Datacenter Operator GDS Holdings' Q3 Revenue Grows 6.4% But Falls Short of Expectations

GDS Holdings Ltd GDS reported a Q3 FY23 net revenue growth of 6.4% Y/Y to $345.26 million, missing the consensus of $351.73 million.

Loss per ADS of $(0.32) missed the consensus loss of $(0.28).

Service revenue of the leading developer and operator of high-performance data centers in China increased 6.4% Y/Y to $345.26 million.

The total area committed and pre-committed by customers rose 5.7% Y/Y to 653,732 square meters (sqm) as of September 30, 2023.

Area in service rose 8.6% Y/Y to 554,210 sqm, with the commitment rate for area in service standing at 91.9% (vs. 95.6%) as of September 30, 2023.

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Adjusted EBITDA rose 5.6% Y/Y to $154.4 million. Adjusted EBITDA margin declined to 44.7% from 45.0% a year ago due to an increase in utility cost.

As of September 30, 2023, the cash balance was $1.03 billion.

Chair and CEO Mr. William Huang said, "In China, we won new business based on firm move-in schedules, and we continued to accelerate backlog delivery. In South East Asia, our first data center came into service, and the anchor customer started to move in."

FY23 Outlook: GDS reiterated the outlook for revenues at RMB9.94 billion – RMB10.32 billion (consensus $1.4 billion), capital expenditure of around RMB7.500 billion, and adjusted EBITDA at RMB4.43 billion – RMB4.60 billion. 

The stock has lost 54% YTD.

Price Action: GDS shares closed lower by 6.80% at $10.97 on Tuesday.