Can you elaborate on demand trends for non-AI traditional cloud and enterprise workloads? What types of AI workloads are driving demand? How would you characterize the competitive environment in meeting this demand?

Majority of demand is AI-driven (GPU data centers), with traditional cloud growth now more associated with AI. Training remains a key driver, but inferencing workloads are also increasing. GDS expects to dominate new markets due to its readiness and financial capability, viewing AI data center competition in China as just starting. “I think the majority, I mean, the demands are driven by a very clear -- driven by the AI, right, GPU type data center demand. Of course, I think the traditional cloud still grows and they are more associated with the AI demand.”

Does the strong order momentum indicate improved chip supply certainty? What are the main locations of the new 3.7 gigawatts of powered land, and how do project returns differ in these new areas?

Chip supply certainty has improved due to U.S. export policy changes and domestic chip advancements, making it the right time for significant CapEx investment. New locations are Horinger, Zhongwei, and Shaoguan. Project returns in new areas are similar, generating a 10% to 11% cash-on-cash yield, sufficient for over 20% ROE. “Now we are much comfortable because the whole environment change adapted to a more positive, more certainty. So I think that's -- we think it's the right timing to step in, in a big way, right?”

What is the expected delivery timeline for the 200-megawatt order? How will realized MSR trends shape up in the next 1-2 years, given the changing location mix?

The 200-megawatt orders are expected to be delivered within 4 quarters, followed by a 4-quarter ramp-up, which is faster than traditional cloud business. MSR decrease will continue beyond 2026, likely 3% to 4% again in 2028, but this will be offset by higher volume growth. “The 200-megawatt new orders, you can assume for forecasting that it will take us 4 quarters on average to deliver. And then it will be a 4-quarter ramp-up.”

GDS

GDS Holdings (GDS) Q4 FY25 earnings call: guidance and Q&A

Q: 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.”

Earnings call· Dec 2025 (Q4 FY25)· Information Technology· Mar 17, 2026

Source: earnings call transcript

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

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

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

Category	Target	Timeline	Confidence
Total Revenue	RMB 12.4 billion to RMB 12.9 billion high materiality	FY26	High
Adjusted EBITDA	RMB 5.75 billion to RMB 6 billion high materiality	FY26	High
Organic CapEx	RMB 9 billion medium materiality	FY26	High
Gross New Bookings	over 500 megawatts high materiality	FY26	High
Gross Move-in	similar to last year medium materiality	FY26	Medium
Asset Injection into C-REIT	complete in the second half of 2026 medium materiality	H2 2026 · FY26	Medium
MSR Reduction	3% to 4% low materiality	by end of 2026 · FY26	High
MSR Reduction	3% to 4% low materiality	FY28	Medium

GDS operating KPIs by quarter

GDS operating KPIs stated on its earnings calls, by fiscal quarter
KPI	Mar 2026 Q1 FY26	Jun 2026 Q2 FY26	Change vs prior quarter
Backlog	<600 MW Our backlog has increased to over 200,000 square meters or almost 600 megawatts most of which we will become billable within the next 6 to 8 quarters. Source: earnings call transcript	757 MW By the middle of the year, our backlog had increased substantially to 757 megawatts. Source: earnings call transcript	—

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Orderbook & backlog

Gross additional area utilized 23,000 square meters 4Q25

Gross move-in 86,000 square meters FY25

highest ever level

Gross additional area committed 21,000 square meters 4Q25

New bookings 96,000 square meters FY25

over 300 megawatts, 3x past 3 years

Equivalent to over 300 megawatts.

New orders secured 200 megawatts YTD 2026

MOUs secured 500 megawatts YTD 2026

Strong indicator of future commitments.

AI-specific new business share 60% to 70% FY26 target

Expected share of new bookings to come from AI.

Deals & partnerships

DayOne Partial 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 Investment Issuance 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-REIT Asset 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

C-REIT Asset Injection underway

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

MSR per square meter decline 4Q25, 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 concentration ongoing

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

MOU conversion to contract

next quarter

Current Over 500 megawatts of MOUs secured YTD 2026

Target High 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.

Find out whether GDS delivers this. Inve re-checks your case every morning.

Q&A highlights

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 read 6 chapters

Detailed narrative

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.

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.

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.

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.

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.

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.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.