costs and timelines. For new vehicle models built on next-gen central computing platforms, Neusoft provides a full-stack AI cockpit software product suite, meeting automakers’ stringent requirements for system stability, reliability, and full-domain control.

Pang Hongyan, Vice President of Neusoft and General Manager of the Automotive Intelligent Software Division, said, “Our dual-track architecture enables every vehicle to embrace AI and enjoy an intelligent future. Both existing models and new-generation vehicles can find the most suitable path to intelligentization.”

Moreover, Neusoft’s NAGIC.AI Cockpit Software Platform features scenario-based, human-centric AI Agents seamlessly integrating driving safety, occupant care services, intelligent assisted driving and in-cabin entertainment. Neusoft also collaborates with global ecosystem partners to drive intelligent upgrades of in-cabin interaction products, fostering a more open and dynamic intelligent cockpit ecosystem.

Strategic Upgrade of Neusoft Smart Go: A World-leading Provider of Full-Domain Upper-Body Electronics Solutions for Intelligent Vehicles

Aligning with the trend of E/E architecture evolution from distributed control to “central computing + zonal control”, Neusoft Smart Go, a subsidiary of Neusoft in the field of intelligent vehicle connectivity, has completed a strategic upgrade, aiming to become a global leader in full-domain upper-body electronics solutions for intelligent vehicles.

This strategic upgrade positions Neusoft Smart Go to focus on full-domain scenarios in upper-body electronics, building a product matrix covering full-category in-vehicle electronics solutions, including central computing platforms, cockpit-driving-parking integration, intelligent cockpits, intelligent communications, intelligent audio systems, and zonal control units, and pioneering the integration of large model algorithms.

Jian Guodong, Senior Vice President of Neusoft and CEO of Neusoft Smart Go, said, “This strategic upgrade represents a significant leap from partial focus to comprehensive layout. Through our dual-track strategy of high-end cutting-edge solutions and mature standardized products, we can flexibly meet the mass production needs of vehicle models across different regions and price segments worldwide.” Neusoft Smart Go will provide mass-producible, adaptable hardware-software integrated solutions, empowering global automakers in achieving intelligent transformation.

Neusoft’s President, Mr.Gai Longjia stated, “In the future, Neusoft Smart Go will create stronger synergy with Neusoft Corporation by sharing internal technologies and capabilities while responding jointly to external demands. This specialized yet collaborative model will preserve business unit’s agility and expertise while enhancing Neusoft’s full-stack technological advantages.”

As a trusted partner in a smarter world, Neusoft is committed to collaborating with global automakers and ecosystem partners to build an open and inclusive intelligent automotive community together for the future of global mobility.

For more information about Neusoft, please visit www.neusoft.com.

View original content:https://www.prnewswire.com/apac/news-releases/neusoft-showcases-full-stack–global-innovations-at-auto-china-2026-302753701.html

SOURCE Neusoft Corporation

Technology

Lianlian DigiTech Returns to Money20/20 Asia to Expand Partnerships, Share Industry Trends, and Explore AI-Enabled Global Financial Infrastructure

Published

9 hours ago

April 26, 2026

BANGKOK, April 26, 2026 /PRNewswire/ — Lianlian DigiTech, a leading global provider of digital payment services, was once again invited to participate in Money20/20 Asia, one of the world’s most influential fintech gatherings, held in Bangkok, Thailand from April 21 to 23. At the event, the company presented its latest developments in cross-border payment infrastructure, technology innovation, and ecosystem collaboration, offering a comprehensive view of its work enhancing global cross-border payment capabilities.

During the conference, Lianlian DigiTech announced a strategic partnership with UK-based fintech company USI Money to further strengthen its global cross-border payment network, delivering more efficient and reliable fund flows for merchants worldwide. Shen Enguang, Co-President of Lianlian DigiTech; Mark Ma, Head of Global Banking Partnership at LianLian Global; and Bryan Jiang, General Manager Hong Kong of LianLian Global, attended the event and engaged with representatives from international financial institutions. They shared perspectives on fintech trends and global payment innovation, offering industry insight into the continued evolution of a more integrated and interoperable cross-border payments ecosystem.

Building a Borderless Payment Network with Global Partners Including USI Money

At the event, Lianlian DigiTech formalized a strategic collaboration with London-headquartered USI Money to further develop its global payment infrastructure.

The partnership will focus on cross-border remittance and foreign exchange services, combining both companies’ technological capabilities and resources to deliver a one-stop payment and collection solution for global businesses. The offering is built to be efficient, secure, and cost-effective, improving overall fund flow efficiency and streamlining foreign exchange execution.

Syed Bukhari, Group Chief Business and Operating Officer at USI Money, said: “Our partnership with Lianlian will strengthen our remittance capabilities, creating greater value for our customers through broader network coverage and improved transaction performance.”

Bryan Jiang, General Manager Hong Kong of LianLian Global, said: “By leveraging the complementary strengths of our ecosystem partners in technology and compliance, Lianlian will continue to scale its global payment network and improve transaction efficiency. We remain committed to enhancing financial connectivity across global financial markets and delivering more efficient and reliable cross-border payment solutions for our customers.”

Founded in 2009 and listed on the Main Board of the Hong Kong Stock Exchange in 2024 (2598.HK), Lianlian DigiTech is a China-based, globally focused digital payment company with increasingly integrated AI capabilities across its platform. Guided by its mission of “Connecting the world, Empowering global commerce,” the company focuses on developing a trusted and scalable financial infrastructure. As of the end of 2025, Lianlian DigiTech has built a cross-border payment network covering more than 100 countries and regions, serving over 10.4 million customers worldwide.

USI Money is a foreign exchange and international remittance service provider offering tailored cross-border financial solutions for businesses and individuals. With competitive real-time exchange rates and efficient execution as its core strengths, the company delivers fast, secure, and reliable global fund transfers.

In addition, Lianlian DigiTech co-hosted a networking session with Unlimit during the event, providing a forum for industry dialogue. The session brought together a broad group of fintech partners to explore collaborative models and help foster a more connected ecosystem.

Industry Roundtables: Unlocking Layered Collaboration in AI-Driven Cross-Border Payments and Advancing Financial Inclusion in Emerging Markets

At the same time, Mark Ma and Bryan Jiang were invited to the themed roundtable discussions, where they shared insights drawn from industry practice and outlined new approaches to aligning fintech innovation with the global financial system.

At the roundtable on “Fintech and Banks,” Mark Ma noted that the global payment system is rapidly shifting from isolated capabilities to a layered, collaborative model. Banks continue to serve as the foundational infrastructure, responsible for clearing networks and liquidity management. Fintech firms like Lianlian, meanwhile, build on top of this foundation to deliver application-layer services for businesses, transforming complex cross-border payment channels into more accessible solutions that support a wider range of practical business scenarios. He also emphasized fintech’s growing role in compliance and value creation. By embedding risk controls and verification processes into technology workflows, fintech companies can act as compliance intermediaries, improving efficiency while filtering risk and enabling banks to operate more effectively at scale. Meanwhile, insights derived from transaction data and business flows allow for more precise evaluation of small and medium-sized businesses, shifting capital allocation from experience-based decisions to data-driven approaches and improving access to financial services.

At the roundtable titled “Different Worlds, Shared Challenges: Bridging Emerging Markets,” Bryan Jiang pointed out that the core of financial inclusion is shifting from scale of coverage to practical usability in everyday financial activity. The ability to serve underserved segments such as small and micro merchants and overseas workers in a sustained and reliable manner ultimately depends on continuous improvements in product design and operational capabilities. Using emerging markets as an example, Jiang explained that small and medium-sized businesses in these regions often face challenges such as difficult account setup, complex cross-border collections, high foreign exchange costs, and multi-layered tax requirements. Many existing solutions still follow traditional business-focused models, resulting in cumbersome KYB processes and lengthy review cycles that are misaligned with the asset-light, high-frequency, fast-turnover nature of these businesses. In response, Lianlian has lowered barriers to fund flows by offering local collection accounts, optimizing foreign exchange mechanisms, and improving settlement efficiency. The company has also restructured account architecture, streamlined review processes, and enhanced fund visibility, creating a more seamless and intuitive user experience that better aligns financial services with its clients’ business operations and day-to-day activities.

As digital technologies increasingly integrate with the real economy, innovations in AI and blockchain are reshaping the foundations of global financial services. Lianlian DigiTech has long invested in AI capabilities, global compliance, and the growth of its international service network. Its broad licensing coverage, regulatory track record, localized service capabilities, and technical reliability have earned the trust of regulators, customers, and partners worldwide.

Looking ahead, Lianlian DigiTech will continue to build on its cross-border expertise and compliance experience to further develop its AI capabilities and deepen collaboration with global partners. The company aims to extend its role beyond payment network services into more integrated financial infrastructure solutions. Lianlian DigiTech remains committed to serving as a trusted platform for global financial transactions in an increasingly digital environment, enabling businesses and individuals worldwide to access faster, more efficient, and more seamless cross-border financial services.

View original content:https://www.prnewswire.com/apac/news-releases/lianlian-digitech-returns-to-money2020-asia-to-expand-partnerships-share-industry-trends-and-explore-ai-enabled-global-financial-infrastructure-302753667.html

SOURCE LianLian Global