GDS

Image source: The Motley Fool. Thursday, Aug. 13, 2026, at 8 a.m. ET Head of Investor Relations-Laura Chen Founder, Chairman and Chief Executive Officer-William Huang Chief Financial Officer-Dan Newman Operator: Hello, ladies and gentlemen. Thank you for standing by for GDS Holdings Limited's Second Quarter 2026 Earnings Conference Call. [Operator Instructions] Today's conference call is being recorded. I'll now turn the call over to your host, Ms. Laura Chen, Head of Investor Relations for the company. Please go ahead, Laura. Laura Chen: Thank you. Hello, everyone. Welcome to the Second Quarter 2026 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 provisions of the U.S. 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 U.S. 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 earnings press release and this conference call include discussions of unaudited GAAP financial information as well as unaudited non-GAAP financial measures. GDS press release contains a reconciliation of the unaudited non-GAAP measures to the unaudited most directly comparable GAAP measures. I'll now turn the call over to GDS Founder, Chairman and CEO, Mr. William Huang. Please go ahead, William. William Huang: Hello, everyone. This is William. Thank you for joining us on today's call. AI is transforming our business. Our sales momentum is the strongest we have ever seen. In the second quarter, we achieved 260 megawatts of new bookings, bringing our total for the first half of 2026 to a record 470 megawatts. During the current quarter, we are well on the way to securing further major business wins with leading customers. We are confidently raising our full year sales target to 1 gigawatt. All of our sales agreements, including -- include a binding take-or-pay commitment. This is a metric which we disclose as bookings. The sales agreement specified delivery date, which is up to 4 quarters after bookings. This allowed us to invest based on secured commitments. Following the delivery date, there is an agreed ramp-up period, usually another 4 quarters, which gives us visibility to the timing of new billings. Alongside the new bookings, our customers also request us to reserve deployable capacity at the same site for their future needs. Reservation has become an integral part of our sales agreements. So far this year, we have secured an additional 600 megawatts of reservations for our -- from our customers. We expect to end this year with over 1 gigawatt of new reservations. This provides us with high visibility for new orders in the next couple of years as customers convert reservations to binding commitments. China's tech giants and emerging AI leaders are driving the adoption of advanced agentic models. This has led to a structural upgrade in the demand for computing power and AI infrastructure. GDS is uniquely positioned to address this opportunity as a result of our strategic customer relationships presence across all key markets in China, track record of execution and financing capabilities. The strength of our platform is clearly evidenced in the composition of our first half bookings. We won significant new business from each of the 3 largest hyperscale customers. At the same time, we started to establish relationships with a group of emerging AI leaders, which have the potential to generate incremental demand in the future. Our new business wins are diversified across the markets. For the first half of the year, around half of our bookings came from the established markets and half from new markets, including the Ulanqab and Horinger in inner Mongolia and Shaoguan in Guangdong province. We are progressing well with customers for our Changshu campus in Jiangsu Province, which is another new market. This new sales success validates our differentiated resource strategy. At the midpoint of this year, we have total binding commitments for over 2 gigawatts plus a further 600 megawatts of reservations. On the capacity side, we have around 3 gigawatts of developable capacity, which is not yet committed or to -- under reservation. It is mostly in new markets. In view of our current sales momentum, we are actively adding to the deployment pipeline in the markets where demand is growing. While pursuing our ambitious target, we remain selective in terms of customers and the contract terms. We invested against binding long-term commitments for -- from the customers, and we are committed to maintaining financial discipline. I will now pass on to Dan for the financial and operating review. Daniel Newman: Thank you, William. I'll start from the backlog buildup on Slide 10. We started the current year with a backlog of 450 megawatts. By the middle of the year, our backlog had increased substantially to 757 megawatts. Based on the pricing in the contracts and our operating cost benchmarks, we estimate that we can generate RMB 2.2 million of adjusted EBITDA per megawatt on average from this backlog. Our booked but not billed adjusted EBITDA was therefore around RMB 1.6 billion. By year-end, assuming we achieve our sales target, we expect the backlog to increase further to over 1 gigawatt. Turning to Slide 11. During the first half of 2026, our net move-in was 145 megawatts. During the second half, we forecast move-in of another 90 megawatts, making 235 megawatts for the full year. The move-in pattern over the course of 2026 reflects the timing of bookings last year. For 2027, we forecast move-in will increase substantially to more than double the number for 2026. The move-in will be heavily weighted to the second half of 2027. Assuming we sustain our sales momentum, 2028 should see another step-up in move-in. Turning to CapEx on Slide 12. Our unit CapEx for the new capacity, which we are constructing averages around RMB 20 million per megawatt. As we just raised our sales target for the current year, we are also raising our guidance for CapEx paid from RMB 9 billion to RMB 10 billion, most of which is in the second half. Our plan is to continue financing new investments with around 60% debt and 40% equity at the project level. Assuming we can generate a stabilized cash yield on new investments of 10% to 11%, this implies leverage of around 5.5 to 6x at the project level. Our primary source of debt is onshore RMB-denominated long-term bank borrowings. The onshore bank market remains highly supportive. During 2Q '26 alone, we were able to complete RMB 4.9 billion of new debt financing and refinancing. For the project equity, we have various sources. We have cash of nearly RMB 20 billion on our balance sheet, and we have delevered down to 4.7x net debt to last quarter annualized adjusted EBITDA. We have operating cash flow, which continues to strengthen. And we have our onshore asset monetization program, which we are building up in a very deliberate way. Following our successful C-REIT IPO, the first post-IPO asset injection is currently under regulatory review. Turning to Slide 16. We are revising upwards our full year revenue and adjusted EBITDA guidance to reflect a more accurate financial outlook for this year, which includes the onetime items disclosed in 1Q '26. Turning to Slide 17. In order to put our first half '26 financial performance and revised full year '26 guidance into context, we have made some pro forma adjustments. Starting from reported revenue and reported adjusted EBITDA, we deduct the onetime items in 1Q '26. For consistency, we also deduct recurring income in prior quarters, which was restructured into the onetime payment. and we deduct the revenue and adjusted EBITDA contributed by the monetized assets prior to their deconsolidation. These adjustments establish a clean basis for comparison. For the first half of 2026, our pro forma adjusted EBITDA increased by 12.7%. Taking the midpoint of our revised guidance for full year '26, the implied growth rate of pro forma adjusted EBITDA is 6.5%. We'd now like to open the call to questions. Operator? Operator: [Operator Instructions] And our first question comes from the line of Yang Liu from Morgan Stanley. Yang Liu: Congratulations on the upward revision of full year guidance. I would like to ask about the future potential move-in. I think that there's a lot of debate on your customers' CapEx and also the availability of GPU in the market and also the constraint of computing power. We also see that you expect your move-in to improve dramatically next year. What could be the downside risk for that? And if there's any concern or a delay in one customer getting the GPUs, will the take-or-pay contract protect GDS revenue? William Huang: Yes. Thank you. I think dynamics of the demand from the different dimension. I think, of course, the key driver is still the GPU. But the GPU, I think in terms of the domestic GPU, the supply is catching up. I think it took a while in the last couple of quarters, right, as we mentioned. But now it looks like on track to catch up. This is number one. But in the meanwhile, I think they also drive a lot of traditional cloud growth. What we have seen is the new order quite a big number is driven by the CPU. So it will not impact in terms of the supply, it's no issue. So I think this is all positive. So that we take a more positive way to look at the current or future chip supply. So that's our view. If you look at the other -- a lot of the traditional cloud business, they are still raising their target and the growth is very significant as well. So I think let's be clear there. Yang Liu: How about the take-or-pay term protecting the GDS revenue? Daniel Newman: Yes. Yes, 2 comments. The first is that in each contract, there is a specific delivery date when the capacity has to be available to move in by the customer and that is a fixed date in each contract. It's up to 4 quarters from when the booking is disclosed. So that part, I think, is unchangeable. After that, there's a move-in period, and it varies from contract to contract. We've been very focused on trying to select contracts which have a shorter move-in period and a fixed commitment. For the purposes of forecasting, we assumed that the move-in will be on average over 4 quarters on a straight-line basis. So that is what our forecast reflects. In reality, it could be faster or it could be slower. But I don't think it will materially deviate from that. Operator: And our next question comes from Sara Wang from UBS. Xinyi Wang: Congrats on the really solid new order signs. As management just mentioned that there is increasing demand from emerging AI leaders. So just wondering, is there any difference in their demand profile or contract terms compared to established cloud or Internet hyperscale customers we already served for quite some time. William Huang: I think we are just starting to build up our team. So far, we are very selective business from some new AI leader. I think in terms of their demand profile, it looks like it's getting bigger and bigger, but we are still very selective. Our main customers and the new business mainly driven by the hyperscale, a couple of large hyperscale. But we think there are some new customer in future, it's the right thing to do to diversify our customer base. So we just start to build some relationship with them right now. So of course, the demand is obviously [indiscernible] in which we believe. Operator: We will now take our next question from the line of Frank Louthan from Raymond James & Associates. Frank Louthan: I wanted to get an update on what your new guidance is and what does that imply for the impact of potential action with the C-REIT contribution? Does that include any of that? And what would you expect that to be -- how would you expect that to impact revenue and EBITDA? And then secondly, if you could just address the slowdown in MRR, how should we think about that? And what -- and if we're looking forward, are you signing contracts that should be resulting in an improvement in MRR going forward? How should we think about that? Daniel Newman: Frank, first of all, on guidance, to make clear that our guidance does not take account of any further asset monetization. There's a transaction in progress under regulatory review. We can't be any more specific about the timing of that. But to be clear, it's not factored in. For the [ MSR, ] we've provided guidance about the yield in terms of EBITDA per megawatt for the backlog and the new business that we're winning. And I think that will help for forecasting. If we go back to [ MSR, ] I always make the comparison on a same quarter basis. So if we take 4Q '26 compared with 4Q '25, we forecast that it will be down 3% and then maybe by a similar amount next year. Part of that is the change in the location mix because there's a substantial amount of new business in new markets. And part of it is due to the legacy contracts where we have about another 18 months to go before we are through the transition of adjusting all of our contracts to the current market pricing. So our guidance this year and what we indicate in the future will fully reflect that. William Huang: I should point out that, I mean, the Tier 1 market, I mean, also the new market, the current price level is stable. It is all about the transition... Operator: And our next question comes from the line of Daley Li from Bank of America Securities. Huiqun Li: Congrats on the upward trend for the new orders. I have one question regarding the move-in. I remember in last earnings call, we are seeing a soft move-in rate in Q2, but it seems the number is better than our -- the market expectation. So what will be the -- what has been the key drivers for better move-in Q2? And secondly, how do we see the demand, supply trend in the data center market in China, considering the power quota approval progress by the government? Daniel Newman: I would not read anything into the quarterly fluctuations. Most of the move-in the current year is the capacity that was booked in 2025 or even before. And if you look at the bookings in 2025, we had a very strong first quarter 2025 and then the second, third, fourth quarter were at a lower -- consistent level. And then from the first quarter of this year, our bookings increased by a very large amount. That's sustained in the second quarter. We gave an indication for the full year that's sustained. So I think you can derive from that the outlook for move-in over 2020 -- remainder of 2026 and 2027, we see a significant increase in move-in the second half of 2027, which is going to lead to a significant acceleration of EBITDA growth. William Huang: I think the current power, there's a couple of key points. Number one is now it's controlled by the central government and the municipal government as well. So basically, if you apply the polish, first step is to go to the municipal level because the local government commitment and their full support, right? This is -- now government is quite selective right now. They try to give some [indiscernible] market leader more allocation. That's why we have built up our land bank in the last 18 months so quickly, right, and take some advantage of the GDS brand, right? So second then we go to the provincial level [ NDRC ] approval, then go to the final approval from the central government, the [ NDRC ] central government. That's the key process of how we get [indiscernible] location. Operator: We will now take our next question from the line of Edison Lee from Jefferies. Yu Lee: So congrats on the good results. My question -- sorry, it's really centering around just reconfirming the definition of the bookings and the reservations. So I assume that bookings, contracts have been signed and reservations mean that is being -- is sort of an MOU with indicating interest by the customers, and you look forward to converting that into signed contracts over the next few quarters. Is my understanding correct? Daniel Newman: Not exactly. What I'd like to make clear is that there's a sales agreement, which contains a booking, which is a contractual take-or-pay commitment. But within the same document, we undertake to reserve capacity to enable the customer to have certainty of being able to make commitments typically at the same site in future over a period of time. So the bookings and the reservations go together, and that's how the customers look at it from a resource planning perspective. William Huang: Yes. In the meanwhile, I think we should say based on our last 12 or 18 months experience, which the reservation -- our customers exercise their reservation in a 100% basis. That's our current experience. But in terms of the case by case, which negotiate, moving in general, reservation is quite certain -- provide a very, very high certainty for our future booking. Yu Lee: Okay. So can I follow up by asking your booking targets this year right now is 1 gigawatt. I think in the last quarter, I think your target was still 500 megawatts. So this doubling of the bookings target, I believe, is driven by your customers or your assessment of the customers' demand. And is it possible for you to split the customers' demand into training versus inference? Or you have no idea how to split that? William Huang: I think the campus like in the new markets, I think they will host a different workload. It's a training plus inference, both their workload increased the guidance. I think the increased guidance is number one is that the whole market demand we see is increased. If you look at our hyperscalers, they continue to increase their CapEx, and that's in line with that. That is number one. Number two, I think GDS still maintain a lot of advantage, which is our customers prefer. So everybody knows we step in the new growth and we started our new business plan. So I think in terms of the capital revenues, even better than the other competitors. So I think the customer will more rely on us. Yu Lee: And in terms of your power reserves, can you talk about the locations of your power reserves? Daniel Newman: The part that we identify is developable capacity that is almost entirely new markets. We have capacity in established markets that it's under reservation. So there's only a small amount in established markets that is not committed or reserved. Yu Lee: So is it very different from what you disclosed in the last quarter in terms of locations? Daniel Newman: [indiscernible]. Operator: We will now move to our next question -- and our next question comes from the line of Timothy Zhao from Goldman Sachs. Timothy Zhao: I think I just want to get more clarity on the move-in and how do you want to look at the revenue and EBITDA, I think beyond this year. Just wondering if you can give us a breakdown, like, for example, for this year, a lot of move-ins, what is the proportion between CPU based and GPU based? And into next year, it seems like you are looking for the move-in to be more than double to close to 700 megawatts next year. And what will be the breakdown between GPU and CPU next year? And with that 700 megawatts move in, of course, I think the majority will be more geared toward the second half of the next year. So if that is the case, then how do you think about the revenue and EBITDA growth, I think, beyond this year into '27 and '28. William Huang: It's -- I think it's not -- in general, we don't have the current detailed specific number in terms of the breakdown there. But in general, I think I can give you the general -- I mean, assumption, maybe it's around 50-50. Daniel Newman: Yes, about growth in 2027, we provide annual guidance. Obviously, we won't be doing that until we give the full year results in around March next year. But what you can already see is that over the course of next year, there's going to be a very significant acceleration. The growth rate from 1Q, 2Q, 3Q, 4Q is going to be very different. I think what really matters is where we are at the end of the year and where we are in 2028. I believe it's already a strong indication that in 2028, GDS is going to be a pretty high-growth company. Timothy Zhao: And my follow-up on the breakdown 50-50. Just wondering if that refers to both this year and next year and onwards or how that mix can change into next year? William Huang: Yes. Maybe GPU will a little bit higher next year, that's what I guess based on the current domestic supply is catching up. I think -- yes. Operator: Thank you. Due to the time limit of today's call, I would now like to turn the call back to the company for any closing remarks. Laura Chen: Thank you all once again for joining us today, and see you next time. Operator: This concludes this conference call. You may now disconnect your lines. Thank you. Before you buy stock in GDS Holdings, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and GDS Holdings wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. 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As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. GDS (GDS) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

GDS Holdings Limited GDS used its second-quarter 2026 earnings call to frame AI-driven demand as the main force behind record bookings and a sharply higher full-year sales target. Founder, chairman and CEO William Huang and CFO Daniel Newman also detailed booking-to-billing timing, raised spending and financial guidance, and addressed questions on GPU supply, contract protection, reservations and pricing. CEO Huang said that GDS booked 260 megawatts in the second quarter, lifting first-half bookings to a record 470 MW. The company raised its 2026 sales target to 1 GW. Huang said that customers also reserved another 600 MW this year and GDS expects reservations to exceed 1 GW by year-end. He described reservations as a source of visibility for future binding orders. For quarterly context, revenues of $455.1 million missed the Zacks Consensus Estimate of $463.2 million. Reported EPS of $0.56 also fell short of the $1.35 estimate. GDS Holdings price-consensus-eps-surprise-chart | GDS Holdings Quote Huang said that China’s tech giants and emerging AI companies are driving higher demand for computing capacity. First-half bookings were split roughly evenly between established markets and newer locations. Huang also mentioned that GDS won meaningful business from each of its three largest hyperscale customers while beginning relationships with emerging AI leaders. He stressed that the company remains selective with newer customers. Huang added that GDS had more than 2 GW of binding commitments at midyear, plus 600 MW of reservations. Around 3 GW of developable capacity remained uncommitted or unreserved, mostly in new markets. Newman said that backlog expanded from 450 MW at the start of 2026 to 757 MW by midyear. He estimated average adjusted EBITDA of RMB2.2 million per megawatt from that backlog. Newman expects 235 MW of move-ins for GDS for 2026, including 145 MW in the first half and another 90 MW in the second half. For 2027, move-ins are forecast to more than double. Newman said that the 2027 move-in profile will be heavily weighted to the second half, creating a pronounced acceleration through the year. He also said 2028 should bring another step-up if sales momentum is sustained. Newman increased full-year revenue guidance to RMB12.7 billion to RMB13 billion from RMB12.4 billion to RMB12.9 billion. Adjusted EBITDA guidance rose to RMB5.9 billion to RMB6.1 billion from RMB5.75 billion to RMB6 billion. CFO Newman said the revised outlook includes first-quarter one-time items but excludes further asset monetization. A C-REIT asset injection remained under regulatory review and was not included in guidance. CFO Newman also raised 2026 capex guidance to around RMB10 billion from RMB9 billion, reflecting stronger sales and development activity. GDS plans to finance new projects with roughly 60% debt and 40% equity. A Morgan Stanley analyst asked whether GPU delays could disrupt move-ins. Huang said that domestic GPU supply was catching up and CPU demand was supporting orders. Newman emphasized fixed delivery dates and take-or-pay commitments. A Jefferies analyst asked whether reservations were nonbinding indications. Newman clarified that bookings and reservations sit in the same sales agreement, while Huang said that customers had exercised reservations at a 100% rate over the prior 12 to 18 months. A Raymond James analyst pressed management on recurring revenue pricing. Newman said that fourth-quarter 2026 MRR is forecast to decline 3% year over year, reflecting market mix and legacy contract repricing, while Huang said that current pricing levels are stable. Huang said that stronger demand is prompting GDS to expand its deployment pipeline, but he emphasized selectivity on customers and contract terms. New investment remains tied to binding, long-term customer commitments. Newman’s financing comments reinforced that posture, with project funding structured around debt and equity as management seeks to preserve financial discipline while capex rises. GDS carries a Zacks Rank #3 (Hold) at present, with a Value Score of B, a Growth Score of C, a Momentum Score of A and a VGM Score of B. Under the Zacks methodology, A and B Style Scores are more favorable than lower grades. The Rank #3 places GDS outside the Zacks Rank #1 (Strong Buy) and 2 (Buy) group that Zacks pairs most strongly with favorable Style Scores. The Zacks Rank can change as earnings estimates are revised following the just-reported results. You can see the complete list of today’s Zacks #1 Rank stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report GDS Holdings (GDS) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Baron Capital, an investment management company, released its Q2 2026 investor letter for the “Baron Opportunity Fund”. A copy of the letter is available to download here. During the second quarter, the Baron Opportunity Fund increased 27.07% (Institutional Shares), outperforming both the Russell 3000 Growth Index (17.05%) and the S&P 500 Index (15.20%). For the first half of 2026, the Fund rose by 15.79% against the Benchmark's 5.88% and the S&P 500's 10.21%. The rally was primarily driven by AI-related growth, despite uncertainty from geopolitical conflicts and inflation. A select group of stocks, notably in Information Technology, led market gains, with the Magnificent Seven contributing significantly to earnings. Growth stocks rebounded, surpassing value stocks, yet still lagged year-to-date. The Fund emphasizes disruptive secular trends like AI and expects long-term growth despite short-term market volatility. The demand for AI compute has dramatically increased, fueled by agentic AI applications. Companies reported measurable economic benefits from AI adoption, reinforcing the Fund's strategy focused on sustainable, innovative growth. Please review the Strategy’s top five holdings to gain insights into their key selections for 2026. In its Q2 2026 investor letter, Baron Opportunity Fund highlighted GDS Holdings Limited (NASDAQ:GDS). GDS Holdings Limited (NASDAQ:GDS), a data center developer and operator based in the People’s Republic of China, detracted from the fund's performance this quarter despite reporting solid results. On August 12, 2026, GDS Holdings Limited (NASDAQ:GDS) closed at $32.74 per share, reflecting a market capitalization of $6.56 billion. GDS Holdings Limited (NASDAQ:GDS) posted a one‑month return of ‑0.03%, while its shares gained 2.83% over the past 52 weeks. Baron Opportunity Fund stated the following regarding GDS Holdings Limited (NASDAQ:GDS) in its Q2 2026 investor letter: GDS Holdings Limited (NASDAQ:GDS) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 51 hedge fund portfolios held GDS Holdings Limited (NASDAQ:GDS) at the end of the first quarter, up from 47 in the previous quarter. While we acknowledge the potential of GDS Holdings Limited (NASDAQ:GDS) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. In another article, we covered GDS Holdings Limited (NASDAQ:GDS) and shared a list of best AI stocks to buy and hold for the next 5 years. In addition, please check out our hedge fund investor letters Q2 2026 page for more investor letters from hedge funds and other leading investors. READ NEXT: 33 Stocks That Should Double in 3 Years and 15 Stocks That Will Make You Rich in 10 Years. Disclosure: None. This article is originally published at Insider Monkey.

Interested in GDS Holdings? Here are five stocks we like better. AI demand is accelerating GDS’s growth: The company recorded a record 470 megawatts of bookings in the first half of 2026 and raised its full-year target to 1 gigawatt from 500 megawatts. It also secured 600 megawatts of additional customer reservations, bringing total binding commitments above 2 gigawatts. GDS’s backlog grew to 757 megawatts by midyear, representing approximately RMB1.6 billion in booked-but-not-billed adjusted EBITDA. Management expects 2027 move-ins to more than double 2026 levels, with the recent booking surge driving significant EBITDA acceleration from the second half of 2027. The company raised 2026 capital-expenditure guidance to RMB10 billion, primarily for second-half investment, with projects expected to be funded through roughly 60% debt and 40% equity. GDS also completed RMB4.9 billion of debt financing and refinancing in the second quarter. 3 Investments to Consider as China’s Market Heats Up GDS (NASDAQ:GDS) said artificial intelligence demand is driving its strongest sales momentum to date, prompting the Chinese data-center operator to raise its full-year 2026 bookings target to 1 gigawatt from 500 megawatts previously. Founder, Chairman and Chief Executive Officer William Huang said the company recorded 260 megawatts of new bookings in the second quarter, bringing first-half bookings to a record 470 megawatts. Huang said all sales agreements include binding take-or-pay commitments, allowing the company to invest against secured customer demand. → AST SpaceMobile Earnings Just Reminded Investors How Risky Space Can Be “AI is transforming our business,” Huang said. “Our sales momentum is the strongest we have ever seen.” The company said its agreements generally specify a delivery date of up to four quarters after a booking is made, followed by a customer ramp-up period that is typically another four quarters. GDS said this structure provides visibility into the timing of future billings, although actual move-ins may occur faster or slower than its planning assumptions. → Nebius’ Q2 Beat Shows the AI Bottleneck Is Capacity, Not Demand Alongside binding bookings, GDS said customers are increasingly requesting that it reserve additional deployable capacity at the same sites for future use. The company secured 600 megawatts of new reservations in the first half and expects to finish 2026 with more than 1 gigawatt of new reservations. Management clarified during the question-and-answer session that reservations are included within the same sales agreements as bookings, rather than representing standalone memoranda of understanding. Huang said customers have exercised their reservations “on a 100% basis” over the past 12 to 18 months, though the timing and percentage of phased move-ins remain subject to negotiation. → On Holding's Price Stumble May Be an Opening for a Company Built to Run At midyear, GDS had more than 2 gigawatts of total binding commitments, plus 600 megawatts of reserved capacity. It also had roughly 3 gigawatts of developable capacity that was neither committed nor reserved, largely located in newer markets. Huang said the first-half bookings included significant business from each of the company’s three largest hyperscale customers. GDS has also begun building relationships with emerging AI-focused customers, although management said it remains selective and that hyperscalers remain the principal source of new business. About half of first-half bookings came from established markets, with the remainder coming from newer markets including Ulanqab and Horinger in Inner Mongolia and Shaoguan in Guangdong province. The company is also progressing with customers at its Zhongwei campus in Ningxia province. Chief Financial Officer Dan Newman said GDS began 2026 with a backlog of 450 megawatts and had increased that backlog to 757 megawatts by midyear. Based on contract pricing and operating-cost benchmarks, the company estimates the backlog can generate average adjusted EBITDA of RMB2.2 million per megawatt, equating to approximately RMB1.6 billion of booked-but-not-billed adjusted EBITDA. Assuming GDS reaches its 1-gigawatt booking target, Newman said the company expects backlog to exceed 1 gigawatt by year-end. GDS reported net move-ins of 145 megawatts in the first half and forecast another 90 megawatts in the second half, for a full-year total of 235 megawatts. Management expects 2027 move-ins to more than double the 2026 level, with activity heavily weighted toward the second half of 2027. Newman said the current-year move-in pattern reflects bookings made during 2025 and earlier. The surge in bookings during the first two quarters of 2026 is expected to support a “significant acceleration” in EBITDA growth beginning in the second half of 2027, he said. Management did not provide formal 2027 financial guidance. GDS raised its 2026 capital-expenditure guidance to RMB10 billion from RMB9 billion, with most spending expected in the second half. Unit capital expenditure for capacity currently under construction averages about RMB20 million per megawatt, Newman said. New investments are expected to be financed with about 60% debt and 40% equity at the project level. GDS targets a stabilized cash yield of 10% to 11% on new investments. The implied project-level leverage is approximately 5.5 to six times, according to management. The company said it completed RMB4.9 billion of new debt financing and refinancing during the second quarter. It also had nearly RMB20 billion of cash on its balance sheet and net debt equal to 4.7 times last-quarter annualized adjusted EBITDA, Newman said. Newman said GDS revised upward its full-year revenue and adjusted EBITDA guidance to reflect what he described as a more accurate financial outlook, including one-time items disclosed in the first quarter. The company did not state the updated revenue or adjusted EBITDA figures during the call. On a pro forma basis that excludes certain one-time items, recurring income restructured into a one-time payment and contributions from monetized assets before deconsolidation, first-half adjusted EBITDA rose 12.7% year over year. Based on the midpoint of revised full-year guidance, pro forma adjusted EBITDA growth would be 6.5% for 2026, Newman said. Management said its full-year guidance does not include the impact of any additional asset monetization. GDS said the first post-initial public offering asset injection into its C-REIT remains under regulatory review. Addressing pricing, Newman said GDS expects MSR to decline about 3% in the fourth quarter of 2026 compared with the fourth quarter of 2025, potentially followed by a similar decline next year. He attributed the change partly to a greater mix of business in newer markets and partly to legacy contracts being reset to current market pricing. Management said pricing in both tier-one and newer markets is currently stable. Huang said domestic GPU supply appears to be catching up after taking time to develop, while traditional cloud demand is also supporting orders. He said some new orders are driven by CPU-based workloads, which face no comparable supply issue. Management estimated the workload mix at roughly 50% CPU and 50% GPU currently, with GPU potentially representing a somewhat higher share next year. GDS Holdings Limited, founded in 2001 and headquartered in Shanghai, is a leading network-neutral data center services provider in China. The company operates a portfolio of state-of-the-art data center facilities designed to support the mission-critical IT infrastructure of cloud service providers, internet enterprises, financial institutions, and government entities. GDS was among the first Chinese providers to offer high-density colocation solutions, catering to customers with demanding computing and storage requirements. GDS specializes in delivering scalable colocation, cross-connect, and interconnection services within its facilities, enabling clients to establish high-speed, low-latency connections to major cloud platforms and internet exchange points. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "GDS Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

GDS Holdings (GDS) came out with quarterly earnings of $0.56 per share, missing the Zacks Consensus Estimate of $1.35 per share. This compares to a loss of $0.06 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of -58.52%. A quarter ago, it was expected that this company would post earnings of $1.06 per share when it actually produced earnings of $1.53, delivering a surprise of +44.34%. Over the last four quarters, the company has surpassed consensus EPS estimates three times. GDS Holdings, which belongs to the Zacks Technology Services industry, posted revenues of $455.11 million for the quarter ended June 2026, missing the Zacks Consensus Estimate by 1.74%. This compares to year-ago revenues of $404.86 million. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. GDS Holdings shares have lost about 6.2% since the beginning of the year versus the S&P 500's gain of 13.2%. While GDS Holdings has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for GDS Holdings was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $1.34 on $464.15 million in revenues for the coming quarter and $2.65 on $1.84 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Technology Services is currently in the bottom 37% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Duos Technologies Group, Inc. (DUOT), another stock in the same industry, has yet to report results for the quarter ended June 2026. The results are expected to be released on August 17. This company is expected to post quarterly loss of $0.02 per share in its upcoming report, which represents a year-over-year change of +93.3%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Duos Technologies Group, Inc.'s revenues are expected to be $10.7 million, up 86.4% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report GDS Holdings (GDS) : Free Stock Analysis Report Duos Technologies Group, Inc. (DUOT) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

SHANGHAI, China, Aug. 13, 2026 (GLOBE NEWSWIRE) -- 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, today announced its unaudited financial results for the second quarter ended June 30, 2026. Second Quarter 2026 Financial Highlights Net revenue increased by 6.5% year-over-year (“Y-o-Y”) to RMB3,088.0 million (US$455.1 million) in the second quarter of 2026 (2Q2025: RMB2,900.3 million). Net income was RMB837.6 million (US$123.5 million) in the second quarter of 2026 (2Q2025: net loss of RMB70.6 million). Net income margin was 27.1% in the second quarter of 2026 (2Q2025: net loss margin of 2.4%). Adjusted EBITDA (non-GAAP) increased by 2.5% Y-o-Y to RMB1,406.0 million (US$207.2 million) in the second quarter of 2026 (2Q2025: RMB1,371.8 million). Adjusted EBITDA margin (non-GAAP) was 45.5% in the second quarter of 2026 (2Q2025: 47.3%). Second Quarter 2026 Operating Highlights Total area committed and pre-committed increased by 18.2% Y-o-Y to 784,802 sqm as of June 30, 2026 (June 30, 2025: 663,959 sqm). Area utilized increased by 13.2% Y-o-Y to 542,236 sqm as of June 30, 2026 (June 30, 2025: 479,186 sqm). Area in service increased by 10.8% Y-o-Y to 684,977 sqm as of June 30, 2026 (June 30, 2025: 618,060 sqm). Utilization rate (area utilized divided by area in service) was 79.2% as of June 30, 2026 (June 30, 2025: 77.5%). “We delivered solid financial and operational results in the second quarter of 2026, reflecting our continued commitment to disciplined execution,” said Mr. William Huang, Chairman and Chief Executive Officer of GDS. “During the quarter, we ramped up backlog delivery while maintaining a high level of net new bookings. As things stand today, we are on track to achieving a record sales commitment for this year, which is much higher than our original target. We are very excited about the opportunities in China ahead of us, driven mainly by AI demand. We are confident in our ability to capture these massive opportunities and expand our business at scale.” “In the second quarter, we grew revenue by 6.5% and adjusted EBITDA by 2.5% year-over-year, yielding an adjusted EBITDA margin of 45.5%,” added Mr. Dan Newman, Chief Financial Officer. “With strengthened financial standing and funding capabilities to support our business expansion, we remain focused on creating sustainable, long-term value for our business partners and shareholders.” Second Quarter 2026 Financial Results Net revenue in the second quarter of 2026 was RMB3,088.0 million (US$455.1 million), a 6.5% increase over the same period last year of RMB2,900.3 million. The Y-o-Y increase was mainly due to continued ramp-up of our data centers. Cost of revenue in the second quarter of 2026 was RMB2,423.7 million (US$357.2 million), a 9.6% increase over the same period last year of RMB2,211.4 million. The Y-o-Y increase was in line with the continued ramp-up of our data centers. Gross profit was RMB664.2 million (US$97.9 million) in the second quarter of 2026, a 3.6% decrease over the same period last year of RMB688.9 million. Gross profit margin was 21.5% in the second quarter of 2026, compared with 23.8% in the same period last year. The Y-o-Y decline was mainly due to a higher level of utility costs as a percentage of net revenue. 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 RMB1,498.9 million (US$220.9 million) in the second quarter of 2026, a 0.7% decrease over the same period last year of RMB1,509.5 million. See “Non-GAAP Disclosure” and “Reconciliations of GAAP and non-GAAP results” elsewhere in this earnings release. Adjusted GP margin (non-GAAP) was 48.5% in the second quarter of 2026, compared with 52.0% in the same period last year. The Y-o-Y decrease was mainly due to a higher level of utility costs as a percentage of net revenue. Selling and marketing expenses, excluding share-based compensation expenses of RMB9.9 million (US$1.5 million), were RMB22.3 million (US$3.3 million) in the second quarter of 2026, a 21.7% decrease over the same period last year of RMB28.5 million (excluding share-based compensation of RMB5.5 million). The Y-o-Y decrease was mainly due to lower level of personnel costs. General and administrative expenses, excluding share-based compensation expenses of RMB35.4 million (US$5.2 million), depreciation and amortization expenses of RMB51.0 million (US$7.5 million) and operating lease cost relating to prepaid land use rights of RMB13.9 million (US$2.0 million), were RMB85.5 million (US$12.6 million) in the second quarter of 2026, a 24.4% decrease over the same period last year of RMB113.0 million (excluding share-based compensation expenses of RMB40.4 million, depreciation and amortization expenses of RMB62.6 million and operating lease cost relating to prepaid land use rights of RMB15.6 million). The Y-o-Y decrease was mainly due to the decrease of allowance in credit losses and greater gain on disposal of certain equipment during the second quarter of 2026. Research and development costs were RMB7.1 million (US$1.0 million) in the second quarter of 2026, compared with RMB8.8 million in the same period last year. Net interest expenses for the second quarter of 2026 were RMB366.8 million (US$54.1 million), a 9.4% decrease over the same period last year of RMB405.0 million. The Y-o-Y decrease was mainly due to lower interest rates as well as higher interest income. Foreign currency exchange gain for the second quarter of 2026 was RMB1.0 million (US$0.2 million), compared with foreign currency exchange gain of RMB1.4 million in the same period last year. Others, net for the second quarter of 2026 was RMB17.8 million (US$2.6 million), compared with RMB9.2 million in the same period last year. Income tax expenses for the second quarter of 2026 were RMB213.5 million (US$31.5 million), compared with RMB64.9 million in the same period last year. The Y-o-Y increase was mainly due to the income tax incurred as a result of intra-group transfer of interests in a subsidiary in preparation for the potential second asset injection into the C-REIT in the second quarter of 2026. Share of results of equity method investees for the second quarter of 2026 was an income of RMB959.9 million (US$141.5 million), mainly arising from the dilution gain on our investment in DayOne Data Centers Limited (“DayOne”) following the completion of DayOne’s Series C Convertible Preferred Share issue during the second quarter of 2026, compared with a loss of RMB25.9 million in the same period last year. Net income in the second quarter of 2026 was RMB837.6 million (US$123.5 million), compared with net loss of RMB70.6 million in the same period last year. Basic income per ordinary share in the second quarter of 2026 was RMB0.52 (US$0.08), compared with basic loss of RMB0.06 in the same period last year. Diluted income per ordinary share in the second quarter of 2026 was RMB0.44 (US$0.07), compared with diluted loss of RMB0.06 in the same period last year. Basic income per American Depositary Share (“ADS”) in the second quarter of 2026 was RMB4.13 (US$0.61), compared with basic loss of RMB0.46 in the same period last year. Diluted income per American Depositary Share (“ADS”) in the second quarter of 2026 was RMB3.53 (US$0.52), compared with diluted loss of RMB0.46 in the same period last year. Adjusted EBITDA (non-GAAP) is defined as net income (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, share of results of equity method investees and gain on deconsolidation of subsidiaries. Adjusted EBITDA was RMB1,406.0 million (US$207.2 million) in the second quarter of 2026, a 2.5% increase over the same period last year of RMB1,371.8 million. Adjusted EBITDA margin (non-GAAP) was 45.5% in the second quarter of 2026, compared with 47.3% in the same period last year. The Y-o-Y decrease was mainly due to a higher level of utility costs as percentage of net revenue, which was partially offset by cost savings at the corporate level. Liquidity As of June 30, 2026, cash and cash equivalents were RMB14,927.3 million (US$2,200.0 million). Total short-term debt was RMB9,209.5 million (US$1,357.3 million), comprised of short-term borrowings and the current portion of long-term borrowings of RMB3,327.3 million (US$490.4 million), current portion of convertible bonds payable of RMB4,219.0 million (US$621.8 million) and the current portion of finance lease and other financing obligations of RMB1,663.1 million (US$245.1 million). Total long-term debt was RMB36,921.5 million (US$5,441.6 million), comprised of long-term borrowings (excluding current portion) of RMB24,024.5 million (US$3,540.8 million), non-current portion of convertible bonds payable of RMB7,573.9 million (US$1,116.3 million) and the non-current portion of finance lease and other financing obligations of RMB5,323.1 million (US$784.5 million). During the second quarter of 2026, the Company obtained new debt financing and refinancing facilities of RMB4,907.3 million (US$723.2 million). Second Quarter 2026 Operating Results Sales Total area committed and pre-committed at the end of the second quarter of 2026 was 784,802 sqm, compared with 663,959 sqm at the end of the second quarter of 2025 and 725,485 sqm at the end of the first quarter of 2026, an increase of 18.2% Y-o-Y and an increase of 8.2% quarter-over-quarter (“Q-o-Q”), respectively. In the second quarter of 2026, gross additional area committed was 64,750 sqm. Net additional total area committed was 59,317 sqm. Data Center Resources Area in service at the end of the second quarter of 2026 was 684,977 sqm, compared with 618,060 sqm at the end of the second quarter of 2025 and 674,269 sqm at the end of the first quarter of 2026, an increase of 10.8% Y-o-Y and an increase of 1.6% Q-o-Q, respectively. Area under construction at the end of the second quarter of 2026 was 170,355 sqm, compared with 132,235 sqm at the end of the second quarter of 2025 and 118,411 sqm at the end of the first quarter of 2026, an increase of 28.8% Y-o-Y and an increase of 43.9% Q-o-Q, respectively. Commitment rate for area in service was 92.4% at the end of the second quarter of 2026, compared with 91.5% at the end of the second quarter of 2025 and 92.8% at the end of the first quarter of 2026. Pre-commitment rate for area under construction was 89.2% at the end of the second quarter of 2026, compared with 74.7% at the end of the second quarter of 2025 and 84.4% at the end of the first quarter of 2026. Move-In Area utilized at the end of the second quarter of 2026 was 542,236 sqm, compared with 479,186 sqm at the end of the second quarter of 2025 and 520,929 sqm at the end of the first quarter of 2026, an increase of 13.2% Y-o-Y and an increase of 4.1% Q-o-Q, respectively. In the second quarter of 2026, gross additional area utilized was 24,841 sqm. Net additional area utilized was 21,307 sqm. Utilization rate for area in service was 79.2% at the end of the second quarter of 2026, compared with 77.5% at the end of the second quarter of 2025 and 77.3% at the end of the first quarter of 2026. Updated Business Outlook The Company revises the previously provided guidance of total revenues for the year of 2026 of RMB12,400 million – RMB12,900 million to RMB12,700 million – RMB13,000 million, representing a Y-o-Y increase of between 11.1% to 13.7%; and the previously provided guidance of Adjusted EBITDA of RMB5,750 million – RMB6,000 million to RMB5,900 million – RMB6,100 million, representing an increase of between 9.2% to 12.9%, both including the one-time items as disclosed in the first quarter of 2026. The Company also revises its previously provided capex guidance of around RMB9,000 million to around RMB10,000 million. The increase in capex guidance reflects the Company’s strong sales achievement, the current sales outlook, and the corresponding increase in the Company’s data center development activities. 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 13, 2026 (8:00 p.m. Beijing Time on August 13, 2026) 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-conf.media-server.com/register/BIa59ef86a877c4e48a19406f31a538f85 A live and archived webcast of the conference call will be available on the Company's investor relations website at https://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 losses 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 (primarily gain or loss on deconsolidation of subsidiaries and share of results of equity method investees), 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. In addition, we exclude the income (loss) from discontinued operations from our Adjusted EBITDA and Adjusted EBITDA margin to measure our financial performance from continuing operations, which will be consistent with our future financial performance disclosure. 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 income (loss) from discontinued operations, 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, impairment losses of long-lived assets, gain on deconsolidation of subsidiaries and share of results of equity method investees, 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. We do not provide forward-looking guidance for certain financial data, such as depreciation, amortization, accretion, share-based compensation, share of results of equity method investees and net income (loss); the impact of such data and related adjustments can be significant. As a result, we are not able to provide a reconciliation of forward-looking U.S. GAAP to forward-looking non-GAAP financial measures without unreasonable effort. Such forward-looking non-GAAP financial measures include the forecast for Adjusted EBITDA in the section captioned “Business Outlook” set forth in this press release. 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 RMB6.7851 to US$1.00, the noon buying rate in effect on June 30, 2026 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. The Company’s facilities are strategically located across the key hubs where demand for high-performance data center services is concentrated. The Company’s data centers have large net floor area, high power capacity, density and efficiency, and multiple redundancies across all critical systems. The Company 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 has a 26-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. The Company also holds a minority equity interest in DayOne Data Centers Limited, an independent Singapore-headquartered hyperscale data center platform. 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 regions in which GDS Holdings’ major equity investees operate, such as 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 results of operations, growth prospects, financial condition, regulatory environment, competitive landscape and other uncertainties associated with the business and operations of GDS Holdings’ major equity investee DayOne; the continued adoption of cloud computing and cloud service providers in China and other major markets that may impact the results of our equity investees, such as 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 and those of its major equity investees; competition in GDS Holdings’ industry in China and in markets that affect the business operations of its major equity investees, such as South East Asia; GDS Holdings’ ability to monetize its existing data center assets through transactions such as public REITs, ABS Schemes, data center funds, joint ventures, sale and lease-back arrangements and private asset sales; security breaches; power outages; and fluctuations in general economic and business conditions in China 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: [email protected] Piacente Financial CommunicationsRoss WarnerPhone: +86 (10) 6508-0677Email: [email protected] Brandi PiacentePhone: +1 (212) 481-2050Email: [email protected] GDS Holdings Limited

This article first appeared on GuruFocus. New Bookings: 260 megawatts in Q2 2026, bringing first-half total to a record 470 megawatts. Full-Year Sales Target: Raised to 1 gigawatt. Reservations: 600 megawatts secured so far this year; expected to exceed 1 gigawatt by year-end. Backlog: Increased from 450 megawatts at the start of the year to 757 megawatts by mid-2026. Backlog Adjusted EBITDA: Estimated at RMB2.2 million per megawatt, totaling around RMB1.6 billion. Net Move-In: 145 megawatts in H1 2026; forecast 90 megawatts in H2, totaling 235 megawatts for the full year. CapEx Guidance: Raised from RMB9 billion to RMB10 billion for 2026. Unit CapEx: Approximately RMB20 million per megawatt for new capacity. Debt Financing: Completed RMB4.9 billion in new debt financing and refinancing during Q2 2026. Cash Position: Nearly RMB20 billion on balance sheet. Leverage: Net debt to last quarter annualized adjusted EBITDA at 4.7 times. Pro Forma Adjusted EBITDA Growth: 4.7% increase in H1 2026; implied full-year growth of 6.5% at midpoint of revised guidance. Warning! GuruFocus has detected 5 Warning Signs with GDS. Is GDS fairly valued? Test your thesis with our free DCF calculator. Release Date: August 13, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Record sales momentum with 260 MW of new bookings in Q2 2026, bringing first-half bookings to 470 MW and raising the full-year sales target to 1 GW. Strong backlog growth to 757 MW by mid-2026, with an estimated RMB2.2 million adjusted EBITDA per MW, providing clear visibility into future earnings. Diversified customer base, winning significant business from each of the three largest hyperscale customers and establishing relationships with emerging AI leaders. Successful financing strategy with RMB4.9 billion in new debt financing during Q2 2026, supported by a highly supportive onshore bank market and a strong balance sheet with nearly RMB20 billion in cash. Upward revision of full-year revenue and adjusted EBITDA guidance, reflecting improved financial outlook and strong operational performance. Potential downside risk from customer GPU availability and CapEx constraints, which could delay Move-In despite take-or-pay contracts. Declining MSR (Monthly Recurring Revenue) expected to be down 3% in Q4 2026 compared to Q4 2025, with further declines next year due to location mix and legacy contract transitions. Heavy reliance on new markets for future growth, which may carry higher execution risks and regulatory approval uncertainties. CapEx guidance raised to RMB10 billion, increasing financial burden and requiring continued access to debt and equity financing. Uncertainty regarding the timing and impact of the C-REIT asset monetization program, which is not factored into current guidance. Q: What drove the upward revision of the full-year sales target to 1 gigawatt, and how are bookings and reservations structured? A: William Huang (CEO) stated that the company's sales momentum is the strongest ever seen, with 260 MW of new bookings in Q2 2026, bringing the first-half total to a record 470 MW. This led to raising the full-year sales target to 1 GW. Dan Newman (CFO) clarified that bookings are binding take-or-pay commitments with specified delivery dates, while reservations are additional capacity held at the same site for future customer needs. Huang added that based on the last 12-18 months of experience, customers have exercised 100% of their reservations, providing high certainty for future bookings. Q: What are the downside risks to the significant Move-In forecast for 2027, and do take-or-pay contracts protect GDS revenue if customers delay GPU deployment? A: William Huang (CEO) noted that domestic GPU supply is catching up, which is a positive driver, and that traditional cloud growth remains significant. Dan Newman (CFO) explained that each contract has a fixed delivery date (up to four quarters from booking) that is unchangeable. After that, there is a Move-In period that varies by contract, but GDS forecasts assume a straight-line Move-In over four quarters on average. He stated that actual Move-In could be faster or slower but should not materially deviate from the forecast. Q: How does the demand profile and contract terms of emerging AI leaders differ from established hyperscale customers? A: William Huang (CEO) said GDS has just started building relationships with emerging AI leaders and has already won significant business from them. While the demand profile from these new customers is growing, the main customer base and new business are still driven by hyperscale customers. He emphasized that diversifying the customer base is the right strategy, and while there are differences in demand patterns, the company is still being selective. Q: Does the revised 2026 guidance include any impact from the C-REIT asset monetization, and how should we think about the MRR (Monthly Recurring Revenue) slowdown? A: Dan Newman (CFO) clarified that the guidance does not factor in any further asset monetization, as the transaction is still under regulatory review. Regarding MRR, he explained that on a same-quarter basis, Q4 2026 is forecast to be down 3% compared to Q4 2025, with a similar decline next year. This is due to a change in location mix (more new market business) and legacy contracts that still have about 18 months before being adjusted to current market pricing. Q: What were the key drivers for the better-than-expected Move-In in Q2, and how do you see the demand-supply trend in China's data center market given government power quota approvals? A: Dan Newman (CFO) advised not to read into quarterly fluctuations, as most Move-In this year comes from capacity booked in 2025. He noted that bookings were strong in Q1 2025, then consistent at lower levels, before increasing significantly from Q1 2026 onward. This implies a significant increase in Move-In during the second half of 2027, leading to accelerated EBITDA growth. William Huang (CEO) added that power quota approvals are now controlled by the central government, requiring municipal, provincial (NDRC), and central government (MIIT) approvals. The government is being selective, favoring market leaders like GDS, which has built up its land bank over the last 18 months. Q: Can you confirm the definitions of bookings versus reservations, and is it possible to split customer demand between training and inference workloads? A: Dan Newman (CFO) clarified that a sales agreement contains a booking (a contractual take-or-pay commitment) and simultaneously reserves capacity for future commitments at the same site. William Huang (CEO) added that the increased guidance reflects both rising market demand from hyperscale customers increasing CapEx and GDS's competitive advantages. Regarding the training versus inference split, Huang estimated it is roughly 50-50, with GPU-based demand potentially being slightly higher next year based on domestic GPU supply catching up. Q: What is the breakdown of the 2027 Move-In forecast between GPU and CPU-based demand, and how should we think about revenue and EBITDA growth beyond 2026? A: William Huang (CEO) stated that GDS does not have a detailed specific breakdown, but the general assumption is around 50-50, with GPU potentially a bit higher next year. Dan Newman (CFO) noted that while annual guidance for 2027 will be provided in March next year, the trajectory shows a very significant acceleration of growth from Q1 through Q4 2027. He emphasized that where the company ends 2027 and its position in 2028 are what matter most, indicating that GDS is poised to be a high-growth company in 2028. Q: Where is the developable capacity that is not yet committed or under reservation located? A: Dan Newman (CFO) stated that the developable capacity of around 3 gigawatts is almost entirely in new markets. Capacity in established markets is largely under reservation, with only a small amount not yet reserved. William Huang (CEO) added that reservations are creating demand in Tier 1 markets, but the uncommitted developable capacity is an aggregate figure primarily in new markets. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

GDS Holdings Limited GDS is scheduled to report second-quarter 2026 results on Aug. 13, before market open. Over the trailing four quarters, GDS Holdings’ earnings surpassed the Zacks Consensus Estimate, with an average earnings surprise of 610%. GDS Holdings price-eps-surprise | GDS Holdings Quote The Zacks Consensus Estimate for the company’s revenues is set at $463.2 million, suggesting a 14.4% year-over-year jump from the year-ago quarter’s $404.9 million. This growth acceleration is predicted to have been led by the growing demand for data centers, high customer conviction in domestic chips and a solid backlog. The AI-fueled resurgence in data center demand is expected to have driven the top line. During the first-quarter 2026 earnings call, William Huang, the CEO, noted that the rising availability of domestic chips is vital to the company’s multi-year growth story. Hence, customers’ heightened inclination toward future deployments at a larger scale and a high degree of conviction are expected to act as the primary growth catalyst. During the first-quarter 2026 earnings call, Huang stated that the company’s backlog increased more than 200,000 square meters, or nearly 600 megawatts. A high proportion of this backlog is expected to become billable within the next six to eight quarters. Counting on this positive, we anticipate GDS’s growth to have experienced sufficient acceleration during the second quarter of 2026. For earnings per share, the consensus estimate is pegged at $1.35, whereas it incurred a loss of 6 cents in the year-ago quarter. The anticipated year-over-year growth rate is a whopping 2,350%. We anticipate data center ramp-ups and solid customer wins to have a positive impact on operational growth, resulting in margin expansion. Margin expansion is likely to have been driven by prudent expense management, leading to bottom-line growth. Our proven model does not conclusively predict an earnings beat for GDS this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that is not the case here. You can uncover the best stocks before they are reported with our Earnings ESP Filter. GDS Holdings has an Earnings ESP of 0.00% and a Zacks Rank of 3 at present. Here are a few stocks from the broader Business Services sector, which, according to our model, have the right combination of elements to beat on earnings this time around. Klarna KLAR: The Zacks Consensus Estimate for the company’s second-quarter 2026 revenues is $987.9 million, indicating 20% year-over-year growth. The consensus estimate for loss is pinned at 7 cents per share, whereas it incurred a loss of 14 cents in the year-ago quarter. The company surpassed earnings estimates in the first quarter of 2026 by 94.4%. KLAR has an Earnings ESP of +43.34% and a Zacks Rank of 3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here. The company is scheduled to announce second-quarter 2026 results on Aug. 18. Coherent Corp. COHR: The Zacks Consensus Estimate for the company’s second-quarter 2026 revenues is $2 billion, hinting at a 30.3% increase from the year-ago quarter’s actual. For earnings, the consensus estimate is pegged at $1.62 per share, suggesting a 62% rally from the year-ago quarter’s reported number. The company met earnings estimates in the first quarter of 2026. COHR has an Earnings ESP of +2.65% and a Zacks Rank of 3 at present. The company is scheduled to announce second-quarter 2026 results on Aug. 12. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report GDS Holdings (GDS) : Free Stock Analysis Report Coherent Corp. (COHR) : Free Stock Analysis Report Klarna Group plc (KLAR) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

SHANGHAI, China, July 30, 2026 (GLOBE NEWSWIRE) -- 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, today announced that it will report its second quarter 2026 unaudited financial results after the close of the Hong Kong market and before the open of the U.S. market on August 13, 2026. The Company’s management will host an earnings conference call at 8:00 AM U.S. Eastern Time on Thursday, August 13, 2026 (8:00 PM Hong Kong Time on the same day). 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-conf.media-server.com/register/BIa59ef86a877c4e48a19406f31a538f85 Additionally, a live and archived webcast of the conference call will be available on the Company’s investor relations website at https://investors.gds-services.com. About GDS Holdings Limited GDS Holdings Limited (NASDAQ: GDS; HKEX: 9698) is a leading developer and operator of high-performance data centers in China. The Company’s facilities are strategically located across the key hubs where demand for high-performance data center services is concentrated. The Company’s data centers have large net floor area, high power capacity, density and efficiency, and multiple redundancies across all critical systems. The Company 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 has a 26-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. The Company also holds a minority equity interest in DayOne Data Centers Limited, an independent Singapore-headquartered hyperscale data center platform. For investor and media inquiries, please contact: GDS Holdings LimitedLaura ChenPhone: +86 (21) 2029-2203Email: [email protected] Piacente Financial Communications Ross WarnerPhone: +86 (10) 6508-0677Email: [email protected] Brandi PiacentePhone: +1 (212) 481-2050Email: [email protected] GDS Holdings Limited

Make better investment decisions with Simply Wall St's easy, visual tools that give you a competitive edge. GDS Holdings (GDS) just reported a record first quarter, with about 200MW of net new bookings, CNY 3,367.1 million in revenue, and CNY 2,648.7 million in net income, while reaffirming its 2026 revenue guidance. See our latest analysis for GDS Holdings. The strong first-quarter update sits against a mixed share price backdrop, with the stock down 16.4% on a 1-month share price return and 7.5% year to date, yet still delivering a 45.4% 1-year total shareholder return and a very large 3-year total shareholder return. If you are looking beyond a single earnings print and want to see what else is moving in data infrastructure and AI related plays, the next step is to scan 47 AI infrastructure stocks With GDS trading at $35.45, below an external price target and showing a 45.4% 1-year total return, is the recent pullback a reset that creates a potential entry point, or is the market already pricing in future growth? The most followed narrative values GDS Holdings at $54.16 per share, which sits well above the last close at $35.45. That gap hinges on how investors view future AI infrastructure demand and capital recycling. Read the complete narrative. Want to see what kind of revenue path, margin compression, and future earnings multiple need to line up for that valuation gap to make sense? The narrative spells out a detailed growth runway, a sharp reset in profitability, and a lofty future P/E that together underpin the $54.16 fair value tag. Result: Fair Value of $54.16 (UNDERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, you also need to factor in pressure on margins and heavy reliance on asset sales, which could quickly challenge the upbeat, AI-driven fair value story. Find out about the key risks to this GDS Holdings narrative. The fair value narrative leans on long term forecasts, but today the stock trades on a P/E of 17.4x versus a fair ratio of 10.9x, even though it sits below the US IT sector on 20.6x and far below peers on 54.6x. That gap suggests less obvious upside and more valuation risk if sentiment cools. For a closer look at how this P/E gap could close, and what it might mean for future returns if pricing shifts toward the fair ratio, See what the numbers say about this price — find out in our valuation breakdown. If this mix of optimism and concern feels familiar, do not wait around for consensus to form. Instead, review the full picture through 2 key rewards and 2 important warning signs If you stop at one stock, you risk missing other opportunities that better fit your goals, risk comfort, and income needs, so keep your options open. Hunt for potential value opportunities with 46 high quality undervalued stocks that combine quality fundamentals with pricing that may still be catching up. Strengthen your income stream by checking 10 dividend fortresses focused on companies offering higher yields with an eye on durability. Prioritise resilience by scanning 64 resilient stocks with low risk scores where lower risk scores can help you stay invested through market swings. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include GDS. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]