VNET Group Reports Strong Q1 2026 Growth as Wholesale Data Center Demand Accelerates
VNET Group Reports Strong Q1 2026 Growth as Wholesale Data Center Demand Accelerates
VNET Group, Inc. reported a strong first quarter of 2026, supported by rapid growth in its wholesale internet data center business and rising demand from artificial intelligence, cloud computing, and enterprise digital infrastructure customers.
The company posted total net revenues of RMB2.69 billion, or about US$390.1 million, representing a 19.8% year-over-year increase. The main growth driver was VNET’s IDC business, especially wholesale data center services, which continued to expand at a much faster pace than the company’s retail and non-IDC segments.
Wholesale IDC Business Becomes the Main Growth Engine
VNET’s IDC revenue rose 27.0% year over year to RMB2.08 billion. Within that figure, wholesale IDC revenue surged 58.1% to RMB1.06 billion, showing that large-scale customers are becoming increasingly important to the company’s business model. Retail IDC revenue grew more moderately, rising 5.4% to RMB1.02 billion.
This performance highlights a clear shift in VNET’s strategy. Instead of relying mainly on smaller retail colocation customers, the company is increasingly focused on large wholesale clients that require high-capacity data center space, stable power supply, and scalable infrastructure. This trend is closely linked to growing demand from AI workloads, cloud platforms, and digital service providers.
Profitability Improves as Revenue Expands
VNET also reported stronger operating efficiency. Adjusted cash gross profit increased 25.1% year over year to RMB1.21 billion, while adjusted cash gross margin improved to 45.0%, compared with 43.1% in the same period last year. Adjusted EBITDA rose 30.6% to RMB891.5 million, and adjusted EBITDA margin expanded to 33.1%.
These results suggest that VNET is not only growing revenue but also improving the quality of its earnings. Higher utilization, better capacity planning, and stronger wholesale demand appear to be helping the company generate more profit from its existing and newly delivered data center assets.
AI Demand Supports Long-Term Data Center Expansion
During the earnings call, management emphasized that demand from artificial intelligence and cloud-related customers remains a major opportunity. According to market summaries of the call, VNET’s capacity in service reached 907 MW, utilization increased to 75.7%, and the company had secured 517 MW of wholesale orders year-to-date.
This is important because AI applications require large amounts of computing power, stable electricity, strong cooling systems, and reliable network connections. Data center companies such as VNET are positioned to benefit when technology firms expand their computing infrastructure.
Full-Year 2026 Outlook Remains Positive
VNET maintained a positive outlook for 2026. The company expects full-year net revenues between RMB11.5 billion and RMB11.8 billion, representing estimated growth of 15.6% to 18.6%. Adjusted EBITDA is expected to reach between RMB3.55 billion and RMB3.75 billion, implying growth of 19.2% to 25.9%.
The guidance shows that management expects the strong momentum seen in the first quarter to continue through the rest of the year. However, investors will likely watch whether VNET can keep utilization high, manage capital spending carefully, and convert large wholesale orders into steady revenue.
Strategic Investors and ESG Progress Add to the Story
Beyond financial growth, VNET has also been working to strengthen its strategic position. The company recently announced new strategic investors, while its ESG progress has also attracted attention. Reports noted that VNET improved its power usage efficiency to 1.24 in 2025 and increased renewable energy usage to 36%.
For data center operators, energy efficiency is a key issue because large facilities consume significant electricity. Improvements in power usage efficiency and renewable energy adoption may help VNET reduce environmental pressure while meeting the expectations of enterprise customers and investors.
Conclusion
VNET Group’s first-quarter 2026 results show a company benefiting from powerful demand trends in China’s digital infrastructure market. Revenue growth, stronger margins, expanding wholesale orders, and positive full-year guidance all point to solid business momentum.
Still, the company operates in a capital-intensive sector. Future performance will depend on execution, financing discipline, customer demand, and the broader growth of AI and cloud computing. For now, VNET’s Q1 2026 report presents a clear message: wholesale data center demand is becoming the company’s strongest growth driver.
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