Shares of VNET Group (VNET) fell 5.01% in pre-market trading on Thursday after the Chinese internet data center services provider reported a net loss for the second quarter of 2025 and maintained a cautious outlook for the full year.

VNET reported a net loss attributable to the company of RMB11.9 million ($1.7 million) for Q2, compared to a net income of RMB63.7 million in the same period last year. The company swung to a loss per share of RMB0.01, missing analyst estimates of RMB0.01 earnings per share.

Despite the bottom-line miss, VNET's total net revenues increased by 22.1% year-over-year to RMB2.43 billion ($339.8 million), driven by strong growth in its wholesale IDC business. Wholesale revenues surged 112.5% to RMB854.1 million, while retail revenues remained relatively stable at RMB958.7 million.

The company maintained its full-year 2025 guidance, projecting total net revenues between RMB9,150 million to RMB9,350 million, representing year-over-year growth of 11% to 13%. Adjusted EBITDA is expected to be in the range of RMB2,760 million to RMB2,820 million, up 14% to 16% year-over-year. However, this outlook appears to have disappointed investors hoping for a more robust forecast given the strong first-half performance.

While VNET highlighted its progress in expanding data center capacity and improving operational efficiency, the market seems concerned about the company's ability to translate top-line growth into profitability. The cautious full-year guidance, despite strong revenue growth, may suggest ongoing cost pressures or challenges in scaling the business profitably.