 SHANGHAI, China, Aug. 18, 2020 GLOBE NEWSWIRE -- GDS Holdings Limited GDS Holdings, GDS or the Company NASDAQ: GDS, a leading developer and operator of high-performance data centers in China, today announced its unaudited financial results for the second quarter ended June 30, 2020. Second Quarter 2020 Financial Highlights Net revenue increased by 36.2 year-over-year Y-o-Y to RMB1,342.2 million US190.0 million in the second quarter of 2020 2Q2019: RMB985.2 million. Service revenue increased by 35.5 Y-o-Y to RMB1,334.5 million US188.9 million in the second quarter of 2020 2Q2019: RMB985.1 million. Net loss was RMB101.0 million US14.3 million in the second quarter of 2020, compared with a net loss of RMB93.2 million in the second quarter of 2019. Adjusted EBITDA non-GAAP increased by 47.8 Y-o-Y to RMB633.4 million US89.7 million in the second quarter of 2020 2Q2019: RMB428.4 million. See Non-GAAP Disclosure and Reconciliations of GAAP and non-GAAP results elsewhere in this earnings release. Adjusted EBITDA margin non-GAAP increased to 47.2 in the second quarter of 2020 2Q2019: 43.5.Operating Highlights Total area committed and pre-committed increased by 46,471 square meters sqm in the second quarter of 2020 to 333,461 sqm as of June 30, 2020, an increase of 51.0 Y-o-Y June 30, 2019: 220,818 sqm. Area in service increased by 36,274 sqm in the second quarter of 2020 to 266,260 sqm as of June 30, 2020, an increase of 47.6 Y-o-Y June 30, 2019: 180,441 sqm. Area utilized or area in service which is revenue-generating increased by 29,324 sqm in the second quarter of 2020 to 193,162 sqm as of June 30, 2020, an increase of 52.0 Y-o-Y June 30, 2019: 127,107 sqm. Commitment rate for area in service was 94.1 as of June 30, 2020 June 30, 2019: 93.7, and utilization rate was 72.5 as of June 30, 2020 June 30, 2019: 70.4. Area under construction was 133,208 sqm as of June 30, 2020 June 30, 2019: 78,373 sqm. Pre-commitment rate for area under construction was 62.3 as of June 30, 2020 June 30, 2019: 66.1.We delivered another exceptional quarter with record results across many aspects of our business, said Mr. William Huang, Chairman and Chief Executive Officer. We added net additional area committed of over 46,000 sqm during the quarter, including historical high organic growth of 26,544 sqm. We further diversified our customer base by adding two new strategic hyperscale customers, both renowned names in the China internet space. We extended our success in edge-of-town deployments, with a sizable anchor order for our new campus in Changshu Shanghai and high visibility into future commitments. Through our recently announced JV with CPE Fund formed to undertake a major new data center project in Beijing, we created an innovative model for capacity sourcing in highly resource-constrained markets, which will further solidify our leadership position.Our growth momentum continued in the second quarter of 2020 with revenue exceeding RMB1.3 billion, representing an increase of 36.2 year-over-year, commented Mr. Dan Newman, Chief Financial Officer. Additionally, our adjusted EBITDA grew by 47.8 year-over-year and adjusted EBITDA margin reached an all-time high of 47.2. We also further strengthened our financial position with a US505 million equity investment from a new long-term shareholder, Hillhouse, and an existing long-term shareholder and strategic partner, STT GDC. We are well on track to execute on our growth initiatives.Second Quarter 2020 Financial ResultsNet revenue in the second quarter of 2020 was RMB1,342.2 million US190.0 million, a 36.2 increase over the second quarter of 2019 of RMB985.2 million and an 8.2 increase over the first quarter of 2020 of RMB1,240.4 million. Service revenue in the second quarter of 2020 was RMB1,334.5 million US188.9 million, a 35.5 increase over the second quarter of 2019 of RMB985.1 million and an 8.3 increase over the first quarter of 2020 of RMB1,232.6 million. The increase over the previous quarter was mainly due to full quarter revenue contribution from additional area utilized in the previous quarter and the contribution from 29,324 sqm of net additional area utilized in the second quarter of 2020, including 14,336 sqm related mainly to the Shanghai 10 SH10, Shenzhen 4 SZ4 Phase 1, Guangzhou 3 GZ3 Phase 2, Beijing 5 BJ5, Langfang 6 LF6, and Zhangbei 4 ZB4 data centers and 14,988 sqm from the previously announced acquisition of the Beijing 10 BJ10, Beijing 11 BJ11 and Beijing 12 BJ12 data centers which closed shortly before the quarter-end. Revenue from IT equipment sales in the second quarter of 2020 was RMB7.7 million US1.1 million, compared with RMB0.1 million in the second quarter of 2019 and RMB7.8 million in the first quarter of 2020.Cost of revenue in the second quarter of 2020 was RMB981.1 million US138.9 million, a 35.6 increase over the second quarter of 2019 of RMB723.4 million and a 10.2 increase over the first quarter of 2020 of RMB890.1 million. The increase over the previous quarter was mainly due to: an increase in data center power consumption as a result of higher area utilized and seasonal factors; an increase in depreciation and amortization costs as a result of completion of the ZB4 data center which came into service in the previous quarter, completion of the Kunshan 2 KS2, LF6, and Langfang 7 LF7 data centers which came into service in the second quarter of 2020, and closing of the acquisition of the BJ10, BJ11 and BJ12 data centers; and, a lower level of government concessions received resulting in higher finance lease costs.Gross profit was RMB361.1 million US51.1 million in the second quarter of 2020, a 37.9 increase over the second quarter of 2019 of RMB261.8 million and a 3.1 increase over the first quarter of 2020 of RMB350.3 million. Gross profit margin was 26.9 in the second quarter of 2020, compared with 26.6 in the second quarter of 2019, and 28.2 in the first quarter of 2020. The decrease in gross profit margin over the previous quarter was primarily due to seasonally higher power consumption and higher depreciation and amortization costs as a result of new data centers coming into service and less government concessions received.Adjusted Net Operating Income Adjusted NOI non-GAAP is defined as net loss computed in accordance with GAAP, excluding 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, selling and marketing expenses, general and administrative expenses, research and development expenses, foreign currency exchange loss gain and others. Adjusted NOI was RMB721.0 million US102.1 million in the second quarter of 2020, a 38.1 increase over the second quarter of 2019 of RMB521.9 million and an 8.4 increase over the first quarter of 2020 of RMB664.9 million.Adjusted NOI margin non-GAAP was 53.7 in the second quarter of 2020, compared with 53.0 in the second quarter of 2019 and 53.6 in the first quarter of 2020. The slight increase over the previous quarter was mainly due to operating leverage on rental, personnel and other costs as a result of higher utilization rates, partially offset by seasonally higher power consumption costs.Selling and marketing expenses, excluding share-based compensation expenses of RMB12.9 million US1.8 million, were RMB16.9 million US2.4 million in the second quarter of 2020, a 25.4 decrease from the second quarter of 2019 of RMB22.6 million excluding share-based compensation of RMB7.2 million and a 1.1 decrease from the first quarter of 2020 of RMB17.1 million excluding share-based compensation of RMB13.2 million. The selling and marketing expenses remained at a reduced level due to limited marketing activities and travel expenses as a result of the COVID-19 pandemic, compared to the previous quarter.General and administrative expenses, excluding share-based compensation expenses of RMB35.6 million US5.0 million, depreciation and amortization expenses of RMB47.6 million US6.7 million, and operating lease cost relating to prepaid land use rights of RMB4.7 million US0.7 million, were RMB68.7 million US9.7 million in the second quarter of 2020, an 11.1 increase over the second quarter of 2019 of RMB61.9 million excluding share-based compensation expenses of RMB16.0 million and depreciation and amortization expenses of RMB16.8 million and a 17.0 increase over the first quarter of 2020 of RMB58.8 million excluding share-based compensation of RMB35.9 million, depreciation and amortization expenses of RMB21.9 million and operating lease cost relating to prepaid land use rights of RMB0.5 million. The increase over the previous quarter was primarily due to higher personnel costs as a result of annual salary revision and higher professional fees related to business and financing activities.Research and development costs were RMB10.2 million US1.5 million in the second quarter of 2020, compared with RMB4.2 million in the second quarter 2019 and RMB8.7 million in the first quarter of 2020.Net interest expenses for the second quarter of 2020 were RMB300.6 million US42.6 million, a 35.5 increase over the second quarter of 2019 of RMB221.9 million and a 15.3 increase over the first quarter of 2020 of RMB260.9 million. The increase over the previous quarter was mainly due to higher non-recurring financing costs and a higher total gross debt balance to finance data center capacity expansion.Foreign currency exchange loss for the second quarter of 2020 was RMB4.6 million US0. 