Anthony Leng

Anthony Leng from JPMorgan Chase & Co. questioned the full-year upward revised guidance, specifically the implied single-digit quarter-on-quarter revenue decline for Q4, asking if there's a special reason or potential for further upside. He also inquired about the Q3 EBITDA margin's sequential decline despite strong customer moving rates, seeking drivers and future trends.

Answer

CFO Qiyu Wang stated that VNET's full-year guidance is consistently prudent, and the likelihood of a Q4 sequential revenue decline is very small, advising reference to the upper end of the guidance range. Regarding the Q3 EBITDA margin, he attributed the slight sequential decline to normal seasonal fluctuations, primarily due to higher tariffs from rising temperatures in Q3, which are reflected in the P&L, while overall revenue and operational costs remained stable.

Anthony Leng asked about the potential for further upside revision to VNET's full-year guidance, noting an implied single-digit quarter-on-quarter revenue decline for Q4, and inquired about the drivers behind the sequential decline in Q3 EBITDA margin despite strong customer moving rates, seeking insights into future margin trends.

Answer

CFO Qiyu Wang stated that VNET maintains a prudent approach to full-year guidance but advised referring to the more aggressive end of the range, noting a sequential Q4 revenue decline is highly unlikely. He explained that the Q3 EBITDA margin fluctuation was seasonal and within a normal range, primarily due to higher electricity tariffs in Q3 from rising temperatures, while operational costs remained consistent.