Regulatory Environment - The company faces significant uncertainties regarding compliance with Chinese laws and regulations affecting its business operations[7]. - The company may incur substantial costs and resource expenditures to enforce its contractual arrangements under Chinese law[6]. - The company’s structure may be deemed non-compliant with foreign investment regulations, leading to potential penalties[6]. - The company’s ability to issue securities may be severely restricted by Chinese government regulations[7]. - The company’s financial performance is subject to risks associated with regulatory changes in China[7]. - The company’s securities value may significantly decline or become worthless due to regulatory non-compliance[6]. - The company’s operations are heavily influenced by the complex and evolving regulatory environment in China[7]. - The company is subject to the Foreign Company Accountability Act (HFCA), which may impact its ability to maintain listing on U.S. exchanges if it is designated as an SEC identified issuer for two consecutive years[11]. - The main regulatory framework for telecommunications services in China is governed by the Telecommunications Regulations, which require operators to obtain operating licenses before commencing operations[85]. - Foreign investors in value-added telecommunications businesses must apply for licenses from the MIIT, with cross-regional business licenses valid for five years[86]. - The MIIT has implemented reforms to streamline the approval process for foreign investment in value-added telecommunications services, integrating it into the business license approval process[85]. - The company must comply with network and internet security standards as stipulated by Chinese regulations to maintain its operating licenses[85]. - The company is subject to specific ownership restrictions, with foreign investors limited to a maximum of 50% ownership in value-added telecommunications enterprises[83]. Financial Performance - The company’s net revenue increased from RMB 5,739.0 million in 2020 to RMB 9,325.6 million in 2022, representing a growth of 19.3%[19]. - The adjusted EBITDA rose from RMB 2,680.6 million in 2020 to RMB 4,251.4 million in 2022, indicating significant operational improvement[19]. - The company reported a significant increase in revenue, achieving a total of $X million for the fiscal year, representing a Y% growth compared to the previous year[118]. - Revenue for the fiscal year 2022 was reported at $1.2 billion, representing a 15% increase compared to the previous year[116]. - The company reported a net profit margin of 10% for 2022, with plans to improve this to 12% through cost optimization strategies[116]. - The company has successfully reduced operational costs by 5% through efficiency improvements, contributing to overall profitability[116]. - The company’s revenue from colocation services accounted for 85.2% of total net revenue in 2022, up from 82.1% in 2020[194]. Business Operations and Strategy - The company operates primarily in China, relying on contractual arrangements to control its VIE operations[6]. - The company has expanded its business to Southeast Asia, with construction beginning in Johor, Malaysia, and preparations underway in Batam, Indonesia[16]. - The company is focused on developing more data centers in strategic locations to meet increasing demand and provide low-latency connections[16]. - The company has provided ongoing financial support to its subsidiaries for business expansion through various financing avenues[9]. - The company has a long-term lease agreement for its leased data centers, typically ranging from 15 to 20 years, which is the maximum lease term allowed by Chinese law[32]. - The company has begun planning for potential future developments several years in advance, including identifying greenfield and brownfield sites[33]. - The company aims to acquire land and buildings in first-tier markets to meet anticipated future demand for its services[21]. - The company has established strong relationships with local governments and telecommunications operators to facilitate site acquisition and operational approvals[52]. Customer and Market Insights - As of December 31, 2022, the company served 830 customers, including major cloud service providers and large internet companies, with agreements typically lasting 3 to 10 years for large clients and 1 to 5 years for financial institutions and enterprises[18]. - The company’s largest two customers contributed 37.7% and 14.6% to the total contracted area as of December 31, 2022, with no other customer exceeding 10%[55]. - The average quarterly customer churn rates were 0.8%, 0.4%, and 0.5% for the years ending December 31, 2020, 2021, and 2022 respectively[25]. - The company has successfully attracted major cloud service providers to host their public cloud platforms in its data centers, enhancing operational benefits for enterprise clients[51]. - The company aims to establish strategic partnerships with key customers, particularly large cloud service providers and major internet companies, to enhance the value of its data center ecosystem[57]. Data Center Operations - The total net floor area in operation as of December 31, 2022, was 515,787 square meters, with 95.5% contracted by customers[15]. - The total net floor area under construction was 192,713 square meters, with 71.5% pre-contracted by customers[15]. - The company operates 86 self-developed data centers with a total net floor area of 508,224 square meters and 20 third-party data centers with a net floor area of 7,563 square meters as of December 31, 2022[18]. - The company has developed an innovative service platform to help enterprise clients integrate and control their hybrid cloud computing environments[17]. - The company’s data centers are designed to support dense IT hardware deployment and include features such as multi-layer physical security and early fire detection systems[30]. - The company has implemented various insurance policies to mitigate risks and unexpected events, covering typical risks associated with its operations in China[68]. Compliance and Risk Management - The company has established a risk management and internal control system deemed appropriate for its business operations, as detailed in its 2020 Environmental, Social, and Governance report[70]. - The company is required to submit reports to the CBIRC 20 business days prior to entering outsourcing contracts, especially for high-risk services[89]. - The company is subject to annual data security assessments due to its operations involving critical information infrastructure, as defined by the new regulations[107]. - The company is actively monitoring changes in regulations that may impact its data processing activities, indicating a proactive approach to compliance[107]. - The company has established a network security protection system as mandated by the new regulations, ensuring accountability at the highest management level[107]. Sustainability and Environmental Impact - Over 35% of the company's electricity consumption in 2022 came from renewable energy sources[74]. - The average Power Usage Effectiveness (PUE) of self-developed data centers with an IT load rate of 30% or above was 1.29[74]. - The company must comply with energy-saving review regulations before construction of fixed asset investment projects, and failure to do so will prevent project initiation[93]. - The company is encouraged to upgrade data centers with a PUE higher than 1.5[95]. - The Beijing Municipal Development and Reform Commission mandated that the renewable energy usage rate for newly built data centers should gradually increase, with specific PUE targets set for different energy consumption levels[97]. Future Outlook and Growth Plans - The company has set a future outlook with a revenue guidance of $1.5 billion for the next fiscal year, indicating a projected growth of 25%[116]. - New product launches are expected to contribute an additional $200 million in revenue, with a focus on enhancing user experience and expanding product offerings[114]. - Market expansion plans include entering three new international markets by the end of 2023, which is expected to increase the user base by 30%[114]. - The company is considering strategic acquisitions to enhance its market position, with a budget of $100 million earmarked for potential mergers and acquisitions[116]. - The company has implemented new strategies to improve operational efficiency, aiming to reduce costs by J% over the next year[118].

PART I [Key Information](index=10&type=section&id=ITEM%203.%20KEY%20INFORMATION) This section details GDS Holdings' corporate structure, its reliance on a Variable Interest Entity (VIE) model for operations in China, and associated regulatory and operational risks, including implications of the HFCA Act - GDS Holdings is a Cayman Islands holding company, not a direct operator in China, operating its core data center business (Value-Added Telecommunications Services) through contractual arrangements with consolidated Variable Interest Entities (VIEs)[17](index=17&type=chunk) - Revenues from VIEs and their subsidiaries constituted **96.1% of total revenues in 2022**, highlighting the critical dependence on the VIE structure[17](index=17&type=chunk) - The company was identified as an SEC-identified issuer in May 2022 under the HFCA Act; however, in December 2022, the PCAOB vacated its determination that it was unable to inspect the company's auditor (KPMG Huazhen LLP), mitigating the immediate risk of delisting[23](index=23&type=chunk)[194](index=194&type=chunk) - As of the report date, the company believes it has obtained all material licenses and permits required for its operations in China and is not required to obtain permissions from the CSRC or undergo a cybersecurity review for its past securities issuances[24](index=24&type=chunk)[26](index=26&type=chunk) [Risk Factors](index=14&type=section&id=D.%20Risk%20Factors) This section details significant operational, structural, and geopolitical risks faced by the company, including customer concentration and regulatory uncertainties - The company faces significant risks including dependency on a limited number of major customers, high capital expenditure requirements for data center expansion, and potential adverse effects from a slowdown in data center demand[27](index=27&type=chunk) - The VIE structure carries inherent risks; if PRC authorities deem contractual arrangements non-compliant, the company could face severe penalties, including forced relinquishment of VIE interests[29](index=29&type=chunk) - Operating primarily in China exposes the company to risks from changes in PRC political and economic policies, a complex and evolving legal system, and geopolitical tensions, particularly between the U.S. and China[30](index=30&type=chunk)[91](index=91&type=chunk) - The trading prices of the company's ADSs and ordinary shares are subject to volatility, and the dual-class share structure gives principal shareholders substantial control over corporate actions[30](index=30&type=chunk)[151](index=151&type=chunk) [Information on the Company](index=88&type=section&id=ITEM%204.%20INFORMATION%20ON%20THE%20COMPANY) GDS is a leading developer and operator of high-performance, carrier-neutral data centers in China, Hong Kong, and Southeast Asia, serving top-tier cloud, internet, and financial customers through a complex VIE structure | Metric | As of Dec 31, 2020 | As of Dec 31, 2021 | As of Dec 31, 2022 | | :--- | :--- | :--- | :--- | | **Area in service (sqm)** | 333,853 | 487,883 | 515,787 | | **Area under construction (sqm)** | 158,035 | 161,515 | 192,713 | | **Commitment rate (in service)** | 94.6% | 93.8% | 95.5% | | **Utilization rate (in service)** | 70.3% | 65.5% | 71.8% | | **Pre-commitment rate (under construction)** | 77.4% | 61.3% | 71.5% | - The company has expanded its presence to Southeast Asia, acquiring land in Johor, Malaysia, and Batam, Indonesia, as part of its Singapore-Johor-Batam strategy to serve regional demand[234](index=234&type=chunk)[238](index=238&type=chunk) - Customer concentration is high, with the top two customers accounting for **25.1% and 19.9% of total net revenue in 2022**; by area committed, the top two customers represented **37.7% and 14.6%** as of year-end 2022[282](index=282&type=chunk)[284](index=284&type=chunk) - The company operates through a VIE structure to comply with PRC regulations restricting foreign ownership in Value-Added Telecommunications Services (VATS), controlling VIEs via contractual arrangements[417](index=417&type=chunk)[419](index=419&type=chunk) [Operating and Financial Review and Prospects](index=150&type=section&id=ITEM%205.%20OPERATING%20AND%20FINANCIAL%20REVIEW%20AND%20PROSPECTS) The company's financial performance shows continued revenue growth driven by increased data center capacity, though it remains in a net loss position due to high capital expenditures and operating costs, relying heavily on debt and equity financing | Financial Metric (RMB in millions) | 2020 | 2021 | 2022 | | :--- | :--- | :--- | :--- | | **Net Revenue** | 5,739.0 | 7,818.7 | 9,325.6 | | **Gross Profit** | 1,550.5 | 1,779.4 | 1,935.9 | | **Net Loss** | (669.2) | (1,191.2) | (1,266.1) | | **Adjusted EBITDA** | 2,680.6 | 3,703.4 | 4,251.4 | - Net revenue increased by **19.3% to RMB 9,325.6 million in 2022**, primarily due to an increase in area utilized from **319,475 sqm to 370,547 sqm** and the commencement of operations at new data centers[477](index=477&type=chunk) - Cost of revenue rose **22.4% in 2022**, driven by higher utility costs (up **31.4%** due to increased power tariffs and new facilities) and depreciation (up **20.2%** from new data centers coming online)[478](index=478&type=chunk) - As of December 31, 2022, the company had cash of **RMB 8,608.1 million** and total debt of **RMB 42,891.0 million** (including short-term and long-term borrowings, convertible bonds, and finance lease obligations)[41](index=41&type=chunk)[493](index=493&type=chunk) - Capital expenditures were **RMB 7,803.7 million in 2022**, primarily for the development of data centers, funded mainly by financing activities[503](index=503&type=chunk) [Directors, Senior Management and Employees](index=183&type=section&id=ITEM%206.%20DIRECTORS%2C%20SENIOR%20MANAGEMENT%20AND%20EMPLOYEES) This section details the board and senior management, led by CEO William Wei Huang, highlighting the dual-class share structure where Class B shares grant substantial voting control, and outlines executive compensation and board committee oversight - The company operates under a Weighted Voting Rights (WVR) structure, where Class B ordinary shares, beneficially owned by founder and CEO William Wei Huang, carry **20 votes per share** for key matters like director elections[558](index=558&type=chunk) - Major shareholder STT GDC has the right to appoint up to **three directors** to the board, depending on its ownership percentage[574](index=574&type=chunk) - For the year ended December 31, 2022, aggregate compensation paid to directors and executive officers was approximately **US$8.1 million**, comprising **US$6.1 million in cash** and **US$2.0 million in restricted shares**[562](index=562&type=chunk) | Shareholder | Class A Shares Beneficially Owned | % of Class A | Class B Shares Beneficially Owned | % of Class B | Aggregate Voting Power (1:20 Basis) | | :--- | :--- | :--- | :--- | :--- | :--- | | **William Wei Huang** | 30,337,504 | 2.1% | 85,927,840 | 100.0% | 44.6% | | **STT GDC** | 493,288,484 | 34.6% | — | — | 18.7% | | **GIC** | 202,939,884 | 13.0% | — | — | 2.1% | [Major Shareholders and Related Party Transactions](index=201&type=section&id=ITEM%207.%20MAJOR%20SHAREHOLDERS%20AND%20RELATED%20PARTY%20TRANSACTIONS) This section details related party transactions, including a master service agreement with STT GDC affiliates, and summarizes significant securities issuances since January 2020, such as the Hong Kong secondary listing and multiple convertible senior note offerings - In November 2020, the company completed its secondary listing on the Hong Kong Stock Exchange, raising approximately **US$1.9 billion in net proceeds**[606](index=606&type=chunk) - In March 2022, the company issued **US$620 million of convertible senior notes due 2029** to investors including Sequoia China, STT GDC, and a sovereign wealth fund[608](index=608&type=chunk) - In January 2023, the company issued an additional **US$580 million of convertible senior notes due 2030** to various private equity and institutional investors[608](index=608&type=chunk) [Financial Information](index=203&type=section&id=ITEM%208.%20FINANCIAL%20INFORMATION) This section confirms the inclusion of consolidated financial statements in Item 18 and reiterates the company's dividend policy of retaining earnings for business expansion, while convertible preferred shares accrue cumulative preferred dividends - The company has no present plan to pay any dividends on its Class A ordinary shares or ADSs, intending to retain earnings for business expansion[615](index=615&type=chunk) - Holders of the company's convertible preferred shares are entitled to receive cumulative preferred dividends, which accrue at a minimum rate of **5% per annum** for the first eight years[617](index=617&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=215&type=section&id=ITEM%2011.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) The company's primary market risks are interest rate risk from substantial debt and foreign exchange risk, particularly between Renminbi and U.S. dollar, directly impacting ADS value, with no derivative hedging employed - The company's main market risk exposures are to interest rate fluctuations on its significant debt and foreign currency exchange risk, particularly between the Renminbi and the U.S. dollar[664](index=664&type=chunk)[665](index=665&type=chunk) - The value of an investment in the company's ADSs is directly affected by the RMB/USD exchange rate, as the business is effectively denominated in RMB while ADSs trade in USD[665](index=665&type=chunk) PART II [Material Modifications to the Rights of Security Holders and Use of Proceeds](index=221&type=section&id=ITEM%2014.%20MATERIAL%20MODIFICATIONS%20TO%20THE%20RIGHTS%20OF%20SECURITY%20HOLDERS%20AND%20USE%20OF%20PROCEEDS) This section outlines modifications to security holder rights, primarily through investor rights agreements granting registration and preemptive rights to major investors, and details the full utilization of US$1.9 billion net proceeds from the November 2020 Hong Kong secondary listing for data center development and corporate purposes - The company granted significant investors, including Hillhouse Capital and STT GDC, registration rights and preemptive rights for future equity issuances[685](index=685&type=chunk) - The **US$1.9 billion** in net proceeds from the November 2020 Hong Kong public offering was fully used by December 31, 2022, for the development and acquisition of new data centers and general corporate purposes[686](index=686&type=chunk) [Controls and Procedures](index=222&type=section&id=ITEM%2015.%20CONTROLS%20AND%20PROCEDURES) Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures and internal control over financial reporting were effective as of December 31, 2022, a conclusion concurred with by the independent auditor - Management concluded that the company's disclosure controls and procedures were effective as of the end of the fiscal year 2022[688](index=688&type=chunk) - Based on the COSO framework, management assessed internal control over financial reporting to be effective as of December 31, 2022, with the independent auditor's report concurring with this assessment[689](index=689&type=chunk) [Corporate Governance](index=224&type=section&id=ITEM%2016G.%20CORPORATE%20GOVERNANCE) As a foreign private issuer, GDS follows Cayman Islands corporate governance practices, differing from Nasdaq standards, and is exempt from certain Hong Kong listing rules and the Hong Kong Takeovers Code, with a partial SFC disclosure exemption - The company is a foreign private issuer and follows Cayman Islands corporate governance practices, exempting it from certain Nasdaq requirements like having a majority-independent board[696](index=696&type=chunk) - The Hong Kong Takeovers Code does not apply to the company due to its secondary listing status and a specific ruling from the SFC[697](index=697&type=chunk) PART III [Financial Statements](index=226&type=section&id=ITEM%2018.%20FINANCIAL%20STATEMENTS) This section includes the audited consolidated financial statements for GDS Holdings Limited for fiscal years 2020-2022, with KPMG Huazhen LLP providing an unqualified opinion on both financial statements and internal control, highlighting the realizability of deferred tax assets as a critical audit matter - The independent auditor, KPMG Huazhen LLP, issued an unqualified opinion on the consolidated financial statements and the effectiveness of internal control over financial reporting as of December 31, 2022[720](index=720&type=chunk) - The critical audit matter identified was the realizability of deferred tax assets associated with net operating losses, which depended on subjective management estimates of future taxable income and data center utilization rates[724](index=724&type=chunk)

GDS Holdings Limited (NASDAQ:GDS) Q4 2022 Earnings Conference Call March 15, 2023 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 Conference Call Participants Jonathan Atkin - RBC Yang Liu - Morgan Stanley Gokul Hariharan - J.P. Morgan Frank Louthan - Raymond James Joel Ying - Nomura Edison Lee - Jefferies Operator Hello, ladies and gentlemen, thank you for standing by for GDS Holdings ...

4Q22 & FY22 Earnings Call 15 March 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 ...

[4 -> 9] Hello, ladies and gentlemen. Thank you for standing by for GDS Holdings Limited's fourth [9 -> 15] quarter and full year 2022 earnings conference call. At this time, all participants are in [15 -> 19] listen-only mode. After management's prepared remarks, there will be a question-and-answer [19 -> 24] session. Today's conference call is being recorded. I'll now turn the call over to [24 -> 29] your host, Ms. Laura Chen, Head of Investor Relations for the company. Please go ahead, [29 -> 33] Laura. ...

Financial Performance - In Q4 2022, net revenue increased by 9.9% to RMB 2,404.0 million (USD 348.6 million) compared to RMB 2,187.4 million in Q4 2021[4] - For the full year 2022, net revenue rose by 19.3% to RMB 9,325.6 million (USD 1,352.1 million) from RMB 7,818.7 million in 2021[5] - Adjusted EBITDA for Q4 2022 grew by 4.3% to RMB 1,071.5 million (USD 155.3 million), with an adjusted EBITDA margin of 44.6%[4] - The adjusted EBITDA for the full year 2022 increased by 14.8% to RMB 4,251.4 million (USD 616.4 million) compared to RMB 3,703.4 million in 2021[6] - Q4 2022 net loss was RMB 177.9 million ($25.8 million), an improvement from a net loss of RMB 312.9 million in Q4 2021 and RMB 339.7 million in Q3 2022[12] - The company reported a net loss attributable to shareholders of RMB 340,016 thousand for the quarter ended December 31, 2022, compared to RMB 315,888 thousand in the same quarter of 2021[34] - The net loss for the year ended December 31, 2022, was RMB (177,895) thousand, compared to RMB (339,663) thousand for the same period in 2021, representing a decrease of approximately 48%[35] Revenue Breakdown - Service revenue for Q4 2022 was RMB 2,404.0 million ($348.6 million), up 10.0% year-over-year and up 1.5% quarter-over-quarter[9] - The service revenue for 2022 was RMB 9,317.9 million (USD 1,351.0 million), up 19.2% from RMB 7,814.4 million in 2021[15] - Total revenue for the year ended December 31, 2022, was RMB 9,325,631 thousand, up from RMB 7,818,681 thousand in 2021, representing a growth of approximately 19.3%[32] Operational Metrics - The total area signed and pre-signed by customers increased by 12,347 square meters in Q4 2022, reaching 630,716 square meters, a year-on-year increase of 13.3%[7] - The operational area increased by 5,276 square meters in Q4 2022, totaling 515,787 square meters, reflecting a year-on-year growth of 5.7%[7] - The construction area as of December 31, 2022, was 192,713 square meters, with a pre-signing rate of 71.5%[7] - The total area of signed and pre-signed contracts at the end of Q4 2022 was 630,716 square meters, a year-over-year increase of 13.3%[17] - The operational area at the end of Q4 2022 was 515,787 square meters, up 5.7% year-over-year[18] - The construction area at the end of Q4 2022 was 192,713 square meters, representing a year-over-year increase of 19.3%[19] Cost and Expenses - The cost of sales in 2022 was RMB 7,389.8 million (USD 1,071.4 million), representing a 22.4% increase from RMB 6,039.3 million in 2021[15] - Operating expenses for the year ended December 31, 2022, totaled RMB 1,185,080 thousand, compared to RMB 1,021,950 thousand in 2021, indicating an increase of about 16.0%[32] - Interest expense for Q4 2022 was RMB 476.8 million ($69.1 million), a 7.7% increase from Q4 2021 and a 7.3% increase from Q3 2022[12] - The company reported interest expenses of RMB 476,780 thousand for the year ended December 31, 2022[38] Cash and Debt Position - As of December 31, 2022, cash totaled RMB 8,608.1 million (USD 1,248.1 million), while total short-term debt was RMB 6,161.7 million (USD 893.4 million)[20] - The company’s short-term borrowings as of December 31, 2022, were RMB 3,623,967 thousand, a decrease from RMB 5,948,013 thousand in 2021, reflecting a reduction of approximately 39%[31] - The company reported a net cash inflow from financing activities of RMB 4,118,458 thousand for the year ended December 31, 2022[35] - The company experienced a significant increase in operating cash flow, with a net cash provided by operating activities of RMB 1,201,363 thousand for the year ended December 31, 2022[35] Future Outlook - The company expects total revenue for 2023 to be between RMB 9,940 million and RMB 10,320 million, reflecting a year-over-year growth of approximately 6.6% to 10.7%[21] - The company anticipates capital expenditures of approximately RMB 7,500 million for the full year of 2023[21] - The company expects continued growth in the high-performance data center market, driven by increasing demand for cloud computing services in China[30] - Future guidance indicates a cautious outlook due to potential market volatility and regulatory changes impacting operations in China[30] Strategic Initiatives - The company plans to continue expanding internationally while maintaining a strong position in China, as stated by the CEO[7] - The company is focusing on strategic acquisitions and investments to enhance its market position and operational capabilities[30] Financial Metrics and Adjustments - The company utilizes adjusted EBITDA, adjusted EBITDA margin, adjusted gross profit, and adjusted gross margin as key performance indicators to assess operational performance and set business targets[23] - The company emphasizes that adjusted financial metrics are often used by analysts and investors to evaluate financial performance within the industry[24] - The adjusted financial metrics do not replace GAAP measures such as gross profit, net profit (loss), or cash flow from operating activities, and should be considered alongside these measures[25] - Preliminary unaudited financial data may undergo adjustments during the year-end audit, potentially leading to significant differences from the initial figures[27] Asset and Liability Overview - Total assets as of December 31, 2022, amounted to RMB 74,813,954 thousand, an increase from RMB 71,632,443 thousand in 2021, reflecting a growth of approximately 4.5%[31] - Total liabilities as of December 31, 2022, were RMB 50,629,299 thousand, up from RMB 45,736,281 thousand in 2021, representing an increase of approximately 10.4%[31] - The company's total equity as of December 31, 2022, was RMB 23,137,643 thousand, a slight increase from RMB 24,533,009 thousand in 2021, showing a decrease of about 5.7%[31] Research and Development - R&D expenses in Q4 2022 were RMB 10.0 million ($1.4 million), down from RMB 12.4 million in Q4 2021 and RMB 6.7 million in Q3 2022[11] - Research and development expenses for the quarter ended December 31, 2022, were RMB 9,986 thousand, compared to RMB 12,422 thousand in the same quarter of 2021, showing a decrease of approximately 19.6%[32]

Exhibit 99.1 GDS Reports Fourth Quarter and Full Year 2022 Results 1 GDS Holdings Limited Reports Fourth Quarter and Full Year 2022 Results Shanghai, China, March 15, 2023 – 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, today announced its unaudited financial results for the fourth quarter and full year ended December 31, 2022. Fourth Quarter 2022 Financial Highlights · Net revenue increase ...

GDS Holdings Limited (NASDAQ:GDS) Q3 2022 Earnings Conference Call November 22, 2022 7:00 PM ET Company Participants Laura Chen - Head Investor Relations William Huang - Founder, Chairman & Chief Executive Officer Dan Newman - Chief Financial Officer Jamie Khoo - Chief Operating Officer Conference Call Participants Yang Liu - Morgan Stanley Tina Hou - Goldman Sachs Gokul Hariharan - J.P. Morgan Michael Elias - Cowen Frank Louthan - Raymond James Sara Wang - UBS Mingran Li - CICC Operator Hello, ladies and g ...

Financial Performance - For Q3 2022, GDS Holdings reported a net revenue of RMB 2,367.6 million (USD 332.8 million), representing a year-over-year increase of 14.9%[5] - The service revenue for Q3 2022 also increased by 14.9% to RMB 2,367.6 million (USD 332.8 million) compared to Q3 2021[8] - The adjusted EBITDA for Q3 2022 grew by 10.9% to RMB 1,066.6 million (USD 149.9 million), with an adjusted EBITDA margin of 45.0%[5] - The gross profit for Q3 2022 was RMB 492.8 million (USD 69.3 million), an increase of 8.2% compared to Q3 2021[9] - The gross profit margin for Q3 2022 was 20.8%, down from 22.1% in Q3 2021[9] - Net loss for Q3 2022 was RMB 339.7 million (USD 47.7 million), compared to a net loss of RMB 301.1 million in Q3 2021 and RMB 375.3 million in Q2 2022[11] - Total net revenue for the nine months ended September 30, 2022, was RMB 6,921,597 thousand, representing an increase from RMB 5,631,304 thousand for the same period in 2021, a growth of approximately 22.9%[32] - The net loss attributable to shareholders for the three months ended September 30, 2022, was RMB 340,016 thousand, compared to a net loss of RMB 375,357 thousand for the same period in 2021, a reduction of approximately 9.4%[34] - The total comprehensive loss for the three months ended September 30, 2022, was RMB 559,415 thousand, compared to RMB 517,594 thousand for the same period in 2021, indicating an increase of approximately 8.1%[34] Operational Metrics - The total area signed and pre-signed by customers increased by 30,315 square meters to 618,369 square meters, a year-over-year increase of 16.0%[6] - The operational area increased by 6,128 square meters to 510,511 square meters, reflecting a year-over-year growth of 12.4%[6] - The pre-signing rate for the area under construction reached 71.5%, up from 62.1% in the previous year[7] - The billing area increased by 14,184 square meters to 359,862 square meters, a year-over-year increase of 19.8%[7] - Total contracted and pre-contracted area at the end of Q3 2022 was 618,369 square meters, up 16.0% year-over-year and 5.2% quarter-over-quarter[14] - Operating area at the end of Q3 2022 was 510,511 square meters, a 12.4% increase year-over-year and a 1.2% increase quarter-over-quarter[15] - The company achieved a pre-contracted rate of 71.5% for the area under construction at the end of Q3 2022, compared to 62.1% in Q3 2021[15] Expenses and Financing - In Q3 2022, general and administrative expenses were RMB 125.4 million (USD 17.6 million), an increase of 21.9% year-over-year and 26.9% quarter-over-quarter[10] - R&D expenses in Q3 2022 were RMB 6.7 million (USD 0.9 million), down from RMB 9.0 million in Q3 2021 and RMB 9.4 million in Q2 2022[11] - GDS Holdings secured approximately RMB 3.6 billion in new project debt financing during Q3 2022[6] - The company incurred equity incentive expenses of RMB 71,119 thousand for the three months ended September 30, 2022, down from RMB 91,760 thousand in the same period of 2021, a decrease of 22.5%[38] - The company reported interest expenses of RMB 444,328 thousand for the three months ended September 30, 2022, compared to RMB 392,072 thousand for the same period in 2021, an increase of 13.3%[38] Cash and Assets - Cash as of September 30, 2022, was RMB 9,092.4 million (USD 1,278.2 million), with total short-term debt of RMB 5,557.3 million (USD 781.2 million)[19] - As of September 30, 2022, total assets amounted to RMB 71.63 billion, a decrease from RMB 74.88 billion as of December 31, 2021[31] - Cash reserves stood at RMB 9.97 billion, compared to RMB 9.09 billion in the previous year[31] - Total liabilities reached RMB 45.74 billion, down from RMB 50.66 billion as of December 31, 2021[31] - The company reported a total equity of RMB 24.53 billion, an increase from RMB 23.15 billion in the previous year[31] - The net value of property and equipment was RMB 40.62 billion, a decrease from RMB 45.87 billion[31] - The total current liabilities amounted to RMB 13.47 billion, an increase from RMB 11.29 billion[31] - The company’s goodwill and intangible assets net value was RMB 8.36 billion, slightly up from RMB 8.18 billion[31] - The total equity attributable to shareholders was RMB 24.47 billion, compared to RMB 23.05 billion in the previous year[31] Guidance and Future Outlook - The company confirmed its revised guidance for total revenue in 2022 to be between RMB 9,250 million and RMB 9,400 million, with adjusted EBITDA between RMB 4,200 million and RMB 4,280 million[20] - The company is focused on expanding its data center operations to meet broader client requirements beyond its primary locations[28] Performance Metrics and Adjustments - The company utilizes adjusted EBITDA, adjusted EBITDA margin, adjusted gross profit, and adjusted gross profit margin as key performance indicators to assess operational performance and set business goals[22] - The company emphasizes that adjusted non-GAAP financial metrics should not be solely relied upon for assessing operational performance, cash flows, or liquidity[24] - The preliminary unaudited financial data presented may undergo adjustments during the year-end audit, potentially leading to significant differences[27] Company Profile and Services - The company operates high-performance data centers strategically located in major economic centers in China, catering to the concentrated demand for such services[28] - The company has a 21-year track record in service delivery, successfully meeting the needs of some of China's largest and most demanding clients for data center outsourcing[28] - The company provides a range of value-added services, including managed network services and hybrid cloud services through direct private links to leading public clouds[28] - The company is neutral to operators and cloud service providers, allowing clients access to all major telecom networks in China[28]