GDS Holdings Limited reported fourth‑quarter and full‑year 2025 results that beat earnings expectations while falling short of revenue forecasts. Net revenue for the year was $2.88 billion, a 10.8 % year‑over‑year increase, but 2.04 % below the consensus estimate of $2.94 billion. Earnings per share were $0.40, a 253 % surprise over the consensus estimate of a $0.26 loss. Adjusted EBITDA margin contracted to 46.7 % from 48.2 % in the prior year, reflecting higher utility costs.
The earnings beat was driven by disciplined cost management and the contribution of asset‑monetization transactions completed in 2025. The company’s adjusted EBITDA margin, while compressed, remained above 45 % thanks to higher pricing in its high‑performance data‑center segment and the elimination of one‑time charges. The $0.40 EPS also reflects a stronger operating income margin relative to the prior year, offsetting the revenue shortfall.
Revenue missed consensus because of a mix shift toward lower‑margin segments and higher utility expenses that eroded gross margin. While demand for AI‑optimized capacity remained robust, the company’s mix of new bookings included a larger proportion of mid‑tier data‑center contracts, which carry lower pricing power. The 2 % shortfall indicates that, although top‑line growth was solid, the company faced headwinds from rising operating costs.
Management guided for 2026 revenue growth of 8.5 % to 12.8 % (RMB 12.40 billion to RMB 12.90 billion) and adjusted EBITDA growth of 6.4 % to 11.0 % (RMB 5.75 billion to RMB 6.00 billion). The outlook reflects confidence in continued AI demand, with 60 % to 70 % of new business expected to come from AI‑driven workloads. Capital expenditures are projected to rise to RMB 9 billion to support hyperscale expansion, while the company’s net debt‑to‑EBITDA ratio is expected to improve to 5.8× from 6.8×.
William Huang, Founder, Chairman and CEO, said, “2025 was a great year for GDS in terms of performance. We recorded 11 % growth in both revenue and adjusted EBITDA. We beat the top end of our adjusted EBITDA guidance, and with the contribution from asset monetization, we were free cash flow positive. AI in China has really taken off. Increasing availability of domestic high‑performance chips is a key enabler. All our major customers are investing in hyperscale computing infrastructure to support AI adoption.” He added, “We concluded 2025 on a strong note, delivering solid financial and operational results that underscore our disciplined execution and strategic focus. During the year of 2025, we achieved the highest level of gross new bookings and gross move‑in for the past five years.”
Investors reacted cautiously to the results, weighing the EPS beat against the revenue miss and margin compression. The market’s focus on the revenue shortfall and higher utility costs suggests that, while the company’s profitability remains strong, top‑line growth may face short‑term headwinds.
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