Thank you. Hello everyone, welcome to the fourth quarter and full year 2025 earnings conference call of GDS Holdings Limited.

The company's results were issued via newswire services earlier today and are posted online. A summary presentation, which will refer to during this conference call, can be viewed and downloaded from our IR website at investors.gdsservices.com.

Leading today's call is Mr. William Huang, GDS Founder, Chairman, and CEO, who will provide an overview of our business strategy and performance.

Mr. Dan Newman, GDS CFO, will then review financial and operating results.

Before we continue, please note that today's discussion will contain forward-looking statements made under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995.

Forward-looking statements involve inherent risks and uncertainties. As such, the company's results may be materially different from the views expressed today.

Further information regarding these and other risks and uncertainties is included in the company's prospectus as filed with the U.S. SEC.

The company does not assume any obligation to update any forward-looking statements except as required under applicable law. Please also note that GDS earnings press release and this conference call include discussions of unaudited GAAP financial information as well as unaudited non-GAAP financial measures.

GDS press release contains a reconciliation of the unaudited non-GAAP measures to the unaudited most directly comparable GAAP measures. I'll now turn the call over to GDS Founder, Chairman, and CEO, William Huang.

Please go ahead, William.

Thank you. Hello everyone.

This is William. Thank you for joining us on today's call.

2025 was a great year for GDS in terms of performance. We recorded a 11% growth in both revenue and adjusted EBITDA.

We beat the top end of our adjusted EBITDA guidance. With the contribution from asset monetization, we were free cash flow positive.

AI in China has really taken off. Increasing availability of domestic high-performance chips is a key enabler.

All our major customers are investing in hyperscale computing infrastructure to support AI adoption. As a result, we are seeing robust recovery in data center demand across both new markets and established markets.

It is the exciting times to be a data center company again. To address this opportunity, we are building up our resources and the funding.

On the resource side, we are working on a 3 GW pipeline, comprising big clusters in new growth market. These will complement the 700 MW of powered land, which we are holding for future development in low latency established markets.

On the funding side, we have increased our cash reserves to over US$2.8 billion, including proceeds from the recent sell-down of our stake in DayOne and the CPS new issue. Furthermore, our success last year in opening up channels for asset monetization gives us a competitive advantage in accessing equity onshore.

During 4Q '25, our gross additional area utilized was around 23,000 square meters. For the full year, gross move-in was over 86,000 square meters, our highest ever level.

Our move-in target for 2026 is similar to last year. However, as our bookings step-up over the current year, it will lead to higher move-in one year forward.

During 4Q '25, our gross additional area committed was over 21,000 square meters. For the full year, our new bookings was over 96,000 square meters or over 300 MW, three times the level of the past three years.

In 2026, we are aiming over 500 MW of gross new bookings, another big step-up from the last year. We expect 60% to 70% of new business to come from AI.

Far this year, we have already secured 200 MW of new orders plus over 500 MW of MOUs, which are a stronger indicator of future commitment. This 700 MW of total demand comes mainly from the three of our largest customers.

It's a great start towards our four full year sales target. Now the domestic chips supply is more certain.

We are moving faster to secure multi-gigawatts of additional power and land in new markets, which can support big cluster deployments. We're focusing on the three locations: Horinger in Inner Mongolia, Zhongwei in Ningxia Province, and Shaoguan in Guangdong Province.

We have already won over 400 MW of new orders and the MOUs for these locations. These new growth markets, all of which are official national hubs, integrates well with our existing platform, enabling us to serve the difference needs of our diversified customer base.

We're very excited about the opportunities in front of us and look forward to growth in sync with China's AI development. I will now pass on to Dan for the financial and operating review.

Thank you, William. Starting on slide 17.

In FY '25, revenue and adjusted EBITDA increased by 10.8% year on year. During the year, we completed two asset monetization transactions: an ABS in 1Q '25, and a C-REIT IPO in 3Q '25, following which we deconsolidated the underlying data center project companies.

If we add back the deconsolidated revenue and EBITDA, the pro forma growth rates were 13.2% for revenue and 14.2% for adjusted EBITDA. Turning to slide 20, our MSR per square meter has been declining due to a combination of lower market selling price and change in location mix to include more edge of town sites and, going forward, new growth markets.

Comparing 4Q '25 with 4Q '24, the decrease was 2.4%. At the same time, we've also seen a comparable decrease in unit development costs.

As a result, the overall yield on our portfolio, as measured by adjusted gross profit divided by gross PP&E, excluding construction in progress, has remained steady at around 11%. Looking forward, we expect further MSR reduction of 3% to 4% by the end of 2026 due to the same combination of factors.

However, the yield on our new investments in both established and new markets continues to be in the 10% to 11% range. Turning to slide 23, in 2025, our organic capex was RMB4.7 billion, in line with our guidance.

Net of the cash proceeds from asset monetization of RMB2.3 billion, our capex was around RMB2.4 billion. As shown on slide 24, our operating cash flow for the full year was around RMB3.4 billion.

The significant improvement year on year was helped by reduction in AR days from 109 in 4Q '24 to 82 days in 4Q '25, as a result of our tight control of collections. After taking into account asset monetization proceeds, we achieved positive cash flow pre-financing of RMB1 billion.

In 2026, we are guiding for organic capex of around RMB9 billion, which corresponds with our 500 MW plus sales target. This year's capex will contribute to next year's growth.

We have started work on a follow-on asset injection into our C-REIT. We have selected an asset which is larger than the seed asset for the IPO.

We aim to complete the asset injection in the second half of 2026, if possible. However, we have not included any assumed proceeds in our capex guidance.

Turning to slide 25, during the first quarter of 2026, we raised $385 million through the partial sell-down of our stake in DayOne. After the sell-down, our remaining stake is worth $2.2 billion, or $11 per GDS ADS, benchmarked to DayOne's Series C new issue price.

We also issued $300 million of convertible preferred shares to Farallon Capital Investment. As a result, we are now sitting on nearly RMB20 billion, or $2.8 billion of cash.

This is an ideal situation to be in as we prepare for a new growth phase. Turning to slide 26 and 27, our net debt to last quarter annualized adjusted EBITDA decreased from 6.8 times at the end of 2024 to 5.8 times at the end of 2025.

The decrease is mainly due to a combination of positive cash flow pre-financing, the deconsolidation of debt of the project companies sold to the ABS and C-REIT, and the proceeds of the equity capital raise which we did in 2Q '25. If we add back the purchase of time deposits, which is included in our reported investment cash flow, and the proceeds of the capital recycling and new issue in 1Q '26, our net debt to EBITDA ratio decreases to 4.8 times.

At the beginning of 2023, we set a target of achieving positive cash flow pre-financing and net debt to EBITDA of below 5 times within three years. Looking back, it was an aggressive target, but I'm pleased to say that we made it.

Turning to slide 29, for FY '25, we achieved the midpoint of our revenue guidance and beat the top end of our adjusted EBITDA guidance. For 2026, we expect total revenues to be between RMB12.4 to RMB12.9 billion, implying a year-on-year increase of between approximately 8.5% to 12.8%.

For adjusted EBITDA, we expect between RMB5.75 billion to RMB6 billion, implying a year-on-year increase of between approximately 6.4% to 11%. As a result of the asset monetizations during 2025, the year-on-year growth rates are not directly comparable.

If we add back the forecast revenue and adjusted EBITDA for the data center project companies sold to the ABS and C-REIT, the implied growth rate of our pro forma revenue and adjusted EBITDA guidance is approximately 1.6 percentage points higher. This is shown on slide 30.

We'd now like to open the call to questions. Operator, please.

Thanks for the opportunity to ask question. First, congratulations on the very strong booking year to date.

I have two questions. The first is about the conversion from MOU to contract.

What is the timetable behind this kind of conversion? What is the potential risk for this kind of conversion?

What do we need to do, or what do our customer need to do behind this kind of conversion? That's my first question.

The second question is about the competition in the new key focus area, like Inner Mongolia, Zhongwei, and Shaoguan. We know that GDS has been far leading in tier one market, but how about in those new focus areas?

Are we seeing more competition or less competitor in those places? What is the GDS advantage there?

Thank you.

Okay. The first question is I think this is a high certainty to convert to our order.

This number one. In terms of the timing, I think it's within two quarter, I think it's high chance we can convert to real contract.

We are very confident on that. This number one.

Number two, I think in terms of the new market, right, I think the current market before we step in, I think that there's some data center operator already there. It's never too late, because now the government set up a very high barrier right now.

Number one, they will measure their criteria for they choose the partner to able to acquire the land. They have a couple of the criteria.

Number one, they will seriously look at the company's track record. Second, they will make sure you have the customer commitment behind you.

The number third, they also will look at your financial capability as well. If this is the current government how they look at a potential partner.

I think if that's the case, which it is, it's already set up a high barrier, and we think we are be able to still sit on the leading position.

Thank you.

Thanks. You referenced a lot of your orders and current interest being AI-oriented.

Can you talk a little bit about the non-AI, kind of traditional cloud, even enterprise types of workloads and the demand trends that you're seeing there? Then any further color around the types of AI workloads, and would you associate it primarily with large foundation models or inference or what?

Thank you.

I think the demand is driven by, very clear, driven by the AI, right? GPU type data center demand.

Of course, I think the traditional cloud still grows, and they more associate with the AI demand. I think that's the kind of profile.

It's not like before, 100% driven by the traditional cloud. Now the cloud still grows, but more associate with the AI.

That's a slight change the driver, right? What's the second question?

Types of AI application.

Foundation model, machine learning, other workloads.

The workload of AI.

I think of course, the training still continue. That's for sure, because China are still behind the U.S., right, for a couple of years.

Now it's catching up. Looks like the training is still a key driver to drive the data center demand.

In the meanwhile, I think a lot of demands also driven by the inferencing right now. That's why our tier one, let's say, traditional market still get the growth in the last year.

We also estimate this year still have a very strong demand from both AI type and inference type and cloud. Then,

I wondered if you could maybe just touch on the competitive environment and it probably varies a little bit by region and market and so forth. In terms of other projects that your peers are pursuing, how would you characterize competition that is meeting the demand, and is that at all different from the last time you gave us an update?

Thank you.

General update.

Competitive environment in new markets, I think.

What? Competitive environment in new markets.

I think if GDS seriously step in a new market, we definitely will dominate the market. That's how we look, that's our behavior.

Otherwise, we will not step in, right? We definitely get ready to step in, and over time, I think we'll take the absolutely leadership in this region.

I think the data center competition in China just a start for AI. I think it's good timing to step in, because especially if you have enough financial capability, that's more easy to win the battle, right?

Thank you.

Thank you for the opportunity to ask question. Congratulations again on the really solid new bookings.

I have two questions. The first one is on supply.

I still remember that earlier last year, management took a very rational and cautious stance on taking new orders because back then there was some uncertainties around chip supply. However, given the strong order and MOU momentum year to date, should we interpret that as a sign that chip supply has improved meaningfully?

Then or in other words, from a supply-side perspective, are there any factors constraining project delivery? That's my first question.

Then my second question is that I noticed that GDS power land reservation has increased from 900 MW last quarter to 3.7 GW this quarter. May I ask where are the main locations of the new resources, and how does the project returns in these new area differ from our existing projects?

Thank you.

Yeah. I think we have the different view, right?

We are always look more deep to the industry. That's why that's mean that we are very disciplined to capex investment.

Last year, we are slightly conservative because of the chips supply still was not that certain. This year, the certainty is more improved, right?

I think that in terms of the U.S. export policy changes and the local domestic chips also catching up.

If you recall a couple of quarters ago when we talk about this, we would always say wait and see, right? That's the right strategy to more disciplined to make the capex investment.

Now we are much comfortable, because the whole environment changed, adapted to a more positive, more certainty. I think we think that it's the right timing to step in in a big way, right?

Shall I answer? I think in terms of land bank, I just mentioned that in my script, right?

I think there's Horinger in Inner Mongolia, and Zhongwei in Ningxia Province, and the Shaoguan is in Guangdong Province. I think that's all the national hub, data center hub, right?

I think that they location will be great for future and well recognized by all our existing customer.

Thank you. How should we think about the project returns?

Thank you.

As I said during the script, we're still able to generate a simple cash-on-cash yield of 10% to 11% whether we're taking on new business in established markets or new markets. With our business model of developing, ramping up, and holding for the qualification period and then monetizing, that yield is sufficient for us to realize a return on equity above 20%.

Got it. Very clear.

Thank you.

Hi. Thanks for taking my question.

First question is on the 200 MW order that you've already secured. Could you talk a little bit about the nature of the urgency of this project, obviously given AI demand seems to be accelerating?

When do you expect to deliver this to customers? Is it also more like an accelerated schedule like we saw with the 150 MW order that we saw last year?

That's my first question. Secondly, just trying to understand a little bit on the realized MSR trends.

Previously, we were expecting MSR to start to flatten out a little bit in 2027, but now obviously our location mix is probably changing a little bit in response to some of the new demand trends. Dan, maybe could you help us understand how MSR is likely to shape up, let's say, 1 or 2 years out from now, the realized MSR based on the contracts that you are signing right now?

Sure, Gokul. The 200 MW new orders, you can assume for forecasting that it will take us four quarters on average to deliver, and then it will be a four-quarter ramp-up.

This is faster than historically when we were doing the more traditional cloud business, and it's consistent with our parameters in terms of selecting new business. The MSR decrease, it will continue beyond next year.

I think in 2028, it's probably 3% to 4% again. The offset in terms of higher volume growth is going to lift our overall growth rate.

In 2026, William said that we're expecting our move-in to be similar to last year, which is in a sort of 80 80 to 90,000 square meter range. If all goes to plan in terms of meeting our sales target this year, we'll be looking at a move-in which could be double that next year.

It's a combination of those two factors is going to drive our growth higher.

Understood. Just one follow-up on the locations.

As we are adding some of these newer locations which are a little bit more remote sites, but obviously the new data centers for the country, is the customer concentration high in some of these new locations? Previously when we went to built-to-suit, I think it became very much very customer-specific.

How should we think about the customer concentration in some of these new locations like Shaoguan or Inner Mongolia, etc.?

I think the global views everywhere, every data center company now is getting more concentrated in terms of the customer.

The

answer I think the maybe global, in China maybe top three. If that's the trend, right?

In global point of view, I think it's four or five company, right? More everybody it's as a trend.

If you position you are hyperscale data center operator, a developer and operator, right? It's not a traditional colo.

If you look at the colo business, this look like a more diversified, right? This is the reality.

Yeah.

I'd just add that the contract length for this kind of business is certainly at the long end or longer than what we've typically been providing before. It's quite often find 10-year contracts, which I think de-risks the investment in these projects.

I think in terms of customer number, GDS already had 1,000 customer, right? Of course, the new demand is mainly driven by the top three AI player in China, right?

Understood. Thank you.

Hey, guys, this is Rob on for Frank. Thank you for taking my question.

Just looking at the demand and the bookings, what's the growth in demand that you're seeing from your non-domestic Chinese customers year over year, and what would you say is the outlook for that going forward?

Rob, the demand is from Chinese customers almost entirely. I think the market opportunity is around 3 GW per annum and concentrated, as William said, in the very largest customers.

We talk about 500 MW sales target, put it into the context of that kind of scale of addressable market.

All right, thank you management for taking my question. Two questions here.

One is really on the resources expansion that you mentioned about the 3 GW pipeline into the new growth market. Just wondering, I think between the three key hubs that you mentioned, Inner Mongolia, Ningxia, and Guangdong, what is the difference or similarities among those regions in terms of customer preference or the IT workload, the pricing, etc.?

A follow-on question related to that is that what is the original breakdown between those three key hubs out of the 3 GW pipeline that you have or out of the 500 500 MW MOUs that you disclose year to date? Second question is on the capex.

I think given that you have very strong sales momentum year to date and to convert that 500 5- that 500 MW into contract probably around two quarters, do you see any possibilities to further revise up the capex guidance for this year? Thank you.

I think the three new market, I think the workload is similar. Major workload is a still training plus a partially is a inference, right?

In the meanwhile, I which just to mention in the traditional market, which say low latency market, right, we also got a lot of order from the our customer, the large language model customer, because they already start to deploy the inference workload. I think it's a quite balanced.

In general, I think the maybe it's 65% to 70% will go to the new market, and still 30% 40- to 40% is go to traditional market, right, which we used to call the tier one market. That's sort of the difference of workload.

Timothy, on your question regarding capex, as I mentioned earlier, you should assume that it takes us four quarters to build, because in many cases, we're talking about new builds in a site which is where we have no previous presence. If we commence construction in 1Q '26, it's for delivery to customer in 1Q '27.

As we win new business going through this year, that will lead to more starts. I think that the capex guidance of RMB9 billion is adequate, and I would not expect to change that.

Great. Thank you so much management for taking my question.

I just have one question that's more longer term. Just now management talked about the data center demand in China is just at the beginning of picking up.

Would it be fair if we look in the next 3 to 5 years to kind of mirror the U.S. trajectory?

Especially on kind of how the large hyperscalers have been accelerating the capex deployment pace? Do you see similar commitment from our key customers?

Lastly, how do you really see the longer term kind of market size and positioning in that trajectory? Thank you.

For our estimation, I think that yes, the China demand will like the growth trajectory more like U.S., because just behind a couple of years, right? That's happening right now.

Last year we just talk about the demand is already there. It's just about the chips supply, right?

Now looks like it is getting much better, more positive right now, more certainty in terms of the chips supply. It will similar pace with as the U.S., right?

I think if you look at the last two years, all the big AI company, tech company, continue to raise their capex guidance, just like what happening in U.S.

Got it. Thank you very much.

If we continue on that route, would it be possible at one point because just now management talked about the MSR still declining slightly all the way until 2028, but would it be possible at some point we still see hyper demand really building, especially given how the OpenClaws or all these agentic integration seems to be driving token consumptions by 10x or even 20x? Then at some point would it be possible for us to see even stronger pricing power down the road?

Yes, it could be. I think it could be.

I think if you look at the U.S. adoption profile in the last five years, if you look at the five years ago, the U.S.

price used to be down to $60 60 US$ per kW, right? Now it's three times average, right?

Two or three times average. That's profile I think if that's will be I think high chance it will be, right?

Understood. Thank you very much.

Because

I give you the sense in the whole western of the current western part of China, the total power capacity now, as of now, just a 30 MW GW to available to supply the future growth. In general, it is still limited, right?

Got it. Thank you.

Hi management. Thanks for taking my question.

Congrats on the strong orders for year to date and for the MOU. My first question is about the 500 MW MOU.

Could management introduce is this mainly for 2026, 2027? It's how many years?

What's could be the time horizon or time period? This is a two 1 or 2-year or 3-year contract?

Potential contracts. My second question is about the capex and the financing the update.

Given the RMB9 billion capex, how do we see the financing and the need, and given we have strong cash on hand right now? Thank you.

The delivery time is, as I mentioned before, four quarters. The business that we're winning in the current first quarter of this year is going to contribute to move-in next year.

It's logical that if we meet our sales target of 500 MW, then next year's move-in could be around double current year's move-in. It would flow through like that.

The contract length, I think it's much longer than what you mentioned. It would be 7 to 10 years, mostly at the 10-year end of that.

The financing, last year, we were self-funding in China but that was achieved when our capex was RMB5 billion, and we were able to complete two asset monetizations last year, an ABS and a C-REIT. Now our capex has gone up to RMB9 billion, and we have a plan for an asset monetization that we can't be sure, but we aim to complete that in the second half of the year.

I don't know whether we will be self-funding in China. Let's say capex is RMB9 billion, operating cash flow is RMB3 billion, and maybe there's some proceeds from asset monetization.

If there's anything left, it will be very easy for us to finance that in the traditional way with project debt.

Thank you.

Thank you all once again for joining us today, and see you next time. Bye-bye.