VNET Group, Inc. Q4 FY2022 Earnings Call

· Earnings call transcript and AI-powered summary

Business Performance Highlights

  • Total cabinets under management reached approximately 87,320, up from 78,540 a year earlier. Customer-utilized cabinets increased to about 48,000, compared to 41,700 in Q4 2021.
  • Utilization rate stood at 55%, unchanged sequentially but supported by a stronger ramp-up from internet players versus cloud service providers.
  • Delivered approximately 8,400 self-built cabinets in 2022, meeting the company’s annual target.
  • Retail MRR per cabinet increased to RMB 9,371, up from RMB 9,287 in Q3 2022.

Financial Results (Q4 2022)

  • Net revenue: RMB 1.881 billion, up 7.7% year-over-year (driven by wholesale and retail IDC growth, cloud services, and VPN services).
  • Gross profit: RMB 328.4 million, down 13.6% YoY; gross margin declined to 17.5% (from 21.8%).
  • Adjusted cash gross profit: RMB 740.1 million, up 3.7% YoY; adjusted cash gross margin declined slightly to 39.4% (from 40.9%).
  • Adjusted operating expenses: RMB 355.4 million, up from RMB 273.7 million last year; 18.9% of revenue vs. 15.7% in Q4 2021.
  • Adjusted EBITDA: RMB 424.3 million, down 8.3% YoY; margin at 22.6% vs. 26.5% last year.

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Operator: Hello, ladies and gentlemen. Thank you for standing by for the Fourth Quarter and Full Year 2022 Earnings Conference Call for VNET Group Inc. [Operator Instructions] 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 is being recorded. I will now turn the call over to your first speaker today, Ms. Xinyuan Liu. Please go ahead. Xinyuan Liu: Thank you, operator. Hello, everyone and welcome to our fourth quarter and full year 2022 earnings conference call. Our earnings release was distributed earlier today and you can find a copy on our IR 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

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