21Vianet Group (VNET) Misses Q1 Views

21Vianet Group (NASDAQ: VNET) reported Q1 EPS of RMB0.12 (US$0.02) per ADS, which may note compare to the analyst estimate of RMB0.21. Revenue for the quarter came rose 46.8% to RMB860.1 million (US$138.7 million) versus the consensus estimate of RMB899.44 million.

Financial Outlook

For the second quarter of 2015, the Company expects net revenues to be in the range of RMB886 million to RMB922 million, representing approximately 37% growth year-over-year at the mid-point. Adjusted EBITDA is expected to be in the range of RMB152 million to RMB172 million, representing approximately 23% growth year-over-year at the mid-point. For the full year 2015, the Company now expects net revenues to be in the range of RMB3.91 billion to RMB4.11 billion, representing approximately 39% growth over 2014 at the mid-point. Adjusted EBITDA for the full year 2015 is expected to be in the range of RMB760 million to RMB860 million, representing approximately 45% growth over 2014 at the mid-point. These forecasts reflect the Company's current and preliminary view, which may be subject to change.

Mr. Josh Chen, Founder, Chairman and Chief Executive Officer of the Company, stated, "Our year is off to a solid start with demand for our internet data center ("IDC") and cloud businesses driving top-line revenue growth and EBITDA expansion. For our IDC business, we had a strong quarter of cabinet sales and a robust pipeline. We further expanded our data center portfolio to a total of 22,024 cabinets at the end of the first quarter, representing a growth of 46.1% year-over-year. In the first quarter, we also extended the commercial operator agreement for public cloud services with Microsoft for four additional years. The extension further strengthens our leadership position in China's cloud computing services market and speaks to our unique competitive advantage in the market. However, we also experienced some softness in our MNS and CDN businesses this quarter, due to stronger than expected seasonality and the continued industry-wide decline in bandwidth prices. We are actively working with our customers and suppliers to further optimize our cost structure and address these challenges. As we enter seasonally strong second half of 2015, we are confident in our ability to re-accelerate our growth and continue executing on our strategies to capture a greater share of the growing data center and cloud services markets."

Mr. Shang-Wen Hsiao, Chief Financial Officer of the Company, commented, "We began the year with another quarter of solid growth, with total revenues growing by 46.8% year-over-year and adjusted EBITDA growing by 47.8% year-over-year. Our adjusted operating expenses as a percentage of revenues decreased from the fourth quarter of 2014. In addition, we continue to effectively manage our working capital, as days-sales-outstanding ("DSO") remained stable at 78 days in the first quarter of 2015. Furthermore, we completed the equity investments from Kingsoft, Xiaomi, and Temasek. These transactions not only provide us with capital that further strengthens our financial position, but also afford us additional opportunities in our IDC business and related services. Recognizing the ongoing expansion of internet usage, mobile traffic, and cloud services demand in China, we believe we are well-equipped to address the growing data needs of our customers and further improve our top line growth and profitability."

For earnings history and earnings-related data on 21Vianet Group (VNET) click here.

You May Also Be Interested In

• Tesla touts acceleration of new models, but Q1 results fall short of estimates
• Stride Inc. (LRN) Tops Q3 EPS by 17c, provides guidance
• Steel Dynamics (STLD) Tops Q1 EPS by 16c