GDS Holdings Limited (NASDAQ:GDS) Q1 2024 Results Conference Call May 22, 2024 8:00 AM ET Company Participants Laura Chen - Head of Investor Relations William Huang - Chairman, Chief Executive Officer Daniel Newman - Chief Financial Officer Jamie Khoo - CEO of GDS International Conference Call Participants Jonathan Atkin - RBC Capital Markets Yang Liu - Morgan Stanley Cooper Belanger - TD Cowen Gokul Hariharan - JPMC Sara Wang - UBS Operator Hello, ladies and gentlemen. Thank you for standing by for GDS Hol ...

Financial Performance - For Q1 2024, GDS Holdings reported a net revenue of RMB 2,627.4 million (USD 363.9 million), representing a year-over-year increase of 9.1% from RMB 2,409.0 million in Q1 2023[4]. - The net loss for Q1 2024 was RMB 344.9 million (USD 47.8 million), an improvement from a net loss of RMB 474.6 million in Q1 2023[4]. - Adjusted EBITDA for Q1 2024 grew by 4.7% year-over-year to RMB 1,183.4 million (USD 163.9 million), with an adjusted EBITDA margin of 45.0%[4][6]. - The gross profit for Q1 2024 was RMB 573.7 million (USD 79.5 million), a 16.7% increase from RMB 491.7 million in Q1 2023[7]. - The adjusted gross profit for Q1 2024 was RMB 1,368.1 million (USD 189.5 million), up 8.6% from RMB 1,259.4 million in Q1 2023[8]. - The cost of sales for Q1 2024 was RMB 2,053.7 million (USD 284.4 million), a 7.1% increase from RMB 1,917.3 million in Q1 2023[7]. - In Q1 2024, the adjusted gross margin was 52.1%, compared to 52.3% in Q1 2023 and 49.7% in Q4 2023, primarily due to a decrease in maintenance and other operating costs[9]. - The company confirmed its revenue guidance for 2024 to be between RMB 11,340 million and RMB 11,760 million, with adjusted EBITDA expected to be between RMB 4,950 million and RMB 5,150 million[18]. Operational Metrics - The total contracted and pre-contracted area as of March 31, 2024, was 668,012 square meters, a 5.4% increase from 633,611 square meters a year earlier[5]. - The operational area increased by 12.5% year-over-year to 583,229 square meters, with a utilization rate of 74.9%[5]. - The total signed and pre-signed area at the end of Q1 2024 was 668,012 square meters, a 5.4% increase from 633,611 square meters at the end of Q1 2023, but a 0.4% decrease from 670,975 square meters at the end of Q4 2023[12]. - The operational area at the end of Q1 2024 was 583,229 square meters, a 12.5% increase from 518,517 square meters at the end of Q1 2023 and a 1.9% increase from 572,555 square meters at the end of Q4 2023[14]. - The billing area at the end of Q1 2024 was 436,875 square meters, a 16.0% increase from 376,632 square meters at the end of Q1 2023 and a 4.3% increase from 418,748 square meters at the end of Q4 2023[15]. - The operational area billing rate in Q1 2024 was 74.9%, compared to 72.6% in Q1 2023 and 73.1% in Q4 2023[15]. Expenses and Investments - Sales and marketing expenses in Q1 2024 were RMB 26.7 million (USD 3.7 million), a 5.3% increase from RMB 25.3 million in Q1 2023 and a 2.9% increase from RMB 25.9 million in Q4 2023, mainly due to increased marketing activities[9]. - General and administrative expenses in Q1 2024 were RMB 153.4 million (USD 21.2 million), a 30.6% increase from RMB 117.4 million in Q1 2023 and a 13.5% increase from RMB 135.1 million in Q4 2023, driven by international business expansion[9]. - R&D expenses in Q1 2024 were RMB 10.0 million (USD 1.4 million), compared to RMB 9.8 million in Q1 2023 and RMB 12.8 million in Q4 2023[9]. - GDS Holdings increased its private equity financing for GDSI from USD 587 million to USD 672 million to support accelerated customer demand[6]. - The company obtained new debt financing and refinancing credit amounting to RMB 4,294.0 million (USD 594.7 million) in the first quarter of 2024[16]. - The company plans to focus on expanding its market presence and investing in new technologies to drive future growth[30]. Debt and Cash Position - As of March 31, 2024, cash amounted to RMB 7,641.4 million (USD 1,058.3 million) while total short-term debt was RMB 5,893.5 million (USD 816.2 million)[16]. - The total long-term debt reached RMB 42,207.0 million (USD 5,845.6 million), including long-term loans of RMB 26,806.8 million (USD 3,712.7 million)[16]. - The company's cash and cash equivalents as of March 31, 2024, were RMB 7,641,439 thousand, a decrease of 0.9% from RMB 7,710,711 thousand as of December 31, 2023[29]. Market Outlook and Strategy - GDS Holdings is focused on maintaining and enhancing relationships with new and existing customers to support its business growth[27]. - The company is exploring strategic acquisitions and investments to expand its operations and market presence[27]. - GDS Holdings anticipates continued growth in the high-performance data center market in China and Southeast Asia, driven by increasing adoption of cloud computing and cloud service providers[27]. - The future outlook remains positive with expectations of continued revenue growth and improved margins[39]. - The company is committed to investing in new technologies to stay competitive in the market[39]. Risks and Compliance - GDS Holdings faces inherent risks and uncertainties that may impact its actual performance compared to forward-looking statements, including competition and regulatory changes in the industry[27]. - The company is committed to providing accurate and timely updates regarding its business outlook and operational strategies[27].

Revenue and Financial Performance - In 2023, the revenue contribution from the VIE and its subsidiaries accounted for 95.3% of the total revenue, down from 96.1% in both 2021 and 2022[5]. - The company's net revenue increased from RMB 7,818.7 million in 2021 to RMB 9,956.5 million in 2023, representing a growth of 6.8%[20]. - Adjusted EBITDA rose from RMB 3,703.4 million in 2021 to RMB 4,624.1 million in 2023, indicating a continuous improvement in operational efficiency[20]. - The company's cumulative losses increased from RMB 3,910.8 million in 2021 to RMB 9,469.8 million in 2023[198]. - Revenue from colocation services accounted for 87.1% of total net revenue in 2023, up from 83.3% in 2021[198]. - The company reported a significant increase in revenue, reaching $1.2 billion, representing a 15% year-over-year growth[103]. - The company anticipates a revenue growth of 10% for the next fiscal year, projecting total revenue to reach approximately $660 million[134]. Operational Structure and Governance - The company operates primarily through contractual arrangements with the VIE, which may not provide control as effective as direct ownership, posing potential risks[8]. - The company has established a series of contractual arrangements with its VIE and its shareholders, including exclusive technology licenses and service agreements[8]. - The management holding company is controlled through a series of contractual arrangements, with five designated management shareholders holding 20% equity each[7]. - GDS Investment Company directly and indirectly holds equity in 60 subsidiaries in mainland China[180]. - The company has established contractual arrangements to control VIE and its subsidiaries, ensuring effective operational governance and economic benefits[184]. Regulatory and Compliance Risks - There is uncertainty regarding the interpretation and application of current and future Chinese laws affecting the company's contractual rights[9]. - The company is subject to significant regulatory risks due to its reliance on contractual arrangements for operating in the value-added telecommunications sector[9]. - The Foreign Company Accountability Act (HFCA) poses a risk as the company may be classified as a "covered issuer" if its auditor is unable to be inspected due to foreign jurisdiction issues, which could lead to trading restrictions on its securities[13]. - The company may face severe penalties if its corporate structure and contractual arrangements are found to violate any current or future Chinese laws or regulations[9]. - The company is subject to capital control measures for profit remittance as per the regulations issued by the State Administration of Foreign Exchange (SAFE) on January 26, 2017, which require compliance with real transaction principles[107]. Market and Competitive Landscape - The Chinese high-performance data center services market continues to grow at a strong fundamental growth rate, driven by digital transformation trends and the application of new technologies[17]. - The company faces competition from both domestic and international network-neutral data center service providers, leveraging its operational track record and market share[60]. - The company is expanding its market presence in Southeast Asia, targeting a 25% market share by the end of 2024[103]. Data Center Operations and Development - The total net floor area in operation as of December 31, 2023, is 572,555 square meters, with 92.8% contracted by customers[17]. - The total net floor area under construction is 182,746 square meters, with 76.4% pre-contracted by customers[17]. - The company operates 93 self-developed data centers with a total net operating area of 565,062 square meters as of December 31, 2023[30]. - The company has a total estimated potential development area of approximately 458,330 square meters for future projects[20]. - The company has begun planning for potential future developments several years in advance, including securing land for new data centers[32]. Sustainability and Energy Efficiency - In 2023, over 38% of the company's electricity consumption came from renewable energy sources[62]. - The average Power Usage Effectiveness (PUE) for data centers with an IT load rate of 30% or more reached approximately 1.28 in 2023, indicating high energy efficiency[31]. - The company is committed to sustainability, with plans to implement eco-friendly practices in all new data center developments[138]. Customer Relationships and Satisfaction - The average customer satisfaction score was 9.647 out of 10, with a net promoter score of 85% based on a survey conducted by NielsenIQ[54]. - The company has successfully attracted major cloud service providers to host their public cloud platforms in its data centers, enabling direct private connections for enterprise clients[42]. - The average quarterly customer churn rate increased from 0.4% in 2021 to 1.9% in 2023, reflecting potential challenges in customer retention[26]. International Expansion and Strategic Partnerships - The company has established a long-term strategic partnership with STT GDC, which is its largest shareholder, providing industry expertise and governance guidance[174]. - The company established a joint venture with Indonesia Investment Authority (INA) in October 2023 to develop and expand data center operations in Indonesia[176]. - The company has expanded its footprint in Southeast Asia by acquiring land in Johor, Malaysia, and Batam, Indonesia, as part of its strategic plan to serve the region[175]. Legal and Litigation Matters - The company is involved in a pending class action lawsuit in California, alleging violations of the Securities Exchange Act[66]. - The company must comply with the requirements set forth in the Building (Planning) Regulations regarding the development intensity of buildings used as data centers[121]. Employee and Workforce Management - As of December 31, 2023, the company had 2,345 employees, an increase from 2,185 in 2022, representing a growth of approximately 7.3%[63]. - The annual employee turnover rate was reported at 16.5%[62]. - The company provides an average of 32.1 hours of training per employee annually[62].

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, 2023. 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 ...

Investment Rating - The report maintains an "Outperform" rating for GDS Holdings [3][4][10] Core Views - The company's net loss has expanded due to non-cash asset impairment, reflecting weak industry demand [4][9] - The company achieved total revenue of approximately RMB 9.957 billion in 2023, a year-on-year increase of 6.8%, with adjusted EBITDA of RMB 4.624 billion, up 8.8% [4][10] - The company is focusing on international business expansion, having secured a total of USD 587 million in convertible preferred stock subscriptions to support operations [4][10] - Revenue growth is expected to improve in 2024, with projections indicating a growth rate of over 12% [4][10] Financial Summary - Revenue projections for 2024-2026 are RMB 11.151 billion (+12%), RMB 12.824 billion (+15%), and RMB 15.004 billion (+17%) respectively [4][10] - Adjusted EBITDA for the same period is expected to be RMB 5.046 billion (+0.16%), RMB 5.667 billion (-2.0%), and RMB 6.332 billion [4][10] - The target price is set at HKD 19.09, reflecting a target market cap of RMB 26.892 billion based on a 13x EV/EBITDA multiple for 2024 [4][10]

GDS Holdings Limited (NASDAQ:GDS) Q4 2023 Earnings Conference Call March 26, 2024 8:00 AM ET Company Participants William Huang - Chairman, Chief Executive Officer Daniel Newman - Chief Financial Officer Laura Chen - Head of Investor Relations Conference Call Participants Frank Louthan - Raymond James Eunice Liu - Goldman Sachs Yang Liu - Morgan Stanley Daley Li - Bank of America Robert Chu - JP Morgan Bora Lee - RBC Capital Markets Sara Wang - UBS Transcript provided to Seeking Alpha by the Company Operato ...

Exhibit 99.1 GDS Reports Fourth Quarter and Full Year 2023 Results 1 GDS Holdings Limited Reports Fourth Quarter and Full Year 2023 Results Shanghai, China, March 26, 2024 – GDS Holdings Limited ("GDS Holdings", "GDS" or the "Company") (NASDAQ: GDS; HKEX: 9698), a leading developer and operator of high-performance data centers in China and South East Asia, today announced its unaudited financial results for the fourth quarter and full year ended December 31, 2023. Fourth Quarter 2023 Financial Highlights · ...

Financial Performance - In Q4 2023, net revenue increased by 6.3% year-over-year to RMB 2,556.5 million (USD 360.1 million) compared to RMB 2,404.0 million in Q4 2022[5] - The net loss for Q4 2023 was RMB 3,164.6 million (USD 445.7 million), a significant increase from a net loss of RMB 177.9 million in Q4 2022[5] - Adjusted EBITDA for Q4 2023 grew by 5.7% year-over-year to RMB 1,132.6 million (USD 159.5 million), with an adjusted EBITDA margin of 44.3%[5] - For the full year 2023, net revenue rose by 6.8% to RMB 9,956.5 million (USD 1,402.3 million) from RMB 9,325.6 million in 2022[6] - The net loss for 2023 was RMB 4,285.4 million (USD 603.6 million), compared to a net loss of RMB 1,266.1 million in 2022[6] - Adjusted EBITDA for 2023 increased by 8.8% to RMB 4,624.1 million (USD 651.3 million), with an adjusted EBITDA margin of 46.4%[6] - The total revenue for the year ended December 31, 2023, was RMB 8,034,051,000, representing a significant increase compared to RMB 7,389,774,000 for the previous year, marking a growth of approximately 8.7%[32] - The net loss attributable to the shareholders of the company for the year ended December 31, 2023, was RMB 4,290,053,000, compared to a net loss of RMB 1,509,885,000 for the previous year, indicating a deterioration in financial performance[32] - The gross profit for the year ended December 31, 2023, was RMB 1,467,200,367, slightly down from RMB 1,469,982,015 in the previous year, reflecting a marginal decline[32] - The company’s operating loss for the year ended December 31, 2023, was RMB 4,300,170,000, compared to an operating loss of RMB 1,268,890,000 in the previous year, highlighting increased operational challenges[32] Revenue and Growth - The company achieved a net increase of 20,074 square meters in billing area in Q4 2023, contributing to revenue growth[8] - The company expects total revenue for 2024 to be between RMB 11,340 million and RMB 11,760 million, representing a year-over-year growth of approximately 13.9% to 18.1%[20] - The expected adjusted EBITDA for 2024 is projected to be between RMB 4,950 million and RMB 5,150 million, with a year-over-year growth of approximately 7.0% to 11.4%[20] - The company reported a significant increase in service revenue, contributing RMB 3,013,416,000 for the year ended December 31, 2023, compared to RMB 2,404,034,000 in the previous year, which is an increase of approximately 25.3%[32] Costs and Expenses - In Q4 2023, the cost of sales was RMB 2,124.2 million (USD 299.2 million), an increase of 10.9% year-over-year and 2.5% quarter-over-quarter[9] - Q4 2023 gross profit was RMB 432.3 million (USD 60.9 million), down 11.4% from Q4 2022 and down 3.4% from Q3 2023[9] - The adjusted gross profit for Q4 2023 was RMB 1,270.9 million (USD 179.0 million), an increase of 3.8% year-over-year and 1.9% quarter-over-quarter[9] - The sales cost for 2023 was RMB 8,034.1 million (USD 1,131.6 million), an increase of 8.7% compared to RMB 7,389.8 million in 2022[14] - Research and development expenses in Q4 2023 were RMB 12.8 million (USD 1.8 million), up from RMB 10.0 million in Q4 2022 and RMB 10.5 million in Q3 2023[10] - Research and development expenses for the year ended December 31, 2023, totaled RMB 1,402,264,000, which is a slight increase from RMB 1,272,000,000 in the previous year, indicating continued investment in innovation[32] Assets and Liabilities - Total assets as of December 31, 2023, amounted to RMB 74.81 billion, a slight increase from RMB 74.45 billion as of December 31, 2022[31] - Cash and cash equivalents reached RMB 8.61 billion, compared to RMB 7.71 billion in the previous year, reflecting a growth of approximately 11.5%[31] - Total current assets increased to RMB 11.95 billion from RMB 10.98 billion, representing a year-over-year growth of about 8.8%[31] - Total liabilities decreased to RMB 50.63 billion from RMB 54.32 billion, indicating a reduction of approximately 6.2%[31] - The company's total equity attributable to shareholders rose to RMB 23.02 billion from RMB 18.89 billion, marking an increase of around 21.2%[31] - The total current liabilities increased to RMB 10.60 billion from RMB 8.31 billion, representing a growth of approximately 27.5%[31] Operational Metrics - Total contracted and pre-contracted area increased by 6.4% year-over-year to 670,975 square meters as of December 31, 2023[7] - Operating area increased by 11.0% year-over-year to 572,555 square meters as of December 31, 2023, with a contracted rate of 92.8%[7] - The adjusted gross profit margin for Q4 2023 was 49.7%, compared to 50.9% in Q4 2022 and 49.5% in Q3 2023[9] - The company is a leading developer and operator of high-performance data centers in China and Southeast Asia, strategically located in major economic centers[28] - The customer base primarily includes large cloud service providers, reflecting the company's capability to meet high-demand outsourcing requirements[28] Future Outlook - The company plans to expand its market presence and invest in new technologies to enhance service offerings and improve financial performance in the upcoming fiscal year[32] - The company plans to expand its market presence and invest in new product development to drive future growth[36] - The company is focusing on enhancing its operational efficiency and reducing costs to improve profitability in the upcoming quarters[36] Non-GAAP Metrics - The company utilizes adjusted EBITDA and adjusted gross margin as non-GAAP financial metrics to assess operational performance and set business targets[22] - The adjusted EBITDA and adjusted gross margin metrics are not defined by GAAP and should not be solely relied upon for assessing operational performance or cash flows[24] - The company does not provide forward-looking guidance on several financial metrics, including depreciation and amortization, due to their significant impact[25] Miscellaneous - The exchange rate used for converting RMB to USD is 7.0999 RMB per 1.00 USD, effective as of December 29, 2023[26] - Preliminary unaudited financial data may undergo adjustments during the year-end audit, potentially leading to significant differences[27] - The company reported a foreign exchange loss of RMB 53,625,000 for the year ended December 31, 2023, compared to a gain in the previous year, indicating increased volatility in currency markets affecting financial results[32] - The company reported a total of RMB 2.08 billion in convertible bonds due within one year, which was not present in the previous year's figures[31] - The company has made adjustments related to acquisition price adjustments, which positively impacted its financial results[36] - The company experienced a cash outflow from operating activities amounting to RMB 1,572,410 thousand for the year[36] - Cash and restricted cash at the end of the period was RMB 3,013,416 thousand, a decrease from RMB 4,856,318 thousand at the beginning of the year[36] - The company reported a net loss of RMB 1,266,118 thousand for the year ending December 31, 2023, compared to a net loss of RMB 4,285,393 thousand for the previous year, indicating a significant improvement[36] - The company reported a significant increase in user data, with a total of 1,270,922 users, representing a growth rate of 49.7%[35]

GDS Holdings Limited (NASDAQ:GDS) Q3 2023 Earnings Call Transcript November 22, 2023 8:00 AM ET Company Participants Laura Chen - Head of IR William Huang - Founder, Chairman and CEO Dan Newman - CFO Conference Call Participants Jonathan Atkin - RBC Yang Liu - Morgan Stanley Sara Wang - UBS Michael Elias - TD Cowen Operator Hello, ladies and gentlemen. Thank you for standing by for GDS Holdings Limited Third Quarter 2023 Earnings Conference Call. At this time, all participants are in listen-only mode. After ...

3Q23 Earnings Call 22 November 2023 NASDAQ: GDS HKEX: 9698 © GDS 2016 0 DISCLAIMER This presentation contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “may,” “will,” “expect,” “anticipate,” “aim,” “estimate,” “intend,” “plan,” “believe,” “potential,” “continue,” “is/are likely to” or othe ...