Q2 FY2026
Filed Aug 18, 2026VNET Reports Unaudited Second Quarter 2026 Financial Results
Revenue and adjusted EBITDA grew 14.2% and 25.4% year-over-year, respectively, led by wholesale IDC, but GAAP gross profit declined 7.8%, gross margin contracted, and net loss attributable to VNET Group, Inc. widened to RMB135.6 million.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Total net revenuesGAAP | RMB2.78 billion (US$409.5 million) | – | 14.2% |
| Net revenues from IDC businessGAAP | RMB2.15 billion (US$316.9 million) | – | 18.6% |
| Net revenues from non-IDC businessGAAP | RMB628.4 million (US$92.6 million) | – | 1.1% |
| Gross profitGAAP | RMB505.2 million (US$74.5 million) | – | (7.8%) |
| Gross marginGAAP | 18.2% | – | – |
| Adjusted cash gross profitnon-GAAP | RMB1.16 billion (US$171.2 million) | – | 9.4% |
| Adjusted cash gross marginnon-GAAP | 41.8% | – | – |
| Total operating expensesGAAP | RMB275.9 million (US$40.7 million) | – | – |
| Sales and marketing expensesGAAP | RMB58.8 million (US$8.7 million) | – | – |
| Research and development expensesGAAP | RMB75.2 million (US$11.1 million) | – | – |
| General and administrative expensesGAAP | RMB164.9 million (US$24.3 million) | – | – |
| Adjusted operating expensesnon-GAAP | RMB271.0 million (US$39.9 million) | – | – |
| Adjusted operating expenses as a percentage of total net revenuesnon-GAAP | 9.8% | – | – |
| Operating profitGAAP | RMB229,250 thousand (US$33,786 thousand) | – | – |
| Adjusted EBITDAnon-GAAP | RMB918.3 million (US$135.3 million) | – | 25.4% |
| Adjusted EBITDA marginnon-GAAP | 33.0% | – | – |
| Net loss attributable to VNET Group, Inc.GAAP | RMB135.6 million (US$20.0 million) | – | – |
| Adjusted net income (loss)non-GAAP | RMB7.4 million (US$1.1 million) | – | – |
| Basic loss per shareGAAP | RMB0.09 (US$0.01) | – | – |
| Diluted loss per shareGAAP | RMB0.09 (US$0.01) | – | – |
| Basic loss per ADSGAAP | RMB0.54 (US$0.06) | – | – |
| Diluted loss per ADSGAAP | RMB0.54 (US$0.06) | – | – |
| Net cash generated from operating activitiesGAAP | RMB218.1 million (US$32.1 million) | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Wholesale IDC businessThe year-over-year increase was mainly driven by an increase in wholesale revenues. | RMB1.10 billion (US$162.8 million) | – | 29.3% |
| Retail IDC businessRetail monthly recurring revenue per retail cabinet increased by 9.9% year-over-year to RMB9,799. | RMB1.05 billion (US$154.1 million) | – | 9.1% |
| Non-IDC businessNo specific driver was provided. | RMB628.4 million (US$92.6 million) | – | 1.1% |
full year of 2026 outlook
- RevenueRMB11.5 billion to RMB11.8 billion, representing year-over-year growth of 15.6% to 18.6%
- NoteAdjusted EBITDA (non-GAAP): RMB3,550 million to RMB3,750 million, representing year-over-year growth of 19.2% to 25.9%.
- NoteCapital expenditure: RMB10 billion to RMB12 billion.
What drove it
- Total net revenue growth was mainly driven by the continued growth of the wholesale IDC business.
- Wholesale revenues represented 39.8% of total net revenues and surpassed retail revenues.
- GAAP gross profit declined mainly due to increased depreciation costs associated with rapid capacity expansion.
- Wholesale capacity in service was 1,007MW as of June 30, 2026, compared with 907MW as of March 31, 2026, and 674MW as of June 30, 2025.
- Wholesale capacity utilized by customers was 744MW as of June 30, 2026, compared with 687MW as of March 31, 2026, and 511MW as of June 30, 2025. The sequential increase of 57MW was mainly contributed by the N-HB Campus 03 and N-OR Campus 01 data centers.
- Total capacity committed was 970MW and commitment rate for capacity in service was 96.3% as of June 30, 2026.
- The Company secured a 345MW wholesale order in the second quarter, bringing total wholesale order wins to 862MW year-to-date.
- The Company secured approximately 1.4GW of land bank capacity during the second quarter, including 908MW in the Chinese mainland and 478MW overseas.
Concerns
- GAAP gross margin was 18.2%, compared with 22.5% in the same period of 2025.
- Adjusted cash gross margin was 41.8%, compared with 43.6% in the same period of 2025 and 45.0% in the first quarter of 2026.
- Net loss attributable to VNET Group, Inc. was RMB135.6 million, compared with RMB11.9 million in the same period of 2025.
- The Company recorded a RMB47.1 million loss from changes in the fair value of financial instruments, compared with a RMB70.4 million gain in the second quarter of 2025.
- Wholesale capacity utilization was 73.9%, compared with 75.7% as of March 31, 2026 and 75.9% as of June 30, 2025.
- Mature wholesale capacity utilization was 92.5%, compared with 93.8% as of March 31, 2026 and 94.6% as of June 30, 2025.
- Net cash generated from operating activities was RMB218.1 million, compared with RMB366.6 million in the same period of 2025.
What to watch
- Delivery and utilization of 585MW of wholesale capacity under construction as of June 30, 2026.
- Conversion of 970MW of total committed capacity into utilization and revenue.
- Execution against full-year capital expenditure guidance of RMB10 billion to RMB12 billion.
- Progress under the strategic cooperation agreement with Contemporary Amperex Technology Co., Limited to develop a three-layer integrated compute-energy ecosystem.
- Retail IDC utilization, which was 64.5% as of June 30, 2026, and retail MRR per cabinet, which was RMB9,799 in the second quarter of 2026.
Balance sheet and cash flow
- Aggregate cash and cash equivalents, restricted cash and short-term investments was RMB7.21 billion (US$1.06 billion) as of June 30, 2026.
- Cash and cash equivalents were RMB6,720,690 thousand (US$990,507 thousand) as of June 30, 2026.
- Restricted cash was RMB477,331 thousand (US$70,350 thousand) as of June 30, 2026.
- Total short-term debt was RMB4.18 billion (US$616.1 million) as of June 30, 2026.
- Total long-term debt was RMB19.24 billion (US$2.84 billion) as of June 30, 2026, comprised of long-term borrowings of RMB14.40 billion (US$2.12 billion) and convertible notes of RMB4.84 billion (US$712.8 million).
- Purchases of property and equipment were RMB1,513,291 thousand (US$223,031 thousand) in the second quarter of 2026.
- Purchases of intangible assets were RMB25,466 thousand (US$3,753 thousand) in the second quarter of 2026.
- Net cash used in investing activities was RMB971,941 thousand (US$143,246 thousand) in the second quarter of 2026.
- Net cash used in financing activities was RMB86,935 thousand (US$12,813 thousand) in the second quarter of 2026.
- The Company obtained new debt financing, refinancing facilities, equity financing and other financings of RMB3.77 billion (US$556.0 million) during the second quarter of 2026.
Analysis
VNET reported a quarter of growth led by wholesale IDC. Total net revenues increased 14.2% year-over-year to RMB2.78 billion, while wholesale revenues increased 29.3% to RMB1.10 billion and retail revenues increased 9.1% to RMB1.05 billion. Wholesale represented 39.8% of total net revenues and surpassed retail revenue. IDC revenue increased 18.6%, whereas non-IDC revenue increased 1.1%, underscoring the concentration of growth in wholesale infrastructure.
Profitability was mixed. GAAP gross profit declined 7.8% to RMB505.2 million and GAAP gross margin fell to 18.2% from 22.5%, with the Company attributing the gross-profit decline to increased depreciation associated with rapid capacity expansion. In contrast, adjusted cash gross profit increased 9.4% to RMB1.16 billion. Adjusted EBITDA grew 25.4% to RMB918.3 million and its margin expanded to 33.0% from 30.1%, while adjusted operating expenses were 9.8% of total net revenues compared with 15.0% a year earlier.
GAAP earnings remained negative. Net loss attributable to VNET Group, Inc. was RMB135.6 million compared with RMB11.9 million in the prior-year period. The release identified a RMB47.1 million loss from changes in the fair value of financial instruments in Q2 2026, compared with a RMB70.4 million gain in Q2 2025. Excluding changes in the fair value of financial instruments, adjusted net income was RMB7.4 million, compared with an adjusted net loss of RMB53.6 million a year earlier.
Capacity deployment and customer commitments continued to expand. Wholesale capacity in service reached 1,007MW and customer-utilized capacity reached 744MW. Total committed capacity was 970MW, with a 96.3% commitment rate for capacity in service. However, wholesale utilization declined to 73.9% from 75.7% at March 31, 2026, as capacity growth outpaced utilization growth. Retail capacity in service declined to 50,081 cabinets, while retail utilization rose to 64.5% and MRR per retail cabinet rose to RMB9,799.
Cash generation and funding remain material considerations alongside the buildout. Operating cash flow was RMB218.1 million, down from RMB366.6 million in the prior-year quarter, while purchases of property and equipment were RMB1,513,291 thousand. Aggregate cash, restricted cash and short-term investments were RMB7.21 billion, against RMB4.18 billion of short-term debt and RMB19.24 billion of long-term debt. Management maintained full-year 2026 guidance for total net revenues of RMB11.5 billion to RMB11.8 billion, adjusted EBITDA of RMB3,550 million to RMB3,750 million, and capital expenditure of RMB10 billion to RMB12 billion.
Management, verbatim
We achieved robust growth across our key financial and operational metrics in the second quarter of 2026, as our execution capabilities and high-quality deliveries continued to attract new orders.
Josh Sheng Chen, Founder, Executive Chairperson of VNET
We secured a 345MW wholesale order from a leading cloud service provider in the second quarter, bringing our total wholesale order wins to 862MW year-to-date.
Josh Sheng Chen, Founder, Executive Chairperson of VNET
Wholesale revenues once again surpassed retail, increasing wholesale’s contribution to 39.8% of our total net revenues and reinforcing its position as our primary growth engine.
Peter Zhihua Zhang, Senior Vice President, Operational Finance of VNET
Not in the filing
stated, not guessed- Previous-release outlook details needed to assess reported results versus prior guidance were not provided.
- Free cash flow was not reported.
- Capital returns, including share repurchases and dividends, were not reported.
- GAAP tax rate was not reported.
- Segment operating income or loss was not reported.
- Quarter-over-quarter percentage changes for revenue, profit, margin, expense, and cash-flow metrics were not reported.
- Non-GAAP earnings per share or ADS were not reported.
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.