GDS Holdings Limited ( GDS ) shares are trading lower after its reported fourth-quarter results.

Net revenue increased 9.1% year over year to CNY2.69 billion. In USD terms, net revenues of $368.6 million missed the consensus of $430.70 million. The revenue increase was mainly due to the ongoing ramp-up of the data centers.

Adjusted gross profit was CNY1.40 billion ($191.3 million), an increase of 11.8% Y/Y, and the margin was 51.9%, compared with 50.7% a year ago.

As of December-end, the total area committed and pre-committed increased by 1.8% Y/Y to 629,997 sqm, while the area utilized grew by 11.8% Y/Y to 453,094 sqm.

The utilization rate for the area in service was 73.8%, slightly down from 73.9% in the previous year.

The area under construction stood at 102,691 sqm (vs. 151,602 sqm in prior year quarter), with pre-commitment rate declining to 64.1% as of fourth quarter-end from 73.8% at the end of the fourth quarter of 2023.

Adjusted EBITDA rose 13.9% Y/Y to CNY 1.30 billion, with margin expanding to 48.2% from 46.2% a year ago.

Loss per ADS of CNY22.51 ($3.08), compared with a loss of CNY17.30 in the fourth quarter of 2023.

As of December 31, the cash balance was CNY7.87 billion ($1.08 billion).

William Huang, Chairman and CEO, said, “We focused on backlog delivery while being selective on new commitments. At the same time, we made significant progress with our asset monetisation program with first ever data center ABS issue in China. Looking forward, we are well positioned strategically and financially to capture new business opportunities arising from AI.”

2025 Outlook: GDS expects FY25 total revenues of CNY11.29 billion – CNY11.59 billion and adjusted EBITDA of CNY5.19 billion – CNY5.39 billion.

The company expects a capital expenditure of CNY4.3 billion.

Investors can gain exposure to the stock via Pacer Data & Infrastructure Real Estate ETF and Global X Data Center & Digital Infrastructure ETF .

Price Action: GDS shares are down 13% at $30.94 at the last check Wednesday.

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