Terry Wang
大家早上好，感谢各位今天参加我们的电话会议。首先，我非常激动能够加入公司管理团队担任首席财务官，并期待在21Vianet下一阶段的增长过程中与组织内的每一位成员紧密合作。与以往季度类似，在讨论运营细节之前，我想先花几分钟时间谈谈我们在所服务的互联网基础设施领域观察到的一些市场动态。
首先，关于新的宽带试点牌照：正如我们上季度讨论过的，中央政府设定了目标，计划发放100张新的宽带试点牌照，总投资额目标为1000亿元人民币，并将试点城市总数在2015年底前扩展至30个。本季度，我们已经看到部分新牌照不仅发放给了现有的宽带服务提供商，也发放给了新兴的高速宽带运营商。与此同时，一些拥有更廉价资本资源的国内同行在网络相关业务领域继续采取激进的促销活动。随着市场进一步放开管制，我们相信将有更多宽带IP和资本持续进入这一市场，为最后一公里宽带接入市场带来增量竞争。
其次，网络效率的提升。从网络设计角度看，我们看到国家级网络接入点（NAP）的数量从最初的3个持续增加，流量正在逐步向其他新建NAP转移，尽管要发展中国庞大的互联网流量需要时间，而要显著提升整体网络效率则需要更长时间。我们相信，随着国家宽带计划的推进以及政府持续推动改善中国网络质量，我们正朝着正确的方向前进。我们看到平均互联网传输速度持续提升，平均带宽成本进一步下降。
在这些行业变革的背景下，我们既看到挑战也看到机遇。短期内，新宽带牌照的发放和网络效率的提升导致带宽价格下降，这对我们的网络带宽相关业务产生了负面影响，如MNS业务，以及较小程度上的Aipu和CDN业务。然而，从长期来看，我们认为这些变革是向更先进的纯互联网基础设施系统转型的必要组成部分。随着我们根据这一转型持续调整战略、运营和组织架构，我们相信我们已做好充分准备，能够随着时间的推移受益并把握更具吸引力的机遇。
现在让我们转向运营业绩。我们很高兴报告又一个稳健增长的季度，总收入同比增长31.7%，调整后EBITDA增长13.2%。同时，我们在数据中心和机柜销售方面继续保持强劲势头，数据中心利用率提升2.5个百分点至67.5%，并维持较低的0.37%托管流失率。这些数据点证明了我们互联网基础设施产品的强大价值以及IDC业务的运营实力。
更仔细地审视我们的IDC业务：对我们核心IDC产品的需求依然强劲，我们本季度再次实现强劲的机柜销售，超过800个，与上季度类似。北京的数据中心如M6和[听不清]继续呈现最强劲的租赁趋势，尽管我们也开始看到[听不清]数据中心有显著改善的销售进展。然而，我们注意到在MRR方面持续面临逆风，因为我们新投入运营的数据中心MRR相对较低，同时我们还要应对全行业带宽价格下降带来的另一挑战。此外，机柜建设出现延迟，主要原因是几个地点的高功率密度机柜需要额外时间。我们的运营团队正积极与外部各方合作，寻找简化流程的方法以提高运营效率。
现在来看我们的云使能服务。本季度，我们继续取得进展，吸引了大型客户以及较小的WebDirect客户，涉及Windows Azure和Office 365产品。经过一些促销活动后，我们目前正在将部分试用客户转化为常规付费客户。此外，我们已与微软全球解决方案合作伙伴AvePoint签署战略合作协议，以向客户扩展Azure和Office 365之外的服务产品。尽管我们第二季度的云收入增长率不如第一季度强劲，但我们注意到同比增速仍超过50%。总体而言，我们对云使能业务的业绩感到满意，该业务在与微软的合作协议下继续良好执行。
接下来是我们的CDN业务。在季节性疲软的第一季度之后，该业务在第二季度开始显现复苏迹象，我们实现了超过60%的环比增长率。然而，部分项目已推迟至2015年下半年。基于这一额外势头，我们预计CDN业务将在今年剩余时间内持续稳步增长。
至于我们的MNS业务，正如我们之前及以往季度提到的，我们在这个领域继续面临结构性逆风，主要原因是全行业价格下降和竞争加剧。为此，我们将继续推进网络梳理流程，并根据不断变化的市场动态调整我们的商业模式。
对于CDN和MNS业务，我们一直专注于组织转型。短期内，这导致了暂时性的成本增加。然而，通过优化组织结构和提高效率，我们相信能够更好地控制成本，并培育这一业务板块在未来实现强劲且可持续的增长。
第二季度并非没有挑战。我们的总收入低于我们自身的预期，主要原因是如前所述的市场动态变化，如带宽价格下降、某些市场竞争加剧以及客户需求转变。此外，由于收入疲软以及运营所需的增量开支，我们的毛利率在本季度受到负面影响。本季度，我们还产生了一些与组织转型相关的一次性成本，这给我们的利润率带来了额外压力。
为应对这些挑战，我们正不懈努力，以最大化收入和最小化支出的方式提升运营效率。为此，我们正在各业务单元的运营团队中推行额外的激励和问责措施。展望未来，我们将继续加强组织结构，投资于核心增长机遇，以在未来时期重新加速增长并提高整体盈利能力，同时我们将优化成本结构，进行审慎投资，并在日益复杂和价值驱动的市场中扩展我们的核心产品。我们相信，我们已做好充分准备，继续巩固我们作为领先互联网基础设施服务提供商的地位。
现在转向我们的财务业绩，在开始之前，我想说明我们今天提供的是非GAAP指标。我们的非GAAP业绩排除了某些非现金支出，这些支出不属于我们的核心运营部分。这些支出的详细信息可在我们早前发布的调节表中找到。另请注意，我们今天提供的所有财务数字均为人民币金额，百分比变化为同比变化，除非另有说明。
我们2015年第二季度的收入增长31.7%，至8.668亿元人民币。托管及相关服务的净收入增长37.9%至6.437亿元人民币，主要得益于收购的贡献、管理机柜总数的增加以及公司云和CDN服务需求的同比增长，部分被向增值税制度的过渡所抵消。2015年第二季度每机柜MRR为9,872元人民币，而2015年第一季度为10,031元人民币。每机柜MRR的环比下降主要由于新机柜的强劲销售（其中部分在初始上架期间使用较低的功率和带宽），以及北京以外机柜贡献增加（这些机柜的MRR相对较低）。
管理网络服务的净收入增长16.7%至2.231亿元人民币。这一增长主要得益于收购的贡献，部分被全行业带宽价格下降和向增值税制度的过渡所抵消。
调整后毛利润增长24.2%至2.457亿元人民币。调整后毛利率为28.3%，而去年同期为30.1%，2015年第一季度为31.7%。调整后毛利率的同比和环比下降主要由于MNS业务持续疲软、电信和电力成本支出增加以及组织转型带来的增量费用。
调整后运营费用增至2.095亿元人民币。调整后运营费用占净收入的比例为24.2%，而去年同期为20.2%，2015年第一季度为24.3%。具体而言，调整后销售和营销费用从去年同期的5,660万元人民币增至7,470万元人民币，原因是公司整体业务销售和服务人员数量增加，以及收购了销售和营销费用较高的业务。调整后一般及行政费用从去年同期的5,180万元人民币增至9,700万元人民币，主要由于公司整体业务增长和收购带来的员工人数增加（这些收购具有较高的一般及行政费用），以及与组织转型相关的增量费用。调整后研发费用从2,440万元人民币增至3,010万元人民币，这反映了我们进一步加强研发能力、扩展云计算和CDN服务产品的努力。
调整后运营费用与我们较高的GAAP总运营费用之间的差异主要由于或有购买对价公允价值的变动（损失1,660万元人民币）和股权激励费用（6,750万元人民币）。或有购买对价公允价值的变动源于截至2015年6月30日与公司过往收购相关的估计现金和股份对价现值的增加。
从盈利能力角度看，调整后EBITDA增长13.2%至1.494亿元人民币，而2014年同期为1.32亿元人民币。调整后EBITDA利润率为17.2%，而去年同期为20.1%，2015年第一季度为19.4%。我们的调整后净亏损为1,600万元人民币，而去年同期调整后净利润为2,320万元人民币。调整后净利率为负1.8%，而去年同期为正3.5%，2015年第一季度为正2.2%。调整后稀释每股亏损为0.02元人民币，相当于每份美国存托凭证（ADS）0.12元人民币或0.02美元。
截至2015年6月30日，我们的现金及现金等价物和短期投资为29.1亿元人民币，相当于4.699亿美元。
现在，我将讨论我们更新的财务展望。目前，我们预计2015年第三季度净收入将在9亿至9.4亿元人民币之间，中点值较2014年同期增长约18%。调整后EBITDA预计在1.46亿至1.66亿元人民币之间，中点值较2014年同期增长约1%。
我们已更新全年展望，以反映2015年上半年业绩低于预期以及一些不断变化的行业动态。目前，2015年全年净收入预计在35.8亿至36.8亿元人民币之间，较先前指引的39亿至41亿元人民币有所下调。修订后的2015年净收入指引中点值较2014年增长约26%。对于2015年全年，调整后EBITDA预计在6.2亿至6.6亿元人民币之间，较先前预期的7.6亿至8.6亿元人民币有所下调。修订后的2015年调整后EBITDA预期中点值较2014年增长约15%。此预测反映了公司当前和初步的评估，可能发生变化。
最后，我想提醒投资者关于21Vianet近期的一些进展。正如2015年6月10日所宣布的，公司收到了来自公司董事会主席兼首席执行官Josh Sheng Chen、金山软件有限公司和紫光集团国际有限公司的非约束性'私有化'提议。目前该交易正在考虑中，自收到要约后，公司董事会已成立特别委员会审查和评估该提议，并聘请了财务和法律顾问协助进行相关交易。
如前所述，由于待定的'私有化'交易，我们今天不在此次电话会议上安排问答环节。我们的准备发言到此结束，感谢各位参加今天的电话会议。现在我们将结束本次电话会议。谢谢。问答环节结束。
Terry Wang
Good morning and thank you for joining us today. And first of all, I am very excited to join the Company's management team as Chief Financial Officer and look forward to working closely with everyone in the organization during the next phase of 21Vianet’s growth. Similar to prior quarters, before going over operating details, I would like to first spend a few minutes to discuss a couple of market dynamics that we are seeing in the Internet infrastructure segment we serve. First, new broadband trial licenses; as we discussed last quarter, the central government has set a goal to issue 100 new broadband trial licenses targeting RMB10 billion total investments and expand the numbers of total trial cities to 30 by year end of 2015. During the quarter, we have seen some of those new licenses already being issued not only to existing broadband service providers, but also to emerging broadband high-speed. Meanwhile, some of our domestic peers equipped with cheaper capital resources continue to be aggressive in promotional activities, especially in the network related businesses. As this market is further deregulated, we believe more broadband IP and the capital will continue to enter this market introducing incremental competition in last-mile broadband access market. Second, improving network efficiencies. From a network design perspective, we’re seeing the number of national network access points or NAPs continues increase from original three with traffic in the process of gradually working to some other new NAPs, although it will take time to develop China’s massive Internet traffic even longer to make a meaningful improvement in overall network efficiencies. We believe that we are moving in a right direction with the national broadband plan and the continued push by the government to improve China’s network quality. We are seeing the average internet transmission speeds continues to increase and average bandwidth cost further declined. In the backlog of this industry changes, we continue to see both challenges and opportunities. In a short-term, new broadband licenses improving network efficiencies have resulted in the lower bandwidth prices, which have negatively impacted our network bandwidth related businesses, such as MMS and to lesser extent Aipu and the CDN. However, in the longer-term, we believe these changes are necessary components of a transformation to our more advanced purely based Internet infrastructure system. As we continue to adjust our strategies, operations, and organization structure in light of this transformation, we believe that we are well-positioned to benefit and capitalize a more attractive opportunities over time. Now let’s move on to operating results. We are pleased to report another quarter of steady growth as evidenced by total revenues growing by 31.7% year-over-year and adjusted EBITDA by 13.2%. At the same time, we had another quarter of strong momentum in data center and cabinet sales, boosted data center utilization rate by 2.5 percent points to 67.5% and maintain a lower 0.37% hosting churn rate. This data points demonstrate the strong value of our Internet infrastructure offerings as well as the operational strength of our IDC business. Looking at our IDC business more closely, demand remained strong for our core IDC offerings as we had another quarter of strong capital sales, which exceeded 800 similar to prior quarter’s data centers in Beijing such as M6 and [indiscernible] continued to witness a strongest leasing trend, although we also started to see meaningful sell through improvement in [indiscernible] data center. However, we note that we experienced continued headwinds in MRR as we ramp up the new data centers with relatively lower MRR, and we manage it through industry-wide decline in bandwidth prices, another challenge as we encountered. However, the delays in cabinets construction, primarily due to additional time required for higher power density cabinets at a couple of locations. Our operations team are actively working with external parties and looking for ways to streamline the processes to improve operating efficiencies. Now let's look at our cloud enabler services. During the quarter, we continued to make progress by attracting both large customers as well as smaller WebDirect customers and both Windows Azure and Office 365 offerings. Following some of the promotional activities, we are now in the process of converting some of the trial customers into regular paying customers. In addition, we have signed a strategic partnership agreement with AvePoint, Microsoft global solutions partner to expand service offerings beyond Azure and Office 365 to our customers. Although our second quarter cloud revenues did not record a growth rate as strong as first quarter, we note that the year-over-year growth rates still exceeded 50%. Overall, we are happy with the performance of our cloud enabler business, which continues to execute well under the partnership agreement with Microsoft. Moving on to our CDN business. After seasonally soft first quarter, this business began to show signs of recovery in second quarter when we achieved more than 60% sequential growth rate. However, some projects have been pushed into the second half of 2015. This additional momentum, we expect our CDN business to continue to grow steadily through the rest of the year. For our MNS business as we have mentioned earlier and in prior quarters, we continue to face secular headwinds in this space mostly due to industry-wide pricing decline and the greater competition. To that extent, we will continue our network grooming process and adapt our business model to changing market dynamics. For both our CDN and MNS businesses we have been focusing on organizational transitioning. In a short-term, this has led to temporarily greater costs. However, through optimizing our organizational structure and increasing efficiency, we are confident that we can better control costs and nurture this segment to achieve strong and sustainable growth in the future. Second quarter was not without its challenges. Our total revenues came in below our own expectations primarily due to changing market dynamics, as we discussed earlier such as declining bandwidth prices, higher competition in certain markets, and a shift in customer needs. In addition, as a result of the softened revenue and the incremental expenses required in operations, our gross margins were negatively impacting the quarter. During the quarter, we also have some one-time costs associated with the organizational transition, which put additional pressure in our margins. To address these challenges, we are working tirelessly to enhance operational efficiency in a way that maximizes revenues and minimizes expenses. To that extent we are in a process of putting additional measures of both incentives and accountability with our operations team at various business units. Going forward, we will continue to strengthen our organizational structure and invest in core gross opportunities in order to reaccelerate growth and improve overall profitability in future period as we fine-tune our cost structure to make disciplined investments and expanding our core offerings in an increasingly sophisticated and value driven market. We believe we are well-positioned to continue to fortify our position as a leading Internet infrastructure service provider. Now moving on to our financial results, before I begin, I would like to state that we present non-GAAP measures today. Our non-GAAP results exclude certain non-cash expenses, which are not a part of our core operations. The details of these expenses may be found in the reconciliation tables included in our earlier release. Also note that all the financial numbers we are presenting today are in RMB amounts and percentage change is year-over-year unless otherwise noted. Our revenues for the second quarter 2015 increased by 31.7%, to RMB866.8 million. Net revenues from hosting and related services increased by 37.9% to RMB643.7 million primarily due to contributions from acquisitions and increase in the total number of cabinets under management as well as year-over-year increase in demand for Company's cloud and CDN services, partially offset by the transition to a Value Added Tax system. The MRR per cabinets was RMB9,872 in the second quarter of 2015, as compared to RMB10,031 in the first quarter of 2015. The sequential decline in MRR per cabinet was primarily due to strong sales of new cabinets, some of which use lower power and bandwidth during the initial ramp up and due to higher contributions from cabinets outside of Beijing, which carry a relatively lower MRR. Net revenues from management network services increased by 16.7% to RMB223.1 million. This increase was primarily because of the contributions from acquisitions, which was partially offset by industry-wide decline in bandwidth prices and transition to a VAT system. Adjusted gross profit increased by 24.2% to RMB245.7 million. Adjusted gross margin was 28.3%, compared with 30.1% in the prior year period and 31.7% in the first quarter of 2015. The year-over-year and quarter-over-quarter decreases in adjusted gross margin was primarily due to the continued softness in the MNS business and higher spending in telecom and electricity costs and the incremental expenses due to organizational transitions. Adjusted operating expenses increased to RMB209.5 million as a percentage of net revenue adjusted operating expenses were 24.2%, compared with 20.2% in the prior year period and 24.3% in the first quarter of 2015. More specifically, adjusted sales and marketing expenses increased to RMB74.7 million from RMB56.6 million in the prior year period due to increase in the number of sales and service personnel in company’s overall business and acquisitions of the businesses with higher sales and marketing expenses. Adjusted general and administrative expenses increased to RMB97 million from RMB51.8 million in the prior year period, primarily due to increased headcount associated with the growth in the company’s overall business acquisitions with higher general and administrative expenses and incremental expenses related to organizational transitions. Adjusted research and development expenses increased to RMB30.1 million from RMB24.4 million, which reflected our efforts to further strengthen our research and development capabilities and expand our cloud computing and CDN service offerings. The difference between adjusted operating expenses and our high GAAP total operating expense amount is primarily due to changes in the fair value of contingent purchase consideration payable, which was a loss of RMB16.6 million and share-based compensation expenses of RMB67.5 million. The changes in the fair value of contingent purchase consideration payable resulted from an increase in the present value of estimated cash and share consideration as of June 30, 2015 associated with our Company’s past acquisitions. From a profitability perspective, adjusted EBITDA increased by 13.2% to RMB149.4 million from RMB132 million in the comparative period in 2014. Adjusted EBITDA margin was 17.2%, compared to 20.1% in the prior year period and 19.4% in the first quarter of 2015. Our adjusted net loss was RMB16 million compared to adjusted net profit of RMB23.2 million in the prior year period. Adjusted net margin was negative 1.8% compared with positive 3.5% in the prior year period and positive 2.2% in the first quarter of 2015. Adjusted diluted loss per share was RMB0.02, which represents the equivalent of 0.12 per RMB or US$0.02 per ADS. As of June 30, 2015 our cash and cash equivalents and short-term investment were RMB2.91 billion, equivalent to US$469.9 million. Now, I will discuss our updated financial outlook. Currently, we expect the third quarter of 2015 net revenues to be in the range of RMB900 million to RMB940 million, which at the midpoint represents growth of approximately 18% from comparative period in 2014. Adjusted EBITDA expected to be in the range of RMB146 million to RMB166 million, which at the midpoint represents growth of approximately 1% from the comparative period in 2014. We have updated our full-year outlook to reflect a softer than expected the first half of 2015 results and some of the changing industry dynamics. Currently net revenues from the full-year 2015 are expected to be in the range of RMB3.58 billion to RMB3.68 billion revised from a prior guidance of RMB3.9 billion to RMB4.1 billion. The revised guidance from 2015 net revenues and midpoint represents approximately 26% growth over 2014. For the full-year 2015, adjusted EBITDA is expected to be in the range of RMB620 million to RMB660 million revised from prior expectation of RMB760 million to RMB860 million. The revised expectation for 2015 adjusted EBITDA at the midpoint represents approximately 15% growth over 2014. And this forecasts reflect the Company’s current and preliminary review, which is subjected to change. Lastly, I want to remind the investors of some of the recent developments for 21Vianet as was announced in June 10, 2015 the Company received the non-binding “going private” proposal from Josh Sheng Chen, Chairman of the Board and Chief Executive Officer of the Company, Kingsoft Corporation and Tsinghua Unigroup International. This transaction is currently the consideration since receiving the offer of the Company's Board of Directors has formed a special committee to review and evaluate the proposal and has repaying the financial and the legal advisors in conjunction with the ongoing transaction. As previously mentioned due to the pending “going private” transaction we are not hosting a Q&A session on this call today. This concludes our prepared remarks and thank you for joining our call today. And now we’ll like to conclude the call. Thanks. End of Q&A
