GDS Holdings (NASDAQ: GDS), the largest carrier-neutral data center operator in China, today announced its Q4 and full-year 2021 earnings and provided updates on its outlook for 2022 (including factors pressuring its EBITDA margins), capital expenditure plans, data center portfolio, leasing, utilization, pricing, backlog, development pipeline, and recent convertible debt financing.

Financial Performance in Q4 2021 – GDS Holdings

In Q4 2021, GDS Holdings reported revenue of RMB2,187m ($343m), a 6.1% increase quarter-over-quarter, and adjusted EBITDA of RMB1,027m ($161m), a 6.8% increase quarter-over-quarter. Therefore, the company’s EBITDA margin was 47.0% in Q4 2021, a ~30 bps improvement quarter-over-quarter.

GDS’ revenue growth was in-part attributable to new capacity brought on-line organically at its Shanghai 17 (SH17) Phase 2, Beijing 8 (BJ8), Beijing 16 (BJ16), Langfang 3 (LF3), Langfang 9 (LF9), and Langfang 10 (LF10) data centers.

Full-Year 2021 and Outlook for 2022 – GDS Holdings

Full-Year 2021

For full-year 2021, GDS Holdings reported total revenue of RMB7,819m ($1.23bn), a 36% increase year-over-year, and adjusted EBITDA of RMB3,703m ($581m), a 38% increase year-over-year. Therefore, GDS Holdings’ EBITDA margin was 47.4% in full-year 2021, a ~70 bps improvement year-over-year.

Outlook for 2022

For full-year 2022, GDS Holdings provides an outlook for revenue of RMB9,320m to RMB9,680m ($1.46bn to $1.52bn). Additionally, the company forecasts adjusted EBITDA of RMB4,285m to RMB4,450m ($673m to $699m), implying a 46.0% EBITDA margin. Finally, the mid-point of GDS Holdings’ 2022 outlook infers a year-over-year increase of 21.5% and 18% in revenue and adjusted EBITDA, respectively.

Notably, GDS’ outlook for 2022 contemplates a lower EBITDA margin of 46.0%, as compared to the company’s EBITDA margin of 47.4% in 2021. A “major factor” driving GDS’ lower EBITDA margin are “higher coal prices”, which is translating into an increase of 10% to 20% in “thermal power tariffs” across Tier-1 markets in China. While GDS notes that it is “passing on around half of the increased cost to our customers”, the company is also absorbing a portion of the power cost increases itself. In turn, GDS estimates that “temporarily elevated power tariffs are a drag of around 1.0% to 1.5% on our profit margin” in 2022.

Capital Expenditures

In terms of investment, including premiums paid for acquisitions, GDS expects to make capital expenditures of around RMB12,000m ($1.88bn) for full-year 2022. Decomposing this capital expenditure figure further:

  • Mainland China: organic capital expenditures of RMB6,000m ($942m)
  • Regional Expansion: capital expenditures of RMB2,000m ($314m)
  • Acquisition Consideration: RMB4,000m ($628m)

As such, the company is forecasting a 12.4% reduction in capital expenditures in 2022, relative to 2021. Accordingly, in 2022, GDS expects to bring around 85k sqm (915k sqft) of area into service.

Operational Performance in Q4 2021 – GDS Holdings


In Q4 2021, GDS brought 33.5k sqm (361k sqft) of area into service. In turn, the company’s total capacity reached 649k sqm (7.0 million sqft), of which 488k sqm (5.25 million sqft) was in service and 161.5k sqm (1.74 million sqft) was under construction.


During Q4 2021, GDS signed a total of 54+ megawatts of power capacity, across 23.5k sqm (253k sqft).

Of this total, GDS secured five notable hyperscale commitments, comprising 41.8 megawatts of committed IT power, across 17.8k sqm (191k sqft). Specifically, these hyperscale commitments include:

  • SH17 Phase 3 (Shanghai): 6.6 megawatts of committed IT power, across 2.8k sqm (30k sqft) of area
  • CS3 Phase 1 (Changshu): 14.1 megawatts of committed IT power, across 6.0k sqm (65k sqft) of area
  • BJ13 (Beijing): 7.1 megawatts of committed IT power, across 2.8k sqm (30k sqft) of area
  • BJ14 Phase 1 (Beijing): 7.1 megawatts of committed IT power, across 2.7k sqm (29k sqft) of area
  • HL1 Phase 2 (Huailai): 6.9 megawatts of committed IT power, across 3.4k sqm (37k sqft) of area

In terms of customer profile, GDS’ five hyperscale commitments came from cloud service providers and large internet companies, in addition to one commitment from a financial institution. For full-year 2021, GDS’ net additional area committed by customer segment was as follows: 50% cloud service providers, 30% large internet companies, and 20% financial institutions & large enterprises.

Additionally, 3.4k sqm (37k sqft) of GDS’ Q4 2021 leasing was attributable to customer agreements from its build-operate-transfer (B-O-T) joint ventures.

Finally, for 2022, GDS expects to achieve ~90k sqm (969k sqft) of new organic commitments.


In Q4 2021, GDS’ utilized space by customers increased by 19.1k sqm (206k sqft). Additionally, the company’s utilization rate for area in service was 65.5% as of Q4 2021, a 0.6% decline quarter-over-quarter.

GDS Holdings Utilization Commitment Rate Q4 2021

Notably, the company’s commitment rate for area in service was 93.8% as of Q4 2021. Therefore, as new lease commencements occur, GDS’ utilization rate should trend closer towards its commitment rate.


Monthly service revenue (MSR) per sqm declined 0.4% quarter-over-quarter to RMB2,351. For full-year 2022, GDS expects that MSR per sqm will decline further by “mid-single digits in percentage terms” year-over-year. Specifically, the company points to MSR dilution from edge of town and build-operate-transfer (B-O-T) projects as the drivers in 2022. Albeit the same trend, management expects the MSR decline will be “more mild in 2023 and onwards”.


Overall, GDS’ backlog reached 237k sqm (2.55 million sqft), which now includes its build-operate-transfer (B-O-T) joint venture data centers. Of this total, 58% or 138k sqm (1.5 million sqft) is backlog for area in service. While 42% or 99k sqm (1.07 million sqft) is backlog for area under construction.

Development Pipeline – GDS Holdings

GDS’ total development pipeline, as of Q4 2021, stood at 475k sqm (5.1 million sqft). Decomposing this development pipeline further, GDS’ largest markets are Greater Beijing (Beijing-Tianjin-Hebei), Greater Shanghai (Yangtze River Delta), and the Greater Bay Area:

  • Beijing: 43.5k sqm (469k sqft) held for future development
  • Shanghai: 122k sqm (1.3 million sqft) held for future development
  • Bay Area: 210k sqm (2.3 million sqft) held for future development

Debt Financing – Convertible Senior Notes

In March 2022, GDS Holdings raised $620m through a private convertible senior notes issuance to Sequoia China Infrastructure Fund I (SCIF), STT GDC (GDS’ largest shareholder with a 31.8% stake), and GIC, Singapore’s sovereign wealth fund. Specifically, these 7-year convertible senior notes are due in 2029, have a 0.25% coupon, and the conversion price will initially be US$50 per ADS.

Mary Zhang covers Data Centers for Dgtl Infra, including Equinix (NASDAQ: EQIX), Digital Realty (NYSE: DLR), CyrusOne, CoreSite Realty, QTS Realty, Switch Inc, Iron Mountain (NYSE: IRM), Cyxtera (NASDAQ: CYXT), and many more. Within Data Centers, Mary focuses on the sub-sectors of hyperscale, enterprise / colocation, cloud service providers, and edge computing. Mary has over 5 years of experience in research and writing for Data Centers.


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