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21Vianet Group, Inc. Reports Unaudited Third Quarter 2020 Financial Results

·25 min read

BEIJING, Nov. 24, 2020 (GLOBE NEWSWIRE) -- 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, 2020. The Company will hold a conference call at 8:00 P.M. on Tuesday, November 24, 2020, U.S. Eastern Time to discuss the financial results. Dial-in details are provided at the end of this release.

Third quarter 2020 Financial Highlights

  • Net revenues increased by 27.0% to RMB1.25 billion (US$183.5 million) from RMB981.0 million in the same period of 2019.

  • Adjusted cash gross profit (non-GAAP) increased by 32.6% to RMB526.2 million (US$77.5 million) from RMB396.7 million in the same period of 2019. Adjusted cash gross margin (non-GAAP) was 42.2%, compared to 40.4% in the same period of 2019 and 40.9% in the second quarter of 2020.

  • Adjusted EBITDA (non-GAAP) increased by 35.2% to RMB368.5 million (US$54.3 million) from RMB272.5 million in the same period of 2019. Adjusted EBITDA margin (non-GAAP) was 29.6%, compared to 27.8% in the same period of 2019 and 26.8% in the second quarter of 2020.

Third quarter 2020 Operational Highlights

  • Total cabinets under management net increased by 7,426 to 51,476 as of September 30, 2020, compared to 44,050 as of June 30, 2020, and 32,116 as of September 30, 2019.

  • Retail IDC MRR1 per cabinet increased slightly to RMB9,074 in the third quarter of 2020, compared to RMB8,711 in the same period of 2019 and RMB8,953 in the second quarter of 2020.

  • Compound utilization rate improved to 64.2% from 61.4% in the second quarter of 2020, mainly reflecting the Company’s shortened move-in period for newly delivered cabinets and ongoing refinement of its customer mix.

    • Utilization rate for mature IDCs delivered prior to 2019 improved to 77.0% in the third quarter of 2020 from 73.6% in the second quarter of 2020.

    • Utilization rate for newly-built and ramp-up IDCs delivered since 2019 improved to 35.9% in the third quarter of 2020, compared to 30.1% in the second quarter of 2020.

_________________________________
1Retail IDC MRR: Refers to Monthly Recurring Revenues for the retail IDC business.

Mr. Alvin Wang, Chief Executive Officer and President of the Company, stated, “We are pleased to announce that we delivered a strong performance in the third quarter of 2020 as a result of our dual-core growth strategy, competitive IDC solutions for both retail and wholesale customers, and on-track delivery schedule. Moreover, in recognition of the IDC industry’s steady growth trajectory in China, we continued to work towards better positioning ourselves for long-term growth. Firstly, to further bolster our IDC pipeline in the surrounding areas of tier-one cities, we secured two separate IDC resources to the immediate east of Beijing, adding around 50MW in total capacity to this key area. Furthermore, we secured an additional 140MW of IT power to be used in the expansion of our Jiangsu Campus over the next three to five years. Secondly, we announced the launch of our management rotation program, which will take effect in the coming year and help us to develop more internal synergies and cross-functional expertise. Thirdly, we developed our 2021-2023 Three-Year Growth Plan to accelerate our future expansion and further optimize our dual-core growth strategy. Looking ahead, we are confident that such measures will serve to sustain our growth momentum, enhance our operations, and unlock more value throughout China’s IDC industry over the long term.”

Ms. Sharon Liu, Chief Financial Officer of the Company, commented, “We concluded the third quarter of 2020 with solid financial results as our revenues were within our previous guidance range and our adjusted EBITDA exceeded the high end of our guidance range. In the meantime, we also continued to improve our margins. Our strong financial growth reflects both our continuous cabinet expansion and improved utilization rates. To date, we have already delivered more than 15,000 cabinets in total since the beginning of this year. Our strong balance sheet, ability to secure cost-efficient financing sources, and endorsement from well-established investors in the IDC industry continue to showcase the strength of our financials and our preparedness to capitalize on new growth opportunities. Going forward, we remain confident in our ability to reach our development goals, continue increasing our market share, and deliver lasting value to our shareholders in turn.”

Third quarter 2020 Financial Results

NET REVENUES: Net revenues in the third quarter of 2020 increased by 27.0% to RMB1.25 billion (US$183.5 million) from RMB981.0 million in the third quarter of 2019, representing an increase of 8.9% from RMB1.14 billion in the second quarter of 2020. The increase was mainly due to the growing demand of both wholesale and retail IDC customers, driven by the long-term trend of corporate digitization across China.

GROSS PROFIT: Gross profit in the third quarter of 2020 was RMB275.1 million (US$40.5 million), representing an increase of 23.6% from RMB222.6 million in the same period of 2019 and an increase of 1.0% from RMB272.3 million in the second quarter of 2020. Gross margin in the third quarter of 2020 was 22.1%, compared to 22.7% in the same period of 2019 and 23.8% in the second quarter of 2020. The year-over-year decrease in gross margin was primarily attributable to the delivery of additional IDC capacity as well as the additional time required to ramp up the utilization rates of the newly added cabinets.

ADJUSTED CASH GROSS PROFIT, which excludes depreciation, amortization, and share-based compensation expenses, was RMB526.2 million (US$77.5 million) in the third quarter of 2020, compared to RMB396.7 million in the same period of 2019 and RMB467.6 million in the second quarter of 2020. Adjusted cash gross margin in the third quarter of 2020 was 42.2%, compared to 40.4% in the same period of 2019 and 40.9% in the second quarter of 2020.

OPERATING EXPENSES: Total operating expenses in the third quarter of 2020 were RMB199.3 million (US$29.4 million), compared to RMB157.1 million in the same period of 2019 and RMB193.5 million in the second quarter of 2020. As a percentage of net revenues, total operating expenses in the third quarter of 2020 was 16.0%, compared to 16.0% in the same period of 2019 and 16.9% in the second quarter of 2020.

Sales and marketing expenses in the third quarter of 2020 were RMB45.8 million (US$6.7 million), representing a decrease of 12.7% from RMB52.4 million in the same period of 2019 and a decrease of 11.4% from RMB51.7 million in the second quarter of 2020. The decrease in sales and marketing expenses was primarily attributable to temporarily delayed sales and marketing activities.

Research and development expenses in the third quarter of 2020 were RMB26.1 million (US$3.8 million), representing an increase of 15.8% from RMB22.5 million in the same period of 2019 and an increase of 10.2% from RMB23.7 million in the second quarter of 2020, primarily due to the Company’s continuous investments in technology upgrades.

General and administrative expenses in the third quarter of 2020 were RMB127.5 million (US$18.8 million), representing an increase of 55.2% from RMB82.2 million in the same period of 2019 and an increase of 6.7% from RMB119.5 million in the second quarter of 2020. The increase in general and administrative expenses was primarily due to increased staff costs related to the recruitment of experienced management personnel.

ADJUSTED OPERATING EXPENSES, which exclude share-based compensation expenses, were RMB180.5 million (US$26.6 million) in the third quarter of 2020, representing an increase of 23.4% from RMB146.2 million in the same period of 2019 and a slight decrease of 1.1% from RMB182.5 million in the second quarter of 2020. As a percentage of net revenues, adjusted operating expenses in the third quarter of 2020 decreased to 14.5% from 14.9% in the same period of 2019 and from 15.9% in the second quarter of 2020.

ADJUSTED EBITDA: Adjusted EBITDA in the third quarter of 2020 was RMB368.5 million (US$54.3 million), representing an increase of 35.2% from RMB272.5 million in the same period of 2019 and an increase of 20.2% from RMB306.4 million in the second quarter of 2020. Adjusted EBITDA in the third quarter of 2020 excluded share-based compensation expenses of RMB23.1 million (US$3.4 million). Adjusted EBITDA margin was 29.6% in the third quarter of 2020, compared to 27.8% in the same period of 2019 and 26.8% in the second quarter of 2020.

NET PROFIT/LOSS: Net profit attributable to ordinary shareholders in the third quarter of 2020 was RMB97.1 million (US$14.3 million), compared to a net loss attributable to ordinary shareholders of RMB69.5 million in the same period of 2019 and a net loss attributable to ordinary shareholders of RMB2.12 billion in the second quarter of 2020.

PROFIT/LOSS PER SHARE: Basic and diluted profit per share were RMB0.11 (US$0.02) and RMB0.08 (US$0.01), respectively, in the third quarter of 2020, which represents the equivalent of RMB0.66 (US$0.12) and RMB0.48 (US$0.06), respectively, per American depositary share ("ADS"). Each ADS represents six Class A ordinary shares. Diluted profit/loss per share is calculated using net profit/loss attributable to ordinary shareholders divided by the weighted average number of diluted shares outstanding.

As of September 30, 2020, the aggregate amount of the Company's cash and cash equivalents, restricted cash, and short-term investments were RMB5.53 billion (US$815.2 million).

Net cash generated from operating activities in the third quarter of 2020 was RMB210.0 million (US$30.9 million), compared to RMB198.6 million in the same period of 2019 and RMB161.8 million in the second quarter of 2020.

Financial Outlook

For the fourth quarter of 2020, the Company expects net revenues to be in the range of RMB1,320 million to RMB1,340 million. Adjusted EBITDA in the fourth quarter of 2020 is expected to be in the range of RMB380 million to RMB400 million.

For the full year of 2020, the Company expects net revenues to be in the range of RMB4,800 million to RMB4,820 million. Adjusted EBITDA for the full year of 2020 is expected to be in the range of RMB1,314 million to RMB1,334 million. The midpoints of the Company’s updated estimates imply an increase of 27% and 26% year over year in net revenues and adjusted EBITDA, respectively.

The forecast reflects the Company’s current and preliminary views on the market and its operational conditions, which do not factor in any of the potential future impacts caused by the COVID-19 pandemic, and are subject to change.

Three-Year Growth Plan

In order to capitalize on the forecasted market trends and augment its market position as a reliable carrier- and cloud-neutral Internet data center services provider in China, the Company has developed a new Three-Year Growth Plan, outlining its objectives from 2021 to 2023. As part of the plan, the Company has set a minimum capacity expansion target of 25,000 standard cabinets (or 180MW) per year.

The forecast reflects the Company’s current and preliminary views on the market and its operational conditions, which are subject to change.

Conference Call

The Company will hold a conference call at 8:00 P.M. on Tuesday, November 24, 2020, U.S. Eastern Time, or 9:00 A.M. on Wednesday, November 25, 2020, Beijing Time, to discuss the financial results.

In advance of the conference call, all participants must use the following link to complete the online registration process to receive a unique registrant ID and a set of participant dial-in numbers to join the conference call.

Conference ID:

5348857

Registration Link:

http://apac.directeventreg.com/registration/event/5348857

The replay will be accessible through December 2, 2020, by dialing the following numbers:

United States Toll Free:

+1-855-452-5696

International:

+61-2-8199-0299

Conference ID:

5348857

A live and archived webcast of the conference call will be available through the Company's investor relations 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 Securities and Exchange Commission as a 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 RMB6.7896 to US$1.00, the noon buying rate in effect on September 30, 2020, 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. 21Vianet operates in more than 20 cities throughout China, servicing a diversified and loyal base of over 6,000 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," “target,” "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 2121
IR@21Vianet.com

Julia Jiang
+86 10 8456 2121
IR@21Vianet.com

ICR, Inc.
Xinran Rao
+1 (646) 405-4922
IR@21Vianet.com


21VIANET GROUP, INC.

CONSOLIDATED BALANCE SHEETS

(Amount in thousands of Renminbi (“RMB”) and US dollars (“US$”))

As of

As of

December 31, 2019

September 30, 2020

RMB

RMB

US$

(Audited)

(Unaudited)

(Unaudited)

Assets

Current assets:

Cash and cash equivalents

1,808,483

5,204,689

766,568

Restricted cash

478,873

178,949

26,356

Accounts and notes receivable, net

657,158

883,902

130,185

Short-term investments

363,856

80,444

11,848

Prepaid expenses and other current assets

1,618,149

1,328,463

195,661

Amounts due from related parties

301,665

125,007

18,412

Total current assets

5,228,184

7,801,454

1,149,030

Non-current assets:

Property and equipment, net

5,443,565

7,184,471

1,058,158

Intangible assets, net

410,595

571,967

84,242

Land use rights, net

233,154

257,400

37,911

Operating lease right-of-use assets, net

1,221,616

1,238,443

182,403

Goodwill

989,530

994,993

146,547

Long-term investments

169,653

151,226

22,273

Amounts due from related parties

20,654

20,229

2,979

Restricted cash

69,821

70,673

10,409

Deferred tax assets

209,366

147,895

21,783

Other non-current assets

277,568

411,234

60,568

Total non-current assets

9,045,522

11,048,531

1,627,273

Total assets

14,273,706

18,849,985

2,776,303

Liabilities and Shareholders' Equity

Current liabilities:

Short-term bank borrowings

234,500

38,500

5,670

Accounts and notes payable

303,128

332,726

49,005

Accrued expenses and other payables

978,935

1,451,722

213,816

Deferred revenue

57,625

51,993

7,658

Advances from customers

1,068,692

627,981

92,492

Income taxes payable

48,032

50,454

7,431

Amounts due to related parties

166,935

64,006

9,427

Current portion of long-term bank borrowings

32,500

44,500

6,554

Current portion of finance lease liabilities

227,115

355,084

52,298

Current portion of deferred government grant

2,595

2,074

305

Current portion of bonds payable

911,147

-

-

Current portion of operating lease liabilities

437,817

468,056

68,937

Total current liabilities

4,469,021

3,487,096

513,593

Non-current liabilities:

Long-term borrowings

79,500

485,123

71,451

Amounts due to related parties

745,899

742,611

109,375

Unrecognized tax benefits

2,443

3,873

571

Deferred tax liabilities

202,572

243,370

35,845

Non-current portion of finance lease liabilities

896,927

1,061,281

156,310

Non-current portion of deferred government grant

5,906

4,551

670

Bonds payable

2,060,708

2,024,365

298,157

Non-current portion of operating lease liabilities

579,102

558,154

82,207

Convertible promissory notes

-

2,539,118

373,972

Total non-current liabilities

4,573,057

7,662,446

1,128,558

Shareholders' equity

Treasury stock

(349,523

)

(349,523

)

(51,479

)

Ordinary shares

46

55

8

Additional paid-in capital

9,202,567

12,790,027

1,883,767

Accumulated other comprehensive gain

77,904

38,605

5,686

Statutory reserves

60,469

60,030

8,841

Accumulated deficit

(4,038,390

)

(6,205,303

)

(913,942

)

Series A perpetual convertible preferred shares

-

1,044,831

153,887

Total 21Vianet Group, Inc. shareholders’ equity

4,953,073

7,378,722

1,086,768

Noncontrolling interest

278,555

321,721

47,384

Total shareholders' equity

5,231,628

7,700,443

1,134,152

Total liabilities and shareholders' equity

14,273,706

18,849,985

2,776,303


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, 2019

June 30, 2020

September 30, 2020

September 30, 2019

September 30, 2020

RMB

RMB

RMB

US$

RMB

RMB

US$

(Unaudited)

(Unaudited)

(Unaudited)

(Unaudited)

(Unaudited)

(Unaudited)

(Unaudited)

Net revenues

980,969

1,144,061

1,245,794

183,486

2,740,848

3,480,652

512,645

Cost of revenues

(758,414

)

(871,729

)

(970,651

)

(142,961

)

(2,049,270

)

(2,699,066

)

(397,529

)

Gross profit

222,555

272,332

275,143

40,525

691,578

781,586

115,116

Operating expenses

Sales and marketing

(52,399

)

(51,652

)

(45,760

)

(6,740

)

(143,121

)

(146,122

)

(21,521

)

Research and development

(22,518

)

(23,665

)

(26,078

)

(3,841

)

(63,872

)

(70,727

)

(10,417

)

General and administrative

(82,156

)

(119,494

)

(127,546

)

(18,785

)

(305,293

)

(372,242

)

(54,825

)

(Allowance) reversal for doubtful debt

(6

)

1,338

111

16

(485

)

(1,072

)

(158

)

Total operating expenses

(157,079

)

(193,473

)

(199,273

)

(29,350

)

(512,771

)

(590,163

)

(86,921

)

Operating profit

65,476

78,859

75,870

11,175

178,807

191,423

28,195

Interest income

15,379

11,713

6,440

949

39,619

27,535

4,055

Interest expense

(96,936

)

(102,742

)

(96,366

)

(14,193

)

(257,580

)

(301,366

)

(44,386

)

Other income

2,187

8,197

2,747

405

14,220

11,803

1,738

Other expense

(127

)

(2,158

)

(4,995

)

(736

)

(4,362

)

(28,986

)

(4,269

)

Changes in the fair value of convertible promissory notes

-

(1,612,054

)

24,939

3,673

-

(1,587,115

)

(233,757

)

Foreign exchange (loss) gain

(40,192

)

275

114,101

16,805

(50,507

)

72,629

10,697

Loss on debt extinguishment

(969

)

-

-

-

(18,773

)

-

-

(Loss) gain before income taxes and (loss) gain from equity method investments

(55,182

)

(1,617,910

)

122,736

18,078

(98,576

)

(1,614,077

)

(237,727

)

Income tax expenses

(10,039

)

(20,410

)

(25,230

)

(3,716

)

(30,123

)

(68,126

)

(10,034

)

(Loss) gain from equity method investments

(1,078

)

(10,457

)

2,265

334

(30,293

)

(4,325

)

(637

)

Net (loss) profit

(66,299

)

(1,648,777

)

99,771

14,696

(158,992

)

(1,686,528

)

(248,398

)

Net profit attributable to noncontrolling interest

(3,157

)

(3,573

)

(2,627

)

(387

)

(6,884

)

(7,441

)

(1,096

)

Net (loss) profit attributable to 21 Vianet Group, Inc.

(69,456

)

(1,652,350

)

97,144

14,309

(165,876

)

(1,693,969

)

(249,494

)

Deemed distribution to Series A perpetual convertible preferred shareholders

-

(470,643

)

-

-

-

(470,643

)

(69,318

)

Net (loss) profit attributable to the Company’s ordinary shareholders

(69,456

)

(2,122,993

)

97,144

14,309

(165,876

)

(2,164,612

)

(318,812

)

(Loss) profit per share

Basic

(0.10

)

(3.21

)

0.11

0.02

(0.24

)

(3.17

)

(0.47

)

Diluted

(0.10

)

(3.21

)

0.08

0.01

(0.24

)

(3.17

)

(0.47

)

Shares used in (loss) profit per share computation

Basic*

679,135,837

660,949,226

716,409,506

716,409,506

678,359,403

686,292,393

686,292,393

Diluted*

679,135,837

660,949,226

805,640,008

805,640,008

678,359,403

686,292,393

686,292,393

(Loss) profit per ADS (6 ordinary shares equal to 1 ADS)

Basic

(0.60

)

(19.26

)

0.66

0.12

(1.44

)

(19.02

)

(2.82

)

Diluted

(0.60

)

(19.26

)

0.48

0.06

(1.44

)

(19.02

)

(2.82

)

* 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, 2019

June 30, 2020

September 30, 2020

September 30, 2019

September 30, 2020

RMB

RMB

RMB

US$

RMB

RMB

US$

Gross profit

222,555

272,332

275,143

40,525

691,578

781,586

115,116

Plus: depreciation and amortization

173,712

194,651

246,747

36,342

514,235

623,954

91,898

Plus: share-based compensation expenses

464

569

4,340

639

1,397

5,369

791

Adjusted cash gross profit

396,731

467,552

526,230

77,506

1,207,210

1,410,909

207,805

Adjusted cash gross margin

40.4

%

40.9

%

42.2

%

42.2

%

44.0

%

40.5

%

40.5

%

Operating expenses

(157,079

)

(193,473

)

(199,273

)

(29,350

)

(512,771

)

(590,163

)

(86,921

)

Plus: share-based compensation expenses

10,833

11,005

18,768

2,764

33,930

49,401

7,276

Adjusted operating expenses

(146,246

)

(182,468

)

(180,505

)

(26,586

)

(478,841

)

(540,762

)

(79,645

)

Operating profit

65,476

78,859

75,870

11,175

178,807

191,423

28,195

Plus: depreciation and amortization

195,729

215,981

269,478

39,690

572,563

688,066

101,341

Plus: share-based compensation expenses

11,297

11,574

23,108

3,403

35,327

54,770

8,067

Adjusted EBITDA

272,502

306,414

368,456

54,268

786,697

934,259

137,603

Adjusted EBITDA margin

27.8

%

26.8

%

29.6

%

29.6

%

28.7

%

26.8

%

26.8

%


21VIANET GROUP, INC.

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(Amount in thousands of Renminbi (“RMB”) and US dollars (“US$”))

Three months ended

September 30, 2019

June 30, 2020

September 30, 2020

RMB

RMB

RMB

US$

(Unaudited)

(Unaudited)

(Unaudited)

(Unaudited)

CASH FLOWS FROM OPERATING ACTIVITIES

Net (loss) profit

(66,299

)

(1,648,777

)

99,771

14,696

Adjustments to reconcile net (loss) profit to net cash generated from operating activities:

Depreciation and amortization

195,729

215,981

269,478

39,690

Stock-based compensation expenses

11,297

11,574

23,108

3,403

Others

33,913

1,776,114

(60,721

)

(8,943

)

Changes in operating assets and liabilities

Accounts and notes receivable

(133,929

)

(79,036

)

74,342

10,949

Prepaid expenses and other current assets

(84,332

)

(126,703

)

438,214

64,542

Accounts and notes payable

35,444

(37,021

)

(4,676

)

(689

)

Accrued expenses and other payables

105,076

41,951

8,016

1,181

Deferred revenue

16,138

(18,731

)

(2,334

)

(344

)

Advances from customers

103,772

29,340

(559,680

)

(82,432

)

Others

(18,259

)

(2,905

)

(75,547

)

(11,127

)

Net cash generated from operating activities

198,550

161,787

209,971

30,926

CASH FLOWS FROM INVESTING ACTIVITIES

Purchases of property and equipment

(448,614

)

(478,231

)

(786,554

)

(115,847

)

Purchases of intangible assets

(8,278

)

(15,707

)

(8,923

)

(1,314

)

(Payments for) proceeds from investments

(320,660

)

68,989

(106,368

)

(15,666

)

Proceeds from (payments for) other investing activities

162,811

9,484

(12,626

)

(1,860

)

Net cash used in investing activities

(614,741

)

(415,465

)

(914,471

)

(134,687

)

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from issuance of ordinary shares

-

-

2,680,706

394,825

Proceeds from bank borrowings

200,000

203,978

24,776

3,649

Repayment of bank borrowings

(44,331

)

-

(200,000

)

(29,457

)

Payments for finance lease

(83,274

)

(73,165

)

(137,982

)

(20,323

)

Repurchase of 2020 Notes

(126,553

)

-

(915,543

)

(134,845

)

Payment of issuance cost of 2021 Notes

(183

)

-

-

-

Proceeds from issuance of convertible promissory notes

-

509,577

-

-

Proceeds from Series A perpetual convertible preferred shares

-

1,058,325

-

-

(Payments for) proceeds from other financing activities

(95,477

)

107,796

(6,628

)

(976

)

Net cash (used in) generated from financing activities

(149,818

)

1,806,511

1,445,329

212,873

Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash

68,718

10,778

(108,885

)

(16,037

)

Net (decrease) increase in cash, cash equivalents and restricted cash

(497,291

)

1,563,610

631,944

93,075

Cash, cash equivalents and restricted cash at beginning of period

3,085,400

3,258,757

4,822,367

710,258

Cash, cash equivalents and restricted cash at end of period

2,588,109

4,822,367

5,454,311

803,333