GDS Holdings Limited Q4 FY2025 earnings call

• 2025 was a great year with 11% growth in revenue and adjusted EBITDA, beat adjusted EBITDA guidance, and was free cash flow positive. - AI in China took off, major customers investing in hyperscale computing infrastructure for AI adoption, seeing robust recovery in data center demand. - Building up resources and funding: working on a three gigawatt pipeline in new growth markets, holding 700 megawatts of powered land in established markets. Cash reserves increased to over 2.8 billion USD. - 4Q25 gross additional area utilized around 23,000 sq meters, full year gross move-in over 86,000 sq meters. 4Q25 gross additional area committed over 21,000 sq meters, full year new bookings over 96,000 sq meters (over 300 megawatts). Aiming over 500 megawatts of gross new bookings in 2026, 60%-70% from AI. Secured 200 megawatts of new orders plus over 500 megawatts of MOUs. Focusing on three locations in new growth markets, won over 400 megawatts of new orders and MOUs for these locations. - In FY25, completed two asset monetization transactions, deconsolidated underlying data center project companies. - Started work on follow-on asset injection into CREIT, aim to complete in second half of 2026. - Raised $385 million through partial sell-down of stake in day one and issued $300 million of convertible preferred shares to Huatai Capital Investment, now has nearly 20 billion RMB or $2.8 billion in cash.

In FY25, revenue and adjusted EBITDA increased by 10.8% year-on-year. If adding back deconsolidated revenue and EBITDA, pro forma growth rates were 13.2% for revenue and 14.2% for adjusted EBITDA. MSR per square meter has been declining due to lower market selling price and change in location mix. The overall yield on the portfolio remained steady at around 11%. In 2025, organic CapEx was 4.7 billion RMB, net of cash proceeds from asset monetization was 2.3 billion RMB, and CapEx was around 2.4 billion RMB. Operating cash flow for the full year was around 3.4 billion RMB. In 2026, organic CapEx is guided at around 9 billion RMB. 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, and to 4.8 times when adding back certain items. For FY25, achieved midpoint of revenue guidance and beat top end of adjusted EBITDA guidance. For 2026, expect total revenues between 12.4 to 12.9 billion RMB (approx 8.5 - 12.8% y-o-y increase) and adjusted EBITDA between 5.75 billion to 6 billion RMB (approx 6.4 - 11% y-o-y increase). Pro forma growth rates would be approx 1.6 percentage points higher if adding back forecast revenue and adjusted EBITDA for sold project companies.

• For 2026, expect total revenues between 12.4 to 12.9 billion RMB, implying y-o-y increase of approx 8.5 - 12.8%. - For adjusted EBITDA, expect between 5.75 billion to 6 billion RMB, implying y-o-y increase of approx 6.4 - 11%. - Organic CapEx guided at around 9 billion RMB in 2026. - Expect further MSR reduction of 3% to 4% by end of 2026. - Aim to complete follow-on asset injection into CREIT in second half of 2026. - In 2026, aiming over 500 megawatts of gross new bookings.

Q: About conversion from MOU to contract, timetable, potential risk, and what needed for conversion; also about competition in new focus areas.

A: High certainty to convert to order within two quarters. In new market, government has high barriers considering company's track record, customer commitment, and financial capability, and GDS thinks will still sit on leading position.

Q: Referenced AI oriented orders, talk about non-AI traditional cloud workloads demand trends and AI application types; also competitive environment.

A: Majority demand driven by AI GPU type data center demand, traditional cloud still grows and associated with AI. AI applications include inferential machine learning, training still key driver, larger language model owners driving inferencing. GDS will dominate new markets if steps in, having enough financial capability.

Q: On supply, given strong order and MOU momentum, is chip supply improved meaningfully and factors constraining project delivery; also on power land reservation locations and project returns.

A: Chip supply improved due to more certainty, including U.S. export policy changes and domestic chips catching up. Power land reservation in Mongolia, Zhongwei in Ningxia Province, and Shaoguan in Guangdong Province. Project return still 10% - 11% cash-on-cash yield.

Q: On 200 megawatt order urgency, delivery schedule; also MSR trends and customer concentration in new locations.

A: 200 megawatt new orders take 4 quarters on average to deliver with 4-quarter ramp-up. MSR decrease to continue beyond next year. Customer concentration in new locations similar to global trend, mainly top three AI players in China.

Q: On growth in demand from non-domestic Chinese customers year over year and outlook.

A: Demand from Chinese customers almost entirely, market opportunity around 3 gigawatts per annum, concentrated in largest customers.

Q: On 3 gigawatt pipeline in new growth markets, difference/similarity among locations in terms of customer preference, etc.; also on CAPEX guidance revision.

A: Workload similar in new markets, 65%-70% to new market and 30%-40% to traditional market. CapEx guidance of 9 billion RMB is adequate, not expecting revision.

Q: On data center demand in China narrowing U.S. trajectory and longer term market size and positioning; also MSR and pricing power.

A: China demand will grow trajectory like U.S. as chip supply more certain. MSR still declining until 2028, but high chance of stronger pricing power down the road.

Q: On 500 megawatts MOU time horizon and CAPEX financing.

A: 500 megawatts MOU delivery time 4 quarters, contract length 7-10 years mostly 10-year. CapEx 9 billion RMB, operating cash flow 3 billion RMB, with plan for asset monetization, can finance with project debt if needed.