GDS (GDS) Q1 2026 earnings summary

Executive summary

• Net revenue for Q1 2026 grew 7.9% year-over-year to RMB 2,938.0 million, excluding one-time items, with adjusted EBITDA up 8.0% to RMB 1,430.3 million; normalized revenue rose 7.9% year-over-year, and net income surged 247.1% to RMB 2,652.1 million, driven by a significant dilution gain from DayOne investment.

• Total area committed increased 11.7% year-over-year to 725,485 sqm, and area utilized rose 12.7% to 520,929 sqm, with a utilization rate of 77.3%.

• Record net new bookings of around 200MW, with total bookings reaching 1.8 GW by end of Q1 2026 and a three-year plan to add 500–800 MW of new bookings annually.

• Platform expanded to new locations, with a secured land bank nearing 4 GW to support large-scale AI deployments.

• Raised US$385 million from a partial sell-down of DayOne and US$300 million from a convertible preferred share issue, strengthening liquidity.

Financial highlights

• Adjusted gross profit margin improved to 58.0% in Q1 2026, up 4.5 percentage points year-over-year; adjusted EBITDA margin reached 57.9%, up 9.3 percentage points year-over-year.

• Gross profit rose 75.5% year-over-year to RMB 1,131.5 million; normalized gross profit up 8.9% year-over-year.

• Operating cash flow for Q1 2026 was RMB 447.7 million; cash and time deposits exceeded RMB 19 billion ($2.7 billion) at quarter end.

• Net debt reduced to RMB 31.1 billion, with net debt/LQA adjusted EBITDA at 5.4x, improving from 6.6x a year ago.

• Organic CapEx in Q1 was RMB 770 million; annual capex guidance for FY26 set at RMB 9,000 million.

Outlook and guidance

• Full-year 2026 guidance reaffirmed: total revenue RMB 12,400–12,900 million, adjusted EBITDA RMB 5,750–6,000 million, capex around RMB 9,000 million.

• Pro forma FY26 revenue guidance is RMB 12,860–13,360 million, with adjusted EBITDA of RMB 6,020–6,270 million.

• Move-in pace expected to rebound in H2 2026, with significant acceleration in H2 2027; 2026 move-in expected to exceed 70,000 sqm, with 2027 projected to be substantially higher.

• Forecasts for 2026 are based solely on domestic chip supply; imported chips could provide upside.

• Management expects continued strong demand for AI infrastructure and data center services.