VNET Group, Inc. Q2 FY2021 Earnings Call

· Earnings call transcript and AI-powered summary

Quarter Highlights

  • Net revenue reached RMB 1.5 billion, up 30.8% year-over-year (vs. RMB 1.14 billion in Q2 2020) and above guidance.
  • Adjusted EBITDA reached RMB 425.1 million, up 38.7% year-over-year (vs. RMB 306.4 million in Q2 2020).
  • Adjusted EBITDA margin improved to 28.4% (up from 26.8% in Q2 2020).
  • Gross profit grew 32% year-over-year to RMB 359.5 million.
  • Net profit attributable to shareholders was RMB 455.9 million, compared with a net loss of RMB 2.12 billion last year.
  • Total cash, restricted cash, and short-term investments reached RMB 5.03 billion, an increase of RMB 1.63 billion from year-end 2020.

Operational Updates

  • Approximately 7,000 new cabinets were added in Q2 2021; full-year target of 25,000 cabinets reaffirmed.
  • Utilization rate for mature IDCs (delivered prior to/during 2019) rose to 76.3% (from 73.9% in Q1 2021).
  • Overall compound utilization rate decreased to 59.9% (from 61.7% in Q1) due to ramp-up of new capacity.
  • Diversified customer demand growth across industries: e-commerce, financial services, logistics, AI, local services, technology, and automotive.
  • Expanded wholesale presence into Northern China; planning to deliver ~30MW capacity to a major content/social platform.
  • Extended partnership with Microsoft, becoming one of the first partners for the Microsoft Connected Vehicle Platform in China.

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Operator: Good morning and good evening, ladies and gentlemen. Thank you and welcome to 21Vianet Group's Second Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. We will be hosting a question-and-answer session after management's prepared remarks. With us today are Mr. Samuel Shen, Chief Executive Officer and Executive Chairman of Retail IDC; Mr. Tim Chen, Chief Financial Officer; and Ms. Xinyuan Liu, Investor Relations Director of the company. I will now turn the call over to the first speaker today, Ms. Liu, IR Director of 21Vianet. Please go ahead, ma'am. Xinyuan Liu: Hello, everyone. Welcome to our second quarter 2021 earnings call. Before we start, please note that this call may contain forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management's current expectations and observations that involve known and unknown risks, uncertainties and other factors not under the company's control which may cause actual results, performance or achievements of the company to be materially different from the results, performance or expectations implied by these forward-looking statements. All forward-looking statements are expressly qualified in their entirety by the cautionary statements, risk factors and details of the company's filings with the SEC. 21Vianet undertakes no duty to revise or update any forward-looki

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