GDS Holdings Limited (“GDS”) develops and operates high-performance data center facilities in the People’s Republic of China. Its business is centered on owning and operating data center campuses and then monetizing them through mission-critical infrastructure services. The company is widely positioned as a “carrier-neutral” provider, meaning customers can typically choose ...GDS Holdings Limited (“GDS”) develops and operates high-performance data center facilities in the People’s Republic of China. Its business is centered on owning and operating data center campuses and then monetizing them through mission-critical infrastructure services. The company is widely positioned as a “carrier-neutral” provider, meaning customers can typically choose from multiple network carriers within the same facility, which supports redundancy and flexible connectivity requirements.
From a services perspective, GDS is known for (1) colocation, where customers lease physical space (server racks), reliable power, and cooling infrastructure; and (2) managed hosting and managed services, which can include business continuity and disaster recovery capabilities, network administration, secure data storage, system security, and ongoing support for operating systems, databases, and middleware. In addition, GDS offers managed cloud offerings and professional consulting services, extending beyond raw facility space into higher-level managed IT operations.
Typical customers include cloud service providers, major internet firms, financial institutions, telecommunications and IT service companies, as well as sizable domestic private enterprises and multinational corporations. This customer mix aligns with the demand characteristics of data centers—high uptime expectations, strong security controls, and predictable performance—rather than purely commodity hosting.
Economically, GDS operates a capital-intensive infrastructure model. Building and upgrading data centers requires substantial upfront investment in power, cooling, and physical security systems; ongoing operational expenditures cover energy management, facility operations, maintenance, and managed service delivery. The provided financial snapshot metrics suggest the business generates meaningful margins at the operating level, while free cash flow can vary depending on capex cycles and financing structure—typical for data center operators expanding capacity or improving efficiency.
Key people: William Wei Huang is the company’s founder, chairman, and has served as CEO since 2002, reflecting long-term strategic continuity.
Overall, GDS’s “wish list” in this industry generally includes sustained utilization of deployed capacity, disciplined capital allocation to improve energy efficiency and reliability, continued expansion in high-demand regions, and strengthening differentiated managed services that deepen customer lock-in beyond basic rack or power leasing.
Operator: Hello, ladies and gentlemen. Thank you for standing by for GDS Holdings Limited's Second Quarter 2026 Earnings Conference Call. [Operator Instructions] Today's conference call is being recorded. I'll now turn the call over to your host, Ms. Laura Chen, Head of Investor Relations for the company. Please go ahead, Laura.
Laura Chen: Thank you. Hello, everyone. Welcome to the Second Quarter 2026 Earnings Conference Call of GDS Holdings Limited. The company's results were issued via Newswire Services earlier today and are posted online. A summary presentation, which we will refer to during this conference call, can be viewed and downloaded from our IR website at investors.gds-services.com. Leading today's call is Mr. William Huang, GDS Founder, Chairman and CEO, who will provide an overview of our business strategy and performance. Mr. Dan Newman, GDS CFO, will then review the financial and operating results. Before we continue, please note that today's discussion will contain forward-looking statements made under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward looking statements involve inherent risks and uncertainties. As such, the company's results may be materially different from the views expressed today. Further information regarding these and other risks and uncertainties is included in the company's prospectus as filed with the U.S. SEC. The company does not assume any obligation to update any forward-looking statements, except as required under applicable law. Please also note that GDS earnings press release and this conference call include discussions of unaudited GAAP financial information as well as unaudited non-GAAP financial measures. GDS press release contains a reconciliation of the unaudited non-GAAP measures to the unaudited most directly comparable GAAP measures. I'll now turn the call over to GDS Founder, Chairman and CEO, Mr. William Huang. Please go ahead, William.
William Huang: Hello, everyone. This is William. Thank you for joining us on today's call. AI is transforming our business. Our sales momentum is the strongest we have ever seen. In the second quarter, we achieved 260 megawatts of new bookings, bringing our total for the first half of 2026 to a record 470 megawatts. During the current quarter, we are well on the way to securing further major business wins with leading customers. We are confidently raising our full year sales target to 1 gigawatt. All of our sales agreements, including -- include a binding take-or-pay commitment. This is a metric which we disclose as bookings. The sales agreement specified delivery date, which is up to 4 quarters after bookings. This allowed us to invest based on secured commitments. Following the delivery date, there is an agreed ramp-up period, usually another 4 quarters, which gives us visibility to the timing of new billings. Alongside the new bookings, our customers also request us to reserve deployable capacity at the …
