VNET Reports Unaudited Fourth Quarter and Full Year 2022 Financial Results.

BEIJING: 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 fourth quarter and full year ended December 31, 2022.

"We concluded a challenging 2022 with solid fourth quarter results, achieving meaningful development on a broad scale," said Jeff Dong, Chief Executive Officer of VNET. "Amid the macro headwinds, our dual-core strategy encompassing both the wholesale and retail IDC markets continued to prove strongly effective. We continued to grow our wholesale business with two major orders totaling over 100MW, extending the service contract with one of our largest existing customers in the fourth quarter and winning a bid for an IDC project with a new customer recently. On the retail business front, we made decent progress in expanding our customer base and fueling deeper collaboration with existing customers as we have been consistently building out our high-quality service offerings. Heading into 2023, with a gradual but noticeable economic recovery, we remain optimistic about the long-term prospects of the IDC industry."

Tim Chen, Chief Financial Officer of VNET, commented, "We delivered a resilient performance in the fourth quarter of 2022, with year-over-year revenue growth of 7.7% and adjusted EBITDA margin of 22.6%. For the full year of 2022, we achieved our annual cabinet delivery target by adding approximately 8,400 self-built cabinets despite external challenges, which speaks to our outstanding execution. Looking ahead, we will continue to execute on our dual-core growth strategy and remain focused on our core businesses, while continuing to explore more capital resources to strengthen our financial position."

Fourth Quarter 2022 Financial Highlights

Net revenues increased by 7.7% to RMB1.88 billion (US$272.7 million) from RMB1.75 billion in the same period of 2021.

Adjusted cash gross profit (non-GAAP) increased by 3.7% to RMB740.1 million (US$107.3 million) from RMB713.8 million in the same period of 2021. Adjusted cash gross margin (non-GAAP) was 39.4%, compared to 40.9% in the same period of 2021.

Adjusted EBITDA (non-GAAP) decreased by 8.3% to RMB424.3 million (US$61.5 million) from RMB463.0 million in the same period of 2021. Adjusted EBITDA margin (non-GAAP) was 22.6%, compared to 26.5% in the same period of 2021.

Full Year 2022 Financial Highlights

Net revenues increased by 14.1% to RMB7.07 billion (US$1.02 billion) from RMB6.19 billion in the full year of 2021.

Adjusted cash gross profit (non-GAAP) increased by 8.1% to RMB2.85 billion (US$412.7...