• GDS Holdings Limited Reports First Quarter 2023 Results

    来源: Nasdaq GlobeNewswire / 25 5月 2023 06:00:11   America/Chicago

    SHANGHAI, China, May 25, 2023 (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 and South East Asia, today announced its unaudited financial results for the first quarter ended March 31, 2023.

    First Quarter 2023 Financial Highlights

    • Net revenue increased by 7.4% year-over-year (“Y-o-Y”) to RMB2,409.0 million (US$350.8 million) in the first quarter of 2023 (1Q2022: RMB2,243.6 million).
    • Service revenue increased by 7.4% Y-o-Y to RMB2,408.4 million (US$350.7 million) in the first quarter of 2023 (1Q2022: RMB2,243.5 million).
    • Net loss was RMB474.6 million (US$69.1 million) in the first quarter of 2023 (1Q2022: net loss of RMB373.3 million).
    • Adjusted EBITDA (non-GAAP) increased by 7.5% Y-o-Y to RMB1,130.0 million (US$164.5 million) in the first quarter of 2023 (1Q2022: RMB1,051.2 million). See “Non-GAAP Disclosure” and “Reconciliations of GAAP and non-GAAP results” elsewhere in this earnings release.
    • Adjusted EBITDA margin (non-GAAP) was 46.9% in the first quarter of 2023 (1Q2022: 46.9%).

    First Quarter 2023 Operating Highlights
            

    • Total area committed and pre-committed by customers increased by 2,895 square meters (“sqm”) (net of churn of 8,774 sqm) in the first quarter of 2023, to reach 633,611 sqm as of March 31, 2023, an increase of 10.2% Y-o-Y (March 31, 2022: 575,009 sqm).
    • Area in service increased by 2,730 sqm in the first quarter of 2023, to reach 518,517 sqm as of March 31, 2023, an increase of 5.3% Y-o-Y (March 31, 2022: 492,344 sqm).
    • Commitment rate for area in service was 93.9% as of March 31, 2023 (March 31, 2022: 95.3%).
    • Area under construction was 196,858 sqm as of March 31, 2023 (March 31, 2022: 168,128 sqm).
    • Pre-commitment rate for area under construction was 74.4% as of March 31, 2023 (March 31, 2022: 63.1%).
    • Area utilized by customers increased by 6,085 sqm (net of churn of 6,488 sqm) in the first quarter of 2023, to reach 376,632 sqm as of March 31, 2023, an increase of 13.4% Y-o-Y (March 31, 2022: 332,019 sqm).
    • Utilization rate for area in service was 72.6% as of March 31, 2023 (March 31, 2022: 67.4%).

    “Amidst ongoing macro challenges, we’ve shown resilience in the first quarter of 2023,” said Mr. William Huang, Chairman and Chief Executive Officer. “For our mainland China business, we continue to prioritize faster backlog delivery and, at the same time, to win the new business which is strategic to us and has accelerated move-in schedule. Our customers are talking much more positively and we are looking forward to a pick-up in the near future. For our international business, we progressed by winning the expansion commitment from the anchor customer in our Johor site, which further proves our competitiveness in the region.”

    “In the first quarter of 2023, we grew revenue by 7.4% and adjusted EBITDA by 7.5% year-over-year,” said Mr. Dan Newman, Chief Financial Officer. “Our adjusted EBITDA margin was 46.9% mainly due to lower utility cost during the winter season. On the funding side, we successfully raised US$580 million through a new convertible bond issuance which helps us keep a healthy cash position.”

    First Quarter 2023 Financial Results

    Net revenue in the first quarter of 2023 was RMB2,409.0 million (US$350.8 million), a 7.4% increase over the first quarter of 2022 of RMB2,243.6 million and a 0.2% increase over the fourth quarter of 2022 of RMB2,404.0 million. Service revenue in the first quarter of 2023 was RMB2,408.4 million (US$350.7 million), a 7.4% increase over the first quarter of 2022 of RMB2,243.5 million and a 0.2% increase over the fourth quarter of 2022 of RMB2,404.0 million. The increase over the fourth quarter of 2022 was mainly due to the full quarter revenue contribution from additional area utilized in the fourth quarter of 2022 and the contribution from 6,085 sqm of net additional area utilized in the first quarter of 2023, mainly related to the Beijing 8 (“BJ8”), Beijing 13 (“BJ13”) Phase 1, Langfang 9 (“LF9”), and Chongqing 1 (“CQ1”) Phase 1 data centers.

    Cost of revenue in the first quarter of 2023 was RMB1,917.3 million (US$279.2 million), a 9.1% increase over the first quarter of 2022 of RMB1,757.2 million and a 0.1% increase over the fourth quarter of 2022 of RMB1,916.0 million. The slight increase over the fourth quarter of 2022 was mainly due to an increase in depreciation and amortization resulting from more data centers coming into service in recent quarters, partially offset by seasonally lower utility cost.

    Gross profit was RMB491.7 million (US$71.6 million) in the first quarter of 2023, a 1.1% increase over the first quarter of 2022 of RMB486.4 million, and a 0.7% increase over the fourth quarter of 2022 of RMB488.0 million.

    Gross profit margin was 20.4% in the first quarter of 2023, compared with 21.7% in the first quarter of 2022, and 20.3% in the fourth quarter of 2022. The slight increase over the fourth quarter of 2022 was mainly due to seasonally lower utility cost, partially offset by an increase in depreciation and amortization resulting from more data centers coming into service in recent quarters.

    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 RMB1,259.4 million (US$183.4 million) in the first quarter of 2023, a 7.2% increase over the first quarter of 2022 of RMB1,174.6 million and a 2.8% increase over the fourth quarter of 2022 of RMB1,224.7 million. See “Non-GAAP Disclosure” and “Reconciliations of GAAP and non-GAAP results” elsewhere in this earnings release.

    Adjusted GP margin (non-GAAP) was 52.3% in the first quarter of 2023, compared with 52.4% in the first quarter of 2022, and 50.9% in the fourth quarter of 2022. The increase over the fourth quarter of 2022 was mainly due to the seasonally lower utility cost.

    Selling and marketing expenses, excluding share-based compensation expenses of RMB12.5 million (US$1.8 million), were RMB25.3 million (US$3.7 million) in the first quarter of 2023, a 11.5% decrease from the first quarter of 2022 of RMB28.6 million (excluding share-based compensation of RMB13.0 million) and a 2.1% increase from the fourth quarter of 2022 of RMB24.8 million (excluding share-based compensation of RMB8.2 million). The increase over the fourth quarter of 2022 was mainly due to a slight increase in marketing activities.

    General and administrative expenses, excluding share-based compensation expenses of RMB43.1 million (US$6.3 million), depreciation and amortization expenses of RMB110.7 million (US$16.1 million) and operating lease cost relating to prepaid land use rights of RMB18.3 million (US$2.7 million), were RMB117.4 million (US$17.1 million) in the first quarter of 2023, a 11.5% increase over the first quarter of 2022 of RMB105.3 million (excluding share-based compensation expenses of RMB52.6 million, depreciation and amortization expenses of RMB121.1 million and operating lease cost relating to prepaid land use rights of RMB20.7 million) and a 25.7% decrease from the fourth quarter of 2022 of RMB158.1 million (excluding share-based compensation of RMB5.5 million, depreciation and amortization expenses of RMB110.4 million, and operating lease cost relating to prepaid land use rights of RMB22.1 million). The decrease over the fourth quarter of 2022 was mainly due to less professional fees incurred.

    Research and development costs were RMB9.8 million (US$1.4 million) in the first quarter of 2023, compared with RMB9.8 million in the first quarter 2022 and RMB10.0 million in the fourth quarter of 2022.

    Net interest expenses for the first quarter of 2023 were RMB484.4 million (US$70.5 million), a 6.8% increase over the first quarter of 2022 of RMB453.5 million and a 1.6% increase over the fourth quarter of 2022 of RMB476.8 million. The increase over the fourth quarter of 2022 was mainly due to the new convertible bond issued during the first quarter of 2023.

    Foreign currency exchange loss for the first quarter of 2023 was RMB7.0 million (US$1.0 million), compared with a loss of RMB4.7 million in the first quarter of 2022 and a gain of RMB4.7 million in the fourth quarter of 2022.

    Others, net for the first quarter of 2023 was RMB25.8 million (US$3.8 million), compared with RMB21.5 million in the first quarter of 2022 and RMB31.0 million in the fourth quarter of 2022.

    Income tax expenses for the first quarter of 2023 was RMB163.6 million (US$23.8 million), compared with RMB72.0 million in the first quarter of 2022 and RMB78.0 million in the fourth quarter of 2022. The increase over the fourth quarter of 2022 was mainly due to internal restructuring for the preparation of transferring projects to the China Data Center Fund in the near future.

    Net loss in the first quarter of 2023 was RMB474.6 million (US$69.1 million), compared with a net loss of RMB373.3 million in the first quarter of 2022 and a net loss of RMB177.9 million in the fourth quarter of 2022.

    Adjusted EBITDA (non-GAAP) is defined as net loss excluding net interest expenses, income tax expenses (benefits), depreciation and amortization, operating lease cost relating to prepaid land use rights, accretion expenses for asset retirement costs, share-based compensation expenses, gain from purchase price adjustment and impairment loss of long-lived assets. Adjusted EBITDA was RMB1,130.0 million (US$164.5 million) in the first quarter of 2023, a 7.5% increase over the first quarter of 2022 of RMB1,051.2 million and a 5.5% increase over the fourth quarter of 2022 of RMB1,071.5 million.

    Adjusted EBITDA margin (non-GAAP) was 46.9% in the first quarter of 2023, compared with 46.9% in the first quarter of 2022, and 44.6% in the fourth quarter of 2022. The increase over the fourth quarter of 2022 was mainly due to the seasonally lower utility cost and a lower level of general corporate expenses.

    Basic and diluted loss per ordinary share in the first quarter of 2023 was RMB0.33 (US$0.05), compared with RMB0.39 in the first quarter of 2022, and RMB0.13 in the fourth quarter of 2022.

    Basic and diluted loss per American Depositary Share (“ADS”) in the first quarter of 2023 was RMB2.67 (US$0.39), compared with RMB3.15 in the first quarter of 2022, and RMB1.06 in the fourth quarter of 2022. Each ADS represents eight Class A ordinary shares.

    Sales

    Total area committed and pre-committed at the end of the first quarter of 2023 was 633,611 sqm, compared with 575,009 sqm at the end of the first quarter of 2022 and 630,716 sqm at the end of the fourth quarter of 2022, an increase of 10.2% Y-o-Y and 0.5% quarter-over-quarter (“Q-o-Q”), respectively. In the first quarter of 2023, gross additional total area committed was 11,669 sqm, including significant contributions from the Shanghai 18 (“SH18”) Phase 2 and Nusajaya 4 (“NTP4”) data centers. Net additional total area committed was 2,895 sqm. The difference of 8,774 sqm was mainly due to a single customer which is redeploying from our Beijing 9 (“BJ9”), Beijing 10 (“BJ10”) and Beijing 12 (“BJ12”) data centers, as the Company disclosed previously. This customer has pre-committed for a similar amount of new capacity at several of our data centers in Langfang, Hebei province, for delivery later this year and next year.

    Data Center Resources

    Area in service at the end of the first quarter of 2023 was 518,517 sqm, compared with 492,344 sqm at the end of the first quarter of 2022 and 515,787 sqm at the end of the fourth quarter of 2022, an increase of 5.3% Y-o-Y and 0.5% Q-o-Q. In the first quarter of 2023, Beijing 14 (“BJ14”) Phase 2 and Shenzhen 10 (“SZ10”) data centers came into service.

    Area under construction at the end of the first quarter of 2023 was 196,858 sqm, compared with 168,128 sqm at the end of the first quarter of 2022 and 192,713 sqm at the end of the fourth quarter of 2022, an increase of 17.1% Y-o-Y and 2.2% Q-o-Q, respectively. During the first quarter, construction commenced on SH18 Phase 2 and NTP4 data centers.

    • SH18 Phase 2 is part of the Company’s multi-phase development at its Pujiang campus in the Minhang District of Shanghai. SH18 Phase 2 has a net floor area of 4,572 sqm and is 100% pre-committed.
    • NTP4 is the first data center being constructed on the Company’s second land site at Nusajaya Tech Park in Johor, Malaysia. NTP4 has a net floor area of 6,385 sqm and is 100% pre-committed.

    Commitment rate for area in service was 93.9% at the end of the first quarter of 2023, compared with 95.3% at the end of the first quarter of 2022 and 95.5% at the end of the fourth quarter of 2022. Pre-commitment rate for area under construction was 74.4% at the end of the first quarter of 2023, compared with 63.1% at the end of the first quarter of 2022 and 71.5% at the end of the fourth quarter of 2022.

    Area utilized at the end of the first quarter of 2023 was 376,632 sqm, compared with 332,019 sqm at the end of the first quarter of 2022 and 370,547 sqm at the end of the fourth quarter of 2022, an increase of 13.4% Y-o-Y and 1.6% Q-o-Q. Gross additional area utilized was 12,573 sqm in the first quarter of 2023, which mainly came from additional area utilized in the BJ8, BJ13 Phase 1, LF9, and CQ1 Phase 1 data centers. Net additional area utilized was 6,085 sqm during the quarter. The difference of 6,488 sqm was mainly due to a single customer which is redeploying from our BJ9, BJ10 and BJ12 data centers, as the Company previously disclosed, before moving in to a similar amount of new capacity at several of our data centers in Langfang, Hebei province with effect from later this year and next year.

    Utilization rate for area in service was 72.6% at the end of the first quarter of 2023, compared with 67.4% at the end of the first quarter of 2022 and 71.8% at the end of the fourth quarter of 2022.

    Completion of New Convertible Bond Issuance
    On January 20, 2023, the Company closed its sale of US$580 million in aggregate principal amount of 4.50% convertible senior notes due 2030 to various private equity funds and institutional investors, including a sovereign wealth fund.

    Update on China Data Center Fund
    Following the previously announced framework agreement with a sovereign wealth fund (“Investor”) for the formation of a China Data Center Fund, during the first quarter of 2023, the Company has signed a limited partnership agreement for China Data Center Fund 1 (the “Fund”), with 30% of capital commitment coming from GDS and 70% from the Investor. Completion of the establishment of the Fund and the injection of the first data center asset from GDS is subject to execution of a Sales and Purchase Agreement and ancillary documents, as well as regulatory approvals, and satisfaction of various conditions.

    Liquidity

    As of March 31, 2023, cash was RMB10,241.3 million (US$1,491.3 million). Total short-term debt was RMB6,936.1 million (US$1,010.0 million), comprised of short-term borrowings and the current portion of long-term borrowings of RMB4,429.3 million (US$645.0 million), the current portion of finance lease and other financing obligations of RMB447.5 million (US$65.2 million) and the current portion of convertible bonds payable of RMB2,059.2 million (US$299.9 million). Total long-term debt was RMB39,884.5 million (US$5,807.6 million), comprised of long-term borrowings (excluding current portion) of RMB23,528.0 million (US$3,425.9 million), the non-current portion of convertible bonds payable of RMB8,171.3 million (US$1,189.8 million) and the non-current portion of finance lease and other financing obligations of RMB8,185.3 million (US$1,191.9 million). During the first quarter of 2023, the Company obtained new debt financing and re-financing facilities of RMB1,319.4 million (US$192.1 million) and further raised US$580 million from a convertible bond issuance.

    Business Outlook

    The Company confirms the previously provided guidance of total revenues for the year of 2023 of RMB9,940 – RMB10,320 million, Adjusted EBITDA of RMB4,430 – RMB4,600 million and capex of around RMB7,500 million remain unchanged.

    This forecast reflects the Company’s preliminary view on the current business situation and market conditions, which are subject to change.

    Conference Call

    Management will hold a conference call at 8:00 a.m. U.S. Eastern Time on May 25, 2023 (8:00 p.m. Beijing Time on May 25, 2023) to discuss financial results and answer questions from investors and analysts.

    Participants should complete online registration using the link provided below at least 15 minutes before the scheduled start time. Upon registration, participants will receive the conference call access information, including dial-in numbers, a personal PIN and an e-mail with detailed instructions to join the conference call.

    Participant Online Registration:
    https://register.vevent.com/register/BI24be0a8ed1e5453aa9561f8ee2b9d311

    A live and archived webcast of the conference call will be available on the Company's investor relations website at investors.gds-services.com.

    Non-GAAP Disclosure

    Our management and board of directors use Adjusted EBITDA, Adjusted EBITDA margin, Adjusted GP and Adjusted GP margin, which are non-GAAP financial measures, to evaluate our operating performance, establish budgets and develop operational goals for managing our business. We believe that the exclusion of the income and expenses eliminated in calculating Adjusted EBITDA and Adjusted GP can provide useful and supplemental measures of our core operating performance. In particular, we believe that the use of Adjusted EBITDA as a supplemental performance measure captures the trend in our operating performance by excluding from our operating results the impact of our capital structure (primarily interest expense), asset base charges (primarily depreciation and amortization, operating lease cost relating to prepaid land use rights, accretion expenses for asset retirement costs and impairment loss of long-lived assets), other non-cash expenses (primarily share-based compensation expenses), and other income and expenses which we believe are not reflective of our operating performance, whereas the use of adjusted gross profit as a supplemental performance measure captures the trend in gross profit performance of our data centers in service by excluding from our gross profit the impact of asset base charges (primarily depreciation and amortization, operating lease cost relating to prepaid land use rights and accretion expenses for asset retirement costs) and other non-cash expenses (primarily share-based compensation expenses) included in cost of revenue.

    We note that depreciation and amortization is a fixed cost which commences as soon as each data center enters service. However, it usually takes several years for new data centers to reach high levels of utilization and profitability. The Company incurs significant depreciation and amortization costs for its early stage data center assets. Accordingly, gross profit, which is a measure of profitability after taking into account depreciation and amortization, does not accurately reflect the Company’s core operating performance.

    We also present these non-GAAP measures because we believe these non-GAAP measures are frequently used by securities analysts, investors and other interested parties as measures of the financial performance of companies in our industry.

    These non-GAAP financial measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. These non-GAAP financial measures have limitations as analytical tools, and when assessing our operating performance, cash flows or our liquidity, investors should not consider them in isolation, or as a substitute for gross profit, net income (loss), cash flows provided by (used in) operating activities or other consolidated statements of operations and cash flow data prepared in accordance with U.S. GAAP. There are a number of limitations related to the use of these non-GAAP financial measures instead of their nearest GAAP equivalent. First, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted GP, and Adjusted GP margin are not substitutes for gross profit, net income (loss), cash flows provided by (used in) operating activities or other consolidated statements of operation and cash flow data prepared in accordance with U.S. GAAP. Second, other companies may calculate these non-GAAP financial measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of these non-GAAP financial measures as tools for comparison. Finally, these non-GAAP financial measures do not reflect the impact of net interest expenses, incomes tax benefits (expenses), depreciation and amortization, operating lease cost relating to prepaid land use rights, accretion expenses for asset retirement costs, share-based compensation expenses, gain from purchase price adjustment and impairment loss of long-lived assets, each of which have been and may continue to be incurred in our business.

    We mitigate these limitations by reconciling the non-GAAP financial measure to the most comparable U.S. GAAP performance measure, all of which should be considered when evaluating our performance.

    For more information on these non-GAAP financial measures, please see the table captioned “Reconciliations of GAAP and non-GAAP results” set forth at the end of this press release.

    Exchange Rate

    This announcement contains translations of certain RMB amounts into U.S. dollars (“USD”) at specified rates solely for the convenience of the reader. Unless otherwise stated, all translations from RMB to USD were made at the rate of RMB6.8676 to US$1.00, the noon buying rate in effect on March 31, 2023 in the H.10 statistical release of the Federal Reserve Board. The Company makes no representation that the RMB or USD amounts referred could be converted into USD or RMB, as the case may be, at any particular rate or at all.

    Statement Regarding Preliminary Unaudited Financial Information

    The unaudited financial information set out in this earnings release is preliminary and subject to potential adjustments. Adjustments to the consolidated financial statements may be identified when audit work has been performed for the Company’s year-end audit, which could result in significant differences from this preliminary unaudited financial information.

    About GDS Holdings Limited

    GDS Holdings Limited (NASDAQ: GDS; HKEX: 9698) is a leading developer and operator of high-performance data centers in China and South East Asia. The Company’s facilities are strategically located in primary economic hubs where demand for high-performance data center services is concentrated. The Company also builds, operates and transfers data centers at other locations selected by its customers in order to fulfill their broader requirements. The Company’s data centers have large net floor area, high power capacity, density and efficiency, and multiple redundancies across all critical systems. GDS is carrier and cloud-neutral, which enables its customers to access the major telecommunications networks, as well as the largest PRC and global public clouds, which are hosted in many of its facilities. The Company offers co-location and a suite of value-added services, including managed hybrid cloud services through direct private connection to leading public clouds, managed network services, and, where required, the resale of public cloud services. The Company has a 22-year track record of service delivery, successfully fulfilling the requirements of some of the largest and most demanding customers for outsourced data center services in China. The Company’s customer base consists predominantly of hyperscale cloud service providers, large internet companies, financial institutions, telecommunications carriers, IT service providers, and large domestic private sector and multinational corporations.

    Safe Harbor Statement

    This announcement contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “aim,” “anticipate,” “believe,” “continue,” “estimate,” “expect,” “future,” “guidance,” “intend,” “is/are likely to,” “may,” “ongoing,” “plan,” “potential,” “target,” “will,” and similar statements. Among other things, statements that are not historical facts, including statements about GDS Holdings’ beliefs and expectations regarding the growth of its businesses and its revenue for the full fiscal year, the business outlook and quotations from management in this announcement, as well as GDS Holdings’ strategic and operational plans, are or contain forward-looking statements. GDS Holdings may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (the “SEC”) on Forms 20-F and 6-K, in its current, interim and annual reports to shareholders, in announcements, circulars or other publications made on the website of the Stock Exchange of Hong Kong Limited (the “Hong Kong Stock Exchange”), in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause GDS Holdings’ actual results or financial performance to differ materially from those contained in any forward-looking statement, including but not limited to the following: GDS Holdings’ goals and strategies; GDS Holdings’ future business development, financial condition and results of operations; the expected growth of the market for high-performance data centers, data center solutions and related services in China; GDS Holdings’ expectations regarding demand for and market acceptance of its high-performance data centers, data center solutions and related services; GDS Holdings’ expectations regarding building, strengthening and maintaining its relationships with new and existing customers; the continued adoption of cloud computing and cloud service providers in China; risks and uncertainties associated with increased investments in GDS Holdings’ business and new data center initiatives; risks and uncertainties associated with strategic acquisitions and investments; GDS Holdings’ ability to maintain or grow its revenue or business; fluctuations in GDS Holdings’ operating results; changes in laws, regulations and regulatory environment that affect GDS Holdings’ business operations; competition in GDS Holdings’ industry in China; security breaches; power outages; and fluctuations in general economic and business conditions in China and globally, the impact of the COVID outbreak, 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 Limited
    Laura Chen
    Phone: +86 (21) 2029-2203
    Email: ir@gds-services.com

    The Piacente Group, Inc.
    Ross Warner
    Phone: +86 (10) 6508-0677
    Email: GDS@tpg-ir.com

    Brandi Piacente
    Phone: +1 (212) 481-2050
    Email: GDS@tpg-ir.com

    GDS Holdings Limited




     GDS HOLDINGS LIMITED
     UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
     (Amount in thousands of Renminbi ("RMB") and US dollars ("US$"))
      
       As of
    December 31, 2022    		 As of March 31, 2023
      RMBRMBUS$
         
     Assets   
    Current assets   
     Cash8,608,131 10,241,314 1,491,251 
     Accounts receivable, net of allowance for doubtful accounts2,406,025 3,051,928 444,395 
     Value-added-tax (“VAT”) recoverable164,743 169,240 24,643 
     Prepaid expenses and other current assets772,177 955,382 139,115 
     Total current assets11,951,076 14,417,864 2,099,404 
         
    Property and equipment, net46,916,628 47,597,484 6,930,730 
    Prepaid land use rights, net23,002 22,848 3,327 
    Operating lease right-of-use assets5,633,946 5,631,331 819,985 
    Goodwill and intangible assets, net8,124,214 8,105,958 1,180,319 
    Other non-current assets2,165,088 2,358,387 343,407 
     Total assets74,813,954 78,133,872 11,377,172 
         
     Liabilities, Mezzanine Equity and Equity   
    Current liabilities   
     Short-term borrowings and current portion of long-term borrowings3,623,967 4,429,349 644,963 
     Convertible bonds payable, current2,083,829 2,059,248 299,850 
     Accounts payable3,092,884 2,640,711 384,517 
     Accrued expenses and other payables1,173,091 1,390,332 202,448 
     Operating lease liabilities, current175,749 182,009 26,503 
     Finance lease and other financing obligations, current453,855 447,548 65,168 
     Total current liabilities10,603,375 11,149,197 1,623,449 
         
    Long-term borrowings, excluding current portion23,518,058 23,527,981 3,425,939 
    Convertible bonds payable, non-current4,294,985 8,171,254 1,189,827 
    Operating lease liabilities, non-current1,617,986 1,572,962 229,041 
    Finance lease and other financing obligations, non-current8,916,266 8,185,250 1,191,865 
    Other long-term liabilities1,678,629 1,707,787 248,673 
     Total liabilities50,629,299 54,314,431 7,908,794 
         
    Mezzanine equity   
     Redeemable preferred shares1,047,012 1,033,046 150,423 
     Total mezzanine equity1,047,012 1,033,046 150,423 
         
    GDS Holdings Limited shareholders' equity   
     Ordinary shares516 516 75 
     Additional paid-in capital29,048,598 29,124,023 4,240,786 
     Accumulated other comprehensive loss(848,360)(800,186)(116,516)
     Accumulated deficit(5,179,705)(5,656,047)(823,584)
     Total GDS Holdings Limited shareholders' equity23,021,049 22,668,306 3,300,761 
    Non-controlling interests116,594 118,089 17,194 
     Total equity23,137,643 22,786,395 3,317,955 
         
     Total liabilities, mezzanine equity and equity74,813,954 78,133,872 11,377,172 
            




     GDS HOLDINGS LIMITED
     UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
     (Amount in thousands of Renminbi ("RMB") and US dollars ("US$")
     except for number of shares and per share data)
      
      Three months ended
      March 31,
    2022    		December 31, 2022March 31, 2023
      RMBRMBRMBUS$
          
    Net revenue    
    Service revenue2,243,535 2,404,034 2,408,449 350,697 
    Equipment sales59 0 509 74 
    Total net revenue2,243,594  2,404,034  2,408,958  350,771  
    Cost of revenue(1,757,177)(1,916,000)(1,917,271)(279,176)
    Gross profit486,417  488,034  491,687  71,595  
          
    Operating expenses    
     Selling and marketing expenses(41,555)(32,932)(37,841)(5,510)
     General and administrative expenses(299,712)(296,067)(289,496)(42,154)
     Research and development expenses(9,767)(9,986)(9,785)(1,425)
     Impairment loss of long-lived assets0 (12,759)0 0 
    Income from operations135,383  136,290  154,565  22,506  
    Other income (expenses):    
     Net interest expenses(453,481)(476,780)(484,427)(70,538)
     Foreign currency exchange (loss) gain, net(4,720)4,664 (6,975)(1,016)
     Gain from purchase price adjustment0 205,000 0 0 
     Others, net21,533 30,970 25,793 3,756 
    Loss before income taxes(301,285)(99,856)(311,044)(45,292)
    Income tax expenses(71,968)(78,039)(163,568)(23,817)
    Net loss(373,253)(177,895)(474,612)(69,109)
    Net income attributable to non-controlling interests(173)(2,851)(1,730)(252)
    Net loss attributable to redeemable non-controlling interests655 0 0 0 
    Net loss attributable to GDS Holdings Limited shareholders(372,771)(180,746)(476,342)(69,361)
    Accretion to redemption value of redeemable non-controlling interests(10,801)0 0 0 
    Adjustment to the redemption value of redeemable non-controlling interests(178,982)0 0 0 
    Net loss available to GDS Holdings Limited shareholders(562,554)(180,746)(476,342)(69,361)
    Cumulative dividend on redeemable preferred shares(11,912)(13,662)(12,895)(1,878)
    Net loss available to GDS Holdings Limited ordinary shareholders(574,466)(194,408)(489,237)(71,239)
          
    Loss per ordinary share    
    Basic and diluted(0.39)(0.13)(0.33)(0.05)
          
    Weighted average number of ordinary share outstanding    
    Basic and diluted1,460,918,179 1,467,200,367 1,467,200,367 1,467,200,367 
             




    GDS HOLDINGS LIMITED
    UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
    (Amount in thousands of Renminbi ("RMB") and US dollars ("US$"))
     
      Three months ended
      March 31,
    2022    		December 31, 2022March 31, 2023
      RMBRMBRMBUS$
          
    Net loss(373,253)(177,895)(474,612)(69,109)
    Foreign currency translation adjustments, net of nil tax(13,419)127,949 47,939 6,980 
    Comprehensive loss(386,672)(49,946)(426,673)(62,129)
    Comprehensive income attributable to non-controlling interests(84)(3,602)(1,495)(218)
    Comprehensive loss attributable to redeemable non-controlling interests655 0 0 0 
    Comprehensive loss attributable to GDS Holdings Limited shareholders(386,101)(53,548)(428,168)(62,347)
             




    GDS HOLDINGS LIMITED
    UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
    (Amount in thousands of Renminbi ("RMB") and US dollars ("US$"))
     
     Three months ended
     March 31,
    2022    		December 31,
    2022    		March 31, 2023
     RMBRMBRMBUS$
         
    Net loss(373,253)(177,895)(474,612)(69,109)
    Depreciation and amortization781,756 820,443 843,359 122,803 
    Amortization of debt issuance cost and debt discount40,547 35,711 44,692 6,508 
    Share-based compensation expense92,977 38,375 84,865 12,357 
    Gain from purchase price adjustment0 (205,000)0 0 
    Others4,501 (18,536)(641)(93)
    Changes in operating assets and liabilities(791,258)414,805 (626,843)(91,276)
    Net cash (used in) provided by operating activities(244,730)907,903  (129,180)(18,810)
         
    Purchase of property and equipment and land use rights(2,161,747)(2,135,231)(2,042,103)(297,354)
    (Payments) receipts related to acquisitions and investments(2,770,277)4,270 (151,255)(22,024)
    Net cash used in investing activities(4,932,024)(2,130,961)(2,193,358)(319,378)
         
    Net proceeds from financing activities4,610,815 859,971 3,874,415 564,158 
    Net cash provided by financing activities4,610,815  859,971  3,874,415  564,158  
    Effect of exchange rate changes on cash and restricted cash(5,920)(8,652)24,942 3,632 
         
    Net (decrease) increase of cash and restricted cash(571,859)(371,739)1,576,819 229,602 
    Cash and restricted cash at beginning of period12,026,367 9,253,805 8,882,066 1,293,329 
    Reclassification as assets of disposal group classified as held for sale0 0 (2,240)(326)
    Cash and restricted cash at end of period11,454,508  8,882,066  10,456,645  1,522,605  
             



    GDS HOLDINGS LIMITED
    RECONCILIATIONS OF GAAP AND NON-GAAP RESULTS
    (Amount in thousands of Renminbi ("RMB") and US dollars ("US$")
    except for percentage data)
     
      Three months ended
      March 31,
    2022    		December 31,
    2022    		March 31, 2023
      RMBRMBRMBUS$
          
    Gross profit486,417  488,034  491,687  71,595  
    Depreciation and amortization658,878 708,324 730,908 106,428 
    Operating lease cost relating to prepaid land use rights1,918 4,344 8,356 1,217 
    Accretion expenses for asset retirement costs1,602 1,578 1,726 251 
    Share-based compensation expenses25,833 22,417 26,699 3,888 
    Adjusted GP1,174,648  1,224,697  1,259,376  183,379  
    Adjusted GP margin52.4%50.9%52.3%52.3%
             


    GDS HOLDINGS LIMITED
    RECONCILIATIONS OF GAAP AND NON-GAAP RESULTS
    (Amount in thousands of Renminbi ("RMB") and US dollars ("US$")
    except for percentage data)
     
      Three months ended
      March 31, 2022December 31,
    2022    		March 31, 2023
      RMBRMBRMBUS$
          
    Net loss(373,253)(177,895)(474,612)(69,109)
    Net interest expenses453,481 476,780 484,427 70,538 
    Income tax expenses71,968 78,039 163,568 23,817 
    Depreciation and amortization781,756 820,443 843,359 122,803 
    Operating lease cost relating to prepaid land use rights22,625 26,401 26,704 3,888 
    Accretion expenses for asset retirement costs1,602 1,578 1,726 251 
    Share-based compensation expenses92,977 38,375 84,865 12,357 
    Gain from purchase price adjustment0 (205,000)0 0 
    Impairment loss of long-lived assets0 12,759 0 0 
    Adjusted EBITDA1,051,156  1,071,480  1,130,037  164,545  
    Adjusted EBITDA margin46.9%44.6%46.9%46.9%
             

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