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GDS (NASDAQ:GDS) stock fell ~17% on Tuesday after the company’s Q3 results.

Net loss widened to -RMB339.7M (-$47.7M), compared to -RMB301.1M in Q3 2021.

Net revenue grew +14.85% Y/Y to RMB2.37B ($332.8M). The revenue comprised of Service revenue. In Q2 Service revenue was RMB2.30B.

The Chinese company said the increase Q/Q was mainly due to the full quarter revenue contribution from additional area utilized in the previous quarter and the contribution from 14,184 sqm of net additional area utilized in Q3, mainly related to the Shanghai 17 (SH17) Phase 2, Langfang 1 (LF1), Nantong 4 (NT4) and Nantong 5 (NT5) data centers.

Gross profit margin was 20.8%, compared to 22.1% in Q3 2021.

Adjusted EBITDA increased +10.9% Y/Y to RMB1.07B ($149.9M). Adjusted EBITDA margin was 45.0%, compared to 46.7% in Q3 2021.

As of Sept. 30, cash was RMB9.09B ($1.28B).

Outlook:

GDS said that it reaffirmed the previously provided total revenue outlook for 2022 of RMB9.25B to RMB9.4B.

Adjusted EBITDA is expected between RMB4.2B to RMB4.28B. Meanwhile, the original capex guidance of around RMB12B remains unchanged, according to the company.


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