GDS Holdings Limited Q3 FY2024 Earnings Call

· Earnings call transcript and AI-powered summary

Business Performance Highlights

  • Revenue grew 18% year-over-year, while adjusted EBITDA increased 15% year-over-year, reflecting improved China operations and strong execution internationally.
  • Record gross additional area utilized of over 25,000 square meters in Q3 2024, all organically driven in China’s tier 1 markets. This is the highest quarterly move-in ever for the company.
  • AI-driven demand is the primary growth driver. About half of Q3 move-ins came from recent AI-related orders.
  • Full-year 2024 net additional area utilized is expected to be around 60,000 square meters, matching the company’s 2020 peak year.
  • Company expects sustained move-in momentum as AI inferencing workloads concentrate in tier 1 markets where GDS holds scarce land and power resources.

China Operations

  • China segment revenue grew 6.1% year-over-year, while adjusted EBITDA rose 3.6% year-over-year.
  • Total area utilized in China grew 11.6% year-over-year. However, MSR per square meter declined about 4% from Q3 2023 due to pricing pressure and higher power tariffs implemented in late 2023.
  • Adjusted EBITDA margin in China declined by 1 percentage point compared to Q3 2023 due to power tariff increases.
  • Net additional area utilized expected to remain around 15,000 square meters per quarter going forward.

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Laura Chen : Thank you. Hello, everyone. Welcome to the third quarter of 2024 earnings conference call of GDS Holdings Limited. The company's results were issued via Newswire services earlier today and are posted online. A summary presentation which we will refer to during this conference call, can be viewed and downloaded from our IR website at investors.gds-services.com. Leading today's call is Mr. William Huang, GDS Founder, Chairman, and CEO, who will provide an overview of our business strategy and performance. Mr. Dan Newman, GDS, CFO, will then review the financial and operating results. Before we continue, please note that today's discussion will contain forward-looking statements made under the Safe Harbor provision of the US Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, the Company’s results may be materially different from the views expressed today. Further information regarding these and other risks and uncertainties is included in the Company’s prospectus as filed with the US SEC. The Company does not assume any obligation to update any forward-looking statements except as required under applicable law. Please also note that GDS’s earnings press release and this conference call include discussions of unaudited GAAP financial information, as well as unaudited non-GAAP financial measures. GDS’s press release contains a reconciliation of the unaudited non-GAAP measures to the unaudited

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