21Vianet Group, Inc. Reports Unaudited Third Quarter 2019 Financial Results
Third Quarter 2019 Financial Highlights
- Net revenues increased by 12.7% year over year to
RMB981.0 million (US$137.2 million ).
- Adjusted EBITDA (non-GAAP) increased by 11.1% year over year to
RMB272.5 million (US$38.1 million ). Adjusted EBITDA margin was 27.8%, compared to 28.2% in the same period of 2018.
- Net cash generated from operating activities was
RMB103.0 million (US$14.4 million ) compared toRMB260.7 million in the same period of 2018.
Third Quarter 2019 Operational Highlights
- Hosting MRR1 per cabinet was
RMB8,711 in the third quarter of 2019 compared toRMB8,384 in the third quarter of 2018 andRMB8,663 in the second quarter of 2019.
- Total cabinets under management was 32,116 as of
September 30, 2019 , compared to 30,303 as ofSeptember 30, 2018 , and 31,111 as ofJune 30, 2019 . As ofSeptember 30, 2019 , the Company had 27,267 cabinets in its self-built data centers and 4,849 cabinets in its partnered data centers.
- Utilization rate was 66.2% in the third quarter of 2019, compared to 66.0% in the second quarter of 2019.
Mr.
Ms.
Third Quarter 2019 Financial Results
REVENUES: Net revenues increased by 12.7% to
GROSS PROFIT: Gross profit was
ADJUSTED CASH GROSS PROFIT, which excludes depreciation, amortization, and share-based compensation expenses, increased by 1.2% to
OPERATING EXPENSES: Total operating expenses decreased by 11.0% to
Sales and marketing expenses were
Research and development expenses were
General and administrative expenses were
ADJUSTED OPERATING EXPENSES, which exclude share-based compensation expenses and changes in the fair value of contingent purchase consideration payables, decreased by 10.2% to
ADJUSTED EBITDA: Adjusted EBITDA in the third quarter of 2019 increased by 11.1% to
NET PROFIT/LOSS: Net loss attributable to ordinary shareholders in the third quarter of 2019 was
PROFIT/LOSS PER SHARE: Basic and diluted loss per share were
As of
Net cash generated from operating activities was
The Company signed a memorandum of understanding (the “MoU”) with
Financial Outlook
For the fourth quarter of 2019, the Company expects net revenues to be in the range of
For the full year of 2019, the Company expects net revenues to be in the range of
The forecast reflects the Company’s current and preliminary view on the market and its operational conditions, which is subject to change.
Conference Call
The Company will hold a conference call at
Participants may access the call by dialing the following numbers:
United States Toll Free: | +1-866-519-4004 |
International: | +65-6713-5090 |
China Domestic: | 400-620-8038 |
Hong Kong: | +852-3018-6771 |
Conference ID: | 8777175 |
The replay will be accessible through
United States Toll Free: | +1-855-452-5696 |
International: | +61-2-8199-0299 |
Conference ID: | 8777175 |
A live and archived webcast of the conference call will be available through the Company's investor relation website at http://ir.21vianet.com.
Non-GAAP Disclosure
In evaluating its business, 21Vianet considers and uses the following non-GAAP measures defined as non-GAAP financial measures by the
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
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 21Vianet
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," "believes," "estimates" and similar statements. Among other things, quotations from management in this announcement as well as 21Vianet's strategic and operational plans contain forward-looking statements. 21Vianet may also make written or oral forward-looking statements in its reports filed with, or furnished to, the
Investor Relations Contacts:
+86 10 8456 2121
IR@21Vianet.com
+86 10 8456 2121
IR@21Vianet.com
+1 (646) 405-4922
IR@21Vianet.com
____________________________________
1Hosting MRR: Refers to Monthly Recurring Revenues for the hosting business.
21VIANET GROUP, INC. | ||||||
CONSOLIDATED BALANCE SHEETS | ||||||
(Amount in thousands of Renminbi (“RMB”) and US dollars (“US$”)) | ||||||
As of | As of | |||||
December 31, 2018 | September 30, 2019 | |||||
RMB | RMB | US$ | ||||
(Audited) | (Unaudited) | (Unaudited) | ||||
Assets | ||||||
Current assets: | ||||||
Cash and cash equivalents | 2,358,556 | 2,092,427 | 292,741 | |||
Restricted cash | 265,214 | 426,385 | 59,653 | |||
Accounts and notes receivable, net | 524,305 | 806,502 | 112,834 | |||
Short-term investments | 245,014 | 356,104 | 49,821 | |||
Prepaid expenses and other current assets | 1,159,574 | 1,549,337 | 216,760 | |||
Amounts due from related parties | 125,446 | 414,925 | 58,050 | |||
Total current assets | 4,678,109 | 5,645,680 | 789,859 | |||
Non-current assets: | ||||||
Property and equipment, net | 4,031,242 | 4,945,021 | 691,834 | |||
Intangible assets, net | 355,313 | 422,754 | 59,145 | |||
Land use rights, net | 147,493 | 144,806 | 20,259 | |||
Operating lease right-of-use assets, net | - | 746,311 | 104,413 | |||
Goodwill | 989,530 | 989,530 | 138,440 | |||
Long-term investments | 544,323 | 194,968 | 27,277 | |||
Amounts due from related parties | 34,424 | 38,860 | 5,437 | |||
Restricted cash | 37,251 | 69,297 | 9,695 | |||
Deferred tax assets | 159,441 | 173,768 | 24,311 | |||
Other non-current assets | 173,591 | 272,419 | 38,113 | |||
Total non-current assets | 6,472,608 | 7,997,734 | 1,118,924 | |||
Total assets | 11,150,717 | 13,643,414 | 1,908,783 | |||
Liabilities and Shareholders' Equity | ||||||
Current liabilities: | ||||||
Short-term bank borrowings | 50,000 | 230,000 | 32,178 | |||
Accounts and notes payable | 389,508 | 332,451 | 46,512 | |||
Accrued expenses and other payables | 659,320 | 1,066,569 | 149,219 | |||
Deferred revenue | 57,754 | 61,016 | 8,536 | |||
Advances from customers | 670,037 | 996,064 | 139,354 | |||
Income taxes payable | 13,111 | 40,844 | 5,714 | |||
Amounts due to related parties | 52,328 | 113,698 | 15,907 | |||
Current portion of long-term bank borrowings | 75,284 | 29,000 | 4,057 | |||
Current portion of capital lease obligations | 219,695 | 180,033 | 25,188 | |||
Current portion of deferred government grant | 4,173 | 3,048 | 426 | |||
Operating lease liabilities - current | - | 187,854 | 26,282 | |||
Total current liabilities | 2,191,210 | 3,240,577 | 453,373 | |||
Non-current liabilities: | ||||||
Long-term borrowings | 112,000 | 96,000 | 13,431 | |||
Amounts due to related parties | 504,478 | 519,834 | 72,727 | |||
Unrecognized tax benefits | 6,677 | 4,131 | 578 | |||
Deferred tax liabilities | 157,720 | 204,573 | 28,621 | |||
Non-current portion of capital lease obligations | 765,993 | 715,248 | 100,067 | |||
Non-current portion of deferred government grant | 11,619 | 7,578 | 1,060 | |||
Bonds payable | 2,037,836 | 3,007,973 | 420,831 | |||
Operating lease liabilities - non current | - | 559,704 | 78,305 | |||
Total non-current liabilities | 3,596,323 | 5,115,041 | 715,620 | |||
Shareholders' equity | ||||||
Treasury stock | (337,683 | ) | (337,683 | ) | (47,244 | ) |
Ordinary shares | 46 | 46 | 6 | |||
Additional paid-in capital | 9,141,494 | 9,087,046 | 1,271,324 | |||
Accumulated other comprehensive gain | 85,979 | 126,776 | 17,737 | |||
Statutory reserves | 42,403 | 43,838 | 6,134 | |||
Accumulated deficit | (3,838,032 | ) | (4,005,343 | ) | (560,368 | ) |
Total 21Vianet Group, Inc. shareholders’ equity | 5,094,207 | 4,914,680 | 687,589 | |||
Noncontrolling interest | 268,977 | 373,116 | 52,201 | |||
Total shareholders' equity | 5,363,184 | 5,287,796 | 739,790 | |||
Total liabilities and shareholders' equity | 11,150,717 | 13,643,414 | 1,908,783 | |||
21VIANET GROUP, INC. | |||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||
(Amount in thousands of Renminbi (“RMB”) and US dollars (“US$”) except for number of shares and per share data) | |||||||||||||||
Three months ended | Nine months ended | ||||||||||||||
September 30, 2018 | June 30, 2019 | September 30, 2019 | September 30, 2018 | September 30, 2019 | |||||||||||
RMB | RMB | RMB | US$ | RMB | RMB | US$ | |||||||||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||
Net revenues | 870,068 | 888,020 | 980,969 | 137,243 | 2,499,150 | 2,740,848 | 383,459 | ||||||||
Cost of revenues | (628,873 | ) | (659,772 | ) | (758,414 | ) | (106,106 | ) | (1,800,620 | ) | (2,049,270 | ) | (286,703 | ) | |
Gross profit | 241,195 | 228,248 | 222,555 | 31,137 | 698,530 | 691,578 | 96,756 | ||||||||
Operating expenses | |||||||||||||||
Sales and marketing | (39,918 | ) | (46,626 | ) | (52,399 | ) | (7,331 | ) | (122,966 | ) | (143,121 | ) | (20,023 | ) | |
Research and development | (24,333 | ) | (18,790 | ) | (22,518 | ) | (3,150 | ) | (68,526 | ) | (63,872 | ) | (8,936 | ) | |
General and administrative | (110,243 | ) | (102,341 | ) | (82,156 | ) | (11,494 | ) | (331,674 | ) | (305,293 | ) | (42,712 | ) | |
(Allowance) reversal for doubtful debt | (643 | ) | (457 | ) | (6 | ) | (1 | ) | 1,839 | (485 | ) | (68 | ) | ||
Changes in the fair value of contingent purchase consideration payables | (1,413 | ) | - | - | - | (4,623 | ) | - | - | ||||||
Total operating expenses | (176,550 | ) | (168,214 | ) | (157,079 | ) | (21,976 | ) | (525,950 | ) | (512,771 | ) | (71,739 | ) | |
Operating profit | 64,645 | 60,034 | 65,476 | 9,161 | 172,580 | 178,807 | 25,017 | ||||||||
Interest income | 13,484 | 12,389 | 15,379 | 2,152 | 30,972 | 39,619 | 5,543 | ||||||||
Interest expense | (60,766 | ) | (91,202 | ) | (96,936 | ) | (13,562 | ) | (163,636 | ) | (257,580 | ) | (36,037 | ) | |
Gain on deconsolidation of subsidiaries | - | - | - | - | 4,843 | - | - | ||||||||
Other income | 8,436 | 8,958 | 2,187 | 306 | 50,983 | 14,220 | 1,989 | ||||||||
Other expense | (137 | ) | (4,177 | ) | (127 | ) | (18 | ) | (2,228 | ) | (4,362 | ) | (610 | ) | |
Foreign exchange loss | (55,024 | ) | (39,853 | ) | (40,192 | ) | (5,623 | ) | (83,543 | ) | (50,507 | ) | (7,066 | ) | |
Loss on debt extinguishment | - | (17,804 | ) | (969 | ) | (136 | ) | - | (18,773 | ) | (2,626 | ) | |||
(Loss) gain before income taxes and loss from equity method investments | (29,362 | ) | (71,655 | ) | (55,182 | ) | (7,720 | ) | 9,971 | (98,576 | ) | (13,790 | ) | ||
Income tax benefits (expenses) | 7,624 | (9,343 | ) | (10,039 | ) | (1,405 | ) | (70,761 | ) | (30,123 | ) | (4,213 | ) | ||
Loss from equity method investments | (6,156 | ) | (18,277 | ) | (1,078 | ) | (151 | ) | (27,904 | ) | (30,293 | ) | (4,238 | ) | |
Net loss | (27,894 | ) | (99,275 | ) | (66,299 | ) | (9,276 | ) | (88,694 | ) | (158,992 | ) | (22,241 | ) | |
Net profit attributable to noncontrolling interest | (1,739 | ) | (2,785 | ) | (3,157 | ) | (442 | ) | (2,309 | ) | (6,884 | ) | (963 | ) | |
Net loss attributable to ordinary shareholders | (29,633 | ) | (102,060 | ) | (69,456 | ) | (9,718 | ) | (91,003 | ) | (165,876 | ) | (23,204 | ) | |
Loss per share | |||||||||||||||
Basic | (0.04 | ) | (0.15 | ) | (0.10 | ) | (0.01 | ) | (0.13 | ) | (0.24 | ) | (0.03 | ) | |
Diluted | (0.04 | ) | (0.15 | ) | (0.10 | ) | (0.01 | ) | (0.13 | ) | (0.24 | ) | (0.03 | ) | |
Shares used in loss per share computation | |||||||||||||||
Basic* | 676,327,014 | 677,802,980 | 679,135,837 | 679,135,837 | 674,723,544 | 678,359,403 | 678,359,403 | ||||||||
Diluted* | 676,327,014 | 677,802,980 | 679,135,837 | 679,135,837 | 674,723,544 | 678,359,403 | 678,359,403 | ||||||||
Loss per ADS (6 ordinary shares equal to 1 ADS) | |||||||||||||||
Basic | (0.24 | ) | (0.90 | ) | (0.60 | ) | (0.06 | ) | (0.78 | ) | (1.44 | ) | (0.18 | ) | |
Diluted | (0.24 | ) | (0.90 | ) | (0.60 | ) | (0.06 | ) | (0.78 | ) | (1.44 | ) | (0.18 | ) | |
* Shares used in (loss) profit per share/ADS computation were computed under weighted average method. | |||||||||||||||
21VIANET GROUP, INC. | |||||||||||||||
RECONCILIATIONS OF GAAP AND NON-GAAP RESULTS | |||||||||||||||
(Amount in thousands of Renminbi (“RMB”) and US dollars (“US$”)) | |||||||||||||||
Three months ended | Nine months ended | ||||||||||||||
September 30, 2018 | June 30, 2019 | September 30, 2019 | September 30, 2018 | September 30, 2019 | |||||||||||
RMB | RMB | RMB | US$ | RMB | RMB | US$ | |||||||||
Gross profit | 241,195 | 228,248 | 222,555 | 31,137 | 698,530 | 691,578 | 96,756 | ||||||||
Plus: depreciation and amortization | 150,056 | 175,102 | 173,712 | 24,303 | 403,900 | 514,235 | 71,944 | ||||||||
Plus: share-based compensation expenses | 689 | 459 | 464 | 65 | 996 | 1,397 | 195 | ||||||||
Adjusted cash gross profit | 391,940 | 403,809 | 396,731 | 55,505 | 1,103,426 | 1,207,210 | 168,895 | ||||||||
Adjusted cash gross margin | 45.0% | 45.5% | 40.4% | 40.4% | 44.2% | 44.0% | 44.0% | ||||||||
Operating expenses | (176,550 | ) | (168,214 | ) | (157,079 | ) | (21,976 | ) | (525,950 | ) | (512,771 | ) | (71,739 | ) | |
Plus: share-based compensation expenses | 12,240 | 6,932 | 10,833 | 1,516 | 29,342 | 33,930 | 4,747 | ||||||||
Plus: changes in the fair value of contingent purchase consideration payables | 1,413 | - | - | - | 4,623 | - | - | ||||||||
Adjusted operating expenses | (162,897 | ) | (161,282 | ) | (146,246 | ) | (20,460 | ) | (491,985 | ) | (478,841 | ) | (66,992 | ) | |
Operating profit | 64,645 | 60,034 | 65,476 | 9,161 | 172,580 | 178,807 | 25,017 | ||||||||
Plus: depreciation and amortization | 166,244 | 193,302 | 195,729 | 27,383 | 454,847 | 572,563 | 80,105 | ||||||||
Plus: share-based compensation expenses | 12,929 | 7,391 | 11,297 | 1,581 | 30,338 | 35,327 | 4,942 | ||||||||
Plus: changes in the fair value of contingent purchase consideration payables | 1,413 | - | - | - | 4,623 | - | - | ||||||||
Adjusted EBITDA | 245,231 | 260,727 | 272,502 | 38,125 | 662,388 | 786,697 | 110,064 | ||||||||
Adjusted EBITDA margin | 28.2% | 29.4% | 27.8% | 27.8% | 26.5% | 28.7% | 28.7% | ||||||||
21VIANET GROUP, INC. | ||||||||
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS | ||||||||
(Amount in thousands of Renminbi (“RMB”) and US dollars (“US$”)) | ||||||||
Three months ended | ||||||||
September 30, 2018 | June 30, 2019 | September 30, 2019 | ||||||
RMB | RMB | RMB | US$ | |||||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
Net loss | (27,894) | (99,275) | (66,299) | (9,276) | ||||
Adjustments to reconcile net loss to net cash generated from operating activities: | ||||||||
Depreciation and amortization | 166,244 | 193,302 | 195,729 | 27,383 | ||||
Stock-based compensation expenses | 12,929 | 7,391 | 11,297 | 1,581 | ||||
Others | 41,616 | 69,061 | 33,913 | 4,744 | ||||
Changes in operating assets and liabilities | ||||||||
Accounts and notes receivable | (34,113) | (119,144) | (133,929) | (18,737) | ||||
Prepaid expenses and other current assets | (37,448) | (50,381) | (84,332) | (11,798) | ||||
Accounts and notes payable | 37,690 | 14,644 | (60,121) | (8,411) | ||||
Accrued expenses and other payables | (19,359) | 9,996 | 105,076 | 14,701 | ||||
Deferred revenue | 11,154 | 936 | 16,138 | 2,258 | ||||
Advances from customers | 114,528 | 125,227 | 103,772 | 14,518 | ||||
Others | (4,632) | (24,647) | (18,259) | (2,554) | ||||
Net cash generated from operating activities | 260,715 | 127,110 | 102,985 | 14,409 | ||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
Purchases of property and equipment | (123,027) | (208,520) | (448,614) | (62,763) | ||||
Purchases of intangible assets | (4,032) | (6,990) | (8,278) | (1,158) | ||||
Payments for investments | (196,319) | (127,148) | (320,660) | (44,862) | ||||
Proceeds from other investing activities | 18,061 | 11,575 | 162,811 | 22,778 | ||||
Net cash used in investing activities | (305,317) | (331,083) | (614,741) | (86,005) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
Proceeds from short-term bank borrowings | - | - | 200,000 | 27,981 | ||||
Repayment of long-term bank borrowings | - | (27,779) | (44,331) | (6,202) | ||||
Payments for capital lease | (50,996) | (66,316) | (83,274) | (11,650) | ||||
Repurchase of 2020 Notes | - | (1,021,539) | (126,553) | (17,705) | ||||
Proceeds from issuance of 2021 Notes | - | 2,012,084 | - | - | ||||
Payment of issuance cost of 2021 Notes | - | (35,427) | (183) | (26) | ||||
Proceeds from (payments for) other financing activities | 328,801 | (3,542) | 88 | 12 | ||||
Net cash generated from (used in) financing activities | 277,805 | 857,481 | (54,253) | (7,590) | ||||
Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash | 63,580 | 56,386 | 68,718 | 9,614 | ||||
Net increase (decrease) in cash, cash equivalents and restricted cash | 296,783 | 709,894 | (497,291) | (69,572) | ||||
Cash, cash equivalents and restricted cash at beginning of period | 2,439,152 | 2,375,506 | 3,085,400 | 431,663 | ||||
Cash, cash equivalents and restricted cash at end of period | 2,735,935 | 3,085,400 | 2,588,109 | 362,091 | ||||
Source: 21Vianet Group, Inc.