Ticker: VNET

Quarter: Q3 2025

Date: 2025-11-20 07:00:00

Operator: Hello, ladies and gentlemen. Thank you for standing by for the Third Quarter 2025 Earnings Conference Call for VNET Group, Inc. After the management's prepared remarks, there will be a question and answer session. Please note the Chinese line is in listen-only mode. If you wish to ask questions, please dial in through the English line. Participants from our management include Mr. Ju Ma, Rotating President, Mr. Qiyu Wang, Chief Financial Officer, and Ms. Xinyuan Liu, Head of Investor Relations of the company. Please note that today's conference call is being recorded. I will now turn the call over to the first speaker today, Ms. Xinyuan Liu. Please go ahead.

Xinyuan Liu: Thank you, Operator. Hello, everyone, and welcome to the Third Quarter 2025 Earnings Conference Call. Our earnings release was distributed earlier today, and you can find a copy on our website as well as on newswire services. Please note that today's call will contain forward-looking statements made under the safe harbor provisions of The US Private Securities Litigation Reform Act of 1995. Forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from our current expectations. For detailed discussions of these risks and uncertainties, please refer to our latest annual report and other documents filed with the SEC. VNET does not undertake any obligations to update any forward-looking statements except as required under applicable laws. Please also note that VNET earnings press release and this conference call include the disclosure of unaudited GAAP and non-GAAP financial matters. VNET earnings press release contains a reconciliation of the unaudited non-GAAP matters to the unaudited GAAP measures. A summary presentation, which we will refer to during this conference call, can be viewed and downloaded from our IR website at ir.vnet.com. Next, I'd like to alert you that we will be utilizing text-to-speech technology powered by neulink.ai, to deliver this quarter's prepared remarks by Mr. Ju Ma, our Rotating President, and Mr. Qiyu Wang, our CFO. The management team will join the Q&A session in person. Additionally, this conference is being recorded. A webcast of this conference call will also be available on our IR site at ir.vnet.com. Now let's get started with today's presentation. Mr. Ma, please go ahead.

Ju Ma: Good morning, and good evening, everyone. Thank you for joining our call today. I'll start with an overview of our major accomplishments during 2025. Let's turn to slide four. We delivered another strong quarter demonstrating our strategy's effectiveness in capturing opportunities. On the operational side, our wholesale IDC business sustained its robust growth trajectory driven by our rapid delivery capabilities and customers' fast-moving pace. As of 09/30/2025, our wholesale capacity in service grew by 16.1% quarter over quarter to 783 megawatts, an increase of around 109 megawatts. Wholesale capacity utilized by customers rose by 13.8% quarter over quarter to 582 megawatts, an increase of around 70 megawatts while the utilization rate was 74.3% reflecting customers' continuous demand for our high-quality high-performance AIDC services. Our retail IDC business continued to progress smoothly, benefiting from growing AI-driven demand. This quarter, our retail MRR per cabinet increased for six consecutive quarters, reaching RMB 8,948. On the financial side, our total net revenues increased by 21.7% year over year to RMB 2.58 billion for the third quarter. Wholesale revenues remained our key growth driver reaching RMB 956 million, a significant year-over-year increase of 82.7%, fueled by the rapid growth of our wholesale IDC business. Our adjusted EBITDA for the third quarter also increased by 27.5% year over year to RMB 758 million. In addition, building on the increase we announced to our full-year guidance before Q2 earnings this year, we are further increasing our full-year revenue and adjusted EBITDA guidance this quarter. Thanks to faster than anticipated move-ins among wholesale IDC customers and ongoing operational efficiency gains. Supported by our premium wholesale and retail IDC services, we continue to capitalize on strong customer momentum and secure new orders in the third quarter. I'll share more on the next slide. Moving on to our new order wins on Slide five. In the third quarter, we secured three wholesale orders totaling 63 megawatts. Specifically, in addition to the 20-megawatt order from our JV project we mentioned on our last call, we won a 40-megawatt order from an Internet company as announced in September and a three-megawatt order from an intelligent driving company. All four data centers in the Greater Beijing area. Entering the fourth quarter, we are seeing continued order momentum, including a 32-megawatt wholesale order we just secured from an Internet company for a data center in the Yangtze River Delta. Furthermore, driven by growing demand from customers for intelligent deployment, we secured a combined capacity of approximately two megawatts in new retail orders across multiple retail data centers from customers in the cloud services, local services, and financial services sectors. During the quarter, rapid AI development and a broader adoption of AI applications continued to fuel growth in China's IDC industry. We saw sustained momentum in AI-related investments, especially from hyperscalers that are executing strong CapEx expansion plans. This has further accelerated demand for high-performance data centers driven by AI training and inference needs. AI has become the core growth driver of the IDC industry, propelling the industry's business model evolution from project-based resource delivery to platform-based services that provide integrated AIDC solutions. Meanwhile, customer demand and critical resources such as power are increasingly concentrated among leading IDC players. As an industry pioneer in AIDC development, we are leveraging our acute insights, strong resources, and premium reliable services to seize these structural growth opportunities by quickly meeting customers' needs. Now let's delve into our business updates, starting with our wholesale business on slide seven. Our wholesale business maintained strong growth momentum, with capacity in service increasing by around 109 megawatts quarter over quarter to 783 MW, and utilization rate remaining stable at 74.3%, mainly attributable to our delivery capacities at our NOR Campus 02 and NHB Campus 01a and faster than expected move-ins at our NOR Campus 01. Our mature capacity utilization rate also reached 94.7%, a relatively high level. We have a clear growth path for our wholesale data center capacity. Let's move on to Slide eight. As of the end of the third quarter, our total wholesale resource capacity was around 1.8 gigawatts. Specifically, our capacity under construction was around 306 megawatts. Capacity held for short-term future development was around 414 megawatts, and the capacity held for long-term future development was around 291 megawatts. These secured resources represent a significant advantage in light of the IDC industry's limited effective supply and are in line with our optimistic view of AI-driven demand's long-term growth potential. Moving to our retail IDC business on Slide nine. Our retail business continued to progress smoothly in the third quarter. Retail capacity in service was 52,288 cabinets with the utilization rate increasing slightly to 64.8% as of September. As I just mentioned, our retail MRR per cabinet has increased for six consecutive quarters, reaching RMB 8,948. Turning to our delivery plan on slide 10. With our strong and efficient delivery capabilities, we successfully delivered a total of around 109 megawatts in 2025, bringing our total deliveries around 297 megawatts as of September. We currently have seven data centers under construction, with six in the Greater Beijing area and one in the Yangtze River Delta. We plan to deliver around 306 megawatts of capacity over the next twelve months, or around 132 megawatts during 2025 and 2026, and around 174 megawatts during 2026. This delivery plan reflects our view as of September, but we may update these estimates as we gain greater visibility over the next couple of quarters. In conclusion, our strong third-quarter results showcase our ability to identify opportunities and our readiness to seamlessly meet evolving market demand. Our visionary hyperscale 2.0 framework has positioned us to lead under the new global AI-driven paradigm, supported by advantages across high-density deployment, delivery speed and quality, and cutting-edge sustainable technology. As AI-related demand grows, we will continue to advance our effective dual-core strategy and hyperscale 2.0 framework, seizing opportunities to further unleash our growth potential in the AI era. Now I will turn the call over to our CFO, Qiyu Wang, for further discussion of our operating and financial performance. Thank you, everyone. Good morning and good evening, everyone.

Qiyu Wang: Before we start the detailed discussion of our third-quarter performance, please note that unless otherwise stated, all the financials we present today are for 2025 and are in renminbi terms. Furthermore, unless otherwise specified, all the growth rates I am reviewing are on a year-over-year basis. Let's turn to slide 12. In the third quarter, we continued to pursue high-quality business. Our total net revenues increased by 21.7% to RMB 2.58 billion, mainly driven by the rapid growth of our wholesale business. Our adjusted cash gross profit rose by 22.1% to RMB 1.05 billion, while our adjusted EBITDA also grew year over year by 27.5% to RMB 758.3 million. Let's look more closely at our top line. As you can see on slide 13, in the third quarter, wholesale revenues, our key revenue growth driver, increased significantly by 82.7% to RMB 955.5 million, and the rapid growth was mainly attributable to the NOR Campus 01. Retail revenues increased by 2.4% to RMB 999.1 million. Our non-IDC business revenues increased by 0.8% to RMB 627.1 million. During the third quarter, we maintained solid margins thanks to our continuous efforts to enhance overall efficiency. As shown on slide 14, our adjusted cash gross margins improved to 40.7% from 40.6% in the same period last year. Our adjusted EBITDA margin rose to 29.4% compared with 28% in the same period last year. Moving on to liquidity on slide 15. We maintain robust and healthy liquidity bolstered by a net operating cash inflow of RMB 809.8 million during the third quarter, bringing our net operating cash flow for the first nine months of the year to RMB 1.37 billion. Our cash position remains solid, with total cash and cash equivalents, restricted cash, and short-term investments reaching RMB 5.33 billion as of 09/30/2025. Next, let's take a look at our debt structure on slide 16. We maintained our prudent approach to debt management. As of 09/30/2025, our net debt to the trailing twelve months adjusted EBITDA ratio was 5.5 and total debt to the trailing twelve months adjusted EBITDA ratio was 6.7, both remaining at healthy levels. Our trailing twelve months adjusted EBITDA to interest coverage ratio was 6.5. We prioritize long-term debt maturity planning in our debt and strategic management to ensure the security of debt repayment. Currently, the company's short and medium-term debt maturing in 2025 to 2027 comprises 41.4% of our total debt. Turning now to CapEx spending. As you can see on slide 17, for the first nine months, our CapEx was RMB 6.24 billion, with the majority allocated to the expansion of our wholesale IDC business. We still expect our CapEx for the full year 2025 to be in the range of RMB 10 billion and RMB 12 billion. The increase is mainly to support our planned delivery of 400 to 450 megawatts in 2025. Now moving to our full-year guidance for 2025 on slide 18. As we expect faster than anticipated move-ins among wholesale IDC customers and ongoing operational efficiency gains through the end of the year, we have further increased our full-year revenue and adjusted EBITDA guidance. We now expect total net revenues to be in the range of RMB 9.55 billion to RMB 9.867 billion, a year-over-year increase of 16% to 19%, and adjusted EBITDA to be in the range of RMB 2.91 billion to RMB 2.945 billion, representing a year-over-year increase of 20% to 21%. If the RMB 87.7 million of disposal gains on the EJS 02 data center were excluded from the adjusted EBITDA calculation for 2024, the year-over-year growth rate would be 24% to 26%. Please note our updated guidance factors in the impact of the private REIT transactions we issued early this November and excludes the target IDC project's financials from our consolidated financial statements. Before I conclude, I'd like to briefly update you on our ESG efforts. Our outstanding sustainability performance has once again earned recognition from a leading global rating institution. In 2025, our ESG score improved to 73 from 70 last year, ranking among the top 8% of the IT service industry globally. We stand out in areas including risk management, information security, environmental management, and customer relations, underscoring our comprehensive capabilities in sustainability development. This quarter's strong growth and enhanced profitability are yet another testament to our high-quality growth strategy. Looking ahead, we will continue to consolidate our core strengths and capture growth opportunities, delivering sustainable long-term value for all stakeholders. This concludes our prepared remarks for today. We are now ready to take questions.

Xinyi Wang: Thank you. We will now begin the question and answer session. If you wish to ask a question, please press 1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press 2. If you're on a speakerphone, please pick up the handset to ask your question. For the benefit of all participants on today's call, please ask your question to management in English and then repeat in Chinese. Your first question comes from Tom Tang from Morgan Stanley. Please go ahead.

Tom Tang: Thanks, management, for this opportunity to ask questions, and congrats again on a very strong quarterly result. I have two questions. So first question is more on the 2026 outlook. So we're hearing that there has been some expansion in the domestic chips and capacities. Just wondering what is our current outlook for the overall auto tendering in 2026. Second question is about private REITs. So we noticed that we have filed another private REITs with a size of almost RMB 10 billion. So just wondering what will be the timeline of this private REITs execution, how much cash flow is going to recycle, and what will be your impact on the financial statements.

Ju Ma: Thank you very much. You know, as we are approaching the end of the year, we are engaging our customers and trying to learn about their development path. This would put us in a well-positioned to plan our resources accordingly. So according to our communications with the clients and also the current status quo of the pipeline, we believe that the market will be fairly stable with a moderate increase for the year 2023. According to our conversations with our clients, we feel that they are having very detailed expansion plans or growth nationwide. Therefore, we have to plan carefully in order to accommodate the user's needs. Because they are requiring us to deliver the capacities at a faster pace with a higher requirement. So that's why we are planning accordingly as well. And so the overall rating for the next year is that the market is going to be stable with a moderate increase. And with regard to your second question on the domestic chip, so we, VNET, are tracking and monitoring the development of the domestic chips very closely. We know that the sector is evolving very quickly, with a lot more options available. And we believe that in 2026, you know, we're going to see intensive competition among domestic chip players other than the two to three major players, there are more upcoming players coming into the market. So we're going to see significant growth and development in this sector. So that will give us give the customers a lot more choices with more certainty again, that would push the development or, in return, drive the development of our business.

Qiyu Wang: Thank you. I will take your second question with regard to the REITs projects. So these two REITs projects followed on the heel of our first private REITs projects. So the underlying project for our first REITs project was retail IDC, whereas the underlying project underlying assets for these two REITs projects are wholesale IDCs. So this would be the first time that we have scaled private REITs issuance with the underlying assets of wholesale. So if these issues were too successful, this would officially mark so that we have completed the full closed-loop financial capital cycle of development holding, partial exit, as well as the long-term operation. These two REITs projects are currently being reviewed by the exchanges. And the expected valuation multiples would be better than the first REITs project. Once the two REITs projects were successfully issued, we will, unlike the first REITs project, we will consolidate the financial statements of these two projects into the group level financial statements. So therefore, it wouldn't impact the group level financial statements, specifically the revenue or EBITDA data. We are planning to adopt a similar approach with future private REITs projects with underlying assets of wholesale IDCs. And our goal is to complete the issuance by Q1 next year.

Xinyi Wang: Next question, please. Thank you. Your next question comes from Timothy Zhao from Goldman Sachs. Please go ahead.

Timothy Zhao: Great. Thank you, Madam, for taking my question. And congrats on the very solid results. Two questions here. One regarding I think this earlier mentioned that ran I think so receive more orders for hello?

Xinyi Wang: Yeah. We can hear you now.

Timothy Zhao: Okay. Yeah. So I was in the appears to be we need more orders in your wholesale campuses in Hebei and Jiangsu. From the geographical location perspective, how do you think about the customer preferences, and what kind of does each campus serve differently? That's my first question. My second question is regarding the pricing. It's just for the wholesale business. I noticed that for this quarter, there is some fluctuation in the wholesale and MRR. Just wondering how do you think about the pricing trend into the fourth quarter and next year?

Ju Ma: I'll take your first question. Actually, the client takes specific considerations with regard to their orders for their business across different regions, they do not have very particular preferences. I think the major considerations on their end are first, the type of business and product offerings. Second, the distance or proximity to their headquarters. And the third is how convenient it is to scale up the existing capacity that they have with us. And take VNET Us For Example. So We Have Observed That The Client Have Different Types Pays With Regard To Their Requests Across Different Regions. And It Would Vary Quarter By Quarter. We Have A Lot Of The Demand Coming From The Greater Beijing area as well as the Yangtze Delta area. However, we do have upcoming new demand from customers for campuses in Hebei province as well as the Wuhan Chapel campus. Like I said, the major considerations on the client side are their type of current product offerings and the proximity to their headquarters as well as how convenient it is to scale their existing capacity with us. So that's the major considerations on their end. And based on that, they are varying their requests quarter by quarter. And with regard to the pricing of our wholesale IDCs, according to what we have observed, the pricing for Q3 was fairly stable.

Qiyu Wang: I would like to elaborate on that. First, customers are moving in faster than we expected. Therefore, the IRR of these projects is better than we expected. And number two, frankly speaking, in areas where the dynamics of the supply and demand is in tight balance, VNET does not engage in the beatings with the low prices. Therefore, we are able to secure fairly stable order or contract price. Thank you. Next question.

Xinyi Wang: Thank you. Your next question comes from Daley Li from Bank of America. Please go ahead.

Daley Li: Hi. Management. Thanks for taking my question. Congrats on the strong results. I have two questions here. First one is, in our last earnings call, we mentioned we have a few projects, and we are participating in the tendering. And, could you update us on the progress and, how we complete, you know, all the, projects ongoing, or are we how many projects we are dealing with our clients? And in future, how do you see the, seasonality of mold tendering in future? My second question is about the new land and the power resources. You need to call with the our total resources on hand. Is likely stable. And, in future, where would we to which area will be our focus to, find more resources? Land, and power?

Ju Ma: Thank you for your questions. You know, as we have observed for the first three quarters, that different customers are coming up with different requests at different paces. And for us, we follow their paces closely. And I have done a very brief summary of what we have achieved, in terms of the new orders that we have secured for the past twelve months, that was 331 megawatts. Looking ahead to 2026, based on the services we are offering to our client as well as the understanding of our clients, we are confident that we are able to sustain this growth momentum. And so with regard to the wholesale ID we have been, you know, following closely, the client AI development trend. We have noticed that customers are actually balancing their inferencing and training demand. And we have captured that change the customers are pivoting more towards the inferencing, and we are deploying resources accordingly to meet that customer's needs. So therefore, we are repurposing some of our cabinets and acquiring GPUs in advance. So this would put us in a good position to accommodate our users' needs. And you know, particularly with these orders from the key clients, we are confident in that with the efforts on our end, are able to accommodate users' needs as the AI growth momentum continues to unleash. And with regard to your second question on resources that we're planning to acquire in the future, that's something that the company values a lot and put a lot of thoughts in. Based on the service that we offer to our clients as well as the understanding that we have, on them, we are planning our resources for the next year. On top of that, we have extended our planning over to a five-year horizon rather than on a yearly basis. So this would allow us to plan more strategically to accommodate users' needs. And to break it down, we carefully weigh three factors. One is the split the demand split between generic computing power versus the smart computing power, and the second is the geolocations and the third is the AI-related chips development. And more specifically, with regard to next year, we are going to focus number one, the Greater Beijing area, particularly Wulan Chabu, Hebei, and Beijing surrounding areas. Second, number two, the Yangtze River Delta areas. We are starting to acquire resources for the next five years. To accommodate our users' demand. And, additionally, we are exploring the resources outside of these two major areas that I've mentioned. Thank you.

Xinyi Wang: Thank you. Your next question comes from Sara Wang from UBS. Please go ahead.

Sara Wang: Thank you for the opportunity to ask a question. I actually only have one question. So I recall earlier this year, management had shared that one of the top priorities from Habitco customer is the time to market. So has that changed? And, also, as interest demand is going to be the growth driver into next year, is there any change in the like, customer's consideration in terms of new order release? And if we talk about more workloads by inference, that that mean maybe user latency will be a relatively more important configuration factor going forward.

Ju Ma: I would take I'll answer the second half of your question. Yes. We have observed that inferencing will become a major growth driver for next year. So that means that the customers have higher requirements in terms of latency. So the lower latency the better. Therefore, we are in a very good position to meet customers' needs with our campuses in the Greater Beijing area, particularly Hebei province as well as the Wuhan Jiangbo campus. And with regard to the first half of your question, yes, it is quite a trade-off that we have to face. So we are facing significant challenges in terms of how fast the customer wants to move in with the capacity that they have secured with us. And there are three approaches that we are taking to meet customers' demand. Number one, we are planning early in terms of civil engineering and external power supply. Number two, we are consolidating our capacity in terms of supply chain management. Number three, we are adopting electromechanical modularization as well as other standardized construction solutions to meet customers' needs. As you know, the general timeline that the customer expects is t plus six, which means they want to move in within six months after signing the contract. Yes, we are able to accommodate user needs in terms of the horizon. In one particular case, we're even able to accommodate or deliver within three months after signing the contract. Just so you know.

Xinyi Wang: Thank you. Next question, please.

Shuyun Che: Thank you. Your next question comes from Shuyun Che from CICC. Please go ahead.

Shuyun Che: Hi. My name is management. Congratulations on the company's strong earnings, and thank you for taking my question. My first question is about the wholesale IDC and the delivery piece for the IDC business is very fast and has the company set the utilization rate target for the next two years? My second question is about the retail IDC business. We have seen the retail business IDC business, MRR has been grossing for several quarters. And what are the main drivers behind this trend, and how to view this sustainability in the future.

Ju Ma: With regard to the utilization rate, of course, the customers are demanding to move in at a faster pace. For our mature IDCs, the utilization rate is inching closer to 95%. And with regard to the specific target on the utilization rate, I think it's partly that depends on the capacity that's going to be delivered in the next two years. We will disclose more information in the Q4 financials, and we are in the long run, we are confident that the utilization rate will steadily increase. And thanks for your attention on our retail ID business. As you know, the wholesale IDC business has been growing fairly quickly in contrast to the Retail IDC. We are very pleased to see the MRR of our retail business continue to grow quarter over quarter for several consecutive quarters. As you know, the competition landscape in this sector is fairly intense. I think the growth hardly boiled down to a couple of factors. Number one, in terms of the needs of customers, they are adding a smart computing on top of storage plus generic computing. And we are proactively repurposing our cabinets in order to meet their demands, in order to capture on this growth momentum and need. And the factor number two on our side, on top of the hosting service we offer to clients, we are providing incremental value-added services on the software level. Let's say, networking, as well as storage networking, services? And another factor is the initiative of repurposing the retail cabinet into higher density cabinets. And clearly, we are benefiting from these efforts and initiatives. Last but not least, should the demand from customers in terms of storage generic computing plus value-added services sustain, we're confident to sustain the growth momentum of our retail business. Thank you.

Xinyi Wang: Next question, please.

Andy Yu: Thank you. Your next question comes from Andy Yu from DBS.

Andy Yu: Hi. You, management, for taking my questions, and congratulations on the solid results. So I have two questions. So your key peer has announced plans to expand into regions with lower electricity costs to capture AI training demand. So how do you see the supply-demand dynamics will evolve in these regions where VNETs currently have a first-mover advantage? And secondly, the government stand on data center CVITs has become more positive with a shorter timeline for new asset in post IPO. Do we expect our serial application to accelerate? And apart from these projects, what will our funding strategy be going forward?

Ju Ma: Thank you. I'll take your first question. I think different companies are adopting different strategic growth approaches with regard to their own reading on the market dynamics as well as their development legacy. So they are actually deploying resources, you know, based on all of these factors. However, I would like to elaborate on how we go about it. Like, we iterated many times, over the next three to five years, AI is going to be an increasingly more important growth driver. On the corporate level, our reading is that the training of foundational models that type of demand will be increasingly concentrated to one or few top capable deep-pocketed players. So that's the first reading that we have on the market. And number two, we believe that inferencing and private deployment will continue to sustain its growth momentum. As you know, it can be avid or confirmed from Jensen Huang's remarks. And number three, we believe over the course of the next five years as the GPU grows domestic GPU chips grow, there is going to be more demand from the inferencing private deployment, as well as many emerging group intelligent agents. So these are the growth areas or customer demands that we are paying closer attention to. So in a nutshell, we, VNET, will adhere to the principle of a coordinated balanced development. So using our resources, to meet users' varying demands. Thank you. So our C rate is still underway. However, I am not in a position to disclose any information at the moment, and we wish to update you later as we see more progress. So other than the C rates or public rates, we are proactively advancing the holding type ABS, also known as private REITs. And we have successfully issued one. And we are hopeful that this would allow us to recycle a major sizable asset fund. Or capital. From such types of issuance. And, additionally, I am happy to share that one of the operating entity domestic operating entity, Beijing VNET, has just got a triple-A rating from a domestic rating institution. Which is rare among private-owned companies. Non-state-owned companies. So with this rating, favorable rating, so we are actively advancing the issuance of domestic corporate bond particularly the Science and Tech Innovation Bond which comes with a very favorable interest rate. So should it be pulled through, we are going to benefit from a lower interest rate with a widening channel of financing.

Xinyi Wang: Next question, please.

Edison Lee: Thank you. Your next question comes from Edison Lee from Nomura. Please go ahead.

Edison Lee: Okay. Thanks, management, for taking the question. So only one quick question. So how do you see the trend for our unit CapEx spending? Because I noticed that for the first nine months, the total CapEx plan, there was around RMB 6 billion versus our full-year guidance of RMB 10 to 12 billion. So it looks a bit behind schedule versus our capacity delivery schedule. And so just wondering if management can provide some colors on this and also for next year's CapEx, what's our outlook? And potential sources for funding our next year's CapEx?

Ju Ma: So the majority of our CapEx is on the wholesale IDC. And the CapEx per unit megawatt for our wholesale IDs campuses are gradually trending down. And we are still in the process of putting together our CapEx for next year, and we are preparing a similar size of funding and the proceeds or the sources of the funding would mainly come from asset securitization as well as the issuance of corporate domestic corporate bonds. So a quick number that I want to share with you. So through the pre-REITs, private REITs, and development fund, that issued in 2025, we have successfully recycled RMB 2 billion to the equity assets. And our goal is that we're going to beat this number in 2026. There are a lot of tools in our toolboxes. Financing toolboxes, I would say. And we are confident that we're able to fund our CapEx while keeping the leverage ratio within a secure range. Safe range.

Xinyi Wang: Next question, please.

Anthony Leng: Thank you. Your next question comes from Anthony Leng from JPMorgan.

Anthony Leng: Hello. So I have two questions regarding the full-year update 50 guidance. So the full-year guidance is five four q on revenue. Appears to be down a little bit. So they should based on the midpoint. And on the what's be the potential reasoning given the strong fat customer moving rate, is there a potential upside to the full-year guidance further? Second question is regarding the three q reported take the margin. This be there was a sequential decline versus two q despite a very strong customer moving rate. What's the potential driver to cost this decline? And what would be the next few quarters EBITDA margin trend?

Ju Ma: Let me take your question. As always, we have been consistently prudent in terms of offering our full-year revenue guidance. I think we are going to watch closely, the pace of our customers moving in as well as the electricity used by them. Because they are closely related to the revenue. Looking to the quarter-over-quarter growth, I think there's very little likelihood that the Q4 revenue will decline sequentially. I would advise you to refer to the upper end of our full-year revenue guidance range. And with regard to the EBITDA margin, I would say it's within a reasonable range because the majority of our offerings is, you know, revenue is from the wholesale IDC business. And because of the rising temperatures in Q3, therefore, we are seeing more tariffs for Q3. Given that these are actually reflected in our P and L, in terms of the tariffs that we pay. However, with regard to our costs, they are consistent. We do not see huge fluctuations. And with you know, so I would see this is reasonable seasonal fluctuations.

Xinyi Wang: Thank you.

Operator: Thank you. Ladies and gentlemen, that concludes our conference for today. Thank you for participating. You may now disconnect your lines.