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]

GDS Holdings Limited (NASDAQ:GDS) Q2 2022 Earnings Conference Call August 23, 2022 8:00 AM 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 Michael Elias - Cowen Tina Hou - Goldman Sachs Bora Lee - RBC Capital Markets Yang Liu - Morgan Stanley Frank Louthan - Raymond James Operator Hello, ladies and gentlemen. Thank you for standing by ...

Financial Performance - For Q2 2022, GDS Holdings reported a net revenue of RMB 2,310.4 million (USD 344.9 million), a year-over-year increase of 24.0% from RMB 1,863.9 million in Q2 2021[6]. - Service revenue for Q2 2022 was RMB 2,302.7 million (USD 343.8 million), reflecting a 23.6% increase compared to RMB 1,863.0 million in Q2 2021[6]. - GDS Holdings experienced a net loss of RMB 375.3 million (USD 56.0 million) in Q2 2022, compared to a net loss of RMB 298.5 million in Q2 2021[6]. - The gross profit for Q2 2022 was RMB 468.6 million (USD 70.0 million), a 6.5% increase from RMB 439.9 million in Q2 2021[9]. - Total revenue for the six months ended June 30, 2022, was RMB 4,546,264, an increase from RMB 3,567,443 for the same period in 2021, representing a growth of approximately 27%[31]. - The company reported a net loss of RMB 375,307 for the three months ended June 30, 2022, compared to a net loss of RMB 298,463 for the same period in 2021, indicating a deterioration in performance[31]. - The gross profit for the six months ended June 30, 2022, was RMB 955,018, compared to RMB 836,721 for the same period in 2021, showing an increase of about 14%[31]. - The net loss for the six months ended June 30, 2022, was RMB 748,560 thousand, compared to RMB 675,947 thousand for the same period in 2021, representing an increase of approximately 10.5%[32]. Operational Metrics - The adjusted EBITDA for Q2 2022 grew by 18.6% to RMB 1,062.2 million (USD 158.6 million), with an adjusted EBITDA margin of 46.0%, down from 48.1% in Q2 2021[6]. - The total area signed and pre-signed by customers increased by 13,045 square meters to 588,054 square meters, a year-over-year growth of 16.1%[7]. - The operational area increased by 12,039 square meters to 504,383 square meters, representing an 18.2% year-over-year increase[7]. - The billing area rose by 13,659 square meters to 345,678 square meters, marking a 22.7% increase compared to the previous year[7]. - The adjusted EBITDA for the six months ended June 30, 2022, was RMB 2,113,357 thousand, with an adjusted EBITDA margin of 46.4%[36]. Expenses and Costs - The cost of sales for Q2 2022 was RMB 1,841.8 million (USD 275.0 million), a 29.3% increase from RMB 1,424.1 million in Q2 2021[9]. - The gross margin for Q2 2022 was 20.3%, down from 23.6% in Q2 2021 and 21.7% in Q1 2022, primarily due to rising electricity prices and seasonal increases in electricity consumption[10]. - Sales and marketing expenses for Q2 2022 were RMB 26.3 million (USD 3.9 million), a 20.9% increase from RMB 21.7 million in Q2 2021, but an 8.0% decrease from RMB 28.6 million in Q1 2022[10]. - R&D expenses for Q2 2022 were RMB 9.4 million (USD 1.4 million), compared to RMB 8.6 million in Q2 2021 and RMB 9.8 million in Q1 2022[11]. - Net interest expense for Q2 2022 was RMB 470.8 million (USD 70.3 million), a 14.4% increase from RMB 411.7 million in Q2 2021 and a 3.8% increase from RMB 453.5 million in Q1 2022[11]. Debt and Financing - As of June 30, 2022, cash amounted to RMB 9,159.2 million (USD 1,367.4 million), while total short-term debt was RMB 5,593.7 million (USD 835.1 million) and total long-term debt was RMB 34,118.1 million (USD 5,093.7 million)[15]. - The company has secured new debt financing and refinancing credit of RMB 1,826.0 million (USD 272.6 million) in the second quarter of 2022[15]. - The company completed the sale of a 49% stake in the Ulanqab No. 1 (UL1) data center project, which is a Build-Operate-Transfer (B-O-T) joint venture, with GDS holding 51% and GIC holding 49%[16]. Strategic Initiatives - A framework agreement has been signed to establish an offshore China data center fund with a sovereign wealth fund, with a total investment of RMB 6.7 billion (approximately USD 1 billion), where GDS will manage the projects[17]. - The company is investing in new data center plans and strategic acquisitions to enhance its market position[27]. - GDS anticipates continued growth in the high-performance data center market and related services in China[27]. Market Position and Client Base - GDS Holdings Limited operates high-performance data centers strategically located in major economic centers in China[25]. - The company provides a range of services including managed hybrid cloud services and managed network services, catering to some of China's largest clients[26]. - GDS's client base includes large cloud service providers, internet companies, financial institutions, and multinational corporations[26]. - The company emphasizes the importance of maintaining relationships with new and existing clients in a competitive market[27]. Share Structure and Governance - The company has a dual-class share structure with Class A and Class B ordinary shares, where Class B shares have 20 votes per share in specific matters[38]. - As of June 30, 2022, there were 67,590,336 Class B ordinary shares issued, primarily held by Mr. Huang[38]. - Class B ordinary shares can be converted into Class A ordinary shares at any time, and all Class B shares will convert into Class A shares upon certain conditions being met[39]. - Mr. Huang retains the right to nominate five directors as long as he holds at least 5% of the company's issued share capital[39]. - The quorum for a shareholders' meeting requires at least two eligible shareholders representing not less than one-third of the total voting rights, except for certain specified meetings[40].

GDS Holdings Limited (NASDAQ:GDS) Q1 2022 Earnings Conference Call May 18, 2022 8:00 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 Tina Hou - Goldman Sachs Jon Atkin - RBC Capital Markets. Frank Louthan - Raymond James Gokul Hariharan - JPMorgan Joel Ying - Nomura Sara Wang - UBS Operator Hello, ladies and gentlemen. Thank you fo ...