VNET Group’s wholesale data center business continued to grow as a larger driver of the company in Q2 2026, with wholesale revenue up 29.3% year over year to RMB1.10 billion, or approximately $162.8 million, as wholesale capacity in service expanded 49.4% to 1,007MW from 674MW.
The expansion pushed wholesale revenue above retail revenue during the quarter. Retail IDC revenue increased 9.1% to RMB1.05 billion, while wholesale represented 39.8% of VNET’s total net revenue, reinforcing the segment as the company’s primary growth engine. Total company revenue increased 14.2% to RMB2.78 billion, or approximately $409.5 million.
The physical expansion is being accompanied by increasing customer utilization. Wholesale capacity utilized by customers reached 744MW, compared with 687MW at the end of Q1 and 511MW a year earlier. VNET attributed the 57MW sequential increase primarily to its N-HB Campus 03 and N-OR Campus 01 data centers.
VNET had 970MW of total wholesale capacity committed at June 30, up from 869MW at the end of March and 674MW a year earlier. That represented a 96.3% commitment rate on capacity in service, indicating that most of the company’s available wholesale capacity has already been committed under effective customer agreements even though actual utilization stood at 73.9%. Another 585MW was under construction at quarter-end.
The company’s forward pipeline expanded sharply during the quarter. VNET secured a 345MW wholesale order from a leading cloud provider, bringing wholesale order wins for the first half to 862MW. It also secured approximately 1.4GW of additional land-bank capacity, including 908MW in mainland China and 478MW internationally, lifting total available capacity to more than 4GW.
Rapid capacity expansion is creating some near-term accounting pressure. Gross profit declined 7.8% to RMB505.2 million and gross margin fell to 18.2% from 22.5%, primarily because of higher depreciation associated with new capacity. However, adjusted EBITDA increased 25.4% to RMB918.3 million, while adjusted EBITDA margin expanded to 33% from 30.1%.
VNET ended June with RMB7.21 billion, or approximately $1.06 billion, of cash, restricted cash and short-term investments. The company also carried RMB4.18 billion of short-term debt and RMB19.24 billion of long-term debt. Q2 operating cash flow was RMB218.1 million, while VNET raised approximately RMB3.77 billion through new debt, refinancing, equity and other financing arrangements during the quarter.
For 2026, VNET continues to expect revenue of RMB11.5 billion to RMB11.8 billion and adjusted EBITDA of RMB3.55 billion to RMB3.75 billion. The company also expects RMB10 billion to RMB12 billion of capital expenditures as it develops the capacity required to support its expanding wholesale order pipeline.
KEY QUOTES:
“We achieved robust growth across our key financial and operational metrics in the second quarter of 2026, as our execution capabilities and high-quality deliveries continued to attract new orders. We secured a 345MW wholesale order from a leading cloud service provider in the second quarter, bringing our total wholesale order wins to 862MW year-to-date. Meanwhile, we continued to expand our strategic resource reserves, securing approximately 1.4GW of land bank capacity during the second quarter, including 908MW in the Chinese mainland and 478MW overseas. This increased our total capacity to over 4GW, providing a clear, multi-year growth runway across both domestic and international markets.”
Josh Sheng Chen, Founder and Executive Chairperson of VNET
