3Q18 adjusted EBITDA margin expanded to
28.2%Raising full year 2018 adjusted EBITDA guidance
21Vianet Group, Inc. (Nasdaq: VNET) ("21Vianet" or the "Company"),
a leading carrier- and cloud-neutral Internet data center services
provider in China, today announced its unaudited financial results
for the third quarter ended September 30, 2018. The Company will
hold a conference call at 8:00 pm on Tuesday, November 20, 2018,
U.S. Eastern Time to discuss the financial results. Dial-in details
are provided at the end of this release.
Third Quarter 2018 Financial
Highlights (including hosting and related services &
MNS1 business)
- Revenues from hosting and related
services increased by 14.6% year over year and 5.0% quarter over
quarter to RMB870.1 million (US$126.7 million).
- Adjusted cash gross margin expanded
to 45.0% from 38.3% in the same period of 2017 and 43.9% in the
second quarter of 2018.
- Operating profit improved to
RMB64.6 million (US$9.4 million) from an operating loss of
RMB1,223.6 million in the same period of 2017 and RMB51.5 million
in the second quarter of 2018.
- Adjusted EBITDA increased by 81.6%
year over year and 10.9% quarter over quarter to RMB45.2 million
(US$35.7 million). Adjusted EBITDA margin expanded to 28.2% from
15.2% in the same period of 2017 and 26.7% in the second quarter of
2018.
- Net cash generated from operating
activities was RMB260.7 million (US$38.0 million) in the third
quarter of 2018 compared to RMB206.6 million in the same period of
2017 and RMB111.4 million in the second quarter of 2018.
The financial results of the same period of 2017
included those from both the hosting and related services business
and the MNS business. The year-over-year improvement was partially
attributable to the disposal of the MNS business in September
2017.
Third Quarter 2018 Operational Highlights
- Hosting MRR2 per cabinet increased
to RMB8,384 in the third quarter of 2018 compared to RMB7,817 in
the third quarter of 2017 and RMB8,271 in the second quarter of
2018.
- Total cabinets under management
increased to 30,303 as of September 30, 2018 from 29,149 as of June
30, 2018. As of September 30, 2018, the Company had 25,361 cabinets
in its self-built data centers and 4,942 cabinets in its partnered
data centers.
- Utilization rate in the third
quarter of 2018 remained stable at 71.1% compared to the second
quarter of 2018, due to the additional 1,194 cabinets that were
delivered in September 2018.
Mr. Alvin Wang, Chief Executive Officer and
President of the Company, stated, “We maintained our strong
momentum in revenue growth and profitability expansion during the
third quarter of 2018. Our revenues grew by 14.6% year over year as
we won new orders from existing customers, attracted additional
notable customers, and experienced growth of Microsoft cloud
service in China. Meanwhile, our adjusted EBITDA margin expanded to
28.2%, as we continuously grew our scale and improved our
operational efficiency. While remain cautiously optimistic about
our growth prospect and profitability against a backdrop of
macroeconomic uncertainties, we will continue to execute our
long-term strategy by accelerating our capacity growth in Tier 1
cities, nearby satellite cities and quasi-tier 1 cities. As we
maintain our focus on sharpening our competitive edges in network
quality and technology capability, we will be well-positioned to
capitalize on the increasing market demand in China going
forward.”
Ms. Sharon Liu, Chief Financial Officer of the
Company, commented, “We once again delivered a solid quarter with
strong top- and bottom-line growths. In the third quarter of 2018,
our net revenues reported RMB870.1 million, beating the high-end of
our guidance. More importantly, our adjusted EBITDA margin further
increased to 28.2%, showcasing constant improvement in the past
three quarters. We are raising our full year 2018 adjusted EBITDA
guidance to reflect our achievement.”
Third Quarter 2018 Financial
Results
To fully reflect the Company’s performance, all
analysis between “REVENUES” and “ADJUSTED EBITDA” presents only the
results of the hosting and related service business. The MNS
business, which was disposed of in the third quarter of 2017, is
excluded.
REVENUES: Net revenues
increased by 14.6% to RMB870.1 million (US$126.7 million) in the
third quarter of 2018 from RMB759.3 million in the same period of
2017 and increased by 5.0% from RMB828.3 million in the second
quarter of 2018. The increase was primarily due to the growing
demand for data centers and cloud services in the domestic
market.
GROSS PROFIT: Gross profit
increased by 11.1% to RMB241.2 million (US$35.1 million) in the
third quarter of 2018 from RMB217.1 million in the same period of
2017 and increased by 5.1% from RMB229.4 million in the second
quarter of 2018. Gross margin decreased slightly to 27.7% in the
third quarter of 2018 from 28.6% in the same period of 2017 but
remained stable compared to the second quarter of 2018. The
year-over-year decrease in gross margin was mainly due to an
increase in depreciation.
ADJUSTED CASH GROSS
PROFIT, which excludes depreciation,
amortization, and share-based compensation expenses, increased by
24.2% to RMB391.9 million (US$57.1 million) in the third quarter of
2018 from RMB315.6 million in the same period of 2017 and increased
by 7.7% from RMB364.0 million in the second quarter of 2018.
Adjusted cash gross margin expanded to 45.0% in the third quarter
of 2018 from 41.6% in the same period of 2017 and 43.9% in the
second quarter of 2018.
OPERATING EXPENSES: Total operating expenses
increased by 1.1% to RMB176.6 million (US$25.7 million) in the
third quarter of 2018 from RMB174.6 million in the same period of
2017 but decreased by 0.8% from RMB177.9 million in the second
quarter of 2018. As a percentage of net revenues, total operating
expenses decreased to 20.3% in the third quarter of 2018 from 23.0%
in the same period of 2017 and 21.5% in the second quarter of
2018.
Adjusted operating expenses, which exclude
share-based compensation expenses and changes in the fair value of
contingent purchase consideration payable, increased by 3.0% to
RMB162.9 million (US$23.7 million) in the third quarter of 2018
from RMB158.1 million in the same period of 2017 and increased by
0.6% from RMB161.9 million in the second quarter of 2018. As a
percentage of net revenues, adjusted operating expenses decreased
to 18.7% in the third quarter of 2018 from 20.8% in the same period
of 2017 and 19.5% in the second quarter of 2018. The decrease of
adjusted operating expenses as a percentage of total revenues was
primarily due to the successful implementation of the Company’s
efficiency enhancement initiatives.
Sales and marketing expenses were RMB39.9
million (US$5.8 million) in the third quarter of 2018 compared to
RMB50.1 million in the same period of 2017 and from RMB41.8 million
in the second quarter of 2018.
Research and development expenses were RMB24.3
million (US$3.5 million) in the third quarter of 2018 compared to
RMB22.2 million in the same period of 2017 and RMB22.2 million in
the second quarter of 2018.
General and administrative expenses were
RMB110.2 million (US$16.1 million) in the third quarter of 2018
compared to RMB98.8 million in the same period of 2017 and RMB109.1
million in the second quarter of 2018.
ADJUSTED EBITDA: Adjusted
EBITDA in the third quarter of 2018 increased by 39.5% to RMB245.2
million (US$35.7 million) from RMB175.8 million in the same period
of 2017 and increased by 10.9% from RMB221.1 million in the second
quarter of 2018. Adjusted EBITDA in the third quarter of 2018
excludes share-based compensation expenses of RMB12.9 million
(US$1.9 million) and changes in the fair value of contingent
purchase consideration payable, which was a loss of RMB1.4 million
(US$0.2 million). Adjusted EBITDA margin expanded to 28.2% in the
third quarter of 2018 from 23.1% in the same period of 2017 and
26.7% in the second quarter of 2018.
NET LOSS: Net loss in the third
quarter of 2018 was RMB27.9 million (US$4.1 million) compared to a
net loss of RMB1,479.1 million in the same period of 2017 and a net
loss of RMB95.5 million in the second quarter of 2018. Net loss in
the third quarter of 2018 included a foreign exchange loss of
RMB55.0 million (US$8.0 million) compared to RMB5.6 million in the
same period of 2017 and RMB73.4 million in the second quarter of
2018.
LOSS PER SHARE: Basic and
diluted loss per share was RMB0.04 (US$0.01) in the third quarter
of 2018, which represents the equivalent of RMB0.24 (US$0.06) per
American Depositary Share ("ADS"). Each ADS represents six ordinary
shares. Diluted profit per share is calculated using net profit
divided by the weighted average number of shares.
As of September 30, 2018, the Company's
cash and cash equivalents, restricted
cash and short-term investments were
RMB2.96 billion (US$431.4 million).
Net cash generated from operating
activities was RMB260.7 million (US$38.0 million) in the
third quarter of 2018 compared to RMB206.6 million in the same
period of 2017 and RMB111.4 million in the second quarter of
2018.
Financial Outlook
For the fourth quarter of 2018, the Company
expects net revenues to be in the range of RMB870 million to RMB890
million. Adjusted EBITDA is expected to be in the range of RMB245
million to RMB265 million.
Consequently, for the full year of 2018, the
Company now expects net revenues to be in the range of RMB3,370
million to RMB3,390 million. Adjusted EBITDA is expected to be in
the range of RMB905 million to RMB925 million. The midpoints of the
Company’s updated estimates imply an increase of 13.6%
year-over-year in total revenues and 36.4% year-over-year in
adjusted EBITDA.
The forecast reflects the Company’s current and
preliminary view on the market and its operational conditions,
which is subject to change.
Conference Call
The Company will hold a conference call at 8:00 pm on Tuesday,
November 20, 2018 U.S. Eastern Time, or 9:00 am on Wednesday,
November 21, 2018 Beijing Time, to discuss the financial
results.
Participants may access the call by dialing the following
numbers:
United States Toll
Free: |
+1-855-500-8701 |
International: |
+65-6713-5440 |
China Domestic: |
400-120-0654 |
Hong Kong: |
+852-3018-6776 |
Conference
ID: |
8076287 |
The replay will be accessible through November 28, 2018 by
dialing the following numbers:
United States Toll
Free: |
+1-855-452-5696 |
International: |
+61-2-9003-4211 |
Conference
ID: |
8076287 |
A live and archived webcast of the conference call will be
available through the Company's investor relation website at
http://ir.21vianet.com.
Non-GAAP Disclosure
In evaluating its business, 21Vianet considers
and uses the following non-GAAP measures defined as non-GAAP
financial measures by the SEC as supplemental measure to review and
assess its operating performance: adjusted cash gross profit,
adjusted cash gross margin, adjusted operating expenses, adjusted
EBITDA, adjusted EBITDA margin, The presentation of these non-GAAP
financial measures is not intended to be considered in isolation or
as a substitute for the financial information prepared and
presented in accordance with U.S. GAAP. For more information on
these non-GAAP financial measures, please see the table captioned
"Reconciliations of GAAP and non-GAAP results" set forth at the end
of this press release.
The non-GAAP financial measures are provided as
additional information to help investors compare business trends
among different reporting periods on a consistent basis and to
enhance investors' overall understanding of the Company's current
financial performance and prospects for the future. These non-GAAP
financial measures should be considered in addition to results
prepared in accordance with U.S. GAAP, but should not be considered
a substitute for, or superior to, U.S. GAAP results. In addition,
the Company's calculation of the non-GAAP financial measures may be
different from the calculation used by other companies, and
therefore comparability may be limited.
Exchange Rate
This announcement contains translations of
certain RMB amounts into U.S. dollars (“USD”) at specified rates
solely for the convenience of the reader. Unless otherwise stated,
all translations from RMB to USD were made at the rate of RMB6.868
to US$1.00, the noon buying rate in effect on September 30, 2018 in
the H.10 statistical release of the Federal Reserve Board. The
Company makes no representation that the RMB or USD amounts
referred could be converted into USD or RMB, as the case may be, at
any particular rate or at all. For analytical presentation, all
percentages are calculated using the numbers presented in the
financial statements contained in this earnings release.
Statement Regarding Unaudited Condensed
Financial Information
The unaudited financial information set forth
above is preliminary and subject to potential adjustments.
Adjustments to the consolidated financial statements may be
identified when audit work has been performed for the Company's
year-end audit, which could result in significant differences from
this preliminary unaudited condensed financial information.
About 21Vianet
21Vianet Group, Inc. is a leading carrier- and
cloud-neutral Internet data center services provider in China.
21Vianet provides hosting and related services, including IDC
services, cloud services, and business VPN services to improve the
reliability, security and speed of its customers' Internet
infrastructure. Customers may locate their servers and equipment in
21Vianet's data centers and connect to China's Internet backbone
through 21Vianet's extensive fiber optic network. 21Vianet operates
in more than 30 cities throughout China, servicing a diversified
and loyal base of nearly 5,000 hosting and related enterprise
customers that span numerous industries ranging from Internet
companies to government entities and blue-chip enterprises to
small- to mid-sized enterprises.
Safe Harbor Statement
This announcement contains forward-looking
statements. These forward-looking statements are made under the
"safe harbor" provisions of the U.S. Private Securities Litigation
Reform Act of 1995. These statements can be identified by
terminology such as "will," "expects," "anticipates," "future,"
"intends," "plans," "believes," "estimates" and similar statements.
Among other things, quotations from management in this announcement
as well as 21Vianet's strategic and operational plans contain
forward-looking statements. 21Vianet may also make written or oral
forward-looking statements in its reports filed with, or furnished
to, the U.S. Securities and Exchange Commission, in its annual
reports to shareholders, in press releases and other written
materials and in oral statements made by its officers, directors or
employees to third parties. Statements that are not historical
facts, including statements about 21Vianet's beliefs and
expectations, are forward-looking statements. Forward-looking
statements involve inherent risks and uncertainties. A number of
factors could cause actual results to differ materially from those
contained in any forward-looking statement, including but not
limited to the following: 21Vianet's goals and strategies;
21Vianet's expansion plans; the expected growth of the data center
services market; expectations regarding demand for, and market
acceptance of, 21Vianet's services; 21Vianet's expectations
regarding keeping and strengthening its relationships with
customers; 21Vianet's plans to invest in research and development
to enhance its solution and service offerings; and general economic
and business conditions in the regions where 21Vianet provides
solutions and services. Further information regarding these and
other risks is included in 21Vianet's reports filed with, or
furnished to, the Securities and Exchange Commission. All
information provided in this press release and in the attachments
is as of the date of this press release, and 21Vianet undertakes no
duty to update such information, except as required under
applicable law.
Investor Relations Contacts:
21Vianet Group, Inc.Rene Jiang+86 10 8456
2121IR@21Vianet.com
Julia Jiang+86 10 8456 2121IR@21Vianet.com
ICR, Inc.Jack Wang+1 (646)
405-4922IR@21Vianet.com
____________________________________
1MNS: Refers to managed network services.
2Hosting MRR: Refers to Monthly Recurring Revenues for the
hosting business.
21VIANET GROUP, INC. |
|
CONSOLIDATED BALANCE SHEETS |
|
(Amount in thousands of Renminbi (“RMB”) and US
dollars (“US$”)) |
|
|
As of |
As of |
|
December 31, 2017 |
September 30, 2018 |
|
|
RMB |
RMB |
US$ |
|
|
(Audited) |
(Unaudited) |
(Unaudited) |
|
Assets |
|
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash
equivalents |
1,949,631 |
|
2,334,260 |
|
339,875 |
|
|
Restricted cash |
242,494 |
|
398,138 |
|
57,970 |
|
|
Accounts
and notes receivable, net |
455,811 |
|
570,112 |
|
83,010 |
|
|
Short-term investments |
548,890 |
|
227,037 |
|
33,057 |
|
|
Prepaid
expenses and other current assets |
934,460 |
|
1,215,211 |
|
176,939 |
|
|
Amount
due from related parties |
114,256 |
|
134,292 |
|
19,553 |
|
|
Total current assets |
4,245,542 |
|
4,879,050 |
|
710,404 |
|
|
|
|
|
|
|
Non-current assets: |
|
|
|
|
Property
and equipment, net |
3,319,424 |
|
3,975,522 |
|
578,847 |
|
|
Intangible assets, net |
401,115 |
|
362,904 |
|
52,840 |
|
|
Land use
rights, net |
163,671 |
|
148,390 |
|
21,606 |
|
|
Goodwill |
989,530 |
|
989,530 |
|
144,078 |
|
|
Long-term investments |
510,926 |
|
695,277 |
|
101,234 |
|
|
Amount
due from related parties |
20,210 |
|
20,735 |
|
3,019 |
|
|
Restricted cash |
3,344 |
|
3,537 |
|
515 |
|
|
Deferred
tax assets |
172,818 |
|
143,866 |
|
20,947 |
|
|
Other
non-current assets |
81,581 |
|
136,288 |
|
19,844 |
|
|
Total non-current assets |
5,662,619 |
|
6,476,049 |
|
942,930 |
|
|
Total assets |
9,908,161 |
|
11,355,099 |
|
1,653,334 |
|
|
|
|
|
|
|
Liabilities and Shareholders' Equity |
|
|
|
|
Current liabilities: |
|
|
|
|
Short-term bank borrowings |
50,000 |
|
69,999 |
|
10,192 |
|
|
Accounts
and notes payable |
252,892 |
|
421,242 |
|
61,334 |
|
|
Accrued
expenses and other payables |
657,133 |
|
542,539 |
|
78,995 |
|
|
Deferred
revenue |
55,753 |
|
52,619 |
|
7,661 |
|
|
Advances
from customers |
403,244 |
|
590,069 |
|
85,916 |
|
|
Income
taxes payable |
13,309 |
|
32,903 |
|
4,791 |
|
|
Amounts
due to related parties |
55,675 |
|
230,174 |
|
33,514 |
|
|
Current
portion of long-term bank borrowings |
70,289 |
|
104,974 |
|
15,285 |
|
|
Current
portion of capital lease obligations |
201,315 |
|
206,559 |
|
30,076 |
|
|
Current
portion of deferred government grant |
4,574 |
|
4,574 |
|
666 |
|
|
Current
portion of bonds payable |
11,139 |
|
12,239 |
|
1,782 |
|
|
Total current liabilities |
1,775,323 |
|
2,267,891 |
|
330,212 |
|
|
|
|
|
|
|
Non-current liabilities: |
|
|
|
|
Long-term bank borrowings |
187,638 |
|
125,000 |
|
18,200 |
|
|
Amounts
due to related parties |
- |
|
433,984 |
|
63,189 |
|
|
Unrecognized tax benefits |
16,511 |
|
22,492 |
|
3,275 |
|
|
Deferred
tax liabilities |
190,873 |
|
182,680 |
|
26,599 |
|
|
Non-current portion of capital lease obligations |
600,882 |
|
843,374 |
|
122,798 |
|
|
Non-current portion of deferred government grant |
17,861 |
|
12,985 |
|
1,891 |
|
|
Bonds
payable |
1,918,069 |
|
2,027,695 |
|
295,238 |
|
|
Total non-current liabilities |
2,931,834 |
|
3,648,210 |
|
531,190 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders' equity |
|
|
|
|
|
|
|
Treasury
stock |
(337,683 |
) |
(337,683 |
) |
(49,168 |
) |
|
Ordinary
shares |
46 |
|
46 |
|
7 |
|
|
Additional paid-in capital |
8,980,407 |
|
9,019,296 |
|
1,313,235 |
|
|
Accumulated other comprehensive (loss) gain |
(2,673 |
) |
92,781 |
|
13,509 |
|
|
Statutory reserves |
38,736 |
|
40,014 |
|
5,826 |
|
|
Accumulated deficit |
(3,629,300 |
) |
(3,721,580 |
) |
(541,874 |
) |
|
Total 21Vianet Group, Inc. shareholders’
equity |
5,049,533 |
|
5,092,874 |
|
741,535 |
|
|
Noncontrolling interest |
151,471 |
|
346,124 |
|
50,397 |
|
|
Total shareholders' equity |
5,201,004 |
|
5,438,998 |
|
791,932 |
|
|
Total liabilities and shareholders' equity |
9,908,161 |
|
11,355,099 |
|
1,653,334 |
|
|
|
|
|
|
|
|
|
|
|
|
21VIANET GROUP, INC. |
|
CONSOLIDATED STATEMENTS OF
OPERATIONS |
|
(Amount in thousands of Renminbi (“RMB”) and
US dollars (“US$”) except for number of shares and per share
data) |
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended |
|
Nine months
ended |
|
|
September 30, 2017 |
June 30, 2018 |
September
30, 2018 |
|
September 30, 2017 |
September 30, 2018 |
|
|
RMB |
RMB |
RMB |
US$ |
|
RMB |
RMB |
US$ |
|
|
(Unaudited) |
(Unaudited) |
(Unaudited) |
(Unaudited) |
|
(Unaudited) |
(Unaudited) |
(Unaudited) |
|
Net revenues |
|
|
|
|
|
|
|
|
|
Hosting and related
services |
759,255 |
|
828,317 |
|
870,068 |
|
126,684 |
|
|
2,209,364 |
|
2,499,150 |
|
363,883 |
|
|
Managed
network services |
126,780 |
|
- |
|
- |
|
- |
|
|
417,527 |
|
- |
|
- |
|
|
Total
net revenues |
886,035 |
|
828,317 |
|
870,068 |
|
126,684 |
|
|
2,626,891 |
|
2,499,150 |
|
363,883 |
|
|
Cost of
revenues |
(696,234 |
) |
(598,884 |
) |
(628,873 |
) |
(91,566 |
) |
|
(2,068,650 |
) |
(1,800,620 |
) |
(262,175 |
) |
|
Gross profit |
189,801 |
|
229,433 |
|
241,195 |
|
35,118 |
|
|
558,241 |
|
698,530 |
|
101,708 |
|
|
Operating expenses |
|
|
|
|
|
|
|
|
|
|
Sales
and marketing |
(77,268 |
) |
(41,816 |
) |
(39,918 |
) |
(5,812 |
) |
|
(213,980 |
) |
(122,966 |
) |
(17,904 |
) |
|
Research
and development |
(38,308 |
) |
(22,163 |
) |
(24,333 |
) |
(3,543 |
) |
|
(119,803 |
) |
(68,526 |
) |
(9,978 |
) |
|
General
and administrative |
(129,683 |
) |
(109,091 |
) |
(110,243 |
) |
(16,052 |
) |
|
(404,599 |
) |
(331,674 |
) |
(48,293 |
) |
|
(Allowance) reversal for doubtful debt |
(4,366 |
) |
627 |
|
(643 |
) |
(94 |
) |
|
(36,280 |
) |
1,839 |
|
268 |
|
|
Changes
in the fair value of contingent purchase consideration payable |
(1,002 |
) |
(5,494 |
) |
(1,413 |
) |
(206 |
) |
|
2,897 |
|
(4,623 |
) |
(673 |
) |
|
Impairment of long-lived assets |
(401,808 |
) |
- |
|
- |
|
- |
|
|
(401,808 |
) |
- |
|
- |
|
|
Goodwill
impairment |
(766,440 |
) |
- |
|
- |
|
- |
|
|
(766,440 |
) |
- |
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses |
(1,418,875 |
) |
(177,937 |
) |
(176,550 |
) |
(25,707 |
) |
|
(1,940,013 |
) |
(525,950 |
) |
(76,580 |
) |
|
Other
operating income |
5,439 |
|
|
|
- |
|
|
5,439 |
|
- |
|
- |
|
|
Operating (loss) profit |
(1,223,635 |
) |
51,496 |
|
64,645 |
|
9,411 |
|
|
(1,376,333 |
) |
172,580 |
|
25,128 |
|
|
Interest
income |
6,664 |
|
8,961 |
|
13,484 |
|
1,963 |
|
|
22,104 |
|
30,972 |
|
4,510 |
|
|
Interest
expense |
(57,417 |
) |
(51,328 |
) |
(60,766 |
) |
(8,848 |
) |
|
(134,477 |
) |
(163,636 |
) |
(23,826 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment of long-term investment |
(20,397 |
) |
- |
|
- |
|
- |
|
|
(20,397 |
) |
- |
|
- |
|
|
Disposal
(loss) gain of subsidiaries |
(180,048 |
) |
4,843 |
|
- |
|
- |
|
|
(180,048 |
) |
4,843 |
|
705 |
|
|
Other
income |
7,220 |
|
20,386 |
|
8,436 |
|
1,228 |
|
|
13,504 |
|
50,983 |
|
7,423 |
|
|
Other
expense |
(12,630 |
) |
(565 |
) |
(137 |
) |
(20 |
) |
|
(16,828 |
) |
(2,228 |
) |
(324 |
) |
|
Foreign
exchange loss |
(5,628 |
) |
(73,360 |
) |
(55,024 |
) |
(8,012 |
) |
|
(21,481 |
) |
(83,543 |
) |
(12,164 |
) |
|
(Loss) gain before income taxes and gain (loss) from equity
method investments |
(1,485,871 |
) |
(39,567 |
) |
(29,362 |
) |
(4,278 |
) |
|
(1,713,956 |
) |
9,971 |
|
1,452 |
|
|
Income
tax (expenses) benefits |
(19,794 |
) |
(44,305 |
) |
7,624 |
|
1,110 |
|
|
(37,308 |
) |
(70,761 |
) |
(10,303 |
) |
|
Gain
(loss) from equity method investments |
26,546 |
|
(11,659 |
) |
(6,156 |
) |
(896 |
) |
|
36,051 |
|
(27,904 |
) |
(4,063 |
) |
|
Net
loss |
(1,479,119 |
) |
(95,531 |
) |
(27,894 |
) |
(4,064 |
) |
|
(1,715,213 |
) |
(88,694 |
) |
(12,914 |
) |
|
Net loss
(profit) attributable to noncontrolling interest |
104,354 |
|
1,321 |
|
(1,739 |
) |
(253 |
) |
|
143,841 |
|
(2,309 |
) |
(336 |
) |
|
Net loss
attributable to ordinary shareholders |
(1,374,765 |
) |
(94,210 |
) |
(29,633 |
) |
(4,317 |
) |
|
(1,571,372 |
) |
(91,003 |
) |
(13,250 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss)
profit per share |
|
|
|
|
|
|
|
|
|
Basic |
(2.20 |
) |
(0.14 |
) |
(0.04 |
) |
(0.01 |
) |
|
(2.54 |
) |
(0.13 |
) |
(0.02 |
) |
|
Diluted |
(2.20 |
) |
(0.14 |
) |
(0.04 |
) |
(0.01 |
) |
|
(2.54 |
) |
(0.13 |
) |
(0.02 |
) |
|
Shares
used in (loss) profit per share computation |
|
|
|
|
|
|
|
|
|
Basic* |
670,701,497 |
|
675,062,068 |
|
676,327,014 |
|
676,327,014 |
|
|
673,261,889 |
|
674,723,544 |
|
674,723,544 |
|
|
Diluted* |
670,701,497 |
|
675,062,068 |
|
676,327,014 |
|
676,327,014 |
|
|
673,261,889 |
|
674,723,544 |
|
674,723,544 |
|
|
|
|
|
|
|
|
|
|
|
|
(Loss)
profit per ADS (6 ordinary shares equal to 1 ADS) |
|
|
|
|
|
|
|
|
Basic |
(13.20 |
) |
(0.84 |
) |
(0.24 |
) |
(0.06 |
) |
|
(15.24 |
) |
(0.78 |
) |
(0.12 |
) |
|
Diluted |
(13.20 |
) |
(0.84 |
) |
(0.24 |
) |
(0.06 |
) |
|
(15.24 |
) |
(0.78 |
) |
(0.12 |
) |
|
|
|
|
|
|
|
|
|
|
|
* Shares used in (loss) profit per share/ADS computation were
computed under weighted average method. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21VIANET GROUP, INC. |
|
RECONCILIATIONS OF GAAP AND NON-GAAP
RESULTS |
|
(Amount in thousands of Renminbi (“RMB”) and
US dollars (“US$”)) |
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended |
|
Nine months
ended |
|
|
September 30,2017 |
June 30, 2018 |
September
30, 2018 |
|
September 30,2017 |
September 30, 2018 |
|
|
RMB |
RMB |
RMB |
US$ |
|
RMB |
RMB |
US$ |
|
Gross profit |
189,801 |
|
229,433 |
|
241,195 |
|
35,118 |
|
|
558,241 |
|
698,530 |
|
101,708 |
|
|
Plus:
depreciation and amortization |
149,434 |
|
134,282 |
|
150,056 |
|
21,849 |
|
|
440,149 |
|
403,900 |
|
58,809 |
|
|
Plus:
share-based compensation expenses |
(181 |
) |
293 |
|
689 |
|
100 |
|
|
(361 |
) |
996 |
|
145 |
|
|
Adjusted cash gross profit |
339,054 |
|
364,008 |
|
391,940 |
|
57,067 |
|
|
998,029 |
|
1,103,426 |
|
160,662 |
|
|
Adjusted cash gross margin |
38.3% |
|
43.9% |
|
45.0% |
|
45.0% |
|
|
38.0% |
|
44.2% |
|
44.2% |
|
|
Operating expenses |
(1,413,436 |
) |
(177,937 |
) |
(176,550 |
) |
(25,707 |
) |
|
(1,934,574 |
) |
(525,950 |
) |
(76,580 |
) |
|
Plus:
share-based compensation expenses |
15,981 |
|
10,547 |
|
12,240 |
|
1,782 |
|
|
32,089 |
|
29,342 |
|
4,272 |
|
|
Plus:
changes in the fair value of contingent purchase consideration
payable |
1,002 |
|
5,494 |
|
1,413 |
|
206 |
|
|
(2,897 |
) |
4,623 |
|
673 |
|
|
Plus:
impairment of long-lived assets |
401,808 |
|
- |
|
- |
|
- |
|
|
401,808 |
|
- |
|
- |
|
|
Plus:
Goodwill impairment |
766,440 |
|
- |
|
- |
|
- |
|
|
766,440 |
|
- |
|
- |
|
|
Adjusted operating expenses |
(228,205 |
) |
(161,896 |
) |
(162,897 |
) |
(23,719 |
) |
|
(737,134 |
) |
(491,985 |
) |
(71,635 |
) |
|
Operating (loss) profit |
(1,223,635 |
) |
51,496 |
|
64,645 |
|
9,411 |
|
|
(1,376,333 |
) |
172,580 |
|
25,128 |
|
|
Plus:
depreciation and amortization |
173,592 |
|
153,313 |
|
166,244 |
|
24,206 |
|
|
523,136 |
|
454,847 |
|
66,227 |
|
|
Plus:
share-based compensation expenses |
15,800 |
|
10,840 |
|
12,929 |
|
1,882 |
|
|
31,728 |
|
30,338 |
|
4,417 |
|
|
Plus:
changes in the fair value of contingent purchase consideration
payable |
1,002 |
|
5,494 |
|
1,413 |
|
206 |
|
|
(2,897 |
) |
4,623 |
|
673 |
|
|
Plus:
impairment of long-lived assets |
401,808 |
|
- |
|
- |
|
- |
|
|
401,808 |
|
- |
|
- |
|
|
Plus:
Goodwill impairment |
766,440 |
|
- |
|
- |
|
- |
|
|
766,440 |
|
- |
|
- |
|
|
Adjusted EBITDA |
135,007 |
|
221,143 |
|
245,231 |
|
35,705 |
|
|
343,882 |
|
662,388 |
|
96,445 |
|
|
Adjusted EBITDA margin |
15.2% |
|
26.7% |
|
28.2% |
|
28.2% |
|
|
13.1% |
|
26.5% |
|
26.5% |
|
|
|
|
|
|
|
|
|
|
|
|
21VIANET GROUP, INC. |
|
SUPPLEMENTARY DISCLOSURE FOR HOSTING AND
RELATED SERVICES |
|
(Amount in thousands of Renminbi (“RMB”) and
US dollars (“US$”)) |
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended |
|
Nine months
ended |
|
|
September 30, 2017 |
June 30, 2018 |
September
30, 2018 |
|
September 30, 2017 |
September 30, 2018 |
|
GAAP Disclosure |
RMB |
RMB |
RMB |
US$ |
|
RMB |
RMB |
US$ |
|
Net
revenues |
759,255 |
|
828,317 |
|
870,068 |
|
126,684 |
|
|
2,209,364 |
|
2,499,150 |
|
363,883 |
|
|
Cost of
revenues |
(542,179 |
) |
(598,884 |
) |
(628,873 |
) |
(91,566 |
) |
|
(1,564,633 |
) |
(1,800,620 |
) |
(262,175 |
) |
|
Gross profit |
217,076 |
|
229,433 |
|
241,195 |
|
35,118 |
|
|
644,731 |
|
698,530 |
|
101,708 |
|
|
Sales
and marketing |
(50,063 |
) |
(41,816 |
) |
(39,918 |
) |
(5,812 |
) |
|
(129,059 |
) |
(122,966 |
) |
(17,904 |
) |
|
Research
and development |
(22,167 |
) |
(22,163 |
) |
(24,333 |
) |
(3,543 |
) |
|
(68,257 |
) |
(68,526 |
) |
(9,978 |
) |
|
General
and administrative |
(98,766 |
) |
(109,091 |
) |
(110,243 |
) |
(16,052 |
) |
|
(301,805 |
) |
(331,674 |
) |
(48,293 |
) |
|
(Allowance) reversal for doubtful debt |
(2,590 |
) |
627 |
|
(643 |
) |
(94 |
) |
|
(5,110 |
) |
1,839 |
|
268 |
|
|
Changes
in the fair value of contingent purchase consideration payable |
(1,002 |
) |
(5,494 |
) |
(1,413 |
) |
(206 |
) |
|
2,897 |
|
(4,623 |
) |
(673 |
) |
|
Total operating expenses |
(174,588 |
) |
(177,937 |
) |
(176,550 |
) |
(25,707 |
) |
|
(501,333 |
) |
(525,950 |
) |
(76,580 |
) |
|
Other
operating income |
5,439 |
|
- |
|
- |
|
- |
|
|
5,439 |
|
- |
|
- |
|
|
Operating profit |
47,927 |
|
51,496 |
|
64,645 |
|
9,411 |
|
|
148,837 |
|
172,580 |
|
25,128 |
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
disclosure |
|
|
|
|
|
|
|
|
|
Gross
profit |
217,076 |
|
229,433 |
|
241,195 |
|
35,118 |
|
|
644,731 |
|
698,530 |
|
101,708 |
|
|
Plus:
depreciation and amortization |
98,693 |
|
134,282 |
|
150,056 |
|
21,849 |
|
|
283,593 |
|
403,900 |
|
58,809 |
|
|
Plus:
share-based compensation expenses |
(175 |
) |
293 |
|
689 |
|
100 |
|
|
(246 |
) |
996 |
|
145 |
|
|
Adjusted cash gross profit |
315,594 |
|
364,008 |
|
391,940 |
|
57,067 |
|
|
928,078 |
|
1,103,426 |
|
160,662 |
|
|
Adjusted cash gross margin |
41.6% |
|
43.9% |
|
45.0% |
|
45.0% |
|
|
42.0% |
|
44.2% |
|
44.2% |
|
|
Operating expenses |
(174,588 |
) |
(177,937 |
) |
(176,550 |
) |
(25,707 |
) |
|
(501,333 |
) |
(525,950 |
) |
(76,580 |
) |
|
Plus:
share-based compensation expenses |
15,501 |
|
10,547 |
|
12,240 |
|
1,782 |
|
|
32,089 |
|
29,342 |
|
4,272 |
|
|
Plus:
changes in the fair value of contingent purchase consideration
payable |
1,002 |
|
5,494 |
|
1,413 |
|
206 |
|
|
(2,897 |
) |
4,623 |
|
673 |
|
|
Adjusted operating expenses |
(158,085 |
) |
(161,896 |
) |
(162,897 |
) |
(23,719 |
) |
|
(472,141 |
) |
(491,985 |
) |
(71,635 |
) |
|
Operating profit |
47,927 |
|
51,496 |
|
64,645 |
|
9,411 |
|
|
148,837 |
|
172,580 |
|
25,128 |
|
|
Plus:
depreciation and amortization |
111,510 |
|
153,313 |
|
166,244 |
|
24,206 |
|
|
322,010 |
|
454,847 |
|
66,227 |
|
|
Plus:
share-based compensation expenses |
15,326 |
|
10,840 |
|
12,929 |
|
1,882 |
|
|
31,843 |
|
30,338 |
|
4,417 |
|
|
Plus:
changes in the fair value of contingent purchase consideration
payable |
1,002 |
|
5,494 |
|
1,413 |
|
206 |
|
|
(2,897 |
) |
4,623 |
|
673 |
|
|
Adjusted EBITDA |
175,765 |
|
221,143 |
|
245,231 |
|
35,705 |
|
|
499,793 |
|
662,388 |
|
96,445 |
|
|
Adjusted EBITDA margin |
23.1% |
|
26.7% |
|
28.2% |
|
28.2% |
|
|
22.6% |
|
26.5% |
|
26.5% |
|
|
|
|
|
|
|
|
|
|
|
|
21VIANET GROUP, INC. |
|
CONDENSED CONSOLIDATED STATEMENT OF CASH
FLOWS |
|
(Amount in thousands of Renminbi (“RMB”) and US
dollars (“US$”)) |
|
|
|
|
|
|
|
|
|
|
|
|
September
30, 2017 |
June 30, 2018 |
September
30, 2018 |
|
|
RMB |
RMB |
RMB |
US$ |
|
|
(Unaudited) |
(Unaudited) |
(Unaudited) |
(Unaudited) |
|
CASH FLOWS FROM OPERATING
ACTIVITIES |
|
|
|
|
|
Net
loss |
(1,479,119 |
) |
(95,531 |
) |
(27,894 |
) |
(4,064 |
) |
|
Adjustments to reconcile net loss to
net cash generated from operating
activities: |
|
|
|
|
|
Depreciation and amortization |
173,592 |
|
153,313 |
|
166,244 |
|
24,206 |
|
|
Impairment of long-lived assets |
401,808 |
|
- |
|
- |
|
- |
|
|
Impairment of goodwill |
766,440 |
|
- |
|
- |
|
- |
|
|
Stock-based compensation expenses |
15,720 |
|
10,840 |
|
12,929 |
|
1,882 |
|
|
Loss from disposal of subsidiaries |
180,048 |
|
- |
|
- |
|
- |
|
|
Others |
12,421 |
|
93,201 |
|
41,616 |
|
6,059 |
|
|
Changes in operating assets and
liabilities |
|
|
|
|
|
Accounts and notes receivable |
36,562 |
|
(29,540 |
) |
(34,113 |
) |
(4,967 |
) |
|
Prepaid expenses and other current assets |
(119,384 |
) |
(14,088 |
) |
(37,448 |
) |
(5,453 |
) |
|
Accounts and notes payable |
26,379 |
|
(4,819 |
) |
37,690 |
|
5,488 |
|
|
Accrued expenses and other payables |
120,015 |
|
25,971 |
|
(19,359 |
) |
(2,819 |
) |
|
Deferred revenue |
(11,598 |
) |
6,217 |
|
11,154 |
|
1,624 |
|
|
Advances from customers |
77,225 |
|
(1,698 |
) |
114,528 |
|
16,676 |
|
|
Others |
6,455 |
|
(32,468 |
) |
(4,632 |
) |
(672 |
) |
|
Net cash generated from operating
activities |
206,564 |
|
111,398 |
|
260,715 |
|
37,960 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING
ACTIVITIES |
|
|
|
|
|
Purchases of property and equipment |
(77,872 |
) |
(91,256 |
) |
(123,027 |
) |
(17,913 |
) |
|
Purchases of intangible assets |
(43 |
) |
(3,756 |
) |
(4,032 |
) |
(587 |
) |
|
Disposal of subsidiaries, net of cash |
(77,719 |
) |
- |
|
- |
|
- |
|
|
Payments for investments |
(399,035 |
) |
(39,098 |
) |
(196,319 |
) |
(28,585 |
) |
|
Proceeds from minority equity interest transfer of a
subsidiary |
- |
|
- |
|
196,129 |
|
28,557 |
|
|
Proceeds from other investing activities |
6,115 |
|
357,302 |
|
18,061 |
|
2,630 |
|
|
Net cash (used in) generated from
investing activities |
(548,554 |
) |
223,192 |
|
(109,188 |
) |
(15,898 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING
ACTIVITIES |
|
|
|
|
|
Repayment of loan from a third party |
(100,000 |
) |
- |
|
- |
|
- |
|
|
Proceeds from issuance of 2020 bonds |
1,316,974 |
|
- |
|
- |
|
- |
|
|
Repayment of long-term bank borrowings |
(40,676 |
) |
- |
|
- |
|
- |
|
|
Repayment of short-term bank borrowings |
(11,843 |
) |
- |
|
- |
|
- |
|
|
Repayments of bank borrowings |
- |
|
(27,953 |
) |
- |
|
- |
|
|
Payments for capital lease |
(39,280 |
) |
(95,183 |
) |
(50,996 |
) |
(7,425 |
) |
|
Withdrawal of advance for shares repurchase plan |
- |
|
- |
|
42,710 |
|
6,219 |
|
|
Payment for shares repurchase plan |
(50,054 |
) |
- |
|
- |
|
- |
|
|
(Payments for) proceeds from other financing
activities |
(34,746 |
) |
38,801 |
|
89,810 |
|
13,077 |
|
|
Contribution from noncontrolling interest in a
subsidary |
62,357 |
|
- |
|
- |
|
- |
|
|
Net cash generated from (used in)
financing activities |
1,102,732 |
|
(84,335 |
) |
81,524 |
|
11,871 |
|
|
Effect of foreign exchange rate
changes on cash, cash
equivalents and restricted
cash |
(86,759 |
) |
80,660 |
|
63,732 |
|
9,280 |
|
|
Net increase in cash, cash
equivalents and restricted
cash |
673,983 |
|
330,915 |
|
296,783 |
|
43,213 |
|
|
Cash, cash equivalents and
restricted cash at beginning of
period |
2,676,069 |
|
2,108,237 |
|
2,439,152 |
|
355,147 |
|
|
Cash, cash equivalents and
restricted cash at end of
period |
3,350,052 |
|
2,439,152 |
|
2,735,935 |
|
398,360 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes: |
|
|
|
|
|
The Company adopted Accounting Standards Update (“ASU”) No.
2016-18, Statement of Cash Flows (Topic 230): Restricted Cash on
January 1, 2018 and retrospectively adjusted the condensed
consolidated statement of cash flows for the three months ended
September 30, 2017 by excluding the movement of restricted cash of
RMB53.1 million. |
|
|
|
|
|
|
|
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