Century Internet disclosed in its Q2 2026 earnings call that robust AI demand is directly driving growth in its wholesale business segment.
VNET Group Inc. (NASDAQ: VNET) reported second-quarter 2026 total net revenues of RMB 2.78 billion, representing a 14.2% year-over-year increase. Wholesale revenues remained the primary growth driver, reaching RMB 1.10 billion, up 29.3% YoY. Adjusted EBITDA rose 25.4% YoY to RMB 918.3 million. For the first half of 2026, the company generated an operating cash inflow of RMB 391.8 million. Management noted that after adjusting for RMB 389.7 million in income taxes and other one-off items related to capital transactions, the adjusted operating cash inflow stood at RMB 781.5 million. As of June 30, 2026, cash, cash equivalents, restricted funds, and short-term investments totaled RMB 7.21 billion. Capital expenditures for the first half reached RMB 3.55 billion, primarily allocated to wholesale data center construction and capacity expansion.
Wholesale IDC continues to serve as the core growth engine, accounting for 39.8% of quarterly revenue. More than 90% of wholesale IDC revenue is recurring, supported by a weighted average remaining lease term of seven years and minimal near-term expiration risk. In-service wholesale capacity surpassed 1 gigawatt for the first time, rising 49.4% YoY to 1,007 megawatts. Customer-utilized capacity grew 45.5% YoY to 744 megawatts, yielding a utilization rate of 73.9%. Of the total committed capacity, 96.3% is under signed contracts. Capacity under construction increased to 585 megawatts, with a pre-signing rate of 94.2%, while mature capacity utilization stands at 92.5%.
Following the addition of approximately 1.5 gigawatts this quarter, wholesale resource reserves now exceed 4 gigawatts. Newly acquired land supports roughly 1.4 gigawatts, comprising 908 megawatts in mainland China and 478 megawatts overseas. Management has identified Inner Mongolia and East China as primary regions for domestic resource acquisition, with plans to continue securing land in Inner Mongolia—particularly Ulanqab—over the next three years. Regarding deliveries, VNET handed over 117 megawatts in the first half and plans to deliver 585 megawatts over the next twelve months (~333 megawatts in H2 2026 and 252 megawatts in H1 2027), with most coming from the Ulanqab IDC park. For contracted orders, the company expects to deliver approximately 287 megawatts in 2026, 345 megawatts in 2027, and 230 megawatts in 2028 and beyond. Year-to-date, VNET secured 862 megawatts in new wholesale orders, including a 345-megawatt win from a leading cloud service provider for its Greater Beijing data center, alongside 517 megawatts announced in the prior quarter. Additional retail orders totaling approximately 2 megawatts were secured across IT services, local services, and financial sectors. Reservations currently stand at 355 megawatts, bringing total orders and reservations above 1.2 gigawatts.
The retail IDC segment maintained steady progress, with in-service cabinets reaching 50,081 and utilization holding stable at 64.5%. Monthly recurring revenue (MRR) per cabinet increased to RMB 9,799.
VNET advanced two key strategic initiatives during the quarter. First, it signed a strategic cooperation agreement with CATL, a global leader in zero-carbon new energy technology, to jointly develop a three-layer integrated compute-energy ecosystem. The partnership will focus on gigawatt-scale compute-power integration facilities, distributed compute-power networks, and a zero-carbon token ecosystem. Management plans to unveil its future operational strategy and outlook in the fourth quarter. Second, the company strengthened its strategic resource reserves, exceeding 3.5 gigawatts in mainland China and securing approximately 500 megawatts overseas by quarter-end.
Management highlighted that AI training and inference workloads continue to drive substantial demand for large-capacity, high-density infrastructure. However, the market faces structural constraints from power and chip supply. Existing projects will be executed at contracted prices, while new project pricing will factor in regional peer benchmarks, construction costs, resource scarcity, competitive dynamics, and target returns. Wholesale customer occupancy remained stable in Q2, with management anticipating a slight acceleration in H2, supported by anticipated improvements in domestic chip production. On the international front, the first overseas project is slated for delivery in Southeast Asia, with opportunities in the Middle East and Europe under evaluation. Management emphasized that overseas development remains strictly order-driven, with capital deployment kept prudent. Regarding reservation conversions, orders and reservations are typically consolidated under single sales agreements. Reservations are designated for future expansion within the same park and will convert to formal orders in batches aligned with deployment schedules. To enhance cost efficiency, management intends to leverage economies of scale, maintain disciplined headcount management, and increase internal adoption of AI tools.
Prepared remarks for Rotating President Wen Teng and SVP of Operational Finance Peter Zhang were delivered via text-to-speech technology powered by newlink.ai. Executive Vice Presidents Sharon Liu and Ju Ma, along with Senior Manager of Investor Relations Julia Jiang, joined the live Q&A session. A webcast is available at ir.vnet.com. Participants should note that the discussion contains forward-looking statements subject to risks outlined in the company’s SEC filings. VNET does not undertake any obligation to update such statements except as legally required. Reconciliations of audited GAAP and unaudited non-GAAP financial measures are provided in the earnings release and presentation materials. As AI models become increasingly sophisticated and AI applications continue to scale across industries,