GDS Holdings Limited (NASDAQ: GDS) reported Q4 EPS of ($0.10). Revenue for the quarter came in at $169.4 million.

Fourth Quarter 2019 Financial Highlights

• Net revenue increased by 42.2% year-over-year (“Y-o-Y”) to RMB1,179.2 million (US$169.4 million) in the fourth quarter of 2019 (4Q2018: RMB829.5 million).
• Service revenue increased by 39.9% Y-o-Y to RMB1,159.6 million (US$166.6 million) in the fourth quarter of 2019 (4Q2018: RMB829.1 million).
• Net loss was RMB103.7 million (US$14.9 million) in the fourth quarter of 2019, compared with a net loss of RMB122.9 million in the fourth quarter of 2018.
• Adjusted EBITDA (non-GAAP) increased by 59.3% Y-o-Y to RMB528.7 million (US$75.9 million) in the fourth quarter of 2019 (4Q2018: RMB331.8 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 44.8% in the fourth quarter of 2019 (4Q2018: 40.0%).

“2019 was another year of great progress across all aspects of our business," said Mr. William Huang, Chairman and Chief Executive Officer. "We achieved more than 81,000 sqm of net additional area committed, exceeding our sales target, and carried over strong sales momentum into 2020. We further expanded our data center capacity by adding 90,000 sqm of area in service and under construction. We currently have another 320,000 sqm secured for future development, which will be key to our continuing success. Due to the challenges presented by the COVID-19 epidemic, adoption of digital services is increasing, which will drive more demand for data centers in the medium and long term.”

“We delivered strong financial results in 2019 with 47.6% revenue and 74.3% adjusted EBITDA growth, both beating our guidance,” commented Mr. Dan Newman, Chief Financial Officer. “Our adjusted EBITDA margin increased by an impressive 6.7 percentage points to 44.2% in 2019 as a result of greater operating leverage. During the year, we raised nearly US$900 million of equity and established our strategic partnership with GIC to support our growth with diverse and cost-effective funding solutions. Despite the tough conditions, we expect our business performance to be highly resilient during the current year.”

Business Outlook

For the full year of 2020, the Company expects its total revenues to be between RMB5,510 million and RMB5,750 million, implying a year-on-year increase of between approximately 33.7% to 39.5%; and adjusted EBITDA to be between RMB2,550 million to RMB2,670 million, implying a year-on-year increase of between approximately 39.8% to 46.4%. In addition, the Company expects capex to be around RMB7,500 million for the full year of 2020, including around Rmb2,500 million related to previously announced property and data center acquisitions.

This forecast reflects the Company’s preliminary view based on the current business situation and market conditions. Due to the impact of the COVID-19 epidemic and the resulting business disruption in many aspects of the Chinese and global economy, this forecast remains uncertain and subject to change. While China appears to be on a path to recovery, the situation is evolving, and we are closely monitoring developments. Looking beyond the current period, we are confident that GDS will emerge stronger, with even greater opportunity to drive long-term sustainable growth.

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