6-K - VNET - Equibles

UNITED STATES

SECURITIES AND EXCHANGECOMMISSION

WASHINGTON, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATEISSUER

PURSUANT TO RULE 13a-16 OR 15d-16UNDER

THE SECURITIES EXCHANGEACT OF 1934

For the month of March 2023

Commission File Number: 001-35126

VNET Group, Inc.

Guanjie Building, Southeast1st Floor10# Jiuxianqiao East Road

Chaoyang District

Beijing 100016

The People’sRepublic of China

(Address of principalexecutive office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F x Form 40-F ¨

EXPLANATORY NOTE

Exhibit 99.1 to this Current Report on Form 6-K is hereby incorporated by reference into the Registration Statement on Form F-3 of VNET Group, Inc. (File No. 333-240044) and shall form a part thereof from the date on which this Current Report is furnished, to the extent not superseded by documents or reports subsequently filed or furnished.

EXHIBIT INDEX

Exhibit No.	Description
99.1	Press Release

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

VNET Group, Inc.
By:	/s/ Tim Chen
Name:	Tim Chen
Title:	Chief Financial Officer

Date: March 21, 2023

Exhibit 99.1

VNET Reports Unaudited Fourth Quarter and FullYear 2022 Financial Results

BEIJING, March 21, 2023 /PRNewswire/ -- VNET Group, Inc. (Nasdaq: VNET) ("VNET" or the "Company"), a leading carrier- and cloud-neutral internet data center services provider in China, today announced its unaudited financial results for the fourth quarter and full year ended December 31, 2022.

“We concluded a challenging 2022 with solid fourth quarter results, achieving meaningful development on a broad scale,” said Jeff Dong, Chief Executive Officer of VNET. “Amid the macro headwinds, our dual-core strategy encompassing both the wholesale and retail IDC markets continued to prove strongly effective. We continued to grow our wholesale business with two major orders totaling over 100MW, extending the service contract with one of our largest existing customers in the fourth quarter and winning a bid for an IDC project with a new customer recently. On the retail business front, we made decent progress in expanding our customer base and fueling deeper collaboration with existing customers as we have been consistently building out our high-quality service offerings. Heading into 2023, with a gradual but noticeable economic recovery, we remain optimistic about the long-term prospects of the IDC industry.”

Tim Chen, Chief Financial Officer of VNET, commented, “We delivered a resilient performance in the fourth quarter of 2022, with year-over-year revenue growth of 7.7% and adjusted EBITDA margin of 22.6%. For the full year of 2022, we achieved our annual cabinet delivery target by adding approximately 8,400 self-built cabinets despite external challenges, which speaks to our outstanding execution. Looking ahead, we will continue to execute on our dual-core growth strategy and remain focused on our core businesses, while continuing to explore more capital resources to strengthen our financial position.”

Fourth Quarter 2022 Financial Highlights

·	Net revenues increased by 7.7% to RMB1.88 billion (US$272.7 million) from RMB1.75 billion in the<br> same period of 2021.
·	Adjusted cash gross profit (non-GAAP) increased by 3.7% to RMB740.1 million (US$107.3 million) from<br> RMB713.8 million in the same period of 2021. Adjusted cash gross margin (non-GAAP) was 39.4%, compared to 40.9% in the same period<br> of 2021.
·	Adjusted EBITDA (non-GAAP) decreased by 8.3% to RMB424.3 million (US$61.5 million) from RMB463.0<br> million in the same period of 2021. Adjusted EBITDA margin (non-GAAP) was 22.6%, compared to 26.5% in the same period of 2021.

Full Year 2022 Financial Highlights

·	Net<br>revenues increased by 14.1% to RMB7.07 billion (US$1.02 billion) from RMB6.19 billion in the full year of 2021.
·	Adjusted<br>cash gross profit (non-GAAP) increased by 8.1% to RMB2.85 billion (US$412.7 million) from RMB2.63 billion in the full year of 2021. Adjusted<br>cash gross margin (non-GAAP) was 40.3%, compared to 42.6% in the full year of 2021.
·	Adjusted<br>EBITDA (non-GAAP) increased by 6.8% to RMB1.87 billion (US$ 271.5 million) from RMB1.75 billion in the full year of 2021. Adjusted EBITDA<br>margin (non-GAAP) was 26.5%, compared to 28.3% in the full year of 2021.

Fourth Quarter 2022 Operational Highlights

·	Total<br>cabinets under management increased by 4,662 in the fourth quarter of 2022 to reach 87,322 as of December 31, 2022, compared to 78,540<br>as of December 31, 2021.
·	Cabinets<br>utilized by customers increased by 2,489 in the fourth quarter of 2022 to reach 48,016 as of December 31, 2022, compared to 45,527 as<br>of September 30, 2022 and 41,703 as of December 31, 2021.
·	Overall<br>utilization rate of cabinets^1^ was 55.0% as of December 31, 2022, compared to 55.1% as of September 30, 2022 and 53.1% as<br>of December 31, 2021.
·	Retail<br>IDC MRR^2^ per cabinet increased to RMB9,371 in the fourth quarter of 2022, compared to RMB9,287 in the third quarter of 2022<br>and RMB9,301 in the fourth quarter of 2021.

^1^The overall utilization rate is calculated by dividing the number of customer-utilized cabinets by the total cabinets under management at the end of the period. Before the first quarter of 2022, the Company used the compound utilization rate, a metric that was calculated based on the weighted average number of customer-utilized cabinets over the reported period.

^2^ Retail IDC MRR refers to Monthly Recurring Revenues for the retail IDC business.

Fourth Quarter 2022 Financial Results

NET REVENUES: Net revenues in the fourth quarter of 2022 were RMB1.88 billion (US$272.7 million), representing an increase of 7.7% from RMB1.75 billion in the same period of 2021. The year-over-year increase was mainly due to the increased demand from both wholesale and retail IDC customers, as well as the growth of our cloud and VPN services.

GROSS PROFIT: Gross profit in the fourth quarter of 2022 was RMB328.4 million (US$47.6 million), compared with RMB380.0 million in the same period of 2021. Gross margin in the fourth quarter of 2022 was 17.5%, compared to 21.8% in the same period of 2021.

ADJUSTED CASH GROSS PROFIT, which excludes depreciation, amortization, and share-based compensation expenses, was RMB740.1 million (US$107.3 million) in the fourth quarter of 2022, compared to RMB713.8 million in the same period of 2021. Adjusted cash gross margin in the fourth quarter of 2022 was 39.4%, compared to 40.9% in the same period of 2021.

OPERATING EXPENSES: Total operating expenses in the fourth quarter of 2022 were RMB345.7 million (US$50.1 million), compared to RMB649.7 million in the same period of 2021. As a percentage of net revenues, total operating expenses in the fourth quarter of 2022 were 18.4%, compared to 37.2% in the same period of 2021.

Sales and marketing expenses in the fourth quarter of 2022 were RMB76.4 million (US$11.1 million), compared to RMB85.5 million in the same period of 2021.

Research and development expenses in the fourth quarter of 2022 were RMB84.1 million (US$12.2 million), compared to RMB63.0 million in the same period of 2021.

General and administrative expenses in the fourth quarter of 2022 were RMB156.2 million (US$22.7 million), compared to RMB390.9 million in the same period of 2021.

ADJUSTED OPERATING EXPENSES, which exclude share-based compensation expenses, compensation for postcombination employment in an acquisition, impairment of loan receivable to potential investee and impairment of long-lived assets, were RMB355.4 million (US$51.5 million) in the fourth quarter of 2022, compared to RMB273.7 million in the same period of 2021. As a percentage of net revenues, adjusted operating expenses in the fourth quarter of 2022 were 18.9%, compared to 15.7% in the same period of 2021.

ADJUSTED EBITDA: Adjusted EBITDA in the fourth quarter of 2022 was RMB424.3 million (US$61.5 million), representing a decrease of 8.3% from RMB463.0 million in the same period of 2021. Adjusted EBITDA in the fourth quarter of 2022 excluded reverse of share-based compensation expenses of RMB7.8 million (US$1.1 million). Adjusted EBITDA margin in the fourth quarter of 2022 was 22.6%, compared to 26.5% in the same period of 2021.

NET LOSS ATTRIBUTABLE TO ORDINARY SHAREHOLDERS: Net loss attributable to ordinary shareholders in the fourth quarter of 2022 was RMB64.2 million (US$9.3 million), compared to a net loss attributable to ordinary shareholders of RMB27.3 million in the same period of 2021. Net loss attributable to ordinary shareholders in the fourth quarter of 2022 included a loss from changes in the fair value of convertible promissory notes of RMB48.5 million (US$7.0 million), compared to a gain of RMB227.8 million in the same period of 2021.

LOSS PER SHARE: Basic and diluted loss per share in the fourth quarter of 2022 were both RMB0.07 (US$0.01) which represented the equivalent of both RMB0.42 (US$0.06) per American depositary share (“ADS”). Each ADS represents six Class A ordinary shares. Diluted loss per share is calculated using adjusted net loss attributable to ordinary shareholders divided by the weighted average number of diluted shares outstanding.

As of December 31, 2022, the aggregate amount of the Company’s cash, cash equivalents and restricted cash was RMB2.99 billion (US$433.4 million).

Net cash generated from operating activities, in the fourth quarter of 2022, was RMB569.6 million (US$82.6 million), compared to RMB664.0 million in the same period of 2021.

Full Year 2022 Financial Results

NET REVENUES: Net revenues in the full year of 2022 increased by 14.1% to RMB7.07 billion (US$1.02 billion) from RMB6.19 billion in the full year of 2021.

GROSS PROFIT: Gross profit in the full year of 2022 was RMB1.36 billion (US$196.9 million), representing a decrease of 5.5% from RMB1.44 billion in the full year of 2021. Gross margin in the full year of 2022 was 19.2%, compared to 23.2% in the full year of 2021.

ADJUSTED CASH GROSS PROFIT, which excludes depreciation, amortization, and share-based compensation expenses, was RMB2.85 billion (US$412.7 million) in the full year of 2022, compared to RMB2.63 billion in the full year of 2021. Adjusted cash gross margin in the full year of 2022 was 40.3%, compared to 42.6% in the full year of 2021.

OPERATING EXPENSES: Total operating expenses in the full year of 2022 were RMB1.24 billion (US$179.4 million), compared to RMB1.42 billion in the full year of 2021. As a percentage of net revenues, total operating expenses in the full year of 2022 were 17.5%, compared to 22.9% in the full year of 2021.

Sales and marketing expenses in the full year of 2022 were RMB311.9 million (US$45.2 million), compared to RMB255.4 million in the full year of 2021.

Research and development expenses in the full year of 2022 were RMB306.8 million (US$44.5 million), compared to RMB188.5 million in the full year of 2021.

General and administrative expenses in the full year of 2022 were RMB642.9 million (US$93.2 million), compared to RMB842.4 million in the full year of 2021.

ADJUSTED OPERATING EXPENSES, which exclude share-based compensation expenses, compensation for postcombination employment in an acquisition, impairment of loan receivable to potential investee and impairment of long-lived assets, were RMB1.08 billion (US$156.9 million) in the full year of 2022, compared to RMB965.7 million in the full year of 2021. As a percentage of net revenues, adjusted operating expenses in the full year of 2022 were 15.3%, compared to 15.6% in the full year of 2021.

ADJUSTED EBITDA: Adjusted EBITDA in the full year of 2022 was RMB1.87 billion (US$271.5 million), representing an increase of 6.8% from RMB1.75 billion in the full year of 2021. Adjusted EBITDA in the full year of 2022 excluded share-based compensation expenses of RMB118.2 million (US$17.1 million). Adjusted EBITDA margin in the full year of 2022 was 26.5%, compared to 28.3% in the full year of 2021.

NET PROFIT/LOSS ATTRIBUTABLE TO ORDINARYSHAREHOLDERS: Net loss attributable to ordinary shareholders in the full year of 2022 was RMB776.0 million (US$112.5 million), compared to a net profit attributable to ordinary shareholders of RMB500.1 million in the full year of 2021. Net loss attributable to ordinary shareholders in the full year of 2022 included foreign exchange loss of RMB523.2 million (US$75.9 million), compared to a foreign exchange gain of RMB110.0 million in the full year of 2021.

LOSS PER SHARE: Basic and diluted loss per share in the full year of 2022 were both RMB0.87 (US$0.13) which represented the equivalent of both RMB5.22 (US$0.78) per American depositary share (“ADS”). Each ADS represents six Class A ordinary shares. Diluted loss per share is calculated using adjusted net loss attributable to ordinary shareholders divided by the weighted average number of diluted shares outstanding.

Net cash generated from operating activities in the full year of 2022 was RMB2.60 billion (US$377.3 million), compared to RMB1.39 billion in the full year of 2021.

Business Outlook

The Company expects net revenues for the full year of 2023 to be in the range of RMB7,600 million to RMB7,900 million, representing a year-over-year growth of 7.6% to 11.8%, and adjusted EBITDA to be in the range of RMB2,025 million to RMB2,125 million, representing a year-over-year growth of 8.1% to 13.5%.

The forecast reflects the Company’s current and preliminary views on the market and its operational conditions, and is subject to change.

Conference Call

The Company’s management will host an earnings conference call at 9:00 PM U.S. Eastern Time on Tuesday, March 21, 2023, or 9:00 AM Beijing Time on Wednesday, March 22, 2023.

For participants who wish to join the call, please access the link provided below to complete the online registration process and dial in 5 minutes prior to the scheduled call start time.

Event Title:	VNET Fourth Quarter and Full Year 2022 Earnings Conference Call
Registration Link:	https://register.vevent.com/register/BI709e0aa4469e467db06fa0d18082d4bf

Upon registration, each participant will receive a set of dial-in numbers by location, a personal PIN and an email with further detailed instructions, which will be used to join the conference call.

A simultaneous audio webcast and replay of the conference call will be accessible on the Company’s investor relations website at http://ir.vnet.com.

Non-GAAP Disclosure

In evaluating its business, VNET considers and uses the following non-GAAP measures defined as non-GAAP financial measures by the U.S. Securities and Exchange Commission as a supplemental measure to review and assess its operating performance: adjusted cash gross profit, adjusted cash gross margin, adjusted operating expenses, adjusted EBITDA and adjusted EBITDA margin. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with U.S. GAAP. For more information on these non-GAAP financial measures, please see the table captioned "Reconciliations of GAAP and non-GAAP results" set forth at the end of this press release.

The non-GAAP financial measures are provided as additional information to help investors compare business trends among different reporting periods on a consistent basis and to enhance investors' overall understanding of the Company's current financial performance and prospects for the future. These non-GAAP financial measures should be considered in addition to results prepared in accordance with U.S. GAAP, but should not be considered a substitute for, or superior to, U.S. GAAP results. In addition, the Company's calculation of the non-GAAP financial measures may be different from the calculation used by other companies, and therefore comparability may be limited.

Exchange Rate

This announcement contains translations of certain RMB amounts into U.S. dollars (“USD”) at specified rates solely for the convenience of the reader. Unless otherwise stated, all translations from RMB to USD were made at the rate of RMB6.8972 to US$1.00, the noon buying rate in effect on December 30, 2022, 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 FinancialInformation

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 6,500 hosting and related enterprise customers that span numerous industries ranging from internet companies to government entities and blue-chip enterprises to small- to mid-sized enterprises.

Safe Harbor Statement

This announcement contains forward-looking statements. These forward-looking statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “target,” “believes,” “estimates” and similar statements. Among other things, quotations from management in this announcement as well as VNET’s strategic and operational plans contain forward-looking statements. VNET may also make written or oral forward-looking statements in its reports filed with, or furnished to, the U.S. Securities and Exchange Commission, in its annual reports to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about VNET’s beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: VNET’s goals and strategies; VNET’s 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 and in the attachments 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			As of
	December<br> 31, 2021			December<br> 31, 2022
	RMB			RMB			US
	(Audited)			(Unaudited)			(Unaudited)
Assets
Current assets:
Cash and cash equivalents		1,372,481			2,661,321
Restricted cash		327,767			327,673
Accounts and notes receivable,<br> net		1,405,997			1,763,693
Prepaid expenses and other current<br> assets		2,049,911			2,147,500
Amounts due<br> from related parties		167,967			152,089
Total<br> current assets		5,324,123			7,052,276
Non-current assets:
Property and equipment, net		10,092,419			11,964,498
Intangible assets, net		900,335			1,497,131
Land use rights, net		337,235			576,020
Operating lease right-of-use assets,<br> net		2,869,338			3,503,925
Goodwill		1,339,657			1,364,191
Restricted cash		8,225			500
Deferred tax assets, net		168,002			196,098
Long-term investments, net		98,243			242,194
Other non-current<br> assets		1,957,462			551,572
Total<br> non-current assets		17,770,916			19,896,129
Total<br> assets		23,095,039			26,948,405
Liabilities and Shareholders'<br> Equity
Current liabilities:
Accounts and notes payable		493,506			713,628
Accrued expenses and other payables		2,298,089			2,410,479
Advances from customers		1,041,902			1,157,963
Deferred revenue		55,695			95,078
Income taxes payable		43,770			42,017
Amounts due to related parties		8,772			6,928
Current portion of long-term borrowings		384,158			484,020
Current portion of convertible<br> promissory notes		-			537,778
Current portion of finance lease<br> liabilities		244,032			206,260
Current portion of deferred government<br> grant		2,074			3,646
Current portion<br> of operating lease liabilities		607,997			674,288
Total<br> current liabilities		5,179,995			6,332,085
Non-current liabilities:
Long-term borrowings		2,215,015			3,049,856
Convertible promissory notes		4,266,951			5,859,259
Non-current portion of finance<br> lease liabilities		1,119,751			1,047,640
Unrecognized tax benefits		77,573			87,174
Deferred tax liabilities		348,404			682,580
Non-current portion of deferred<br> government grant		2,294			2,673
Non-current<br> portion of operating lease liabilities		2,284,055			2,905,283
Total<br> non-current liabilities		10,314,043			13,634,465
Shareholders' equity
Treasury stock		(349,523	)		(349,523	)		)
Ordinary shares		60			60
Additional paid-in capital		15,198,055			15,239,926
Accumulated other comprehensive<br> (loss) income		(90,443	)		11,022
Statutory reserves		74,462			77,995
Accumulated<br> deficit		(7,590,382	)		(8,369,868	)		)
Total<br> VNET Group, Inc. shareholders’ equity		7,242,229			6,609,612
Noncontrolling interest		358,772			372,243
Total<br> shareholders' equity		7,601,001			6,981,855
Total<br> liabilities and shareholders' equity		23,095,039			26,948,405

All values are in US Dollars.

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											Twelve months ended
	December 31, 2021			September 30, 2022			December 31, 2022					December 31, 2021			December 31, 2022
	RMB			RMB			RMB			US		RMB			RMB			US
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)		(Audited)			(Unaudited)			(Unaudited)
Net revenues		1,745,440			1,814,210			1,880,673					6,189,801			7,065,232
Cost of revenues		(1,365,472	)		(1,497,627	)		(1,552,298	)		)		(4,751,771	)		(5,706,976	)		)
Gross profit		379,968			316,583			328,375					1,438,030			1,358,256
Operating income (expense)
Other operating income		-			5,763			12,965					-			60,013
Sales and marketing		(85,474	)		(80,245	)		(76,363	)		)		(255,400	)		(311,917	)		)
Research and development		(63,037	)		(73,350	)		(84,137	)		)		(188,489	)		(306,842	)		)
General and administrative		(390,935	)		(165,436	)		(156,228	)		)		(842,354	)		(642,945	)		)
(Allowance) reversal for doubtful debt		(1,028	)		3,096			(41,983	)		)		(18,399	)		(35,409	)		)
Impairment of loan receivable to potential investee		9			-			-					(2,807	)		-
Impairment of long-lived assets		(109,267	)		-			-					(109,267	)		-
Total operating expenses		(649,732	)		(310,172	)		(345,746	)		)		(1,416,716	)		(1,237,100	)		)
Operating (loss) profit		(269,764	)		6,411			(17,371	)		)		21,314			121,156
Interest income		8,937			9,455			8,756					31,897			31,574
Interest expense		(75,363	)		(78,733	)		(72,923	)		)		(334,950	)		(273,305	)		)
Impairment of long-term investment		-			-			-					(3,495	)		-
Other income		22,137			2,169			6,872					33,923			17,328
Other expenses		(3,498	)		(3,174	)		(22,380	)		)		(22,700	)		(26,599	)		)
Changes in the fair value of convertible promissory notes		227,843			13,179			(48,510	)		)		829,149			22,626
Foreign exchange gain (loss)		82,444			(317,157	)		89,048					110,036			(523,235	)		)
(Loss) gain before income taxes and (loss) gain from equity method investments		(7,264	)		(367,850	)		(56,508	)		)		665,174			(630,455	)		)
Income tax expenses		(15,549	)		(55,717	)		(101	)		)		(111,407	)		(133,464	)		)
(Loss) gain from equity method investments		(1,729	)		(384	)		(828	)		)		(38,666	)		1,925
Net (loss) profit		(24,542	)		(423,951	)		(57,437	)		)		515,101			(761,994	)		)
Net gain attributable to noncontrolling interest		(2,736	)		(1,260	)		(6,807	)		)		(15,003	)		(13,958	)		)
Net (loss) profit attributable to the Company’s ordinary shareholders		(27,278	)		(425,211	)		(64,244	)		)		500,098			(775,952	)		)
(Loss) profit per share
Basic		(0.03	)		(0.48	)		(0.07	)		)		0.57			(0.87	)		)
Diluted		(0.28	)		(0.48	)		(0.07	)		)		(0.36	)		(0.87	)		)
Shares used in (loss) profit per share computation
Basic*		867,823,835			888,443,329			888,327,554					865,352,554			886,817,620
Diluted*		901,823,836			888,443,329			888,327,554					911,591,433			886,817,620
(Loss) profit per ADS (6 ordinary shares equal to 1 ADS)
Basic		(0.18	)		(2.88	)		(0.42	)		)		3.42			(5.22	)		)
Diluted		(1.68	)		(2.88	)		(0.42	)		)		(2.16	)		(5.22	)		)

All values are in US Dollars.

* Shares used in (loss) profit 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<br> months ended											Twelve<br> months ended
	December<br> 31, 2021			September<br> 30, 2022			December<br> 31, 2022					December<br> 31, 2021			December<br> 31, 2022
	RMB			RMB			RMB			US		RMB			RMB			US
Gross profit		379,968			316,583			328,375					1,438,030			1,358,256
Plus: depreciation and amortization		329,929			388,217			409,825					1,182,114			1,487,438
Plus: share-based compensation expenses		3,932			2,876			1,893					13,713			563
Adjusted cash<br> gross profit		713,829			707,676			740,093					2,633,857			2,846,257
Adjusted cash gross<br> margin		40.9	%		39.0	%		39.4	%		%		42.6	%		40.3	%		%
Operating expenses		(649,732	)		(310,172	)		(345,746	)		)		(1,416,716	)		(1,237,100	)		)
Plus: share-based compensation expenses		249,108			32,355			(9,684	)		)		306,297			117,607
Plus: compensation for postcombination employment in an<br> acquisition		17,644			2,685			-					32,603			37,398
Plus: impairment of loan receivable to potential investee		(9	)		-			-					2,807			-
Plus: impairment of long-lived assets		109,267			-			-					109,267			-
Adjusted operating<br> expenses		(273,722	)		(275,132	)		(355,430	)		)		(965,742	)		(1,082,095	)		)
Operating (loss) profit		(269,764	)		6,411			(17,371	)		)		21,314			121,156
Plus: depreciation and amortization		352,784			410,988			449,469					1,267,578			1,595,942
Plus: share-based compensation expenses		253,040			35,231			(7,791	)		)		320,010			118,170
Plus: compensation for postcombination employment in an<br> acquisition		17,644			2,685			-					32,603			37,398
Plus: impairment of loan receivable to potential investee		(9	)		-			-					2,807			-
Plus: impairment of long-lived assets		109,267			-			-					109,267			-
Adjusted EBITDA		462,962			455,315			424,307					1,753,579			1,872,666
Adjusted EBITDA<br> margin		26.5	%		25.1	%		22.6	%		%		28.3	%		26.5	%		%

All values are in US Dollars.

VNET GROUP, INC.

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

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

	Three months ended
	December 31, 2021			September 30, 2022			December 31, 2022
	RMB			RMB			RMB			US
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss		(24,542	)		(423,951	)		(57,437	)		)
Adjustments to reconcile net loss to net cash generated from operating activities:
Depreciation and amortization		352,784			410,988			449,469
Share-based compensation expenses		253,040			35,231			(7,791	)		)
Others		(8,128	)		436,876			131,774
Changes in operating assets and liabilities
Accounts and notes receivable		113,974			64,291			(109,803	)		)
Prepaid expenses and other current assets		93,473			84,574			175,880
Accounts and notes payable		1,399			(47,279	)		65,879
Accrued expenses and other payables		70,162			158,009			108,598
Deferred revenue		(12,799	)		20,086			(774	)		)
Advances from customers		53,499			(33,711	)		(46,355	)		)
Others		(228,871	)		(97,697	)		(139,873	)		)
Net cash generated from operating activities		663,991			607,417			569,567
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment		(935,772	)		(563,546	)		(898,459	)		)
Purchases of intangible assets		(8,625	)		(16,976	)		(17,132	)		)
Payments for investments		(566,460	)		(36,631	)		(209,998	)		)
Proceeds from (payments for) other investing activities		374,013			2,670			(207,794	)		)
Net cash used in investing activities		(1,136,844	)		(614,482	)		(1,333,383	)		)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from bank borrowings		490,815			273,169			156,912
Repayment of bank borrowings		(141,686	)		(73,070	)		(56,390	)		)
Payments for finance lease		(97,772	)		(116,896	)		(65,886	)		)
Repayment of 2021 Notes		(1,945,620	)		-			-
Payments for other financing activities		(48,644	)		(10,438	)		(23,625	)		)
Net cash (used in) generated from financing activities		(1,742,907	)		72,765			11,011
Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash		(7,255	)		74,119			(13,774	)		)
Net (decrease) increase in cash, cash equivalents and restricted cash		(2,223,015	)		139,818			(766,579	)		)
Cash, cash equivalents and restricted cash at beginning of period		3,931,488			3,616,255			3,756,073
Cash, cash equivalents and restricted cash at end of period		1,708,473			3,756,073			2,989,494

All values are in US Dollars.