GDS Q1 2025 Earnings Report

GDS EPS Results

• Actual EPS: $0.48
• Consensus EPS: -$0.22
• Beat/Miss: Beat by +$0.70
• One Year Ago EPS: -$1.96

GDS Revenue Results

• Actual Revenue: $375.14 million
• Expected Revenue: $2.72 billion
• Beat/Miss: Missed by -$2.34 billion
• YoY Revenue Growth: +3.60%

GDS Announcement Details

• Quarter: Q1 2025
• Date: 5/20/2025
• Time: Before Market Opens
• Conference Call Date: Tuesday, May 20, 2025
• Conference Call Time: 8:00AM ET

GDS (NASDAQ:GDS) Limited, together with its subsidiaries, develops and operates data centers in the People's Republic of China. The company provides colocation services comprising critical facilities space, customer-available power, racks, and cooling; managed hosting services, including business continuity and disaster recovery, network management, data storage, system security, operating system, database, and server middleware services; managed cloud services; and consulting services. It serves cloud service providers, large Internet companies, financial institutions, telecommunications and IT service providers, and large domestic private sector and multinational corporations. GDS Holdings Limited was founded in 2001 and is headquartered in Shanghai, the People's Republic of China.

GDS Q1 2025 Earnings Call Transcript

Key Takeaways

• Q1 financial results: Revenue grew 12% year-on-year and adjusted EBITDA rose 16%, driven by backlog delivery and ~20,000 sqm of gross move-ins in Tier 1 markets with a 75.7% utilization rate.
• AI inference demand surges: A 152 MW “mega deal” signed in Q1 illustrates growing AI inferencing needs in Tier 1 markets, and GDS holds ~900 MW of future development capacity to capture this multi-year opportunity.
• Asset monetization progress: GDS completed its first ADS transaction in Q1, deconsolidating ~RMB 1.1 billion of debt, and expects to launch a China-listed “Sea REIT” later this year, setting a ~13× EV/EBITDA benchmark.
• Day One expansion: The data center subsidiary added 70 MW in Q1 and secured >220 MW in Thailand and Finland projects, taking total power commitments past 750 MW toward a 1 GW three-year target.
• Chip supply uncertainty: Short-term AI chip constraints in China may delay some training-focused deployments, though inferencing workloads are less affected.

Presentation

[Operator]

Hello, ladies and gentlemen. Thank you for standing by for GTS Holdings Limited First Quarter twenty twenty five 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.

[Operator]

I will now turn the call over to your host, Ms. Laura Chen, Head of Investor Relations for the company. Please go ahead, Laura.

[Laura Chen, Head-Investor Relations at GDS]

Thank you. Hello, everyone, and welcome to the first quarter twenty twenty five 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 IR website at investorsgdsservices.com. Leading today's call is Mr. William Huang, GDS's Founder, Chairman and CEO, who will provide an overview of our business strategy and performance. Mr. Dan Newman, GDS's 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 U. S.

[Laura Chen, Head-Investor Relations at GDS]

Private Securities Litigation Reform Act of 1995. Forward looking statements involve inherent risks and uncertainties. As such, the company's results may be materially different from the views expressed today. Further information regarding these and other risks and uncertainties is included in the company's prospectus as filed with the U. S.

[Laura Chen, Head-Investor Relations at GDS]

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 this conference call include discussions of unaudited GAAP financial information as well as unaudited non GAAP financial measures. GDS's press release contains a reconciliation of the unaudited non GAAP measures to the unaudited most directly comparable GAAP measures. I'll now turn the call over to GDS's Founder, Chairman and CEO, William Huang. Please go ahead, William.

[William Huang, Founder, Chairman of the Board & CEO at GDS]

Thank you, Laura. Hello, everyone. This is William. Thank you for joining us on today's call. We started 2025 with very solid results.

[William Huang, Founder, Chairman of the Board & CEO at GDS]

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 new orders with faster moving schedule. Our gross move in during 1Q twenty twenty five was around 20,000 square meters, all in Tier one markets. Our utilization rate reached 75.7%.

[William Huang, Founder, Chairman of the Board & CEO at GDS]

Quarterly move in has stayed at a consistent level since the beginning of last year. We expect the pace of move in 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 one markets with AI Inferencing.

[William Huang, Founder, Chairman of the Board & CEO at GDS]

We believe Inferencing could be a much bigger and more sustainable opportunity across multiple years. The mega deal of 152 that was signed during 1Q twenty twenty five is a perfect example and evidence of stronger 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.

[William Huang, Founder, Chairman of the Board & CEO at GDS]

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.

[William Huang, Founder, Chairman of the Board & CEO at GDS]

We already have around 900 MW of capacity held for future developments in and around Tier one 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 one markets. We have multiple sites sustainable for AI inferencing around Beijing, Shanghai and the center. As demand continues to grow and the time to deliver becomes the key fact, our health force development capacity will become more valuable. We believe there is a good chance that we will develop all of these 900 MW and more within the next four years.

[William Huang, Founder, Chairman of the Board & CEO at GDS]

On the financing side, we made significant progress with our asset monetization program. We completed the first ADS transaction in 1Q twenty twenty five, and we are making good progress on the Sea REIT transaction. Our asset monetization strategy gives us financing flexibility in terms of being able to recycle cash in China when we need to. It gives us an option to capitalize new projects. Lastly, I would like to share some key operational updates for Day one.

[William Huang, Founder, Chairman of the Board & CEO at GDS]

In 1Q twenty twenty five, added 70 MW of new commitments, which bring its total power commitment committed to over five thirty MW. In the current quarter, they have also made substantial progress in expanding its footprint. It obtained customer commitments for its Thailand project. In addition, it made a breakthrough into 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 two twenty MW, which will be added to power committed in the next few months.

[William Huang, Founder, Chairman of the Board & CEO at GDS]

This will bring total power committed to over seven fifty MW. Day one is ahead of schedule to meet the target of one GW of total power committed within three years. The new market expansion demonstrates DAYWOR's capability of working with world leading tech companies to provide total data center solutions. They will create new markets where customers can scale up efficiently and within a short lead time. It has done successfully in Malaysia and Indonesia, and it will do so again in Thailand and Finland.

[William Huang, Founder, Chairman of the Board & CEO at GDS]

This capability is truly what sets Day One apart. Now I will now pass on to Dan for the financing and operating review.

[Daniel Newman, Chief Financial Officer at GDS]

Thank you, William. Over the past few years, our financial objectives were to get back onto a higher growth track in terms of EBITDA, while at the same time strengthening our financial position and deleveraging. With the advent of AI demand in China, we can look forward over the next few years to more and better growth opportunities. However, as we capture these opportunities, we will maintain strict financial discipline. We believe that this is the right approach which has potential to create significant equity value with low investment and financing risk.

[Daniel Newman, Chief Financial Officer at GDS]

Starting on slide 13 in 1Q twenty five revenue increased by 12% year on year. This was a result of an increase in total area utilized of 14.6% and a decrease in MSR per square meter of 2.6% as compared with 1Q twenty four. In 1Q twenty five, adjusted EBITDA increased by 16.1% year on year. In addition, we realized a gain on deconsolidation of subsidiaries sold to the ABS of over RMB1 billion, which we have not included in adjusted EBITDA. Adjusted EBITDA margin for 1Q twenty twenty five was 48.6% compared with 46.9% in 1Q twenty twenty four.

[Daniel Newman, Chief Financial Officer at GDS]

The higher margin was mainly due to lower operating costs. Over the next three quarters, we expect quarterly adjusted EBITDA to increase on average by high single digits percentage year on year. This takes account of deconsolidation EBITDA with completion of the ABS transaction on thirty first March twenty twenty five. As shown on slide 16, subject to achieving performance conditions, we will receive total cash consideration of up to RMB1.8 billion for the sale of the ABS, out of which we will reinvest up to RMB500 million for our 30% share of the ABS issue. The first installment of cash proceeds has been received and booked in 2Q twenty five.

[Daniel Newman, Chief Financial Officer at GDS]

In addition, we have deconsolidated debt and other liabilities of approximately RMB1.1 billion. The implied EV to EBITDA for the sale to ABS is around 13 times, which we believe sets an important benchmark for our forthcoming CV offering and for the valuation of our stabilized China assets as a whole. We are making good progress with the establishment of an onshore listed Sea REIT. It is moving forward faster than expected. We've received approval from NDRC, and it is now being reviewed by CSRC and the Shanghai Stock Exchange.

[Daniel Newman, Chief Financial Officer at GDS]

The application documents are filed publicly. Subject to obtaining all necessary approvals, we hope to launch and complete the offering later this year. The CRE transaction is going to be very strategic. It will establish a further valuation benchmark for our stabilized data centers in China and it will create a vehicle into which we can potentially drop down further assets in future if we choose to do so. On slide 22, we show the pro form a deleveraging effect of the ABS and CRE.

[Daniel Newman, Chief Financial Officer at GDS]

The ABS is a done deal, while for the CRE we made working assumptions for illustrative purposes. As you can see we are able to support total CapEx in the current year of RMB4.8 billion before taking account of the proceeds of asset monetization while lowering our net debt and leverage ratios. Turning to slide 23 on business outlook. When we gave guidance at the last quarter end we already assumed that the ABS will be deconsolidated from the beginning of 2Q twenty five. If we complete the CRE this year, it will have some impact on our financials, but we still think that we can meet our original revenue and adjusted EBITDA guidance.

[Daniel Newman, Chief Financial Officer at GDS]

Thus we're keeping the previously provided guidance of total revenue and adjusted EBITDA unchanged. The CB transaction if completed will also impact our investment cash flow. As of now we keep our CapEx guidance unchanged which just includes gross CapEx less the initial proceeds from the ABS transaction. Finishing on slide 24. Now that we have deconsolidated day one, it is important to look at the equity value of GDS on its sum of the past basis.

[Daniel Newman, Chief Financial Officer at GDS]

In addition to our equity value creation in China, we expect the value of our equity interest in day one to appreciate significantly. Based on the series b benchmark from last year, our equity interest in day one was worth around 1,300,000,000.0 US dollars or 7 US dollars per GDS ADR. William mentioned that day one is already on track to achieve total power commitments of over seven fifty megawatts in the next few months. As day one achieves optimal operating leverage, its EBITDA per megawatt should trend upwards towards industry benchmark levels. This gives an indication of the current level of contracted EBITDA which can be converted to actual EBITDA as backlog contracts are delivered over the next few years.

[Daniel Newman, Chief Financial Officer at GDS]

I'd now like to open the floor to questions. Operator?

[Operator]

Thank you, sir.

[Operator]

Thank you. We are now going to proceed with our first question. So the questions come from the line of Yang Liu from Morgan Stanley. Please ask your question.

[Yang Liu, Executive Director at Morgan Stanley]

Thanks for the opportunity. Two questions from my side. First, congratulations on the solid result. My first question is regarding the China demand, especially from the hyperscaler side. We start to hear a lot of noise on the chipset supply since March.

[Yang Liu, Executive Director at Morgan Stanley]

Could management update us in terms of their demand quarter to date, given a lot of things happened in the past two months? Is there still any order coming in, in certain quarter, Q to date? Yes, that's my first question. My second question is regarding the financial guidance because Dan just mentioned that previous guidance does not factor in the ABS deconsolidation. And now the deal got closed, and actually, you don't need to change the guidance.

[Yang Liu, Executive Director at Morgan Stanley]

So what should be the expectation on the three quarters of the contribution from that project to full year number. Yes. Thank you.

[William Huang, Founder, Chairman of the Board & CEO at GDS]

Okay. This is Wenem. Let me ask you answer the first question. I think the demand obvious is very strong in general. And we see that AI demand AI related demand will continue maintain a strong position.

[William Huang, Founder, Chairman of the Board & CEO at GDS]

But we have to say, we are lucky, we are sitting in there all our assets sitting in the Tier one market, which is this demand mainly driven by the inference. So inference that means the customer less rely on the GPU. They will use more hybrid and traditional. So I think for us, we will see our demand will continue. It's it's too early to say what what's our target.

[William Huang, Founder, Chairman of the Board & CEO at GDS]

But in general, I I have to say, we are we have 900 megawatts held for future development capacity, well positioned. And as I said, in the general midterm, long term, we can we can buy just we can sell this 900 megawatts within four years. We are very confident on that. But I think maybe in short term, I think a lot of training demand will be impact, but it's not our target net net net in in in past couple of years, for training demand is not our target.

[Daniel Newman, Chief Financial Officer at GDS]

So when we gave EBITDA guidance, I think at the midpoint it implied year on year growth full year '25 versus 24 of 8.5% and we had assumed that the ABS transaction would close at the end of 1Q which indeed it did. If we had not done that ABS transaction we would have continued to consolidate the underlying assets for the second third and fourth quarter of this year. And on that basis we actually the last cycle that our annual growth rate in terms of EBITDA would have been around 11%. So the impact of the ABS transaction closing at the end of 1Q is to reduce full year EBITDA by around RMB130 million. That's what we would have consolidated over the next three quarters and to reduce the annual growth rate from 11% down to the guided 8.5%.

[Daniel Newman, Chief Financial Officer at GDS]

Now of course we completed the first quarter. Announced in the first quarter our year on year growth rate was 16% which is clearly well above that level of growth. That's why I try to give some indication of the expected growth rate year on year in the second third and fourth quarter. I said it won't be as high as the first quarter but it should be high single digits in percentage terms on average each quarter 2Q versus 2Q 3Q versus 4Q versus 4Q.

[William Huang, Founder, Chairman of the Board & CEO at GDS]

Yeah, I want to add one point. I think, based on what we know understanding, our customer already tested domestic GPU for a while. So I think the if the chips in get some issue, I think the in the next twelve months to domestic GPU will catch up. Just how are you? Yeah.

[Yang Liu, Executive Director at Morgan Stanley]

Thank you.

[Operator]

We are now going to proceed with our next question. The questions come from the line of Sarah Wong from UBS. Please ask your question.

[Xinyi Wang, Equity Research Analyst - Greater China Telecom & Data Center at UBS Group]

Okay. Thank you for the opportunity to ask questions. I just have one question. Given GDS is actually expanding beyond Southeast Asia and even into Europe, can we compare the IRR profile or EBITDA yield across different markets, for example, Draw Hore Thailand or Finland, and also compare that to China? Thank you.

[Daniel Newman, Chief Financial Officer at GDS]

Sarah, I have to correct you. It's not GDS. It's Shaiyuan.

[Xinyi Wang, Equity Research Analyst - Greater China Telecom & Data Center at UBS Group]

Yeah, I'm sorry. Shaiyuan. Yeah, I'm sorry.

[Daniel Newman, Chief Financial Officer at GDS]

Okay.

[Xinyi Wang, Equity Research Analyst - Greater China Telecom & Data Center at UBS Group]

Yeah, just on single further level. Thank you.

[Daniel Newman, Chief Financial Officer at GDS]

Yeah. What seen so far, and it's across several different markets, we simply take say the development yield it's in the low teens which is I think quite healthy and higher than what we currently achieve in China on a total investment cost basis.

[Daniel Newman, Chief Financial Officer at GDS]

That probably reflects that in the markets in which day one is operating there's a slightly different supply demand balance from China. But it's a good I'd say leading indicator because AI demand really takes off in China in tier one markets We can see that demand supply balance shifting in China and hopefully that will lead to better yields in China as well.

[Operator]

We are now going to proceed with our next question. The questions come from the line of Frank Louthan from Raymond James and Associates. Please ask your question.

[Frank Louthan, Managing Director at Raymond James Financial]

Great. Thank you. Can you give us an idea of when you expect the China business to be self funding? And does this new wave of AI demand push that out a little bit? And then if you can comment on whether you have the full amount of funding for the seven fifty megawatts of commitments at day one, that'd be great.

[Daniel Newman, Chief Financial Officer at GDS]

First part of Frank's question is about so in in in China we are roughly break even in terms of free cash flow before financing we were actually positive free cash flow before financing last year and in the current year maybe we should instead of looking at free cash flow before financing we look at net debt and with the contribution from two asset monetization transactions we should be able to bring down net debt over the course of the year so that means that we are already through operating cash flow and asset monetization able to generate sufficient cash flow and to deconsolidate debt on sale of assets so that is at least equal to the amount of annual CapEx. William mentioned that we're quite confident that over the next four years we could potentially develop our entire land and power bank in tier one markets which is around 900 megawatts and maybe more. If we did that evenly over four years it would equate to around 5,000,000,000 RMB of annual capex which is similar to this year's level and with the operating cash flow which we expect to grow over that time period and the ability to monetize assets through a listed CRE vehicle I believe we'll be able to repeat the pattern of this year's financing in terms of investment cash flow being offset by operating cash flow and asset monetization proceeds.

[Daniel Newman, Chief Financial Officer at GDS]

On the day one we take $7.50 megawatts William mentioned and Day one to date has raised nearly $2,500,000,000 of equity. So Day one is fully capitalized to be able to develop and deliver that portfolio, that level of commitments.

[William Huang, Founder, Chairman of the Board & CEO at GDS]

Yeah. I believe if they want me raise money, it's not an issue and can well access all international capital market.

[Frank Louthan, Managing Director at Raymond James Financial]

Okay. Great. Thank you very much.

[Operator]

For the benefit of all the participants on today's call, please limit yourself to one question. If you have more questions, please reenter the queue. Thank you. We are now going to proceed with our next question. The questions come from the line of Edison Lee from Jefferies Hong Kong. Please ask your question.

[Edison Lee, Head - HK/China Tech, Telecom & Software Research at Jefferies]

Hi, William and Dan. Congratulations on another great quarter. I have, in fact, two pretty quick questions. Number one question is about your gross new area committed in the first quarter at 46,000 square meter. I think that's a new high in many quarters.

[Edison Lee, Head - HK/China Tech, Telecom & Software Research at Jefferies]

So can you share some color as to how many customers this new number is coming from and where the locations are for this 46,000 square meter. And then number two is there has been some talk in the industry in China about new government regulations controlling the expansion of AI data center, and right now they need to approve any project seven megawatt or above. And also there is some talk in the industry that China in fact does not want or does not prefer private companies to be building AI data centers, they prefer SOEs to be building AI data centers. And I understand a lot of your power reserve actually has been obtained some years ago already. So I just want to know whether there's any risk that the government actually needs to reopen the book and we approve some of your power?

[Edison Lee, Head - HK/China Tech, Telecom & Software Research at Jefferies]

And what is your thought on these market talks right now? Thank you.

[William Huang, Founder, Chairman of the Board & CEO at GDS]

Okay. I think the first question is, I think the Q1 mainly driven by the one of our traditional hyperscale customers. I think it is located in which is this at a town school, which very close to Shanghai and Beijing. So this is exactly if if if everybody remember in a during the cloud era, we used to represent 50% of the cloud pops in this major city or around this major city. So we are are very, very lucky at that era.

[William Huang, Founder, Chairman of the Board & CEO at GDS]

So now inference, I think it's we have benefit for that inference demand because I just mentioned. Right? So the increase model is more like a hybrid. Use the GPU plus CPU card. So they will call cooperate together.

[William Huang, Founder, Chairman of the Board & CEO at GDS]

So I think this is one thing, the first question. The other is about the control AI data center. Based on my understanding, mainly I think, you mainly mainly for the SOE investment. So I think the I I should point out our 900 megawatts capacity, already most of them, we already obtained the power energy quota. So this is the world.

[William Huang, Founder, Chairman of the Board & CEO at GDS]

New new guidance, new policy will not impact impact us.

[Edison Lee, Head - HK/China Tech, Telecom & Software Research at Jefferies]

Okay. Thank you.

[Operator]

We are now going to proceed with our next question. Questions come from the line of Dailey Le from Bank of America. Please ask your question.

[Daley Li, Vice President, Equity Research Analyst - China Software & Semis Sector at Bank of America Merrill Lynch]

Hi, management. Thanks for taking my question. Congrats on the solid demand trend. I have two questions. Number one is about the overseas business.

[Daley Li, Vice President, Equity Research Analyst - China Software & Semis Sector at Bank of America Merrill Lynch]

Recent, we received like 70 megawatts new orders. And could management give some color about the mix of the clients for China and overseas and or the mix of AI and non AI? And given the AI diffusion policy has been withdrawn by The US, how could you share some color about the client feedback about the future, you know, new orders or the moving progress for the international business? My second question is about the our series insurance in China market. I saw the news we received the first round of feedback from the CSRC and how do we see the progress?

[Daley Li, Vice President, Equity Research Analyst - China Software & Semis Sector at Bank of America Merrill Lynch]

Can we expect to update in the second half this year or how is the timeline, please? Thank you.

[William Huang, Founder, Chairman of the Board & CEO at GDS]

Yeah. The first question, I think if everybody remember, we used to talk about our client in the for day one. It's in general is mixed. We got we successfully took out the order from international customer and also Chinese customer as well. I think I think we used to talk about our client, our major client from China.

[William Huang, Founder, Chairman of the Board & CEO at GDS]

They are major use the purpose for their deployment is to support their ecommerce and the video business and the social medium business. It's just to use it. It's used it a high performance CPU. So in general, in the last three years, based on our understanding, our total capacity is served 90% for GPU CPU, sorry, CPU, only maybe around 10% used to the purpose for GPU. So this is I think everybody remember the last couple of quarters when we talk about the international market, that's nothing changed.

[Daniel Newman, Chief Financial Officer at GDS]

For the seaweed offering, we've been through many rounds of review and approval. And the stage what we've now reached is that the listing application is being reviewed by the Chinese securities regulator CSRC and the Shanghai Stock Exchange and this is a public process so the prospectus and some other key documents have been filed and are available for the public to access and we've been asked questions just like US SEC process where applicants are asked to address a number of questions and our responses will also be filed publicly. But typically this this stage of the process takes a few months. We don't take anything for granted but if all goes well we would hope to receive the clearance to be able to proceed with an offering and a listing and then we would have one year in which to make a decision as to when to to launch that. And, you know, ideally, we would be able to do that later this year and complete the complete the process and and lift the CRE before the end of this before the end of this year.

[Daley Li, Vice President, Equity Research Analyst - China Software & Semis Sector at Bank of America Merrill Lynch]

Thank you.

[Operator]

We are now going to proceed with our next question. The next questions come from the line of Eunice Liu from Goldman Sachs. Please ask your question.

[Yucen (Eunice) Liu, Global Investment Research Analyst at Goldman Sachs]

Good evening, William, Dan and Laura. Thanks for taking my question. I'm asking question on behalf of our analyst, Timothy Zhao. So our question is, first, on GDS China. Could you elaborate more on the pricing outlook for the China business?

[Yucen (Eunice) Liu, Global Investment Research Analyst at Goldman Sachs]

And my second question is on day one. So we noticed your EBITDA margin improved through the latest quarter. Could you explain the drivers behind? Thank you.

[William Huang, Founder, Chairman of the Board & CEO at GDS]

Yeah. I think the the article for the China business, we maintain very confidence in. Oh, okay. The price of it. Right?

[William Huang, Founder, Chairman of the Board & CEO at GDS]

I think the the the current new business price is very stable. And I think the, you know, the in general, I think the the the new business is is, let's say, maintained at very, very stable level right now, whatever from the Beijing market or Shanghai market or central market. Right? So this is our outlook for the future.

[Daniel Newman, Chief Financial Officer at GDS]

You know, the one had had a EBITDA margin in 01/2025 of of 31%. So for a company that actually only started to generate revenue about five quarters ago, that's already quite remarkable. And my understanding is that day one ramp up over the next few years as it delivers its backlog is going be very rapid. As that happens, day one will be able to achieve higher operating leverage on its corporate costs and on its business development costs. And I think within within a few years, you'll see that, EBITDA margin hit hit sort of in industry benchmark levels.

[Operator]

Thank you. This concludes the question and answer session. I'd like now turn the call back over to the company for closing remarks. Thank you.

[Laura Chen, Head-Investor Relations at GDS]

Thank you all once again for joining us today, and we'll see you next time. Bye bye.

[Operator]

This concludes this conference call. Thank you all for participating. You may now disconnect your line. Thank you.

Participants

Executives

• Laura Chen, Head-Investor Relations
• William Huang, Founder, Chairman of the Board & CEO
• Daniel Newman, Chief Financial Officer

Analysts

• Yang Liu, Executive Director at Morgan Stanley
• Xinyi Wang, Equity Research Analyst - Greater China Telecom & Data Center at UBS Group
• Frank Louthan, Managing Director at Raymond James Financial
• Edison Lee, Head - HK/China Tech, Telecom & Software Research at Jefferies
• Daley Li, Vice President, Equity Research Analyst - China Software & Semis Sector at Bank of America Merrill Lynch
• Yucen (Eunice) Liu, Global Investment Research Analyst at Goldman Sachs