21Vianet Group, Inc. Reports Unaudited First Quarter 2018 Financial Results

21Vianet Group Inc (NASDAQ:VNET), a leading carrier-neutral internet data center services provider in China announced its unaudited financial results for the first quarter ended March 31, 2018.

The company said that its revenues from hosting and related services increased by 13.3 percent year over year to RMB800.8 million or US$127.7 million. The company’s adjusted gross profit increased 7.6 year over year to RMB 347.5 million or US$55.4 million.

As quoted in the press release:

• Operating profit improved to RMB56.4 million from an operating loss of RMB72.1 million in the same period of 2017.
• Adjusted EBITDA increased by 95.5% year over year to RMB196.0 million (US$31.2 million). Adjusted EBITDA margin expanded to 24.5% from 11.6% in the same period of 2017.
• Net cash generated from operating activities was RMB95.9 million (US$15.3 million) in the first quarter of 2018 compared to RMB46.4 million in the same period of 2017.

The financial numbers of the same period of 2017 include hosting and related services and MNS business. The year-over-year increase was partially driven by the disposal of the MNS business in September 2017.

First Quarter 2018 Operational Highlights

• Hosting MRR² per cabinet increased to RMB7,905 in the first quarter of 2018 compared to RMB7,598 in the first quarter of 2017.
• Total cabinets under management decreased slightly to 29,035 as of March 31, 2018 from 29,080 as of December 31, 2017. As of March 31, 2018, the Company had 23,839 cabinets in its self-built data centers and 5,196 cabinets in its partnered data centers.
• Utilization rate was 70.0% in the first quarter of 2018 compared to 75.7% in the fourth quarter of 2017 due to the incremental cabinet capacity the Company delivered at the end of 2017.

Mr. Alvin Wang, Chief Executive Officer and President of the Company, stated, “We entered 2018 with accelerated financial and operating performance in the first quarter. We are pleased to see continued improvement on our results following our successful business restructuring in 2017. During the quarter, the demand for computing and storage capacity from both large and small corporations in China continued to grow. To capitalize on the market opportunities, we further expanded our data center network while maintaining our industry-leading service quality. This not only made us the clear choice of data center providers for our clients, it also made us the ideal partner for world-class technology leaders such as Microsoft Corp. With our long-term partnership with Microsoft, we will continue to improve our capabilities and capacities to deliver localized and customized cloud solutions with optimal user experiences to Chinese customers in the future.”

Ms. Sharon Liu, Chief Financial Officer of the Company, commented, “We are delighted to sustain our strong momentum and deliver another quarter of robust financial growth. In the first quarter of 2018, our revenue from the hosting and related services business increased by 13.3% year over year to RMB800.8 million, exceeding the high end of our previous guidance. More importantly, as a result of our improved operating efficiency, we recorded adjusted EBITDA of RMB196.0 million in the first quarter of 2018, representing a year-over-year increase of 95.5%. As our restructuring strategy to fully focus on our core hosting and related services business continues to prove successful, we expect our growth momentum to carry into the quarters ahead.”

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