Technology

VNET Reports Unaudited Third Quarter 2024 Financial Results

Published

13 hours ago

November 20, 2024

BEIJING, Nov. 20, 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 third quarter ended September 30, 2024.

“We achieved strong third quarter results mainly driven by our wholesale IDC business,” said Josh Sheng Chen, Founder, Executive Chairperson and interim Chief Executive Officer of VNET. “Our wholesale IDC business maintained its strong growth momentum as we capitalized on rising AI-driven demand. We also continued attracting high-quality customers during the third quarter, with six new order wins totaling 84MW. Notably, we won a new wholesale order from an Internet customer for 32MW at our Huailai IDC Campus, one of our green computing clusters in Hebei province. Moving forward, we will continue to develop our high-performance data centers and green business, providing reliable, premium IDC services to meet market demand. Propelling VNET’s high-quality, sustainable development remains our priority as we strive to deliver value to all of our stakeholders.”

Qiyu Wang, Chief Financial Officer of VNET, commented, “In the third quarter, we remained focused on high-quality revenue businesses with high margins. Our total net revenues increased by 12.4% year over year to RMB2.12 billion, mainly driven by remarkable wholesale revenue growth of 86.4% year over year. Our adjusted EBITDA also grew by 17.1% year over year to RMB594.8 million in the third quarter of 2024. We previously reported adjusted EBITDA for the third quarter of 2023 at RMB507.9 million. Such figure included VAT surplus deduction benefit of RMB13.3 million, which is now considered non-continuable due to the termination of preferential tax policies since January 1, 2024 (the “Discontinued VAT Benefits”). The year-over-year growth in adjusted EBITDA would be 20.2% if the Discontinued VAT Benefits were excluded from the adjusted EBITDA calculation for the same period last year. We also aim to enter a definitive agreement with one of China’s leading insurance companies by the end of 2024 to form a pre-REITs fund. The fund will feature the first and second phases of our Taicang IDC Campus as the underlying assets, with us retaining approximately a 51% interest in the fund. This will further strengthen our cash reserves and support our sustainable development. Looking ahead, we will continue strengthening our core capabilities and capitalizing on AI-driven opportunities to create long-term shareholder value.”

Third Quarter 2024 Financial Highlights

Total net revenues increased by 12.4% to RMB2.12 billion (US$302.2 million) from RMB1.89 billion in the same period of 2023.Net revenues from the IDC business[1] increased by 18.4% to RMB1.50 billion (US$213.5 million) from RMB1.27 billion in the same period of 2023.Net revenues from the wholesale IDC business (“wholesale revenues”) increased by 86.4% to RMB523.0 million (US$74.5 million) from RMB280.6 million in the same period of 2023.Net revenues from the retail IDC business (“retail revenues”) decreased slightly by 1.0% to RMB975.5 million (US$139.0 million) from RMB984.9 million in the same period of 2023.Net revenues from the non-IDC business[2] increased by 0.2% to RMB622.3 million (US$88.7 million) from RMB621.4 million in the same period of 2023.Adjusted cash gross profit (non-GAAP) increased by 16.6% to RMB860.7 million (US$122.6 million) from RMB738.4 million in the same period of 2023. Adjusted cash gross margin (non-GAAP) was 40.6%, compared with 39.1% in the same period of 2023.Adjusted EBITDA (non-GAAP) increased by 17.1% to RMB594.8 million (US$84.8 million) from RMB507.9 million in the same period of 2023. Such figure in the third quarter of 2023 included Discontinued VAT Benefits of RMB13.3 million. The year-over-year growth in adjusted EBITDA would be 20.2% if the Discontinued VAT Benefits were excluded from the adjusted EBITDA calculation for the same period last year. Adjusted EBITDA margin (non-GAAP) was 28.0%, compared with 26.9% in the same period of 2023.Net income increased by RMB372.0 million and RMB260.3 million to RMB332.2 million (US$47.3 million) in the third quarter, compared with a net loss of RMB39.9 million in the same period of 2023 and a net income of RMB71.8 million in the second quarter of 2024, respectively.

Third Quarter 2024 Operational Highlights

Wholesale IDC Business[3]

Capacity in service was 358MW as of September 30, 2024, compared with 332MW as of June 30, 2024, and 290MW as of September 30, 2023. Capacity under construction was 297MW as of September 30, 2024.Capacity utilized by customers reached 279MW as of September 30, 2024, compared with 252MW as of June 30, 2024, and 161MW as of September 30, 2023. The sequential increase during the third quarter of 2024 was 27MW, which was mainly contributed by the E-JS Campus 02 C data center and the N-OR06 data center.Utilization rate[4] of wholesale capacity was 78.0% as of September 30, 2024, compared with 75.9% as of June 30, 2024, and 55.4% as of September 30, 2023.Utilization rate of mature wholesale capacity[5] was 95.6% as of September 30, 2024, compared with 94.9% as of June 30, 2024, and 94.4% as of September 30, 2023.Utilization rate of ramp-up wholesale capacity[6] was 46.4% as of September 30, 2024, compared with 45.7% as of June 30, 2024, and 18.4% as of September 30, 2023.Total capacity committed[7] was 352MW as of September 30, 2024, compared with 326MW as of June 30, 2024, and 236MW as of September 30, 2023.Commitment rate[8] for capacity in service was 98.2% as of September 30, 2024, compared with 98.1% as of June 30, 2024, and 81.3% as of September 30, 2023.Total capacity pre-committed[9] was 262MW and pre-commitment rate[10] for capacity under construction was 88.4% as of September 30, 2024.

Retail IDC Business[11]

Capacity in service was 52,250 cabinets as of September 30, 2024, compared with 52,177 cabinets as of June 30, 2024, and 52,200 cabinets as of September 30, 2023.Capacity utilized by customers reached 32,950 cabinets as of September 30, 2024, compared with 33,253 cabinets as of June 30, 2024, and 33,845 cabinets as of September 30, 2023.Utilization rate of retail capacity was 63.1% as of September 30, 2024, compared with 63.7% as of June 30, 2024, and 64.8% as of September 30, 2023.Utilization rate of mature retail capacity[12] was 69.5% as of September 30, 2024, compared with 72.5% as of June 30, 2024, and 73.1% as of September 30, 2023.Utilization rate of ramp-up retail capacity[13] was 16.8% as of September 30, 2024, compared with 12.7% as of June 30, 2024, and 18.7% as of September 30, 2023.Monthly recurring revenue (MRR) per retail cabinet was RMB8,788 in the third quarter of 2024, compared with RMB8,753 in the second quarter of 2024 and RMB8,845 in the third quarter of 2023.

[1] IDC business refers to managed hosting services, consisting of the wholesale IDC business and the retail IDC business. Beginning in the first quarter of 2024, our IDC business was subdivided into wholesale IDC business and retail IDC business according to the nature and scale of our data center projects. Prior to 2024, the subdivision was based on customer contract types.

[2] Non-IDC business consists of cloud services and VPN services.

[3] For wholesale IDC business, certain projects hosted in our E-JS02 data center with an aggregate of 27MW capacity were excluded and are expected to be continuously excluded from in-service wholesale due to pending commercial discussion with the client. Such projects were included as in-service wholesale from the first quarter of 2021 to the fourth quarter of 2023, given that such projects had been delivered to the client based on the terms of the MOU.

[4] Utilization rate is calculated by dividing capacity utilized by customers by the capacity in service.

[5] Mature wholesale capacity refers to wholesale data centers in which utilization rate is at or above 80%.

[6] Ramp-up wholesale capacity refers to wholesale data centers in which utilization rate is below 80%.

[7] Total capacity committed is the capacity committed to customers pursuant to customer agreements remaining in effect.

[8] Commitment rate is calculated by total capacity committed divided by total capacity in service.

[9] Total capacity pre-committed is the capacity under construction which is pre-committed to customers pursuant to customer agreements remaining in effect.

[10] Pre-commitment rate is calculated by total capacity pre-committed divided by total capacity under construction.

[11] For retail IDC business, since the first quarter of 2024, we have excluded a certain number of reserved cabinets from the capacity in service. Reserved cabinets refer to those that have not been utilized on a large scale, those that are planned to be closed, or those that are planned to be further upgraded. As of September 30, 2023, June 30, 2024, and September 30, 2024, 4,426, 4,150, and 4,150 reserved cabinets, respectively, were excluded from the calculation of utilization rate of retail IDC business capacity.

[12] Mature retail capacity refers to retail data centers that came into service prior to the past 24 months.

[13] Ramp-up retail capacity refers to retail data centers that came into service within the past 24 months, or mature retail data centers that have undergone improvements within the past 24 months.

Third Quarter 2024 Financial Results

TOTAL NET REVENUES: Total net revenues in the third quarter of 2024 were RMB2.12 billion (US$302.2 million), representing an increase of 12.4% from RMB1.89 billion in the same period of 2023. The year-over-year increase was mainly driven by the continued growth of our wholesale IDC business.

Net revenues from IDC business increased by 18.4% to RMB1.50 billion (US$213.5 million) from RMB1.27 billion in the same period of 2023. The year-over-year increase was mainly driven by an increase in wholesale revenues.

Wholesale revenues increased by 86.4% to RMB523.0 million (US$74.5 million) from RMB280.6 million in the same period of 2023.Retail revenues decreased to RMB975.5 million (US$139.0 million) from RMB984.9 million in the same period of 2023.

Net revenues from non-IDC business increased by 0.2% to RMB622.3 million (US$88.7 million) from RMB621.4 million in the same period of 2023.

GROSS PROFIT: Gross profit in the third quarter of 2024 was RMB491.7 million (US$70.1 million), representing an increase of 60.4% from RMB306.5 million in the same period of 2023. Gross margin in the third quarter of 2024 was 23.2%, compared with 16.2% in the same period of 2023. The year-over-year increase was primarily attributable to a reduction in depreciation expense due to the change in the estimated useful lives of property and equipment starting from January 1, 2024.

ADJUSTED CASH GROSS PROFIT (non-GAAP), which excludes depreciation, amortization, and share-based compensation expenses, was RMB860.7 million (US$122.6 million) in the third quarter of 2024, compared with RMB738.4 million in the same period of 2023. Adjusted cash gross margin (non-GAAP) in the third quarter of 2024 was 40.6%, compared with 39.1% in the same period of 2023.

OPERATING EXPENSES: Total operating expenses in the third quarter of 2024 were RMB300.3 million (US$42.8 million), compared with RMB274.3 million in the same period of 2023.

Sales and marketing expenses were RMB60.7 million (US$8.7 million) in the third quarter of 2024, compared with RMB64.1 million in the same period of 2023.

Research and development expenses were RMB53.1 million (US$7.6 million) in the third quarter of 2024, compared with RMB80.7 million in the same period of 2023.

General and administrative expenses were RMB132.5 million (US$18.9 million) in the third quarter of 2024, compared with RMB137.9 million in the same period of 2023.

ADJUSTED OPERATING EXPENSES (non-GAAP), which exclude share-based compensation expenses, were RMB293.6 million (US$41.8 million) in the third quarter of 2024, compared with RMB264.8 million in the same period of 2023. As a percentage of total net revenues, adjusted operating expenses (non-GAAP) in the third quarter of 2024 were 13.8%, compared with 14.0% in the same period of 2023.

ADJUSTED EBITDA (non-GAAP): Adjusted EBITDA in the third quarter of 2024 was RMB594.8 million (US$84.8 million), representing an increase of 17.1% from RMB507.9 million in the same period of 2023. Such figure in the third quarter of 2023 included Discontinued VAT Benefits of RMB13.3 million. The year-over-year growth in adjusted EBITDA would be 20.2% if the Discontinued VAT Benefits were excluded from the adjusted EBITDA calculation for the same period last year). Adjusted EBITDA margin (non-GAAP) in the third quarter of 2024 was 28.0%, compared with 26.9% in the same period of 2023.

NET INCOME/LOSS ATTRIBUTABLE TO VNET GROUP, INC.: Net income attributable to VNET Group, Inc. in the third quarter of 2024 was RMB317.6 million (US$45.3 million), compared with a net loss attributable to VNET Group, Inc. of RMB50.5 million in the same period of 2023. The year-over-year increase was mainly due to a gain in debt extinguishment.

EARNINGS PER SHARE: Basic and diluted earnings per share in the third quarter of 2024 were RMB0.20 (US$0.03) and RMB0.05 (US$0.01), respectively, which represents the equivalent to RMB1.20 (US$0.18) and RMB0.30 (US$0.06) per American depositary share (“ADS”). Each ADS represents six Class A ordinary shares. Diluted earnings per share is calculated using adjusted net income attributable to ordinary shareholders divided by the weighted average number of diluted shares outstanding.

LIQUIDITY: As of September 30, 2024, the aggregate amount of the Company’s cash and cash equivalents, restricted cash and short-term investments was RMB2.10 billion (US$298.9 million).

Total short-term debt consisting of short-term bank borrowings and the current portion of long-term borrowings was RMB1.87 billion (US$266.4 million). Total long-term debt was RMB8.88 billion (US$1.26 billion), comprised of long-term borrowings of RMB7.08 billion (US$1.0 billion) and convertible promissory notes of RMB1.79 billion (US$255.6 million).

Net cash generated from operating activities in the third quarter of 2024 was RMB760.4 million (US$108.4 million), compared with RMB454.3 million in the same period of 2023. During the third quarter of 2024, the Company obtained new debt financing, refinancing facilities and other financings of RMB0.95 billion (US$134.7 million).

Recent Development

The Company plans to sign a definitive agreement by the end of 2024 on a pre-REITs project with one of China’s leading insurance companies, under which the Company will form a pre-REITs fund (the “Fund”) to feature the first and second phases of our Taicang IDC Campus as the underlying assets with approximately 210MW total IT capacity and RMB5.74 billion estimated value.

The Company is expected to own approximately 51% interest in the Fund and sell the remaining 49% interest to the insurance company, the consideration of which would be approximately RMB1.15 billion, calculated based on the assets and liabilities of the fund at the establishment date.

After the completion of this transaction, VNET intends to consolidate the Fund for financial reporting purpose, while operating the Taicang IDC project to offer stable and premium infrastructure services. The financial results of the Fund’s underlying assets are expected to be consolidated into the Company’s financial statement.

Business Outlook

The Company increased its full year 2024 guidance for total net revenues and adjusted EBITDA. Specifically, the Company now expects total net revenues for 2024 to be between RMB8,000 million to RMB8,100 million, representing year-over-year growth of 7.9% to 9.3%, and adjusted EBITDA (non-GAAP) to be in the range of RMB2,280 million to RMB2,300 million, representing year-over-year growth of 11.8% to 12.8%. Such figure in the third quarter of 2023 adjusted EBITDA included Discontinued VAT Benefits of RMB13.3 million. The year-over-year growth in adjusted EBITDA would be 16.4% to 17.4% if the Discontinued VAT Benefits were excluded from the adjusted EBITDA calculation for the same period last year.

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 20, 2024, or 9:00 AM Beijing Time on Thursday, November 21, 2024.

For participants who wish to join the call, please access the links provided below to complete the online registration process.

English line:
https://s1.c-conf.com/diamondpass/10043189-1ej64l.html

Chinese line (listen-only mode):
https://s1.c-conf.com/diamondpass/10043190-a2lrfs.html

Participants can choose between the English and Chinese options for pre-registration above. Please note that the Chinese option will be in listen-only mode. Upon registration, each participant will receive an email containing details for the conference call, including dial-in numbers, a conference call passcode and a unique access PIN, which will be used to join the conference call.

Additionally, a live and archived webcast of the conference call will be available on the Company’s investor relations website at http://ir.vnet.com.

A replay of the conference call will be accessible through November 28, 2024, by dialing the following numbers:

US/Canada:

1 855 883 1031

Mainland China:

400 1209 216

Hong Kong, China:

800 930 639

International:

+61 7 3107 6325

Reply PIN (English line):

10043189

Reply PIN (Chinese line):

10043190

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 RMB7.0176 to US$1.00, the noon buying rate in effect on September 30, 2024, 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, including the plan to sign a definitive agreement on a pre-REITs project, 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

VNET GROUP, INC.

CONSOLIDATED BALANCE SHEETS

(Amount in thousands of Renminbi (“RMB”) and US dollars (“US$”))

As of

December 31, 2023

September 30, 2024

RMB

US$

Assets

Current assets:

Cash and cash equivalents

2,243,537

1,524,819

217,285

Restricted cash

2,854,568

556,266

79,267

Accounts and notes receivable, net

1,715,975

1,861,828

265,308

Short-term Investments

356,820

15,879

2,263

Prepaid expenses and other current assets

2,375,341

2,665,924

379,891

Amounts due from related parties

277,237

317,619

45,260

Total current assets

9,823,478

6,942,335

989,274

Non-current assets:

Property and equipment, net

13,024,393

15,153,253

2,159,321

Intangible assets, net

1,383,406

1,347,751

192,053

Land use rights, net

602,503

588,846

83,910

Operating lease right-of-use assets, net

4,012,329

4,412,834

628,824

Restricted cash

882

126

Deferred tax assets, net

247,644

309,390

44,088

Long-term investments, net

757,949

798,638

113,805

Other non-current assets

533,319

371,501

52,938

Total non-current assets

20,562,425

22,983,095

3,275,065

Total assets

30,385,903

29,925,430

4,264,339

Liabilities and Shareholders’ Equity

Current liabilities:

Short-term bank borrowings

30,000

552,270

78,698

Accounts and notes payable

696,177

728,361

103,791

Accrued expenses and other payables

2,783,102

2,527,584

360,178

Advances from customers

1,605,247

1,752,935

249,791

Deferred revenue

95,477

87,354

12,448

Income taxes payable

35,197

51,554

7,346

Amounts due to related parties

356,080

354,903

50,573

Current portion of long-term borrowings

723,325

1,317,343

187,720

Current portion of finance lease liabilities

115,806

107,785

15,359

Current portion of deferred government grants

8,062

8,538

1,217

Current portion of operating lease liabilities

780,164

874,957

124,680

Convertible promissory notes

4,208,495

–

Total current liabilities

11,437,132

8,363,584

1,191,801

Non-current liabilities:

Long-term borrowings

5,113,521

7,082,026

1,009,181

Convertible promissory notes

1,769,946

1,793,894

255,628

Non-current portion of finance lease liabilities

1,159,525

1,169,573

166,663

Unrecognized tax benefits

98,457

14,030

Deferred tax liabilities

688,362

703,390

100,232

Deferred government grants

145,112

265,941

37,896

Non-current portion of operating lease liabilities

3,270,759

3,587,701

511,243

Derivative liability

188,706

–

Total non-current liabilities

12,434,388

14,700,982

2,094,873

Shareholders’ equity

Ordinary shares

107

109

Additional paid-in capital

17,291,312

17,256,955

2,459,096

Accumulated other comprehensive loss

(14,343)

(16,088)

(2,293)

Statutory reserves

80,615

94,276

13,434

Accumulated deficit

(11,016,323)

(10,835,688)

(1,544,073)

Treasury stock

(326,953)

(163,073)

(23,238)

Total VNET Group, Inc. shareholders’

equity

6,014,415

6,336,491

902,942

Noncontrolling interest

499,968

524,373

74,723

Total shareholders’ equity

6,514,383

6,860,864

977,665

Total liabilities and shareholders’

equity

30,385,903

29,925,430

4,264,339

VNET GROUP, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Amount in thousands of Renminbi (“RMB”) and US dollars (“US$”) except for number of shares and per share data)

Three months ended

Nine months ended

September 30, 2023

June 30, 2024

September 30, 2024

September 30, 2023

September 30, 2024

RMB

US$

RMB

US$

Net revenues

1,886,924

1,993,760

2,120,794

302,211

5,514,450

6,012,680

856,800

Cost of revenues

(1,580,446)

(1,568,865)

(1,629,111)

(232,146)

(4,512,843)

(4,685,381)

(667,661)

Gross profit

306,478

424,895

491,683

70,065

1,001,607

1,327,299

189,139

Operating income (expenses)

Operating income

26,706

–

11,767

1,677

73,980

15,716

2,240

Sales and marketing expenses

(64,077)

(58,225)

(60,700)

(8,650)

(192,921)

(190,668)

(27,170)

Research and development expenses

(80,673)

(61,998)

(53,127)

(7,571)

(241,549)

(190,514)

(27,148)

General and administrative expenses

(137,931)

(107,297)

(132,482)

(18,879)

(393,395)

(466,076)

(66,415)

Allowance for doubtful debt

(18,316)

(2,753)

(65,731)

(9,367)

(7,034)

(63,309)

(9,021)

Total operating expenses

(274,291)

(230,273)

(300,273)

(42,790)

(760,919)

(894,851)

(127,514)

Operating profit

32,187

194,622

191,410

27,275

240,688

432,448

61,625

Interest income

12,887

5,449

4,218

601

28,606

21,796

3,106

Interest expense

(91,800)

(92,172)

(93,996)

(13,394)

(233,295)

(323,850)

(46,148)

Impairment of long-term investments

(11,115)

–

(11,115)

–

Other income

7,536

30,475

15,584

2,221

22,892

50,873

7,249

Other expenses

(10,975)

(6,900)

(8,783)

(1,252)

(14,887)

(17,105)

(2,437)

Changes in the fair value of financial liabilities

266

712

(7,107)

(1,013)

21,718

(2,537)

(362)

Gain on debt extinguishment

–

246,175

35,080

–

246,175

35,080

Foreign exchange gain (loss)

24,606

(4,387)

14,833

2,114

(168,391)

(17,915)

(2,553)

(Loss) income before income taxes and

gain from equity method investments

(36,408)

127,799

362,334

51,632

(113,784)

389,885

55,560

Income tax expenses

(6,317)

(59,149)

(31,149)

(4,439)

(63,748)

(151,682)

(21,615)

Gain from equity method investments

2,842

3,199

965

138

3,651

6,770

965

Net (loss) income

(39,883)

71,849

332,150

47,331

(173,881)

244,973

34,910

Net income attributable to noncontrolling

interest

(10,579)

(8,174)

(14,524)

(2,070)

(27,167)

(50,677)

(7,221)

Net (loss) income attributable to the

VNET Group, Inc.

(50,462)

63,675

317,626

45,261

(201,048)

194,296

27,689

(Loss) earnings per share

Basic

(0.06)

0.04

0.20

0.03

(0.23)

0.12

0.02

Diluted

(0.06)

0.04

0.05

0.01

(0.24)

(0.02)

(0.00)

Shares used in (loss) earnings per share

computation

Basic*

889,058,872

1,594,662,099

1,602,860,426

888,724,901

1,588,659,647

Diluted*

889,058,872

1,595,517,338

1,740,565,086

899,884,241

1,725,023,283

(Loss) earnings per ADS (6 ordinary shares equal to 1 ADS)

Basic

(0.36)

0.24

1.20

0.18

(1.38)

0.72

0.12

Diluted

(0.36)

0.24

0.30

0.06

(1.44)

(0.12)

(0.02)

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

VNET GROUP, INC.

RECONCILIATIONS OF GAAP AND NON-GAAP RESULTS

(Amount in thousands of Renminbi (“RMB”) and US dollars (“US$”))

Three months ended

Nine months ended

September 30, 2023

June 30, 2024

September 30, 2024

September 30, 2023

September 30, 2024

RMB

US$

RMB

US$

Gross profit

306,478

424,895

491,683

70,065

1,001,607

1,327,299

189,139

Plus: depreciation and amortization

431,933

364,616

368,764

52,548

1,233,983

1,085,984

154,751

Plus: share-based compensation

expenses

–

(2,190)

234

–

234

Adjusted cash gross profit

738,411

787,321

860,681

122,646

2,235,590

2,413,517

343,923

Adjusted cash gross margin

39.1 %

39.5 %

40.6 %

40.5 %

40.1 %

Operating expenses

(274,291)

(230,273)

(300,273)

(42,790)

(760,919)

(894,851)

(127,514)

Plus: share-based compensation

expenses

9,475

(12,962)

6,709

956

25,817

105,428

15,023

Adjusted operating expenses

(264,816)*

(243,235)

(293,564)

(41,834)

(735,102)

(789,423)

(112,491)

Operating profit

32,187*

194,622

191,410

27,275

240,688

432,448

61,625

Plus: depreciation and amortization

466,285

394,334

396,428

56,491

1,332,649

1,170,313

166,768

Plus: share-based compensation

expenses

9,475

(15,152)

6,943

989

25,817

105,662

15,057

Adjusted EBITDA

507,947*

573,804

594,781

84,755

1,599,154

1,708,423

243,450

Adjusted EBITDA margin

26.9 %

28.8 %

28.0 %

29.0 %

28.4 %

* Included VAT surplus deduction benefit of RMB13.3 million, which is now considered non-continuable due to the termination of preferential tax policies since January 1, 2024.

VNET GROUP, INC.

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(Amount in thousands of Renminbi (“RMB”) and US dollars (“US$”))

Three months ended

September 30, 2023

June 30, 2024

September 30, 2024

RMB

US$

CASH FLOWS FROM OPERATING ACTIVITIES

Net (loss) income

(39,883)

71,849

332,150

47,331

Adjustments to reconcile net (loss) income to net cash generated from operating activities:

Depreciation and amortization

461,603

388,711

393,719

56,105

Share-based compensation expenses

9,475

(15,152)

6,943

989

Others

130,633

101,890

(107,550)

(15,326)

Changes in operating assets and liabilities

Accounts and notes receivable

(70,896)

142,469

(138,968)

(19,803)

Prepaid expenses and other current assets

(48,380)

(79,893)

116,055

16,538

Accounts and notes payable

21,763

(47,018)

8,463

1,206

Accrued expenses and other payables

(54,577)

(61,463)

65,481

9,329

Deferred revenue

36,008

(14,000)

2,300

328

Advances from customers

124,816

(63,305)

222,083

31,647

Others

(116,249)

(18,884)

(140,310)

(19,994)

Net cash generated from operating activities

454,313

405,204

760,366

108,350

CASH FLOWS FROM INVESTING ACTIVITIES

Purchases of property and equipment

(946,444)

(998,489)

(1,426,892)

(203,330)

Purchases of intangible assets

(18,228)

(7,594)

(33,806)

(4,817)

Proceeds from (payments for) investments

144,516

(138,224)

92,426

13,171

Proceeds from other investing activities

70,010

117,209

31,762

4,526

Net cash used in investing activities

(750,146)

(1,027,098)

(1,336,510)

(190,450)

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from bank borrowings

756,101

690,848

745,534

106,238

Repayments of bank borrowings

(78,050)

(533,324)

(129,893)

(18,510)

Repayments of 2025 Convertible Notes

(148,842)

–

Payments for finance leases

(30,366)

(9,586)

(27,669)

(3,943)

Proceeds from (payments for) other financing activities

216,711

516,493

(59,645)

(8,499)

Net cash generated from financing activities

715,554

664,431

528,327

75,286

Effect of foreign exchange rate changes on

cash, cash equivalents and restricted cash

(12,476)

3,370

(6,049)

(862)

Net increase (decrease) in cash, cash

equivalents and restricted cash

407,245

45,907

(53,866)

(7,676)

Cash, cash equivalents and restricted cash at

beginning of period

2,616,969

2,089,926

2,135,833

304,354

Cash, cash equivalents and restricted cash at

end of period

3,024,214

2,135,833

2,081,967

296,678

View original content:https://www.prnewswire.com/news-releases/vnet-reports-unaudited-third-quarter-2024-financial-results-302311297.html

SOURCE VNET Group, Inc.

Technology

OSL Bolsters Leadership Team with the Appointment of Ivan Wong as CFO

Published

51 minutes ago

November 21, 2024

HONG KONG, Nov. 21, 2024 /PRNewswire/ — OSL Group Limited (863.HK), a Hong Kong publicly listed company fully dedicated to digital assets (the “Group”), is pleased to announce the appointment of Ivan Wong as the Chief Financial Officer (CFO) of the Group. This strategic appointment aims to accelerate the Group’s growth strategy and drive its long-term business success.

With more than 16 years of financial experience in the banking and technology sector, Ivan is an accomplished financial services professional and seasoned technology investor with extensive experience in capital markets, strategic investment and management consulting. He joined OSL Group in September 2024 as the Chief Investment Officer, playing a pivotal role driving the Group’s strategic investment efforts to spearhead its global expansion strategy. Prior to OSL Group, Ivan held key positions at renowned global firms, including Morgan Stanley Asia Limited, Ant Group and the Boston Consulting Group.

Ivan holds a master’s degree in financial engineering from Columbia University and a bachelor’s degree in quantitative finance from the Hong Kong University of Science and Technology.

Lawrence Lee, Chairman of the Board at OSL Group, commented: “We are thrilled to welcome Ivan as our new CFO. His invaluable insights and expertise in strategic investment and financial management will be instrumental, as we navigate the evolving landscape of digital assets in Asia and beyond, and supercharge our next phase of growth.”

Ivan Wong, Chief Financial Officer of OSL Group, stated: “I am excited to be appointed as the CFO of OSL Group and be part of a dynamic team that is shaping the future of the digital asset industry. I look forward to leveraging my experience to help drive our strategic initiatives and achieve our vision to enable trusted access to digital assets for every person and business.”

About OSL Group

OSL Group (formerly BC Technology Group) is at the forefront of the digital asset industry, striving for excellence in providing innovative solutions for institutions, professional, and retail investors. As a leading player in the digital asset space, OSL Group is committed to a long-term strategy.

With a rich history and experience in the sector, OSL Group is backed by a track record of regulatory compliance and excellence. OSL offers a comprehensive suite of services, including brokerage, custody, exchange, and SaaS, setting the standard for the digital asset industry.

Proudly the world’s first insured and SFC-licensed digital asset platform, OSL Digital Securities, a leading regulated digital asset platform and a member of OSL Group, places paramount importance on regulatory compliance and security, upholding the highest industry standards. Our platform is designed to cater to institutional clients, professional & retail investors, providing a user-friendly interface that seamlessly integrates cutting-edge technology.

At OSL Group, we envision the future of finance in digital assets and are dedicated to guiding our clients through this dynamic landscape. Our team of experts brings together extensive experience in traditional finance, technology, and digital assets, ensuring that our clients receive top-tier support and guidance.

For more information, visit: group.osl.com

View original content to download multimedia:https://www.prnewswire.com/apac/news-releases/osl-bolsters-leadership-team-with-the-appointment-of-ivan-wong-as-cfo-302312770.html

SOURCE OSL Group

Technology

Yiren Digital Reports Third Quarter 2024 Financial Results

Published

51 minutes ago

November 21, 2024

BEIJING, Nov. 20, 2024 /PRNewswire/ — Yiren Digital Ltd. (NYSE: YRD) (“Yiren Digital” or the “Company”), an AI-powered platform providing a comprehensive suite of financial and lifestyle services in China, today announced its unaudited financial results for the quarter ended September 30, 2024.

Third Quarter 2024 Operational Highlights

Financial Services Business

Total loans facilitated in the third quarter of 2024 reached RMB13.4 billion (US$1.9 billion), representing an increase of 3.5% from RMB12.9 billion in the second quarter of 2024 and compared to RMB9.8 billion in the same period of 2023.Cumulative number of borrowers served reached 11,611,899 as of September 30, 2024, representing an increase of 7.4% from 10,807,497 as of June 30, 2024, and compared to 8,595,780 as of September 30, 2023.Number of borrowers served in the third quarter of 2024 was 1,498,020, representing an increase of 0.4% from 1,491,756 in the second quarter of 2024 and compared to 1,204,012 in the same period of 2023. As our efforts to upgrade the customer mix reach a milestone success, we are now shifting our focus to increasing the repeat rate of existing high-quality borrowers.Outstanding balance of performing loans facilitated reached RMB22.8 billion (US$3.2 billion) as of September 30, 2024, representing an increase of 4.3% from RMB21.8 billion as of June 30, 2024 and compared to RMB15.1 billion as of September 30, 2023.

Insurance Brokerage Business

Cumulative number of insurance clients served reached 1,470,738 as of September 30, 2024, representing an increase of 4.3% from 1,410,158 as of June 30, 2024, and compared to 1,256,762 as of September 30, 2023.Number of insurance clients served in the third quarter of 2024 was 82,291, representing a decrease of 7.3% from 88,766 in the second quarter of 2024, and compared to 123,693 in the same period of 2023. The decrease was due to the decline in new sales of our insurance products amid regulatory changes.Gross written premiums in the third quarter of 2024 were RMB1,351.3 million (US$192.6 million), representing an increase of 27.4% from RMB1,060.9 million in the second quarter of 2024 and compared to RMB1,428.5 million in the same period of 2023. The quarterly increase was attributed to the gradual recovery of our life insurance business following product changes made in response to new regulations, along with the continued rise in renewed life insurance premiums.

Consumption and Lifestyle Business

Total gross merchandise volume generated through our e-commerce platform and “Yiren Select” channel reached RMB507.6 million (US$72.3 million) in the third quarter of 2024, representing a decrease of 8.5% from RMB554.6 million in the second quarter of 2024, and compared to RMB563.2 million in the same period of 2023. The decrease was mainly due to the already high penetration of our products and services within the existing customer pool, along with our strategic scale-back of product offerings as we shift our focus to upgrading customer segmentation.

“I’m pleased to report a stable and healthy quarter with concrete business development and strategic exploration, driven by our ‘quality over quantity’ strategy, which underscores our consistent focus on sustainable, high-quality growth.” said Mr. Ning Tang, Chairman and Chief Executive Officer.

“Our financial services business has improved asset quality through strong risk management and borrower optimization. We’ve also made progress in exploring new online business models for our insurance division. As a tech-powered platform, Yiren Digital prioritizes the use of technology and digital capabilities to enhance our business model. Furthermore, our AI investments are driving operational efficiency and enhancing the customer experience. These efforts lay the foundation for higher-quality growth and long-term value for our stakeholders.”

“In the third quarter of this year, our total revenue reached RMB 1.5 billion, up 13% year-over-year.” Mr.Yuning Feng, Chief Financial Officer commented. “On the balance sheet side, as we continued to make strategic long-term investments this quarter, cash and cash equivalents decreased compared to the end of the previous quarter, bringing the total to RMB3.7 billion. Despite this, our cash position remains strong and competitive within the industry. Meanwhile, we are continuing share buybacks and executing cash dividends to enhance returns for our shareholders.”

Third Quarter 2024 Financial Results

Total net revenue in the third quarter of 2024 was RMB1,479.1 million (US$210.8 million), representing an increase of 12.8% from RMB1,310.8 million in the third quarter of 2023. Particularly, in the third quarter of 2024, revenue from financial services business was RMB836.2 million (US$119.2 million), representing an increase of 25.2% from RMB668.0 million in the same period of 2023.The increase was attributed to the persistent and growing demand for our small revolving loan products. Revenue from insurance brokerage business was RMB85.5 million (US$12.2 million), representing a decrease of 67.7% from RMB264.6 million in the third quarter of 2023. The decrease was primarily driven by a decline in life insurance sales, resulting from product modifications mandated by new regulations, along with an industry-wide reduction in commission fee rates due to the implementation of more stringent regulatory standards on rates and terms. Revenue from consumption and lifestyle business and others was RMB557.4 million (US$79.4 million), representing an increase of 47.4% from RMB378.2 million in the third quarter of 2023. The annual increase was primarily attributed to the continuous growth of the service and product penetration in the expanding base of paying customers. As the penetration rate reached a substantial level in the third quarter of 2024, the growth rate is expected to moderate.

Sales and marketing expenses in the third quarter of 2024 were RMB335.6 million (US$47.8 million), compared to RMB195.7 million in the same period of 2023. The increase was primarily driven by the swift growth of our financial services segment and enhanced marketing endeavors aimed at attracting new, high-caliber customers while optimizing our customer composition.

Origination, servicing and other operating costs in the third quarter of 2024 were RMB205.9million (US$29.3 million), compared to RMB245.4 million in the same period of 2023. The decrease was mainly due to the decline in insurance brokerage services.

Research and development expenses in the third quarter of 2024 were RMB150.8 million (US$21.5 million), compared to RMB39.0 million in the same period of 2023. The increase was mainly attributed to our ongoing investment in AI upgrades and technological innovations.

General and administrative expenses in the third quarter of 2024 were RMB80.1 million (US$11.4 million), compared to RMB53.5 million in the same period of 2023. The increase was primarily due to increasing incentive bonus and employee benefits.

Allowance for contract assets, receivables and others in the third quarter of 2024 was RMB94.9 million (US$13.5 million), compared to RMB72.7 million in the same period of 2023. The increase reflects the growing volume of loans facilitated on our platform and the stringent risk estimates in response to the evolving external credit environment.

Provision for contingent liabilities in the third quarter of 2024 was RMB272.4 million (US$38.8 million), compared to RMB11.1 million in the same period of 2023. The increase was mainly attributed to a higher volume of loans facilitated under our risk-taking model[1].

Income tax expense in the third quarter of 2024 was RMB44.7 million (US$6.4 million).

Net income in the third quarter of 2024 was RMB355.4 million (US$50.7 million), as compared to RMB554.4 million in the same period in 2023. The decrease was primarily due to the growing loan volume facilitated under our risk-taking model, resulting in substantial upfront provisions required by the current accounting principles.

Adjusted EBITDA[2] (non-GAAP) in the third quarter of 2024 was RMB393.9 million (US$56.1 million), compared to RMB692.7 million in the same period of 2023.

Basic and diluted income per ADS in the third quarter of 2024 were RMB4.1 (US$0.6) and RMB4.0 (US$0.6) respectively, compared to a basic income per ADS of RMB6.3 and a diluted income per ADS of RMB6.2 in the same period of 2023.

Net cash generated from operating activities in the third quarter of 2024 was RMB50.4 million (US$7.2 million), compared to RMB645.4 million in the same period of 2023.

Net cash used in investing activities in the third quarter of 2024 was RMB1,859.6 million (US$265.0 million), compared to RMB393.9 million in the same period of 2023.

Net cash used in financing activities in the third quarter of 2024 was RMB22.2 million (US$3.2 million), compared to RMB502.6 million in the same period of 2023.

The changes in cash flows reflect strategic decisions aimed at driving the company’s growth and long-term development. This includes a cash infusion to support broader collaborations with institutional business partners in our financial services division as our loan balance reaches a considerable size, which is reflected in the decline in net cash generated from operating activities. Changes in net cash used in investing and financing activities were driven by investments in potential acquisitions and business expansion, as well as ongoing share repurchases to enhance shareholder value.

As of September 30, 2024, cash and cash equivalents were RMB3,705.9 million (US$528.1 million), compared to RMB5,496.9 million as of June 30, 2024. The decline is due to our long-term investments in business expansion and potential acquisitions, which are still in the early stages and have not been finalized. As of September 30, 2024, the balance of held-to-maturity investments was RMB5.1 million (US$0.7 million), remained unchanged from June 30, 2024. As of September 30, 2024, the balance of available-for-sale investments was RMB321.6 million (US$45.8 million), compared to RMB329.8 million as of June 30, 2024. As of September 30, 2024, the balance of trading securities was RMB63.3 million (US$9.0 million), compared to RMB83.9 million as of June 30, 2024.

Delinquency rates[3]. As of September 30, 2024, the delinquency rates for loans that are past due for 1-30 days, 31-60 days and 61-90 days were 1.8%, 1.2% and 1.2%, respectively, compared to 1.9%, 1.4% and 1.5%, respectively, as of June 30, 2024.

[1] The risk-taking model refers to the framework in which the company assumes the credit risk for the loans facilitated on our platform.
[2] “Adjusted EBITDA” is a non-GAAP financial measure. For more information on this non-GAAP financial measure, please see the section of “Operating Highlights and Reconciliations of GAAP to Non-GAAP Measures” and the table captioned “Reconciliations of Adjusted EBITDA” set forth at the end of this press release.
[3] “Delinquency rates” refers to the outstanding principal balance of loans that were 1-30 days, 31-60 days and 61-90 days past due as a percentage of the total performing outstanding principal balance of loans as of a specific date. Loans originating outside mainland China are not included in the calculation. We define a performing loan as one that is being repaid according to the agreed terms and has not become delinquent for more than 90 days.

Dividend Policy

Under the Company’s semi-annual dividend policy, the Company distributed cash dividends in October 2024, representing a payout ratio of 14% of earnings for the first half of 2024.

Update on Share Repurchase

In the third quarter of 2024, the Company allocated US$3.0 million to repurchase shares in the public market. As of September 30, 2024, the Company had in aggregate purchased approximately 5.0 million ADSs in the open market for a total amount of approximately US$16.5 million (exclusive of commissions) under the 2022 share repurchase program.

Business Outlook

Based on the Company’s preliminary assessment of business and market conditions, the Company projects the total revenue in the fourth quarter of 2024 to be between RMB1.3 billion to RMB1.5 billion, with a healthy net profit margin.

This is the Company’s current and preliminary view, which is subject to changes and uncertainties.

Non-GAAP Financial Measures

In evaluating the business, the Company considers and uses several non-GAAP financial measures, such as adjusted EBITDA and adjusted EBITDA margin as supplemental measures to review and assess operating performance. We believe these non-GAAP measures provide useful information about our core operating results, enhance the overall understanding of our past performance and prospects and allow for greater visibility with respect to key metrics used by our management in our financial and operational decision-making. 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 accounting principles generally accepted in the United States of America (“U.S. GAAP”). The non-GAAP financial measures have limitations as analytical tools. Other companies, including peer companies in the industry, may calculate these non-GAAP measures differently, which may reduce their usefulness as a comparative measure. The Company compensates for these limitations by reconciling the non-GAAP financial measures to the nearest U.S. GAAP performance measure, all of which should be considered when evaluating our performance. See “Operating Highlights and Reconciliation of GAAP to Non-GAAP measures” at the end of this press release.

Currency Conversion

This announcement contains currency conversions of certain RMB amounts into US$ at specified rates solely for the convenience of the reader. Unless otherwise noted, all translations from RMB to US$ are made at a rate of RMB7.0176 to US$1.00, the effective noon buying rate on September 30, 2024, as set forth in the H.10 statistical release of the Federal Reserve Board.

Conference Call

Yiren Digital’s management will host an earnings conference call at 7:00 a.m. U.S. Eastern Time on November 20, 2024 (or 8:00 p.m. Beijing/Hong Kong Time on November 20, 2024).
Participants who wish to join the call should register online in advance of the conference at:
https://dpregister.com/sreg/10194517/fdfac17402
Once registration is completed, participants will receive the dial-in details for the conference call.
Additionally, a live and archived webcast of the conference call will be available at:
https://event.choruscall.com/mediaframe/webcast.html?webcastid=MvArF4tV

Safe Harbor Statement

This press release contains forward-looking statements. These statements constitute “forward-looking” statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates,” “target,” “confident” and similar statements. Such statements are based upon management’s current expectations and current market and operating conditions and relate to events that involve known or unknown risks, uncertainties and other factors, all of which are difficult to predict and many of which are beyond Yiren Digital’s control. Forward-looking statements involve risks, uncertainties, and other factors that could cause actual results to differ materially from those contained in any such statements. Potential risks and uncertainties include, but are not limited to, uncertainties as to Yiren Digital’s ability to attract and retain borrowers and investors on its marketplace, its ability to introduce new loan products and platform enhancements, its ability to compete effectively, PRC regulations and policies relating to the peer-to-peer lending service industry in China, general economic conditions in China, and Yiren Digital’s ability to meet the standards necessary to maintain the listing of its ADSs on the NYSE or other stock exchange, including its ability to cure any non-compliance with the NYSE’s continued listing criteria. Further information regarding these and other risks, uncertainties or factors is included in Yiren Digital’s filings with the U.S. Securities and Exchange Commission. All information provided in this press release is as of the date of this press release, and Yiren Digital does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under applicable law.

About Yiren Digital

Yiren Digital Ltd. is an advanced, AI-powered platform providing a comprehensive suite of financial and lifestyle services in China. Our mission is to elevate customers’ financial well-being and enhance their quality of life by delivering digital financial services, tailor-made insurance solutions, and premium lifestyle services. We support clients at various growth stages, addressing financing needs arising from consumption and production activities, while aiming to augment the overall well-being and security of individuals, families, and businesses.

Unaudited Condensed Consolidated Statements of Operations

(in thousands, except for share, per share and per ADS data, and percentages)

For the Three Months Ended

For the Nine Months Ended

September 30,
2023

June 30,
2024

September 30,
2024

September 30,
2023

September 30,
2024

RMB

USD

RMB

USD

Net revenue:

Loan facilitation services

586,883

695,532

600,899

85,627

1,518,401

1,972,726

281,111

Post-origination services

984

1,290

1,421

203

12,573

4,483

639

Insurance brokerage services

264,611

91,526

85,530

12,188

865,664

301,982

43,032

Financing services

9,937

19,574

31,448

4,481

47,410

61,688

8,790

Electronic commerce services

350,635

523,641

546,366

77,856

881,218

1,572,943

224,143

Guarantee services

30,173

68,934

136,746

19,486

42,275

222,533

31,711

Others

67,551

96,039

76,678

10,927

253,782

217,353

30,972

Total net revenue

1,310,774

1,496,536

1,479,088

210,768

3,621,323

4,353,708

620,398

Operating costs and expenses:

Sales and marketing

195,714

285,101

335,647

47,829

450,873

897,971

127,960

Origination,servicing and other operating costs

245,360

246,542

205,913

29,342

791,472

685,725

97,715

Research and development

38,981

55,812

150,840

21,495

101,168

247,173

35,222

General and administrative

53,519

68,670

80,097

11,413

180,623

232,441

33,123

Allowance for contract assets, receivables and others

72,652

123,285

94,913

13,525

160,923

320,532

45,675

Provision for contingent liabilities

11,104

278,925

272,406

38,818

28,578

618,589

88,148

Total operating costs and expenses

617,330

1,058,335

1,139,816

162,422

1,713,637

3,002,431

427,843

Other income/(expenses):

Interest income, net

25,815

24,668

21,877

3,117

50,869

74,258

10,582

Fair value adjustments related to Consolidated ABFE

(8,104)

38,706

36,423

5,190

(36,777)

90,597

12,910

Others, net

5,177

(11)

2,535

362

11,496

3,201

456

Total other income/(expenses)

22,888

63,363

60,835

8,669

25,588

168,056

23,948

Income before provision for income taxes

716,332

501,564

400,107

57,015

1,933,274

1,519,333

216,503

Income tax expense

161,917

92,036

44,665

6,365

424,345

268,480

38,258

Net income

554,415

409,528

355,442

50,650

1,508,929

1,250,853

178,245

Weighted average number of ordinary shares outstanding,
basic

176,866,653

172,831,722

175,018,644

177,189,206

173,557,082

Basic income per share

3.1346

2.3695

2.0309

0.2894

8.5159

7.2072

1.0270

Basic income per ADS

6.2692

4.7390

4.0618

0.5788

17.0318

14.4144

2.0540

Weighted average number of ordinary shares outstanding,
diluted

178,366,565

174,711,554

176,035,324

179,220,434

175,457,062

Diluted income per share

3.1083

2.3440

2.0192

0.2877

8.4194

7.1291

1.0159

Diluted income per ADS

6.2166

4.6880

4.0384

0.5754

16.8388

14.2582

2.0318

Unaudited Condensed Consolidated Cash Flow Data

Net cash generated from operating activities

645,416

368,908

50,393

7,181

1,753,781

1,051,044

149,773

Net cash (used in)/provided by investing activities

(393,919)

(536,883)

(1,859,587)

(264,989)

360,376

(3,080,167)

(438,920)

Net cash used in financing activities

(502,636)

(125,884)

(22,227)

(3,167)

(901,587)

(162,885)

(23,211)

Effect of foreign exchange rate changes

2,395

(896)

(6,252)

(891)

2,543

(5,808)

(828)

Net (decrease)/increase in cash, cash equivalents and
restricted cash

(248,744)

(294,755)

(1,837,673)

(261,866)

1,215,113

(2,197,816)

(313,186)

Cash, cash equivalents and restricted cash, beginning of period

5,824,552

5,993,216

5,698,461

812,024

4,360,695

6,058,604

863,344

Cash, cash equivalents and restricted cash, end of period

5,575,808

5,698,461

3,860,788

550,158

5,575,808

3,860,788

550,158

Unaudited Condensed Consolidated Balance Sheets

(in thousands)

As of

December 31,
2023

June 30,
2024

September 30,
2024

RMB

USD

Cash and cash equivalents

5,791,333

5,496,932

3,705,866

528,082

Restricted cash

267,271

201,529

154,922

22,076

Trading securities

76,053

83,889

63,276

9,017

Accounts receivable

499,027

654,698

668,757

95,297

Guarantee receivable

2,890

260,759

391,547

55,795

Contract assets, net

978,051

962,482

916,543

130,606

Contract cost

206

279

Prepaid expenses and other assets

423,621

1,662,654

2,291,397

326,521

Loans at fair value

677,835

473,311

414,803

59,109

Financing receivables

116,164

30,501

28,672

4,086

Amounts due from related parties

820,181

1,509,651

3,338,868

475,785

Held-to-maturity investments

10,420

5,087

725

Available-for-sale investments

438,084

329,829

321,550

45,820

Equity investments

–

2,500

7,105

1,012

Property, equipment and software, net

79,158

77,970

80,224

11,432

Deferred tax assets

73,414

44,309

54,595

7,780

Right-of-use assets

23,382

19,462

14,454

2,060

Total assets

10,276,916

11,815,769

12,457,945

1,775,243

Accounts payable

30,902

43,710

42,712

6,085

Amounts due to related parties

14,414

2,485

96,498

13,751

Guarantee liabilities-stand ready

8,802

278,656

449,759

64,090

Guarantee liabilities-contingent

28,351

336,190

512,004

72,960

Deferred revenue

54,044

38,843

18,348

2,615

Payable to investors at fair value

445,762

350,000

49,875

Accrued expenses and other liabilities

1,463,369

1,727,182

1,672,111

238,274

Deferred tax liabilities

122,075

55,520

16,434

2,342

Lease liabilities

23,648

19,280

15,226

2,170

Total liabilities

2,191,367

2,851,866

3,173,092

452,162

Ordinary shares

130

132

Additional paid-in capital

5,171,232

5,175,653

5,198,271

740,748

Treasury stock

(94,851)

(139,380)

(160,534)

(22,876)

Accumulated other comprehensive
income

23,669

47,798

21,226

3,024

Retained earnings

2,985,369

3,879,702

4,225,758

602,166

Total equity

8,085,549

8,963,903

9,284,853

1,323,081

Total liabilities and equity

10,276,916

11,815,769

12,457,945

1,775,243

Operating Highlights and Reconciliation of GAAP to Non-GAAP Measures

(in thousands, except for number of borrowers, number of insurance clients, cumulative number of insurance clients and percentages)

For the Three Months Ended

For the Nine Months Ended

September 30,
2023

June 30,
2024

September 30,
2024

September 30,
2023

September 30,
2024

RMB

USD

RMB

USD

Operating Highlights

Amount of loans facilitated

9,814,359

12,936,017

13,392,676

1,908,441

24,390,773

38,239,060

5,449,022

Number of borrowers

1,204,012

1,491,756

1,498,020

2,128,924

3,365,960

Remaining principal of performing loans

15,090,800

21,827,634

22,768,555

3,244,493

15,090,800

22,768,555

3,244,493

Cumulative number of insurance clients

1,256,762

1,410,158

1,470,738

1,256,762

1,470,738

Number of insurance clients

123,693

88,766

82,291

293,254

226,191

Gross written premiums

1,428,484

1,060,885

1,351,311

192,560

3,684,325

3,324,627

473,756

First year premium

914,839

577,387

511,377

72,871

2,644,082

1,602,905

228,412

Renewal premium

513,645

483,498

839,934

119,689

1,040,243

1,721,722

245,344

Gross merchandise volume

563,224

554,574

507,585

72,330

1,267,611

1,687,280

240,435

Segment Information

Financial services business:

Revenue

667,966

851,031

836,193

119,157

1,733,813

2,425,341

345,608

Sales and marketing expenses

146,369

253,103

307,459

43,812

311,751

812,484

115,778

Origination, servicing and other operating
costs

59,300

113,234

119,706

17,058

145,870

318,727

45,418

Allowance for contract assets, receivables and
others

77,135

124,765

93,248

13,288

163,111

319,140

45,477

Provision for contingent liabilities

11,104

278,925

272,406

38,818

28,578

618,589

88,148

Insurance brokerage business:

Revenue

264,611

91,526

85,530

12,188

865,664

301,982

43,032

Sales and marketing expenses

3,175

4,263

3,545

505

9,309

11,373

1,621

Origination, servicing and other operating
costs

176,182

122,358

78,466

11,181

599,650

337,707

48,123

Allowance for contract assets, receivables and
others

(3,981)

(1,502)

(414)

(59)

(355)

(904)

(129)

Consumption & lifestyle business and others:

Revenue

378,197

553,979

557,365

79,423

1,021,846

1,626,385

231,758

Sales and marketing expenses

46,170

27,735

24,643

3,512

129,813

74,114

10,561

Origination, servicing and other operating
costs

9,878

10,950

7,741

1,103

45,952

29,291

4,174

Allowance for contract assets, receivables and
others

(313)

(11)

1,666

237

(1,545)

1,664

237

Reconciliation of Adjusted EBITDA

Net income

554,415

409,528

355,442

50,650

1,508,929

1,250,853

178,245

Interest income, net

(25,815)

(24,668)

(21,877)

(3,117)

(50,869)

(74,258)

(10,582)

Income tax expense

161,917

92,036

44,665

6,365

424,345

268,480

38,258

Depreciation and amortization

1,664

2,026

2,401

342

5,310

6,319

901

Share-based compensation

513

2,136

13,235

1,886

5,923

16,578

2,362

Adjusted EBITDA

692,694

481,058

393,866

56,126

1,893,638

1,467,972

209,184

Adjusted EBITDA margin

52.8 %

32.1 %

26.6 %

52.3 %

33.7 %

Delinquency Rates

1-30 days

31-60 days

61-90 days

December 31, 2019

2.1 %

1.2 %

0.9 %

December 31, 2020

1.3 %

0.7 %

0.6 %

December 31, 2021

2.0 %

1.5 %

1.2 %

December 31, 2022

1.7 %

1.2 %

1.1 %

December 31, 2023

2.0 %

1.4 %

1.2 %

March 31, 2024

2.1 %

1.6 %

1.4 %

June 30, 2024

1.9 %

1.4 %

1.5 %

September 30, 2024

1.8 %

1.2 %

30+ Days Delinquency Rates by Vintage[1]

Loan Issued Period

Month on Book

2019Q1

0.0 %

0.5 %

1.6 %

2.3 %

3.3 %

4.4 %

5.9 %

6.1 %

6.4 %

6.9 %

2019Q2

0.3 %

1.4 %

2.8 %

5.0 %

7.8 %

8.9 %

9.5 %

10.0 %

10.3 %

10.7 %

10.9 %

11.2 %

2019Q3

0.3 %

2.0 %

5.1 %

7.6 %

9.1 %

10.4 %

11.3 %

12.4 %

13.3 %

14.1 %

14.7 %

15.2 %

2019Q4

0.7 %

3.0 %

4.4 %

5.7 %

6.6 %

7.3 %

8.1 %

8.5 %

9.0 %

9.4 %

9.7 %

10.3 %

2020Q1

0.8 %

2.0 %

3.4 %

4.5 %

5.4 %

5.9 %

6.5 %

6.8 %

7.1 %

7.5 %

8.1 %

8.5 %

2020Q2

0.6 %

2.0 %

3.3 %

4.5 %

5.3 %

6.0 %

6.4 %

6.9 %

7.4 %

8.0 %

8.6 %

8.8 %

2020Q3

1.3 %

2.8 %

4.3 %

5.4 %

6.3 %

6.9 %

7.5 %

8.2 %

8.9 %

9.3 %

9.5 %

2020Q4

0.3 %

1.4 %

2.4 %

3.4 %

4.3 %

5.4 %

6.4 %

7.3 %

7.7 %

8.0 %

8.2 %

8.3 %

2021Q1

0.5 %

1.8 %

3.0 %

4.2 %

5.3 %

6.3 %

7.1 %

7.3 %

7.5 %

7.7 %

7.8 %

7.9 %

2021Q2

0.5 %

2.1 %

3.8 %

5.5 %

6.8 %

7.5 %

7.7 %

7.9 %

8.1 %

8.3 %

8.2 %

2021Q3

0.6 %

2.5 %

4.2 %

5.4 %

6.1 %

6.5 %

6.7 %

6.9 %

6.8 %

2021Q4

0.8 %

2.7 %

4.1 %

4.9 %

5.4 %

5.8 %

5.7 %

5.6 %

5.5 %

2022Q1

0.7 %

2.1 %

3.2 %

4.0 %

4.6 %

4.8 %

4.7 %

4.6 %

4.5 %

4.4 %

2022Q2

0.5 %

1.8 %

2.9 %

3.8 %

4.3 %

4.5 %

4.4 %

4.3 %

4.2 %

4.1 %

2022Q3

0.6 %

2.2 %

3.5 %

4.3 %

4.8 %

5.0 %

4.9 %

4.8 %

4.7 %

2022Q4

0.7 %

2.5 %

3.9 %

4.9 %

5.6 %

5.9 %

5.8 %

5.7 %

5.6 %

5.5 %

2023Q1

0.6 %

2.4 %

4.0 %

5.2 %

5.9 %

6.2 %

6.1 %

6.0 %

5.9 %

5.5 %

2023Q2

0.7 %

3.0 %

4.9 %

6.3 %

7.0 %

7.3 %

7.2 %

6.9 %

2023Q3

0.9 %

3.7 %

5.8 %

7.1 %

7.9 %

8.1 %

7.8 %

2023Q4

0.8 %

3.6 %

5.8 %

7.0 %

7.6 %

2024Q1

0.7 %

3.2 %

5.0 %

6.4 %

2024Q2

0.6 %

2.7 %

2024Q3

0.6 %

[1]The 30+ days delinquency rate by vintage refers to the outstanding principal balance of loans facilitated over a specified period that are more than 30 days past due,

as a percentage of the total loans facilitated during that same period. Loans originating outside mainland China are excluded from the calculation.

View original content:https://www.prnewswire.com/news-releases/yiren-digital-reports-third-quarter-2024-financial-results-302312773.html

SOURCE Yiren Digital

Technology

111, Inc. to Participate in Fireside Chat with Water Tower Research on December 6, 2024

Published

51 minutes ago

November 21, 2024

SHANGHAI, Nov. 21, 2024 /PRNewswire/ — 111, Inc. (“111” or the “Company”) (NASDAQ: YI), a leading tech-enabled healthcare platform company committed to reshaping the value chain of healthcare industry by digitally empowering the upstream and downstream in China, today announced that it will participate in a fireside chat with Robert Sassoon, senior research analyst at Water Tower Research (“WTR”) on Friday, December 6, 2024 at 11:00 a.m. ET.

Mr. Junling Liu, Co-Founder, Chairman, and Chief Executive Officer of 111, will discuss the Company’s Q3 2024 earnings (to be reported on Wednesday, November 27, 2024), along with challenges, opportunities, and the NASDAQ share price compliance issue.

To register for this listen-only event, please visit:

Fireside Chat Registration Link

The replay of the fireside chat will be available under “Events” in the 111’s investor relations website at http://ir.111.com.cn/.

Forward-Looking Statements

This press release contains forward-looking statements. These statements constitute “forward-looking” statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates,” “target,” “confident” and similar statements. Among other things, the Business Outlook and quotations from management in this announcement, as well as 111’s strategic and operational plans, contain forward-looking statements. 111 may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Such statements are based upon management’s current expectations and current market and operating conditions and relate to events that involve known or unknown risks, uncertainties and other factors, all of which are difficult to predict and many of which are beyond the Company’s control. Forward-looking statements involve inherent risks, uncertainties and other factors that could cause actual results to differ materially from those contained in any such statements. Potential risks and uncertainties include, but are not limited to, uncertainties as to the Company’s ability comply with extensive and evolving regulatory requirements, its ability to compete effectively in the evolving PRC general health and wellness market, its ability to manage the growth of its business and expansion plans, its ability to achieve or maintain profitability in the future, its ability to control the risks associated with its pharmaceutical retail and wholesale businesses, and the Company’s ability to meet the standards necessary to maintain listing of its ADSs on the Nasdaq Global Market, including its ability to cure any non-compliance with Nasdaq’s continued listing criteria. Further information regarding these and other risks, uncertainties or factors is included in the Company’s filings with the U.S. Securities and Exchange Commission. All information provided in this press release is as of the date of this press release, and 111 does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under applicable law.

About 111, Inc.

111, Inc. (NASDAQ: YI) (“111” or the “Company”) is a leading tech-enabled healthcare platform company committed to reshaping the value chain of healthcare industry by digitally empowering the upstream and downstream in China. The Company provides consumers with better access to pharmaceutical products and healthcare services directly through its online retail pharmacy, 1 Pharmacy, and indirectly through its offline virtual pharmacy network. The Company also offers online healthcare services through its internet hospital, 1 Clinic, which provides consumers with cost-effective and convenient online consultation, electronic prescription service, and patient management service. In addition, the Company’s online platform, 1 Medicine, serves as a one-stop shop for pharmacies to source a vast selection of pharmaceutical products. With the largest virtual pharmacy network in China, 111 enables offline pharmacies to better serve their customers with cloud-based services. 111 also provides an omni-channel drug commercialization platform to its strategic partners, which includes services such as digital marketing, patient education, data analytics, and pricing monitoring.

For more information on 111, please visit: http://ir.111.com.cn/.

View original content:https://www.prnewswire.com/news-releases/111-inc-to-participate-in-fireside-chat-with-water-tower-research-on-december-6-2024-302312552.html

SOURCE 111, Inc.