VNET Group, a leading internet data center services provider in China, saw its stock plummet 5.30% in pre-market trading following the release of its first-quarter 2025 financial results. The company reported a wider net loss and missed earnings per share (EPS) estimates, overshadowing some positive aspects of its performance.
For Q1 2025, VNET Group reported a net loss of RMB237.6 million (US$32.7 million), significantly higher than the RMB187.0 million loss in the same period last year. The company's EPS came in at a loss of RMB0.90 (US$0.12) per American depositary share (ADS), missing the FactSet estimate of a RMB0.12 loss. This disappointing bottom-line performance appears to be the primary driver of the stock's pre-market decline.
Despite the widened loss, VNET Group did report some positive metrics. Revenue for the quarter increased to RMB2.25 billion, slightly above the FactSet analyst consensus of RMB2.22 billion. The company also saw its adjusted EBITDA rise by 26.4% year-over-year to RMB682.4 million, with an improved adjusted EBITDA margin of 30.4%. However, these improvements were not enough to offset investor concerns about the company's profitability. Adding to the negative sentiment, VNET Group's full-year 2025 revenue guidance of RMB9.10-9.30 billion fell short of the FactSet estimate of RMB9.33 billion, potentially contributing to the stock's pre-market weakness.