Hello, ladies and gentlemen. Thank you for standing by for GDS Holdings Limited's second quarter 2026 earnings conference call. At this time, all participants are in listen-only mode. After management's prepared remarks, there will be a question-and-answer session. Today's conference call is being recorded. I will now turn the call over to your host, Ms. Laura Chen, Head of Investor Relations for the company. Please go ahead, Laura. Thank you. Hello, everyone. Welcome to the second quarter 2026 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 investors.gds-services.com. Leading today's call is Mr. William Huang, GDS Founder, Chairman, and CEO, who will provide an overview of our business strategy and performance. Mr. Dan Newman, GDS 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. 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. SEC. The company does not assume any obligation to update any forward-looking statements except as required under applicable law. Please also note that GDS earnings press release and this call include discussions of unaudited GAAP financial information as well as unaudited non-GAAP financial measures. GDS press release contains a reconciliation of the unaudited non-GAAP measures to the unaudited most directly comparable GAAP measures. I will now turn over the call to GDS Founder, Chairman, and CEO, Mr. William Huang. Please go ahead, William. Hello, everyone. This is William. Thank you for joining us on today's call. AI is transforming our business. Our sales momentum is the strongest we have ever seen. In the second quarter, we achieved 260 MW of new bookings, bringing our total for the first half of 2026 to a record 470 MW. During the current quarter, we are well on the way to securing further major business wins with leading customers. We are confidently raising our full-year sales target to 1 GW. All of our sales agreements include a binding take-or-pay commitment. It is a metric which we disclose as bookings. The sales agreements specify the delivery date, which is up to four quarters after bookings. This allows us to invest based on secure commitments. Following the delivery date, there is an agreed ramp-up period, usually another four quarters, which gives us visibility to the timing of new billings. Alongside new bookings, our customers also request us to reserve deployable capacity at the same site for their future needs. Reservation has become an integral part of our sales agreement. So far this year, we have secured an additional 600 MW of reservations from our customers. We expect to end this year with over 1 GW of new reservations. This provides us with high visibility for new orders in the next couple of years as customers convert reservations to binding commitments. China's tech giants and the emerging AI leaders are driving the adoption of advanced agentic models. This has led to a structural upgrade in the demand for computing power and AI infrastructure. GDS is uniquely positioned to address this opportunity as a result of our strategic customer relationships, presence across all key markets in China, track record of execution, and the financing capability. The strength of our platform is clearly evident in the compositions of our first-half bookings. We won significant new business from each of the three largest hyperscale customers. At the same time, we started to establish relationships with a group of emerging AI leaders, which have the potential to generate incremental demand in the future. Our new business wins are diversified across the markets. For the first half of the year, around half our bookings came from established markets. Apart from new markets, including the Ulanqab and the Horinger in Inner Mongolia and Shaoguan in Guangdong Province. We are progressing well with customers for our Zhongwei Campus in Ningxia Province, which is another new market. This sales success validates our differentiation resource strategy. At the midpoint of this year, we had total binding commitments for over 2 GW, plus a further 600 MW of reservation. On the capacity side, we have around 3 GW of developable capacity, which is not yet committed to under reservation. It is mostly in new markets. In view of our current sales momentum, we are actively adding to the deployment pipeline in the markets where demand is growing. While pursuing our ambitious target, we remain selective in terms of customers and the contract terms. We invest against binding long-term commitments from the customers, and we are committed to maintaining financial discipline. I will now pass on to Dan for the financial and operating review. Thank you, William. I'll start from the backlog buildup on slide 10. We started the current year with a backlog of 450 MW. By the middle of the year, our backlog had increased substantially to 757 MW. Based on the pricing in the contracts and our operating cost benchmarks, we estimate that we can generate RMB 2.2 million of adjusted EBITDA per megawatt on average from this backlog. Our booked, but not billed adjusted EBITDA was therefore around RMB 1.6 billion. By year-end, assuming we achieve our sales target, we expect the backlog to increase further to over 1 GW. Turning to slide 11. During the first half of 2026, our net move-in was 145 MW. During the second half, we forecast move-in of another 90 MW, making 235 MW for the full year. The move-in pattern over the course of 2026 reflects the timing of bookings last year. For 2027, we forecast move-in will increase substantially to more than double the number for 2026. The move-in will be heavily weighted to the second half of 2027. Assuming we sustain our sales momentum, 2028 should see another step-up in move-in. Turning to CapEx on slide 12. Our unit CapEx for the new capacity which we are constructing averages around RMB 20 million per megawatt. As we just raised our sales target for the current year, we are also raising our guidance for CapEx paid from RMB 9 billion to RMB 10 billion, most of which is in the second half. Our plan is to continue financing new investments with around 60% debt and 40% equity at the project level. Assuming we can generate a stabilized cash yield on new investments of 10%-11%, this implies leverage of around 5.5x - 6x at the project level. Our primary source of debt is onshore renminbi-denominated long-term bank borrowings. The onshore bank market remains highly supportive. During 2Q26 alone, we were able to complete RMB 4.9 billion of new debt financing and refinancing. For the project equity, we have various sources. We have cash of nearly RMB 20 billion on our balance sheet, and we have de-levered down to 4.7x net debt to last quarter annualized adjusted EBITDA. We have operating cash flow, which continues to strengthen, and we have our onshore asset monetization program, which we are building up in a very deliberate way. Following our successful C-REIT IPO, the first post-IPO asset injection is currently under regulatory review. Turning to slide 16. We are revising upwards our full-year revenue and adjusted EBITDA guidance to reflect a more accurate financial outlook for this year, which includes the one-time items disclosed in 1Q 2026. Turning to slide 17. In order to put our first half 2026 financial performance and revised full year 2026 guidance into context, we have made some pro forma adjustments. Starting from reported revenue and reported adjusted EBITDA, we deduct the one-time items in 1Q 2026. For consistency, we also deduct recurring income in prior quarters, which was restructured into the one-time payment. We deduct the revenue and adjusted EBITDA contributed by the monetized assets prior to their deconsolidation. These adjustments establish a clean basis for comparison. For first half of 2026, our pro forma adjusted EBITDA increased by 12.7%. Taking the midpoint of our revised guidance for full year 2026, the implied growth rate for pro forma adjusted EBITDA is 6.5%. We would now like to open the call to questions. Operator? Thank you. We will now begin the question-and-answer session. To ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. For the benefit of all participants on today's call, please limit yourself to one question. If you have more follow-up questions, please reenter the queue. A moment for our first question. Our first question comes from the line of Yang Liu from Morgan Stanley. Please ask your question. Yang, your line is open. Thanks for the opportunity to ask question, and congratulations on the upward revision of full year guidance. I would like to ask about the future potential move-in. I think that there is a lot of debate on your customers' CapEx and also the availability of GPU in the market and also the constraint of computing power. We also see that you expect your move-in to improve dramatically next year. What could be the downside risk for that? If there is any concern or a delay in when customer gets the GPUs, will the take-or-pay contract protect GDS revenue? Thank you. Okay. Yes. Thank you. I think the dynamic of the demands from the different dimension, I think that, of course, the key drivers are still the GPU. I think in terms of the domestic GPU, the supply is catching up. I think it took a while in the last couple of quarter, as we mentioned, but now looks like on track to catching up. This is number one. In the meanwhile, I think they also drive a lot of traditional cloud growth. What we have seen is the new order, quite a big number is driven by the CPU. It will not impact in terms of the supply, there is no issue. I think this is more positive. That is why we take the more positive way to look at the current or future chips supply. That is our view. If you look at the other, a lot of the traditional cloud business, they are still raising their capacity, and the growth is very significant as well. I think let us be clear there. Thank you. How about the take-or-pay term protect the GDS revenue? Yeah. Two comments. The first is that in each contract, there is a specific delivery date when the capacity has to be available for move-in by the customer. That is a fixed date in each contract. It is up to four quarters from when the booking is disclosed. That part I think is unchangeable. After that, there is a move-in period and it varies from contract to contract. We have been very focused on trying to select contracts which had a shorter move-in period and a fixed commitment. For the purposes of forecasting, we assumed that the move-in will be on average over four quarters on a straight line basis. That is what our forecast reflects. In reality, it could be faster or it could be slower, but I do not think it will materially deviate from that. Thank you. Thank you. We will now proceed to take our next question, and our next question comes from Sara Wang from UBS. Please ask your question, Sara. Thank you for the opportunity to ask a question, and then congrats on the really solid new order signs. As management just mentioned that there is increasing demand from emerging AI leaders. Just wondering, is there any difference in their demand profile or contract terms compared to established cloud or internet type of scale customers we already served for quite some time? I think we are just starting to build up our relationship. So far, we are very selective with some business from some new AI leader. I think in terms of their demand profile, it looks like it is getting bigger and bigger, but we are still very selective. Our main customer base and the new business mainly driven by the hyperscale, a couple of larger hyperscale. But we think that there are some new customer in future. It is the right thing to do to diversify our customer base. We just start to build some relationship with them right now. Of course, their demands workload is obviously inference, which we believe, yeah. I see. Thank you. Thank you. We will now take our next question from the line of Frank Louthan from Raymond James & Associates. Please ask your question, Frank. Your line is open. Great. Thank you. I wanted to get an update on what your new guidance and what does that imply for the impact of potential action with the C-REIT contribution. Does that include any of that? And what would you expect that to be? How would you expect that to impact revenue and EBITDA? Secondly, if you could just address the slowdown at MRR, how should we think about that? And if we are looking forward, are you signing contracts that should be resulting in an improvement in MRR going forward? How should we think about that? Thanks. Frank, first of all, on guidance, to make clear that our guidance does not take account of any further asset monetization. There's a transaction in progress under regulatory review. We can't be any more specific about the timing of that. To be clear, it's not factored in. For the MSR, we provided guidance about the yield in terms of EBITDA per megawatt for the backlog and the new business that we're winning. I think that will help for forecasting. If we go back to MSR, I always make the comparison on a same quarter basis. If we take 4Q 2026 compared with 4Q 2025, we forecast that it will be down 3% and then maybe by a similar amount next year. But part of that is the change in the location mix because there's a substantial amount of new business in new markets. And part of it is due to the legacy contracts where we have about another 18 months to go before we are through the transition of adjusting all of our contracts to the current market pricing. So our guidance this year and what we indicate in the future will fully reflect that. Yeah. I should point out, the tier 1 market, also the new market, the current price level is quite stable. There's a lot about the transition. Okay, great. Thank you. Thank you. Our next question comes from the line of Daley Li from Bank of America Securities. Please ask your question, Daley. Your line is open. Hi, I'm taking a question. Congrats on the opportunity for the new orders. I have one question regarding the move-in. I remember in last earnings call, we are seeing a soft move-in rate in Q2, but it seems the number is better than the marketing expectation. What has been the key drivers for better move-in in Q2? Secondly, how do we see the demand and supply trend in the data center market in China, considering the power quota approval progress by the government? Thank you. Daley, I would not read anything into the quarterly fluctuations. Most of the move-in in the current year is a capacity that was booked in 2025 or even before. If you look at the bookings in 2025, we had a very strong first quarter 2025, and then the second, third, fourth quarter were at a lower consistent level. From the first quarter this year, our bookings increased by a very large amount. That sustained in the second quarter really gave an indication for the full year that sustained. I think you can derive from that the outlook for move-in made of 2026 and 2027. We see a significant increase in move-in in the second half of 2027, which is going to lead to a significant acceleration of EBITDA growth. Great. He'll close your question up. Our power quota. Yeah. I think the current power quota, there's a couple of key points. I think number one is now it's controlled by the central government and the provincial governments as well. Basically, if you apply the power, first step is to go to the municipal level, to get the local government their commitment, their full support, right? This is the normal. Our government is quite selective right now. They try to give the market leader more allocation. That's why we have built up our land bank in the last 18 months so quickly, right? And take some advantage of the GDS grant, right? Second off there, we go to the provincial level, NDRC approval, then go to ask the final approval from the central government, the NDRC of the central government. That's the key process of how we get a power location. Thank you, [inaudible]. Thank you. Thank you. We will now take our next question from the line of Edison Lee from Jefferies. Please ask your question. Edison, your line is open. Hey, thank you for taking my questions. Congrats on the good results. My question is really centering around just reconfirming the definition of the bookings and the reservations. I assume that bookings mean contracts have been signed and reservations mean that is sort of an MOU with indicated interest by the customers, and you look forward to converting that into signed contracts over the next few quarters. Is my understanding correct? Not exactly. What I would like to make clear is that there is a sales agreement which contains a booking, which is a contractual take-or-pay commitment. But within the same document, we undertake to reserve capacity to enable the customer to have certainty of being able to make commitments, typically at the same site in future over a period of time. The bookings and the reservations go together, and that is how the customers look at it from a resource planning perspective. Yeah. In the meanwhile, I think we should say based on what last 12 or 18 months experience, which the reservation, our customers exercise their reservation in 100% base. That is our current experience. But in terms of the phase by phase, we should negotiate the move-in percentage of that. But in general, reservation is quite certain, provide a very high certainty for our future booking. Okay. Can I follow up by asking, your booking targets this year right now is 1 GW. I think in the last quarter, I think your target was still 500 MW. This doubling of the bookings target, I believe is driven by your customers or your assessment of the customers' demand. Is it possible for you to split the customers' demand into training versus inference, or you have no idea how to split that? I think the campus in the new markets, I think they will host different workloads as a training plus inference. They are both workloads. Why we increased. Increased the guidance? I think increased guidance, number one, it is the whole market demand we see is increased. If you look at our hyperscalers, they continue to increase their CapEx, and that is in line with it. So that is number one. Number two, I think GDS still maintain a lot of advantage, which is our customers prefer vendor. So everybody know we step in the new growth and we start our new business plan. So I think in terms of the capital readiness, even better than the other competitors. So I think the customer will more rely on that. In terms of your power reserves, can you talk about the locations of your power reserves? Other one. The part that we identify is developable capacity that is almost entirely new markets. We have capacity in established markets, but it is under reservation. There is only a small amount in established markets that is not committed or reserved. Is that very different from what you disclosed in the last quarter in terms of locations? We disclosed all the new market, right? Yeah. Reservation, including the tier 1 market. Yeah, it's an aggregated base. Yeah. Thank you. We will now move up to our next question, and our next question comes from the line of Timothy Zhao from Goldman Sachs. Please ask your question, Timothy. Your line is open. Sure. Thank you much for taking that question. I think I just want to get more clarity on the move-in and how do you want to look at the revenue and EBITDA, I think, beyond this year. Just wondering if you can give us a breakdown, like for example, for this year, a lot of move-ins, what is the proportion between CPU-based and GPU-based? And into next year, it seems that you are looking for the move-in to be more than double to close to 700 MW next year. And what will be that breakdown between GPU and CPU next year? And with that 700 MW move-in, of course, I think the majority will be more geared toward the second half of the next year. If that is the case, then how do you think about the revenue and EBITDA growth, I think, beyond this year in 2027 and 2028? Thank you. It's not I think it's not. In general, we don't have the current detailed number, specific number, in terms of the breakdown there. But in general, I think I can give you the general assumption. Maybe it's around 50/50. Yeah. About growth in 2027, we provide annual guidance. Obviously, we were doing that until we give the full year results in around March next year. But what you can already see is that over the course of next year, there's going to be a very significant acceleration for the growth rate from 1Q, 2Q, 3Q, 4Q is going to be very different. I think what really matters is where we are at the end of the year and where we are in 2028. I believe it's already a strong indication that in 2028, GDS is going to be a pretty high-growth company. Thank you. If I may follow up on the breakdown 50/50. Just wondering if that refers to both this year and next year and onwards, or how that mix can change in the next year. Yeah. Maybe GPU will a little bit higher next year. Yeah. That's what I guess. Yeah. Based on the current domestic supply, it's catching up. I think, yeah. Thank you. Due to the time limit of today's call, I'll now like to turn the call back to the company for any closing remarks. Thank you all once again for joining us today. Thank you. And see you next time. Thank you. Bye. This concludes this conference call. You may now disconnect your lines. Thank you.