#China #Beijing #Data Center #VNET Group #IDC Services

VNET Group Reports First Quarter 2026 Financial Results

VNET Group, Inc. (Nasdaq: VNET), a leading provider of carrier- and cloud-neutral internet data center services in China, has released its unaudited financial results for the first quarter ending on March 31, 2026. The company has demonstrated robust growth driven by its innovative strategies and increasing market demand.

Overview of Financial Performance

VNET's first-quarter report indicated a total net revenue of RMB 2.69 billion (approximately US$390.1 million), representing a remarkable year-over-year increase of 19.8% compared to RMB 2.25 billion in the same period last year. This increase has been primarily fueled by a significant growth of 58.1% in wholesale revenues, which equated to RMB 1.06 billion (US$154.3 million) for the quarter, as compared to RMB 673.2 million in Q1 2025.

Strategic Developments

Josh Sheng Chen, the Founder and Interim CEO of VNET, emphasized the company's effective implementation of its dual-core strategy, along with the Hyperscale 2.0 framework. This strategic direction has enabled VNET to secure new orders totaling 517MW in capacity for 2026, with 510MW stemming from a prominent internet customer based in the Greater Beijing Area.

VNET has also made significant progress in developing high-performance, large-scale, green data center clusters, amidst an ever-increasing demand constrained by resource limitations. The partnership with affiliates of Contemporary Amperex Technology Co., Limited (CATL) as new strategic investors is anticipated to create synergies that will enhance both technology and supply chain capabilities.

Operational Highlights

During the first quarter, the company's wholesale IDC capacity expanded to 907MW, up from 889MW at the end of 2025. This capacity was utilized at a rate of 75.7% by customers, an increase from 70.1% at the previous quarter's end. Meanwhile, the service capacity in the retail IDC business reached 50,170 cabinets; with utilization rates also reflecting a steady improvement.

The utilization of retail capacity was reported at 64.1%, slightly up from 64.0% as of December 31, 2025, demonstrating VNET’s operational efficiency and customer engagement in its retail offerings.

Financial Highlights of Q1 2026

• - Adjusted EBITDA (non-GAAP) was RMB 891.5 million (US$129.2 million), marking a substantial 30.6% increase year-over-year.
• - Gross profit stood at RMB 615.9 million (US$89.3 million), representing an 8.9% increase over the previous year. The adjusted cash gross profit rose to RMB 1.21 billion (US$175.6 million), reflecting a robust cash gross margin improvement to 45.0%.
• - Cash generated from operating activities was RMB 173.7 million (US$25.2 million), showing effective cash management amid expansive growth pursuits.

Looking Ahead

As VNET's management outlines their expectations for the year, they anticipate total net revenues to range between RMB 11.5 billion and RMB 11.8 billion, projecting an annual growth of 15.6% to 18.6%. Additionally, the adjusted EBITDA is expected to grow between RMB 3.55 and 3.75 billion, presenting a potential year-over-year growth of 19.2% to 25.9%. The projected capital expenditure for the year is estimated at RMB 10 billion to RMB 12 billion.

VNET is firmly positioning itself to capitalize on AI-driven opportunities while continuing to deliver sustainable growth and value for all stakeholders involved.

Conclusion

VNET Group’s performance in the first quarter of 2026 reflects its strong market presence and commitment to innovation. The company’s strategic initiatives, augmented capabilities, and robust financial health underpin its competitive positioning within the rapidly evolving data center landscape in China. Stakeholders will be watching closely as VNET continues to leverage its resources and partnerships for future successes.