GDS lifts its sales target to 1GW but capex by only 8 percent as China demand outruns the plan

GDS Holdings used its Q2 2026 earnings call to raise its full-year sales target to 1GW of new reservations by end-2026, a figure chairman and CEO William Huang described as much higher than the company's original target [s1c1][s1c2]. At the same time it lifted capex guidance for the year from $1.3 billion to $1.4 billion [s1c3], an increase of about 7.7 percent ^[13]. Anyone underwriting APAC capacity on the assumption that developer build plans track developer sales plans should note the gap.

The backlog numbers are the clearest signal. GDS entered the year with a 450MW backlog and ended Q2 at 757MW [s1c4], a gain of 307MW, or roughly 68 percent, in two quarters ^[14]. The company puts average adjusted EBITDA at $326,254 per megawatt of that backlog [s1c5], which values the 757MW at about $247 million a year once delivered ^[15]. Committed and pre-committed area reached 784,800 sqm, up 18.2 percent year over year and 8.2 percent quarter over quarter [s1c6]; the quarterly rate, if sustained, compounds to roughly 37 percent a year, twice the trailing annual pace ^[16]. Utilization moved to 79.2 percent from 77.3 percent in Q1 and 77.5 percent a year earlier [s1c7], gains of 1.9 and 1.7 points ^[17].

The income statement is doing something less flattering. Net revenue rose 6.5 percent year over year to $455.1 million, while cost of revenue rose 9.6 percent to $357.2 million [s1c8][s1c9], a 3.1 point gap in growth rates ^[18]. Gross profit fell 3.6 percent to $97.9 million, which GDS attributed to higher utility costs as a share of net revenue [s1c10]. The margin figures as published by DatacenterDynamics (a decline "from 21.5 percent to 23.8 percent") do not reconcile with a stated decline, so the direction is what the company asserts, not something the printed numbers demonstrate [s1c11].

There is a second reconciliation problem worth flagging. Huang put total binding commitments for the first half at more than 2GW with a further 600MW reserved [s1c2], which sits awkwardly beside a full-year new-sales target of 1GW [s1c1]; the source does not explain whether the 2GW is a cumulative contracted position or a period figure. Buyers pricing off headline gigawatts should ask which definition they are being quoted.

Growth arithmetic is the other pressure point. GDS reported $1.6 billion of revenue for 2025 and expects $1.8 billion in 2026 [s1c12], implying 12.5 percent growth ^[19] against Q2's actual 6.5 percent [s1c8]. Q2 revenue annualizes to about $1.82 billion ^[20], so the guide holds only if delivery keeps ramping through the second half.

Watch whether the $1.4 billion capex number survives Q3, because a sales target raised sharply against spend raised modestly is a lead-time problem for tenants, not a discipline story. Watch utility costs, which are already compressing gross profit as utilization climbs [s1c10][s1c7]. And note that GDS's international exposure now sits in DayOne, a separate company in which it holds a non-controlling 35.6 percent stake [s1c13], so China demand and pan-APAC supply are no longer the same balance sheet.