VNET Group, Inc. reported its unaudited fourth‑quarter and full‑year results for the period ended December 31 2025, showing a 19.6% year‑over‑year increase in total net revenues to RMB 2.69 billion and a 20.5% rise to RMB 9.95 billion for the year. Adjusted EBITDA climbed 11.6% to RMB 805.1 million in Q4 and 22.6% to RMB 2.98 billion for the full year, surpassing the guidance range of RMB 2.91–2.95 billion. The revenue and earnings beat were driven largely by a 47.1% jump in wholesale IDC revenues, which reached RMB 978.1 million, and by a 135 MW influx of new wholesale orders in the quarter.
The company’s earnings per share for Q4 2025 were RMB 0.17, falling short of the consensus estimate of RMB 0.18. The miss reflects a combination of higher operating costs and a shift in the revenue mix toward lower‑margin segments, which compressed the adjusted EBITDA margin from 32.1% to 30.0% year‑over‑year. Management noted that the margin compression was “a result of increased investment in capacity expansion and higher operating expenses associated with the Hyperscale 2.0 rollout.”
Gross margin also slipped from 22.5% to 20.1% in Q4, underscoring the cost pressure. The company’s management explained that the decline was “primarily driven by higher energy and labor costs, as well as the need to accelerate deployment of new data‑center sites to meet AI demand.”
Segment analysis shows that wholesale IDC revenue grew 47.1% to RMB 978.1 million, while retail IDC and non‑IDC segments saw modest growth, reflecting a shift in customer mix toward high‑margin wholesale contracts. The 135 MW of new wholesale orders secured in Q4 signals continued demand from hyperscale cloud providers, reinforcing VNET’s position as a preferred partner for AI‑driven workloads.
Management reiterated its 2026 outlook, projecting total net revenues of RMB 11.5–11.8 billion and adjusted EBITDA of RMB 3.55–3.75 billion, while maintaining a capital‑expenditure budget of RMB 10–12 billion. “We closed 2025 with strong full‑year results, successfully achieving our 2025 delivery plan with a record 404 MW delivered and exceeding guidance on both revenues and adjusted EBITDA,” said founder and interim CEO Josh Sheng Chen. “Our wholesale IDC business maintained exceptional momentum, driven by strong customer demand and our proven ability to scale capacity rapidly and efficiently.”
Investor reaction was largely positive, driven by the revenue and EBITDA beat and the robust growth in wholesale IDC capacity. The EPS miss, however, tempered enthusiasm, as analysts noted that margin compression and higher operating costs could weigh on profitability in the near term. The company’s guidance signals confidence in sustained AI‑driven demand, but the margin dynamics highlight the need for continued cost discipline as capacity expansion accelerates.
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