GDS Holdings Ltd. (NASDAQ:GDS) reported its fourth-quarter 2025 results Tuesday, posting revenue growth driven by continued data center ramp-up, while margins contracted amid higher utility costs.
Details
Net revenue rose 8.6% year over year to 2.92 billion yuan. In U.S. dollar terms, revenue totaled $417.8 million, narrowly topping the consensus estimate of $417.7 million.
Adjusted gross profit increased 5.8% to 1.48 billion yuan ($211.3 million), while the margin declined to 50.6% from 51.9% a year earlier. The company attributed the margin contraction to elevated utility expenses.
Adjusted EBITDA climbed 5.2% to 1.37 billion yuan, with margin narrowing to 46.7% from 48.2% in the prior-year period.
Earnings per American depositary share were 2.47 yuan (35 cents), compared with 22.51 yuan in the year-ago quarter. In U.S. dollar terms, the company reported a loss that missed expectations for a 1-cent loss.
As of Dec. 31, cash and cash equivalents stood at 14.3 billion yuan ($2.05 billion).
Operating Metrics Improve
Total area committed and pre-committed increased 6.4% year over year to 670,106 square meters. Area utilized rose 11.4% to 504,843 square meters.
The utilization rate for area in service improved to 75.5%, up from 73.8% a year earlier.
Area under construction declined to 73,994 square meters from 102,691 square meters in the prior-year quarter. The pre-commitment rate for projects under construction rose to 66.1% from 64.1%.
Chief Financial Officer Dan Newman said the company completed asset monetization transactions, including ABS and C-REIT deals, in 2025, providing flexibility to recycle capital through China’s equity markets.
“Recently, we raised $685 million through sale of DayOne shares and a private placement of convertible preferred shares, further solidifying our financial position,” Newman said. “We are well prepared in terms of funding capabilities for data center capacity expansion to address the compelling new opportunities in our core business.”
Outlook Signals Growth, Below Consensus
For fiscal 2026, GDS expects total revenue of 12.40 billion yuan to 12.90 billion yuan and adjusted EBITDA of 5.75 billion yuan to 6.00 billion yuan. Capital expenditures are projected at 9.0 billion yuan.
In U.S. dollar terms, the company forecasts revenue of $1.749 billion to $1.819 billion, below the consensus estimate of $1.84 billion.
Chairman and CEO William Huang said 2025 marked the company’s strongest year for bookings and customer move-ins in the past five years, driven by rising demand tied to artificial intelligence.
“We strongly believe that demand will further accelerate during the AI era,” Huang said. “Heading into 2026, we remain committed to disciplined and sustainable growth, viewing AI as a transformative catalyst for our long-term success.”
GDS Price Action: GDS Holdings shares were up 0.83% at $43.52 at the time of publication on Tuesday, according to Benzinga Pro data.
Photo by T. Schneider via Shutterstock
Recent Comments