GDS Holdings Ltd. (NASDAQ:GDS) shares are trading lower on Wednesday after the company reported first-quarter results and reiterated below-consensus guidance.
Details
Net revenue rose 23.6% year over year (Y/Y) to 3.37 billion yuan. In U.S. dollar terms, revenue came in at $488.1 million, above expectations of $440.7 million.
Earnings per American depositary share were 10.58 yuan, compared with 3.47 yuan in the year-ago quarter. In U.S. dollar terms, EPS of $1.53, exceeded the $1.06 consensus estimate.
The company reported a strong rebound in data center demand driven by AI, with total bookings reaching 1.8 gigawatts as of Q1 2026.
CEO William Huang said the company recorded net new bookings of around 200MW. That’s “the highest level ever” for a single quarter.
Adjusted gross profit increased 34.1% Y/Y to 1.95 billion yuan, and the margin rose to 58.0% from 53.4% a year earlier.
Adjusted EBITDA increased 47.2% Y/Y to 1.95 billion yuan. Also, margins improved to 57.9%, or 48.7% excluding one-offs, compared with 48.6% in the prior-year period.
As of March 31, cash and cash equivalents stood at 14.8 billion yuan.
Operating Metrics Improve
Total committed and pre-committed area increased 11.7% Y/Y to 725,485 sqm as of March 31, 2026.
Utilized area rose 12.7% Y/Y to 520,929 sqm, while area in service grew 10.4% Y/Y to 674,269 sqm.
Utilization rate improved to 77.3%, up from 75.7% in the prior-year period.
Outlook Unchanged
For fiscal 2026, GDS expects total revenue of 12.40 billion yuan to 12.90 billion yuan and adjusted EBITDA of 5.75 billion yuan to 6.00 billion yuan. Capital expenditures are projected at 9.0 billion yuan.
In U.S. dollar terms, the company reaffirmed its outlook for revenue of $1.749 billion to $1.819 billion, below the consensus estimate of $1.90 billion.
Also, the company reaffirmed a minimum target of at least 500 MW of sales, noting it has already secured more than 340 MW of new bookings year-to-date, signaling strong progress toward its goal.
Long Term Target
GDS outlined a multi-year expansion strategy targeting 500–800 MW of new bookings annually over the next three years, with additional upside depending on demand trends.
Management also plans to invest approximately 30–50 billion yuan over the same period to expand its data center footprint across key markets.
GDS Price Action: GDS Holdings shares were down 6.41% at $37.82 at the time of publication on Wednesday, according to Benzinga Pro.
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