Key Highlights

  • Revenue rose 14.2% YoY to RMB2.78 billion ($409.5 million).
  • Wholesale/hyperscale Revenue rose 29.3% to RMB1.10 billion.
  • Adjusted EBITDA Margin was 33.0%, against 30.1% a year earlier.
  • Shares closed at $5.26, down $0.06, or 1%, at Tuesday's close.

VNET Group, Inc. (NASDAQ:VNET)'s second quarter combined higher revenue and adjusted EBITDA margin with a decline in GAAP gross margin, as the company's wholesale Data Center Business continued to outgrow its urban retail segment. Senior Vice President of Finance Zhang Zhihua said strong order momentum, long-term customer commitments and an orderly delivery cadence have enhanced visibility into the company's future revenue growth.

VNET is a carrier- and cloud-neutral internet data center services provider in China, operating wholesale and retail colocation businesses. The company said its wholesale business accounted for 39.8% of total net revenue in the quarter, up from a year earlier, cementing its position as a primary growth driver.

The company added approximately 1.4 gigawatts of new land reserve capacity during the quarter, including 908 megawatts domestically and 478 megawatts overseas, and secured 347 megawatts of new orders.

Second quarter 2026 compared with the prior-year quarter

Total revenue grew 14.2% year over year to RMB2.78 billion. Wholesale business revenue rose 29.3% to RMB1.10 billion. Gross margin was 18.2%, against 22.5% a year earlier, while adjusted cash gross margin was 41.8%, against 43.6%, which the company attributed in part to higher Utility costs and a one-off gain in the prior quarter.

Adjusted EBITDA margin was 33.0%, against 30.1%. Retail monthly Recurring Revenue per retail cabinet rose 9.9% to RMB9,799, with the installed rate stable at 64.5%. Total cash and cash equivalents were RMB7.21 billion at quarter-end.

Management outlook and stated risks

Management maintained its full-year 2026 guidance of total net revenues between RMB11.5 billion and RMB11.8 billion, adjusted EBITDA of RMB3,550 million to RMB3,750 million, and Capital Expenditure of RMB10 billion to RMB12 billion. The company said it plans to deliver 585 megawatts of capacity over the next 12 months, with a focus on the second half of 2026.

Management said it expects a faster move-in pace for customers in the second half of 2026, aided by improved domestic chip production.

Final Analysis

Management tied its forward plans to converting its wholesale order pipeline into delivered capacity, including a 345-megawatt wholesale order secured during the quarter from a leading cloud service provider. The company said its well-paced delivery roadmap is intended to strengthen visibility into future revenue growth.