BEIJING - VNET Group, Inc. (NASDAQ:VNET), a prominent carrier- and cloud-neutral internet data center services provider in China, reported a smaller-than-expected loss for the fourth quarter but missed revenue estimates and issued weaker guidance for full-year 2024, sending its shares down 2.67%.
The company posted a fourth-quarter loss of RMB0.42 per share, RMB0.18 better than analysts' expectations of a RMB0.60 loss. However, revenue for the quarter was RMB1.9 billion, falling short of the consensus estimate of RMB2.05 billion. Compared to the same quarter last year, the revenue increased by a modest 0.9%.
For the full year of 2024, VNET anticipates net revenues to be between RMB7,800 million to RMB8,000 million, which is below the analyst consensus of RMB8,337 million. This guidance suggests a year-over-year growth of 5.2% to 7.9%. The company also expects adjusted EBITDA to range from RMB2,220 million to RMB2,280 million, indicating a year-over-year growth of 8.9% to 11.8%.
The company's CEO, Jeff Dong, highlighted the effective execution of their dual-core strategy and the increased overall utilization rate of cabinets from 55.0% to 59.0%. He also emphasized the company's focus on leveraging advanced technology and IDC resources to meet the growing demands driven by AI applications across various industries.
Despite the positive developments, the market responded negatively to the revenue miss and the guidance, which was weaker than expected. The stock's decline reflects investors' concerns about the company's ability to meet future revenue targets and sustain growth amid economic recovery efforts.
VNET's CFO, Qiyu Wang, expressed confidence in the company's strategic focus on high-quality revenues and the recent completion of significant refinancing projects. The management remains committed to creating long-term, sustainable value for stakeholders.
The company's financial health was also addressed, with a net cash generation from operating activities in the fourth quarter of RMB730.7 million, an increase from RMB407.5 million in the same period of the previous year.
Investors will be watching closely to see if VNET can overcome the challenges reflected in its weak guidance and revenue miss and capitalize on the opportunities presented by the expanding AI and digital transformation markets.
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