VNET Group's Strong Financial Performance in Fourth Quarter and Full Year 2024

VNET Group Reports Exceptional Fourth Quarter and Full Year Financial Results for 2024

VNET Group, Inc. (Nasdaq: VNET), a prominent carrier- and cloud-neutral internet data center services provider in China, has released its unaudited financial results for the fourth quarter and the full year ending December 31, 2024. The company closed the year on a strong note, attributed to the remarkable performance of its wholesale IDC business, which capitalized on the increasing demand driven by artificial intelligence (AI).

Key Highlights from Q4 2024

CEO Josh Sheng Chen expressed confidence in the company's results, stating, "Our high-performance data centers and exceptional service capabilities have consistently attracted quality orders. In Q4, we secured a significant 32MW order from an internet client in the Yangtze River Delta and captured a 1.5MW order from a new customer in the intelligent driving sector within the Greater Bay Area. Furthermore, we signed a substantial 100MW framework agreement with an internet client in Ulanqab, anticipating substantial service deliveries in 2025. This includes a recent 55MW order from a leading cloud computing customer."

The company noted that its fourth-quarter revenue increased by 18.3%, totaling RMB 2.25 billion (approximately US$307.8 million) up from RMB 1.90 billion in the same period of the previous year. Noteworthy was the IDC business segment, which experienced a 28.3% jump to RMB 1.63 billion, while wholesale revenues saw explosive growth of 125.4% to RMB 665.2 million.

The retail IDC segment posted a slight decline, with revenues falling by 1.1% to RMB 964.8 million, while a 1.9% decrease in non-IDC revenues led to a total of RMB 616.5 million. On the profit side, the adjusted cash gross profit rose by 24.6% to RMB 923.9 million, reflecting a gross margin of 41.1%. Adjusted EBITDA surged by 63.8% to RMB 721.3 million with a notable EBITDA margin of 32.1%.

Full Year 2024 Financial Performance

VNET's full-year revenue figures also showcased impressive growth, increasing by 11.4% to RMB 8.26 billion (US$1.13 billion) from RMB 7.41 billion in 2023. IDC business revenue climbed by 16.1% to reach RMB 5.78 billion, while wholesale revenues climbed substantially by 90.4%, resulting in a total of RMB 1.95 billion for the year.

Retail revenues took a minor hit, decreasing by 3.1% to RMB 3.83 billion. Non-IDC operations demonstrated minor growth of 1.7%, leading to revenues of RMB 2.48 billion. Overall gross profit for the year stood at RMB 1.83 billion, a remarkable 41.8% increase year-over-year.

VNET's net income for 2024 showed significant improvement, rising from a net loss of RMB 2.64 billion in 2023 to a net profit of RMB 248.4 million. The company’s management is optimistic, projecting continued growth with expected revenues for 2025 to range between RMB 9.1 billion to RMB 9.3 billion, driven by the increasing adoption of AI in the market.

Looking Ahead

As VNET Group enters 2025, it expresses confidence in the robust potential of the Chinese market, particularly following recent advances in AI technology. The company plans to leverage its established infrastructure and substantial resources to tap into this growing sector. With an established foundation for sustainable growth, VNET is well-positioned to capture emerging opportunities in the expanding data center industry. The future outlook reflects the company’s commitment to delivering optimal services while maximizing shareholder value.

In conclusion, VNET’s financial performance in 2024 is a testament to its strategic positioning in the ever-evolving technology landscape. As the demand for high-performance data centers continues to climb, VNET Group is poised to thrive in a competitive marketplace, setting the stage for future successes.