GDS Holdings Limited (Nasdaq: GDS, HKEX: 9698): Corporate Profile & Financials

Source: Form 20-F Annual Report For the fiscal year ended December 31, 2025

Quick Facts / Company Snapshot

Company Overview

GDS Holdings Limited (“GDS Holdings,” the “Company,” “we,” “us,” or “our”) is a leading developer and operator of high-performance data centers in China. GDS Holdings is not an operating company in mainland China, but a Cayman Islands exempted holding company that conducts its data center operations in mainland China primarily through consolidated variable interest entities (“VIEs”) and their subsidiaries, as well as through direct subsidiaries. Current laws and regulations in the People’s Republic of China (“PRC”) restrict foreign ownership in value-added telecommunications services (“VATS”), including internet data center (“IDC”) businesses. As a result, GDS Holdings operates its mainland China data center operations through contractual arrangements with Management HoldCo (Shanghai Xinwan Enterprise Management Co., Ltd.), GDS Beijing (Beijing Wanguo Chang’an Science and Technology Co., Ltd.), GDS Shanghai (Shanghai Shu’an Data Services Co., Ltd.), and their respective subsidiaries. GDS Holdings holds no direct equity ownership in the consolidated VIEs, but is their primary beneficiary under U.S. GAAP.

The Company’s core business involves planning, sourcing, designing, building, and operating high-performance carrier-neutral and cloud-neutral data centers. These facilities feature large net floor area, high power capacity, high power density, and multiple redundancies across electrical and cooling systems. The facilities host the IT infrastructures of hyperscale cloud service providers, large internet companies, financial institutions, telecommunications carriers, and multinational enterprises. Colocation customers can deploy mission-critical IT equipment in shared or customized private spaces, interconnecting across major domestic telecommunications carriers (China Telecom, China Unicom, and China Mobile) and directly accessing major public cloud platforms operating in China.

In addition to direct operations in China, the Company holds an equity-method investment in DayOne Data Centers Limited (“DayOne,” previously known as DigitalLand Holdings Limited or GDSI), an independent, Singapore-headquartered international data center platform. DayOne ceased to be a consolidated subsidiary of GDS Holdings on December 31, 2024, following the closing of its Series B preferred share financing, and its operations outside mainland China are presented as discontinued operations for periods prior to deconsolidation.

Business Segments

Following the reorganization of its reporting structure on April 1, 2024, the Company identified two operating segments: DayOne (representing the international data center operations outside mainland China) and the remaining operations of the Company. Because DayOne was deconsolidated on December 31, 2024, its operations qualify for reporting as discontinued operations, and no segment information is required to be disclosed for it under ASC 280-10-55-7.

For continuing operations, the Company operates in a single operating and reportable segment: the design, build-out and operation of data centers. The chief operating decision maker (the Chief Executive Officer) evaluates segment performance, allocates resources, and makes operational decisions based on net revenue, net income (loss), and Adjusted EBITDA.

For the fiscal year ended December 31, 2025, the design, build-out and operation of data centers segment generated:

• Net Revenue: RMB 11,432,274 thousand (US$ 1,634,793 thousand), compared to RMB 10,322,068 thousand in 2024 and RMB 9,782,448 thousand in 2023.
• Segment Cost of Revenue: RMB (8,846,859) thousand (US$ (1,265,084) thousand) in 2025, compared to RMB (8,099,439) thousand in 2024 and RMB (7,831,222) thousand in 2023.
• Segment Operating Expenses: RMB (2,641,165) thousand (US$ (377,682) thousand) in 2025, compared to RMB (1,070,636) thousand in 2024 and RMB (4,158,447) thousand in 2023.
• Adjusted EBITDA: RMB 5,403,462 thousand (US$ 772,685 thousand) in 2025, compared to RMB 4,876,436 thousand in 2024 and RMB 4,733,004 thousand in 2023.
• Net (Loss) Income from Continuing Operations: Net income of RMB 959,362 thousand (US$ 137,186 thousand) in 2025, compared to a net loss of RMB (770,912) thousand in 2024 and a net loss of RMB (3,926,017) thousand in 2023.

History and Evolution

GDS began its business operations in 2001 as an IT service provider focused on business continuity and disaster recovery solutions, serving financial institutions with strict IT compliance mandates. During its initial years, the Company leased third-party data center capacity to support its service commitments.

Key corporate milestones include:

• 2006: GDS Holdings Limited was incorporated as an exempted company with limited liability in the Cayman Islands on December 1, 2006.
• 2009–2011: Sensed a structural shortage of qualified high-performance data center facilities in key markets and commenced developing its own data centers. Facilities in Shanghai and Chengdu entered service in 2010 and 2011.
• 2013–2014: Expanded data center footprint to Beijing and Shenzhen, establishing a presence across China’s primary economic markets. In 2014, secured a strategic partnership and equity investment from STT GDC Pte. Ltd. (“STT GDC”), an indirect subsidiary of Singapore Technologies Telemedia Pte Ltd.
• 2016: Completed its initial public offering on the Nasdaq Global Market under ticker symbol “GDS.”
• 2019: Enhanced its variable interest entity structure by creating Management HoldCo, transferring legal ownership of GDS Beijing and GDS Shanghai, and introducing three-member boards of directors. In March 2019, issued US$150 million of Series A convertible preferred shares to an affiliate of Ping An Overseas Holdings.
• 2020: Completed its secondary listing on the Main Board of the Hong Kong Stock Exchange under stock code “9698.”
• 2022: Established DigitalLand Holdings Limited (subsequently rebranded as DayOne Data Centers Limited) in May 2022 as a dedicated holding vehicle for its international data center assets headquartered in Singapore. Issued US$620 million in convertible senior notes due 2029.
• 2023: Issued US$580 million in convertible senior notes due 2030 in January 2023. Repurchased US$299.91 million of the convertible senior notes due 2025 upon exercise of holder put options.
• 2024: DayOne raised US$672 million in Series A preferred shares and US$1.2 billion in Series B preferred shares from institutional private equity investors. GDS diluted its equity interest to 35.6% as of December 31, 2024, resulting in the deconsolidation of DayOne and treatment of DayOne as an equity-method investee. STT GDC transferred its beneficial interest to STT Garnet Pte. Ltd. (“STT Garnet”).
• 2025: Executed an asset monetization program. In March 2025, completed an Asset-Backed Securities (“ABS”) transaction, transferring equity in the Beijing 20 to 23 data center project companies to an ABS vehicle, receiving net consideration and subscribing for a 30% retained interest. In July 2025, completed the sale of the Kunshan 2 and 3 project companies to China Southern GDS Data Center Closed-End Infrastructure Securities Investment Fund (“GDS C-REIT”), listing on the Shanghai Stock Exchange, while retaining a 20% stake. Issued US$550 million in convertible senior notes due 2032 and raised US$141.4 million through a public offering of ADSs.
• 2026: On January 15, 2026, DayOne repurchased 11,000,000 ordinary shares from GDS for US$385 million. In February 2026, GDS issued 300,000 Series B convertible preferred shares to Huatai Capital Investment Limited for US$300 million. On March 10, 2026, shareholders approved an amendment to the Articles of Association increasing Class B ordinary shares voting rights from 20 votes to 50 votes per share for specified matters. Following an upsizing of DayOne’s Series C preferred financing, GDS’s equity interest in DayOne was diluted to approximately 19.9% as of the date of the annual report.

Products and Services

The Company offers a comprehensive suite of digital infrastructure solutions to enterprise and hyperscale customers:

Colocation Services

Colocation services represent the Company’s primary revenue stream, accounting for RMB 10,373,374 thousand (US$ 1,483,400 thousand), or 90.8% of total net revenue in 2025. Services include:

• Provision of critical facilities space, conditioned power, racks, and precision cooling.
• Options for private computer rooms configured to specific customer requirements or shared colocation environments.
• High-density power configurations averaging 2.34 kW/sqm across self-developed capacity in service and under construction, with new development areas reaching 2.97 kW/sqm and future pipeline up to 3.05 kW/sqm.
• Power usage optimization, achieving an average power usage effectiveness (“PUE”) of approximately 1.23 for self-developed data centers that commenced operations after 2020 with an IT power utilization rate of 30% or higher.

Managed Hosting Services

Managed hosting services encompass full-lifecycle IT infrastructure management covering all operational layers:

• Business continuity and disaster recovery (“BCDR”) solutions.
• Network management, assisting customers in architecting and monitoring private networks.
• Data storage architecture design, database customization, and performance tuning.
• System security services, including access control, intrusion detection, firewall administration, and vulnerability mitigation.
• Operating system administration, server middleware optimization, and hardware virtualization management.

Managed Cloud Services

Managed cloud services enable enterprise clients to deploy and manage hybrid cloud architectures:

• Direct private connections providing high-bandwidth, low-latency links from data center suites to leading public cloud platforms colocated within GDS facilities.
• Innovative service platform tools enabling unified monitoring, integration, and management of private IT assets alongside one or more public cloud environments.
• Cloud migration consulting and reselling of third-party public cloud services.

IT Equipment Sales and Other Services

The Company supplies IT hardware either on a stand-alone basis or bundled into customer managed services agreements, generating RMB 4,197 thousand (US$ 600 thousand) in 2025. In addition, the Company provides data center design, development, and consulting services.

Brand Portfolio

The Company operates under registered trademarks and brand identifiers that protect its service presence in Greater China and internationally. As of December 31, 2025, GDS held:

• 219 trademark registrations in mainland China and 86 trademark registrations outside mainland China.
• 27 pending trademark applications in mainland China and 16 pending trademark applications outside mainland China.
• Registered figure trademarks including the stylized GDS logo, as well as character marks for “万国数据” and “GDS” in various service categories.
• 246 registered computer software copyrights in mainland China protecting its proprietary Data Center Operation Management Platform and related infrastructure monitoring systems.
• 164 patents granted and 149 patent applications in mainland China, alongside 4 patents granted and 3 patent applications outside mainland China.
• 17 registered domain names, including gds-services.com.

Geographical Presence

The Company concentrates its data center infrastructure in China’s low-latency established economic markets and strategic big clusters in new growth hubs:

• Established Markets: The urban centers and outer-edge campuses surrounding Shanghai, Beijing, Shenzhen, Guangzhou, Chengdu, and Chongqing. These regions house mission-critical, latency-sensitive applications for financial institutions and cloud enterprises.
• New Growth Markets: Resource-rich areas including Inner Mongolia (Wulanchabu), Ningxia, and Shaoguan (Guangdong), providing scalable land and power access for large-scale computing and training clusters that are not latency-critical.
• Hong Kong and Macau: Data centers and corporate operational support serving regional enterprise requirements.

The breakdown of the Company’s data center portfolio as of December 31, 2025 is presented below:

As of December 31, 2025, the Company operated 90 self-developed data centers in service and 8 under construction (totaling 98 self-developed facilities), and held developable resources of approximately 3.7 gigawatts for future development.

Competitor Analysis

The Company operates in a competitive environment characterized by evolving technical demands, rapid capacity buildouts, and pricing discipline. Disclosed competitive groups include:

• State-Owned Telecommunications Carriers: China Telecom, China Unicom, and China Mobile. These carriers maintain dominant transmission infrastructure and national market presence. While GDS competes with them for colocation customers, it also maintains cooperative relations: carriers act as key connectivity partners, sales channels/intermediate contracting parties, and occasionally end users. GDS differentiates itself through carrier neutrality, allowing customers to link across multiple carriers within a single facility.
• Domestic Carrier-Neutral Data Center Service Providers: Specialized independent operators with facilities in major tier-1 metropolitan markets. GDS competes based on larger multi-market scale, proprietary design and construction execution, advanced high-power densities, long operating track record, and multi-cloud connectivity.
• International Carrier-Neutral Operators: Global data center providers operating in or entering the Chinese market. GDS differentiates via its established relationships with domestic carriers and municipal energy bureaus, regulatory compliance history, and widespread land and power reserves.

The filing notes that pricing competition has intensified across the data center industry in China in recent years, driven by new supply coming online, power usage limitations, and enhanced buyer leverage from hyperscale cloud accounts.

Operating Performance and Business Drivers

During the fiscal year ended December 31, 2025, the Company’s consolidated operating results were shaped by the expansion of billable capacity, customer move-in dynamics, an asset monetization program, long-lived asset impairments, and equity-method accounting for its DayOne investment.

Revenue and Utilization Growth

Net revenue from continuing operations reached RMB 11,432,274 thousand (US$ 1,634,793 thousand) in 2025, up 10.8% from RMB 10,322,068 thousand in 2024. Growth was driven by an increase in area utilized, which expanded from 453,094 sqm at year-end 2024 to 504,843 sqm at year-end 2025 (a utilization rate of 75.5% on 668,283 sqm in service). Customers with commitments progressively occupied committed capacity, and new service agreements commenced billing. Area committed reached 621,188 sqm, reflecting a 93.0% commitment rate on in-service capacity.

Cost of Revenue and Gross Margin

Cost of revenue rose 9.2% to RMB 8,846,859 thousand (US$ 1,265,084 thousand) in 2025 from RMB 8,099,439 thousand in 2024. The primary drivers were an 18.9% increase in utility expenses to RMB 3,995.3 million (US$ 571.3 million), resulting from higher customer IT power utilization and facility deliveries, and a 9.0% rise in depreciation and amortization to RMB 3,212.0 million (US$ 459.3 million). Consolidated gross margin improved slightly from 21.5% in 2024 to 22.6% in 2025, while Adjusted Gross Profit margin expanded to 51.7% in 2025 from 51.5% in 2024.

Impairment Losses on Long-Lived Assets

In 2025, the Company recorded non-cash impairment losses of RMB 1,561,235 thousand (US$ 223,254 thousand) on data centers’ long-lived assets, reflecting lower pricing terms upon renewals and slower customer move-in rates at certain leased facilities with fixed lease terms. By comparison, no impairment loss was recorded in 2024, whereas RMB 3,013,416 thousand was recorded in 2023.

Asset Monetization and Deconsolidation Gains

In 2025, the Company recorded a gain on deconsolidation of subsidiaries of RMB 2,364,104 thousand (US$ 338,062 thousand) in continuing operations:

• ABS Transaction: In March 2025, GDS monetized the Beijing 20 to 23 project companies, transferring 100% equity to an ABS special purpose vehicle for an estimated total equity consideration of RMB 1,834,615 thousand, while subscribing to 30% of the vehicle for RMB 482,760 thousand. This produced a gain on deconsolidation of RMB 1,107,178 thousand.
• GDS C-REIT Transaction: In July 2025, GDS sold 100% equity in the Kunshan 2 and 3 project companies to the public C-REIT for cash consideration of RMB 2,252,324 thousand, while subscribing for 20% of the C-REIT units for RMB 480,000 thousand. This generated a gain on deconsolidation of RMB 1,256,926 thousand.

Equity-Method Results and DayOne Dilution

The Company recognized net income from its share of results of equity-method investees of RMB 715,928 thousand (US$ 102,376 thousand) in 2025. This was comprised of an accounting dilution gain of RMB 1,681,006 thousand (US$ 240,400 thousand) triggered when DayOne completed the initial US$1.3 billion closing of its Series C convertible preferred shares in December 2025 (diluting GDS from 35.6% to 30.1%), partially offset by the Company’s proportionate share of DayOne’s operational net loss of RMB (963,796) thousand.

Board of Directors and Leadership Team

The Company’s governance is directed by an 11-member Board of Directors and an experienced executive management team:

Board of Directors

• William Wei Huang: Founder, Chairman of the Board, and Chief Executive Officer.
• Sio Tat Hiang: Vice-Chairman of the Board, Director (STT Garnet designee); Chairman of the Compensation Committee.
• Satoshi Okada: Director; member of the Board of Directors of Alibaba.com Japan.
• Bruno Lopez: Director (STT Garnet designee); President and Group Chief Executive Officer of STT GDC; Chairman of the Executive Committee.
• Liu Chee Ming: Director (STT Garnet designee); Managing Director of Platinum Holdings Company Limited.
• Lim Ah Doo: Independent Director; Chairman of the Audit Committee; Chairman and Independent Non-Executive Director of Olam Group Limited.
• Bin Yu: Independent Director; member of the Audit Committee; Certified Public Accountant in the United States.
• Zulkifli Baharudin: Independent Director; Executive Chairman of Indo-Trans Corporation; Singapore’s Non-Resident Ambassador to Kazakhstan and Uzbekistan.
• Chang Sun: Independent Director; Senior Advisor to TPG Global; Founder and Honorary Chairman of the China Venture Capital Association.
• Gary J. Wojtaszek: Director; Founder and CEO of RecNation; former President and CEO of CyrusOne, Inc.
• Judy Qing Ye: Independent Director; Advisor for Yimei Capital; member of the Executive Committee.

Executive Officers and Senior Management

• Daniel Newman: Chief Financial Officer (served since September 2011).
• Jonathan King: Member of the Executive Committee; Group Chief Strategy and Investment Officer of STT GDC.
• Yan Liang: Executive Vice President, Data Center Operation and Delivery.
• Kejing Zhang: Executive Vice President, Sales and Service.
• Jessie Yixin Qian: Executive Vice President, Operation.

Future Strategy and Business Priorities

The Company’s disclosed strategic plans focus on disciplined resource allocation, operational optimization, and capital recycling:

• Expanding Hyperscale Infrastructure in Core Strategic Nodes: Prioritizing development within established metro markets (Shanghai, Beijing, Greater Bay Area) for latency-critical workloads, while scaling large campus clusters in new growth regions (Ningxia, Shaoguan, Inner Mongolia) with lower-cost green power to support AI training and computing demand.
• Asset Monetization and Capital Recycling: Utilizing public C-REITs and private ABS platforms as long-term capitalization and liquidity mechanisms, unlocking asset value, lowering direct balance sheet leverage, and recycling capital into high-return project developments while retaining operational and property management fees.
• Sustainability and Clean Energy Integration: Aligning with China’s “Dual-Control on Carbon Emissions” and renewable mandates by expanding direct green power purchase agreements, purchasing renewable energy certificates, and targeting renewable power consumption proportions exceeding 80% for newly constructed facilities in national hubs.
• Preserving Capital Discipline: Managing development capital expenditures to match committed customer demand, phasing modular fit-outs, and maintaining robust debt service coverage.
• Independent Value Creation at DayOne: Supporting DayOne’s independent execution of its Southeast Asia and international pipeline, creating shareholder value as an equity-method investee, and exploring eventual liquidity events such as an initial public offering.

Key Strengths

Disclosed operational and strategic factors supporting the Company’s competitive position include:

• Large-Scale High-Performance Data Center Footprint: Operating 668,283 sqm of in-service capacity across China’s key economic hubs, supported by 73,994 sqm under construction and an estimated 3.7 gigawatts of secured developable resources.
• Carrier and Cloud Neutrality: Direct access to China Telecom, China Unicom, and China Mobile, together with hosted points of presence for major domestic and international public cloud service providers, facilitating multi-cloud and hybrid cloud deployments for enterprise clients.
• Predictable Revenue Base and Substantial Backlog: Total committed area of 670,106 sqm with high commitment rates (93.0% in-service, 66.1% under construction) and an unbilled revenue backlog of 165,263 sqm as of December 31, 2025.
• In-House Engineering and Operational Capabilities: Specialized engineering teams deploying modular pre-fabrication techniques that shorten build cycles, along with a proprietary Data Center Operation Management Platform that enhances energy efficiency and delivers an average PUE of 1.23 in modern facilities.
• Strategic Sponsorship and Partnerships: Enduring strategic relationships with major industrial and financial shareholders, including STT Garnet, GIC, and institutional infrastructure investors.

Key Challenges and Risks

The Company faces material challenges and risk factors detailed in its annual report:

• High Indebtedness and Capital Expenditure Requirements: Total consolidated indebtedness of RMB 46,210,400 thousand (US$ 6,608,000 thousand) as of December 31, 2025, including bank borrowings, finance lease obligations, and convertible debt. The Company requires ongoing capital to service obligations and fund pipeline construction.
• Customer Concentration: Dependence on a concentrated group of hyperscale cloud and internet customers. Two end-user customers accounted for 29.0% and 12.0% of total net revenues in 2025, and 37.9% and 11.8% of total area committed as of December 31, 2025.
• Pricing Pressures: Industry-wide downward pricing trends in China resulting from expanding market capacity, customer volume bargaining leverage, and competitive dynamics.
• Power Supply and Regulatory Approvals: Strict enforcement of energy conservation reviews, PUE caps, carbon emission intensity limits, and tiered or punitive electricity tariffs by municipal authorities in established markets.
• Risks of Long-Lived Asset Impairments: Asset impairment charges of RMB 1,561,235 thousand in 2025 and RMB 3,013,416 thousand in 2023 reflect vulnerabilities to customer move-in delays and contract renegotiations in leased data centers.
• Corporate Structure and VIE Uncertainties: Operational dependence on contractual agreements with consolidated VIEs to comply with PRC VATS foreign investment limitations. Regulatory changes or contractual enforceability challenges could impair the Company’s operational control and financial consolidation.
• Minority Stake in DayOne: As a minority equity-method holder (reduced to approximately 19.9% in April 2026), GDS does not control DayOne’s strategic decisions, capital allocation, or international project execution in complex regional markets.
• Dual-Class Voting Structure and Key-Man Exposure: Class B ordinary shares held by CEO William Wei Huang entitle him to 50 votes per share on specified matters. If his beneficial ownership drops below 2.75%, the dual-class structure automatically converts to a single-class structure, which would trigger change-of-control provisions under certain material commercial and credit agreements.

Conclusion and Strategic Outlook

GDS Holdings Limited remains a central digital infrastructure provider in China, operating an extensive high-performance data center platform across top-tier metropolitan markets and national computing hubs. In 2025, the Company generated RMB 11,432,274 thousand in revenue, returned to net profitability with RMB 959,362 thousand in net income, and made significant progress in balance-sheet de-risking via its ABS and C-REIT monetization transactions. Moving forward, the Company’s strategic focus centers on balancing capital discipline and customer move-in acceleration with the complex challenges of power availability, regulatory PUE compliance, pricing trends, and significant outstanding debt obligations.

Official Site

The Company’s official investor relations website can be accessed at: https://investors.gds-services.com.

Financial Statements

The consolidated financial statements of GDS Holdings Limited are presented in Renminbi (RMB) in thousands, except per share data, share quantities, or unless otherwise noted. The fiscal year ends on December 31 for each period presented.

Income Statement

Balance Sheet

Cash Flow Statement

Subsidiaries & Joint Ventures

Other Investments & Holdings

Physical Properties

Investments and Capital Expenditure

Share Capital and Outstanding Shares

Major Beneficial Shareholders (as of March 31, 2026)

Frequently Asked Questions

What is GDS Holdings Limited’s primary business model?

GDS Holdings develops and operates high-performance data centers in China, generating recurring revenue primarily through colocation services (providing data center space, power, cooling, and physical security) and managed services (including hosting management, BCDR, and direct hybrid cloud connectivity) to cloud service providers, large internet enterprises, and financial institutions.

How does GDS operate in mainland China given foreign ownership restrictions?

Because PRC regulations limit foreign equity ownership in value-added telecommunications services such as internet data center services to 50% or less, GDS Holdings operates through contractual arrangements with consolidated variable interest entities (VIEs), including Management HoldCo, GDS Beijing, GDS Shanghai, and their subsidiaries. GDS Holdings has no direct equity ownership in the VIEs, but is their primary beneficiary under U.S. GAAP.

What is the relationship between GDS Holdings and DayOne?

DayOne (formerly DigitalLand Holdings Limited or GDSI) was originally established in May 2022 to house GDS’s international data center operations outside mainland China. Following private equity preferred share financings in 2024, GDS’s equity stake was diluted, leading to the deconsolidation of DayOne on December 31, 2024. GDS now accounts for DayOne as an equity-method investee, with its equity interest standing at approximately 19.9% as of April 2026.

What were the major asset monetization transactions completed by GDS in 2025?

In March 2025, GDS monetized its Beijing 20 to 23 data center assets through an Asset-Backed Securities (ABS) special purpose vehicle, retaining a 30% interest and recognizing a deconsolidation gain of RMB 1,107,178 thousand. In July 2025, GDS sold 100% equity in its Kunshan 2 and 3 data center project companies to the newly established China Southern GDS C-REIT, subscribing for 20% of the public REIT units and recognizing a deconsolidation gain of RMB 1,256,926 thousand.