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    GDS
    Earnings call· Dec 2025(Q4 FY25)

    GDS Holdings Q4 FY25 earnings call GDS

    Mar 17, 2026 Source

    Executive summary

    GDS Holdings Limited Q4 FY25 — Strong Bookings and AI-Driven Demand

    GDS Holdings delivered a strong quarter and full year, driven by robust AI-related demand and strategic land bank expansion. The company successfully exceeded its adjusted EBITDA guidance and significantly increased new bookings, positioning itself for accelerated growth in the coming years. Management's focus on financial discipline led to a strengthened balance sheet, enabling further investment in new growth markets.

    Highlights

    5

    • Achieved 11% growth in both revenue and adjusted EBITDA for FY25, beating the top end of adjusted EBITDA guidance.

    • Recorded highest-ever gross move-in of over 86,000 square meters for FY25.

    • New bookings reached over 96,000 square meters (300 megawatts) in FY25, 3x the level of the past 3 years.

    • Secured 200 megawatts of new orders and over 500 megawatts of MOUs year-to-date 2026, mainly from top 3 AI players.

    • Increased cash reserves to over $2.8 billion, achieving positive cash flow pre-financing and net debt-to-EBITDA below 5x.

    Concerns

    3

    • MSR per square meter declined by 2.4% in 4Q25 compared to 4Q24 due to lower market selling price and change in location mix.

    • Expected further MSR reduction of 3% to 4% by the end of 2026 due to similar factors.

    • Year-on-year growth rates for revenue and adjusted EBITDA are not directly comparable due to asset monetizations in 2025.

    Guidance & targets

    8
    CategoryTargetConfidence
    Total Revenue
    RMB 12.4 billion to RMB 12.9 billion
    high materiality
    High
    Adjusted EBITDA
    RMB 5.75 billion to RMB 6 billion
    high materiality
    High
    Organic CapEx
    RMB 9 billion
    medium materiality
    High
    Gross New Bookings
    over 500 megawatts
    high materiality
    High
    Gross Move-in
    similar to last year
    medium materiality
    Medium
    Asset Injection into C-REIT
    complete in the second half of 2026
    medium materiality
    Medium
    MSR Reduction
    3% to 4%
    low materiality
    High
    MSR Reduction
    3% to 4%
    low materiality
    Medium

    Operational metrics

    29
    Revenue growth
    10.8%YoY
    FY25

    Reported revenue growth for the full year 2025.

    Pro forma Revenue growth
    13.2%YoY
    FY25

    Pro forma growth rate after adding back deconsolidated revenue from asset monetization.

    Adjusted EBITDA growth
    10.8%YoY
    FY25

    Reported adjusted EBITDA growth for the full year 2025.

    Pro forma Adjusted EBITDA growth
    14.2%YoY
    FY25

    Pro forma growth rate after adding back deconsolidated EBITDA from asset monetization.

    MSR per square meter decrease
    2.4%vs 4Q24
    4Q25

    Decrease due to lower market selling price and change in location mix.

    Unit development costs
    comparable decreasevs 4Q24
    4Q25

    Comparable decrease to MSR per square meter decline.

    Yield on portfolio
    11%steady
    FY25

    Remained steady at around 11%.

    Yield on new investments
    10% to 11%
    ongoing

    Expected yield on new investments in both established and new markets.

    Organic CapEx
    RMB 4.7 billionin line with guidance
    FY25

    In line with guidance for the full year 2025.

    Net CapEx (after asset monetization)
    RMB 2.4 billion
    FY25

    Organic CapEx of RMB 4.7 billion minus RMB 2.3 billion cash proceeds from asset monetization.

    AR days
    82 daysdown from 109 in 4Q24
    4Q25

    Reduced from 109 days in 4Q24 due to tight control of collections.

    Cash flow pre-financing
    RMB 1 billionpositive
    FY25

    Achieved positive cash flow pre-financing after taking into account asset monetization proceeds.

    Cash and investments balance
    $2.8 billionincreased
    as of 1Q26

    Increased cash reserves including proceeds from DayOne sell-down and CPS new issue.

    Net debt to last quarter annualized adjusted EBITDA
    5.8xdown from 6.8x at end of 2024
    end of 2025

    Decrease due to positive cash flow pre-financing, deconsolidation of debt, and equity capital raise.

    Pro forma Net debt to last quarter annualized adjusted EBITDA
    4.8x
    end of 2025

    After adding back purchase of time deposits and proceeds of capital recycling and new issue in 1Q26.

    Gross additional area utilized
    23,000 square meters
    4Q25

    Gross additional area utilized in the fourth quarter of 2025.

    Gross move-in
    86,000 square metershighest ever level
    FY25

    Highest ever level of gross move-in for the full year 2025.

    Gross additional area committed
    21,000 square meters
    4Q25

    Gross additional area committed in the fourth quarter of 2025.

    New bookings
    96,000 square metersover 300 megawatts, 3x past 3 years
    FY25

    New bookings for the full year 2025, three times the level of the past three years.

    New orders secured
    200 megawatts
    YTD 2026

    New orders secured so far in 2026.

    MOUs secured
    500 megawatts
    YTD 2026

    Memorandums of Understanding secured so far in 2026, strong indicator of future commitments.

    AI business share of new bookings
    60% to 70%
    FY26

    Expected share of new business to come from AI in 2026.

    Powered land pipeline
    3 gigawatts
    future

    Pipeline of powered land for future development.

    Powered land for future development
    700 megawatts
    future

    Powered land held for future development in established markets.

    New orders and MOUs for new locations
    400 megawatts
    YTD 2026

    New orders and MOUs secured for the new growth markets.

    Delivery time for new orders
    4 quarters
    future

    Expected time to deliver new orders to customers, followed by a 4-quarter ramp-up.

    Contract length for new business
    7 to 10 years
    future

    Typical contract length for new business, mostly at the 10-year end.

    Customer number
    1,000
    current

    Total number of customers GDS currently serves.

    Power capacity in Western China
    30 gigawatts
    current

    Total available power capacity in Western China for future growth, noted as still limited.

    Industry KPIs

    7
    MetricValueDetails
    Headcount dso82 daysdays
    Infra economics10% to 11%%
    Rpo current rpo700 megawattsmegawatts
    Customer logo metrics1,000customers
    Large customer cohorts3customers
    Bookings tcv book to billover 300 megawattsmegawatts
    Genai ai book of business60% to 70%%

    Orderbook & backlog

    7
    Gross additional area utilized23,000 square meters4Q25
    Gross move-in86,000 square metersFY25

    highest ever level

    Gross additional area committed21,000 square meters4Q25
    New bookings96,000 square metersFY25

    over 300 megawatts, 3x past 3 years

    Equivalent to over 300 megawatts.

    New orders secured200 megawattsYTD 2026
    MOUs secured500 megawattsYTD 2026

    Strong indicator of future commitments.

    AI-specific new business share60% to 70%FY26 target

    Expected share of new bookings to come from AI.

    Deals & partnerships

    3
    DayOnePartial sell-down of stake$385 million

    Raised $385 million through the partial sell-down of stake in DayOne during 1Q26. Remaining stake is worth $2.2 billion, benchmarked to DayOne's Series C new issue price.

    Huatai Capital InvestmentIssuance of convertible preferred shares$300 million

    Issued $300 million of convertible preferred shares to Huatai Capital Investment, contributing to increased cash reserves.

    ABS and C-REITAsset monetization transactions

    Completed two asset monetization transactions in FY25: an ABS in 1Q25 and a C-REIT IPO in 3Q25. This led to the deconsolidation of underlying data center project companies and contributed RMB 2.3 billion in cash proceeds.

    Capital programs

    1
    C-REIT Asset Injectionunderway

    Benefit: asset larger than seed asset

    Follow-on asset injection into the C-REIT, aiming to complete in H2 2026. The selected asset is larger than the seed asset for the IPO. No assumed proceeds are included in the CapEx guidance.

    Risks & headwinds

    3
    MSR per square meter decline4Q25, FY26, FY28

    2.4% decrease in 4Q25 vs 4Q24; further 3% to 4% reduction expected by end of 2026 and in 2028

    Mitigation: Offset by comparable decrease in unit development costs, maintaining yield on portfolio; higher volume growth expected to lift overall growth rate.

    Customer concentrationongoing

    New demand mainly driven by top 3 AI players in China

    Mitigation: Contract lengths for new business are longer (7-10 years, mostly 10-year), derisking investments. GDS has over 1,000 customers overall.

    Chip supply uncertainty (historical)past (last year)

    Not quantified, but caused conservative CapEx investment stance in prior year

    Mitigation: Chip supply certainty has improved due to U.S. export policy changes and domestic chip advancements, leading to increased CapEx investment.

    What to watch in Q1 FY26

    5

    MOU conversion to contract

    next quarter
    CurrentOver 500 megawatts of MOUs secured YTD 2026
    TargetHigh certainty of conversion within 2 quarters

    Why it matters

    Conversion of MOUs to firm contracts is crucial for achieving the 2026 new bookings target and future revenue growth.

    I think this is a high certainty to convert to our order. This is number one. In terms of the timing, I think it's within 2 quarters. I think it's a high chance we can convert to the real contract.

    Q&A highlights

    5

    What is the timetable and risk for converting MOUs to contracts? How is the competitive environment in new focus areas like Inner Mongolia, Zhongwei, and Shaoguan, and what is GDS's advantage?

    MOUs have a high certainty of conversion within two quarters. In new markets, government criteria for land acquisition (track record, customer commitment, financial capability) create high barriers, allowing GDS to maintain a leading position.

    “I think this is a high certainty to convert to our order. This is number one. In terms of the timing, I think it's within 2 quarters. I think it's a high chance we can convert to the real contract.”

    asked by Yang Liu · answered by William Huang

    2 min read6 chapters

    Detailed Narrative

    01

    AI-Driven Demand Resurgence

    GDS is experiencing a robust recovery in data center demand, primarily driven by the acceleration of AI adoption in China. The increasing availability of domestic high-performance chips is a key enabler, with major customers investing in hyperscale computing infrastructure. The company expects 60% to 70% of new business to come from AI, with strong demand for both training and inferencing workloads across new and traditional markets.

    02

    Strategic Land Bank Expansion

    To capitalize on the AI opportunity, GDS is actively building a 3-gigawatt pipeline of big clusters in new growth markets, complementing its 700 megawatts of powered land in established low-latency markets. Key new locations include Horinger in Inner Mongolia, Zhongwei in Ningxia province, and Shaoguan in Guangdong province, all designated national hubs. These locations are expected to support large-scale deployments and integrate with the existing platform.

    03

    Record Bookings and Future Growth Outlook

    The company achieved its highest-ever gross move-in of over 86,000 square meters in FY25. New bookings for FY25 reached over 96,000 square meters (300 megawatts), tripling the level of the past three years. For 2026, GDS aims for over 500 megawatts of gross new bookings, with 200 megawatts of new orders and over 500 megawatts of MOUs already secured year-to-date, primarily from three largest customers.

    04

    Financial Discipline and Deleveraging Success

    GDS successfully increased its cash reserves to over $2.8 billion through strategic asset monetizations and a convertible preferred share issue. The company achieved positive cash flow pre-financing and reduced its net debt-to-EBITDA ratio from 6.8x at the end of 2024 to 4.8x (pro forma for capital recycling and new issue in 1Q26), meeting an aggressive target set at the beginning of 2023.

    05

    Project Returns and MSR Trends

    Despite a declining MSR per square meter due to market pricing and location mix shifts, the yield on GDS's portfolio, measured by adjusted gross profit divided by gross PP&E, has remained steady at around 11%. New investments in both established and new markets are expected to maintain this 10% to 11% yield, enabling a return on equity above 20% through the company's develop-ramp-monetize business model.

    06

    Competitive Positioning in New Markets

    GDS believes it is well-positioned to dominate new growth markets, citing government criteria for land acquisition that favor companies with strong track records, customer commitments, and financial capability. The company views the current timing as opportune for significant expansion in the AI data center space, leveraging its financial strength to gain a leading position.

    AI-generated summary of the company’s earnings call. Not investment advice.