GDS (GDS) Q3 2025 earnings summary

Executive summary

• Net revenue for 3Q25 increased 10.2% year-over-year to RMB 2,887.1 million (US$405.6 million), with adjusted EBITDA up 11.4% to RMB 1,342.2 million (US$188.5 million) and a margin of 46.5%, continuing a healthy growth trend since the business recovery began last year.

• Gross additional area utilized was around 23,000 sq m in 3Q 2025, with total area committed rising 4.8% year-over-year to 656,729 sqm and area utilized increasing 10.9% to 486,607 sqm, with a utilization rate of 74.4%.

• Secured RMB 5,054 million (US$710 million) in new debt financing/refinancing and completed a C-REIT IPO at an enterprise value of RMB 2,400 million (US$337 million), providing a new channel for asset monetization and capital recycling.

• Total new bookings for the first nine months reached 75,000 sq m (240 MW), with a full-year target of nearly 300 MW, and approximately 65% of 2025 bookings are AI-related, reflecting a surge in AI infrastructure investment by major tech players in China.

• Achieved a return to profitability in Q3 2025, with net income of RMB 728.6 million (US$102.4 million) and a net income margin of 25.2%.

Financial highlights

• Adjusted EBITDA for the first nine months of 2025 grew by 15.4% on a pro forma basis, excluding deconsolidated project companies.

• Adjusted gross profit margin for 3Q25 was 51.0%, up 0.5 ppt year-over-year; adjusted EBITDA margin was 46.5%, a 0.5 ppt increase year-over-year.

• Operating cash flow for 3Q25 was RMB 736.5 million, with annualized net debt/LQA adjusted EBITDA improving to 6.0x; effective interest rate declined to 3.3% in 3Q25 from 4.3% a year earlier.

• Organic CapEx for the first nine months was RMB 3.8 billion, with a full-year expectation of RMB 4.8 billion; net CapEx after asset monetization is RMB 2.7 billion.

• CREET units, listed on the Shanghai Stock Exchange since August, have risen 45.8% from IPO price, trading at 24.6x EV/2026E EBITDA and a 3.6% implied dividend yield.

Outlook and guidance

• On track to achieve the midpoint of revenue guidance and at or above the top end of EBITDA guidance for 2025, with FY25 revenue guidance of RMB 11,290–11,590 million and adjusted EBITDA guidance of RMB 5,190–5,390 million.

• Growth rate in 2025 benefited from strong 1Q bookings and a short book-to-build period; subdued bookings since 2Q25 will impact 2026 growth, but higher bookings are projected for next year.

• Capex after ABS & C-REIT is expected to decrease 10.3% to around RMB 2,700 million in FY25.

• Strategic focus on acquiring more powered land, especially in locations with lower power tariffs near tier one cities, to capture future AI demand.