VNET Group (VNET) Q1 2025 earnings summary

Executive summary

• Achieved strong Q1 2025 results with 18.3% year-over-year revenue growth to RMB 2.25 billion, driven by robust wholesale IDC business, increased capacity utilization, and surging AI-related demand.

• Wholesale IDC capacity in service grew to 573 MW, with utilization rate rising to 76.2% and mature capacity utilization at 94.5%.

• Secured major wholesale orders totaling 125 MW from cloud, internet, and intelligent driving sectors, and 4 MW in retail from diverse industries.

• Retail IDC revenues from private deployments of open-source large language models rose 309% in March versus January.

• Maintained solid growth in total net revenues and Adjusted EBITDA, supported by strong order wins and efficient delivery.

Financial highlights

• Total net revenues increased 18.3% year-over-year to RMB 2.25 billion in Q1 2025; IDC business revenues up 27.8% to RMB 1.64 billion.

• Wholesale IDC revenues surged 86.5% year-over-year to RMB 673 million; retail IDC revenues grew 4.8% to RMB 968.3 million.

• Adjusted EBITDA grew 26.4% year-over-year to RMB 682 million, with margin up to 30.4%.

• Adjusted cash gross profit rose 26.4% year-over-year to RMB 967.8 million; adjusted cash gross margin improved to 43.1%.

• Net loss widened to RMB 237.6 million, mainly due to changes in fair value of financial instruments.

Outlook and guidance

• Reiterated full-year 2025 guidance: total net revenues of RMB 9.1–9.3 billion (10–13% YoY growth), Adjusted EBITDA of RMB 2.7–2.76 billion (15–18% YoY growth).

• CapEx for 2025 expected at RMB 10–12 billion, up 101–141% YoY, supporting delivery of 400–450 MW.

• Confident in sustained demand from hyperscalers and robust utilization ramp-up for the next four quarters.