VNET Group, Inc. Q1 FY2023 Earnings Call

· Earnings call transcript and AI-powered summary

Quarterly Performance Highlights

  • Net revenues reached RMB 1.81 billion, up 9.7% year-over-year (compared with Q1 2022).
  • Adjusted EBITDA rose 9.9% year-over-year to RMB 556.2 million.
  • Adjusted EBITDA margin remained stable at 30.8%, the same as Q1 2022.
  • Gross profit was RMB 352.4 million, down 0.9% year-over-year due to margin pressure.
  • Gross margin declined to 19.5% from 21.6% in Q1 2022.
  • Adjusted cash gross profit rose 10.1% to RMB 754.3 million.
  • Adjusted cash gross margin slightly improved to 41.8% from 41.6% in Q1 2022.
  • Net income attributable to shareholders was RMB 82.3 million, down from RMB 90.7 million last year.
  • Retail MRR per cabinet reached a record RMB 9,486, up from RMB 9,371 in Q4 2022.

Operational & Business Highlights

  • Utilized cabinets increased by 1,300 during the quarter; utilization rate rose to 56.5% from 55% in Q4 2022.
  • Total cabinets under management rose to 87,310 (from 78,960 one year prior).
  • Wholesale business strengthened, including a major new 100+ MW project for a leading Chinese Internet company, with phased delivery beginning year-end 2023.
  • Retail IDC demand remained strong across cloud services, media, online gaming, IT services, and financial services sectors.
  • Value-added services were a key contributor to rising retail MRR.

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Operator: Hello, ladies and gentlemen. Thank you for standing by for First Quarter 2023 Earnings Conference Call for VNET Group Inc. . Participants from our management include Mr. Jeff Dong, Chief Executive Officer; Mr. Tim Chen, Chief Financial Officer; and Ms. Xinyuan Liu, Investor Relations Director of the company. Please note that today's conference call is being recorded. I would now like to turn the call over to the first speaker today, Ms. Xinyuan Liu. Please go ahead. Xinyuan Liu: Thank you, operator. Hello, everyone, and welcome to our first quarter 2023 earnings conference call. Our earnings release was distributed earlier today, and you can find a copy on our website, as well as on Newswire services. Please note that the discussion today will contain forward-looking statements made under the Safe Harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from our current expectations. For detailed discussions of these risks and uncertainties, please refer to our latest annual report and other documents filed with the SEC. VNET does not undertake any obligation to update any forward-looking statements, except as required under applicable laws. Please also note that VNET's earnings press release and this conference call include the disclosure of unaudited GAAP financial matters as well as audited non-GAAP financial matters. VNET's

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