GDS : 1Q24 Earnings Presentation 0522

1Q24 Earnings Call

22 May 2024

NASDAQ: GDS

HKEX: 9698

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DISCLAIMER

This presentation contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "may," "will," "expect," "anticipate," "aim," "estimate," "intend," "plan," "believe," "potential," "continue," "is/are likely to" or other similar expressions. Such statements are based upon management's current assumptions, forecasts, expectations and current market and operating conditions, and relate to events that involve known or unknown risks, uncertainties, assumptions and other factors, all of which are difficult to predict and many of which are beyond the Company's control, which may cause the Company's actual results, performance or achievements to differ materially from those in the forward-looking statements. Further information regarding these and other risks, uncertainties or factors is included in the Company's filings with the U.S. Securities and Exchange Commission. The Company does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under law.

In addition to U.S. GAAP financials, this presentation includes certain non-GAAP financial measures. These non-GAAP financial measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. The non-GAAP measures have limitations as analytical tools and you should not consider them in isolation or as a substitute for an analysis of the Company's results under U.S. GAAP. There are a number of limitations related to the use of these non-GAAP financial measures versus their nearest GAAP equivalent. First, adjusted GP, adjusted GP margin, adjusted EBITDA and adjusted EBITDA margin are not substitutes for gross profit, net income (loss), cash flows provided by (used in) operating activities or other consolidated statements of operation and cash flow data prepared in accordance with U.S. GAAP. Second, other companies may calculate these non-GAAP financial measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of these non-GAAP financial measures as tools for comparison. Finally, these non-GAAP financial measures do not reflect the impact of net interest expenses, income tax expenses (benefits), depreciation and amortization, operating lease cost relating to

prepaid land use rights, accretion expenses for asset retirement costs, share-based compensation expenses, gain from purchase price adjustment and impairment losses of long-lived assets, each of which have been and may continue to be incurred in the Company's business.

See the Appendix for reconciliation between our adjusted GP and adjusted EBITDA to the most directly comparable financial measures calculated and presented in accordance with U.S. GAAP, which is gross profit and net income or net loss, respectively.

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Business Strategy & Performance Highlights

William Huang, Chairman & CEO

1Q24 HIGHLIGHTS (1)

Customer Commitments	• New customer commitments (gross) of +16,808 sqm
	• Total area committed increased by 5.4% y/y to 668,012 sqm
Customer Move-In	• Additional area utilized (net) of +18,127 sqm
	• Total area utilized of 436,875 sqm, +16.0% y/y, and utilization rate of 74.9%
Financial Results	• Total revenue grew by 9.1% y/y to Rmb 2,627.4 mn ($363.9 mn)
	• Adjusted EBITDA grew by 4.7% y/y to Rmb 1,183.4 mn ($163.9 mn)
Financing Transactions	• Obtained Rmb 4,294 mn ($595 mn) of new debt financing / refinancing facilities
	• Series A equity raise for GDS International in 1Q24 upsized to $672 mn

Notes:

1. Exchange rate of 7.2203:1 (RMB:USD) is used throughout this presentation, except where otherwise stated.

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Driving Share Price Recovery

SOTP Equity Value Per GDS ADS (1)

$9.30 closing price per GDS ADS on 21 May 2024

$3.86 / ADS

International: Based on pre-money equity value of $750 mn implied by Series A new issue price

$5.44 / ADS

GDS Group Excluding International: Implied EV / 1Q24 Annualized Adjusted EBITDA of 9.4 times (2)

Notes:
1	. Total shares outstanding of 1,555,180,903 ordinary shares or 194,397,612 ADS, as at March 31, 2024.
2	. Based on Rmb 34.95 bn of net debt for GDS Group at 31 March 2024, excluding net debt of International and pro forma for repayment of shareholder loans and other amounts due to GDS Group from International at
	the closing of the Series A new issue, and 1Q24 Adjusted EBITDA for GDSH segment (GDS Group excluding International) of Rmb 1,136.6 mn multiplied by 4.	4

Gross Additional Area Utilized (Organic Tier 1 Only) (1)

By Quarter (Sqm)

China International

19,819

17,032

By Year (Sqm)

China International

60,284

53,008

48,739

12,365

11,056

783

1Q23 2Q23

Notes:

1. Excludes B-O-T and acquisitions.

12,839 12,478

7,997

3,632

3Q23 4Q23 1Q24

33,860

19,819

17,032

12,412

923111

FY20

FY21

FY22

FY23

1Q24

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Net Additional Area Utilized

By Quarter (Sqm)

	1Q23	2Q23	3Q23	4Q23	1Q24
China
Organic Tier 1 (Gross)	11,056	12,365	12,839	12,478	17,032
Churn	(6,488)	(8,691)	(4,903)	(602)	(6,214)
B-O-T (Net)	1,517	1,706	4,310	201	(12,510)
Acquisition (1)	-	-	-	-	-
China (Net)	6,085	5,380	12,246	12,077	(1,692)
International (Net)	-	783	3,632	7,997	19,819
Total (Net)	6,085	6,163	15,878	20,074	18,127

Notes:

1. Refers to area utilized under customer agreements remaining in effect at the closing of the acquisition.

By Year (Sqm)

	FY20	FY21	FY22	FY23	1Q24
China
Organic Tier 1 (Gross)	53,008	60,284	33,860	48,739	17,032
Churn	(1,921)	(2,185)	(4,864)	(20,684)	(6,214)
B-O-T (Net)	12,386	8,867	21,966	7,733	(12,510)
Acquisition (1)	15,236	16,855	-	-	-
China (Net)	78,709	83,821	50,962	35,788	(1,692)
International (Net)	-	923	111	12,412	19,819
Total (Net)	78,709	84,744	51,073	48,200	18,127

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Capacity Expansion - China

Capacity In Service & Under Construction At 1Q24

Additional Capacity Brought Into Service

Additional Capacity To Be Delivered

	153,107
104,002
				63,389		50,678
					41,700
			33,709
		27,682	49,200
				14,189 (1)
FY20	FY21	FY22	FY23	FY24	FY25	FY26 & Beyond

Notes:

1. Excludes 13,188 sqm of area in service at three B-O-T data centers which the Company plans to transfer to the customer on an accelerated basis. This area is deducted from total area in service in 1Q24.

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Capacity & Utilization - China

At 1Q24

We can grow utilized capacity by over 50% for existing projects…

Utilizable	Utilized: 403,609 sqm	Inventory: 218,226 sqm	621,836 sqm
Capacity

Assuming 90% utilization rate

Deliverable	In Service: 549,352 sqm	Under Construction: 141,576 sqm	690,928 sqm
Capacity

Area

Under Construction:

…with a marginal cost to complete of only141,576~Rmb 7.4 bn

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Gross Additional Area Committed (Organic Tier 1 Only) (1)

By Quarter (Sqm)

By Year (Sqm)

China

International (2)

21,499

19,154

16,098

7,440

11,6695,792

21,499

6,385

11,714

10,306

5,284

1Q23

2Q23

3Q23

4Q23

		China	International (2)
	99,197	95,362
		4,085	80,506
16,808
				68,419
			28,331
7,334				19,617
	99,197	91,277
9,474			52,175	48,802	16,808
					7,334
					9,474
1Q24	FY20	FY21	FY22	FY23	1Q24

Notes:

1. Excludes B-O-T and acquisitions.

2. For the purpose of this presentation, "China" refers to assets or business in mainland China and includes 3rd party data centers in Hong Kong and Macau. "International" refers to assets or business outside mainland China, except for 3rd party data centers in Hong Kong and Macau which are included in "China", unless stated otherwise.

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