GDS Holdings Tops Q2 Estimates, Reaffirms FY23 Outlook

GDS Holdings Ltd GDS reported a Q2 FY23 net revenue growth of 7.0% Y/Y to $340.91 million, beating the consensus of $337.64 million.

Service revenue increased 7.4% Y/Y to $340.9 million.

The total area committed and pre-committed by customers rose 8.4% Y/Y to 637,661 square meters (sqm) as of June 30, 2023.

Area in service rose 5.3% Y/Y to 531,216 sqm, with the commitment rate for area in service standing at 92.4% (vs. 95.9%) as of June 30, 2023.

Loss per ADS of $(0.18) beat the consensus loss of $(0.26).

Adjusted EBITDA rose 16.3% Y/Y to $170.3 million. Adjusted EBITDA margin (non-GAAP) expanded to 50.0% from 46.0% a year ago.

As of June 30, 2023, the cash balance stood at $1.13 billion.

FY23 Outlook: GDS reiterated the outlook for revenues at RMB9.94 billion – RMB10.32 billion, capital expenditure of around RMB7.500 billion, and adjusted EBITDA at RMB4.43 billion – RMB4.60 billion. 

"In mainland China, we prioritize faster backlog delivery while tactically capturing new strategic business opportunities. Internationally, we have commenced capacity delivery at our Hong Kong 1 data center, and we anticipate utilization to ramp up at our Johor site in the second half of 2023. Furthermore, we are thrilled to have been selected by the Singapore Government to develop new data center capacity in Singapore, further strengthening our ecosystem in the region," said William Huang, Chairman and CEO.

Price Action: GDS shares are trading higher by 6.30% at $10.80 premarket on the last check Tuesday.