[GDS Fourth Quarter and Full Year 2021 Results Report](index=1&type=section&id=GDS%20Reports%20Fourth%20Quarter%20and%20Full%20Year%202021%20Results) [GDS Holdings Limited Fourth Quarter and Full Year 2021 Results Report](index=2&type=section&id=GDS%20Holdings%20Limited%20Reports%20Fourth%20Quarter%20and%20Full%20Year%202021%20Results) [Fourth Quarter 2021 Financial Highlights](index=2&type=section&id=Fourth%20Quarter%202021%20Financial%20Highlights) GDS Holdings achieved significant financial growth in Q4 2021, with strong year-over-year increases in net revenue and adjusted EBITDA, alongside an improved adjusted EBITDA margin Fourth Quarter 2021 Financial Highlights | Metric | Q4 2021 (RMB) | Q4 2020 (RMB) | YoY Growth (%) | | :----------------------- | :------------ | :------------ | :------------- | | Net Revenue | 2,187.4 million | 1,631.6 million | 34.1 | | Service Revenue | 2,185.9 million | 1,627.5 million | 34.3 | | Net Loss | 312.9 million | 271.5 million | - | | Adjusted EBITDA | 1,027.4 million | 758.0 million | 35.5 | | Adjusted EBITDA Margin | 47.0% | 46.5% | 0.5 percentage points | [Full Year 2021 Financial Highlights](index=2&type=section&id=Full%20Year%202021%20Financial%20Highlights) For the full year 2021, GDS Holdings reported substantial growth in net revenue and adjusted EBITDA, with a steady increase in adjusted EBITDA margin, indicating continuous business expansion and improved profitability Full Year 2021 Financial Highlights | Metric | 2021 (RMB) | 2020 (RMB) | YoY Growth (%) | | :----------------------- | :------------ | :------------ | :------------- | | Net Revenue | 7,818.7 million | 5,739.0 million | 36.2 | | Service Revenue | 7,814.4 million | 5,716.9 million | 36.7 | | Net Loss | 1,191.2 million | 669.2 million | - | | Adjusted EBITDA | 3,703.4 million | 2,680.6 million | 38.2 | | Adjusted EBITDA Margin | 47.4% | 46.7% | 0.7 percentage points | [Fourth Quarter and Full Year 2021 Operating Highlights](index=3&type=section&id=Fourth%20Quarter%20and%20Full%20Year%202021%20Operating%20Highlights) GDS Holdings achieved significant growth in total committed area, area in service, and area utilized by customers in Q4 and full year 2021, further solidifying its market leadership Fourth Quarter and Full Year 2021 Operating Highlights | Metric | As of Dec 31, 2021 (sqm) | As of Dec 31, 2020 (sqm) | YoY Growth (%) | | :----------------------------------- | :----------------------- | :----------------------- | :------------- | | Total Committed and Pre-committed Area | 556,822 | 438,100 | 27.1 | | Area in Service | 487,883 | 333,853 | 46.1 | | Area Under Construction | 161,515 | 158,035 | 2.2 | | Area Utilized by Customers | 319,475 | 234,731 | 36.1 | | Commitment Rate for Area in Service | 93.8% | 94.6% | -0.8 percentage points | | Pre-commitment Rate for Area Under Construction | 61.3% | 77.4% | -16.1 percentage points | | Utilization Rate for Area in Service | 65.5% | 70.3% | -4.8 percentage points | - The company added approximately **120,000 sqm of net committed area** in full year 2021, strengthening capacity in resource-scarce Tier-1 markets through organic development and acquisitions[7](index=7&type=chunk) - The company achieved significant milestones in its Southeast Asia regionalization plan, establishing strategic footholds in Malaysia and Indonesia to support international growth for Chinese customers and capture new demand in the region[7](index=7&type=chunk) [Management Commentary](index=3&type=section&id=Management%20Commentary) Management expressed satisfaction with 2021 performance, highlighting strong sales momentum, capacity expansion, and strategic positioning in Southeast Asia, while the CFO noted robust financial health and enhanced financial strength through convertible senior notes issuance for future growth - Chairman and CEO William Huang stated that the company achieved **excellent results in 2021**, adding approximately **120,000 sqm of net committed area** and strengthening capacity in Tier-1 markets through organic development and acquisitions[7](index=7&type=chunk) - The company achieved significant milestones in its Southeast Asia regionalization plan, establishing strategic footholds in Malaysia and Indonesia to support international growth for Chinese customers and capture new demand in the region[7](index=7&type=chunk) - CFO Dan Newman commented that the company achieved **36.2% revenue growth** and **38.2% adjusted EBITDA growth** in 2021, with the adjusted EBITDA margin rising to **47.4%**[9](index=9&type=chunk) - In Q1 2022, the company successfully raised **US$620 million** through the issuance of convertible senior notes to Sequoia China, STT GDC, and an Asian sovereign wealth fund, further enhancing its financial strength to capture future growth opportunities[9](index=9&type=chunk) [Fourth Quarter 2021 Financial Results](index=4&type=section&id=Fourth%20Quarter%202021%20Financial%20Results) [Revenue and Cost of Revenue (Q4 2021)](index=4&type=section&id=Revenue%20and%20Cost%20of%20Revenue%20%284Q21%29) In Q4 2021, both net revenue and service revenue saw year-over-year and quarter-over-quarter growth, primarily driven by contributions from newly utilized area, while cost of revenue also increased due to higher power consumption and depreciation from new data centers Fourth Quarter 2021 Revenue Overview | Metric | Q4 2021 (RMB) | Q4 2020 (RMB) | Q3 2021 (RMB) | YoY Growth (%) | QoQ Growth (%) | | :------------- | :------------ | :------------ | :------------ | :------------- | :------------- | | Net Revenue | 2,187.4 million | 1,631.6 million | 2,061.4 million | 34.1 | 6.1 | | Service Revenue| 2,185.9 million | 1,627.5 million | 2,061.1 million | 34.3 | 6.1 | | Cost of Revenue| 1,700.1 million | 1,201.6 million | 1,606.0 million | 41.5 | 5.9 | - Revenue growth was primarily driven by the full quarter revenue contribution from newly utilized area in the previous quarter, along with an additional **19,147 sqm of net utilized area** in the current quarter, mainly from SH17 Phase 2, BJ8, BJ16, LF3, LF9, and LF10 data centers[10](index=10&type=chunk) - The increase in cost of revenue was mainly due to higher power consumption from increased utilized area, and increased depreciation and amortization costs from new data centers put into service in the previous quarter and acquired data centers BJ20, BJ21, BJ22, BJ23, and SZ9 in the current quarter[11](index=11&type=chunk) [Gross Profit and Adjusted Gross Profit (Q4 2021)](index=4&type=section&id=Gross%20Profit%20and%20Adjusted%20Gross%20Profit%20%284Q21%29) In Q4 2021, both gross profit and adjusted gross profit increased year-over-year and quarter-over-quarter, though gross profit margin decreased year-over-year, while adjusted gross profit margin remained stable quarter-over-quarter, reflecting consistent core operational performance Fourth Quarter 2021 Gross Profit Overview | Metric | Q4 2021 (RMB) | Q4 2020 (RMB) | Q3 2021 (RMB) | YoY Growth (%) | QoQ Growth (%) | | :--------------------- | :------------ | :------------ | :------------ | :------------- | :------------- | | Gross Profit | 487.3 million | 430.0 million | 455.4 million | 13.3 | 7.0 | | Gross Profit Margin | 22.3% | 26.4% | 22.1% | -4.1 percentage points | 0.2 percentage points | | Adjusted Gross Profit | 1,148.4 million | 873.5 million | 1,083.1 million | 31.5 | 6.0 | | Adjusted Gross Profit Margin | 52.5% | 53.5% | 52.5% | -1.0 percentage points | 0.0 percentage points | - Gross profit margin slightly increased quarter-over-quarter, mainly due to reduced use of backup power compared to Q3, when grid power supply was constrained in some regions[12](index=12&type=chunk) [Operating Expenses (Q4 2021)](index=5&type=section&id=Operating%20Expenses%20%284Q21%29) In Q4 2021, sales and marketing expenses and general and administrative expenses both increased, primarily due to heightened marketing activities and higher professional service fees related to acquisitions, with R&D costs also seeing a slight rise Fourth Quarter 2021 Operating Expenses (Excluding Share-based Compensation) | Metric | Q4 2021 (RMB) | Q4 2020 (RMB) | Q3 2021 (RMB) | YoY Growth (%) | QoQ Growth (%) | | :----------------------------- | :------------ | :------------ | :------------ | :------------- | :------------- | | Sales and Marketing Expenses | 29.7 million | 25.3 million | 23.2 million | 17.7 | 28.0 | | General and Administrative Expenses | 116.2 million | 86.9 million | 102.9 million | 33.8 | 13.0 | | Research and Development Costs | 12.4 million | 10.0 million | 9.0 million | 24.0 | 37.8 | - Sales and marketing expenses increased quarter-over-quarter primarily due to increased year-end marketing activities[14](index=14&type=chunk) - General and administrative expenses increased quarter-over-quarter mainly due to higher professional service fees related to acquisitions[15](index=15&type=chunk) [Other Income (Expenses) and Net Loss (Q4 2021)](index=5&type=section&id=Other%20Income%20%28Expenses%29%20and%20Net%20Loss%20%284Q21%29) In Q4 2021, net interest expense increased due to higher debt and refinancing costs, foreign exchange losses remained stable, and other net income grew significantly from increased government subsidies, resulting in an expanded net loss both year-over-year and quarter-over-quarter Fourth Quarter 2021 Other Income (Expenses) and Net Loss | Metric | Q4 2021 (RMB) | Q4 2020 (RMB) | Q3 2021 (RMB) | | :------------------------- | :------------ | :------------ | :------------ | | Net Interest Expense | 442.8 million | 386.7 million | 392.1 million | | Foreign Exchange Loss, Net | 3.9 million | 3.7 million | 3.9 million | | Other, Net | 37.2 million | 7.6 million | 14.7 million | | Net Loss | 312.9 million | 271.5 million | 301.1 million | - Net interest expense increased quarter-over-quarter primarily due to a higher total debt balance funding data center capacity expansion and higher non-recurring financing costs related to debt refinancing activities[16](index=16&type=chunk) - Other net income increased quarter-over-quarter mainly due to higher VAT-related government subsidies in the current quarter[17](index=17&type=chunk) [Adjusted EBITDA and Per Share Data (Q4 2021)](index=5&type=section&id=Adjusted%20EBITDA%20and%20Per%20Share%20Data%20%284Q21%29) In Q4 2021, adjusted EBITDA grew year-over-year and quarter-over-quarter, with an improved adjusted EBITDA margin primarily due to increased government subsidies; however, basic and diluted loss per share expanded both year-over-year and quarter-over-quarter Fourth Quarter 2021 Adjusted EBITDA and Per Share Data | Metric | Q4 2021 (RMB) | Q4 2020 (RMB) | Q3 2021 (RMB) | | :--------------------------- | :------------ | :------------ | :------------ | | Adjusted EBITDA | 1,027.4 million | 758.0 million | 962.2 million | | Adjusted EBITDA Margin | 47.0% | 46.5% | 46.7% | | Basic and Diluted Loss Per Share | 0.24 | 0.21 | 0.23 | | Basic and Diluted Loss Per ADS | 1.92 | 1.70 | 1.85 | - Adjusted EBITDA margin increased quarter-over-quarter primarily due to higher VAT-related government subsidies, partially offset by higher corporate expenses in the current quarter[19](index=19&type=chunk) [Full Year 2021 Financial Results](index=6&type=section&id=Full%20Year%202021%20Financial%20Results) [Revenue and Cost of Revenue (FY 2021)](index=6&type=section&id=Revenue%20and%20Cost%20of%20Revenue%20%28FY21%29) For the full year 2021, both net revenue and service revenue achieved strong year-over-year growth, while IT equipment sales significantly declined, and cost of revenue substantially increased, leading to a year-over-year decrease in gross profit margin Full Year 2021 Revenue Overview | Metric | 2021 (RMB) | 2020 (RMB) | YoY Growth (%) | | :------------- | :------------ | :------------ | :------------- | | Net Revenue | 7,818.7 million | 5,739.0 million | 36.2 | | Service Revenue| 7,814.4 million | 5,716.9 million | 36.7 | | IT Equipment Sales | 4.3 million | 22.1 million | -80.5 | | Cost of Revenue| 6,039.3 million | 4,188.5 million | 44.2 | [Gross Profit (FY 2021)](index=6&type=section&id=Gross%20Profit%20%28FY21%29) For the full year 2021, gross profit increased year-over-year, but the gross profit margin decreased due to cost of revenue growing faster than revenue Full Year 2021 Gross Profit Overview | Metric | 2021 (RMB) | 2020 (RMB) | YoY Growth (%) | | :------------- | :------------ | :------------ | :------------- | | Gross Profit | 1,779.4 million | 1,550.5 million | 14.8 | | Gross Profit Margin | 22.8% | 27.0% | -4.2 percentage points | [Operating Expenses (FY 2021)](index=6&type=section&id=Operating%20Expenses%20%28FY21%29) For the full year 2021, sales and marketing expenses and general and administrative expenses both increased, while research and development costs slightly decreased Full Year 2021 Operating Expenses (Excluding Share-based Compensation) | Metric | 2021 (RMB) | 2020 (RMB) | YoY Growth (%) | | :----------------------------- | :----------- | :----------- | :------------- | | Sales and Marketing Expenses | 95.1 million | 80.7 million | 17.7 | | General and Administrative Expenses | 421.4 million | 289.6 million | 45.5 | | Research and Development Costs | 39.3 million | 40.0 million | -1.8 | [Other Income (Expenses) and Net Loss (FY 2021)](index=6&type=section&id=Other%20Income%20%28Expenses%29%20and%20Net%20Loss%20%28FY21%29) For the full year 2021, net interest expense significantly increased, and other net income also grew substantially, leading to an expanded net loss year-over-year, reflecting business expansion and associated cost increases Full Year 2021 Other Income (Expenses) and Net Loss | Metric | 2021 (RMB) | 2020 (RMB) | | :----------------- | :------------ | :------------ | | Net Interest Expense | 1,604.3 million | 1,287.5 million | | Other, Net | 86.7 million | 32.0 million | | Net Loss | 1,191.2 million | 669.2 million | [Adjusted EBITDA and Per Share Data (FY 2021)](index=7&type=section&id=Adjusted%20EBITDA%20and%20Per%20Share%20Data%20%28FY21%29) For the full year 2021, adjusted EBITDA achieved strong year-over-year growth, and the adjusted EBITDA margin improved; however, basic and diluted loss per share expanded year-over-year Full Year 2021 Adjusted EBITDA and Per Share Data | Metric | 2021 (RMB) | 2020 (RMB) | | :--------------------------- | :------------ | :------------ | | Adjusted EBITDA | 3,703.4 million | 2,680.6 million | | Adjusted EBITDA Margin | 47.4% | 46.7% | | Basic and Diluted Loss Per Share | 0.90 | 0.59 | | Basic and Diluted Loss Per ADS | 7.23 | 4.71 | [Operating Performance and Developments](index=7&type=section&id=Operating%20Performance%20%26%20Developments) [Sales Performance](index=7&type=section&id=Sales) In Q4 2021, the company's total committed and pre-committed area continued to grow significantly quarter-over-quarter and year-over-year, primarily driven by contributions from several new data centers Total Committed and Pre-committed Area | Period | Area (sqm) | | :------------------- | :--------- | | End of Q4 2021 | 556,822 | | End of Q4 2020 | 438,100 | | End of Q3 2021 | 533,284 | | YoY Growth | 27.1% | | QoQ Growth | 4.4% | - In Q4 2021, net new committed area totaled **23,538 sqm**, primarily from SH17 Phase 3, CS3 Phase 1, BJ13, BJ14 Phase 1, and HL1 Phase 2 data centers[25](index=25&type=chunk) [Data Center Resources](index=7&type=section&id=Data%20Center%20Resources) In Q4 2021, the company significantly increased its area in service and area under construction, initiated construction of several new data centers, further expanded resources in Beijing and Shenzhen through acquisitions, and adjusted equity structures of some joint venture data centers Data Center Area Overview | Metric | End of Q4 2021 (sqm) | End of Q4 2020 (sqm) | End of Q3 2021 (sqm) | | :----------------------------------- | :------------------- | :------------------- | :------------------- | | Area in Service | 487,883 | 333,853 | 454,354 | | Area Under Construction | 161,515 | 158,035 | 157,227 | | Commitment Rate for Area in Service | 93.8% | 94.6% | 95.9% | | Pre-commitment Rate for Area Under Construction | 61.3% | 77.4% | 62.1% | | Area Utilized by Customers | 319,475 | 234,731 | 300,328 | | Utilization Rate for Area in Service | 65.5% | 70.3% | 66.1% | - In Q4 2021, SH17 Phase 2, BJ16, BJ20/BJ21/BJ22/BJ23 (via acquisition), LF4 Phase 1, and SZ9 (via acquisition) data centers were put into service[26](index=26&type=chunk) - In Q4, construction commenced for SH17 Phase 3, CS3 Phase 1, BJ14 Phase 1, HL1 Phase 2, and SZ10 data centers[26](index=26&type=chunk) - The company completed the acquisition of a major data center campus in Beijing (comprising four data centers: BJ20, BJ21, BJ22, and BJ23, with a total net area of **11,632 sqm**), and the acquisition of SZ9 and SZ10 data centers (SZ9 in service, SZ10 under construction)[30](index=30&type=chunk)[31](index=31&type=chunk) - The company completed the sale of a **49% equity interest** in the HL1 Phase 1 data center project company to GIC, making it the first B-O-T joint venture data center with GIC[31](index=31&type=chunk) [Liquidity](index=9&type=section&id=Liquidity) As of December 31, 2021, the company maintained ample cash reserves, but also had high total short-term and long-term debt, reflecting aggressive financing activities for data center expansion Liquidity Overview as of December 31, 2021 | Metric | Amount (RMB) | Amount (US$) | | :----------------------------------- | :-------------- | :-------------- | | Cash | 9,968.1 million | 1,564.2 million | | Total Short-term Debt | 6,647.2 million | 1,043.1 million | | Total Long-term Debt | 29,113.9 million| 4,568.6 million | | New Debt Financing and Refinancing in Q4 2021 | 6,881.6 million | 1,079.9 million | | New Debt Financing and Refinancing in Full Year 2021 | 16,596.6 million| 2,604.4 million | [Recent Developments](index=9&type=section&id=Recent%20Developments) GDS Holdings has made significant recent developments in both domestic and international markets, including acquiring new data centers and land in China, strategic expansion in Southeast Asia (Malaysia and Indonesia), constructing a new data center in Hong Kong, and private placement of convertible senior notes with a strategic partnership with Sequoia China - The company completed the acquisition of a site in Wuhan (comprising two data centers under construction, Wuhan 1 and Wuhan 2, with a total net area of approximately **8,400 sqm**)[35](index=35&type=chunk) - The company completed the acquisition of a greenfield site in Nusajaya Tech Park, Johor, Malaysia (planned for development into a data center campus with a total net area of approximately **18,000 sqm** or **54 MW of IT power capacity**), with the first phase expected to be delivered in **2024**[35](index=35&type=chunk) - The company completed the acquisition of a greenfield site in Nongsa Digital Park, Batam, Indonesia (planned for two new data centers with a total net area of approximately **10,000 sqm** or **28 MW of IT power capacity**), complementing its "Singapore+" strategy[36](index=36&type=chunk) - The company completed the acquisition of a majority equity interest in a greenfield site in Xianghe County, Langfang, Hebei Province (Xianghe Land Plot 1, with a total net area of approximately **30,000 sqm**), which has secured the required energy quota[37](index=37&type=chunk) - The company signed a lease agreement for the Hong Kong 3 (HK3) data center (located in West Kowloon, with a net area of **7,265 sqm**), expected to be delivered in the **second half of 2024**[38](index=38&type=chunk) - The company signed an agreement to acquire a **100% equity interest** in the Shenzhen 11 (SZ11) data center (located in Longhua District, Shenzhen, under construction, with a net area of approximately **7,089 sqm**)[40](index=40&type=chunk) - The company completed a private placement of **US$620 million** aggregate principal amount of **0.25% convertible senior notes due 2029** to Sequoia China Infrastructure Fund I, ST Telemedia Global Data Centres, and an Asian sovereign wealth fund[40](index=40&type=chunk) - The company entered into a strategic cooperation agreement with Sequoia Capital China to jointly identify and pursue business synergy opportunities, advance GDS's regionalization strategy, and undertake strategic acquisitions and investments in China and overseas[41](index=41&type=chunk) [Business Outlook](index=10&type=section&id=Business%20Outlook) GDS Holdings anticipates robust growth in total revenue and adjusted EBITDA for the full year 2022, alongside substantial capital expenditures to support business expansion Full Year 2022 Business Outlook | Metric | Forecast Range (RMB) | YoY Growth (%) | | :--------------- | :------------------- | :------------- | | Total Revenue | 9,320 - 9,680 million | 19.2 - 23.8 | | Adjusted EBITDA | 4,285 - 4,450 million | 15.7 - 20.2 | | Capital Expenditure | Approximately 12,000 million | - | [Conference Call Information](index=10&type=section&id=Conference%20Call) Management held a conference call on March 22, 2022, to discuss financial results and address investor and analyst questions, with access provided for call replay and webcast - Management held a conference call on **March 22, 2022, at 8:00 AM U.S. Eastern Time** (8:00 PM Beijing/Hong Kong Time on the same day)[43](index=43&type=chunk) - A replay of the conference call will be available until **8:59 AM U.S. Eastern Time on March 30, 2022**[45](index=45&type=chunk) - A live and archived webcast of the conference call is available on the company's investor relations website at investors.gdsservices.com[46](index=46&type=chunk) [Non-GAAP Disclosure](index=11&type=section&id=Non-GAAP%20Disclosure) The company uses non-GAAP financial measures such as adjusted EBITDA, adjusted EBITDA margin, adjusted gross profit, and adjusted gross profit margin to evaluate operational performance, set budgets, and operational goals, believing these metrics provide useful supplemental measures of core operational performance - Management and the board of directors use non-GAAP financial measures such as **adjusted EBITDA**, **adjusted EBITDA margin**, **adjusted gross profit**, and **adjusted gross profit margin** to evaluate operational performance, set budgets, and operational goals[47](index=47&type=chunk) - The company believes that excluding certain revenues and expenses from the calculation of adjusted EBITDA and adjusted gross profit provides useful supplemental measures of its core operating performance[47](index=47&type=chunk) - These non-GAAP financial measures are not defined or presented in accordance with U.S. GAAP and should not be considered in isolation or as a substitute for GAAP measures when evaluating the company's performance[51](index=51&type=chunk) [Exchange Rate Information](index=12&type=section&id=Exchange%20Rate) All RMB amounts in this announcement are converted to US dollars using the noon buying rate from the Federal Reserve Board's H.10 statistical release on December 30, 2021, which was RMB 6.3726 to US$1.00 - All conversions of RMB to US dollars in this announcement are made at the noon buying rate in the H.10 statistical release of the Federal Reserve Board on **December 30, 2021**, which was **RMB 6.3726 to US$1.00**[53](index=53&type=chunk) [Statement Regarding Preliminary Unaudited Financial Information](index=12&type=section&id=Statement%20Regarding%20Preliminary%20Unaudited%20Financial%20Information) The unaudited financial information in this earnings release is preliminary and subject to adjustments upon completion of the company's year-end audit, which may result in material differences from the preliminary information - The unaudited financial information in this earnings release is preliminary and subject to potential adjustments[54](index=54&type=chunk) - Adjustments to the consolidated financial statements may be identified upon completion of the company's year-end audit, which could result in material differences from the preliminary unaudited financial information[54](index=54&type=chunk) [About GDS Holdings Limited](index=12&type=section&id=About%20GDS%20Holdings%20Limited) GDS Holdings Limited is a leading developer and operator of high-performance data centers in China, strategically located in major economic hubs, offering colocation and managed services with 21 years of service delivery experience to hyperscale cloud service providers and large internet companies - GDS Holdings Limited is a leading developer and operator of **high-performance data centers in China**[55](index=55&type=chunk) - The company's facilities are strategically located in China's primary economic hubs, and it builds, operates, and transfers data centers for customers in other selected locations[55](index=55&type=chunk) - The company provides colocation and managed services, including direct private connections to leading public clouds, an innovative service platform for hybrid cloud management, and resale of public cloud services[55](index=55&type=chunk) [Safe Harbor Statement](index=13&type=section&id=Safe%20Harbor%20Statement) This announcement contains forward-looking statements protected by the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995, involving uncertainties related to future business development, financial condition, market growth, customer relationships, industry competition, operational risks, and macroeconomic conditions, where actual results may differ materially from expectations - This announcement contains forward-looking statements protected by the safe harbor provisions of the **U.S. Private Securities Litigation Reform Act of 1995**[57](index=57&type=chunk) - Forward-looking statements involve inherent risks and uncertainties that may cause GDS Holdings' actual results or financial performance to differ materially from those contained in any forward-looking statement[57](index=57&type=chunk) - Risk factors include, but are not limited to, business objectives and strategies, future business development, financial condition and operating results, growth of the high-performance data center market, customer demand and market acceptance, cloud computing adoption, investment risks, acquisition risks, fluctuations in operating results, changes in laws and regulations, industry competition, security breaches, power outages, and fluctuations in China's and global economic and business conditions[57](index=57&type=chunk) [For Investor and Media Inquiries](index=13&type=section&id=For%20investor%20and%20media%20inquiries%2C%20please%20contact%3A) Contact information for GDS Holdings Limited and its investor relations team, The Piacente Group, Inc., including phone and email, is provided for investor and media inquiries - Investors and media may contact Laura Chen of GDS Holdings Limited at **+86 (21) 2029-2203** or ir@gds-services.com[58](index=58&type=chunk) - Alternatively, contact Ross Warner or Brandi Piacente of The Piacente Group, Inc., with contact details for China, International, and U.S[58](index=58&type=chunk) [Financial Statements](index=14&type=section&id=Financial%20Statements) [Unaudited Condensed Consolidated Balance Sheets](index=14&type=section&id=UNAUDITED%20CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) As of December 31, 2021, GDS Holdings' total assets and liabilities significantly increased, reflecting continuous investment and expansion in data center infrastructure, with cash balances decreasing but net property and equipment, goodwill, and intangible assets substantially rising Condensed Consolidated Balance Sheets Summary (As of December 31, 2021) | Metric | As of Dec 31, 2021 (RMB Thousand) | As of Dec 31, 2020 (RMB Thousand) | | :----------------------------------------- | :-------------------------------- | :-------------------------------- | | Total Assets | 71,632,443 | 57,258,795 | | Cash | 9,968,109 | 16,259,457 | | Property and Equipment, Net | 40,623,503 | 29,596,061 | | Goodwill and Intangible Assets, Net | 8,359,141 | 3,381,715 | | Total Liabilities | 45,736,281 | 30,591,073 | | Short-term borrowings and current portion of long-term borrowings | 5,948,013 | 2,153,390 | | Long-term borrowings, excluding current portion | 18,284,514 | 10,566,746 | | Equity attributable to GDS Holdings Limited shareholders | 24,473,836 | 25,565,992 | [Unaudited Condensed Consolidated Statements of Operations](index=15&type=section&id=UNAUDITED%20CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) For Q4 and full year 2021, the company saw significant growth in net revenue and service revenue, but net loss expanded year-over-year due to increased cost of revenue and operating expenses, with loss per share also rising Condensed Consolidated Statements of Operations Summary (Q4 and Full Year 2021) | Metric | Q4 2021 (RMB Thousand) | Full Year 2021 (RMB Thousand) | | :----------------------------- | :--------------------- | :---------------------------- | | Total Net Revenue | 2,187,377 | 7,818,681 | | Cost of Revenue | (1,700,104) | (6,039,252) | | Gross Profit | 487,273 | 1,779,429 | | Total Operating Expenses | (335,267) | (1,209,907) | | Operating Income | 152,006 | 569,522 | | Net Interest Expense | (442,828) | (1,604,292) | | Net Loss | (312,882) | (1,191,213) | | Basic and Diluted Loss Per Share | (0.24) | (0.90) | [Unaudited Condensed Consolidated Statements of Comprehensive Loss](index=16&type=section&id=UNAUDITED%20CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20COMPREHENSIVE%20LOSS) For Q4 and full year 2021, the company's comprehensive loss expanded, primarily influenced by net loss and foreign currency translation adjustments Condensed Consolidated Statements of Comprehensive Loss Summary (Q4 and Full Year 2021) | Metric | Q4 2021 (RMB Thousand) | Full Year 2021 (RMB Thousand) | | :----------------------------------------- | :--------------------- | :---------------------------- | | Net Loss | (312,882) | (1,191,213) | | Foreign currency translation adjustments, net | (70,816) | (159,714) | | Comprehensive Loss | (383,698) | (1,350,927) | | Comprehensive loss attributable to GDS Holdings Limited shareholders | (386,541) | (1,346,769) | [Unaudited Condensed Consolidated Statements of Cash Flows](index=17&type=section&id=UNAUDITED%20CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) In Q4 2021, cash flow from operating activities was positive, but investing activities saw significant outflows mainly for property and equipment purchases and acquisitions, while financing activities generated substantial inflows, reflecting the company's funding efforts for expansion, resulting in a net decrease in cash and restricted cash for the full year Condensed Consolidated Statements of Cash Flows Summary (Q4 and Full Year 2021) | Metric | Q4 2021 (RMB Thousand) | Full Year 2021 (RMB Thousand) | | :----------------------------------------- | :--------------------- | :---------------------------- | | Net cash provided by operating activities | 406,095 | 1,201,363 | | Net cash used in investing activities | (2,729,642) | (13,691,538) | | Net cash provided by financing activities | 4,118,458 | 8,119,155 | | Net increase (decrease) in cash and restricted cash | 1,803,701 | (4,466,562) | | Cash and restricted cash at end of period | 12,026,367 | 12,026,367 | - Cash outflow from investing activities was primarily for purchases of property and equipment and payments related to acquisitions and investments[69](index=69&type=chunk) [Reconciliations of GAAP and Non-GAAP Results](index=18&type=section&id=RECONCILIATIONS%20OF%20GAAP%20AND%20NON-GAAP%20RESULTS) The company provides reconciliations of gross profit and net loss to adjusted gross profit and adjusted EBITDA, illustrating the calculation of non-GAAP metrics and their differences from GAAP measures, highlighting the impact of non-cash items like depreciation, amortization, and share-based compensation on core operational performance Reconciliation of Adjusted Gross Profit (Q4 and Full Year 2021) | Metric | Q4 2021 (RMB Thousand) | Full Year 2021 (RMB Thousand) | | :----------------------------------------- | :--------------------- | :---------------------------- | | Gross Profit | 487,273 | 1,779,429 | | Add: Depreciation and amortization | 632,779 | 2,265,181 | | Add: Accrued operating lease costs related to prepaid land use rights | 1,249 | 5,260 | | Add: Accrued costs for asset retirement obligations | 1,483 | 6,227 | | Add: Share-based compensation expenses | 25,613 | 110,291 | | Adjusted Gross Profit | 1,148,397 | 4,166,388 | | Adjusted Gross Profit Margin | 52.5% | 53.3% | Reconciliation of Adjusted EBITDA (Q4 and Full Year 2021) | Metric | Q4 2021 (RMB Thousand) | Full Year 2021 (RMB Thousand) | | :----------------------------------------- | :--------------------- | :---------------------------- | | Net Loss | (312,882) | (1,191,213) | | Add: Net interest expense | 442,828 | 1,604,292 | | Add: Income tax expense | 62,332 | 242,461 | | Add: Depreciation and amortization | 739,176 | 2,616,898 | | Add: Accrued operating lease costs related to prepaid land use rights | 10,553 | 40,422 | | Add: Accrued costs for asset retirement obligations | 1,483 | 6,227 | | Add: Share-based compensation expenses | 90,906 | 391,275 | | Less: Gain on purchase price adjustment | (7,010) | (7,010) | | Adjusted EBITDA | 1,027,386 | 3,703,352 | | Adjusted EBITDA Margin | 47.0% | 47.4% |

GDS Holdings Limited (NASDAQ:GDS) Q3 2021 Earnings Conference Call November 16, 2021 8:00 AM ET Company Participants Laura Chen – Head-Investor Relations William Huang – Founder, Chairman and Chief Executive Officer Dan Newman – Chief Financial Officer Conference Call Participants Jonathan Atkin – RBC Capital Markets Yang Liu – Morgan Stanley Michael Baca – Cowen and Company Frank Louthan – Raymond James Edison Lee – Jefferies Hongjie Li – CICC Operator Hello, ladies and gentlemen, thank you for standing by ...

Financial Performance - GDS Holdings reported a significant increase in revenue for the first half of 2021, reaching approximately $200 million, representing a year-over-year growth of 30%[2]. - In Q2 2021, net revenue increased by 38.9% year-on-year to RMB 1,863.9 million (USD 288.7 million) compared to RMB 1,342.2 million in Q2 2020[6]. - Service revenue for Q2 2021 grew by 39.6% year-on-year to RMB 1,863.0 million (USD 288.5 million) from RMB 1,334.5 million in Q2 2020[6]. - Total net revenue for the three months ended June 30, 2021, was RMB 1,863,919 thousand, representing a 39% increase from RMB 1,342,205 thousand for the same period in 2020[15]. - Service revenue for the six months ended June 30, 2021, reached RMB 3,567,443 thousand, up 39% from RMB 2,567,064 thousand in the same period of 2020[15]. - The gross profit for Q2 2021 was RMB 439.9 million (USD 68.1 million), an increase of 21.8% compared to RMB 361.1 million in Q2 2020[7]. - The adjusted gross profit and adjusted gross profit margin are used as supplementary performance indicators to better reflect core operational performance[10]. - Adjusted EBITDA for Q2 2021 rose by 41.4% year-on-year to RMB 895.9 million (USD 138.8 million) compared to RMB 633.4 million in Q2 2020[6]. - Adjusted EBITDA for the six months ended June 30, 2021, was RMB 895,862 thousand, which is an increase of 9.5% compared to RMB 817,947 thousand for the same period in 2020[18]. - The adjusted gross margin for the six months ended June 30, 2021, was 54.0%, slightly down from 54.4% in the same period of 2020[18]. Customer Metrics - The company achieved a total of 1,200 customers by June 30, 2021, reflecting a 15% increase compared to the previous year[3]. - GDS Holdings has initiated a new product line focused on hybrid cloud solutions, aiming to capture a growing segment of the market[2]. - The company reported a customer retention rate of 95%, highlighting strong customer satisfaction and loyalty[3]. Growth Projections - GDS Holdings anticipates continued growth, projecting revenue for the full fiscal year 2021 to be between $400 million and $420 million, indicating a potential increase of 25% to 30% year-over-year[4]. - The company is actively expanding its data center capacity, with plans to add 200 megawatts of power by the end of 2022, which is expected to enhance service offerings and customer acquisition[2]. Strategic Initiatives - GDS Holdings is investing in new technologies, including AI and machine learning, to improve operational efficiency and customer service capabilities[3]. - The company is exploring strategic acquisitions to bolster its market position and expand its service portfolio in the Asia-Pacific region[4]. - The company completed the acquisition of BJ15 and SZ8 data centers during Q2 2021, and acquired 65% equity in a target company owning the TJ1 data center[9]. - The company signed a purchase agreement to acquire 100% equity in a target company that owns undeveloped land in Taicang, Jiangsu Province, which covers approximately 59,000 square meters[9]. Operational Metrics - The operating area increased by 61,351 square meters in Q2 2021, reaching a total of 393,885 square meters, a year-on-year increase of 47.9%[6]. - The total area contracted and pre-contracted increased by 44,848 square meters to 470,125 square meters as of June 30, 2021, a year-on-year increase of 41.0%[7]. - The operational area billing rate at the end of Q2 2021 was 69.0%, compared to 72.5% at the end of Q2 2020 and 72.9% at the end of Q1 2021[9]. Financial Position - As of June 30, 2021, the company's cash amounted to RMB 12,326.9 million (approximately $1,909.2 million) with short-term debt totaling RMB 2,669.2 million (approximately $413.4 million)[10]. - The total long-term debt reached RMB 24,974.4 million (approximately $3,868.0 million), including long-term borrowings of RMB 14,866.7 million (approximately $2,302.6 million)[10]. - The company's total assets amounted to RMB 62,456,383 thousand, an increase from RMB 57,258,795 thousand as of December 31, 2020, representing an increase of approximately 9.5%[12]. - The total liabilities increased to RMB 36,061,823 thousand as of June 30, 2021, compared to RMB 30,591,073 thousand as of December 31, 2020, indicating an increase of approximately 17.7%[12]. - The company's total liabilities to equity ratio increased to approximately 1.44 as of June 30, 2021, compared to 1.20 as of December 31, 2020, indicating a higher leverage position[12]. Losses and Expenses - The net loss for Q2 2021 was RMB 298.5 million (USD 46.2 million), compared to a net loss of RMB 101.0 million in Q2 2020[6]. - The company reported a net loss of RMB 577,200 thousand for the six months ended June 30, 2021, compared to RMB 193,078 thousand for the same period in 2020, reflecting a significant increase in losses[16]. - The company experienced a significant increase in interest expenses, which rose to RMB 411,722 thousand for the six months ended June 30, 2021, compared to RMB 300,649 thousand for the same period in 2020[18]. - The company reported a significant increase in depreciation and amortization expenses, totaling RMB 619,613 thousand for the six months ended June 30, 2021, compared to RMB 709,223 thousand for the same period in 2020[18].

GDS Holdings Limited (NASDAQ:GDS) Q2 2021 Results Conference Call August 17, 2021 8:00 AM ET Company Participants Laura Chen - Head of Investor Relations William Huang - Founder, Chairman and Chief Executive Officer Dan Newman - Chief Financial Officer Jamie Khoo - Chief Operating Officer Conference Call Participants Tina Hou - Goldman Sachs Yang Liu - Morgan Stanley James Wang - UBS Hongjie Li - CICC Colby Synesael - Cowen Edison Lee - Jeffries Gokul Hariharan - JPMorgan Frank Louthan - Raymond James Joel ...

GDS Holdings Limited (NASDAQ:GDS) Q1 2021 Earnings Conference Call May 19, 2021 8:00 PM ET Company Participants Laura Chen – Head of Investor Relations William Huang – Founder, Chairman and Chief Executive Officer Dan Newman – Chief Financial Officer Jamie Khoo – Chief Operating Officer Conference Call Participants Yang Liu – Morgan Stanley Jon Atkin – RBC Colby Synesael – Cowen James Wang – UBS Tina Hou – Goldman Sachs Gokul Hariharan – JPMorgan Frank Louthan – Raymond James Operator Hello, ladies and gent ...

Operational Capacity and Development - As of December 31, 2020, the total net floor area in operation was 318,272 square meters, with 94.3% contracted by customers[4] - The total net floor area under construction was 137,070 square meters, with 73.9% pre-contracted by customers[4] - The company operates 51 self-developed data centers with a total net floor area of 310,128 square meters, and approximately 19 third-party data centers with a total net floor area of 8,144 square meters[6] - The total estimated developable net floor area held by the company for future potential development is approximately 480,000 square meters[6] - The company has 14 new self-developed data centers and two existing self-developed data centers under construction, with a total net floor area of 137,070 square meters[6] - As of December 31, 2020, the total signed area (excluding B-O-T joint venture data centers) was 401,554 square meters, with operational area and area under construction being 300,213 square meters and 101,341 square meters respectively[12] - The company constructed 12 new self-developed data centers in first-tier markets in 2020, with a total net room area of 65,866 square meters[10] - The total net room area under construction as of December 31, 2020, was 137,070 square meters, of which 73.9% was pre-signed[10] - The operational area (excluding B-O-T joint venture data centers) as of December 31, 2020, was 310,128 square meters[11] - The company has approximately 480,000 square meters of estimated total developable net room area in first-tier markets for potential future development[13] Market Demand and Strategic Positioning - The demand for high-performance data center services in China is driven by rapid data growth due to digital transformation and the application of new technologies such as cloud computing and AI[4] - The Chinese government supports technology-driven development and digital economy growth, promoting "new infrastructure construction" which includes large data centers[4] - The company operates data centers primarily in major economic hubs such as Shanghai, Beijing, Shenzhen, Guangzhou, Hong Kong, Chengdu, and Chongqing[5] - The strategic locations of the data centers provide convenient connectivity and access to extensive multi-operator telecom networks, enhancing facility performance and reducing connection costs[5] - The high-performance data center capacity in key economic hubs is relatively scarce due to challenges in acquiring suitable land and regulatory approvals[5] - The ongoing investment wave in the economy driven by government policies is expected to create numerous business opportunities for the company in the future[4] Financial Performance - Net revenue increased from RMB 2,792.1 million in 2018 to RMB 4,122.4 million in 2019, representing a growth of 47.6%, and further increased to RMB 5,739.0 million (USD 879.5 million) in 2020, a growth of 39.2%[8] - The cumulative net loss grew from RMB 430.3 million in 2018 to RMB 669.2 million (USD 102.6 million) in 2020[8] - Adjusted EBITDA rose from RMB 1,046.5 million in 2018 to RMB 2,680.6 million (USD 410.8 million) in 2020[8] - The signing rate for contracts was 94.9%, 91.9%, and 94.3% for the years ending December 31, 2018, 2019, and 2020, respectively[8] - The billing rates increased from 67.6% in 2018 to 71.1% in 2020[8] - The pre-signing rate for contracts improved from 48.4% in 2018 to 73.9% in 2020[8] - The company focuses on developing high-performance data centers with large net floor areas and high power capacity[8] - The company aims to maintain high signing rates across its data centers[8] Customer Base and Retention - As of December 31, 2020, the company served 703 customers, including major cloud service providers and large internet companies in China and globally[6] - The average quarterly customer churn rates for the years ending December 31, 2018, 2019, and 2020 were 0.9%, 0.5%, and 0.8% respectively, indicating strong customer retention[9] - The company aims to maintain high levels of revenue visibility due to long-term customer agreements and a significant backlog of orders[9] - The company’s cloud service providers, large internet, financial institutions, and enterprise customers accounted for 76.7%, 14.1%, and 9.2% of total contracted area as of December 31, 2020[37] Managed Services and Innovations - The company offers managed services, including direct private connections with leading public clouds and innovative hybrid cloud management platforms[4] - The company has developed an innovative service platform to assist enterprise customers in managing their IT infrastructure[6] - The company provides a range of managed services, including business continuity and disaster recovery solutions, network management, data storage, and system security services[32] - The company has developed a proprietary data center operations management platform that provides real-time information on various aspects of data center performance[36] - The company is developing an innovative service platform to assist enterprise clients in integrating private servers with one or more public cloud service providers[34] Regulatory Compliance and Legal Matters - GDS operates its internet data center business through a VIE structure due to Chinese regulations restricting foreign ownership in value-added telecommunications services[59] - The Chinese legal framework for foreign investment includes a negative list, which prohibits foreign investment in certain sectors, and GDS must comply with these regulations to operate[60] - The company is subject to regulatory oversight by the China Banking and Insurance Regulatory Commission, ensuring compliance with laws and regulations related to outsourcing services[68] - The company must adhere to strict guidelines regarding the management of outsourcing service providers, including risk assessments and service quality standards[68] - GDS Holdings Limited is committed to ongoing collaboration with regulatory bodies to ensure adherence to industry standards and best practices[68] Sustainability and Environmental Initiatives - Over 20% of the company's electricity consumption in 2020 came from renewable energy sources[49] - The company has 15 self-developed data centers that have received green certifications from leading domestic and global institutions[50] - Three data centers have received LEED certification, with two achieving Gold status[50] - The company is actively seeking to increase the use of renewable energy, including potential direct contracts with renewable energy suppliers[49] - The company has signed letters of intent to secure future supplies of International REC (I-REC) energy certificates to offset carbon emissions[49] Employee and Organizational Structure - As of December 31, 2020, the company had 1,479 full-time employees, with 17% being women[52] - The employee turnover rate for 2020 was 17.0%, down from 18.2% in 2019[55] - The company has a diverse workforce, with women comprising 34% of senior management and 18% of board members[52] - The company provides competitive compensation and benefits, including performance bonuses and stock options for employees[55] - The company has established a health and safety management system based on ISO45001 to ensure a safe working environment[52] Future Outlook and Growth Strategies - The company is focused on resource acquisition, feasibility analysis, technical design, cost estimation, and project management to maintain operational efficiency[34] - The company plans to invest in innovative technologies to enhance data processing capabilities and improve service delivery[70] - The company is exploring potential mergers and acquisitions to enhance its service offerings and market presence[64] - The company aims to maintain a foreign investment cap of 50% in joint ventures, ensuring compliance with local laws while attracting international partners[64] - Overall, the company is optimistic about future growth, driven by strategic initiatives and a robust user base[64]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 20-F (Mark One) ☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934 OR ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2020. OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 OR ☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITI ...