Core Insights - Century Internet (VNET.US) reported a strong financial performance for Q2 2025, with total revenue increasing by 22.1% year-on-year to 2.43 billion RMB [1][2] - The company is focusing on the transition to AI-driven data centers (AIDC) through its newly launched Hyperscale 2.0 framework, aiming to enhance competitiveness and sustainability [2][4] Financial Performance - Total revenue for Q2 2025 reached 2.43 billion RMB, reflecting a year-on-year growth of 22.1% [1][2] - Adjusted cash gross profit increased by 34.9% to 1.06 billion RMB, with an adjusted cash gross margin rising from 39.5% to 43.6% [1] - Adjusted EBITDA grew by 27.7% to 732 million RMB, with an adjusted EBITDA margin improving from 28.8% to 30.1% [1][2] Business Operations - The base IDC business saw a significant year-on-year revenue increase of 112.5%, contributing to the overall revenue growth [2] - As of June 30, the operational capacity of the base IDC business increased by 17.5% to 674 MW, with a total of 326 MW under construction and 374 MW in reserve [3] - The company secured approximately 4 MW of orders in urban IDC business and won a 20 MW order for base IDC in Hebei [3] Strategic Initiatives - The Hyperscale 2.0 framework aims to transform the business model from single project resource delivery to providing comprehensive AIDC solutions [4] - The company plans to increase its managed data center asset scale to 10 GW by 2036, with initial developments in Inner Mongolia, Hebei, and Beijing [4] - Century Internet is focusing on high-quality, high-margin business operations while optimizing operational efficiency [3]

Core Insights - Century Internet (VNET.US) reported a strong financial performance for Q2 2025, with total revenue increasing by 22.1% year-on-year to reach 2.43 billion RMB [1][4] - The company’s adjusted cash gross profit grew by 34.9% to 1.06 billion RMB, while adjusted EBITDA rose by 27.7% to 732 million RMB, reflecting improved profitability [1][4] - The company’s founder emphasized the robust growth of its base IDC business, which saw operational capacity increase by 101 MW to 674 MW, driven by strong customer demand [1][3] Group 1: IDC Business Growth - The base IDC business continued to be a key growth driver, with operational capacity increasing by 17.5% and new capacity added reaching 101 MW [3][4] - The company’s urban IDC business maintained stable operations, with operational capacity reaching 52,131 cabinets and a slight increase in the cabinet utilization rate to 63.9% [3] - In the first half of 2025, Century Internet delivered approximately 188 MW, with plans to deliver an additional 326 MW in the next 12 months, indicating strong demand for high-quality computing resources [3] Group 2: Revenue and Profitability - Total revenue for Q2 2025 was 2.43 billion RMB, reflecting a year-on-year increase of 22.1% and a quarter-on-quarter increase of 8.4% [4] - The base IDC business revenue surged to 854 million RMB, marking a significant year-on-year growth of 112.5% [4] - Adjusted EBITDA reached 732 million RMB, with a year-on-year increase of 27.7% and an EBITDA margin of 30.1%, up 1.3 percentage points from the previous year [4] Group 3: Strategic Initiatives - Century Internet launched the Hyperscale 2.0 framework aimed at enhancing its AIDC capabilities and plans to increase its managed data center assets to 10 GW by 2036 [2][6] - The company is focusing on innovative technologies to improve the efficiency and flexibility of data center construction, transitioning from traditional IDC to AIDC solutions [6][7] - The Hyperscale 2.0 initiative will begin in regions such as Inner Mongolia, Hebei, and Beijing, aiming to create a seamless collaboration between computing power and energy management across data center hubs [7] Group 4: Order Acquisition - In Q2 2025, Century Internet secured approximately 4 MW of orders from various sectors, including IT services and financial services, indicating strong demand for AI-driven solutions [5] - The company also won a significant 20 MW order for its base IDC business from a leading cloud computing client in Hebei [5]

Core Viewpoint - Century Internet (VNET.US) reported a significant increase in its financial performance for Q2 2025, with total revenue reaching 2.43 billion RMB, reflecting a year-on-year growth of 22.1% [1][2]. Financial Performance Summary - Total net revenue for Q2 2025 was 2.43 billion RMB (339.8 million USD), up from 1.99 billion RMB in Q2 2024, marking a 22.1% increase [2]. - IDC business net revenue grew by 32.6%, from 1.37 billion RMB to 1.81 billion RMB (253.1 million USD) [2]. - Wholesale business revenue surged by 112.5%, increasing from 402 million RMB to 854.1 million RMB (119.2 million USD) [2]. - Retail business revenue slightly decreased from 964.8 million RMB to 958.7 million RMB (133.8 million USD) [2]. - Non-IDC business net revenue saw a minor decline of 0.9%, from 627 million RMB to 621.4 million RMB (86.7 million USD) [2]. Profitability Metrics - Adjusted cash gross profit for Q2 2025 was 1.06 billion RMB (148.2 million USD), up from 787.3 million RMB in Q2 2024, representing a 34.9% increase [3]. - Adjusted cash gross margin improved to 43.6% from 39.5% year-on-year [3]. - Total gross profit for Q2 2025 was 547.7 million RMB (76.5 million USD), a 28.9% increase from 424.9 million RMB in Q2 2024, with a gross margin of 22.5% [2]. Operating Expenses - Total operating expenses for Q2 2025 were 374.7 million RMB (52.3 million USD), compared to 230.3 million RMB in Q2 2024 [3]. - Sales and marketing expenses increased to 70 million RMB (9.8 million USD) from 58.2 million RMB [4]. - R&D expenses rose to 67.6 million RMB (9.4 million USD) from 62 million RMB [5]. - General and administrative expenses increased significantly to 212.5 million RMB (29.7 million USD) from 107.3 million RMB [6]. EBITDA and Net Income - Adjusted EBITDA for Q2 2025 was 732.5 million RMB (102.2 million USD), up 27.7% from 573.8 million RMB in Q2 2024, with an EBITDA margin of 30.1% [6]. - The company reported a net loss attributable to the parent company of 11.9 million RMB (1.7 million USD) for Q2 2025, compared to a net profit of 63.7 million RMB in Q2 2024, primarily due to increased interest and tax expenses [6]. Liquidity and Debt - As of June 30, 2025, the company had cash and cash equivalents totaling 4.66 billion RMB (651.1 million USD) [7]. - Total short-term debt amounted to 2.73 billion RMB (380.5 million USD), while long-term debt was 14.65 billion RMB (2.05 billion USD) [8]. Stock Buyback Plan - The company's board approved a stock buyback plan on June 27, 2025, allowing for the repurchase of up to 50 million USD worth of American Depositary Shares over the next 12 months [9]. Business Outlook - The company expects total net revenue for 2025 to be between 9.15 billion RMB and 9.35 billion RMB, representing a year-on-year growth of 11% to 13% [10]. - Adjusted EBITDA is projected to be between 2.76 billion RMB and 2.82 billion RMB, indicating a growth of 14% to 16% [10].

Financial Data and Key Metrics Changes - Total net revenues increased by 22.1% year over year to RMB2.43 billion for the second quarter [9][20] - Adjusted EBITDA for the second quarter increased by 27.7% year over year to RMB732 million, with an adjusted EBITDA margin of 30.1%, up 1.3 percentage points year over year [9][20] - Adjusted cash gross profit rose by 34.9% to RMB1.06 billion, with adjusted cash gross margins improving to 43.6% from 39.5% in the same period last year [20][21] Business Line Data and Key Metrics Changes - Wholesale revenues reached RMB854 million for the quarter, representing year over year growth of 112.5%, driven by the rapid growth of the wholesale IDC business [9][20] - Retail capacity in service was 52,131 cabinets, with the utilization rate increasing slightly to 63.9% as of June [15] - Monthly Recurring Revenue (MRR) per retail cabinet increased to RMB8,915 this quarter [16] Market Data and Key Metrics Changes - Wholesale capacity in service grew by 17.5% quarter over quarter to 674 megawatts, with utilization rate stable at 75.9% [8][14] - Capacity under construction was around 326 megawatts with a pre-commitment rate of 55.2% as of June [15] - The company secured a combined capacity of around 4 megawatts in retail orders from various sectors, indicating strong demand in the Greater Beijing area and the Yangtze River Delta [10] Company Strategy and Development Direction - The company unveiled its Hyperscale 2.0 framework aimed at developing AIDC solutions, with a goal to grow data center assets under management to 10 gigawatts by 2036 [11][12] - The business model is evolving from project-based capacity delivery to comprehensive AIDC solutions, positioning the company as a pioneer in AIDC development [11][13] - The company plans to establish data center hubs in Inner Mongolia, Hebei province, and Beijing, focusing on rapid construction and flexible solutions [13] Management Comments on Operating Environment and Future Outlook - Management expressed optimism about future demand, particularly in AI-driven sectors, and noted that the market is relatively active [30][54] - The company raised its full-year revenue and adjusted EBITDA guidance, expecting total net revenues to be in the range of RMB9.15 billion to RMB9.35 billion, a year-over-year increase of 11% to 13% [26][27] - Management acknowledged potential impacts from AI chip supply constraints but remains optimistic about maintaining order momentum [54] Other Important Information - The company maintained robust liquidity with total cash and cash equivalents reaching RMB4.66 billion as of June 30, 2025 [22] - A buyback program was authorized to repurchase up to US$50 million in shares, reflecting confidence in future growth [25] Q&A Session Summary Question: Future demand and orders related to NVIDIA's chipsets - Management noted that AI demand is strong in active digital economy regions and is monitoring potential demand closely, especially for large clients [30][31] Question: Update on wind power build-out in Yulan Top - The wind power project is underway and expected to deliver power by the end of this year, with a positive impact anticipated on the company's IR [36] Question: Gross margin fluctuations - Changes in gross margin were attributed to timing and depreciation factors, with cash gross margin still showing healthy growth [41][42] Question: Full-year guidance and second half outlook - Management remains optimistic about the second half, monitoring utilization speed and client orders closely [48][54] Question: Retail IDC revenue decline - A slight decline in retail IDC revenue was noted but is considered within a reasonable range, with expectations for stability and potential increase [50]

Financial Data and Key Metrics Changes - Total net revenues increased by 22.1% year over year to RMB2.43 billion for the second quarter [8][19] - Adjusted EBITDA for the second quarter increased by 27.7% year over year to RMB732 million, with an adjusted EBITDA margin of 30.1%, up 1.3 percentage points year over year [8][20] - Adjusted cash gross profit rose by 34.9% to RMB1.06 billion, with adjusted cash gross margins improving to 43.6% from 39.5% in the same period last year [19][20] Business Line Data and Key Metrics Changes - Wholesale revenues reached RMB854 million for the quarter, representing year over year growth of 112.5%, driven by the rapid growth of the wholesale IDC business [8][19] - Retail capacity in service was 52,131 cabinets, with the utilization rate increasing slightly to 63.9% as of June [15] - Monthly Recurring Revenue (MRR) per retail cabinet increased to RMB8,915 this quarter [15] Market Data and Key Metrics Changes - Wholesale capacity in service grew by 17.5% quarter over quarter to 674 megawatts, with utilization rate stable at 75.9% [7][13] - Capacity under construction was around 326 megawatts with a pre-commitment rate of 55.2% as of June [14] - The company secured a combined capacity of around 4 megawatts in retail orders from various sectors, including IT services and AIoT [9] Company Strategy and Development Direction - The company unveiled its Hyperscale 2.0 framework aimed at developing AIDCs and plans to grow the capacity of its data center assets to 10 gigawatts by 2036 [10][12] - The business model is evolving from project-based capacity delivery to offering comprehensive AIDC solutions [10] - The company aims to establish data center hubs with megawatt scale cabinets and gigawatt scale campuses [12] Management Comments on Operating Environment and Future Outlook - Management expressed optimism about future demand, particularly in regions with active digital economies like Greater Beijing and the Yangtze River Delta [30] - The company is closely monitoring the impact of AI chip supply constraints on new orders and customer movements [55] - Management remains committed to driving innovation and fostering industry development while delivering value to stakeholders [26] Other Important Information - The company maintained robust liquidity with total cash and cash equivalents reaching RMB4.66 billion as of June 30, 2025 [21] - CapEx for 2025 was RMB3.89 billion, with expectations to be in the range of RMB10 billion to RMB12 billion for the full year [22][23] - A buyback program was authorized to repurchase up to USD50 million in the open market over the next twelve months [23] Q&A Session Summary Question: Future demand and orders related to NVIDIA's chipsets - Management noted that the market is relatively active, with strong AI demand in key regions and attention to potential demand releases around September [30] Question: Update on wind power build-out in Yulan Top and its impact - The wind power project is underway and expected to deliver power by the end of this year, with a positive impact anticipated on IR [36] Question: Gross margin fluctuations and future expectations - Changes in gross margin were attributed to timing and depreciation factors, with cash gross margin showing healthy growth [41][42] Question: Full year guidance and second half outlook - Management remains optimistic about the second half, monitoring utilization speed and potential impacts from AI chip supply [55] Question: Retail IDC revenue decline in the second quarter - Slight decline in retail IDC revenue was noted, but management expects stability and potential increases moving forward [49]

Core Viewpoint - VNET Group reported a quarterly loss of $0.01 per share, missing the Zacks Consensus Estimate of $0.02, and showing a significant decline from earnings of $0.06 per share a year ago, indicating a -150.00% earnings surprise [1] Financial Performance - The company posted revenues of $339.8 million for the quarter ended June 2025, exceeding the Zacks Consensus Estimate by 5.75%, and representing an increase from $274.35 million in the same quarter last year [2] - Over the last four quarters, VNET Group has surpassed consensus revenue estimates three times [2] Stock Performance - VNET Group shares have increased approximately 68.4% since the beginning of the year, significantly outperforming the S&P 500's gain of 8.7% [3] Future Outlook - The company's earnings outlook will be crucial for determining the stock's immediate price movement, with current consensus EPS estimates at $0.03 for the coming quarter and $0.03 on $1.31 billion in revenues for the current fiscal year [4][7] - The estimate revisions trend for VNET Group was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] Industry Context - The Internet - Software industry, to which VNET Group belongs, is currently ranked in the top 30% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8]

Financial Performance - Total Net Revenues reached RMB 2,434 million, a 22.1% year-over-year increase and an 8.4% quarter-over-quarter increase[8] - Wholesale IDC Revenue was RMB 854 million, showing a significant increase of 112.5% year-over-year and 26.9% quarter-over-quarter[8] - Adjusted EBITDA reached RMB 732 million, representing a 27.7% year-over-year increase and a 7.3% quarter-over-quarter increase[8] - The company's FY2025 revised guidance projects revenues between RMB 9,150 million and RMB 9,350 million, implying an 11%-13% year-over-year growth[66] - The company's FY2025 revised guidance projects Adjusted EBITDA between RMB 2,760 million and RMB 2,820 million, implying an 18%-20% year-over-year growth[66] IDC Business Growth - Wholesale IDC Business capacity in service increased to 674MW, with a quarter-over-quarter increase of 101MW, representing a 17.5% growth[8] - Wholesale IDC Business capacity utilized increased to 511MW, with a quarter-over-quarter increase of 74MW, representing a 17.0% growth[8] - The utilization rate of the company's wholesale IDC business was 75.9% in 2Q25[8] - The company secured a 20MW order from a leading cloud services provider via its JV project[8] - The company plans to grow data center assets under management to 10GW by 2036[12] Capacity and Infrastructure - Wholesale capacity in service is distributed with 55.0% in the Greater Beijing Area and 45.0% in the Yangtze River Delta[18] - Wholesale capacity under construction is distributed with 77.4% in the Greater Beijing Area and 22.6% in the Yangtze River Delta[19] - Wholesale capacity held for future development is heavily concentrated in the Greater Beijing Area, accounting for 98.1%[20]

Exhibit 99.1 Qiyu Wang, Chief Financial Officer of VNET, commented, "We maintained our business's vibrant momentum with strong financial results during the second quarter. Our total net revenues rose 22.1% year over year to RMB2.43 billion, driven by significant wholesale revenue growth of 112.5% year over year. Adjusted EBITDA also increased by 27.7% year over year to RMB732.5 million, with an adjusted EBITDA margin of 30.1%, up 1.3 percentage points year over year. With our effective business strategy and ...

Core Insights - VNET Group, Inc. reported strong financial results for Q2 2025, with total net revenues increasing by 22.1% year-over-year to RMB2.43 billion (US$339.8 million) driven by significant growth in the wholesale IDC business [2][11][24] - The company aims to expand its data center capacity to 10GW by 2036 under its new Hyperscale 2.0 framework, focusing on building greener and more intelligent data centers for the AI era [2][24] Financial Performance - Total net revenues rose to RMB2.43 billion (US$339.8 million), up from RMB1.99 billion in Q2 2024, primarily due to a 112.5% increase in wholesale revenues to RMB854.1 million (US$119.2 million) [3][11][27] - Retail revenues remained stable at RMB958.7 million (US$133.8 million), slightly down from RMB964.8 million in the same period last year [3][27] - Adjusted EBITDA increased by 27.7% year-over-year to RMB732.5 million (US$102.2 million), with an adjusted EBITDA margin of 30.1% [18][24] Operational Highlights - The wholesale capacity in service increased by 101MW quarter-over-quarter to 674MW, with utilized wholesale capacity growing by 74MW to 511MW [2][8] - The company secured approximately 4MW in retail orders and a 20MW wholesale order through a joint venture project in Hebei Province [2][8] Business Outlook - VNET expects total net revenues for 2025 to be between RMB9,150 million to RMB9,350 million, representing year-over-year growth of 11% to 13% [24] - Adjusted EBITDA is projected to be in the range of RMB2,760 million to RMB2,820 million, indicating year-over-year growth of 14% to 16% [24]

Core Viewpoint - Century Internet (VNET) is a leading digital infrastructure company in China, focusing on data centers and cloud computing services, with a significant market presence and strategic partnerships, particularly with Microsoft [1][2]. Financial Performance - As of March 31, 2025, Century Internet reported total revenue of 2.246 billion RMB, representing a year-on-year growth of 18.34% [1]. - The company's net profit attributable to shareholders was -238 million RMB, a decrease of 27.03% year-on-year [1]. Business Operations - Century Internet operates over 50 data centers across more than 30 cities in China, with a base business operational capacity exceeding 480 MW and over 52,000 operational cabinets in urban areas [2]. - The company has established large-scale data center industry clusters in key regions such as Beijing-Tianjin-Hebei, Yangtze River Delta, and Guangdong-Hong Kong-Macau, facilitating smooth data migration from first-tier to edge cities [2]. Strategic Partnerships - As a strategic partner of Microsoft, Century Internet operates international-standard cloud services in China, including Microsoft Azure, Microsoft 365, Dynamics 365, and Power Platform [2]. - The company has built a solid foundation for business development for over 6,000 high-quality enterprise clients, including nearly 100 leading companies in high-growth industries [2].