GDS Holdings Limited

Hello, ladies and gentlemen. Thank you for standing by for GTS Holdings Limited's first quarter 2025 earnings conference call. At this time, all participants are in a listen-only mode. After management prepared remarks, there will be a question and answer session. Today's conference call is being recorded. I will now turn the call over to your host, Ms. Laura Chen, Head of Investor Relations for the company. Please go ahead, Laura.

Thank you. Hello, everyone. Welcome to the first quarter 2025 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 AI website at investorsgdsservices.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 US Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and certainties As such, the company's results may be maturely different from the views expressed today. Further information regarding these and other risks and services is included in the company's prospectus as filed with the US SEC. The company does not assume any obligation to update any forward-looking statements except as required under applicable laws. Please also note that GDS earnings press release and its conference call includes discussions of unaudited debt financial information as well as unaudited non-debt financial measures. GDS press release contains a reconciliation of the unaudited non-debt measures to the unaudited most directly comparable debt measures. I'll now turn the call over to GDS founder, chairman, and the CEO, William Huang. Please go ahead, William.

Thank you, Laura. Hello everyone, this is William. Thank you for joining us on today's call. We started 2025 with very solid results. In the first quarter, we achieved revenue growth of 12% and adjusted EBITDA growth of 16% year-on-year. It is the highest growth rate for the past two years. This is the result of our continued focus on backlog delivery and the new orders with faster moving schedule. Our growth moving during 1Q25 was around 20,000 square meters, all in travel markets. Our utilization rate reached 75.7%. Quarterly moving has stayed at a consistent level since the beginning of last year. We expect the pace of moving to continue through this year, with around 40% of the current backlog to be delivered by year end. The demand environment has turned the corner with AI developments. This led to an initial wave of demand for AI training in remote locations. Now the demand is coming to Tier 1 markets with AI inferencing. We believe inferencing could be a much bigger and more sustainable opportunity across multiple years. The mega deal of 152 megawatts that was signed during 1Q25 is a perfect example and evidence of strong demand during this AI era. This new order requires us to deliver data centers within six months. The customer committed to moving fully within the following six months. The whole cycle for obtaining the new order to full utilization is about one year. This is a high quality AI driven new business with no moving risk, as we confirmed with the customer. Looking forward, there are still uncertainties around AI chip supply in China in the short term. Our customers are working out their deployment plans. As chip supply becomes more clear, we expect demand to take off. In terms of capacity supply, we are well positioned to capture these opportunities. We already have around 900 megawatts of capacity held for future developments in and around tier 1 markets. As I mentioned, we believe the coming wave for AI demand is going to be largely from inferencing, which requires large sites in tier 1 markets. We have multiple sites sustainable for AI inferencing around Beijing, Shanghai, and Shenzhen. As demand continues to grow and the time to deliver becomes a key fact, our healthful development capacity will become more valuable. We believe there is a good chance that we will develop all of these 900 megawatts and more within the next four years. On the financing side, We made significant progress with our asset monetization program. We completed the first ABS transaction in 1Q25. And we are making good progress on the CREIT transaction. Our asset monetization strategy gave us financing flexibility in terms of being able to recycle cash in China. when we need to. It gives us an option to catalyze new projects. Lastly, I would like to share some operation updates for Day 1. In 1Q25, Day 1 added 70 megawatts of new commitments, which brings its total power commitment committed to over 530 megawatts. In the current quarter, they also made substantial progress in expanding its footprint. It obtained customer commitments for its Thailand project. In addition, it made a breakthrough into a completely new market, Europe, and landed its first project in Finland, together with secured customer commitments. The order for Thailand and Finland are expected to total over 220 megawatts, which will be added to power committed in the next few months. This will bring total power committed to the over 750 megawatts. Taiwan is ahead of schedule to meet the target of one gigawatt of total power committed within three years. The new market expansion demonstrated Daewon's capability of working with world-leading tech companies to provide total data center solutions. Daewon creates new markets where customers can scale up efficiently and within a short lead time. It has done it successfully in Malaysia and Indonesia. and will do so again in Thailand and Finland. This capability is truly what sets Day One apart. I will now pass on to Dan for the financing and operating review.