GDS (NASDAQ:GDS) Releases Quarterly Earnings Results, Beats Expectations By $0.51 EPS

GDS (NASDAQ:GDS) issued its quarterly earnings data on Thursday. The company reported $0.52 earnings per share for the quarter, topping analysts’ consensus estimates of $0.01 by $0.51, FiscalAI reports. GDS had a net margin of 30.70% and a return on equity of 18.63%. The business had revenue of $475.06 million during the quarter, compared to analysts’ expectations of $454.25 million.

Here are the key takeaways from GDS’s conference call:

• Record sales momentum: GDS booked 260 MW in Q2 and 470 MW in the first half, prompting management to raise its full-year bookings target to 1 GW. Customers also reserved 600 MW of future capacity, with reservations expected to exceed 1 GW by year-end.
• Strong growth visibility: Backlog rose to 757 MW at midyear, representing an estimated RMB 1.6 billion of booked-but-not-billed adjusted EBITDA. Management expects 2027 move-ins to more than double 2026 levels, with another step-up anticipated in 2028.
• Management raised full-year revenue and adjusted EBITDA guidance, while first-half pro forma adjusted EBITDA increased 12.7%. The guidance does not include any potential contribution from a further asset monetization currently under regulatory review.
• Investment and pricing pressures remain: 2026 CapEx guidance increased to RMB 10 billion, and management expects same-quarter MSR to decline about 3% in Q4 2026 and potentially by a similar amount next year due partly to new-market mix and legacy contract repricing.

GDS Trading Down 1.0%

GDS traded down $0.36 during trading on Friday, hitting $34.41. The company’s stock had a trading volume of 1,663,979 shares, compared to its average volume of 1,844,099. GDS has a twelve month low of $26.97 and a twelve month high of $48.61. The stock has a market cap of $6.90 billion, a PE ratio of 16.00 and a beta of 0.43. The firm’s 50 day moving average price is $32.12 and its 200-day moving average price is $38.62. The company has a debt-to-equity ratio of 1.25, a current ratio of 1.87 and a quick ratio of 1.87.

Insider Buying and Selling at GDS

In related news, Director Judy Qing Ye sold 37,394 shares of the stock in a transaction dated Tuesday, June 2nd. The stock was sold at an average price of $36.21, for a total transaction of $1,354,036.74. The transaction was disclosed in a filing with the SEC, which can be accessed through the SEC website. Also, VP Yixin Qian sold 10,000 shares of the firm’s stock in a transaction dated Wednesday, June 10th. The stock was sold at an average price of $35.25, for a total value of $352,500.00. Following the completion of the sale, the vice president directly owned 66,865 shares in the company, valued at approximately $2,356,991.25. The trade was a 13.01% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. 7.99% of the stock is owned by company insiders.

Institutional Inflows and Outflows

Several large investors have recently modified their holdings of GDS. Canada Pension Plan Investment Board grew its holdings in GDS by 77.7% in the second quarter. Canada Pension Plan Investment Board now owns 7,004,083 shares of the company’s stock valued at $214,115,000 after purchasing an additional 3,062,658 shares during the period. Alyeska Investment Group L.P. raised its stake in GDS by 62.0% during the third quarter. Alyeska Investment Group L.P. now owns 1,892,103 shares of the company’s stock worth $73,224,000 after purchasing an additional 724,290 shares during the period. Barclays PLC raised its stake in GDS by 20,731.3% during the fourth quarter. Barclays PLC now owns 1,720,247 shares of the company’s stock worth $60,037,000 after purchasing an additional 1,711,989 shares during the period. Marshall Wace LLP boosted its holdings in shares of GDS by 22.7% in the 4th quarter. Marshall Wace LLP now owns 1,506,344 shares of the company’s stock valued at $52,571,000 after purchasing an additional 279,141 shares during the last quarter. Finally, Nishkama Capital LLC purchased a new stake in shares of GDS during the 3rd quarter valued at $28,037,000. 33.71% of the stock is currently owned by hedge funds and other institutional investors.

Key Stories Impacting GDS

Here are the key news stories impacting GDS this week:

• Positive Sentiment: Management said AI is transforming GDS’s business, with sales momentum at its strongest level ever. Record first-half bookings and rising demand for high-performance data centers support the company’s growth outlook. GDS CEO says AI is transforming the business as sales momentum hits strongest level ever
• Positive Sentiment: GDS set a 1-gigawatt sales target for 2026, while its backlog is building toward a significant increase in customer move-ins expected in 2027. The stronger booking pipeline could improve future revenue visibility. GDS Q2 earnings call focuses on AI demand and 1-GW sales target
• Positive Sentiment: The company raised its 2026 revenue outlook to approximately $1.9 billion, above the roughly $1.8 billion analyst consensus. Reported second-quarter revenue of about $475.1 million also exceeded expectations near $454.3 million. GDS Holdings reports second-quarter 2026 results
• Neutral Sentiment: Reported earnings comparisons vary by source and measurement: one account showed quarterly EPS of $0.52 versus a $0.01 consensus estimate, while another reported $0.56 versus a $1.35 estimate. The conflicting figures may have contributed to investor uncertainty despite solid operating trends. GDS Holdings misses Q2 earnings and revenue estimates
• Negative Sentiment: The earnings miss highlighted by Zacks may have outweighed the revenue beat and upbeat AI commentary, particularly if investors are focused on profitability and the company’s ability to convert its expanding backlog into earnings and cash flow.

Analyst Upgrades and Downgrades

A number of equities research analysts have commented on GDS shares. Piper Sandler set a $36.00 target price on GDS in a report on Thursday, May 21st. Wall Street Zen upgraded GDS from a “sell” rating to a “hold” rating in a research report on Saturday, May 2nd. TD Cowen decreased their price objective on GDS from $37.00 to $36.00 and set a “buy” rating on the stock in a research note on Thursday, May 21st. Zacks Research cut GDS from a “strong-buy” rating to a “hold” rating in a research report on Friday, July 24th. Finally, Weiss Ratings raised shares of GDS from a “hold (c-)” rating to a “hold (c)” rating in a research note on Monday, May 18th. One research analyst has rated the stock with a Strong Buy rating, five have assigned a Buy rating and two have issued a Hold rating to the company. According to data from MarketBeat.com, the company has a consensus rating of “Moderate Buy” and an average target price of $48.33.

About GDS

GDS Holdings Limited, founded in 2001 and headquartered in Shanghai, is a leading network-neutral data center services provider in China. The company operates a portfolio of state-of-the-art data center facilities designed to support the mission-critical IT infrastructure of cloud service providers, internet enterprises, financial institutions, and government entities. GDS was among the first Chinese providers to offer high-density colocation solutions, catering to customers with demanding computing and storage requirements.

GDS specializes in delivering scalable colocation, cross-connect, and interconnection services within its facilities, enabling clients to establish high-speed, low-latency connections to major cloud platforms and internet exchange points.