GDS Holdings Limited reported third‑quarter 2025 results that surpassed analyst expectations, with net revenue rising 10.2% to RMB 2,887.1 million (US$405.6 million) and adjusted EBITDA increasing 11.4% to RMB 1,342.2 million (US$188.5 million). The company’s earnings per share of RMB 3.21 (US$0.45) beat the consensus estimate of –RMB 0.06 (US$–0.06) by a margin of RMB 3.27, a 5,400% upside that reflects disciplined cost control and a favorable mix of high‑margin AI‑centric data‑center contracts. The revenue growth was driven by a 12% increase in the hyperscale segment, driven by new AI‑ready infrastructure orders in Shanghai, Beijing, and the Shenzhen‑Guangzhou corridor, while the enterprise segment grew 8% as cloud‑service demand accelerated.
The adjusted EBITDA margin expanded to 46.5% from 46.0% in Q3 2024, a lift of 0.5 percentage points. The improvement stems from higher utilization of existing data‑center capacity, which reduced the proportion of cash operating costs and corporate expenses relative to revenue. Operating leverage is evident: the company added 23,000 m² of gross additional area in the quarter, translating into a 3% increase in revenue per square meter. Management noted that the margin gain is “a result of lower cash operating costs and corporate expenses as a percentage of net revenue as data centers continue to ramp up.”
Capital recycling has strengthened GDS’s balance sheet. Net proceeds of RMB 2,247.9 million from the China REIT IPO were used to repay short‑term debt, bringing the net debt to last‑quarter‑adjusted EBITDA ratio down from 6.6× in Q2 2025 to 6.1× at quarter‑end. Management projects the ratio to fall to 5.9× after the C‑REIT transaction, underscoring the company’s intent to fund future AI‑ready infrastructure expansion in China’s Tier 1 markets without diluting equity. The move also signals confidence in the company’s cash‑flow generation and a strategic shift toward asset monetization.
GDS reaffirmed its full‑year 2025 guidance, maintaining revenue expectations of RMB 11.29 billion to RMB 11.59 billion and adjusted EBITDA of RMB 5.19 billion to RMB 5.39 billion. The company reiterated a revised capex plan of approximately RMB 2.7 billion, aligned with a 152‑MW hyperscale order and a backlog that includes 75,000 m² of new bookings in the first nine months. CEO William Huang emphasized that “the China market is at an inflection point” and that the firm is “strategically positioned to capture the accelerating demand from AI.” The guidance reflects management’s confidence in sustained AI‑driven growth while maintaining disciplined capital allocation.
Market reaction to the results was muted, with the stock rising only 1–1.4% in pre‑market trading. Analysts noted that despite the substantial EPS beat, investors remained cautious, likely due to broader market volatility and concerns about the company’s high net‑debt‑to‑EBITDA ratio. The modest reaction suggests that while the fundamentals are strong, valuation concerns and macro‑economic uncertainty are tempering enthusiasm for the upside.
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