Financial Data and Key Metrics Changes - The company reported a revenue growth of 12.4% year on year and an adjusted EBITDA increase of 11.2% year on year for Q2 2025 [8][17] - The adjusted EBITDA margin for Q2 2025 was 47.3%, slightly down from 47.8% in Q2 2024 [18] - The net debt to LQA adjusted EBITDA ratio decreased from 6.6 times at the end of Q1 2025 to 6.1 times at the end of Q2 2025 [23][24] Business Line Data and Key Metrics Changes - Gross new bookings in Q2 2025 were 23,000 square meters, primarily from traditional internet and cloud businesses [10] - The gross moving during Q2 2025 was around 20,000 square meters, consistent with the previous five quarters, with a utilization rate reaching 77.5% [9] Market Data and Key Metrics Changes - The company achieved a significant milestone with the successful completion of its C REITs IPO, with units trading on the Shanghai Stock Exchange at an implied cap rate of below 5% [8] - The company noted that AI demand was relatively quiet due to uncertainties in chip supply in China, affecting customer decisions [11] Company Strategy and Development Direction - The company is focusing on asset monetization strategies, having completed the first data center ABS transaction and the first data center REITs IPO in China [14][20] - The company has around 900 megawatts of power land held for future development in Tier one markets, anticipating a wave of AI demand primarily for inference [12][13] - The company aims to maintain a flexible approach to asset monetization, targeting a net debt to EBITDA ratio of around five times while exploring new investment opportunities [31] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in AI-driven demand over the medium to long term, despite current uncertainties [11] - The company expects to deliver 35% of its total current backlog in 2025, indicating solid operational performance [10] - Management acknowledged that the market price for services has been stable since mid-last year, which is satisfactory given the broader economic context [43] Other Important Information - The company raised net proceeds of $676 million through the issuance of convertible bonds and equity, strengthening its balance sheet [8] - DayOne, the company's equity investment, added 246 megawatts of new commitments in Q2 2025, bringing its total power committed to over 780 megawatts [15][27] Q&A Session Summary Question: Future strategy regarding asset monetization in China - Management indicated that asset monetization remains highly accretive for shareholders, with attractive new investment opportunities on the horizon [30][31] Question: Development targets for DayOne - Management targets adding at least 500 megawatts annually, with a commitment to the market of at least 300 megawatts [34][35] Question: Customer profile and workloads for new orders - The customer profile includes traditional internet companies and cloud service providers, with a mix of GPU and CPU workloads [41] Question: Impact of deconsolidation on guidance - Management maintained FY 2025 revenue and adjusted EBITDA guidance unchanged despite the deconsolidation of C REIT assets [26][62] Question: Growth expectations for the second half of the year - Management expects a reacceleration in revenue and EBITDA growth in Q2 and Q3 of next year, driven by significant capacity deliveries [70]
GDS(GDS) - 2025 Q2 - Earnings Call Transcript