GDS Holdings Limited (NASDAQ: GDS) reported Q4 EPS of ($0.02), $0.06 better than the analyst estimate of ($0.08). Revenue for the quarter came in at $120.6 million versus the consensus estimate of $122.49 million.

• Net revenue increased by 64.1% year-over-year (“Y-o-Y”) to RMB829.5 million (US$120.6 million) in the fourth quarter of 2018 (4Q2017: RMB505.5 million).
• Service revenue increased by 67.9% Y-o-Y to RMB829.1 million (US$120.6 million) in the fourth quarter of 2018 (4Q2017: RMB493.7 million).
• Net loss was RMB122.9 million (US$17.9 million) in the fourth quarter of 2018, compared with a net loss of RMB116.5 million in the fourth quarter of 2017.
• Adjusted EBITDA (non-GAAP) increased by 114.2% Y-o-Y to RMB331.8 million (US$48.3 million) in the fourth quarter of 2018 (4Q2017: RMB154.9 million). See “Non-GAAP Disclosure” and “Reconciliations of GAAP and non-GAAP results” elsewhere in this earnings release.
• Adjusted EBITDA margin (non-GAAP) increased to 40.0% in the fourth quarter of 2018 (4Q2017: 30.6%).

Operating Highlights

• Total area committed increased by 79.2% Y-o-Y to 183,743 square meters (“sqm”) as of December 31, 2018 (December 31, 2017: 102,528 sqm).
• Area utilized (or revenue generating space) increased by 75.5% Y-o-Y to 108,326 sqm as of December 31, 2018 (December 31, 2017: 61,713 sqm).
• Area in service increased by 58.4% Y-o-Y to 160,356 sqm as of December 31, 2018 (December 31, 2017: 101,258 sqm).
• Commitment rate for area in service was 94.9% as of December 31, 2018 (December 31, 2017: 91.8%), and utilization rate was 67.6% as of December 31, 2018 (December 31, 2017: 60.9%).
• Area under construction was 65,201 sqm as of December 31, 2018 (December 31, 2017: 24,505 sqm).
• Pre-commitment rate for area under construction was 48.4% as of December 31, 2018 (December 31, 2017: 39.0%).

“2018 was an outstanding year for GDS marked by accelerated growth and robust results across our organization,” said Mr. William Huang, Chairman and Chief Executive Officer. “Notably, we added over 80,000 sqm of net additional area committed, or over 180 MW of IT power capacity, for the year of 2018, double last year’s achievements. We have further diversified our customer base, with new strategic names contributing over 30% to our new bookings in 2018. A key to our success in 2018 was our proven ability to expand capacity in key markets. We added 15 new data centers with a total capacity of around 100,000 sqm and ended the year with 35 data centers in our portfolio. With multi-year growth from cloud and other technologies fueling demand, we see a compelling opportunity before us. Looking forward, we are well-positioned and confident in our ability to continue to deliver strong results and shareholder value.”

“We are pleased to report over 70% revenue and over 100% adjusted EBITDA growth for 2018, beating our revised guidance,” commented Mr. Dan Newman, Chief Financial Officer. “Our adjusted EBITDA margin hit a milestone of 40% in 4Q18. Our FY18 adjusted EBITDA margin reached 37.5%, around 6 percentage points increase from FY17, as a result of our operating leverage. During 2018, we successfully raised US$500 million through a follow-on offering and a convertible bond offering, and obtained debt financing and refinancing facilities of around RMB3.8 billion, evidencing our strong ability to secure the financial resources required to grow our business.”

For earnings history and earnings-related data on GDS Holdings Limited (GDS) click here.