VNET Reports Unaudited First Quarter 2026 Financial Results

BEIJING, May 26, 2026 /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 first quarter ended March 31, 2026.

"We delivered a strong first quarter through effective execution of our dual-core strategy and Hyperscale 2.0 framework," said Josh Sheng Chen, Founder, Executive Chairperson and Interim Chief Executive Officer of VNET. "Our wholesale IDC business continued to thrive, securing a total of 517MW of new orders year-to-date 2026, including 510MW from a leading internet customer for our data centers in the Greater Beijing Area. As a pioneer in AIDC, we also advanced the development of high-performance, large-scale, green data center clusters, a segment where surging demand is increasingly constrained by limited resource availability. Moreover, we further strengthened our shareholder base by welcoming the affiliates of Contemporary Amperex Technology Co., Limited ("CATL") as strategic investors. At the same time, we would like to thank Shandong Hi-Speed Holdings Group Limited for their continued trust and support over the years. Looking ahead, our strategic alignment with CATL will unlock meaningful synergies across technology and supply chain, accelerating the development of next-generation AIDC. Going forward, our deep resource reserves in core regions, combined with rapid delivery capabilities and operational excellence, position us well to capture growing demand and reinforce our industry leadership."

Peter Zhihua Zhang, Senior Vice President, Operational Finance of VNET, commented, "We sustained our high-quality development trajectory in the first quarter of 2026. Total net revenues increased by 19.8% year-over-year to RMB2.69 billion, driven by 58.1% year-over-year growth in wholesale revenues, while adjusted EBITDA increased by 30.6% year-over-year to RMB891.5 million. This quarter marks a new milestone for us, as wholesale revenues surpassed retail revenues for the first time. Additionally, we further advanced our asset monetization strategy with the successful listing of two REIT projects in March, establishing a scalable capital recycling model that supports efficient reinvestment into new project development and deepens our competitive positioning in this capital-intensive industry. Looking ahead, we remain focused on strengthening our core capabilities to capitalize on AI-driven opportunities, delivering sustainable growth and long-term value for all stakeholders."

First Quarter 2026 Financial Highlights

[1] IDC business refers to managed hosting services, which consists of wholesale IDC business and retail IDC business. Such categorization is based on the nature and scale of our data center projects.

[2] Non-IDC business consists of cloud services and VPN services.

First Quarter 2026 Operational Highlights

Wholesale IDC Business

Retail IDC Business [8]

[3] Utilization rate is calculated by dividing capacity utilized by customers by capacity in service.

[4] Mature wholesale capacity refers to wholesale data centers with utilization rate at or above 80%.

[5] Ramp-up wholesale capacity refers to wholesale data centers with utilization rate below 80%.

[6] Total capacity committed represents capacity committed to customers under effective agreements.

[7] Commitment rate is calculated by dividing total capacity committed by total capacity in service.

[8] For the 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 include those with limited utilization, those scheduled for closure, or those planned for upgrades. As of March 31, 2025, December 31, 2025, and March 31, 2026, 3,766, 3,791 and 4,097 reserved cabinets, respectively, were excluded from retail IDC utilization rate calculations.

[9] Mature retail capacity refers to retail data centers that came into service over 24 months ago.

[10] Ramp-up retail capacity refers to retail data centers that entered service within the past 24 months, or mature retail data centers that underwent improvements within the past 24 months.

First Quarter 2026 Financial Results

TOTAL NET REVENUES: Total net revenues in the first quarter of 2026 were RMB2.69 billion (US$390.1 million), representing an increase of 19.8% from RMB2.25 billion in the same period of 2025. The year-over-year increase was mainly driven by the continued growth of our wholesale IDC business.

Net revenues from IDC business increased by 27.0% to RMB2.08 billion (US$302.2 million) from RMB1.64 billion in the same period of 2025. The year-over-year increase was mainly driven by an increase in wholesale revenues.

Net revenues from non-IDC business increased by 0.3% to RMB606.6 million (US$87.9 million) from RMB604.8 million in the same period of 2025.

GROSS PROFIT: Gross profit in the first quarter of 2026 was RMB615.9 million (US$89.3 million), representing an increase of 8.9% from RMB565.3 million in the same period of 2025. Gross margin in the first quarter of 2026 was 22.9%, compared with 25.2% in the same period of 2025.

ADJUSTED CASH GROSS PROFIT (non-GAAP), which excludes depreciation and amortization and share-based compensation expenses from gross profit, increased by 25.1% to RMB1.21 billion (US$175.6 million) in the first quarter of 2026 from RMB967.8 million in the same period of 2025. Adjusted cash gross margin (non-GAAP) in the first quarter of 2026 was 45.0%, compared with 43.1% in the same period of 2025.

OPERATING EXPENSES: Total operating expenses in the first quarter of 2026 were RMB368.9 million (US$53.5 million), compared with RMB316.8 million in the same period of 2025.

Sales and marketing expenses were RMB53.7 million (US$7.8 million) in the first quarter of 2026, compared with RMB64.3 million in the same period of 2025.

Research and development expenses were RMB74.4 million (US$10.8 million) in the first quarter of 2026, compared with RMB43.6 million in the same period of 2025.

General and administrative expenses were RMB162.4 million (US$23.5 million) in the first quarter of 2026, compared with RMB179.8 million in the same period of 2025.

ADJUSTED OPERATING EXPENSES (non-GAAP), which exclude share-based compensation expenses from operating expenses, were RMB362.2 million (US$52.5 million) in the first quarter of 2026, compared with RMB310.5 million in the same period of 2025. As a percentage of total net revenues, adjusted operating expenses (non-GAAP) in the first quarter of 2026 were 13.5%, compared with 13.8% in the same period of 2025.

ADJUSTED EBITDA (non-GAAP), which exclude depreciation and amortization, and share-based compensation expenses from operating profit, was RMB891.5 million (US$129.2 million) in the first quarter of 2026, representing an increase of 30.6% from RMB682.4 million in the same period of 2025. Adjusted EBITDA margin (non-GAAP) in the first quarter of 2026 was 33.1%, compared with 30.4% in the same period of 2025.

NET LOSS ATTRIBUTABLE TO VNET GROUP, INC.: Net loss attributable to VNET Group, Inc. in the first quarter of 2026 was RMB531.8 million (US$77.1 million), compared with RMB237.6 million in the same period of 2025, primarily attributable to RMB486.2 million capital transactions-related income tax expenses incurred in the first quarter of 2026.

LOSS PER SHARE: Basic and diluted loss per share in the first quarter of 2026 were both RMB1.36 (US$0.20), which represents the equivalent of RMB8.16 (US$1.20) per American depositary share ("ADS"). Each ADS represents six Class A ordinary shares. Diluted earnings/loss per share is calculated using adjusted net profit/loss attributable to ordinary shareholders divided by the weighted average number of diluted shares outstanding.

LIQUIDITY: As of March 31, 2026, the aggregate amount of the Company's cash and cash equivalents, restricted cash and short-term investments was RMB8.80 billion (US$1.28 billion).

Total short-term debt, consisting of short-term bank borrowings and the current portion of long-term borrowings, was RMB5.18 billion (US$750.4 million). Total long-term debt was RMB17.77 billion (US$2.58 billion), comprised of long-term borrowings of RMB12.93 billion (US$1.87 billion) and convertible notes of RMB4.83 billion (US$700.8 million).

Net cash generated from operating activities in the first quarter of 2026 was RMB173.7 million (US$25.2 million), compared with RMB195.7 million in the same period of 2025. During the first quarter of 2026, the Company obtained new debt financing, refinancing facilities, equity financing and other financings of RMB8.14 billion (US$1.78 billion).

Recent Developments

On May 13, 2026, the Company announced that certain new strategic investors that are non-controlled and non-consolidated affiliates of Contemporary Amperex Technology Co., Limited (CATL) (the "Buyers") entered into a share purchase agreement with wholly owned subsidiaries of Shandong Hi-Speed Holdings Group Limited (the "Sellers"). Pursuant to the share purchase agreement, the Buyers have agreed to acquire up to 650,424,192 Class A ordinary shares of the Company from the Sellers at a purchase price of US$1.4486 per ordinary share (equivalent to US$8.6914 per ADS) (the "Proposed Investment"). The closing of the transaction is expected to take place in the fourth quarter of 2026, and is subject to conditions set forth in the share purchase agreement, including approval by the shareholders of Shandong Hi-Speed Holdings Group Limited. Upon closing, the Buyers will hold up to approximately 38.1% of the Company's total issued and outstanding shares. Additionally, the Buyers have entered into an Investor Rights Agreement with the company and a voting and consortium agreement with Mr. Josh Sheng Chen, Founder, Executive Chairperson and Interim Chief Executive Officer of VNET, and certain of his affiliated investment vehicles (collectively, the "Founder Parties"), both of which will become effective upon closing of the Proposed Investment. Meanwhile, pursuant to the Investor Rights Agreement, the Company will grant the Buyers certain investor rights and the Buyers will be restricted from transferring or otherwise disposing of certain Class A ordinary shares of the Company acquired in the Proposed Investment for a specified period, subject to terms and conditions of the Investor Rights Agreement. In addition, the Buyers undertake to take necessary actions to support the stability of control of the Company.

Business Outlook

For the full year of 2026, the Company expects its total net revenues to be in the range of RMB11.5 billion to RMB11.8 billion, representing year-over-year growth of 15.6% to 18.6%, and adjusted EBITDA (non-GAAP) to be in the range of RMB3,550 million to RMB3,750 million, representing year-over-year growth of 19.2% to 25.9%. In addition, the Company expects capital expenditure to be in the range of RMB10 billion to RMB12 billion for the full year of 2026. 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 8:00 AM U.S. Eastern Time on Tuesday, May 26, 2026, or 8:00 PM Beijing Time on Tuesday, May 26, 2026.

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/10054823-igj5ty.html

Chinese line (listen-only mode):

https://s1.c-conf.com/diamondpass/10054824-q1g6uk.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 June 3, 2026, 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):

10054823

Replay PIN (Chinese line):

10054824

Non-GAAP Disclosure

In evaluating its business, VNET considers and uses the following non-GAAP measures defined as non-GAAP financial measures by the U.S. Securities and Exchange Commission as a supplemental measure to review and assess its operating performance: adjusted cash gross profit, adjusted cash gross margin, adjusted operating expenses, adjusted EBITDA and adjusted EBITDA margin. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with U.S. GAAP. For more information on these non-GAAP financial measures, please see the table captioned "Reconciliations of GAAP and non-GAAP results" set forth at the end of this press release.

The non-GAAP financial measures are provided as additional information to help investors compare business trends among different reporting periods on a consistent basis and to enhance investors' overall understanding of the Company's current financial performance and prospects for the future. These non-GAAP financial measures should be considered in addition to results prepared in accordance with U.S. GAAP, but should not be considered a substitute for, or superior to, U.S. GAAP results. In addition, the Company's calculation of the non-GAAP financial measures may be different from the calculation used by other companies, and therefore comparability may be limited.

Exchange Rate

This announcement contains translations of certain RMB amounts into U.S. dollars ("USD") at specified rates solely for the convenience of the reader. Unless otherwise stated, all translations from RMB to USD were made at the rate of RMB6.8980 to US$1.00, the noon buying rate in effect on March 31, 2026, in the H.10 statistical release of the Federal Reserve Board. The Company makes no representation that the RMB or USD amounts referred to 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 7,000 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. VNET's strategic and operational plans as well as Business Outlook 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: [email protected]

VNET GROUP, INC.

CONSOLIDATED BALANCE SHEETS

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

As of

December 31, 2025

March 31, 2026

RMB

US$

Assets

Current assets:

Cash and cash equivalents

5,523,571

7,772,136

1,126,723

Restricted cash

656,010

284,500

41,244

Short-term Investments

379,198

718,207

104,118

Accounts and notes receivable, net

2,222,106

2,682,764

388,919

Amounts due from related parties

429,411

430,143

62,358

Prepaid expenses and other current assets

2,241,570

2,602,208

377,243

Total current assets

11,451,866

14,489,958

2,100,605

Non-current assets:

Restricted cash

22,104

23,392

3,391

Long-term investments, net

1,062,660

1,025,257

148,631

Property and equipment, net

22,775,579

24,533,134

3,556,558

Intangible assets,net

2,004,710

1,987,282

288,095

Land use rights, net

867,765

868,577

125,917

Operating lease right-of-use assets, net

4,871,341

4,709,302

682,705

Deferred tax assets, net

251,572

244,058

35,381

Derivative financial instrument

11,185

Other non-current assets

1,275,380

1,235,496

179,109

Total non-current assets

33,142,296

34,626,498

5,019,787

Total assets

44,594,162

49,116,456

7,120,392

Liabilities and Shareholders' Equity

Current liabilities:

Short-term bank borrowings

1,172,561

2,559,857

371,101

Current portion of long-term borrowings

2,059,154

2,616,547

379,320

Current portion of finance lease liabilities

357,995

364,084

52,781

Current portion of operating lease liabilities

962,275

963,193

139,634

Accounts and notes payable

741,878

832,786

120,729

Amounts due to related parties

415,889

406,549

58,937

Income taxes payable

154,343

480,831

69,706

Advances from customers

933,920

1,107,869

160,607

Deferred revenue

138,671

157,897

22,890

Current portion of deferred government grants

51,062

50,327

7,296

Accrued expenses and other payables

5,459,465

5,115,594

741,605

Total current liabilities

12,447,213

14,655,534

2,124,606

Non-current liabilities:

Long-term borrowings

11,579,664

12,932,223

1,874,779

Convertible notes

5,138,664

4,833,867

700,764

Non-current portion of finance lease liabilities

1,643,713

1,615,569

234,208

Non-current portion of operating lease liabilities

4,001,047

3,884,787

563,176

Unrecognized tax benefits

118,734

17,213

Deferred tax liabilities

840,387

832,982

120,757

Deferred government grants

260,268

249,319

36,144

Total non-current liabilities

23,582,477

24,467,481

3,547,041

Mezzanine equity:

Redeemable non-controlling interests

1,711,591

5,135,112

744,435

Total mezzanine equity

1,711,591

5,135,112

744,435

Shareholders' equity

Ordinary shares

112

118

Treasury stock

(179,087)

(25,962)

Additional paid-in capital

17,360,323

17,602,639

2,551,847

Statutory reserves

116,316

16,862

Accumulated other comprehensive income

46,375

47,190

6,841

Accumulated deficit

(11,125,595)

(13,355,062)

(1,936,077)

Total VNET Group, Inc. shareholders' equity

6,218,444

4,232,114

613,528

Noncontrolling interest

634,437

626,215

90,782

Total shareholders' equity

6,852,881

4,858,329

704,310

Total liabilities，mezzanine equity and

shareholders' equity

44,594,162

49,116,456

7,120,392

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

March 31, 2025

December 31, 2025

March 31, 2026

RMB

US$

Net revenues

2,246,220

2,687,089

2,691,136

390,133

Cost of revenues

(1,680,879)

(2,146,705)

(2,075,269)

(300,851)

Gross profit

565,341

540,384

615,867

89,282

Operating income (expenses)

Operating income

1,461

14,670

Sales and marketing expenses

(64,346)

(73,564)

(53,682)

(7,782)

Research and development expenses

(43,603)

(78,665)

(74,423)

(10,789)

General and administrative expenses

(179,770)

(218,853)

(162,380)

(23,540)

Allowance for doubtful debt

(30,552)

(30,965)

(78,536)

(11,385)

Total operating expenses

(316,810)

(387,377)

(368,938)

(53,484)

Operating profit

248,531

153,007

246,929

35,798

Interest income

6,751

5,014

10,390

1,506

Interest expense

(100,653)

(189,447)

(221,042)

(32,044)

Other income

1,811

41,176

1,376

199

Other expenses

(2,438)

(4,971)

(2,991)

(434)

Changes in the fair value of financial

instruments

(334,904)

287,384

(32,095)

(4,653)

Gain on deconsolidation of a subsidiary

469,838

Foreign exchange gain (loss)

9,527

(29,436)

36,083

5,231

(Loss) income before income taxes

and gain from equity method

investments

(171,375)

732,565

38,650

5,603

Income tax expenses

(52,062)

(388,933)

(486,161)

(70,479)

Gain from equity method investments

3,214

1,710

2,611

379

Net (loss) income

(220,223)

345,342

(444,900)

(64,497)

Net income attributable to noncontrolling

interests

(17,335)

(20,056)

(19,752)

(2,863)

Net income attributable to redeemable

non-controlling interests

(20,613)

(67,189)

(9,740)

Net (loss) income attributable to

the VNET Group, Inc.

(237,558)

304,673

(531,841)

(77,100)

Accretion to redemption amount of

redeemable non-controlling interests

(4,839)

(1,697,626)

(246,104)

Net (loss) profit attributable to the

Company's ordinary shareholders

(237,558)

299,834

(2,229,467)

(323,204)

Loss (earnings) per share

Basic

(0.15)

0.17

(1.36)

(0.20)

Diluted

(0.15)

(0.00)

(1.36)

(0.20)

Shares used in (loss) earnings per share

computation

Basic*

1,608,799,842

1,616,275,922

1,644,810,699

Diluted*

1,608,799,842

1,762,607,179

1,644,810,699

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

Basic

(0.90)

1.02

(8.16)

(1.20)

Diluted

(0.90)

(0.01)

(8.16)

(1.20)

* 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

March 31, 2025

December 31, 2025

March 31, 2026

RMB

US$

Gross profit

565,341

540,384

615,867

89,282

Plus: depreciation and amortization

402,399

596,766

595,092

86,270

Plus: share-based compensation

expenses

109

507

297

Adjusted cash gross profit

967,849

1,137,657

1,211,256

175,595

Adjusted cash gross margin

43.1 %

42.3 %

45.0 %

Operating expenses

(316,810)

(387,377)

(368,938)

(53,484)

Plus: share-based compensation

expenses

6,329

7,191

6,757

980

Adjusted operating expenses

(310,481)

(380,186)

(362,181)

(52,504)

Operating profit

248,531

153,007

246,929

35,798

Plus: depreciation and amortization

427,440

644,349

637,551

92,425

Plus: share-based compensation

expenses

6,438

7,698

7,054

1,023

Adjusted EBITDA

682,409

805,054

891,534

129,246

Adjusted EBITDA margin

30.4 %

30.0 %

33.1 %

VNET GROUP, INC.

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

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

Three months ended

March 31, 2025

December 31, 2025

March 31, 2026

RMB

US$

CASH FLOWS FROM OPERATING ACTIVITIES

Net cash generated from operating activities

195,713

546,424

173,676

25,178

CASH FLOWS FROM INVESTING ACTIVITIES

Purchases of property and equipment

(1,792,051)

(1,809,905)

(1,752,448)

(254,052)

Purchases of intangible assets

(33,952)

(91,438)

(42,073)

(6,099)

(Payments for) proceeds from investments

(21,440)

1,380,795

(308,408)

(44,710)

Proceeds from disposal of a subsidiary, net

755,964

Payments for other investing activities

(37,327)

(791,034)

(115,851)

(16,795)

Net cash used in investing activities

(1,884,770)

(555,618)

(2,218,780)

(321,656)

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from bank borrowings

1,893,386

1,537,209

6,560,103

951,015

Repayments of bank borrowings

(369,366)

(486,814)

(3,954,802)

(573,326)

Proceeds from issuance of 2030 Convertible Notes

3,084,519

Payments for finance leases

(37,950)

(84,359)

(91,453)

(13,258)

Proceeds from issuance of ordinary shares

951,393

137,923

Contribution from noncontrolling interest in subsidiaries

635,000

702,659

4,976,468

721,436

Proceeds from (payments for) other financing activities

161,033

461,622

(4,493,902)

(651,479)

Net cash generated from financing activities

5,366,622

2,130,316

3,947,807

572,311

Effect of foreign exchange rate changes on cash, cash

equivalents and restricted cash

9,020

(673)

(24,360)

(3,531)

Net increase in cash, cash equivalents and restricted

cash

3,686,585

2,120,450

1,878,343

272,302

Cash, cash equivalents and restricted cash at beginning

of period

2,081,073

4,081,235

6,201,685

899,056

Cash, cash equivalents and restricted cash at end of

period

5,767,658

6,201,685

8,080,028

1,171,358

SOURCE VNET Group, Inc.