GDS (GDS) Q4 2025 earnings summary

Executive summary

• FY 2025 net revenue rose 10.8% year-on-year to RMB 11,432.3 million ($1,634.8 million), with adjusted EBITDA up 10.8% to RMB 5,403.5 million ($772.7 million), surpassing guidance and turning free cash flow positive due to asset monetization.

• Strong AI-driven demand recovery in China, with major customers investing in hyperscale computing infrastructure, leading to robust bookings and move-ins across both new and established markets.

• Significant asset monetization and capital raises, including ABS, C-REIT, and convertible preferred shares, strengthened liquidity and led to deconsolidation of certain project companies.

• Total area committed grew 6.4% year-on-year to 670,106 sqm, and area utilized rose 11.4% to 504,843 sqm, with a utilization rate of 75.5% at year-end.

• FY 2025 swung to net income of RMB 959.4 million from a prior year loss, with a net income margin of 8.4%.

Financial highlights

• FY 2025 revenue and adjusted EBITDA grew 10.8% year-on-year; pro forma growth rates (adding back deconsolidated assets) were 13.2% for revenue and 14.2% for adjusted EBITDA.

• Adjusted gross profit margin for FY 2025 was 51.7%, and adjusted EBITDA margin was 47.3%.

• Operating cash flow for FY 2025 was RMB 3,365.3 million, with positive cash flow pre-financing of RMB 1 billion after asset monetization.

• Net debt to last quarter annualized adjusted EBITDA decreased from 6.8x to 5.8x year-on-year, and further to 4.8x when including time deposits and capital recycling.

• Full-year 2025 net income margin was 8.4%, reversing a net loss margin of 7.5% in 2024.

Outlook and guidance

• FY 2026 revenue guidance: RMB 12,400–12,900 million (8.5%–12.8% year-on-year growth); adjusted EBITDA guidance: RMB 5,750–6,000 million (6.4%–11% year-on-year growth).

• FY 2026 pro forma revenue guidance: RMB 12,860–13,360 million (+10.1% to +14.4% year-on-year); pro forma adjusted EBITDA: RMB 6,020–6,270 million (+8.1% to +12.5%).

• Organic CapEx guidance for 2026 is RMB 9,000 million, aligned with sales targets and new project starts.

• Targeting over 500 MW of gross new bookings in 2026, with 60%-70% expected from AI-related demand.

• Move-in for 2026 expected to match 2025, with potential to double in 2027 if sales targets are met.