Vnet Group Hits Key Data Center Milestone Amid Rising Costs
On August 18, Vnet Group Inc. (NASDAQ:VNET) reported strong quarterly results driven by a significant milestone in its wholesale data center capacity, which surpassed one gigawatt for the first time. This marks progress in the AI infrastructure space and contributed to a 29.3% year-over-year increase in wholesale IDC revenue to RMB1.10 billion. Despite these gains, Vnet faces rising costs that are squeezing margins. Adjusted cash gross margin declined slightly from 43.6% to 41.8%, primarily due to higher utility expenses passed on to customers under its billing structure. Management also highlighted structural challenges in the industry related to power availability and chip supply chains. The company is financing this growth through debt, with net leverage at 4.6 times annualized adjusted EBITDA. Vnet plans capital expenditures of RMB10 billion to RMB12 billion for full-year 2026.
Tickers: $VNET
Topics: AI infrastructure capacity expansion data centers revenue growth