Exhibit 99.1

VNET Reports Unaudited Third Quarter 2023 Financial Results

BEIJING, November 15, 2023 /PRNewswire/ -- VNET Group, Inc. (Nasdaq: VNET) (“VNET” 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, 2023.

“We recorded another solid performance in the third quarter of 2023, highlighted by smooth and timely deliveries of approximately 3,500 cabinets as well as new order wins for our reliable services,” said Jeff Dong, Chief Executive Officer of VNET. “Notably, we extended a wholesale contract for 45MW of capacity with an existing internet giant customer in August. Computing power needs have surged under rapid AI development and supportive policy measures. With our high power density deployment and service capabilities, we are steadily capturing increasing demand for premium IDC services among new and traditional industry verticals. As a dedicated industry leader, we will continue strengthening our core competencies to fulfill the mounting AI-driven demand and propel our long-term, sustainable growth.”

Qiyu Wang, Chief Financial Officer of VNET, commented, “In the third quarter of 2023, we continued to concentrate on high-quality revenues. Our net revenues increased by 4.0% year-over-year to RMB1.89 billion and adjusted EBITDA rose by 11.6% year-over-year to RMB507.9 million. Moving forward, we will remain focused on high-quality business growth while advancing our premium IDC offerings to empower digital transformation across a broader swath of industries.”

Third Quarter 2023 Financial Highlights

Third Quarter 2023 Operational Highlights

1 The overall utilization rate is calculated by dividing the number of customer-utilized cabinets by the total cabinets under management at the end of the period.

2 Retail IDC MRR refers to Monthly Recurring Revenues for the retail IDC business.

Third Quarter 2023 Financial Results

NET REVENUES: Net revenues in the third quarter of 2023 were RMB1.89 billion (US$258.6 million), representing an increase of 4.0% from RMB1.81 billion in the same period of 2022. The year-over-year increase was mainly driven by the continued growth of our IDC business and cloud services.

GROSS PROFIT: Gross profit in the third quarter of 2023 was RMB306.5 million (US$42.0 million), compared with RMB316.6 million in the same period of 2022. Gross margin in the third quarter of 2023 was 16.2%, compared with 17.5% in the same period of 2022.

ADJUSTED CASH GROSS PROFIT, which excludes depreciation, amortization, and share-based compensation expenses, was RMB738.4 million (US$101.2 million) in the third quarter of 2023, compared with RMB707.7 million in the same period of 2022. Adjusted cash gross margin in the third quarter of 2023 was 39.1%, compared with 39.0% in the same period of 2022.

OPERATING EXPENSES: Total operating expenses in the third quarter of 2023 were RMB274.3 million (US$37.6 million), compared with RMB310.2 million in the same period of 2022. As a percentage of net revenues, total operating expenses in the third quarter of 2023 were 14.5%, compared with 17.1% in the same period of 2022.

Sales and marketing expenses in the third quarter of 2023 were RMB64.1 million (US$8.8 million), compared with RMB80.2 million in the same period of 2022.

Research and development expenses in the third quarter of 2023 were RMB80.7 million (US$11.1 million), compared with RMB73.4 million in the same period of 2022.

General and administrative expenses in the third quarter of 2023 were RMB137.9 million (US$18.9 million), compared with RMB165.4 million in the same period of 2022.

ADJUSTED OPERATING EXPENSES, which exclude share-based compensation expenses and compensation for postcombination employment in an acquisition, were RMB264.8 million (US$36.3 million) in the third quarter of 2023, compared with RMB275.1 million in the same period of 2022. As a percentage of net revenues, adjusted operating expenses in the third quarter of 2023 were 14.0%, compared with 15.2% in the same period of 2022.

ADJUSTED EBITDA: Adjusted EBITDA in the third quarter of 2023 was RMB507.9 million (US$69.6 million), representing an increase of 11.6% from RMB455.3 million in the same period of 2022. Adjusted EBITDA in the third quarter of 2023 excluded share-based compensation expenses of RMB9.5 million (US$1.3 million). Adjusted EBITDA margin in the third quarter of 2023 was 26.9%, compared with 25.1% in the same period of 2022.

NET LOSS ATTRIBUTABLE TO VNET GROUP, INC.: Net loss attributable to VNET Group, Inc. in the third quarter of 2023 was RMB50.5 million (US$6.9 million), compared with a net loss attributable to VNET Group, Inc. of RMB425.2 million in the same period of 2022.

LOSS PER SHARE: Basic and diluted loss per share in the third quarter of 2023 were both RMB0.06 (US$0.01), which represented the equivalent of both RMB0.36 (US$0.06) per American depositary share (“ADS”). Each ADS represents six Class A ordinary shares. Diluted loss per share is calculated using adjusted net loss attributable to ordinary shareholders divided by the weighted average number of diluted shares outstanding.

As of September 30, 2023, the aggregate amount of the Company’s cash, cash equivalents and restricted cash was RMB3.02 billion (US$414.5 million).

Net cash generated from operating activities, in the third quarter of 2023, was RMB454.3 million (US$62.3 million), compared with RMB607.4 million in the same period of 2022.

Business Outlook

For the full year of 2023, the Company currently expects total net revenues to be between RMB7,400 million and RMB7,600 million, representing a year-over-year growth of 4.7% to 7.6%, and adjusted EBITDA to be in the range of RMB2,000 million to RMB2,060 million, representing a year-over-year growth of 6.8% to 10.0%. This compares with total net revenues expected between RMB7,600 million and RMB7,900 million and adjusted EBITDA between RMB2,025 million to RMB2,125 million as previously stated. The outlook update is mainly due to the Company’s continuous focus on high-quality revenues to maintain the long-term sustainability of the Company’s operations.

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

Conference Call

The Company’s management will host an earnings conference call at 8:00 PM U.S. Eastern Time on Wednesday, November 15, 2023, or 9:00 AM Beijing Time on Thursday, November 16, 2023.

For participants who wish to join the call, please access the link provided below to complete the online registration process and dial in 5 minutes prior to the scheduled call start time.

Upon registration, each participant will receive a set of dial-in numbers by location, a personal PIN and an email with further detailed instructions, which will be used to join the conference call.

A simultaneous audio webcast and replay of the conference call will be accessible on the Company’s investor relations website at http://ir.vnet.com.

Non-GAAP Disclosure

In evaluating its business, VNET considers and uses the following non-GAAP measures defined as non-GAAP financial measures by the U.S. 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 and 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 RMB7.2960 to US$1.00, the noon buying rate in effect on September 29, 2023, 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 VNET

VNET Group, Inc. is a leading carrier- and cloud-neutral internet data center services provider in China. VNET 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 VNET’s data centers and connect to China’s internet backbone. VNET operates in more than 30 cities throughout China, servicing a diversified and loyal base of over 7,000 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 VNET’s strategic and operational plans contain forward-looking statements. VNET 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 VNET’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: VNET’s goals and strategies; VNET’s expansion plans; the expected growth of the data center services market; expectations regarding demand for, and market acceptance of, VNET’s services; VNET’s expectations regarding keeping and strengthening its relationships with customers; VNET’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 VNET provides solutions and services. Further information regarding these and other risks is included in VNET’s reports filed with, or furnished to, the U.S. 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 VNET undertakes no duty to update such information, except as required under applicable law.

Investor Relations Contact:

Xinyuan Liu

Tel: +86 10 8456 2121

Email: ir@vnet.com

 * Shares used in loss per share/ADS computation were computed under weighted average method.                                                        

* Before the deduction of government grants for three months ended June 30, 2023, three months ended September 30, 2023 and nine months ended September 30, 2023.