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

GDS (NASDAQ:GDS) released its quarterly earnings data on Thursday. The company reported $0.52 EPS for the quarter, topping the consensus estimate of $0.01 by $0.51, FiscalAI reports. GDS had a return on equity of 15.62% and a net margin of 23.83%.The company had revenue of $475.06 million during the quarter, compared to the consensus estimate 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 Stock Performance

NASDAQ:GDS traded down $0.36 during mid-day trading on Friday, hitting $34.41. 1,663,979 shares of the company traded hands, compared to its average volume of 2,220,052. The stock’s fifty day moving average price is $32.11 and its 200-day moving average price is $38.65. The firm has a market cap of $6.90 billion, a price-to-earnings ratio of 21.92 and a beta of 0.43. The company has a quick ratio of 1.87, a current ratio of 1.87 and a debt-to-equity ratio of 1.25. GDS has a one year low of $26.97 and a one year high of $48.61.

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.

Insider Activity at GDS

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

Institutional Investors Weigh In On GDS

A number of institutional investors have recently added to or reduced their stakes in GDS. Canada Pension Plan Investment Board raised its position in shares of GDS by 77.7% during 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 buying an additional 3,062,658 shares during the last quarter. Alyeska Investment Group L.P. increased its holdings in GDS by 62.0% in the 3rd quarter. Alyeska Investment Group L.P. now owns 1,892,103 shares of the company’s stock valued at $73,224,000 after acquiring an additional 724,290 shares during the last quarter. Barclays PLC lifted its stake in GDS by 20,731.3% in the 4th 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 in the last quarter. Marshall Wace LLP lifted its stake in GDS by 22.7% in the 4th quarter. Marshall Wace LLP now owns 1,506,344 shares of the company’s stock worth $52,571,000 after purchasing an additional 279,141 shares in the last quarter. Finally, Nishkama Capital LLC bought a new position in shares of GDS during the 3rd quarter valued at about $28,037,000. 33.71% of the stock is owned by hedge funds and other institutional investors.

Wall Street Analysts Forecast Growth

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

GDS Company Profile

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.