GDS Holdings ((GDS)) has held its Q3 earnings call. Read on for the main highlights of the call.
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GDS Holdings Reports Strong Growth Amid AI Demand and Successful IPO
The recent earnings call for GDS Holdings highlighted a positive sentiment, driven by strong financial performance and strategic positioning. The company has experienced significant growth in AI-driven demand and successfully accessed capital through the C-REIT IPO. Despite some concerns about subdued bookings and potential price pressures, the overall outlook remains optimistic due to the company’s robust financial health.
Revenue and EBITDA Growth
GDS Holdings reported a 10.2% increase in revenue and an 11.4% rise in adjusted EBITDA year-on-year for Q3 2025. This continued trend of healthy growth underscores the company’s strong financial performance and its ability to capitalize on market opportunities.
AI-Driven Demand in China
A significant 65% of GDS’s 2025 bookings are AI-related, indicating a robust recovery in the data center sector. This surge is largely driven by investments in AI infrastructure, positioning GDS as a key player in the evolving tech landscape in China.
Successful C-REIT IPO
The C-REIT IPO in China was a notable success, with units trading 45.8% above the IPO price. This achievement provides GDS with a substantial competitive advantage in accessing capital, further strengthening its financial position.
Financial Discipline and Asset Monetization
GDS has demonstrated strong financial management by improving its net debt to EBITDA ratio to 6.0x from 6.8x and reducing its effective interest rate to 3.3%. These measures reflect the company’s commitment to financial discipline and strategic asset monetization.
Subdued New Bookings
Despite strong bookings in Q1 2025, GDS has experienced relatively subdued new bookings in subsequent quarters. This trend could potentially impact growth rates in the coming year, warranting close monitoring.
Potential Downward Price Pressure
GDS anticipates a 3%-4% decrease in MSR over 2026 due to downward price resets for renewed contracts and elevated move-in levels. This potential price pressure could influence future revenue streams.
Forward-Looking Guidance
GDS Holdings is on track to achieve the midpoint of its revenue guidance and exceed the top end of its EBITDA guidance for the full year of 2025. The company has secured around 900 megawatts of powered land suitable for AI demand and plans further asset injections into its C-REIT. With visible plans for significant move-ins from its backlog, GDS is well-positioned for continued growth.
In conclusion, GDS Holdings’ earnings call reflects a positive sentiment with strong growth driven by AI demand and successful capital access. While challenges such as subdued bookings and potential price pressures exist, the company’s strategic positioning and financial discipline provide a solid foundation for future success.