21Vianet jumps 7.2% in 2Q2019 as company now expects FY revenues of NEARLY $550m
Company’s highlights for the quarter include the signing of a MoU with a “major public cloud provider” which will deliver cabinets in China by April 2020.
Chinese cloud and data centre provider 21Vianet Group (NASDAQ: VNET) has posted revenues of $129.4m for the second quarter of 2019, a 7.2% increase over the same period a year ago.
The jump in revenues comes as the local market continues to expand and both consumers and enterprises adopt cloud services at a faster rate then ever before.
For 21Vianet, this has translated into a gross profit of $32.33m. However, gross profit remained flat year over year. Gross margin was 25.7%, compared to 27.7% in the second quarter of 2018. Adjusted cash gross profit (non-GAAP) increased by 10.9% year over year to $58.8m from $51.57m. Adjusted cash gross margin expanded to 45.5% from 43.9% in the same period of 2018.
Adjusted EBITDA (non-GAAP) increased by 17.9% year over year to $38m. Adjusted EBITDA margin expanded to 29.4% from 26.7% in the same period of 2018. Net cash generated from operating activities was $18.5m compared to $15.78m in the same period of 2018.
Alvin Wang, CEO and President at 21Vianet, said: “During the second quarter, we capitalised on the growing demand for flexible IDC solutions, bolstered our resource planning initiatives, and expanded our cabinet capacity. Through constant client communication and market analysis, we upsold additional cabinet capacity and value-added services to our existing client base.
“Additionally, we signed a number of sizable, long-term contracts with prominent clients in the internet and finance industry, demonstrating the effectiveness of our value proposition and enduring market leadership in such high-growth industries.”
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He continue to explain that on the wholesale side, the company has closed a MoU with “a major public cloud provider”. The deal will see the “major provider” enter the Chinese market with a number of cabinets, expected to be delivered by April 2020.
Wang added: “This project is an important milestone and testament to our ability to win wholesale customers. We are optimistic that more customers will recognize our strength and expertise in future quarters.
“Finally, the adjustment to our partnership with Warburg Pincus is making good progress. Both parties are pleased with the adjustment and believe it gives each other greater flexibility to seize market opportunities.”
As of June 30, 2019, the company’s cash and cash equivalents, restricted cash, and short-term investments were $473.1 million.
Looking ahead, for the third quarter of 2019, 21Vianet expects net revenues to be in the range of $134.59m to $138.84m. Adjusted EBITDA is expected to be in the range of $35.42m to $38.25m.
For the full year of 2019, the company expects net revenues to be in the range of $532.68m to $546.84m. Adjusted EBITDA is expected to be in the range of $141.67m to $155.84m. The midpoints of the Company’s updated estimates imply an increase of 12% year over year in total revenues and an increase of 14% year over year in adjusted EBITDA.
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