VNET Group (VNET Group) Gross Margin % : 15.32% (As of Dec. 2023)

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What is VNET Group Gross Margin %?

Gross Margin % is calculated as gross profit divided by its revenue. VNET Group's Gross Profit for the three months ended in Dec. 2023 was $41 Mil. VNET Group's Revenue for the three months ended in Dec. 2023 was $266 Mil. Therefore, VNET Group's Gross Margin % for the quarter that ended in Dec. 2023 was 15.32%.

Warning Sign:

VNET Group Inc gross margin has been in long-term decline. The average rate of decline per year is -8.3%.

The historical rank and industry rank for VNET Group's Gross Margin % or its related term are showing as below:

VNET' s Gross Margin % Range Over the Past 10 Years
Min: 17.44 Med: 22.79 Max: 28.16
Current: 17.46

During the past 13 years, the highest Gross Margin % of VNET Group was 28.16%. The lowest was 17.44%. And the median was 22.79%.

VNET's Gross Margin % is ranked worse than
85.72% of 2633 companies
in the Software industry
Industry Median: 41.79 vs VNET: 17.46

VNET Group had a gross margin of 15.32% for the quarter that ended in Dec. 2023 => No sustainable competitive advantage

The 5-Year average Growth Rate of Gross Margin for VNET Group was -8.30% per year.

VNET Group Gross Margin % Historical Data

The historical data trend for VNET Group's Gross Margin % can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

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VNET Group Gross Margin % Chart

VNET Group Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

Gross Margin %

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24.79

22.28

23.23

19.22

17.44

VNET Group Quarterly Data
	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23
Gross Margin %	Get a 7-Day Free Trial															17.46	19.51	18.81	16.24	15.32

Competitive Comparison of VNET Group's Gross Margin %

For the Information Technology Services subindustry, VNET Group's Gross Margin %, along with its competitors' market caps and Gross Margin % data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

VNET Group's Gross Margin % Distribution in the Software Industry

For the Software industry and Technology sector, VNET Group's Gross Margin % distribution charts can be found below:

* The bar in red indicates where VNET Group's Gross Margin % falls into.

VNET Group Gross Margin % Calculation

Gross Margin is the percentage of Gross Profit out of sales or Revenue.

VNET Group's Gross Margin for the fiscal year that ended in Dec. 2023 is calculated as

Gross Margin % (A: Dec. 2023 )	=	Gross Profit (A: Dec. 2023 )	/	Revenue (A: Dec. 2023 )
	=	181	/	1038.196
	=	(Revenue - Cost of Goods Sold)	/	Revenue
	=	(1038.196 - 857.181)	/	1038.196
	=	17.44 %

VNET Group's Gross Margin for the quarter that ended in Dec. 2023 is calculated as

Gross Margin % (Q: Dec. 2023 )	=	Gross Profit (Q: Dec. 2023 )	/	Revenue (Q: Dec. 2023 )
	=	40.7	/	265.886
	=	(Revenue - Cost of Goods Sold)	/	Revenue
	=	(265.886 - 225.148)	/	265.886
	=	15.32 %

A positive Gross Profit is only the first step for a company to make a net profit. The gross profit needs to be big enough to also cover related labor, equipment, rental, marketing/advertising, research and development and a lot of other costs in selling the products.

VNET Group (NAS:VNET) Gross Margin % Explanation

Warren Buffett believes that firms with excellent long term economics tend to have consistently higher margins.

Durable competitive advantage creates a high Gross Margin % because of the freedom to price in excess of cost. Companies can be categorized by their Gross Margin %

1. Greater than 40% = Durable competitive advantage
2. Less than 40% = Competition eroding margins
3. Less than 20% = no sustainable competitive advantage
Consistency of Gross Margin is key

VNET Group had a gross margin of 15.32% for the quarter that ended in Dec. 2023 => No sustainable competitive advantage

Be Aware

If a company loses its competitive advantages, usually its gross margin declines well before its sales declines. Watching Gross Margin % and Operating Margin % closely helps avoid value trap situations.

VNET Group Gross Margin % Related Terms

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VNET Group (VNET Group) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Technology » Software » VNET Group Inc (NAS:VNET) » Definitions » Gross Margin %

Comparable Companies

Traded in Other Exchanges

217A:Germany

Address

No. 10 Jiuxianqiao East Road, Guanjie Building Southeast 1st Floor, Chaoyang District, Beijing, CHN, 100016

Website

https://www.vnet.com

VNET started as AsiaCloud in 1999 and moved to the data center business with its first self-developed data center opening in 2010. The firm listed (as 21Vianet) on the Nasdaq in April 2011, subsequently changing its name to VNET Group in 2021. It originally focused on providing data center services such as colocation and cloud services to retail clients in China, but added hyperscale customers in 2019 and now counts large Chinese hyperscalers such as Alibaba Cloud, Tencent Cloud, and Huawei Cloud as customers. At end-September 2023 it had 84,608 self-built cabinets with the majority in Beijing, Shanghai, and the Greater Bay area. It also operated partnered data centers with around 4,314 cabinets and had 476 MW of wholesale capacity contracted or under a memorandum of understanding.