Exhibit 99.1

VNET Reports Unaudited Fourth Quarter and Full Year 2023 Financial Results

BEIJING, March 27, 2024 /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 fourth quarter and full year ended December 31, 2023.

“Throughout 2023, we strongly executed our effective dual-core strategy amid the steady economic recovery, ending the year on a solid note,” said Jeff Dong, Chief Executive Officer of VNET. “We extended our track record of timely, high-quality deliveries with 8,321 self-built cabinets delivered, meeting our 2023 target, with our overall utilization rate increasing to 59.0% compared with 55.0% one year ago. We also effectively leveraged advanced technology and IDC resources to develop reliable solutions for the increasing demand driven by AI applications in various industries. Heading into 2024, we will continue to build on our core capabilities to capture opportunities arising from AI development and facilitate digital transformation across a broad spectrum of verticals.”

Qiyu Wang, Chief Financial Officer of VNET, commented, “We delivered robust 2023 results through our strategic focus on high-quality revenues. Our fourth quarter net revenues reached RMB1.90 billion and adjusted EBITDA increased by 3.8% year-over-year to RMB440.2 million. For the full year, our net revenues increased by 4.9% year-over-year to RMB7.41 billion and adjusted EBITDA improved by 8.9% to RMB2.04 billion. We have also made meaningful strides in refinancing projects recently, completing the US$299 million strategic investment from SDHG in December, as well as the repurchase payment of US$600 million relating to our Convertible Senior Notes due 2026 in February 2024. Looking ahead, we will remain committed to creating long-term, sustainable value for all of our stakeholders.”

Fourth Quarter 2023 Financial Highlights

Full Year 2023 Financial Highlights

Fourth Quarter 2023 Operational Highlights

Fourth Quarter 2023 Financial Results

NET REVENUES: Net revenues in the fourth quarter of 2023 were RMB1.90 billion (US$267.4 million), representing an increase of 0.9% from RMB1.88 billion in the same period of 2022. The year-over-year increase was mainly driven by the continued growth of our core businesses.

GROSS PROFIT: Gross profit in the fourth quarter of 2023 was RMB290.9 million (US$41.0 million), compared with RMB328.4 million in the same period of 2022. Gross margin in the fourth quarter of 2023 was 15.3%, compared with 17.5% in the same period of 2022. The year-over-year decrease was primarily attributable to an increase in depreciation and amortization expenses as additional data centers were put into service during the past quarters.

ADJUSTED CASH GROSS PROFIT (non-GAAP), which excludes depreciation, amortization, and share-based compensation expenses, was RMB741.7 million (US$104.5 million) in the fourth quarter of 2023, compared with RMB740.1 million in the same period of 2022. Adjusted cash gross margin (non-GAAP) in the fourth quarter of 2023 was 39.1%, compared with 39.4% in the same period of 2022.

OPERATING EXPENSES: Total operating expenses in the fourth quarter of 2023 were RMB2.50 billion (US$352.5 million), compared with RMB345.7 million in the same period of 2022. The increase in operating expenses was primarily due to impairment of long-lived assets of RMB506.7 million (US$71.4 million), impairment of goodwill of RMB1.36 billion (US$192.1 million) and allowance of loan receivables of RMB287.9 million (US$40.6 million). Excluding the impairment of long-lived assets, impairment of goodwill and allowance of loan receivables, total operating expenses in the fourth quarter of 2023 were RMB343.7 million (US$48.4 million).

Sales and marketing expenses in the fourth quarter of 2023 were RMB73.3 million (US$10.3 million), compared with RMB76.4 million in the same period of 2022.

Research and development expenses in the fourth quarter of 2023 were RMB80.7 million (US$11.4 million), compared with RMB84.1 million in the same period of 2022.

General and administrative expenses in the fourth quarter of 2023 were RMB148.5 million (US$20.9 million), compared with RMB156.2 million in the same period of 2022.

Impairment of long-lived assets in the fourth quarter of 2023 was RMB506.7 million (US$71.4 million). As a result of the weaker-than-expected operations of several data centers and our preemptive plan to consolidate several data centers, the impairment of long-lived assets was recorded based on the Company's assessment, which was the excess of the carrying amount of the asset groups over their fair value.

Impairment of goodwill in the fourth quarter of 2023 was RMB1.36 billion (US$192.1 million), which represented the amount by which the carrying value of the reporting unit exceeded its fair value.

ADJUSTED OPERATING EXPENSES (non-GAAP), which exclude share-based compensation expenses, compensation for postcombination employment in an acquisition, allowance of loan receivables, impairment of long-lived assets and impairment of goodwill were RMB334.2 million (US$47.1 million) in the fourth quarter of 2023, compared with RMB355.4 million in the same period of 2022. As a percentage of net revenues, adjusted operating expenses in the fourth quarter of 2023 were 17.6%, compared with 18.9% in the same period of 2022.

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.

ADJUSTED EBITDA (non-GAAP): Adjusted EBITDA in the fourth quarter of 2023 was RMB440.2 million (US$62.0 million), representing an increase of 3.8% from RMB424.3 million in the same period of 2022. Adjusted EBITDA margin (non-GAAP) in the fourth quarter of 2023 was 23.2%, compared with 22.6% in the same period of 2022.

NET LOSS ATTRIBUTABLE TO VNET GROUP, INC.: Net loss attributable to VNET Group, Inc. in the fourth quarter of 2023 was RMB2.44 billion (US$344.1 million), compared with a net loss attributable to VNET Group, Inc. of RMB64.2 million in the same period of 2022.

LOSS PER SHARE: Basic and diluted loss per share in the fourth quarter of 2023 were both RMB2.65 (US$0.37), equivalent to both RMB15.88 (US$2.22) 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 December 31, 2023, the aggregate amount of the Company’s cash and cash equivalents, restricted cash, and short-term investments was RMB5.46 billion (US$768.4 million).

Net cash generated from operating activities, in the fourth quarter of 2023, was RMB730.7 million (US$102.9 million), compared with RMB407.5 million in the same period of 2022.

Full Year 2023 Financial Results

NET REVENUES: Net revenues in the full year of 2023 increased by 4.9% to RMB7.41 billion (US$1.04 billion) from RMB7.07 billion in the full year of 2022.

GROSS PROFIT: Gross profit in the full year of 2023 was RMB1.29 billion (US$182.0 million), representing a decrease of 4.8 % from RMB1.36 billion in the full year of 2022. Gross margin in the full year of 2023 was 17.4%, compared to 19.2% in the full year of 2022. The year-over-year decrease was primarily attributable to an increase in depreciation and amortization expenses as additional data centers were put into service during the past quarters.

ADJUSTED CASH GROSS PROFIT (non-GAAP), which excludes depreciation, amortization, and share-based compensation expenses, was RMB2.98 billion (US$419.3 million) in the full year of 2023, compared to RMB2.85 billion in the full year of 2022. Adjusted cash gross margin (non-GAAP) in the full year of 2023 was 40.2%, compared to 40.3% in the full year of 2022.

OPERATING EXPENSES: Total operating expenses in the full year of 2023 were RMB3.26 billion (US$459.6 million), compared to RMB1.24 billion in the full year of 2022. The increase in operating expenses was primarily due to impairment of long-lived assets of RMB506.7 million (US$71.4 million), impairment of goodwill of RMB1.36 billion (US$192.1 million) and allowance of loan receivables of RMB287.9 million (US$40.6 million). Excluding the impairment of long-lived assets, impairment of goodwill and allowance of loan receivables, total operating expenses in the full year of 2023 were RMB1.10 billion (US$155.6 million).

Sales and marketing expenses in the full year of 2023 were RMB266.2 million (US$37.5 million), compared to RMB311.9 million in the full year of 2022.

Research and development expenses in the full year of 2023 were RMB322.2 million (US$45.4 million), compared to RMB306.8 million in the full year of 2022.

General and administrative expenses in the full year of 2023 were RMB541.9 million (US$76.3 million), compared to RMB642.9 million in the full year of 2022.

Impairment of long-lived assets in the full year of 2023 was RMB506.7 million (US$71.4 million). As a result of the weaker-than-expected operations of several data centers and our preemptive plan to consolidate several data centers, the impairment of long-lived assets was recorded based on the Company's assessment, which was the excess of the carrying amount of the asset groups over their fair value..

Impairment of goodwill in the full year of 2023 was RMB1.36 billion (US$192.1 million), which represented the amount by which the carrying value of the reporting unit exceeded its fair value.

ADJUSTED OPERATING EXPENSES (non-GAAP), which exclude share-based compensation expenses, compensation for postcombination employment in an acquisition, allowance of loan receivables, impairment of long-lived assets and impairment of goodwill, were RMB1.07 billion (US$150.6 million) in the full year of 2023, compared to RMB1.08 billion in the full year of 2022. As a percentage of net revenues, adjusted operating expenses in the full year of 2023 were 14.4%, compared to 15.3% in the full year of 2022.

ADJUSTED EBITDA (non-GAAP): Adjusted EBITDA in the full year of 2023 was RMB2.04 billion (US$287.2 million), representing an increase of 8.9% from RMB1.87 billion in the full year of 2022. Adjusted EBITDA margin (non-GAAP) in the full year of 2023 was 27.5%, compared to 26.5% in the full year of 2022.

NET LOSS ATTRIBUTABLE TO VNET GROUP, INC.: Net loss attributable to VNET Group, Inc. in the full year of 2023 was RMB2.64 billion (US$372.4 million), compared to a net loss attributable to VNET Group, Inc. of RMB776.0 million in the full year of 2022. Net loss attributable to VNET Group, Inc. in the full year of 2023 included impairment of long-lived assets of RMB506.7 million (US$71.4 million) and impairment of goodwill of RMB1.36 billion (US$192.1 million).

LOSS PER SHARE: Basic and diluted loss per share in the full year of 2023 were both RMB2.93 (US$0.41), equivalent to both RMB17.58 (US$2.46) 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.

Net cash generated from operating activities, in the full year of 2023, was RMB2.06 billion (US$290.6 million), compared to RMB2.60 billion in the full year of 2022.

Business Outlook

For the full year of 2024, the Company currently expects total net revenues to be between RMB7,800 million to RMB8,000 million, representing a year-over-year growth of 5.2% to 7.9%, and adjusted EBITDA (non-GAAP) to be in the range of RMB2,220 million to RMB2,280 million, representing a year-over-year growth of 8.9% to 11.8%.

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 9:00 PM U.S. Eastern Time on Wednesday, March 27, 2024, or 9:00 AM Beijing Time on Thursday, March 28, 2024.

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 RMB7.0999 to US$1.00, the noon buying rate in effect on December 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 7,500 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 liquidity conditions; 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 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 September 30, 2023, three months ended December 31, 2023 and twelve months ended December 31, 2023.