GDS Holdings raised its 2026 revenue and adjusted EBITDA outlook as accelerating artificial intelligence demand in China drives stronger data center bookings, higher development activity and what management expects to be a record year for new sales commitments.
GDS increased its full-year revenue guidance to between RMB12.7 billion and RMB13 billion, up from its previous range of RMB12.4 billion to RMB12.9 billion. The revised forecast implies year-over-year revenue growth of approximately 11.1% to 13.7%.
The company also increased its adjusted EBITDA outlook to between RMB5.9 billion and RMB6.1 billion from RMB5.75 billion to RMB6 billion previously. The revised range represents expected adjusted EBITDA growth of approximately 9.2% to 12.9%.
GDS is simultaneously increasing investment to support the stronger demand environment. Full-year capital expenditure guidance increased to approximately RMB10 billion from around RMB9 billion. The company said the higher spending reflects strong sales achievement, its current sales outlook and the resulting increase in data center development activity.
Management said demand for high-performance data centers in China is being driven primarily by AI. GDS ramped up backlog delivery during Q2 while maintaining a high level of net new bookings and now expects to achieve a record annual sales commitment that is substantially higher than its original target.
The increase in development activity is already visible in GDS’ operating metrics. Total committed and pre-committed area reached 784,802 square meters at the end of June, increasing 18.2% year-over-year and 8.2% sequentially. GDS added 59,317 square meters of net committed area during Q2.
Area under construction increased even faster, reaching 170,355 square meters. That was up 28.8% year-over-year and 43.9% from the first quarter. The pre-commitment rate for space under construction reached 89.2%, compared with 74.7% a year earlier, indicating that a substantial portion of new capacity already has customer commitments before becoming operational.
Area utilized increased 13.2% year-over-year to 542,236 square meters and 4.1% sequentially. Utilization of in-service capacity improved to 79.2% from 77.5% in the prior-year quarter and 77.3% in the first quarter.
Second-quarter net revenue increased 6.5% year-over-year to RMB3.09 billion, or approximately $455.1 million, primarily reflecting the continued ramp-up of GDS’ data centers. Adjusted EBITDA increased 2.5% to RMB1.41 billion, or approximately $207.2 million, resulting in an adjusted EBITDA margin of 45.5%.
Margins were pressured by higher utility costs. Gross profit declined 3.6% to RMB664.2 million, while gross margin decreased to 21.5% from 23.8%. Adjusted gross profit margin declined to 48.5% from 52%, primarily because utility costs represented a greater proportion of revenue.
GDS nevertheless reported a substantial swing in bottom-line profitability. Net income reached RMB837.6 million, or approximately $123.5 million, compared with a net loss of RMB70.6 million a year earlier. The quarter included approximately RMB959.9 million of income from equity-method investees, mainly related to a dilution gain on GDS’ investment in DayOne Data Centers following DayOne’s Series C financing.
The company also ended the quarter with approximately RMB14.93 billion, or $2.2 billion, of cash and cash equivalents. During Q2, GDS obtained approximately RMB4.91 billion, or $723.2 million, of new debt financing and refinancing facilities as it continues funding the expansion of its data center platform.
KEY QUOTES:
“We delivered solid financial and operational results in the second quarter of 2026, reflecting our continued commitment to disciplined execution. During the quarter, we ramped up backlog delivery while maintaining a high level of net new bookings. As things stand today, we are on track to achieving a record sales commitment for this year, which is much higher than our original target. We are very excited about the opportunities in China ahead of us, driven mainly by AI demand. We are confident in our ability to capture these massive opportunities and expand our business at scale.”
William Huang, Chairman and CEO of GDS Holdings
“In the second quarter, we grew revenue by 6.5% and adjusted EBITDA by 2.5% year-over-year, yielding an adjusted EBITDA margin of 45.5%. With strengthened financial standing and funding capabilities to support our business expansion, we remain focused on creating sustainable, long-term value for our business partners and shareholders.”
Dan Newman, Chief Financial Officer of GDS Holdings
