21Vianet Group Reports Unaudited Second Quarter 2018 Financial Results

21Vianet Group (NASDAQ:VNET), a leading carrier and cloud-neutral internet data center service provider announced its unaudited financial results for the second quarter ended June 30, 2018.

The company reported that revenues from hosting and related services increased by 11.4 percent year over year to RMB 828.3 million (US$125.2 million).

As quoted in the press release:

Mr. Alvin Wang, Chief Executive Officer and President of the Company, stated, “Our strategy of focusing entirely on our core hosting and related services business continued to drive revenue and profitability growth. During the second quarter, we further improved our operational efficiency and achieved an adjusted EBITDA margin of 26.7%. Also we expanded our data center capacity, garnered new significant client wins in the Internet and financial services sectors, and expanded the order size from our existing clients. In addition, we have methodically entered into the promising wholesale data center market.  We are confident that our commitment to network safety, availability, reliability, neutrality, and quality shall enable us to continuously gain market share and solidify our industry leadership.”

Second Quarter 2018 Financial Highlights

• Adjusted cash gross margin expanded to 43.9% from 38.2% in the same period of 2017.
• Operating profit improved to RMB51.5 million from an operating loss of RMB80.6 million in the same period of 2017.
• Adjusted EBITDA increased by 103.6% year over year to RMB221.1 million (US$33.4 million). Adjusted EBITDA margin expanded to 26.7% from 12.4% in the same period of 2017.
• Net cash generated from operating activities was RMB111.4 million (US$16.8 million) in the second quarter of 2018 compared to RMB87.2 million in the same period of 2017.

Ms. Sharon Liu, Chief Financial Officer of the Company, commented, “During the second quarter of 2018, we sustained solid growth in revenue and continued rapid improvement in adjusted EBITDA margin. Our net revenues from hosting and related services increased by 11.4% year over year to RMB828.3 million, while our adjusted EBITDA grew by 29.1% to RMB221.1 million. As we keep close track of our business development and maintain stringent internal control, we have been able to achieve or exceed our own guidance three quarters in a row. For the remainder of 2018, we expect continuous improvement in economy of scale and operational efficiency to result in EBITDA growth outpacing revenue growth and EBITDA margin expanding further.”

Second Quarter 2018 Operational Highlights

• Hosting MRR² per cabinet increased to RMB8,271 in the second quarter of 2018 compared to RMB7,697 in the second quarter of 2017 and RMB7,905 in the first quarter of 2018.

• Total cabinets under management increased slightly to 29,149 as of June 30, 2018 from 29,035 as of March 31, 2018. As of June 30, 2018, the Company had 24,167 cabinets in its self-built data centers and 4,982 cabinets in its partnered data centers.

• Utilization rate was 71.1% in the second quarter of 2018 compared to 70.0% in the first quarter of 2018.

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