GDS Holdings Ltd – ADR (NASDAQ:GDS) stock rose 1.28% (As on November 22, 11:29:56 AM UTC-4, Source: Google Finance) after the company posted lower than expected results for the third quarter of FY 23. Service revenue increased by 6.4% Y-o-Y to RMB2,519.0 million (US$345.3 million) in the third quarter of 2023 (3Q2022: RMB2,367.6 million). Net loss was RMB420.8 million (US$57.7 million) in the third quarter of 2023 (3Q2022: net loss of RMB339.7 million). Adjusted EBITDA (non-GAAP) increased by 5.6% Y-o-Y to RMB1,126.3 million (US$154.4 million) in the third quarter of 2023 (3Q2022: RMB1,066.6 million). Adjusted EBITDA margin (non-GAAP) was 44.7% in the third quarter of 2023 (3Q2022: 45.0%). In China, the company won new business based on firm move-in schedules and the company continued to accelerate backlog delivery. In South East Asia, the first data center came into service and the anchor customer started to move in.

GDS in the third quarter of FY 23 has reported the adjusted Loss per ADS of $(0.32), missing the analysts’ estimates for the adjusted Loss per ADS of $(0.28). The company had reported the adjusted revenue growth of 6.4 percent to $345.26 million in the third quarter of FY 23, missing the analysts’ estimates for revenue of $351.73 million. Adjusted GP was RMB1,247.3 million (US$171.0 million) in the third quarter of 2023, a 3.8% increase over the third quarter of 2022 of RMB1,201.3 million and a 5.5% decrease over the second quarter of 2023 of RMB1,319.8 million or a 0.1% decrease after excluding the abovementioned one-time service revenue in the second quarter. As of September 30, 2023, cash was RMB7,524.9 million (US$1,031.4 million). Total short-term debt was RMB3,024.4 million (US$414.5 million), comprised of short-term borrowings and the current portion of long-term borrowings of RMB2,527.3 million (US$346.4 million) and the current portion of finance lease and other financing obligations of RMB497.1 million (US$68.1 million).

Moreover, total area committed and pre-committed by customers increased by 16,072 square meters (“sqm”) (net) in the third quarter of 2023, to reach 653,732 sqm as of September 30, 2023, an increase of 5.7% Y-o-Y (September 30, 2022: 618,369 sqm). Area in service increased by 22,994 sqm in the third quarter of 2023, to reach 554,210 sqm as of September 30, 2023, an increase of 8.6% Y-o-Y (September 30, 2022: 510,511 sqm). Commitment rate for area in service was 91.9% as of September 30, 2023 (September 30, 2022: 95.6%). Pre-commitment rate for area under construction was 76.1% as of September 30, 2023 (September 30, 2022: 71.5%). Area utilized by customers increased by 15,878 sqm (net) in the third quarter of 2023, to reach 398,674 sqm as of September 30, 2023, an increase of 10.8% Y-o-Y (September 30, 2022: 359,862 sqm). Utilization rate for area in service was 71.9% as of September 30, 2023 (September 30, 2022: 70.5%).