GDS(GDS) - 2022 Q1 - Quarterly Report

GDS Fourth Quarter and Full Year 2021 Results Report GDS Holdings Limited Fourth Quarter and Full Year 2021 Results Report Fourth Quarter 2021 Financial Highlights 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 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 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] - 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] Management Commentary 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] - 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] - 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] - 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] Fourth Quarter 2021 Financial Results Revenue and Cost of Revenue (Q4 2021) 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] - 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] Gross Profit and Adjusted Gross Profit (Q4 2021) 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] Operating Expenses (Q4 2021) 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] - General and administrative expenses increased quarter-over-quarter mainly due to higher professional service fees related to acquisitions[15] Other Income (Expenses) and Net Loss (Q4 2021) 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] - Other net income increased quarter-over-quarter mainly due to higher VAT-related government subsidies in the current quarter[17] Adjusted EBITDA and Per Share Data (Q4 2021) 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] Full Year 2021 Financial Results Revenue and Cost of Revenue (FY 2021) 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) 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) 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) 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) 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 Sales Performance 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] Data Center Resources 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] - In Q4, construction commenced for SH17 Phase 3, CS3 Phase 1, BJ14 Phase 1, HL1 Phase 2, and SZ10 data centers[26] - 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][31] - 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] 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 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] - 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] - 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] - 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] - 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] - 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] - 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] - 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] Business Outlook 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 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] - A replay of the conference call will be available until 8:59 AM U.S. Eastern Time on March 30, 2022[45] - A live and archived webcast of the conference call is available on the company's investor relations website at investors.gdsservices.com[46] Non-GAAP Disclosure 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] - 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] - 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] Exchange Rate Information 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] Statement Regarding Preliminary Unaudited Financial Information 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] - 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] About GDS Holdings Limited 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] - 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] - 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] Safe Harbor Statement 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] - 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] - 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] For Investor and Media Inquiries 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] - Alternatively, contact Ross Warner or Brandi Piacente of The Piacente Group, Inc., with contact details for China, International, and U.S[58] Financial Statements Unaudited Condensed Consolidated Balance Sheets 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 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 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 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] Reconciliations of GAAP and Non-GAAP Results 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% |