Technology

VNET Reports Unaudited Third Quarter 2024 Financial Results

Published

2 years ago

November 20, 2024

BEIJING, Nov. 20, 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 third quarter ended September 30, 2024.

“We achieved strong third quarter results mainly driven by our wholesale IDC business,” said Josh Sheng Chen, Founder, Executive Chairperson and interim Chief Executive Officer of VNET. “Our wholesale IDC business maintained its strong growth momentum as we capitalized on rising AI-driven demand. We also continued attracting high-quality customers during the third quarter, with six new order wins totaling 84MW. Notably, we won a new wholesale order from an Internet customer for 32MW at our Huailai IDC Campus, one of our green computing clusters in Hebei province. Moving forward, we will continue to develop our high-performance data centers and green business, providing reliable, premium IDC services to meet market demand. Propelling VNET’s high-quality, sustainable development remains our priority as we strive to deliver value to all of our stakeholders.”

Qiyu Wang, Chief Financial Officer of VNET, commented, “In the third quarter, we remained focused on high-quality revenue businesses with high margins. Our total net revenues increased by 12.4% year over year to RMB2.12 billion, mainly driven by remarkable wholesale revenue growth of 86.4% year over year. Our adjusted EBITDA also grew by 17.1% year over year to RMB594.8 million in the third quarter of 2024. We previously reported adjusted EBITDA for the third quarter of 2023 at RMB507.9 million. Such figure included VAT surplus deduction benefit of RMB13.3 million, which is now considered non-continuable due to the termination of preferential tax policies since January 1, 2024 (the “Discontinued VAT Benefits”). The year-over-year growth in adjusted EBITDA would be 20.2% if the Discontinued VAT Benefits were excluded from the adjusted EBITDA calculation for the same period last year. We also aim to enter a definitive agreement with one of China’s leading insurance companies by the end of 2024 to form a pre-REITs fund. The fund will feature the first and second phases of our Taicang IDC Campus as the underlying assets, with us retaining approximately a 51% interest in the fund. This will further strengthen our cash reserves and support our sustainable development. Looking ahead, we will continue strengthening our core capabilities and capitalizing on AI-driven opportunities to create long-term shareholder value.”

Third Quarter 2024 Financial Highlights

Total net revenues increased by 12.4% to RMB2.12 billion (US$302.2 million) from RMB1.89 billion in the same period of 2023.Net revenues from the IDC business[1] increased by 18.4% to RMB1.50 billion (US$213.5 million) from RMB1.27 billion in the same period of 2023.Net revenues from the wholesale IDC business (“wholesale revenues”) increased by 86.4% to RMB523.0 million (US$74.5 million) from RMB280.6 million in the same period of 2023.Net revenues from the retail IDC business (“retail revenues”) decreased slightly by 1.0% to RMB975.5 million (US$139.0 million) from RMB984.9 million in the same period of 2023.Net revenues from the non-IDC business[2] increased by 0.2% to RMB622.3 million (US$88.7 million) from RMB621.4 million in the same period of 2023.Adjusted cash gross profit (non-GAAP) increased by 16.6% to RMB860.7 million (US$122.6 million) from RMB738.4 million in the same period of 2023. Adjusted cash gross margin (non-GAAP) was 40.6%, compared with 39.1% in the same period of 2023.Adjusted EBITDA (non-GAAP) increased by 17.1% to RMB594.8 million (US$84.8 million) from RMB507.9 million in the same period of 2023. Such figure in the third quarter of 2023 included Discontinued VAT Benefits of RMB13.3 million. The year-over-year growth in adjusted EBITDA would be 20.2% if the Discontinued VAT Benefits were excluded from the adjusted EBITDA calculation for the same period last year. Adjusted EBITDA margin (non-GAAP) was 28.0%, compared with 26.9% in the same period of 2023.Net income increased by RMB372.0 million and RMB260.3 million to RMB332.2 million (US$47.3 million) in the third quarter, compared with a net loss of RMB39.9 million in the same period of 2023 and a net income of RMB71.8 million in the second quarter of 2024, respectively.

Third Quarter 2024 Operational Highlights

Wholesale IDC Business[3]

Capacity in service was 358MW as of September 30, 2024, compared with 332MW as of June 30, 2024, and 290MW as of September 30, 2023. Capacity under construction was 297MW as of September 30, 2024.Capacity utilized by customers reached 279MW as of September 30, 2024, compared with 252MW as of June 30, 2024, and 161MW as of September 30, 2023. The sequential increase during the third quarter of 2024 was 27MW, which was mainly contributed by the E-JS Campus 02 C data center and the N-OR06 data center.Utilization rate[4] of wholesale capacity was 78.0% as of September 30, 2024, compared with 75.9% as of June 30, 2024, and 55.4% as of September 30, 2023.Utilization rate of mature wholesale capacity[5] was 95.6% as of September 30, 2024, compared with 94.9% as of June 30, 2024, and 94.4% as of September 30, 2023.Utilization rate of ramp-up wholesale capacity[6] was 46.4% as of September 30, 2024, compared with 45.7% as of June 30, 2024, and 18.4% as of September 30, 2023.Total capacity committed[7] was 352MW as of September 30, 2024, compared with 326MW as of June 30, 2024, and 236MW as of September 30, 2023.Commitment rate[8] for capacity in service was 98.2% as of September 30, 2024, compared with 98.1% as of June 30, 2024, and 81.3% as of September 30, 2023.Total capacity pre-committed[9] was 262MW and pre-commitment rate[10] for capacity under construction was 88.4% as of September 30, 2024.

Retail IDC Business[11]

Capacity in service was 52,250 cabinets as of September 30, 2024, compared with 52,177 cabinets as of June 30, 2024, and 52,200 cabinets as of September 30, 2023.Capacity utilized by customers reached 32,950 cabinets as of September 30, 2024, compared with 33,253 cabinets as of June 30, 2024, and 33,845 cabinets as of September 30, 2023.Utilization rate of retail capacity was 63.1% as of September 30, 2024, compared with 63.7% as of June 30, 2024, and 64.8% as of September 30, 2023.Utilization rate of mature retail capacity[12] was 69.5% as of September 30, 2024, compared with 72.5% as of June 30, 2024, and 73.1% as of September 30, 2023.Utilization rate of ramp-up retail capacity[13] was 16.8% as of September 30, 2024, compared with 12.7% as of June 30, 2024, and 18.7% as of September 30, 2023.Monthly recurring revenue (MRR) per retail cabinet was RMB8,788 in the third quarter of 2024, compared with RMB8,753 in the second quarter of 2024 and RMB8,845 in the third 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 September 30, 2023, June 30, 2024, and September 30, 2024, 4,426, 4,150, 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.

Third Quarter 2024 Financial Results

TOTAL NET REVENUES: Total net revenues in the third quarter of 2024 were RMB2.12 billion (US$302.2 million), representing an increase of 12.4% from RMB1.89 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 18.4% to RMB1.50 billion (US$213.5 million) from RMB1.27 billion in the same period of 2023. The year-over-year increase was mainly driven by an increase in wholesale revenues.

Wholesale revenues increased by 86.4% to RMB523.0 million (US$74.5 million) from RMB280.6 million in the same period of 2023.Retail revenues decreased to RMB975.5 million (US$139.0 million) from RMB984.9 million in the same period of 2023.

Net revenues from non-IDC business increased by 0.2% to RMB622.3 million (US$88.7 million) from RMB621.4 million in the same period of 2023.

GROSS PROFIT: Gross profit in the third quarter of 2024 was RMB491.7 million (US$70.1 million), representing an increase of 60.4% from RMB306.5 million in the same period of 2023. Gross margin in the third quarter of 2024 was 23.2%, compared with 16.2% 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 RMB860.7 million (US$122.6 million) in the third quarter of 2024, compared with RMB738.4 million in the same period of 2023. Adjusted cash gross margin (non-GAAP) in the third quarter of 2024 was 40.6%, compared with 39.1% in the same period of 2023.

OPERATING EXPENSES: Total operating expenses in the third quarter of 2024 were RMB300.3 million (US$42.8 million), compared with RMB274.3 million in the same period of 2023.

Sales and marketing expenses were RMB60.7 million (US$8.7 million) in the third quarter of 2024, compared with RMB64.1 million in the same period of 2023.

Research and development expenses were RMB53.1 million (US$7.6 million) in the third quarter of 2024, compared with RMB80.7 million in the same period of 2023.

General and administrative expenses were RMB132.5 million (US$18.9 million) in the third quarter of 2024, compared with RMB137.9 million in the same period of 2023.

ADJUSTED OPERATING EXPENSES (non-GAAP), which exclude share-based compensation expenses, were RMB293.6 million (US$41.8 million) in the third quarter of 2024, compared with RMB264.8 million in the same period of 2023. As a percentage of total net revenues, adjusted operating expenses (non-GAAP) in the third quarter of 2024 were 13.8%, compared with 14.0% in the same period of 2023.

ADJUSTED EBITDA (non-GAAP): Adjusted EBITDA in the third quarter of 2024 was RMB594.8 million (US$84.8 million), representing an increase of 17.1% from RMB507.9 million in the same period of 2023. Such figure in the third quarter of 2023 included Discontinued VAT Benefits of RMB13.3 million. The year-over-year growth in adjusted EBITDA would be 20.2% if the Discontinued VAT Benefits were excluded from the adjusted EBITDA calculation for the same period last year). Adjusted EBITDA margin (non-GAAP) in the third quarter of 2024 was 28.0%, compared with 26.9% in the same period of 2023.

NET INCOME/LOSS ATTRIBUTABLE TO VNET GROUP, INC.: Net income attributable to VNET Group, Inc. in the third quarter of 2024 was RMB317.6 million (US$45.3 million), compared with a net loss attributable to VNET Group, Inc. of RMB50.5 million in the same period of 2023. The year-over-year increase was mainly due to a gain in debt extinguishment.

EARNINGS PER SHARE: Basic and diluted earnings per share in the third quarter of 2024 were RMB0.20 (US$0.03) and RMB0.05 (US$0.01), respectively, which represents the equivalent to RMB1.20 (US$0.18) and RMB0.30 (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 September 30, 2024, the aggregate amount of the Company’s cash and cash equivalents, restricted cash and short-term investments was RMB2.10 billion (US$298.9 million).

Total short-term debt consisting of short-term bank borrowings and the current portion of long-term borrowings was RMB1.87 billion (US$266.4 million). Total long-term debt was RMB8.88 billion (US$1.26 billion), comprised of long-term borrowings of RMB7.08 billion (US$1.0 billion) and convertible promissory notes of RMB1.79 billion (US$255.6 million).

Net cash generated from operating activities in the third quarter of 2024 was RMB760.4 million (US$108.4 million), compared with RMB454.3 million in the same period of 2023. During the third quarter of 2024, the Company obtained new debt financing, refinancing facilities and other financings of RMB0.95 billion (US$134.7 million).

Recent Development

The Company plans to sign a definitive agreement by the end of 2024 on a pre-REITs project with one of China’s leading insurance companies, under which the Company will form a pre-REITs fund (the “Fund”) to feature the first and second phases of our Taicang IDC Campus as the underlying assets with approximately 210MW total IT capacity and RMB5.74 billion estimated value.

The Company is expected to own approximately 51% interest in the Fund and sell the remaining 49% interest to the insurance company, the consideration of which would be approximately RMB1.15 billion, calculated based on the assets and liabilities of the fund at the establishment date.

After the completion of this transaction, VNET intends to consolidate the Fund for financial reporting purpose, while operating the Taicang IDC project to offer stable and premium infrastructure services. The financial results of the Fund’s underlying assets are expected to be consolidated into the Company’s financial statement.

Business Outlook

The Company increased its full year 2024 guidance for total net revenues and adjusted EBITDA. Specifically, the Company now expects total net revenues for 2024 to be between RMB8,000 million to RMB8,100 million, representing year-over-year growth of 7.9% to 9.3%, and adjusted EBITDA (non-GAAP) to be in the range of RMB2,280 million to RMB2,300 million, representing year-over-year growth of 11.8% to 12.8%. Such figure in the third quarter of 2023 adjusted EBITDA included Discontinued VAT Benefits of RMB13.3 million. The year-over-year growth in adjusted EBITDA would be 16.4% to 17.4% if the Discontinued VAT Benefits were excluded from the adjusted EBITDA calculation for the same period last year.

The forecast reflects the Company’s current and preliminary views on the market and its operational conditions and is subject to change.

Conference Call

The Company’s management will host an earnings conference call at 8:00 PM U.S. Eastern Time on Wednesday, November 20, 2024, or 9:00 AM Beijing Time on Thursday, November 21, 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/10043189-1ej64l.html

Chinese line (listen-only mode):
https://s1.c-conf.com/diamondpass/10043190-a2lrfs.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 November 28, 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

Reply PIN (English line):

10043189

Reply PIN (Chinese line):

10043190

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 RMB7.0176 to US$1.00, the noon buying rate in effect on September 30, 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, including the plan to sign a definitive agreement on a pre-REITs project, contain forward-looking statements. VNET may also make written or oral forward-looking statements in its reports filed with, or furnished to, the U.S. Securities and Exchange Commission, in its annual reports to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about VNET’s beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: VNET’s goals and strategies; VNET’s liquidity conditions; VNET’s expansion plans; the expected growth of the data center services market; expectations regarding demand for, and market acceptance of, VNET’s services; VNET’s expectations regarding keeping and strengthening its relationships with customers; VNET’s plans to invest in research and development to enhance its solution and service offerings; and general economic and business conditions in the regions where VNET provides solutions and services. Further information regarding these and other risks is included in VNET’s reports filed with, or furnished to, the U.S. Securities and Exchange Commission. All information provided in this press release is as of the date of this press release, and VNET undertakes no duty to update such information, except as required under applicable law.

Investor Relations Contact:

Xinyuan Liu
Tel: +86 10 8456 2121
Email: ir@vnet.com

VNET GROUP, INC.

CONSOLIDATED BALANCE SHEETS

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

As of

December 31, 2023

September 30, 2024

RMB

US$

Assets

Current assets:

Cash and cash equivalents

2,243,537

1,524,819

217,285

Restricted cash

2,854,568

556,266

79,267

Accounts and notes receivable, net

1,715,975

1,861,828

265,308

Short-term Investments

356,820

15,879

2,263

Prepaid expenses and other current assets

2,375,341

2,665,924

379,891

Amounts due from related parties

277,237

317,619

45,260

Total current assets

9,823,478

6,942,335

989,274

Non-current assets:

Property and equipment, net

13,024,393

15,153,253

2,159,321

Intangible assets, net

1,383,406

1,347,751

192,053

Land use rights, net

602,503

588,846

83,910

Operating lease right-of-use assets, net

4,012,329

4,412,834

628,824

Restricted cash

882

126

Deferred tax assets, net

247,644

309,390

44,088

Long-term investments, net

757,949

798,638

113,805

Other non-current assets

533,319

371,501

52,938

Total non-current assets

20,562,425

22,983,095

3,275,065

Total assets

30,385,903

29,925,430

4,264,339

Liabilities and Shareholders’ Equity

Current liabilities:

Short-term bank borrowings

30,000

552,270

78,698

Accounts and notes payable

696,177

728,361

103,791

Accrued expenses and other payables

2,783,102

2,527,584

360,178

Advances from customers

1,605,247

1,752,935

249,791

Deferred revenue

95,477

87,354

12,448

Income taxes payable

35,197

51,554

7,346

Amounts due to related parties

356,080

354,903

50,573

Current portion of long-term borrowings

723,325

1,317,343

187,720

Current portion of finance lease liabilities

115,806

107,785

15,359

Current portion of deferred government grants

8,062

8,538

1,217

Current portion of operating lease liabilities

780,164

874,957

124,680

Convertible promissory notes

4,208,495

–

Total current liabilities

11,437,132

8,363,584

1,191,801

Non-current liabilities:

Long-term borrowings

5,113,521

7,082,026

1,009,181

Convertible promissory notes

1,769,946

1,793,894

255,628

Non-current portion of finance lease liabilities

1,159,525

1,169,573

166,663

Unrecognized tax benefits

98,457

14,030

Deferred tax liabilities

688,362

703,390

100,232

Deferred government grants

145,112

265,941

37,896

Non-current portion of operating lease liabilities

3,270,759

3,587,701

511,243

Derivative liability

188,706

–

Total non-current liabilities

12,434,388

14,700,982

2,094,873

Shareholders’ equity

Ordinary shares

107

109

Additional paid-in capital

17,291,312

17,256,955

2,459,096

Accumulated other comprehensive loss

(14,343)

(16,088)

(2,293)

Statutory reserves

80,615

94,276

13,434

Accumulated deficit

(11,016,323)

(10,835,688)

(1,544,073)

Treasury stock

(326,953)

(163,073)

(23,238)

Total VNET Group, Inc. shareholders’

equity

6,014,415

6,336,491

902,942

Noncontrolling interest

499,968

524,373

74,723

Total shareholders’ equity

6,514,383

6,860,864

977,665

Total liabilities and shareholders’

equity

30,385,903

29,925,430

4,264,339

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

Nine months ended

September 30, 2023

June 30, 2024

September 30, 2024

September 30, 2023

September 30, 2024

RMB

US$

RMB

US$

Net revenues

1,886,924

1,993,760

2,120,794

302,211

5,514,450

6,012,680

856,800

Cost of revenues

(1,580,446)

(1,568,865)

(1,629,111)

(232,146)

(4,512,843)

(4,685,381)

(667,661)

Gross profit

306,478

424,895

491,683

70,065

1,001,607

1,327,299

189,139

Operating income (expenses)

Operating income

26,706

–

11,767

1,677

73,980

15,716

2,240

Sales and marketing expenses

(64,077)

(58,225)

(60,700)

(8,650)

(192,921)

(190,668)

(27,170)

Research and development expenses

(80,673)

(61,998)

(53,127)

(7,571)

(241,549)

(190,514)

(27,148)

General and administrative expenses

(137,931)

(107,297)

(132,482)

(18,879)

(393,395)

(466,076)

(66,415)

Allowance for doubtful debt

(18,316)

(2,753)

(65,731)

(9,367)

(7,034)

(63,309)

(9,021)

Total operating expenses

(274,291)

(230,273)

(300,273)

(42,790)

(760,919)

(894,851)

(127,514)

Operating profit

32,187

194,622

191,410

27,275

240,688

432,448

61,625

Interest income

12,887

5,449

4,218

601

28,606

21,796

3,106

Interest expense

(91,800)

(92,172)

(93,996)

(13,394)

(233,295)

(323,850)

(46,148)

Impairment of long-term investments

(11,115)

–

(11,115)

–

Other income

7,536

30,475

15,584

2,221

22,892

50,873

7,249

Other expenses

(10,975)

(6,900)

(8,783)

(1,252)

(14,887)

(17,105)

(2,437)

Changes in the fair value of financial liabilities

266

712

(7,107)

(1,013)

21,718

(2,537)

(362)

Gain on debt extinguishment

–

246,175

35,080

–

246,175

35,080

Foreign exchange gain (loss)

24,606

(4,387)

14,833

2,114

(168,391)

(17,915)

(2,553)

(Loss) income before income taxes and

gain from equity method investments

(36,408)

127,799

362,334

51,632

(113,784)

389,885

55,560

Income tax expenses

(6,317)

(59,149)

(31,149)

(4,439)

(63,748)

(151,682)

(21,615)

Gain from equity method investments

2,842

3,199

965

138

3,651

6,770

965

Net (loss) income

(39,883)

71,849

332,150

47,331

(173,881)

244,973

34,910

Net income attributable to noncontrolling

interest

(10,579)

(8,174)

(14,524)

(2,070)

(27,167)

(50,677)

(7,221)

Net (loss) income attributable to the

VNET Group, Inc.

(50,462)

63,675

317,626

45,261

(201,048)

194,296

27,689

(Loss) earnings per share

Basic

(0.06)

0.04

0.20

0.03

(0.23)

0.12

0.02

Diluted

(0.06)

0.04

0.05

0.01

(0.24)

(0.02)

(0.00)

Shares used in (loss) earnings per share

computation

Basic*

889,058,872

1,594,662,099

1,602,860,426

888,724,901

1,588,659,647

Diluted*

889,058,872

1,595,517,338

1,740,565,086

899,884,241

1,725,023,283

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

Basic

(0.36)

0.24

1.20

0.18

(1.38)

0.72

0.12

Diluted

(0.36)

0.24

0.30

0.06

(1.44)

(0.12)

(0.02)

* 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

Nine months ended

September 30, 2023

June 30, 2024

September 30, 2024

September 30, 2023

September 30, 2024

RMB

US$

RMB

US$

Gross profit

306,478

424,895

491,683

70,065

1,001,607

1,327,299

189,139

Plus: depreciation and amortization

431,933

364,616

368,764

52,548

1,233,983

1,085,984

154,751

Plus: share-based compensation

expenses

–

(2,190)

234

–

234

Adjusted cash gross profit

738,411

787,321

860,681

122,646

2,235,590

2,413,517

343,923

Adjusted cash gross margin

39.1 %

39.5 %

40.6 %

40.5 %

40.1 %

Operating expenses

(274,291)

(230,273)

(300,273)

(42,790)

(760,919)

(894,851)

(127,514)

Plus: share-based compensation

expenses

9,475

(12,962)

6,709

956

25,817

105,428

15,023

Adjusted operating expenses

(264,816)*

(243,235)

(293,564)

(41,834)

(735,102)

(789,423)

(112,491)

Operating profit

32,187*

194,622

191,410

27,275

240,688

432,448

61,625

Plus: depreciation and amortization

466,285

394,334

396,428

56,491

1,332,649

1,170,313

166,768

Plus: share-based compensation

expenses

9,475

(15,152)

6,943

989

25,817

105,662

15,057

Adjusted EBITDA

507,947*

573,804

594,781

84,755

1,599,154

1,708,423

243,450

Adjusted EBITDA margin

26.9 %

28.8 %

28.0 %

29.0 %

28.4 %

* Included VAT surplus deduction benefit of RMB13.3 million, which is now considered non-continuable due to the termination of preferential tax policies since January 1, 2024.

VNET GROUP, INC.

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

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

Three months ended

September 30, 2023

June 30, 2024

September 30, 2024

RMB

US$

CASH FLOWS FROM OPERATING ACTIVITIES

Net (loss) income

(39,883)

71,849

332,150

47,331

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

Depreciation and amortization

461,603

388,711

393,719

56,105

Share-based compensation expenses

9,475

(15,152)

6,943

989

Others

130,633

101,890

(107,550)

(15,326)

Changes in operating assets and liabilities

Accounts and notes receivable

(70,896)

142,469

(138,968)

(19,803)

Prepaid expenses and other current assets

(48,380)

(79,893)

116,055

16,538

Accounts and notes payable

21,763

(47,018)

8,463

1,206

Accrued expenses and other payables

(54,577)

(61,463)

65,481

9,329

Deferred revenue

36,008

(14,000)

2,300

328

Advances from customers

124,816

(63,305)

222,083

31,647

Others

(116,249)

(18,884)

(140,310)

(19,994)

Net cash generated from operating activities

454,313

405,204

760,366

108,350

CASH FLOWS FROM INVESTING ACTIVITIES

Purchases of property and equipment

(946,444)

(998,489)

(1,426,892)

(203,330)

Purchases of intangible assets

(18,228)

(7,594)

(33,806)

(4,817)

Proceeds from (payments for) investments

144,516

(138,224)

92,426

13,171

Proceeds from other investing activities

70,010

117,209

31,762

4,526

Net cash used in investing activities

(750,146)

(1,027,098)

(1,336,510)

(190,450)

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from bank borrowings

756,101

690,848

745,534

106,238

Repayments of bank borrowings

(78,050)

(533,324)

(129,893)

(18,510)

Repayments of 2025 Convertible Notes

(148,842)

–

Payments for finance leases

(30,366)

(9,586)

(27,669)

(3,943)

Proceeds from (payments for) other financing activities

216,711

516,493

(59,645)

(8,499)

Net cash generated from financing activities

715,554

664,431

528,327

75,286

Effect of foreign exchange rate changes on

cash, cash equivalents and restricted cash

(12,476)

3,370

(6,049)

(862)

Net increase (decrease) in cash, cash

equivalents and restricted cash

407,245

45,907

(53,866)

(7,676)

Cash, cash equivalents and restricted cash at

beginning of period

2,616,969

2,089,926

2,135,833

304,354

Cash, cash equivalents and restricted cash at

end of period

3,024,214

2,135,833

2,081,967

296,678

View original content:https://www.prnewswire.com/news-releases/vnet-reports-unaudited-third-quarter-2024-financial-results-302311297.html

SOURCE VNET Group, Inc.

Technology

ASUS Accelerates Enterprise AI at Scale with 6th-Gen AMD EPYC Server CPUs

Published

17 minutes ago

July 24, 2026

ASUS leverages 6th-gen AMD EPYC Server CPUs to deliver scalable, efficient compute for enterprise AI, cloud, virtualization and business-critical workloads

SAN FRANCISCO, July 24, 2026 /PRNewswire/ — ASUS today announced its groundbreaking new server lineup powered by the AMD EPYC™ 9006 processors, engineered to deliver unmatched performance for the most demanding intensive enterprise workloads. This advanced portfolio introduces two highly optimized series with efficiency-optimized AMD EPYC SP8 server CPU, the flagship dual-socket ASUS RS700A/720A for extreme compute density and the single-socket ASUS RS500A/520A for superior space efficiency and deployment flexibility.

Both series integrate full PCIe® 6.0, leading memory support, and high-density E3.S storage, all underpinned by proprietary ASUS innovations for superior thermal management and operational efficiency to meet and exceed the rigorous demands of enterprise AI, virtualization, storage and cloud environments.

“The new ASUS server series, powered by 6th-gen AMD EPYC server CPUs, is engineered to power every enterprise workload with flexible, scalable infrastructure,” Paul Ju, Senior Vice President of ASUS, commented, “This launch marks a significant milestone for ASUS and our clients. The new series empowers businesses with a resilient foundation to achieve unprecedented computing efficiency and accelerating AI innovation with inference.”

ASUS expands 6th-gen AMD EPYC server portfolio with dual optimized series

ASUS has introduced a new server lineup segmented into two distinct series, each precisely engineered to meet diverse enterprise demands.

The flagship RS700A/720A series (dual-socket) delivers extreme compute density, making it ideal for AI inferencing, and complex simulations. It offers exceptional bandwidth with PCIe 6.0, memory leadership via 32 DIMM slots supporting ultrafast MRDIMM, and high-density storage with up to 32 E3.S bays in a compact 2U form factor.

Complementing this is the RS500A/520A series (single-socket), a highly efficient and space-optimized solution with depth under 800mm, perfect for mainstream enterprise workloads and rack-constrained environments. Featuring full PCIe 6.0 capabilities, E3.S storage support, and modular scalability through shared components with the RS700A and RS720A series, it provides uncompromised performance in a streamlined, deployment-friendly design.

ASUS elevates the AMD EPYC platform with cutting-edge proprietary innovations

ASUS has significantly advanced the AMD EPYC 9006 platform with a series of proprietary engineering breakthroughs focused on superior reliability, thermal management, and operational efficiency.

The DC-MHS modular architecture features a zone-partitioned chassis that separates I/O, HPM, fan, and storage modules to accelerate development, reduce capital costs, and enable rapid serviceability. The patented ASUS DIMM.2 Innovation repositions M.2 storage to the cooler DIMM region, eliminating thermal throttling without extra heatsinks and unlocking greater scalability. Thermal Radar 3.0 with PID Control delivers precise real-time fan regulation via advanced algorithms, reducing energy use and maintaining peak performance under heavy enterprise-level workload.

Completing the suite is the optimized tool-less operational-velocity design, which boosts maintenance efficiency, maximizing uptime and lowering TCO and sustaining peak performance even under volatile, high-load AI/HPC workloads.

AVAILABILITY & PRICING

ASUS RS700A/720A series and RS500A/520A series servers will be available soon. Please contact your local ASUS representative for further information.

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Technology

Fractal posts 20% revenue growth and 92% net income growth in Q1 FY27

Published

17 minutes ago

July 24, 2026

Adjusted EBITDA Grows at 35% YoYGross Margin up 29 bps1 to 46%; Adjusted EBITDA Margin up 189 bps to 17%

NEW YORK, July 24, 2026 /PRNewswire/ — Fractal Analytics Ltd (BSE: 544700) (NSE: FRACTAL) announced its consolidated financial results for Q1 FY27, ending June 30, 2026.

In Q1 FY27, the Company reported consolidated operating revenue of INR 9,125 m, a growth of 20% year on year (YoY). Revenue growth was led by the company’s Healthcare and Life Sciences (HLS) industry, which clocked 69% growth YoY. Strong sustained growth in HLS over the last several quarters has resulted in it becoming the second largest industry in the portfolio. Banking, Financial Services and Insurance (BFSI) also performed very well, growing 36% YoY in Q1. Fractal’s largest industry, Consumer Packaged Goods and Retail (CPGR), continued to gather momentum, growing 19% YoY. On the other hand, TMT declined 22% YoY.

Fractal’s focus on deepening customer relationships continues to yield good outcomes. Its clients collectively increased their spending with the company, as reflected in the Net Revenue Retention2 of 117% in Q1. Further, its Net Promoter Score (NPS) during the period stood at 77.

The company reported improved profit margins at all levels. Gross Margin in Q1 was at 46%, while Adjusted EBITDA Margin expanded by 189 bps YoY to 17%. Net Income grew 92% YoY to INR 723 m.

Commenting on the performance, Srikanth Velamakanni, Group CEO and Executive Vice-Chairman, said:

“Enterprises are putting real transformation budgets behind AI now and we’re seeing it directly in the size of the deals coming to us. TMT was the drag on our headline growth this quarter. Excluding TMT, our business grew 35% year on year, which is a better read on the underlying demand we’re seeing.

As data sovereignty becomes a bigger priority for governments and enterprises, and as open-weight models keep improving, clients need a partner who can work across models and infrastructure. We have invested heavily in our people, our research, and our own intellectual property to be that partner.”

1 Basis points = 1/100th of 1%
2 Net Revenue Retention in our Fractal.ai segment measures how effectively we retain and expand revenue from our existing clients over a defined period and is calculated by comparing the current period’s revenue from the clients who existed at the start of the period, with their revenue in the previous period – including the effects of upsells, cross-sells and contractions

About Fractal

Fractal Analytics Ltd (BSE: 544700) (NSE: FRACTAL) is a globally recognized pure-play enterprise AI company trusted by Fortune 500®-sized enterprises to power decision-making through AI services, solutions, and products, anchored by Cogentiq, its flagship agentic AI platform. With over 6,000 professionals across North America, EMEA, and Asia-Pacific, Fractal partners with business leaders to drive competitive differentiation for their organizations by embedding AI into critical decisions across business functions and industry verticals.

Fractal invests more than 6% of its revenue in AI R&D, supporting foundational AI research, product development, and IP creation that address both immediate client needs and long-term technological advancement. Fractal’s track record includes developing proprietary models and products such as Cogentiq Health – Vaidya.ai and Cogentiq Data Science – PiEvolve, as well as incubating and spinning out Qure.ai, a global healthcare AI leader focused on the rapid identification and management of tuberculosis, lung cancer, and stroke (or critical health conditions). Fractal’s suite of businesses consists of Asper.ai (a Revenue Growth Management product for CPG companies) and Analytics Vidhya (an Ed-tech platform).

For more information, go to www.fractal.ai.

Logo: https://mma.prnewswire.com/media/2931510/5858548/Fractal_Logo.jpg

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SOURCE Fractal Analytics Limited

Technology

Xryma Plc : Pre-Listing Liquidity Facility and Price Discovery Process

Published

17 minutes ago

July 24, 2026

NICOSIA, Cyprus, July 24, 2026 /PRNewswire/ — Xryma Plc (“Xryma”) announces its intention to reapply within the next twelve months for admission to list on Euronext Paris (“Euronext”), with such admission being subject to Euronext’s approval. Before submitting its application, Xryma intends to launch a pre-listing liquidity facility and price discovery process, comprising a private placement to institutional and qualified investors alongside a secondary market offer to Xryma existing shareholders (“shareholders”) wishing to exit prior to listing.

The admission referred to above that is subject to the approval of Euronext may also be subject to approval by relevant regulatory authorities, and no assurance can be given that approval will be granted or as to the timing of any admission.

The pre-listing liquidity facility and price discovery process is designed to:

Enable shareholders seeking an exit to participate without the need to open an EU brokerage account,Provide a clear and orderly opportunity for existing shareholders to sell all or part of their holdings ahead of any potential admission to trading on Euronext Paris,Enable shareholders to sell all or part of their holdings at the same price at which qualified and institutional investors subscribe for shares in the Company,Establish, through a bookbuild with qualified and institutional investors, a market-validated referenced price for Xryma shares ahead of any potential admission on Euronext Paris (the “Primary Market Placement Price”),Support orderly trading upon potential admission.

Individual shareholder mailouts explaining the details of the pre-listing liquidity facility scheme with instructions and necessary documentation will be conducted during August 2026.

As the Primary Market Placement Price is to be determined by the subsequent bookbuild, shareholders will be given the opportunity to set a floor price which will result in the sale of their shares if the Primary Market Placement Price is higher. Shareholders will receive the Primary Market Placement Price minus applicable fees.

Shareholders and Investors may be scaled back to match corresponding demand from the other party, with partial fulfilment a possibility if the Company cannot match supply to demand.

Completion of the process is subject to achieving a level of institutional and qualified investor demand that the Board considers appropriate to support an orderly market should Xryma subsequently be admitted to trading on Euronext Paris.

Participation is entirely voluntary. Shareholders who do not wish to sell will simply retain their shares. Shareholders that do not intend to participate should continue to onboard with a Euronext participating broker, or a Euroclear ESES custodian, per previous communications.

The major shareholders, SCP Select All Enterprise (Monaco) and SCP Red 5 Solutions (Monaco) will not participate in the offer and will be subject to lock up arrangements.

Mr Nikogiannis (John) Karantzis, CEO of Xryma Plc comments: “Our shareholders have told us they would value a straightforward way to realise their holdings without the time and cost of opening an EU brokerage account. This process is our response to that feedback. We are structuring the placement to be large enough to establish a credible reference price whilst limiting dilution, with demand directed first towards meeting shareholder sell interest. We look forward to updating the market on the revised timetable in due course.”

Shareholders seeking a more detailed explanation of the pre-listing liquidity facility and price discovery process, should refer to the guide available at https://www.xryma.com/investors

Important Information & Disclaimers

This press release may contain inside information within the meaning of Article 7(1) of Regulation (EU) 596/2014 (Market Abuse Regulation).

This publication is not for publication or distribution or release, directly or indirectly, in or into the United States of America (including its territories and possessions, any state of the United States and the District of Columbia), Canada, Australia, South Africa, Japan or any other jurisdiction where such an announcement would be unlawful. The distribution of this publication may be restricted by law in certain jurisdictions and persons into whose possession this document or other information referred to herein comes should inform themselves about and observe any such restriction. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction. No action has been taken that would permit an offering of the treasury shares or possession or distribution of this publication in any jurisdiction where action for that purpose is required.

This publication does not constitute or form part of an offer for sale or solicitation of an offer to purchase or subscribe for securities in the United States, Canada, Australia, South Africa, Japan or any other jurisdiction and the securities referred to herein have not been registered under the securities laws of any such jurisdiction. Any New Shares (if such are issued) will not be registered under the United States Securities Act of 1933, as amended (the “Securities Act”), or under the securities laws of any State or any other jurisdiction of the United States, and may not be offered or sold, directly or indirectly, in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of, the Securities Act and in compliance with all applicable securities laws of any State or any other jurisdiction of the United States. No public offering of securities is being made in the United States or in any other jurisdiction.

The information set forth herein must not be distributed in any jurisdiction where such distribution is unlawful, and any recipients are requested to inform themselves about and to observe such restrictions.

The Offering referred to herein by Xryma Plc will only be made in accordance with all applicable corporate and securities laws. Any shares referred to herein will exclusively be offered or sold in reliance on any applicable exemptions from prospectus or registration requirements in any jurisdiction. In member states of the European Economic Area, this publication is only addressed to and directed at persons who are ‘qualified investors’ within the meaning of Article 2(e) of Regulation (EU) 2017/1129 (as amended and including any relevant delegated regulations, the “Prospectus Regulation”) or in any other circumstances falling within exemptions available in the relevant member state under Article 1(4) and/or 1(5) of the Prospectus Regulation. In the United Kingdom, this publication is only addressed to and directed at qualified investors within the meaning of the Prospectus Regulation, as it forms part of domestic law by virtue of the European Union (Withdrawal) Act 2018, as amended (“EUWA”), who are persons (i) who have professional experience in matters relating to investments falling within Article 19(5) (investment professionals) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended, the “Order”), (ii) falling within article 49(2)(a) to (d) (high net worth companies, incorporated associations, etc.) of the Order, or (iii) to whom it may otherwise be lawfully communicated; any other persons in the United Kingdom should not take any action on the basis of this publication and should not act on or rely on it.

This publication does not constitute a recommendation concerning the prospective Offering. This announcement does not constitute an Offer or invitation to subscribe.

This announcement includes statements that are, or may be deemed to be, ‘forward looking statements’. These forward-looking statements can be identified by the use of forward looking terminology, including the terms ‘believes’, ‘estimates’, ‘anticipates’, ‘expects’, ‘intends’, ‘may’, ‘will’, or ‘should’ or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. By their nature, forward looking statements involve risk and uncertainty because they relate to future events and circumstances which may or may not occur. Many of these factors are beyond the control of the Company. Should one or more of these risks or uncertainties materialise, or should underlying assumptions prove incorrect, actual results and circumstances may vary materially from those described in this announcement as anticipated, believed, estimated or expected.

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