On November 19, GDS Holdings Ltd (GDS.US), a leading high-performance data center operator and service provider in China, released its Q3 2025 financial results. Driven by rapid growth in AI infrastructure demand and policy tailwinds from China's 15th Five-Year Plan, the company demonstrated solid operational fundamentals and strong strategic execution, further solidifying its leadership in digital economy infrastructure.

**Revenue Growth and Strong Cash Flow Support Future Development** The report showed that GDS achieved net revenue of RMB 2.8871 billion in Q3, up 10.2% YoY. Net profit reached RMB 728.6 million, with a profit margin of 25.2%, while adjusted EBITDA grew 11.4% YoY to RMB 1.3422 billion, with the margin improving to 46.5%. The company also showcased robust financial resilience, raising approximately RMB 2.248 billion in net proceeds from China’s first batch of data center REITs, providing ample liquidity for business expansion, R&D, and AI infrastructure development. GDS maintained its 2025 revenue guidance of RMB 11.29–11.59 billion and adjusted EBITDA of RMB 5.19–5.39 billion.

**AI Demand Emerges as Core Growth Driver with High Order Visibility** The AI wave is reshaping data center demand dynamics. With China’s 15th Five-Year Plan emphasizing semiconductor self-sufficiency and breakthroughs in chip performance and capacity, AI infrastructure presents a clear growth opportunity. Chairman and CEO William Huang highlighted that domestic tech giants are aggressively investing in AI infrastructure, signaling a strong industry recovery. Clients are discussing gigawatt-scale demand, with capital expenditure plans reaching hundreds of billions of dollars.

In the first three quarters of 2025, GDS secured 240MW in new data center orders, with full-year bookings expected near 300MW—a significant increase from prior years. Huang noted that most 2025 orders are AI-related, focusing on inference or hybrid inference-training solutions. The company has strategically secured ~900MW of power-ready land in Tier 1 cities and surrounding areas to meet AI inference needs, with further expansions underway.

**REITs and ESG Breakthroughs Strengthen Sustainable Competitive Edge** As competition shifts toward financial strength and capital market access, GDS is leveraging asset securitization and ESG leadership to build long-term moats. In August 2025, its Southern China Data Center REIT listed on the Shanghai Stock Exchange, marking a milestone in industry securitization. The CFO outlined plans to inject additional assets worth RMB 4–6 billion into the REITs platform by Q2 2026, enhancing capital recycling for AI infrastructure investments.

ESG achievements also support AI business needs: 40% renewable energy usage, 42 green-certified data centers, and an industry-leading PUE of 1.24—critical for high-power-density AI operations. ESG ratings climbed (MSCI: A; CDP: B), and GDS became the first data center firm to receive Moody’s NZA "Net Zero Assessment" NZ-2 rating. These efforts mitigate policy risks, hedge against energy price volatility, and align with REITs requirements.

**Outlook: AI Cycle Unlocks Growth via Resources and Capital** Q3 results and management commentary confirm GDS has entered an AI-driven growth phase. With gigawatt-scale AI demand unfolding, its 900MW land reserve and Tier 1 city presence will drive value. REITs expansions will optimize capital structure for scalable AI data center deployments, repositioning GDS as an "AI computing infrastructure provider." As digital transformation accelerates, GDS is poised to integrate technology, capital, and strategic assets to lead the next growth cycle and bolster China’s digital economy.