VNET Group, Inc.

Hello ladies and gentlemen. Thank you for standing by for the fourth quarter and full year 2025 earnings conference call for VNet Group Inc. After management's prepared remarks, there will be a question and answer session. Please note the Chinese line is in listen only mode. If you wish to ask questions, please dial in through the English line. Participants from our management include Ms Sharon Liu, Rotating President, Mr. Peter Zhang, SVP of Operational Finance, and Ms. Xin Yuan Liu, Head of Investor Relations for the company. Please note that today's conference call is being recorded. I'll now like to turn the call over to the first speaker today, Ms. Xin Yuan Liu. Please go ahead.

Thank you, Operator. Hello, everyone, and welcome to our fourth quarter and full year 2025 earnings conference call. Our earnings release was distributed earlier today, and you can find a copy on our website as well as on newswire services. Please note that today's call will contain forward-looking statements made under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from our current expectations. For detailed discussions of these risks and uncertainties, please refer to our latest annual report and other documents filed with the SEC. VNAT does not undertake any obligations to update any forward-looking statements except as required under applicable laws. Please also know that VNAT's earnings priorities and this conference call include the disclosure of unaudited GAAP and non-GAAP financial matters. VNet's earnings press release contains a reconciliation of the unaudited non-GAAP matters to the unaudited GAAP matters. A summary presentation, which we will refer to during this conference call, can be viewed and downloaded from our IR website at ir.vnet.com. Next, I'd like to alert you that we will be utilizing text-to-speech technology powered by NewLink.ai. to deliver this quarter's prepared remarks by Ms. Sharon Liu, our rotating president, and Mr. Peter Zhang, our SVP of operational finance. The management team will join the Q&A session in person. Additionally, this conference is being recorded. A webcast of this conference call will also be available on our website at ir.vnet.com. Now let's get started with today's presentation. Ms. Liu, please go ahead.

Good morning and good evening, everyone. Thank you for joining our call today. I'll start with an overview of our major accomplishments during the fourth quarter and full year of 2025. Before we dive into the key figures, I want to underscore that 2025 was an exceptional year for VNet. Our effective dual core strategy and hyperscale 2.0 framework empowered us to capture surging AI demand and deliver impressive results. Let's turn to slide four. On the operational side, our wholesale IDC business continued to grow significantly, driven by robust customer demand and our rapid delivery capabilities. As of December 31st, 2025, Our wholesale capacity in service grew to 889 megawatts, an increase of around 107 megawatts quarter over quarter, bringing our total deliveries for the full year of 2025 to a record high 404 megawatts. In line with our full-year delivery plan, wholesale capacity utilized by customers rose to 623 megawatts, an increase of around 41 megawatts quarter over quarter, driven by continued strong customer demand and our solid execution. Customers moved into 270 megawatts over the full year, bringing the utilization rate to 70.1%. Our retail IDC business continued to progress smoothly, benefiting from growing AI-driven demand. In the fourth quarter, our retail MRR per cabinet was RMB 9,420. Retail utilization rate was stable at 64.0%. On the financial side, our total net revenues increased by 19.6% year-over-year to RMB 2.69 billion for the fourth quarter. Wholesale revenues remained the key growth driver, reaching RMB 978.1 million. a significant year-over-year increase of 47.1%. Our adjusted EBITDA for the fourth quarter also increased by 11.6% year-over-year to RMB 805.1 million, driven by the rapid growth of our wholesale IDC business, excluding the one-off impact of asset disposals in the fourth quarter of 2024. Adjusted EBITDA increased by 39.3% year-over-year. For the full year of 2025, our total revenues grew significantly by 20.5% to RMB 9.95 billion, and adjusted EBITDA grew 22.6% to RMB 2.98 billion, both significantly outperforming our 2025 guidance. We continue to advance our capital recycling strategy in 2025 and achieved meaningful results. In November 2025, we successfully issued an RMB 860 million holding type real estate green asset-backed security. Also, in March 2026, two of our private rates projects were listed on the Shanghai Stock Exchange, with a total offer size of approximately RMB 6.36 billion. Moving into 2026, Customer demand for our wholesale IDC business remains strong. Meanwhile, our ongoing operational efficiency gains are providing increasingly robust support for this business's high-quality growth. We expect our full-year 2026 revenue to be in the range of RMB 11.5 billion to RMB 11.8 billion, representing a year-over-year increase of 15.6% to 18.6%. and adjusted EBITDA to be in the range of RMB 3.55 billion to RMB 3.75 billion, representing a year-over-year increase of 19.2% to 25.9%. Moving on to our new order wins on slide 5. Order momentum remained strong in the fourth quarter, largely fueled by brisk demand from customers. During the quarter, we secured five wholesale orders, totaling 135 MW. Specifically, in addition to the 32 MW order mentioned on our last call, we won a 12 MW order from Internet customer for a data center in the Yangtze River Delta. Meanwhile, we also won a 56 MW order from a cloud service provider and a 25 MW order from an intelligent driving customer, and an 11 MW order from another Internet customer for our data centers in the greater Beijing area this quarter. Furthermore, bolstered by AI-driven demand, we secured a combined capacity of approximately 2 MW in new retail orders across multiple retail data centers from customers in the intelligent driving, local services, AIoT and financial services sectors. China's IDC industry continues to thrive, driven by strong market demand as well as supportive policies. At the national level, authorities have rolled out a series of systematic and actionable policies, sustaining their support for the digital economy and computing infrastructure. At the industry level, accelerating AI adoption and enterprise digital transformation along with increasingly clear and sustained investment commitments from large and mid-sized customers, particularly leading Internet companies and cloud service providers are fueling strong, visible demand for high-quality IDC services. Market demand is further shifting toward large-scale, clustered and highly reliable data center infrastructure, while rising requirements for delivery certainty Long-term scalability and green operations are tightening effective supply. Our industry-leading delivery performance, premium IDC services, and scalable data center clusters continue to strengthen VNet's competitiveness in this market environment. Guided by our dual core strategy and hyperscale 2.0 framework, we are well positioned to capture growth opportunities and expand market share in an increasingly AI-driven infrastructure landscape. Now let's delve into our business updates, starting with our wholesale business on slide 7. Our wholesale business maintained strong growth momentum with capacity in service increasing by around 107 MW quarter, over quarter to 889 MW, and utilization rate at 70.1%. mainly attributable to rapid deliveries at our NOR Campus 02A and NHB Campus 03, and fast move-ins at our NOR Campus 02A. Our mature capacity utilization rate also reached 93.1%, a relatively high level. We have a clear growth path for our wholesale data center capacity. Let's move on to slide eight. As of the end of the fourth quarter, our total wholesale resource capacity was around 2.2 gigawatts. Specifically, our capacity under construction was around 452 megawatts. Capacity held for short-term future development was around 513 megawatts. And capacity held for long-term future development was around 327 megawatts. These secured resources represent a significant advantage in light of the IDC industry's limited effective supply and are in line with our optimistic view of AI-driven demand's long-term growth potential. Moving to our retail IDC business on slide 9. Our retail business progressed smoothly in the fourth quarter. Retail capacity in service decreased to 49,863 cabinets. from 52,288 cabinets last quarter, mainly because the target retail data center under our private REITs project was excluded from the group's consolidated capacity. The utilization rate was stable at 64.0% as of the end of December. Our MRR per retail cabinet increased slightly to RMB 9,420 this quarter, from RMB 8,948 last quarter driven by the increasing adoption of value-added services amid vast AI-driven demand. Turning to our delivery plan on slide 10, as I mentioned before, leveraging our efficient delivery capabilities, we successfully delivered a total of around 107 megawatts in the fourth quarter of 2025, bringing our total deliveries to around 404 megawatts as of the end of December this year. We currently have seven data centers under construction, with six in the Greater Beijing area and one in the Yangtze River Delta. We plan to deliver 450 to 500 megawatts of capacity over the next 12 months to meet the strong demand from our wholesale customers. In conclusion, our robust fourth quarter and full year 2025 results validate our operational excellence growth strategy and our ability to identify and capture market demand in the AI era. As we move into 2026, we will continue to advance our dual core strategy and hyperscale 2.0 framework, developing our scalable, high performance and energy efficient data centers to seize growth opportunities while empowering China's digital economy for sustainable growth. Now, I will turn the call over to our SVP of Operational Finance, Peter, for further discussion of our operating and financial performance. Thank you, everyone.