GDS Holdings Limited (“GDS Holdings”, “GDS” or the “Company”)
(NASDAQ: GDS; HKEX: 9698), a leading developer and operator of
high-performance data centers in China and South East Asia, today
announced its unaudited financial results for the second quarter
ended June 30, 2023.
Second Quarter 2023 Financial Highlights
- Net revenue increased by 7.0%
year-over-year (“Y-o-Y”) to RMB2,472.0 million (US$340.9 million)
in the second quarter of 2023 (2Q2022: RMB2,310.4 million).
- Service revenue increased by 7.4%
Y-o-Y to RMB2,472.0 million (US$340.9 million) in the second
quarter of 2023 (2Q2022: RMB2,302.7 million).
- Net loss was RMB225.3 million
(US$31.1 million) in the second quarter of 2023 (2Q2022: net loss
of RMB375.3 million).
- Adjusted EBITDA (non-GAAP)
increased by 16.3% Y-o-Y to RMB1,235.1 million (US$170.3 million)
in the second quarter of 2023 (2Q2022: RMB1,062.2 million). See
“Non-GAAP Disclosure” and “Reconciliations of GAAP and non-GAAP
results” elsewhere in this earnings release.
- Adjusted EBITDA margin (non-GAAP)
was 50.0% in the second quarter of 2023 (2Q2022: 46.0%).
Second Quarter 2023 Operating Highlights
- Total area committed and
pre-committed by customers increased by 4,050 square meters (“sqm”)
(net of churn of 12,048 sqm) in the second quarter of 2023, to
reach 637,661 sqm as of June 30, 2023, an increase of 8.4% Y-o-Y
(June 30, 2022: 588,054 sqm).
- Area in service increased by 12,699
sqm in the second quarter of 2023, to reach 531,216 sqm as of June
30, 2023, an increase of 5.3% Y-o-Y (June 30, 2022: 504,383
sqm).
- Commitment rate for area in service
was 92.4% as of June 30, 2023 (June 30, 2022: 95.9%).
- Area under construction was 196,702
sqm as of June 30, 2023 (June 30, 2022: 163,102 sqm).
- Pre-commitment rate for area under
construction was 74.8% as of June 30, 2023 (June 30, 2022:
64.1%).
- Area utilized by customers
increased by 6,163 sqm (net of churn of 8,690 sqm) in the second
quarter of 2023, to reach 382,796 sqm as of June 30, 2023, an
increase of 10.7% Y-o-Y (June 30, 2022: 345,678 sqm).
- Utilization rate for area in
service was 72.1% as of June 30, 2023 (June 30, 2022: 68.5%).
“We executed our strategy with precision in the
second quarter of 2023,” said Mr. William Huang, Chairman and Chief
Executive Officer. “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.”
“In the second quarter of 2023, we grew revenue
by 7.0% and adjusted EBITDA by 16.3% year-over-year,” said Mr. Dan
Newman, Chief Financial Officer. “Our adjusted EBITDA margin was
50.0% this quarter. We have been diligently working towards our
financial targets by delivering our backlog, managing our resources
and ensuring prudent capital allocation.”
Second Quarter 2023 Financial Results
Net revenue in the second quarter of 2023 was
RMB2,472.0 million (US$340.9 million), a 7.0% increase over the
second quarter of 2022 of RMB2,310.4 million and a 2.6% increase
over the first quarter of 2023 of RMB2,409.0 million. Service
revenue in the second quarter of 2023 was RMB2,472.0 million
(US$340.9 million), a 7.4% increase over the second quarter of 2022
of RMB2,302.7 million and a 2.6% increase over the first quarter of
2023 of RMB2,408.4 million. During the second quarter of 2023, the
Company recognized a one-time service revenue of RMB70.7 million
(US$9.7 million), arising from an early termination from the
backlog (area committed but not utilized) as previously disclosed.
Excluding the abovementioned one-time impact, service revenue was
RMB2,401.3 million (US$331.2 million), posting a slight decrease
over the first quarter of 2023. The decrease was mainly due to
elevated levels of churn of area utilized, arising from a single
customer redeploying capacity between our data centers over several
quarters as previously disclosed, partially offset by 6,163 sqm of
net additional area utilized in the second quarter of 2023, mainly
related to the Shanghai 12 ("SH12”), Shanghai 18 ("SH18”) Phase 1,
Changshu 2 (“CS2”) Phase 2, Beijing 16 (“BJ16”), Langfang 15
(“LF15”) Phase 1, and Tianjin 1 (“TJ1”) Phase 1 data centers.
Cost of revenue in the second quarter of 2023
was RMB1,921.0 million (US$264.9 million), a 4.3% increase over the
second quarter of 2022 of RMB1,841.8 million and a 0.2% increase
over the first quarter of 2023 of RMB1,917.3 million. The slight
increase over the first quarter of 2023 was mainly due to an
increase in utility cost as a result of additional area utilized
during the quarter and seasonally higher power consumption.
Gross profit was RMB551.0 million (US$76.0
million) in the second quarter of 2023, a 17.6% increase over the
second quarter of 2022 of RMB468.6 million, and a 12.1% increase
over the first quarter of 2023 of RMB491.7 million.
Gross profit margin was 22.3% in the second
quarter of 2023, compared with 20.3% in the second quarter of 2022,
and 20.4% in the first quarter of 2023. The increase was mainly due
to the one-time service revenue arising from the abovementioned
early termination. Excluding the one-time impact, gross profit
margin was 20.0% in the second quarter of 2023, posting a decrease
over the first quarter of 2023, which was mainly due to an increase
in utility cost.
Adjusted Gross Profit (“Adjusted GP”) (non-GAAP)
is defined as gross profit excluding depreciation and amortization,
operating lease cost relating to prepaid land use rights, accretion
expenses for asset retirement costs and share-based compensation
expenses allocated to cost of revenue. Adjusted GP was RMB1,319.8
million (US$182.0 million) in the second quarter of 2023, a 12.6%
increase over the second quarter of 2022 of RMB1,172.3 million and
a 4.8% increase over the first quarter of 2023 of RMB1,259.4
million. See “Non-GAAP Disclosure” and “Reconciliations of GAAP and
non-GAAP results” elsewhere in this earnings release.
Adjusted GP margin (non-GAAP) was 53.4% in the
second quarter of 2023, compared with 50.7% in the second quarter
of 2022, and 52.3% in the first quarter of 2023. The increase was
mainly due to the one-time service revenue arising from the
abovementioned early termination. Excluding the one-time impact,
Adjusted GP Margin was 52.0%, posting a slight decrease over the
first quarter of 2023, which was mainly due to an increase in
utility cost.
Selling and marketing expenses, excluding
share-based compensation expenses of RMB9.3 million (US$1.3
million), were RMB22.9 million (US$3.2 million) in the second
quarter of 2023, a 12.8% decrease from the second quarter of 2022
of RMB26.3 million (excluding share-based compensation of RMB12.6
million) and a 9.4% decrease from the first quarter of 2023 of
RMB25.3 million (excluding share-based compensation of RMB12.5
million). The decrease over the first quarter of 2023 was mainly
due to a decrease in personnel cost as a result of performance
adjustment.
General and administrative expenses, excluding
share-based compensation expenses of RMB30.7 million (US$4.2
million), depreciation and amortization expenses of RMB136.8
million (US$18.9 million) and operating lease cost relating to
prepaid land use rights of RMB17.5 million (US$2.4 million), were
RMB84.5 million (US$11.7 million) in the second quarter of 2023, a
14.5% decrease over the second quarter of 2022 of RMB98.8 million
(excluding share-based compensation expenses of RMB49.3 million,
depreciation and amortization expenses of RMB114.7 million and
operating lease cost relating to prepaid land use rights of RMB24.3
million) and a 28.0% decrease from the first quarter of 2023 of
RMB117.4 million (excluding share-based compensation of RMB43.1
million, depreciation and amortization expenses of RMB110.7
million, and operating lease cost relating to prepaid land use
rights of RMB18.3 million). The decrease over the first quarter of
2023 was mainly due to a cash reimbursement from the Company’s
American Depositary Share ("ADS”) depositary bank of approximately
RMB22.1 million (US$3.0 million).
Research and development costs were RMB5.0
million (US$0.7 million) in the second quarter of 2023, compared
with RMB9.4 million in the second quarter 2022 and RMB9.8 million
in the first quarter of 2023.
Net interest expenses for the second quarter of
2023 were RMB469.5 million (US$64.7 million), a 0.3% decrease over
the second quarter of 2022 of RMB470.8 million and a 3.1% decrease
over the first quarter of 2023 of RMB484.4 million. The decrease
over the first quarter of 2023 was mainly due to a decrease in the
interest rate.
Foreign currency exchange gain for the second
quarter of 2023 was RMB5.0 million (US$0.7 million), compared with
a gain of RMB3.6 million in the second quarter of 2022 and a loss
of RMB7.0 million in the first quarter of 2023.
Others, net for the second quarter of 2023 was
RMB20.2 million (US$2.8 million), compared with RMB17.6 million in
the second quarter of 2022 and RMB25.8 million in the first quarter
of 2023.
Income tax expenses for the second quarter of
2023 were RMB25.3 million (US$3.5 million), compared with RMB58.8
million in the second quarter of 2022 and RMB163.6 million in the
first quarter of 2023.
Net loss in the second quarter of 2023 was
RMB225.3 million (US$31.1 million), compared with a net loss of
RMB375.3 million in the second quarter of 2022 and a net loss of
RMB474.6 million in the first quarter of 2023.
Adjusted EBITDA (non-GAAP) is defined as net
loss excluding net interest expenses, income tax expenses
(benefits), depreciation and amortization, operating lease cost
relating to prepaid land use rights, accretion expenses for asset
retirement costs, share-based compensation expenses, gain from
purchase price adjustment and impairment loss of long-lived assets.
Adjusted EBITDA was RMB1,235.1 million (US$170.3 million) in the
second quarter of 2023, a 16.3% increase over the second quarter of
2022 of RMB1,062.2 million and a 9.3% increase over the first
quarter of 2023 of RMB1,130.0 million.
Adjusted EBITDA margin (non-GAAP) was 50.0% in
the second quarter of 2023, compared with 46.0% in the second
quarter of 2022, and 46.9% in the first quarter of 2023. The
increase was mainly due to the abovementioned one-time service
revenue arising from the early termination and a lower level of
general corporate expenses resulting from the abovementioned cash
reimbursement from the depositary bank. Excluding the one-time
impact and the cash reimbursement, Adjusted EBITDA margin was
47.6%, posting an increase over the first quarter of 2023, which
was mainly due to a reduction in other corporate expenses,
particularly personnel cost as a result of performance adjustment,
partially offset by higher utility cost.
Basic and diluted loss per ordinary share in the
second quarter of 2023 was RMB0.16 (US$0.02), compared with RMB0.27
in the second quarter of 2022, and RMB0.33 in the first quarter of
2023.
Basic and diluted loss per ADS in the second
quarter of 2023 was RMB1.31 (US$0.18), compared with RMB2.12 in the
second quarter of 2022, and RMB2.67 in the first quarter of 2023.
Each ADS represents eight Class A ordinary shares.
Sales
Total area committed and pre-committed at the
end of the second quarter of 2023 was 637,661 sqm, compared with
588,054 sqm at the end of the second quarter of 2022 and 633,611
sqm at the end of the first quarter of 2023, an increase of 8.4%
Y-o-Y and 0.6% quarter-over-quarter (“Q-o-Q”), respectively. In the
second quarter of 2023, gross additional total area committed was
16,098 sqm, including significant contributions from the Beijing 23
(“BJ23”) and LF15 Phase 2 data centers and the upsizing of a
previously disclosed commitment for the Nusajaya 1/2/3/4 data
centers. Net additional total area committed was 4,050 sqm. The
difference between gross and net additional area committed of
12,048 sqm was mainly due to: (1) a single customer which is
redeploying capacity between our data centers over several quarters
as previously disclosed; and, (2) early termination from the
backlog (area committed but not utilized) by another customer as
previously disclosed.
Data Center Resources
Area in service at the end of the second quarter
of 2023 was 531,216 sqm, compared with 504,383 sqm at the end of
the second quarter of 2022 and 518,517 sqm at the end of the first
quarter of 2023, an increase of 5.3% Y-o-Y and 2.4% Q-o-Q. In the
second quarter of 2023, LF15 Phase 1 and Hong Kong 1 ("HK1”) Phase
1 data centers came into service.
Area under construction at the end of the second
quarter of 2023 was 196,702 sqm, compared with 163,102 sqm at the
end of the second quarter of 2022 and 196,858 sqm at the end of the
first quarter of 2023, an increase of 20.6% Y-o-Y and a decrease of
0.1% Q-o-Q, respectively. During the second quarter, construction
commenced on LF15 Phase 2 data center.
- LF15 Phase 2 is the second and last
phase of LF15 data center located in the Xianghe District of
Langfang, Hebei Province. LF15 Phase 2 has a net floor area of
6,328 sqm and is 100% pre-committed.
Commitment rate for area in service was 92.4% at
the end of the second quarter of 2023, compared with 95.9% at the
end of the second quarter of 2022 and 93.9% at the end of the first
quarter of 2023. Pre-commitment rate for area under construction
was 74.8% at the end of the second quarter of 2023, compared with
64.1% at the end of the second quarter of 2022 and 74.4% at the end
of the first quarter of 2023.
Area utilized at the end of the second quarter
of 2023 was 382,796 sqm, compared with 345,678 sqm at the end of
the second quarter of 2022 and 376,632 sqm at the end of the first
quarter of 2023, an increase of 10.7% Y-o-Y and 1.6% Q-o-Q. Gross
additional area utilized was 14,854 sqm in the second quarter of
2023, which mainly came from additional area utilized in the SH12,
SH18 Phase 1, CS2 Phase 2, BJ16, LF15 Phase 1, and TJ1 data
centers. Net additional area utilized was 6,163 sqm during the
quarter. The difference between gross and net additional area
utilized of 8,690 sqm was mainly due to a single customer which is
redeploying capacity between our data centers over several quarters
as previously disclosed.
Utilization rate for area in service was 72.1%
at the end of the second quarter of 2023, compared with 68.5% at
the end of the second quarter of 2022 and 72.6% at the end of the
first quarter of 2023.
Liquidity
As of June 30, 2023, cash was RMB8,184.8 million
(US$1,128.7 million). Total short-term debt was RMB5,286.3 million
(US$729.0 million), comprised of short-term borrowings and the
current portion of long-term borrowings of RMB4,807.1 million
(US$662.9 million) and the current portion of finance lease and
other financing obligations of RMB479.3 million (US$66.1 million).
Total long-term debt was RMB40,726.7 million (US$5,616.5 million),
comprised of long-term borrowings (excluding current portion) of
RMB23,774.8 million (US$3,278.7 million), the non-current portion
of convertible bonds payable of RMB8,597.1 million (US$1,185.6
million) and the non-current portion of finance lease and other
financing obligations of RMB8,354.8 million (US$1,152.2 million).
During the second quarter of 2023, the Company obtained new debt
financing and re-financing facilities of RMB722.5 million (US$99.6
million), and repurchased US$299,910,000 aggregate principal amount
of its 2.00% Convertible Senior Notes due 2025.
Recent Development
New Data Center Capacity in SingaporeThe Company
was recently selected by the Singapore Government along with three
other data center operators for a total of about 80 MW new data
center capacity in Singapore through the pilot Data Centre – Call
for Application (DC-CFA) exercise. The four awarded proposals were
deemed by the Singapore Government to be best able to meet the
Singapore Government's outcomes holistically and had significantly
competitive propositions to strengthen Singapore’s position as a
regional hub and contribute to broader economic objectives.
Business Outlook
The Company confirms the previously provided
guidance of total revenues for the year of 2023 of RMB9,940 –
RMB10,320 million, Adjusted EBITDA of RMB4,430 – RMB4,600 million
and capex of around RMB7,500 million remain unchanged.
This forecast reflects the Company’s preliminary
view on the current business situation and market conditions, which
are subject to change.
Conference Call
Management will hold a conference call at 8:00 a.m. U.S. Eastern
Time on August 22, 2023 (8:00 p.m. Beijing Time on August 22, 2023)
to discuss financial results and answer questions from investors
and analysts.
Participants should complete online registration using the link
provided below at least 15 minutes before the scheduled start time.
Upon registration, participants will receive the conference call
access information, including dial-in numbers, a personal PIN and
an e-mail with detailed instructions to join the conference
call.
Participant Online
Registration:https://register.vevent.com/register/BI82231b315ef5411a9958adfa22812918
A live and archived webcast of the conference
call will be available on the Company's investor relations website
at investors.gds-services.com.
Non-GAAP Disclosure
Our management and board of directors use
Adjusted EBITDA, Adjusted EBITDA margin, Adjusted GP and Adjusted
GP margin, which are non-GAAP financial measures, to evaluate our
operating performance, establish budgets and develop operational
goals for managing our business. We believe that the exclusion of
the income and expenses eliminated in calculating Adjusted EBITDA
and Adjusted GP can provide useful and supplemental measures of our
core operating performance. In particular, we believe that the use
of Adjusted EBITDA as a supplemental performance measure captures
the trend in our operating performance by excluding from our
operating results the impact of our capital structure (primarily
interest expense), asset base charges (primarily depreciation and
amortization, operating lease cost relating to prepaid land use
rights, accretion expenses for asset retirement costs and
impairment loss of long-lived assets), other non-cash expenses
(primarily share-based compensation expenses), and other income and
expenses which we believe are not reflective of our operating
performance, whereas the use of adjusted gross profit as a
supplemental performance measure captures the trend in gross profit
performance of our data centers in service by excluding from our
gross profit the impact of asset base charges (primarily
depreciation and amortization, operating lease cost relating to
prepaid land use rights and accretion expenses for asset retirement
costs) and other non-cash expenses (primarily share-based
compensation expenses) included in cost of revenue.
We note that depreciation and amortization is a
fixed cost which commences as soon as each data center enters
service. However, it usually takes several years for new data
centers to reach high levels of utilization and profitability. The
Company incurs significant depreciation and amortization costs for
its early stage data center assets. Accordingly, gross profit,
which is a measure of profitability after taking into account
depreciation and amortization, does not accurately reflect the
Company’s core operating performance.
We also present these non-GAAP measures because
we believe these non-GAAP measures are frequently used by
securities analysts, investors and other interested parties as
measures of the financial performance of companies in our
industry.
These non-GAAP financial measures are not
defined under U.S. GAAP and are not presented in accordance with
U.S. GAAP. These non-GAAP financial measures have limitations as
analytical tools, and when assessing our operating performance,
cash flows or our liquidity, investors should not consider them in
isolation, or as a substitute for gross profit, net income (loss),
cash flows provided by (used in) operating activities or other
consolidated statements of operations and cash flow data prepared
in accordance with U.S. GAAP. There are a number of limitations
related to the use of these non-GAAP financial measures instead of
their nearest GAAP equivalent. First, Adjusted EBITDA, Adjusted
EBITDA margin, Adjusted GP, and Adjusted GP margin are not
substitutes for gross profit, net income (loss), cash flows
provided by (used in) operating activities or other consolidated
statements of operation and cash flow data prepared in accordance
with U.S. GAAP. Second, other companies may calculate these
non-GAAP financial measures differently or may use other measures
to evaluate their performance, all of which could reduce the
usefulness of these non-GAAP financial measures as tools for
comparison. Finally, these non-GAAP financial measures do not
reflect the impact of net interest expenses, incomes tax benefits
(expenses), depreciation and amortization, operating lease cost
relating to prepaid land use rights, accretion expenses for asset
retirement costs, share-based compensation expenses, gain from
purchase price adjustment and impairment loss of long-lived assets,
each of which have been and may continue to be incurred in our
business.
We mitigate these limitations by reconciling the
non-GAAP financial measure to the most comparable U.S. GAAP
performance measure, all of which should be considered when
evaluating our performance.
For more information on these non-GAAP financial
measures, please see the table captioned “Reconciliations of GAAP
and non-GAAP results” set forth at the end of this press
release.
Exchange Rate
This announcement contains translations of
certain RMB amounts into U.S. dollars (“USD”) at specified rates
solely for the convenience of the reader. Unless otherwise stated,
all translations from RMB to USD were made at the rate of RMB7.2513
to US$1.00, the noon buying rate in effect on June 30, 2023 in the
H.10 statistical release of the Federal Reserve Board. The Company
makes no representation that the RMB or USD amounts referred could
be converted into USD or RMB, as the case may be, at any particular
rate or at all.
Statement Regarding Preliminary
Unaudited Financial Information
The unaudited financial information set out in
this earnings release is preliminary and subject to potential
adjustments. Adjustments to the consolidated financial statements
may be identified when audit work has been performed for the
Company’s year-end audit, which could result in significant
differences from this preliminary unaudited financial
information.
About GDS Holdings Limited
GDS Holdings Limited (NASDAQ: GDS; HKEX: 9698)
is a leading developer and operator of high-performance data
centers in China and South East Asia. The Company’s facilities are
strategically located in primary economic hubs where demand for
high-performance data center services is concentrated. The Company
also builds, operates and transfers data centers at other locations
selected by its customers in order to fulfill their broader
requirements. The Company’s data centers have large net floor area,
high power capacity, density and efficiency, and multiple
redundancies across all critical systems. GDS is carrier and
cloud-neutral, which enables its customers to access the major
telecommunications networks, as well as the largest PRC and global
public clouds, which are hosted in many of its facilities. The
Company offers co-location and a suite of value-added services,
including managed hybrid cloud services through direct private
connection to leading public clouds, managed network services, and,
where required, the resale of public cloud services. The Company
has a 22-year track record of service delivery, successfully
fulfilling the requirements of some of the largest and most
demanding customers for outsourced data center services in China.
The Company’s customer base consists predominantly of hyperscale
cloud service providers, large internet companies, financial
institutions, telecommunications carriers, IT service providers,
and large domestic private sector and multinational
corporations.
Safe Harbor Statement
This announcement contains forward-looking
statements. These statements are made under the “safe harbor”
provisions of the U.S. Private Securities Litigation Reform Act of
1995. These forward-looking statements can be identified by
terminology such as “aim,” “anticipate,” “believe,” “continue,”
“estimate,” “expect,” “future,” “guidance,” “intend,” “is/are
likely to,” “may,” “ongoing,” “plan,” “potential,” “target,”
“will,” and similar statements. Among other things, statements that
are not historical facts, including statements about GDS Holdings’
beliefs and expectations regarding the growth of its businesses and
its revenue for the full fiscal year, the business outlook and
quotations from management in this announcement, as well as GDS
Holdings’ strategic and operational plans, are or contain
forward-looking statements. GDS Holdings may also make written or
oral forward-looking statements in its periodic reports to the U.S.
Securities and Exchange Commission (the “SEC”) on Forms 20-F and
6-K, in its current, interim and annual reports to shareholders, in
announcements, circulars or other publications made on the website
of the Stock Exchange of Hong Kong Limited (the “Hong Kong Stock
Exchange”), in press releases and other written materials and in
oral statements made by its officers, directors or employees to
third parties. Forward-looking statements involve inherent risks
and uncertainties. A number of factors could cause GDS Holdings’
actual results or financial performance to differ materially from
those contained in any forward-looking statement, including but not
limited to the following: GDS Holdings’ goals and strategies; GDS
Holdings’ future business development, financial condition and
results of operations; the expected growth of the market for
high-performance data centers, data center solutions and related
services in China and South East Asia; GDS Holdings’ expectations
regarding demand for and market acceptance of its high-performance
data centers, data center solutions and related services; GDS
Holdings’ expectations regarding building, strengthening and
maintaining its relationships with new and existing customers; the
continued adoption of cloud computing and cloud service providers
in China and South East Asia; risks and uncertainties associated
with increased investments in GDS Holdings’ business and new data
center initiatives; risks and uncertainties associated with
strategic acquisitions and investments; GDS Holdings’ ability to
maintain or grow its revenue or business; fluctuations in GDS
Holdings’ operating results; changes in laws, regulations and
regulatory environment that affect GDS Holdings’ business
operations; competition in GDS Holdings’ industry in China and
South East Asia; security breaches; power outages; and fluctuations
in general economic and business conditions in China, South East
Asia and globally, and assumptions underlying or related to any of
the foregoing. Further information regarding these and other risks,
uncertainties or factors is included in GDS Holdings’ filings with
the SEC, including its annual report on Form 20-F, and with the
Hong Kong Stock Exchange. All information provided in this press
release is as of the date of this press release and are based on
assumptions that GDS Holdings believes to be reasonable as of such
date, and GDS Holdings does not undertake any obligation to update
any forward-looking statement, except as required under applicable
law.
For investor and media inquiries, please
contact:
GDS Holdings LimitedLaura
ChenPhone: +86 (21) 2029-2203Email: ir@gds-services.com
The Piacente Group, Inc.Ross
WarnerPhone: +86 (10) 6508-0677Email: GDS@tpg-ir.com
Brandi PiacentePhone: +1 (212) 481-2050Email:
GDS@tpg-ir.com
GDS Holdings Limited
|
GDS HOLDINGS LIMITEDUNAUDITED CONDENSED
CONSOLIDATED BALANCE SHEETS(Amount in thousands of
Renminbi ("RMB") and US dollars ("US$")) |
|
|
|
|
|
|
As ofDecember 31, 2022 |
As of June 30, 2023 |
|
|
RMB |
RMB |
US$ |
|
|
|
|
|
|
Assets |
|
|
|
Current
assets |
|
|
|
|
Cash |
8,608,131 |
|
8,184,789 |
|
1,128,734 |
|
|
Accounts receivable, net of
allowance for doubtful accounts |
2,406,025 |
|
2,935,343 |
|
404,802 |
|
|
Value-added-tax (“VAT”)
recoverable |
164,743 |
|
171,414 |
|
23,639 |
|
|
Prepaid expenses and other
current assets |
772,177 |
|
888,785 |
|
122,568 |
|
|
Total current
assets |
11,951,076 |
|
12,180,331 |
|
1,679,743 |
|
|
|
|
|
|
Property and
equipment, net |
46,916,628 |
|
48,741,000 |
|
6,721,691 |
|
Prepaid land use
rights, net |
23,002 |
|
22,695 |
|
3,130 |
|
Operating lease
right-of-use assets |
5,633,946 |
|
5,564,165 |
|
767,333 |
|
Goodwill and
intangible assets, net |
8,124,214 |
|
8,027,083 |
|
1,106,986 |
|
Other non-current
assets |
2,165,088 |
|
2,519,290 |
|
347,425 |
|
|
Total
assets |
74,813,954 |
|
77,054,564 |
|
10,626,308 |
|
|
|
|
|
|
|
Liabilities, Mezzanine Equity and Equity |
|
|
|
Current
liabilities |
|
|
|
|
Short-term borrowings and
current portion of long-term borrowings |
3,623,967 |
|
4,807,066 |
|
662,925 |
|
|
Convertible bonds payable,
current |
2,083,829 |
|
0 |
|
0 |
|
|
Accounts payable |
3,092,884 |
|
2,966,501 |
|
409,099 |
|
|
Accrued expenses and other
payables |
1,173,091 |
|
1,277,369 |
|
176,156 |
|
|
Operating lease liabilities,
current |
175,749 |
|
189,634 |
|
26,152 |
|
|
Finance lease and other
financing obligations, current |
453,855 |
|
479,264 |
|
66,094 |
|
|
Total current
liabilities |
10,603,375 |
|
9,719,834 |
|
1,340,426 |
|
|
|
|
|
|
Long-term
borrowings, excluding current portion |
23,518,058 |
|
23,774,845 |
|
3,278,701 |
|
Convertible bonds
payable, non-current |
4,294,985 |
|
8,597,060 |
|
1,185,589 |
|
Operating lease
liabilities, non-current |
1,617,986 |
|
1,533,036 |
|
211,415 |
|
Finance lease and
other financing obligations, non-current |
8,916,266 |
|
8,354,819 |
|
1,152,182 |
|
Other long-term
liabilities |
1,678,629 |
|
1,685,923 |
|
232,499 |
|
|
Total
liabilities |
50,629,299 |
|
53,665,517 |
|
7,400,812 |
|
|
|
|
|
|
Mezzanine
equity |
|
|
|
|
Redeemable preferred
shares |
1,047,012 |
|
1,086,128 |
|
149,784 |
|
|
Total mezzanine
equity |
1,047,012 |
|
1,086,128 |
|
149,784 |
|
|
|
|
|
|
GDS Holdings
Limited shareholders' equity |
|
|
|
|
Ordinary shares |
516 |
|
516 |
|
71 |
|
|
Additional paid-in
capital |
29,048,598 |
|
29,167,398 |
|
4,022,368 |
|
|
Accumulated other
comprehensive loss |
(848,360 |
) |
(1,112,304 |
) |
(153,394 |
) |
|
Accumulated deficit |
(5,179,705 |
) |
(5,882,623 |
) |
(811,251 |
) |
|
Total GDS Holdings
Limited shareholders' equity |
23,021,049 |
|
22,172,987 |
|
3,057,794 |
|
Non-controlling
interests |
116,594 |
|
129,932 |
|
17,918 |
|
|
Total
equity |
23,137,643 |
|
22,302,919 |
|
3,075,712 |
|
|
|
|
|
|
|
Total liabilities,
mezzanine equity and equity |
74,813,954 |
|
77,054,564 |
|
10,626,308 |
|
|
GDS HOLDINGS LIMITEDUNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS(Amount in
thousands of Renminbi ("RMB") and US dollars
("US$")except for number of shares and per share
data) |
|
|
|
|
|
|
|
Three months ended |
|
Six months ended |
|
|
June 30, 2022 |
March 31, 2023 |
June 30, 2023 |
|
June 30, 2022 |
June 30, 2023 |
|
|
RMB |
RMB |
RMB |
US$ |
|
RMB |
RMB |
US$ |
|
|
|
|
|
|
|
|
|
|
Net
revenue |
|
|
|
|
|
|
|
|
Service
revenue |
2,302,729 |
|
2,408,449 |
|
2,472,020 |
|
340,907 |
|
|
4,546,264 |
|
4,880,469 |
|
673,047 |
|
Equipment
sales |
7,681 |
|
509 |
|
0 |
|
0 |
|
|
7,740 |
|
509 |
|
70 |
|
Total net
revenue |
2,310,410 |
|
2,408,958 |
|
2,472,020 |
|
340,907 |
|
|
4,554,004 |
|
4,880,978 |
|
673,117 |
|
Cost of
revenue |
(1,841,809 |
) |
(1,917,271 |
) |
(1,921,023 |
) |
(264,921 |
) |
|
(3,598,986 |
) |
(3,838,294 |
) |
(529,325 |
) |
Gross
profit |
468,601 |
|
491,687 |
|
550,997 |
|
75,986 |
|
|
955,018 |
|
1,042,684 |
|
143,792 |
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses |
|
|
|
|
|
|
|
|
|
Selling and marketing
expenses |
(38,924 |
) |
(37,841 |
) |
(32,193 |
) |
(4,440 |
) |
|
(80,479 |
) |
(70,034 |
) |
(9,658 |
) |
|
General and administrative
expenses |
(287,179 |
) |
(289,496 |
) |
(269,527 |
) |
(37,169 |
) |
|
(586,891 |
) |
(559,023 |
) |
(77,093 |
) |
|
Research and development
expenses |
(9,371 |
) |
(9,785 |
) |
(5,045 |
) |
(696 |
) |
|
(19,138 |
) |
(14,830 |
) |
(2,045 |
) |
Income
from operations |
133,127 |
|
154,565 |
|
244,232 |
|
33,681 |
|
|
268,510 |
|
398,797 |
|
54,996 |
|
Other
income (expenses): |
|
|
|
|
|
|
|
|
|
Net interest expenses |
(470,838 |
) |
(484,427 |
) |
(469,472 |
) |
(64,743 |
) |
|
(924,319 |
) |
(953,899 |
) |
(131,549 |
) |
|
Foreign currency exchange gain
(loss), net |
3,636 |
|
(6,975 |
) |
4,953 |
|
683 |
|
|
(1,084 |
) |
(2,022 |
) |
(279 |
) |
|
Others, net |
17,613 |
|
25,793 |
|
20,243 |
|
2,792 |
|
|
39,146 |
|
46,036 |
|
6,349 |
|
Loss
before income taxes |
(316,462 |
) |
(311,044 |
) |
(200,044 |
) |
(27,587 |
) |
|
(617,747 |
) |
(511,088 |
) |
(70,483 |
) |
Income tax
expenses |
(58,845 |
) |
(163,568 |
) |
(25,262 |
) |
(3,484 |
) |
|
(130,813 |
) |
(188,830 |
) |
(26,041 |
) |
Net
loss |
(375,307 |
) |
(474,612 |
) |
(225,306 |
) |
(31,071 |
) |
|
(748,560 |
) |
(699,918 |
) |
(96,524 |
) |
Net income
attributable to non-controlling interests |
(50 |
) |
(1,730 |
) |
(1,270 |
) |
(175 |
) |
|
(223 |
) |
(3,000 |
) |
(414 |
) |
Net loss
attributable to redeemable non-controlling interests |
0 |
|
0 |
|
0 |
|
0 |
|
|
655 |
|
0 |
|
0 |
|
Net loss
attributable to GDS Holdings Limited shareholders |
(375,357 |
) |
(476,342 |
) |
(226,576 |
) |
(31,246 |
) |
|
(748,128 |
) |
(702,918 |
) |
(96,938 |
) |
Accretion to
redemption value of redeemable non-controlling interests |
0 |
|
0 |
|
0 |
|
0 |
|
|
(10,801 |
) |
0 |
|
0 |
|
Adjustment to the
redemption value of redeemable non-controlling interests |
0 |
|
0 |
|
0 |
|
0 |
|
|
(178,982 |
) |
0 |
|
0 |
|
Net loss
available to GDS Holdings Limited shareholders |
(375,357 |
) |
(476,342 |
) |
(226,576 |
) |
(31,246 |
) |
|
(937,911 |
) |
(702,918 |
) |
(96,938 |
) |
Cumulative
dividend on redeemable preferred shares |
(12,518 |
) |
(12,895 |
) |
(13,306 |
) |
(1,835 |
) |
|
(24,430 |
) |
(26,201 |
) |
(3,613 |
) |
Net loss
available to GDS Holdings Limited ordinary
shareholders |
(387,875 |
) |
(489,237 |
) |
(239,882 |
) |
(33,081 |
) |
|
(962,341 |
) |
(729,119 |
) |
(100,551 |
) |
|
|
|
|
|
|
|
|
|
|
Loss per
ordinary share |
|
|
|
|
|
|
|
|
Basic and
diluted |
(0.27 |
) |
(0.33 |
) |
(0.16 |
) |
(0.02 |
) |
|
(0.66 |
) |
(0.50 |
) |
(0.07 |
) |
|
|
|
|
|
|
|
|
|
|
Weighted
average number of ordinary share outstanding |
|
|
|
|
|
|
|
|
Basic and
diluted |
1,463,051,878 |
|
1,467,200,367 |
|
1,467,200,367 |
|
1,467,200,367 |
|
|
1,461,990,923 |
|
1,467,200,367 |
|
1,467,200,367 |
|
GDS HOLDINGS LIMITEDUNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF COMPREHENSIVE
LOSS(Amount in thousands of Renminbi ("RMB") and
US dollars ("US$")) |
|
|
|
|
|
|
|
Three months ended |
|
Six months ended |
|
|
June 30, 2022 |
March 31, 2023 |
June 30, 2023 |
|
June 30, 2022 |
June 30, 2023 |
|
|
RMB |
RMB |
RMB |
US$ |
|
RMB |
RMB |
US$ |
|
|
|
|
|
|
|
|
|
|
Net
loss |
(375,307 |
) |
(474,612 |
) |
(225,306 |
) |
(31,071 |
) |
|
(748,560 |
) |
(699,918 |
) |
(96,524 |
) |
Foreign currency
translation adjustments, net of nil tax |
(142,287 |
) |
47,939 |
|
(310,992 |
) |
(42,888 |
) |
|
(155,706 |
) |
(263,053 |
) |
(36,277 |
) |
Comprehensive loss |
(517,594 |
) |
(426,673 |
) |
(536,298 |
) |
(73,959 |
) |
|
(904,266 |
) |
(962,971 |
) |
(132,801 |
) |
Comprehensive
income attributable to non-controlling interests |
(496 |
) |
(1,495 |
) |
(2,396 |
) |
(330 |
) |
|
(580 |
) |
(3,891 |
) |
(537 |
) |
Comprehensive loss
attributable to redeemable non-controlling interests |
0 |
|
0 |
|
0 |
|
0 |
|
|
655 |
|
0 |
|
0 |
|
Comprehensive loss attributable to GDS Holdings Limited
shareholders |
(518,090 |
) |
(428,168 |
) |
(538,694 |
) |
(74,289 |
) |
|
(904,191 |
) |
(966,862 |
) |
(133,338 |
) |
GDS HOLDINGS LIMITEDUNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS(Amount in
thousands of Renminbi ("RMB") and US dollars ("US$")) |
|
|
|
|
|
Three months ended |
|
Six months ended |
|
June 30, 2022 |
March 31, 2023 |
June 30, 2023 |
|
June 30, 2022 |
June 30, 2023 |
|
RMB |
RMB |
RMB |
US$ |
|
RMB |
RMB |
US$ |
|
|
|
|
|
|
|
|
|
Net loss |
(375,307 |
) |
(474,612 |
) |
(225,306 |
) |
(31,071 |
) |
|
(748,560 |
) |
(699,918 |
) |
(96,524 |
) |
Depreciation and amortization |
791,547 |
|
843,359 |
|
874,109 |
|
120,545 |
|
|
1,573,303 |
|
1,717,468 |
|
236,850 |
|
Amortization of debt issuance cost and debt discount |
57,646 |
|
44,692 |
|
45,226 |
|
6,237 |
|
|
98,193 |
|
89,918 |
|
12,400 |
|
Share-based compensation expense |
88,344 |
|
84,865 |
|
63,029 |
|
8,692 |
|
|
181,321 |
|
147,894 |
|
20,396 |
|
Others |
11,177 |
|
(641 |
) |
5,073 |
|
700 |
|
|
15,678 |
|
4,432 |
|
611 |
|
Changes in operating assets
and liabilities |
1,045,759 |
|
(626,843 |
) |
(27,530 |
) |
(3,796 |
) |
|
254,501 |
|
(654,373 |
) |
(90,242 |
) |
Net cash provided by
(used in) operating activities |
1,619,166 |
|
(129,180 |
) |
734,601 |
|
101,307 |
|
|
1,374,436 |
|
605,421 |
|
83,491 |
|
|
|
|
|
|
|
|
|
|
Purchase of property and equipment and land use rights |
(1,744,504 |
) |
(2,042,103 |
) |
(1,415,175 |
) |
(195,162 |
) |
|
(3,906,251 |
) |
(3,457,278 |
) |
(476,780 |
) |
(Payments) receipts related to acquisitions and investments |
(328,006 |
) |
(151,255 |
) |
8,807 |
|
1,215 |
|
|
(3,098,283 |
) |
(142,448 |
) |
(19,644 |
) |
Net cash used in
investing activities |
(2,072,510 |
) |
(2,193,358 |
) |
(1,406,368 |
) |
(193,947 |
) |
|
(7,004,534 |
) |
(3,599,726 |
) |
(496,424 |
) |
|
|
|
|
|
|
|
|
|
Net proceeds from financing activities |
(1,994,747 |
) |
3,874,415 |
|
(1,551,157 |
) |
(213,915 |
) |
|
2,616,068 |
|
2,323,258 |
|
320,392 |
|
Net cash (used in)
provided by financing activities |
(1,994,747 |
) |
3,874,415 |
|
(1,551,157 |
) |
(213,915 |
) |
|
2,616,068 |
|
2,323,258 |
|
320,392 |
|
Effect of exchange rate
changes on cash and restricted cash |
322,530 |
|
24,942 |
|
134,877 |
|
18,601 |
|
|
316,610 |
|
159,819 |
|
22,040 |
|
|
|
|
|
|
|
|
|
|
Net (decrease) increase of
cash and restricted cash |
(2,125,561 |
) |
1,576,819 |
|
(2,088,047 |
) |
(287,954 |
) |
|
(2,697,420 |
) |
(511,228 |
) |
(70,501 |
) |
Cash and restricted cash at
beginning of period |
11,454,508 |
|
8,882,066 |
|
10,456,645 |
|
1,442,037 |
|
|
12,026,367 |
|
8,882,066 |
|
1,224,893 |
|
Reclassification as assets of
disposal group classified as held for sale |
0 |
|
(2,240 |
) |
1,966 |
|
271 |
|
|
0 |
|
(274 |
) |
(38 |
) |
Cash and restricted
cash at end of period |
9,328,947 |
|
10,456,645 |
|
8,370,564 |
|
1,154,354 |
|
|
9,328,947 |
|
8,370,564 |
|
1,154,354 |
|
GDS HOLDINGS LIMITEDRECONCILIATIONS OF
GAAP AND NON-GAAP RESULTS(Amount in thousands of
Renminbi ("RMB") and US dollars ("US$")except for
percentage data) |
|
|
|
|
|
|
|
Three months ended |
|
Six months ended |
|
|
June 30, 2022 |
March 31, 2023 |
June 30, 2023 |
|
June 30, 2022 |
June 30, 2023 |
|
|
RMB |
RMB |
RMB |
US$ |
|
RMB |
RMB |
US$ |
|
|
|
|
|
|
|
|
|
|
Gross
profit |
468,601 |
|
491,687 |
|
550,997 |
|
75,986 |
|
|
955,018 |
|
1,042,684 |
|
143,792 |
|
Depreciation and
amortization |
674,971 |
|
730,908 |
|
735,993 |
|
101,497 |
|
|
1,333,849 |
|
1,466,901 |
|
202,295 |
|
Operating lease
cost relating to prepaid land use rights |
1,999 |
|
8,356 |
|
9,387 |
|
1,295 |
|
|
3,917 |
|
17,743 |
|
2,447 |
|
Accretion expenses
for asset retirement costs |
1,608 |
|
1,726 |
|
1,731 |
|
239 |
|
|
3,210 |
|
3,457 |
|
477 |
|
Share-based
compensation expenses |
25,160 |
|
26,699 |
|
21,697 |
|
2,992 |
|
|
50,993 |
|
48,396 |
|
6,674 |
|
Adjusted
GP |
1,172,339 |
|
1,259,376 |
|
1,319,805 |
|
182,009 |
|
|
2,346,987 |
|
2,579,181 |
|
355,685 |
|
Adjusted
GP margin |
50.7 |
% |
52.3 |
% |
53.4 |
% |
53.4 |
% |
|
51.5 |
% |
52.8 |
% |
52.8 |
% |
GDS HOLDINGS LIMITEDRECONCILIATIONS OF
GAAP AND NON-GAAP RESULTS(Amount in thousands of
Renminbi ("RMB") and US dollars ("US$")except for
percentage data) |
|
|
|
|
|
|
|
Three months ended |
|
Six months ended |
|
|
June 30, 2022 |
March 31, 2023 |
June 30, 2023 |
|
June 30, 2022 |
June 30, 2023 |
|
|
RMB |
RMB |
RMB |
US$ |
|
RMB |
RMB |
US$ |
|
|
|
|
|
|
|
|
|
|
Net
loss |
(375,307 |
) |
(474,612 |
) |
(225,306 |
) |
(31,071 |
) |
|
(748,560 |
) |
(699,918 |
) |
(96,524 |
) |
Net interest
expenses |
470,838 |
|
484,427 |
|
469,472 |
|
64,743 |
|
|
924,319 |
|
953,899 |
|
131,549 |
|
Income tax
expenses |
58,845 |
|
163,568 |
|
25,262 |
|
3,484 |
|
|
130,813 |
|
188,830 |
|
26,041 |
|
Depreciation and
amortization |
791,547 |
|
843,359 |
|
874,109 |
|
120,545 |
|
|
1,573,303 |
|
1,717,468 |
|
236,850 |
|
Operating lease
cost relating to prepaid land use rights |
26,326 |
|
26,704 |
|
26,845 |
|
3,702 |
|
|
48,951 |
|
53,549 |
|
7,385 |
|
Accretion expenses
for asset retirement costs |
1,608 |
|
1,726 |
|
1,731 |
|
239 |
|
|
3,210 |
|
3,457 |
|
477 |
|
Share-based
compensation expenses |
88,344 |
|
84,865 |
|
63,029 |
|
8,692 |
|
|
181,321 |
|
147,894 |
|
20,396 |
|
Adjusted
EBITDA |
1,062,201 |
|
1,130,037 |
|
1,235,142 |
|
170,334 |
|
|
2,113,357 |
|
2,365,179 |
|
326,174 |
|
Adjusted
EBITDA margin |
46.0 |
% |
46.9 |
% |
50.0 |
% |
50.0 |
% |
|
46.4 |
% |
48.5 |
% |
48.5 |
% |
GDS (NASDAQ:GDS)
Historical Stock Chart
From May 2024 to Jun 2024
GDS (NASDAQ:GDS)
Historical Stock Chart
From Jun 2023 to Jun 2024