VNET Group, Inc. Earnings Presentation for 4Q25 and FY2025 March 16, 2026 Disclaimer This presentation has been prepared by VNET Group, Inc. (the "Company") solely for informational purposes and has not been independently verified. No representations, warranties or undertakings, express or implied, are made by the Company or any of its affiliates, advisers or representatives as to, and no reliance should be placed upon, the accuracy, fairness, completeness or correctness of the information or opinions prese ...

Core Insights - MachTen, Inc. reported its financial results for the third quarter ended September 30, 2025, highlighting a commitment to expanding its fiber network and improving operational efficiency [1][2]. Financial Highlights - Revenue for the third quarter was $4.3 million, approximately flat compared to the same period in 2024, as new fiber-optic subscribers offset declines in copper-based voice and DSL customers [5]. - Operating profit decreased to $1.1 million from $1.8 million in 3Q24, impacted by higher depreciation expenses and increased operating costs [5]. - Net income was $496,000, down from $1.7 million, due to higher operating costs and the absence of a one-time benefit from interest expense in the prior year [5]. - EBITDA (Non-GAAP) was reported at $1.9 million, compared to $2.5 million in the previous year [5]. Strategic & Operational Highlights - The company deployed approximately $5.8 million in capital investments year-to-date, completing fiber projects in several locations [3]. - As of September 30, 2025, the company had 2,030 fiber-internet customers, an increase from 1,500 a year ago, with expectations for total fiber passings to exceed 12,000 by the end of 2025 [4]. - The Enhanced-ACAM program is expected to reach approximately 3,500 new fiber passings in 2025, contributing to a total of about 4,350 locations served by year-end [6]. - The company is resuming construction on ReConnect grant projects in Q4 2025, aimed at improving connectivity to 2,500 locations over 500 miles [6]. Network Modernization - A new in-house monitoring and management platform was deployed, providing real-time visibility into 92 active network devices, with scalability to over 10,000 elements [6]. - This modernization effort enhances reliability, accelerates fault detection, and reduces vendor dependency, positioning the company for operational autonomy and improved network resilience [6]. Operating Services Agreement - An Operating Services Agreement (OSA) with UP Fiber is being finalized, which will allow Michigan Broadband to provide customer service and administrative support for UP Fiber's footprint of over 200,000 passings [7].

Business Performance - VNET's wholesale IDC business capacity in service increased by 109MW, a 16.1% QoQ increase, reaching 783MW[8] - Utilized capacity in the wholesale IDC business increased by 70MW, a 13.8% QoQ increase, reaching 582MW, with a utilization rate of 74.3%[8] - Total net revenues reached RMB2,582 million, a 21.7% YoY increase and a 6.1% QoQ increase[8] - Wholesale IDC revenues reached RMB956 million, an 82.7% YoY increase and an 11.9% QoQ increase[8] - Adjusted EBITDA reached RMB758 million, a 27.5% YoY increase and a 3.5% QoQ increase[8] Guidance - Total net revenues guidance raised to RMB9,550 - 9,867 million, reflecting a 16% - 19% YoY increase[8] - Adjusted EBITDA guidance raised to RMB2,910 - 2,945 million, reflecting a 24% - 26% YoY increase[8] - FY2025 capex is expected to be RMB10 billion – 12 billion[58] Customer Orders - Secured three wholesale orders totaling 63MW in 3Q25, including a 20MW order from a leading cloud services provider, a 40MW order from an internet company, and a 3MW order from an intelligent driving company[8] - Secured a 32MW order from an internet company in 4Q25[8] - Secured a combined capacity of around 2MW in multiple retail data centers from customers in various industries in 3Q25[8]

Core Viewpoint - MachTen, Inc. continues to execute its fiber-based investment plan while enhancing operational foundations for sustained growth, aiming to establish a reliable broadband network and drive long-term value for customers and shareholders [1]. Financial Highlights - **Second Quarter 2025 Revenue**: $4.22 million, slightly down from $4.25 million in 2Q24, with subscriber gains in fiber-optic services offset by declines in legacy voice services [5]. - **Operating Profit**: $1.3 million compared to $1.7 million in 2Q24, impacted by increased depreciation and operating expenses [5]. - **Net Income**: $640,000, down from $1.1 million in the prior year period [5]. - **EBITDA (Non-GAAP)**: $2.1 million, down from $2.4 million in 2Q24 [5]. - **Year-to-Date Revenue**: $8.35 million, compared to $8.42 million in 2024 [5]. - **Year-to-Date Operating Profit**: $2.42 million, down from $2.85 million [5]. - **Year-to-Date Net Income**: $1.23 million, down from $1.65 million [5]. - **Year-to-Date EBITDA (Non-GAAP)**: $4.2 million, down from $4.3 million [5]. Strategic & Operational Highlights - **Capital Investments**: Approximately $3.7 million invested year-to-date, adding over 50 fiber route-miles and 1,000 passings in the first half of 2025 [4]. - **Customer Base**: As of June 30, 2025, Michigan Broadband serves approximately 1,800 fiber broadband customers across 9,500 passings, with expected improvements in take-rates as build areas mature [4]. - **E-ACAM Program**: Expected to reach approximately 3,500 new fiber passings in 2025, totaling around 4,500 by year-end 2025, which is about 50% of the target for the end of 2028 [6]. - **ReConnect Projects**: Ongoing construction on RC3 grant projects to improve connectivity to over 2,500 locations across approximately 500 miles, with an estimated total cost of around $85 million [6]. - **Network Modernization**: Core switching and routing upgrades initiated in early 2025 to enhance reliability and throughput as fiber replaces legacy copper-based DSL [6]. - **Operating Services Agreement**: Finalizing an agreement with UP Fiber for customer service and administrative support, which will increase network capacity [6]. Balance Sheet & Liquidity - **Cash and Cash Equivalents**: $1.73 million as of June 30, 2025 [13]. - **Debt**: $20 million term loan with $17 million outstanding at a weighted average interest rate of approximately 5.5% as of June 30, 2025 [13]. - **Total Assets**: $41.91 million as of June 30, 2025, compared to $39.69 million in December 2024 [12][14].