The call introduces Vnet Group Inc.'s Q3 2025 earnings, covering forward-looking statements, GAAP and non-GAAP financial measures, and outlines the structure of the call including prepared remarks and Q&A session.

The company reported robust Q3 2025 results with a 21.7% YoY revenue increase to RMB 2.58 billion, primarily due to a 82.7% YoY rise in wholesale IDC revenues to RMB 956 million. Wholesale capacity in service grew by 16.1% QoQ to 783 MW, with utilization at 74.3%. The company secured new orders totaling 63 MW in Q3, including a 40 MW order from an internet company and a 3 MW order from an intelligent driving company, reflecting strong AI-driven demand and operational efficiency gains.

Wholesale business showed strong growth with 109 MW increase and stable utilization at 74.3%. Retail IDC business progressed with increased MRR per cabinet. Delivery capabilities remain strong, with 109 MW delivered in Q3 and plans for 306 MW over the next 12 months, supporting the company's Hyperscale 2.0 framework for AI-driven growth.

A call was turned over to the CFO for a detailed discussion on the company's operating and financial outcomes, focusing on key performance metrics and financial health.

The company reported a 21.7% year-over-year increase in net revenues to RMB 2.58 billion, driven by a significant 82.7% growth in wholesale business. Adjusted EBITDA surged by 20% to 21%, excluding disposal gains. Robust liquidity and healthy debt ratios were maintained, with a focus on long-term debt maturity planning. CapEx for the year is expected to support planned wholesale IDC expansions. Sustainability efforts were recognized globally, with a Vnet score of 73, ranking in the top 8% of the IT service industry. The company reaffirms its commitment to high-quality growth and long-term value creation.

A Q&A session discussed the 2026 outlook for domestic ship capacity expansion and order tendering, along with the timeline, cash recycling, and impact of recent private rate filings. The session highlighted the company's strong quarterly results and provided insights into future strategies.

As the year draws to a close, there's a focus on customer development paths indicating a stable market with moderate growth in 2023. Accelerated capacity delivery is anticipated due to heightened requirements. The domestic chip sector is evolving rapidly, with intensified competition among both established and emerging players, promising significant advancements and more customer choices.

The dialogue highlights the successful execution of Ritz projects with wholesale IDC as underlying assets, marking the completion of the financial capital cycle including development, holding, and long-term operation.

Ed raised projects are under review, with better expected valuation multiples. Upon successful issuance, financial statements will be consolidated, impacting group level revenue and EBITDA. Similar approach planned for future private risk projects with wholesale Idcs assets, aiming for completion by next year's Qi.

An investor and a financial analyst engage in a detailed discussion about investment strategies, focusing on market trends and portfolio optimization techniques.

Discussion on customer preferences across campuses in Hebei and Jiangsu, and insights into pricing trends for the fourth quarter and next year in the wholesale sector.

Clients prioritize business type, product offerings proximity to headquarters, and scalability when placing IDC orders. Demand varies by region, with notable requests from Greater Bay Area, Delta, Hebei, and Wlan Chapel. Pricing for wholesale IDCs remained stable in Q3.

Discusses improved project IRR due to faster customer adoption and stable pricing in balanced market areas, avoiding price wars.

The dialogue covers updates on ongoing projects, noting secured orders of 331 MW, and discusses future strategies for resource allocation focusing on land and power, emphasizing adaptability to customer demand and seasonal changes.

A strategic approach to resource acquisition and allocation is detailed, focusing on adapting to AI trends, specifically the shift towards inferencing. Plans include repurposing cabinets, acquiring GPUs, and extending planning to a five-year horizon. Key areas for resource expansion are identified as the Greater Beijing area and the Yangtze River Delta, with exploration of additional regions to meet future client demands.

Discusses the ongoing importance of time-to-market for customers, the potential growth in demand influencing new orders, and the increasing significance of user latency in future workflows.

Discusses the challenge of balancing customer demand for rapid capacity expansion with the need for low latency in inferencing. Strategies include early planning for civil engineering and power supply, consolidating capacity through supply chain management, and adopting modular construction solutions.

Discussed the ability to adjust move-in timelines post-contract, with options for six-month and expedited three-month delivery, catering to customer expectations.

Discussion on IDC business growth, including wholesale utilization targets and retail sustainability drivers.

Discusses strategies for increasing utilization rates and sustaining growth in the retail IDC sector, focusing on value-added services, capacity optimization, and adapting to customer demands for smart computing and storage solutions.

Discussion on expanding into low-cost electricity regions for AI training, evolving supply-demand dynamics, and acceleration of data center projects post-IPO, alongside future funding strategies.

Discusses Beijing Vnet's acquisition of a favorable rating from a domestic institution, enabling the company to proactively advance the issuance of domestic corporate bonds, particularly science and tech innovation bonds, which offer very favorable interest rates, aiming to benefit from lower interest rates and broaden financing channels.

The dialogue discusses the company's current CapEx spending, noting it is behind schedule compared to the capacity delivery plan. Management outlines the focus on wholesale IDC and Me watts CapEx, with a gradual reduction per unit. For next year's CapEx, the company plans to secure funding through asset securitization and corporate bond issuance, aiming to surpass the 2 billion RMB equity asset recycling achieved in 2025. The company is confident in maintaining a safe leverage ratio while funding its CapEx needs.

A discussion on potential reasons for a slight dip in Q4 revenue guidance and the impact of strong customer moving rates, alongside an explanation for a sequential decline in Q3 margins attributed to increased tariffs due to rising temperatures, while operational costs remain stable.