We are a leading developer and operator of high-performance data centers in China. In addition, we hold a minority equity interest in DayOne, a Singapore-headquartered data center platform. We accounted for the international business and operations outside mainland China conducted by DayOne as discontinued operations as a result of our loss of control over DayOne on December 31, 2024 following the closing of DayOne’s Series B equity financing. Unless otherwise stated, the discussion and analysis of our financial condition and results of operations in this section apply to our financial information as prepared in accordance with U.S. GAAP. You should read the following discussion and analysis of our financial position and results of operations in conjunction with our consolidated financial statements and the related notes included elsewhere in this annual report. In addition, our consolidated financial statements and the financial data included in this annual report reflect our recent discontinued operations discussed above, and retrospective adjustments have been made throughout the relevant periods to provide a consistent basis of comparison for the financial results. In addition, to assist in evaluating the discontinued operations disclosure, we have included certain operation and financial measures of discontinued operations and have divided the analysis into separate discussions for continuing operations and discontinued operations. Furthermore, our discussion contains forward-looking statements that involve risks and uncertainties. Our actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Item 3. Key Information—D. Risk Factors” and elsewhere in this annual report. Overview We are a leading developer and operator of high-performance data centers in China. Our facilities are strategically located in primary economic hubs where demand for high-performance data center services is concentrated. Our data centers are designed and configured as high-performance data centers with large net floor area and power capacity, high power density and efficiency, and multiple redundancy across all critical systems. We are carrier and cloud neutral, which enables our customers to access all the major telecommunications networks, as well as the largest PRC and global public clouds which we host in many of our facilities. We offer colocation and managed services, including an innovative and unique managed cloud value proposition. We have a 25-year track record of service delivery, successfully fulfilling the requirements of some of the largest and most demanding customers for outsourced data center services. As of December 31, 2025, we had an aggregate net floor area of 668,283 sqm in service, 93% of which was committed by customers, and an aggregate net floor area of 73,994 sqm under construction, 66.1% of which was pre-committed by customers. Our results of operations are largely determined by the degree to which our data center capacity is committed or pre-committed as well as its utilization. We had commitment rates for our area in service of 92.5%, 91.9% and 93.0% as of December 31, 2023, 2024 and 2025, respectively. We had utilization rates for our area in service of 73.9%, 73.8% and 75.5% as of December 31, 2023, 2024 and 2025, respectively. The difference between commitment rate and utilization rate is primarily attributable to customers who have not yet fully utilized all of the revenue-generating services for which they have committed. Our net revenue grew from RMB9,782.4 million in 2023 to RMB10,322.1 million in 2024, representing an increase of 5.5%, and increased to RMB11,432.3 million (US$1,634.8 million) in 2025, representing an increase of 10.8%. Our net loss from continuing operations decreased from RMB3,926.0 million in 2023 to RMB770.9 million in 2024, representing a decrease of 80.4%, and we generated net income from continuing operations of RMB959.4 million (US$137.2 million) in 2025, representing a decrease in loss of 224.4%. Our adjusted EBITDA increased from RMB4,733.0 million in 2023 to RMB4,876.4 million in 2024, and increased to RMB5,403.5 million (US$772.7 million) in 2025. As of December 31, 2023, 2024 and 2025, our accumulated deficit was RMB9,469.8 million, RMB6,044.4 million and RMB5,094.7 million (US$728.5 million), respectively. Our business and results of operations are generally affected by the development of China’s data center services market. We have benefited from rapid growth in this market during recent years and any adverse changes in the data center services market in China may harm our business and results of operations. In addition, we believe that our results of operations are directly affected by the following key factors. 143 Table of Contents Ability to Source and Develop Data Centers Our revenue growth depends on our ability to source and develop additional data centers. We endeavor to ensure continuous availability of data center capacity to satisfy customer demand by maintaining a supply of high-performance data centers in various stages of development—from identifying a pipeline of sites, to developing appropriate sites, to data centers under construction to available net floor areas in existing data centers. In particular, securing suitable land with access to adequate and reliable power infrastructure is a critical component of our site identification and development process. We expand our sourcing of new data center area by (i) acquiring or leasing property which we develop for use as data center facilities, whether through constructing on greenfield land, redeveloping brownfield sites, converting existing industrial buildings, or fitting out and equipping purpose-built building shells, (ii) leasing existing data center capacity from third-party wholesale providers, and (iii) acquiring high-performance data centers from other companies. Our ability to maintain a growing supply of data center assets directly affects our revenue growth potential. If we are unable to obtain suitable land or buildings for new data centers or to do so at an acceptable cost to us or experience delays or increased costs during the data center design and construction development process which includes securing the power and relevant energy quota under the energy conservation review opinion, our ability to grow our revenue and improve our results of operations would be negatively affected. Additionally, if demand slows unexpectedly or we source and develop data centers too rapidly, the resulting overcapacity would adversely affect our results of operations. Ability to Secure Commitments from Our Customers We usually commence marketing new data center facilities before we commence construction by seeking strong indications of interest from customers. We aim to convert such indications of interest into legally-binding pre-commitment agreements for a substantial part of the capacity under development as early as possible in the construction cycle. Through securing such pre-commitments, we are able to reduce investment risk and optimize resource planning. Once construction is complete, and the data center enters service, we re-categorize area pre-committed as area committed. We aim to maintain high levels of long-term commitment rates. We had commitment rates for our area in service of 92.5%, 91.9% and 93.0% as of December 31, 2023, 2024 and 2025, respectively. Our total area committed, as a leading indicator to our results of operations, increased from 618,942 sqm as of December 31, 2023 to 629,997 sqm as of December 31, 2024, and further to 670,106 sqm as of December 31, 2025. Pricing Structure and Power Costs Our results of operations will be affected by our ability to operate our data centers efficiently in terms of power consumption. Our data centers require significant levels of power supply to support their operations. Depending on the agreement, we agree with our customer to either charge them for actual power consumed or we factor it into a fixed price. Accordingly, the customer’s actual power usage during the life of the agreement will affect its profitability to us. In October 2021, the NDRC announced a partial transition from fixed-rate to market rate mechanism for coal-fired power trading prices. As this reform is implemented, we may absorb higher operating expenses for our fixed price customer agreements. Optimal configuration of customers and power usage within each data center will affect our results of operations. In addition, notwithstanding high demand for data center services in China, the trend in pricing has been downward in recent years due to capacity, competition and customer expectations. If prices continue to trend downward, our revenues and margins will be negatively affected. For more detailed information, see “Item 3. Key Information—D. Risk Factors—Risks Relating to Our Business and Industry—We may be unable to maintain current pricing levels for our data center services in China, and a continued or accelerated decline in market prices could materially and adversely affect our revenue, margins and overall financial performance.” Utilization of Existing Capacity Our ability to maximize profitability depends on attaining high utilization of data center facilities. A substantial majority of our cost of revenue and operating expenses are fixed in nature. Such costs increase with each new data center and entail additional power commitment costs, depreciation from new property, plant and equipment, rental costs on leased facilities and land use rights, personnel costs, and start-up costs. By adopting a modular development approach, we aim to optimize resource utilization and maximize capital efficiency to improve profitability. 144 Table of Contents Cost Structure Depending on Data Center Tenure and Location We hold our data centers through a mix of those that we own or lease. The leases typically range from three years for third-party data centers to twenty years for self-developed data centers, all with different renewal periods. The tenure of the leases and the periods during which the amount are fixed or capped under the leases will affect our cost structure in the future. In addition, if many of our data centers continue to be located close to central business districts, where rental costs are generally higher, our cost structure will also be affected. Ability to Manage Our Development Costs Our ability to maximize our returns depends on our ability to develop data centers on an economically feasible basis. We regularly monitor and review our equipment and construction costs related to our data center development capital expenditures to ensure we can optimize our cash outlay for capital expenditure. Our ability to manage an efficient supply chain will improve our cost of development and construction time. As part of our initiatives to improve the cost efficiency of our capital expenditure, we also participate in bulk purchasing programs for certain equipment with our strategic partners and major customers to leverage larger volume purchases to obtain a cost advantage. Data Center Development and Financing Costs Our returns depend on our ability to develop data centers at commercially acceptable terms. We have historically funded data center development through additional equity or debt financing or capital recycled from asset monetization program. We expect to continue to fund future developments through debt financing, through the issuance of additional equity securities or capital recycling through asset monetization program if necessary and when market conditions permit. Such additional financing may not be available, or may not be on commercially acceptable terms or may result in an increase to our financing costs. In addition, we may encounter development delays, excess development costs, or challenges in attracting or retaining customers to use our data center services. We also may not be able to secure suitable land or buildings for new data centers or at a cost or terms acceptable to us. Ability to Identify and Acquire Other Business We have grown our business through acquisitions in the past and intend to continue selectively pursuing strategic partnerships and acquisitions to expand our business. Our ability to sustain our growth and maintain our competitive position may be affected by our ability to identify, acquire and successfully integrate other businesses and, if necessary, to obtain satisfactory debt or equity financing to fund those acquisitions. Performance and Contribution of Our Equity Investment in DayOne Following the closing of DayOne’s Series B equity financing on December 31, 2024, we owned approximately 35.6% of the equity interest of DayOne in the form of ordinary shares on an as-converted basis; since then, we ceased consolidating DayOne for accounting purposes, and account for the investment in DayOne using the equity method. In December 2025, DayOne signed an initial tranche of its Series C equity financing, totaling over US$2.0 billion, of which US$1.3 billion closed on December 31, 2025, at which point our equity interest in DayOne was diluted to 30.1%; the remainder closed in January 2026. In January 2026, DayOne completed a US$385 million repurchase of DayOne shares from us. In April 2026, following the closing of an upsizing of DayOne’s Series C equity financing, the market value of our remaining equity interest in DayOne is over US$2.2 billion (based on the assumed valuation of DayOne based on the Series C offering price). As of the date of this annual report, we owned an equity interest in DayOne of approximately 19.9%. Our investment in DayOne has been and is expected to continue to be a significant contributor to our results of operations and shareholder value. The DayOne discontinued operations accounted for net loss of RMB359.4 million and RMB400.8 million in 2023 and 2024, respectively, not taking into account the gain on deconsolidation. In 2025, we recognized share of DayOne’s results under equity method of RMB717.2 million (US$102.6 million) in profit or loss, including a dilution gain of RMB1,681.0 million (US$240.4 million) and a share of DayOne’s loss of RMB963.8 million (US$137.8 million). As DayOne’s business continues to grow and DayOne continues to expand its operations, we expect that the performance of DayOne will continue to have a significant impact, which may be positive or adverse, on our investment income, results of operations and shareholder value. 145 Table of Contents Key Performance Indicators Our results of operations are largely determined by the amount of data center area in service, the degree to which data center capacity is committed or pre-committed as well as its utilization. Accordingly, we use the following key performance indicators as measures to evaluate our performance: Area in service: the entire net floor area of data centers (or phases of data centers) which are ready for service. Area under construction: the entire net floor area of data centers (or phases of data centers) which are actively under construction and have not yet reached the stage of being ready for service. Area committed: that part of our area in service which is committed to customers pursuant to customer agreements remaining in effect. Area pre-committed: that part of our area under construction which is pre-committed to customers pursuant to customer agreements remaining in effect. Total area committed: the sum of area committed and area pre-committed. Commitment rate: the ratio of area committed to area in service. Pre-commitment rate: the ratio of area pre-committed to area under construction. Area utilized: that part of our area in service that is committed to customers and revenue generating pursuant to the terms of customer agreements remaining in effect. Utilization rate: the ratio of area utilized to area in service. The following table sets forth our key performance indicators for our data center portfolio as of December 31, 2023, 2024 and 2025. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, (Sqm, %) ​ ​ ​ 2023 ​ ​ ​ 2024 ​ ​ ​ 2025 ​ Area in service 548,352 ​ 613,583 ​ 668,283 ​ Area under construction 151,602 ​ 102,691 ​ 73,994 ​ Area committed 507,108 (1)​ 564,139 (1)​ 621,188 (1)​ Area pre-committed 111,834 (1)​ 65,858 (1)​ 48,918 (1)​ Total area committed 618,942 (1)​ 629,997 (1)​ 670,106 (1)​ Commitment rate 92.5 % 91.9 % 93.0 % Pre-commitment rate 73.8 % 64.1 % 66.1 % Area utilized 405,302 ​ 453,094 ​ 504,843 ​ Utilization rate 73.9 % 73.8 % 75.5 % (1) Includes data center area for which we have entered into non-binding agreements or letters of intent with, or have received other confirmations from, certain customers. 146 Table of Contents Components of Results of Operations The following table sets forth our net revenue, cost of revenue and gross profit, both in an absolute amount and as a percentage of net revenue, for the years indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2023 ​ 2024 ​ 2025 ​ ​ ​ ​ ​ ​ ​ ​ % of Net ​ ​ ​ ​ ​ ​ ​ % of Net ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ % of Net ​ ​ RMB ​ Revenue ​ RMB ​ Revenue ​ RMB ​ US$ ​ Revenue ​ (in thousands, except for percentages) Net revenue ​ ​ ​ ​ ​ ​ ​ ​ Service revenue ​ 9,781,884 ​ 100.0 ​ 10,321,888 ​ 100.0 ​ 11,428,077 ​ 1,634,193 ​ 100.0 IT equipment sales ​ 564 ​ 0.0 ​ 180 ​ 0.0 ​ 4,197 ​ 600 ​ 0.0 Total ​ 9,782,448 ​ 100.0 ​ 10,322,068 ​ 100.0 ​ 11,432,274 ​ 1,634,793 ​ 100.0 Cost of revenue ​ (7,831,222) ​ (80.1) ​ (8,099,439) ​ (78.5) ​ (8,846,859) ​ (1,265,084) ​ (77.4) Gross profit ​ 1,951,226 ​ 19.9 ​ 2,222,629 ​ 21.5 ​ 2,585,415 ​ 369,709 ​ 22.6 ​ Net Revenue We derive net revenue primarily from colocation services and, to a lesser extent, managed services, including managed hosting and managed cloud services. In addition, from time to time, we also sell IT equipment on a stand-alone basis or bundled in a managed service agreement to customers and provide consulting services. Substantially all of our service revenue is recognized on a recurring basis. Our colocation services primarily comprise the provision of space, power and cooling to our customers for housing servers and related IT equipment. Our customers have several choices for hosting their networking, server and storage equipment. They can place the equipment in a shared or private space that can be customized to their requirements. We offer power options customized to a customer’s individual power requirement. Our managed services include managed hosting and managed cloud services. Our managed hosting services comprise a broad range of value-added services, covering each layer of the data center IT value chain. Our suite of managed hosting services includes technical services, network management services, data storage services, system security services, database services and server middleware services. Our suite of managed cloud services includes direct private connection to leading public clouds, an innovative service platform for managing hybrid cloud. Our customer agreements have either a variable consideration or a fixed consideration. Sales agreements with cloud service provider and large internet customers are typically deemed to have a variable consideration for revenue recognition purposes because the total amount payable over the life of the sales agreement is not a fixed amount. Such amount varies based on the actual amount of services they use during the move-in period and their actual power consumption, which is metered and billed separately. During the move-in period, customers have the right to use all of the services for which they have committed. They are billed for the amount of services they actually use, subject to a minimum billable amount as stated in such sales agreements. Such minimum billable amount typically steps up over time. From the end of the move-in period until the end of the sales agreement, customers are charged a fixed amount for the right to use all of the capacity for which they have committed, plus a usage-based charge for the actual amount of power which they consume. Revenue under such variable consideration agreements is recognized as services are rendered during the contract term, which means that revenue is recognized based on the amount of services and power which are billable. We do not charge customers or recognize any revenue for services which are pre-committed or for services which are committed but not yet billable under the terms of sales agreements as described above. Sales agreements with our financial institution and large enterprise customers are typically deemed to have a fixed consideration for revenue recognition purposes because the total amount payable over the life of the sales agreement is a fixed amount. Sales agreements with fixed consideration include a stated amount of space, power, and other services which customers have a right to use. No separate charge is made for power consumed, unless consumption exceeds a specified maximum amount. Revenue under such fixed consideration agreements is recognized on a straight-line basis over the contract term. 147 Table of Contents We are subject to value-added tax, or VAT, at a rate of 6% on the IDC services we provide, 9% on leasing of immovable properties and 13% on IT equipment sales and power charges under the unbundled agreements, less any deductible VAT we have already paid or borne. We are also subject to surcharges on VAT payments in accordance with PRC law. Revenue is recognized net of applicable VAT and related surcharges. We consider our customers to be the end users of our services. We may enter into contracts directly with our customers or provide services to our customers through agreements with intermediate contracting parties. We have in the past derived, and believe that we will continue to derive, a significant portion of our total net revenue from a limited number of customers. We had two customers that generated 28.3% and 17.1% of our total net revenue, respectively, in 2023. We had two customers that generated 29.0% and 14.4% of our total net revenue, respectively, in 2024. We had two customers that generated 29.0% and 12.0% of our total net revenue, respectively, in 2025. No other customer accounted for 10% or more of our total net revenue during those periods. We expect our net revenue will continue to be highly dependent on a limited number of customers who account for a large percentage of our total area committed. As of December 31, 2025, we had two customers who accounted for 37.9% and 11.8%, respectively, of our total area committed. Cost of Revenue Our cost of revenue consists primarily of utility costs, depreciation of property and equipment, labor costs, rental costs related to our leased data centers and others. Utility costs refer primarily to the cost of power needed to carry out our data center services. Depreciation of property and equipment primarily relates to depreciation of data center property and equipment, such as assets owned or acquired under finance leases, leasehold improvements to data centers and other long-lived assets. Labor costs refer to compensation and benefit expenses for our engineering and operations personnel. Rental costs relate to the data center capacity we lease under operating lease and use in providing services to our customers. These costs are largely fixed costs. For utility costs, there is a portion that is fixed and a portion that is variable. The fixed portion relates to the amount of power capacity which is activated and committed by the power supplier for use by a given data center. The variable portion of the utility cost relates to the amount of power actually consumed, which is metered and is largely a function of the data center utilization rate. When a new data center comes into service, we mainly incur a level of fixed utility costs that are not directly correlated with net revenue. We expect that our cost of revenue will continue to increase as our business expands and we expect that utility costs, depreciation and amortization and rental costs will continue to comprise the largest portion of our cost of revenue. In addition, in any given period, the increase in our cost of revenue may also outpace the growth of our net revenue depending on the timing of the development of our data centers, our ability to secure customer agreements and the utilization rate of our data centers during the period. While we strive to both secure customer commitments to our data center services so that the most data center capacity will be utilized and also to minimize the time as to when our data center area becomes operational and the customer occupies that area, these timing differences may result in fluctuation of our cost of revenue as a percentage of our net revenue between periods. Operating Expenses Our operating expenses consist of selling and marketing expenses, general and administrative expenses, research and development expenses and impairment losses of long-lived assets. The following sets forth our selling and marketing expenses, general and administrative expenses, research and development expenses and impairment losses of long-lived assets, both in an absolute amount and as a percentage of net revenue, for the years indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2023 ​ 2024 ​ 2025 ​ ​ ​ ​ ​ ​ ​ ​ % of Net ​ ​ ​ ​ ​ ​ ​ % of Net ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ % of Net ​ ​ RMB ​ Revenue ​ RMB ​ Revenue ​ RMB ​ US$ ​ Revenue ​ (in thousands, except for percentages) Selling and marketing expenses ​ 140,890 1.4 116,440 1.1 149,363 21,359 ​ 1.3 General and administrative expenses ​ 965,982 9.9 917,877 8.9 897,867 128,393 ​ 7.8 Research and development expenses ​ 38,159 0.4 36,319 0.4 32,700 4,676 ​ 0.3 Impairment losses of long-lived assets ​ 3,013,416 ​ 30.8 ​ — ​ 0.0 ​ 1,561,235 ​ 223,254 ​ 13.7 Total operating expenses ​ 4,158,447 42.5 1,070,636 10.4 2,641,165 377,682 ​ 23.1 ​ 148 Table of Contents Selling and Marketing Expenses Our selling and marketing expenses consist primarily of compensation, including share-based compensation, and benefit expenses for our selling and marketing personnel, business development and promotion expenses and office and traveling expenses. General and Administrative Expenses Our general and administrative expenses consist primarily of compensation, including share-based compensation, and benefit expenses for management and administrative personnel, start-up costs incurred prior to the operation of new data centers, depreciation and amortization, office and traveling expenses, professional fees and other fees. Depreciation relates primarily to our office equipment and facilities used by our management and staff in the administrative department. Start-up costs consist of costs incurred prior to commencement of operations of a new data center, including rental costs incurred pursuant to operating leases of buildings during the construction of leasehold improvements and other miscellaneous costs. Professional fees relate primarily to audit and legal expenses. As a public company, we have incurred increasing legal, accounting and other expenses, including costs associated with public company reporting requirements. We have also incurred costs in order to comply with the Sarbanes-Oxley Act of 2002 and the related rules and regulations implemented by the SEC and Nasdaq. Research and Development Expenses Research and development expenses consist primarily of compensation and benefit expenses for our research and development personnel. We expect to continue to invest in our proprietary data center operating systems and innovative technologies to further scale our operations. Impairment losses of long-lived assets We test long-lived assets (including property and equipment, prepaid land use rights, operating lease right-of-use assets and intangible assets subject to amortization) for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. If the carrying amount of an asset group exceeds its estimated undiscounted future cash flows, an impairment loss is recognized in the amount of the excess of the asset group’s carrying value over its fair value. As of each relevant measurement date, the fair value of asset groups, if determined to be impaired, were measured under income approach and determined based on the higher of the forecasted discounted cash flows expected to result from the data center assets’ operations and eventual disposition and the price market participant would pay to sub-lease and acquire the remaining data center assets, which reflects the highest and best use of the asset groups. Significant inputs used in the income approach primarily included sales price and utilization rates used to estimate the forecasted undiscounted cash flows expected to result from the data center assets’ operation, and discount rate. Share-Based Compensation The table below shows the effect of the share-based compensation expenses on our cost of revenue and operating expense line items, both in an absolute amount and as a percentage of net revenues, for the years indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2023 ​ 2024 ​ 2025 ​ ​ ​ ​ ​ ​ ​ ​ % of Net ​ ​ ​ ​ ​ ​ ​ % of Net ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ % of Net ​ ​ RMB ​ Revenue ​ RMB ​ Revenue ​ RMB ​ US$ ​ Revenue ​ (in thousands, except for percentages) Cost of revenue 116,467 ​ 1.2 ​ 92,402 ​ 0.9 ​ 64,294 ​ 9,194 ​ 0.6 Selling and marketing expenses 43,765 ​ 0.4 ​ 25,033 ​ 0.2 ​ 33,237 ​ 4,753 ​ 0.3 General and administrative expenses 162,866 ​ 1.7 ​ 165,648 ​ 1.6 ​ 178,568 ​ 25,535 ​ 1.5 Research and development expenses ​ 9,546 ​ 0.1 ​ 9,207 ​ 0.1 ​ 7,277 ​ 1,041 ​ 0.1 Others, net 3,972 ​ 0.0 ​ 4,197 ​ 0.1 ​ — ​ — ​ 0.0 Total share-based compensation expenses 336,616 ​ 3.4 ​ 296,487 ​ 2.9 ​ 283,376 ​ 40,523 ​ 2.5 ​ 149 Table of Contents We incurred less share-based compensation expenses in 2025 as compared to 2024 due to less share awards granted in line with the strategy of cost saving. We expect to continue to grant share options, restricted shares and other share-based awards under our share incentive plan and incur further share-based compensation expenses in future periods. See “—E. Critical Accounting Policies and Estimates—Share-based Compensation” in this section for a description of how we account for the compensation cost from share-based payment transactions. Taxation Cayman Islands We are an exempted company incorporated in the Cayman Islands and conduct our business primarily through our mainland China subsidiaries in the PRC. Under the current laws of the Cayman Islands, we are not subject to tax on income or capital gains. In addition, upon payment of dividends by us to our shareholders, no Cayman Islands withholding tax will be imposed. British Virgin Islands Under the current laws of the British Virgin Islands, we are not subject to tax on income or capital gains. In addition, upon payments of dividends by us to our shareholders, no British Virgin Islands withholding tax will be imposed. Hong Kong GDS Holdings and our Hong Kong SAR entities are subject to the Hong Kong SAR profits tax at the rate of 16.5%. A two-tiered Profits Tax rates regime was introduced since year 2018 where the first HK$2.0 million of assessable profits earned will be taxed at half the current tax rate (8.25)% whilst the remaining profits will continue to be taxed at 16.5%. There is an anti-fragmentation measure where each group will have to nominate only one entity in the group to benefit from the progressive rates. The Inland Revenue (Amendment) (Taxation on Specified Foreign-sourced income) Bill 2022 (“the new FSIE regime”) has been enacted in Hong Kong on 14 December 2022 and will have effect from 1 January 2023 onwards. This is to address the European Union’s inclusion of Hong Kong in the “grey list” in concern of any risk of double non-taxation arising from the tax exemption of offshore passive income for companies in Hong Kong without substantial economic substance. From 1 January 2023, offshore passive income (including interest income, dividend income or gain on disposal of equity interest (where applicable)), that is received or deemed to be received in Hong Kong (i.e., identical to the “received” concept in Singapore), would need to meet additional requirements, including, amongst others, the economic substance requirements (i.e. similar to offshore jurisdictions like Cayman Islands, BVI, etc.) in order to continue to be entitled to the offshore income tax exemption in Hong Kong. The Company will monitor the regulatory developments and continue to evaluate the impact on our financial statements, if any. PRC Generally, our subsidiaries, VIEs and their subsidiaries in mainland China are subject to enterprise income tax on their taxable income in mainland China at a rate of 25%. Those entities that are recognized as “High and New Technology Enterprise” are entitled to enterprise income tax rate of 15% as long as the relevant requirements are satisfied. Certain entities satisfying the criteria of “Small and Micro Businesses” enjoy lower income tax rates. The enterprise income tax is calculated based on the entity’s global income as determined under PRC tax laws and accounting standards. 150 Table of Contents Dividends paid by our wholly foreign-owned subsidiaries in mainland China to our intermediary holding company in Hong Kong will be subject to a withholding tax rate of 10%, unless the relevant Hong Kong entity satisfies all the requirements under the Arrangement between Mainland China and the Hong Kong for the Avoidance of Double Taxation and Prevention of Fiscal Evasion with Respect to Taxes on Income and receives approval from the relevant tax authority. If our Hong Kong subsidiary satisfies all the requirements under the tax arrangement and receives approval from the relevant tax authority, then the dividends paid to the Hong Kong subsidiary would be subject to withholding tax at the standard rate of 5%. Effective from November 1, 2015, the above mentioned approval requirement has been abolished, but a Hong Kong entity is still required to file an application package with the relevant tax authority, and settle overdue taxes if the preferential 5% tax rate is denied based on the subsequent review of the application package by the relevant tax authority. On October 14, 2019, STA Announcement [2019] No. 35, Measures for the Administration of Non-Resident Taxpayers’ Enjoyment of Treaty Benefits, was issued to simplify the procedures for claiming China tax treaty benefits by non-resident taxpayers. If our holding company in the Cayman Islands or any of our subsidiaries outside of mainland China were deemed to be a “resident enterprise” under the PRC Enterprise Income Tax Law, it would be subject to enterprise income tax on its worldwide income at a rate of 25%. See “Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in the People’s Republic of China—We may be treated as a resident enterprise for PRC tax purposes under the PRC Enterprise Income Tax Law, and we may therefore be subject to PRC income tax on our global income.” Effective from June 2014, all value-added telecommunication services, or VATS, provided in mainland China were subject to a VAT of 6% whereas basic telecommunication services were subject to a VAT of 11%. Effective from May 2018, the VAT rate on basic telecommunication services was replaced by a new rate of 10%. On March 20, 2019, the MOF, the STA and the General Administration of Customs jointly issued the Notice of Strengthening Reform of VAT Policies, or the Announcement No. 39, which became effective on April 1, 2019. Pursuant to the Announcement No. 39, the generally applicable VAT rates were simplified to 13%, 9%, 6%, and nil, among which the VAT rate on basic telecommunication services was further replaced by the rate of 9% and the VAT rate on VATS remained at 6%. In addition, a general VAT taxpayer is allowed to offset its qualified input VAT paid on taxable purchases against the output VAT chargeable on the telecommunication services and modern services that it provides. Pillar Two Income Tax The Organization for Economic Cooperation and Development (the “OECD”), the European Union and other jurisdictions (including jurisdictions in which we have operations or presence) have committed to enacting substantial changes to numerous long-standing tax principles impacting how large multinational enterprises are taxed. In particular, the OECD’s Pillar Two initiative introduces a 15% global minimum tax applied on a jurisdiction-by-jurisdiction basis and for which many jurisdictions have now committed to an effective enactment date starting January 1, 2024. ​ 151 Table of Contents A. Results of Operations Results of Operations The following table sets forth a summary of our consolidated results of operations for the years ended December 31, 2023, 2024 and 2025. This information should be read together with our audited consolidated financial statements as of December 31, 2024 and 2025 and for the years ended December 31, 2023, 2024 and 2025 and related notes included elsewhere in this annual report. The operating results in any period are not necessarily indicative of the results that may be expected for any future period. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2023 ​ 2024 ​ 2025 ​ ​ ​ ​ % of net ​ ​ ​ % of net ​ ​ ​ ​ ​ % of net ​ ​ ​ ​ RMB ​ ​ ​ revenue ​ ​ ​ RMB ​ ​ ​ revenue ​ ​ ​ RMB ​ ​ ​ US$ ​ ​ ​ revenue ​ (in thousands, except for percentages) Consolidated Statements of Operations Data: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net revenue 9,782,448 ​ 100.0 ​ 10,322,068 ​ 100.0 ​ 11,432,274 ​ 1,634,793 ​ 100.0 Cost of revenue (7,831,222) ​ (80.1) ​ (8,099,439) ​ (78.5) ​ (8,846,859) ​ (1,265,084) ​ (77.4) Gross profit 1,951,226 ​ 19.9 ​ 2,222,629 ​ 21.5 ​ 2,585,415 ​ 369,709 ​ 22.6 Operating expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Selling and marketing expenses (140,890) ​ (1.4) ​ (116,440) ​ (1.1) ​ (149,363) ​ (21,359) ​ (1.3) General and administrative expenses (965,982) ​ (9.9) ​ (917,877) ​ (8.9) ​ (897,867) ​ (128,393) ​ (7.8) Research and development expenses (38,159) ​ (0.4) ​ (36,319) ​ (0.4) ​ (32,700) ​ (4,676) ​ (0.3) Impairment losses of long-lived assets ​ (3,013,416) ​ (30.8) ​ — ​ 0.0 ​ (1,561,235) ​ (223,254) ​ (13.7) (Loss) income from continuing operations (2,207,221) ​ (22.6) ​ 1,151,993 ​ 11.1 ​ (55,750) ​ (7,973) ​ (0.5) Other income (expenses) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest income 94,008 ​ 1.0 ​ 89,780 ​ 0.9 ​ 154,041 ​ 22,028 ​ 1.3 Interest expenses ​ (1,936,537) ​ (19.8) ​ (1,924,631) ​ (18.7) ​ (1,788,898) ​ (255,809) ​ (15.6) Foreign currency exchange (loss) gain, net ​ (1,573) ​ (0.0) ​ 18,942 ​ 0.2 ​ 1,489 ​ 213 ​ 0.0 Government grants ​ 84,410 ​ 0.9 ​ 27,253 ​ 0.3 ​ 30,944 ​ 4,425 ​ 0.3 Others, net 25,319 ​ 0.2 ​ 21,804 ​ 0.2 ​ 7,221 ​ 1,033 ​ 0.0 Gain on deconsolidation of subsidiaries ​ — ​ 0.0 ​ — ​ 0.0 ​ 2,364,104 ​ 338,062 ​ 20.7 (Loss) income from continuing operations before income taxes and share of results of equity method investees ​ (3,941,594) ​ (40.3) ​ (614,859) ​ (6.0) ​ 713,151 ​ 101,979 ​ 6.2 Income tax benefits (expenses) 15,577 ​ 0.2 ​ (156,053) ​ (1.5) ​ (469,717) ​ (67,169) ​ (4.1) Share of results of equity method investees ​ — ​ 0.0 ​ — ​ 0.0 ​ 715,928 ​ 102,376 ​ 6.3 Net (loss) income from continuing operations (3,926,017) ​ (40.1) ​ (770,912) ​ (7.5) ​ 959,362 ​ 137,186 ​ 8.4 Loss from operations of discontinued operations, net of income taxes ​ (359,376) ​ (3.7) ​ (400,796) ​ (3.9) ​ — ​ — ​ 0.0 Gain on deconsolidation of subsidiaries, net of nil income taxes ​ — ​ 0.0 ​ 4,475,539 ​ 43.4 ​ — ​ — ​ 0.0 (Loss) income from discontinued operations (359,376) ​ (3.7) ​ 4,074,743 ​ 39.5 ​ — ​ — ​ 0.0 Net (loss) income (4,285,393) ​ (43.8) ​ 3,303,831 ​ 32.0 ​ 959,362 ​ 137,186 ​ 8.4 ​ Key Financial Metrics We monitor the following key financial metrics to help us evaluate growth trends, establish budgets, measure the effectiveness of our business strategies and assess operational efficiencies: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ ​ ​ 2023 ​ ​ ​ 2024 ​ ​ ​ 2025 Other Consolidated Financial Data: ​ ​ ​ ​ Gross margin(1) 19.9 % 21.5 % 22.6 % Operating margin(2) (22.6) % 11.1 % (0.5) % Net margin(3) (43.8) % 32.0 % 8.4 % (1)Gross profit as a percentage of net revenue. (2)(Loss) income from continuing operations as a percentage of net revenue. (3)Net (loss) income as a percentage of net revenue. ​ ​ 152 Table of Contents Non-GAAP Measures In evaluating our business, we consider and use the following non-GAAP measures as supplemental measures to review and assess our operating performance: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2023 ​ 2024 ​ 2025 ​ ​ ​ ​ RMB ​ ​ ​ RMB ​ ​ ​ RMB ​ ​ ​ US$ ​ ​ ​ ​ (in thousands, except for numbers of shares and per share data) Non-GAAP Consolidated Financial Data: ​ ​ ​ ​ ​ ​ Adjusted EBITDA(1) ​ 4,733,004 4,876,436 5,403,462 772,685 ​ Adjusted EBITDA margin(2) ​ 48.4 % 47.2 % 47.3 % 47.3 % Adjusted gross profit(3) ​ 5,087,630 5,314,174 5,915,370 845,885 ​ Adjusted gross profit margin(4) ​ 52.0 % 51.5 % 51.7 % 51.7 % (1) Adjusted EBITDA is defined as net income or net loss (computed in accordance with GAAP) excluding income (loss) from discontinued operations, 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, impairment losses of long-lived assets, share of results of equity method investees and gain on deconsolidation of subsidiaries. (2) Adjusted EBITDA margin is defined as adjusted EBITDA as a percentage of net revenue. (3) Adjusted gross profit is defined as gross profit (computed in accordance with U.S. GAAP), excluding depreciation and amortization, operating lease cost relating to prepaid land use rights, accretion expenses for asset retirement costs and share-based compensation expenses allocated to cost of revenue. (4) Adjusted gross profit margin is defined as adjusted gross profit as a percentage of net revenue. Our management and board of directors use adjusted EBITDA, adjusted EBITDA margin, adjusted gross profit, and adjusted gross profit margin, which are non-GAAP financial measures, to evaluate our operating performance, establish budgets and develop operational goals for managing our business. We believe that the exclusion of the income and expenses eliminated in calculating adjusted EBITDA and adjusted gross profit can provide useful supplemental measures of our core operating performance. In particular, we believe that the use of adjusted EBITDA as a supplemental performance measure captures the trend in our operating performance by excluding from our operating results the impact of our capital structure (primarily interest expense), asset base charges (primarily depreciation and amortization, operating lease cost relating to prepaid land use rights, accretion expenses for asset retirement costs and impairment losses of long-lived assets), impact of our subsidiaries and investments (primarily gain on deconsolidation of subsidiaries and share of results of equity method investees), other non-cash expenses (primarily share-based compensation expenses), and other income and expenses which we believe are not reflective of our operating performance, whereas the use of adjusted gross profit as a supplemental performance measure captures the trend in gross profit performance of our data centers in service by excluding from our gross profit the impact of asset base charges (primarily depreciation and amortization, operating lease cost relating to prepaid land use rights and accretion expenses for asset retirement costs) and other non-cash expenses (primarily share-based compensation expenses) included in cost of revenue. In addition, we exclude income (loss) from discontinued operation from our adjusted EBITDA and adjusted EBITDA margin to measure our financial performance from continuing operations, which will be consistent with our future financial performance measurements. We note that depreciation and amortization is a fixed cost which commences as soon as each data center enters service. However, it usually takes several years for new data centers to reach high levels of utilization and profitability. The Company incurs significant depreciation and amortization costs for its early-stage data center assets. Accordingly, gross profit, which is a measure of profitability after taking into account depreciation and amortization, does not accurately reflect the Company’s core operating performance. We also present these non-GAAP measures because we believe these non-GAAP measures are frequently used by analysts, investors and other interested parties as measures of the financial performance of companies in our industry. 153 Table of Contents These non-GAAP financial measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. These non-GAAP financial measures have limitations as analytical tools, and when assessing our operating performance, cash flows or our liquidity, investors should not consider them in isolation, or as a substitute for net income (loss), cash flows provided by (used in) operating activities or other consolidated statements of operations and cash flow data prepared in accordance with U.S. GAAP. There are a number of limitations related to the use of these non-GAAP financial measures instead of their nearest GAAP equivalent. First, adjusted EBITDA, adjusted EBITDA margin, adjusted gross profit, and adjusted gross profit 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 income (loss) from discontinued operations, net interest expenses, income tax benefits (expenses), depreciation and amortization, operating lease cost relating to prepaid land use rights, accretion expenses for asset retirement costs, share-based compensation expenses, impairment losses of long-lived assets, share of results of equity method investees and gain on deconsolidation of subsidiaries, each of which has been and may continue to be incurred in our business. We mitigate these limitations by reconciling the non-GAAP financial measure to the most comparable U.S. GAAP performance measure, all of which should be considered when evaluating our performance. The following table reconciles our adjusted EBITDA and adjusted EBITDA margin in the years presented to the most directly comparable financial measure calculated and presented in accordance with U.S. GAAP, which is net income or net loss and net income or net loss margin: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2023 ​ 2024 ​ 2025 ​ ​ ​ ​ % of net ​ ​ ​ % of net ​ ​ ​ ​ ​ % of net ​ ​ ​ ​ RMB ​ ​ ​ revenue ​ ​ ​ RMB ​ ​ ​ revenue ​ ​ ​ RMB ​ ​ ​ US$ ​ ​ ​ revenue ​ ​ ​ ​ (in thousands, except for percentages) Net (loss) income ​ (4,285,393) ​ (43.8) ​ 3,303,831 ​ 32.0 ​ 959,362 ​ 137,186 ​ 8.4 Loss (income) from discontinued operations ​ 359,376 ​ 3.7 ​ (4,074,743) ​ (39.5) ​ — ​ — ​ 0.0 Net (loss) income from continuing operations ​ (3,926,017) ​ (40.1) ​ (770,912) ​ (7.5) ​ 959,362 ​ 137,186 ​ 8.4 Net interest expenses ​ 1,842,529 ​ 18.8 ​ 1,834,851 ​ 17.8 ​ 1,634,857 ​ 233,781 ​ 14.3 Income tax (benefits) expenses ​ (15,577) ​ (0.2) ​ 156,053 ​ 1.5 ​ 469,717 ​ 67,169 ​ 4.1 Share of results of equity method investees ​ — ​ 0.0 ​ — ​ 0.0 ​ (715,928) ​ (102,376) ​ (6.3) Gain on deconsolidation of subsidiaries ​ — ​ 0.0 ​ — ​ 0.0 ​ (2,364,104) ​ (338,062) ​ (20.7) Depreciation and amortization ​ 3,368,474 ​ 34.4 ​ 3,243,004 ​ 31.3 ​ 3,459,294 ​ 494,672 ​ 30.3 Operating lease cost relating to prepaid land use rights ​ 106,964 ​ 1.1 ​ 110,126 ​ 1.1 ​ 108,435 ​ 15,506 ​ 0.9 Accretion expenses for asset retirement costs ​ 6,599 ​ 0.1 ​ 6,827 ​ 0.1 ​ 7,218 ​ 1,032 ​ 0.1 Share-based compensation expenses ​ 336,616 ​ 3.5 ​ 296,487 ​ 2.9 ​ 283,376 ​ 40,523 ​ 2.5 Impairment losses of long-lived assets ​ 3,013,416 ​ 30.8 ​ — ​ 0.0 ​ 1,561,235 ​ 223,254 ​ 13.7 Adjusted EBITDA ​ 4,733,004 ​ 48.4 ​ 4,876,436 ​ 47.2 ​ 5,403,462 ​ 772,685 ​ 47.3 ​ The following table reconciles our adjusted gross profit and adjusted gross profit margin in the years presented to the most directly comparable financial measure calculated and presented in accordance with U.S. GAAP, which is gross profit and gross profit margin: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2023 ​ 2024 ​ 2025 ​ ​ ​ ​ % of net ​ ​ ​ % of net ​ ​ ​ ​ ​ % of net ​ ​ ​ ​ RMB ​ ​ ​ revenue ​ ​ ​ RMB ​ ​ ​ revenue ​ ​ ​ RMB ​ ​ ​ US$ ​ ​ ​ revenue ​ ​ ​ ​ (in thousands, except for percentages) Gross profit ​ 1,951,226 ​ 19.9 ​ 2,222,629 ​ 21.5 ​ 2,585,415 ​ 369,709 ​ 22.6 Depreciation and amortization ​ 2,974,546 ​ 30.4 ​ 2,947,444 ​ 28.6 ​ 3,211,965 ​ 459,304 ​ 28.0 Operating lease cost relating to prepaid land use rights ​ 38,792 ​ 0.4 ​ 44,872 ​ 0.4 ​ 46,478 ​ 6,646 ​ 0.4 Accretion expenses for asset retirement costs ​ 6,599 ​ 0.1 ​ 6,827 ​ 0.1 ​ 7,218 ​ 1,032 ​ 0.1 Share-based compensation expenses ​ 116,467 ​ 1.2 ​ 92,402 ​ 0.9 ​ 64,294 ​ 9,194 ​ 0.6 Adjusted gross profit ​ 5,087,630 ​ 52.0 ​ 5,314,174 ​ 51.5 ​ 5,915,370 ​ 845,885 ​ 51.7 ​ ​ 154 Table of Contents Year Ended December 31, 2025 Compared to Year Ended December 31, 2024 Net Revenue Our net revenue increased by 10.8% to RMB11,432.3 million (US$1,634.8 million) in 2025 from RMB10,322.1 million in 2024. This increase was due to increases in service revenue of RMB1,106.2 million, mainly due to an increase in area utilized from 453,094 sqm as of December 31, 2024 to 504,843 sqm as of December 31, 2025, as (i) customers with commitments moved into the data center area, and (ii) new service contracts were signed by customers who commenced utilizing services during the period. Cost of Revenue Our cost of revenue increased by 9.2% to RMB8,846.9 million (US$1,265.1 million) in 2025 from RMB8,099.4 million in 2024. This increase was primarily due to an increase of 18.9% in utility costs to RMB3,995.3 million (US$571.3 million) in 2025 from RMB3,360.8 million in 2024, and an increase of 9.0% in depreciation and amortization costs to RMB3,212.0 million (US$459.3 million) in 2025 from RMB2,947.4 million in 2024. The increase in utility costs was largely a result of an increase in customer power utilized and new data center facilities. Increase in depreciation and amortization costs was largely a result of increased properties and equipment. Cost of revenue as a percentage of net revenue decreased to 77.4% in 2025 from 78.5% in 2024. Operating Expenses Our total operating expenses increased by 146.7% to RMB2,641.2 million (US$377.7 million) in 2025 as compared to RMB1,070.6 million in 2024. The increase was primarily due to impairment losses of long-lived assets of RMB1,561.2 million (US$223.3 million) in 2025. Our total operating expenses as a percentage of our net revenue increased to 23.1% in 2025 from 10.4% in 2024. Selling and Marketing Expenses. Our selling and marketing expenses increased by 28.3% to RMB149.4 million (US$21.4 million) from RMB116.4 million in 2024, which was mainly due to the increase in personnel cost of RMB23.8 million. General and Administrative Expenses. Our general and administrative expenses were RMB897.9 million (US$128.4 million) in 2025, compared with RMB917.9 million in 2024, which decrease mainly resulted from (i) a decrease in depreciation and amortization expenses of RMB46.7 million and (ii) a decrease in professional fee of RMB16.6 million, partially offset by (iii) an increase in taxes of RMB25.7 million and (iv) an increase in share-based payment expenses of RMB12.9 million. Research and Development Expenses. Our research and development expenses decreased by 10.0% to RMB32.7 million (US$4.7 million) from RMB36.3 million in 2024. This decrease was primarily attributable to continuing cost control in 2025. Impairment losses of long-lived assets. Impairment losses of long-lived assets of RMB1,561.2 million (US$223.3 million) were provided in 2025, which were mainly due to lower sales price and slower move-in of certain data centers with fixed lease terms. No impairment losses were provided in 2024. Other Income (Expenses) Interest Income. Our interest income increased by 71.6% to RMB154.0 million (US$22.0 million) in 2025 from RMB89.8 million in 2024, which was primarily a result of an increase in cash balance during 2025 as a result of issuance of ordinary shares and convertible bonds. Interest Expenses. Our interest expenses decreased by 7.1% to RMB1,788.9 million (US$255.8 million) in 2025 from RMB1,924.6 million in 2024, which was primarily a result of lower interest rate. Government Grants. Income from government grants increased by 13.5% to RMB30.9 million (US$4.4 million) in 2025 from RMB27.3 million in 2024, primarily due to the increase in certain government support we applied in 2025. Foreign Currency Exchange (Loss) Gain, net. Changes in currency exchange rates resulted in a gain of RMB1.5 million (US$0.2 million) in 2025 as compared to a gain of RMB18.9 million in 2024. The smaller exchange gain in 2025 was primarily due to the appreciation of RMB against U.S. dollar in later 2025. 155 Table of Contents Gain on deconsolidation of subsidiaries Gain on deconsolidation of subsidiaries of RMB2,364.1 million (US$338.1 million) in 2025 was mainly due to the deconsolidation of the project companies through asset monetization transactions including ABS and GDS C-REIT. Income Tax Benefits (Expenses) Income tax expenses were RMB469.7 million (US$67.2 million) in 2025, compared to income tax expenses of RMB156.1 million in 2024. Our income tax benefits (expenses) are comprised of current tax expense, mainly attributable to certain profitable subsidiaries in mainland China, and deferred tax impact. The increase in income tax expenses in 2025 was mainly due to the income tax incurred for the gain on selling the project companies to ABS and GDS C-REIT. The effective tax rate was 65.9% for 2025, compared with negative 25.4% for 2024, which was mainly due to the valuation allowance provided for the deferred tax assets arising from the impairment losses of long-lived assets. Share of results of equity method investees Share of results of equity method investees in 2025 was an income of RMB715.9 million (US$102.4 million), which included a loss on share of investees’ results under equity method of RMB965.1 million (US$138.0 million), primarily from DayOne, and a gain on dilution of equity method investment of RMB1,681.0 million (US$240.4 million) following the completion of part of DayOne’s Series C Convertible Preferred Share issuance. (Loss) Income from Discontinued Operations Income from discontinued operations was RMB4,074.7 million in 2024, consisting of loss from operations of discontinued operations, net of income taxes, of RMB400.8 million and gain on deconsolidation of subsidiaries, net of nil income taxes of RMB4,475.5 million. After deconsolidation of DayOne on December 31, 2024, there were no discontinued operations included in our consolidated financial statements. Net (Loss) Income As a result of the foregoing, net income was RMB959.4 million (US$137.2 million) in 2025, compared to a net income of RMB3,303.8 million in 2024. Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 Net Revenue Our net revenue increased by 5.5% to RMB10,322.1 million in 2024 from RMB9,782.4 million in 2023. This increase was due to increases in service revenue of RMB540.0 million, mainly due to an increase in area utilized from 405,302 sqm as of December 31, 2023 to 453,094 sqm as of December 31, 2024, as (i) customers with commitments moved into the data center area, and (ii) new service contracts were signed by customers who commenced utilizing services during the period. Cost of Revenue Our cost of revenue increased by 3.4% to RMB8,099.4 million in 2024 from RMB7,831.2 million in 2023. This increase was primarily due to an increase of 9.3% in utility costs to RMB3,360.8 million in 2024 from RMB3,076.2 million in 2023, and an increase of 9.2% in personnel costs to RMB512.1 million in 2024 from RMB469.1 million in 2023. The increase in utility costs was largely a result of an increase in customer power utilized and new data center facilities. Increase in personnel costs was largely a result of increased headcount. Cost of revenue as a percentage of net revenue decreased to 78.5% in 2024 from 80.1% in 2023. Operating Expenses Our total operating expenses decreased by 74.3% to RMB1,070.6 million in 2024 as compared to RMB4,158.4 million in 2023. The decrease was primarily due to impairment losses of long-lived assets of RMB3,013.4 million in 2023. Our total operating expenses as a percentage of our net revenue decreased to 10.4% in 2024 from 42.5% in 2023. 156 Table of Contents Selling and Marketing Expenses. Our selling and marketing expenses decreased by 17.4% to RMB116.4 million from RMB140.9 million in 2023, which was mainly due to the decrease in share-based payment expenses of RMB18.7 million. General and Administrative Expenses. Our general and administrative expenses were RMB917.9 million in 2024, compared with RMB966.0 million in 2023, which decrease mainly resulted from (i) a decrease in depreciation and amortization expenses of RMB96.1 million and (ii) a decrease in allowance for credit losses of RMB31.5 million, partially offset by (i) an increase in personnel cost of RMB19.8 million as a result of increased headcount in 2024, (ii) a cash reimbursement from the Company’s ADS depositary bank of RMB22.1 million in 2023, (iii) an increase in taxes of RMB14.9 million, and (iv) an increase in other expenses of RMB22.7 million. Research and Development Expenses. Our research and development expenses decreased by 4.8% to RMB36.3 million from RMB38.2 million in 2023. This decrease was primarily attributable to cost control in 2024. Impairment losses of long-lived assets. Impairment losses of long-lived assets of RMB3,013.4 million were provided in 2023 mainly due to lower sales price and slower move-in within fixed lease terms for the leased properties and proactive plans to consolidate certain data centers. No impairment losses were provided in 2024. Other Income (Expenses) Interest Income. Our interest income decreased by 4.5% to RMB89.8 million in 2024 from RMB94.0 million in 2023, which was primarily a result of a decrease in income generating deposits held during 2024. Interest Expenses. Our interest expenses decreased by 0.6% to RMB1,924.6 million in 2024 from RMB1,936.5 million in 2023. This decrease was primarily a result of lower interest rate. Government Grants. Income from government grants decreased by 67.7% to RMB27.3 million in 2024 from RMB84.4 million in 2023, primarily due to the expiration of certain government support policies. Foreign Currency Exchange (Loss) Gain, net. Changes in currency exchange rates resulted in a gain of RMB18.9 million in 2024 as compared to a loss of RMB1.6 million in 2023, primarily due to the exchange gain from cash balances denominated in U.S. dollar held by our PRC entities as RMB depreciated against U.S. dollar during 2024. Income Tax Benefits (Expenses) Income tax expenses were RMB156.1 million in 2024, compared to income tax benefits of RMB15.6 million in 2023. Our income tax benefits (expenses) are comprised of current tax expense, mainly attributable to certain profitable subsidiaries in mainland China, and deferred tax impact. In 2023, the income tax benefits mainly arose from the impairment losses of long-lived assets and the amortization of deferred tax liabilities attributable to acquisitions. The income tax expenses in 2024 consisted of current tax expenses of RMB337.6 million arising from the profit generated by certain subsidiaries in mainland China and deferred tax benefits of RMB181.6 million mainly due to the amortization of deferred tax liabilities attributable to acquisitions. (Loss) Income from Discontinued Operations Income from discontinued operations was RMB4,074.7 million in 2024, consisting of loss from operations of discontinued operations, net of income taxes, of RMB400.8 million and gain on deconsolidation of subsidiaries, net of nil income taxes of RMB4,475.5 million. In 2023, loss from discontinued operations represented loss from operations of discontinued operations, net of income taxes of RMB359.4 million. The increase in loss from operations of discontinued operations, net of income taxes was mainly due to greater operating expenses for business expansion, partially offset by the increase in gross profit resulting from the increase in area utilized. Net (Loss) Income As a result of the foregoing, net income was RMB3,303.8 million in 2024, compared to a net loss of RMB4,285.4 million in 2023. 157 Table of Contents Variable Interest Entity Financial Information The following tables present the condensed consolidating schedule of financial performance, financial position and cash flows for our company, the non-VIE subsidiaries, and the VIEs and their subsidiaries for the years and as of the dates presented. ​ Selected Condensed Consolidated Statements of Operations Information ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, 2025 ​ ​ Our ​ Non-VIE ​ VIEs and their ​ Consolidation ​ Consolidated ​ ​ ​ ​ company (4) ​ ​ ​ subsidiaries(1)(2) ​ ​ ​ subsidiaries(1)(3) ​ ​ ​ adjustments (5) ​ ​ ​ Total ​ ​ (in thousands of RMB) Net revenue 2,542 ​ 9,020,229 ​ 11,275,197 ​ (8,865,694) ​ 11,432,274 Cost of revenue (69,586) ​ (7,024,556) ​ (10,619,075) ​ 8,866,358 ​ (8,846,859) Net income (loss) 949,643 ​ 688,111 ​ 107,577 ​ (785,969) ​ 959,362 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, 2024 ​ ​ Our ​ Non-VIE ​ VIEs and their ​ Consolidation ​ Consolidated ​ ​ company (4) ​ ​ ​ subsidiaries(1)(2) ​ ​ ​ subsidiaries(1)(3) ​ ​ ​ adjustments (5) ​ ​ ​ Total ​ ​ (in thousands of RMB) Net revenue ​ 6,952 ​ 8,252,368 ​ 10,086,220 ​ (8,023,472) ​ 10,322,068 Cost of revenue ​ (97,174) ​ (6,480,910) ​ (9,526,368) ​ 8,005,013 ​ (8,099,439) Net (loss) income from continuing operations ​ (1,050,153) ​ (393,073) ​ 214,697 ​ 457,617 ​ (770,912) Income (loss) from discontinued operations ​ 4,475,539 ​ (375,346) ​ — ​ (25,450) ​ 4,074,743 Net income (loss) 3,425,386 ​ (768,419) ​ 214,697 ​ 432,167 ​ 3,303,831 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, 2023 ​ ​ Our ​ Non-VIE ​ VIEs and their ​ Consolidation ​ Consolidated ​ ​ company (4) ​ ​ ​ subsidiaries(1)(2) ​ ​ ​ subsidiaries(1)(3) ​ ​ ​ adjustments (5) ​ ​ ​ Total ​ ​ (in thousands of RMB) Net revenue ​ 6,776 ​ 7,623,403 ​ 9,702,806 ​ (7,550,537) ​ 9,782,448 Cost of revenue ​ (121,592) ​ (5,988,643) ​ (9,270,933) ​ 7,549,946 ​ (7,831,222) Net loss from continuing operations ​ (4,290,053) ​ (3,325,083) ​ (7,897) ​ 3,697,016 ​ (3,926,017) Loss from discontinued operations ​ — ​ (351,900) ​ — ​ (7,476) ​ (359,376) Net loss (4,290,053) ​ (3,676,983) ​ (7,897) ​ 3,689,540 ​ (4,285,393) (1) The VIEs and their subsidiaries were contracting parties in IDC service agreements, while our non-VIE subsidiaries provided outsourcing and other services by charging service fees to the VIEs and their subsidiaries. (2)Net revenue of the non-VIE subsidiaries disclosed above comprises of the following items: ● net revenue for provision of services and sales of equipment to third parties, including DayOne after it was deconsolidated, of RMB291.2 million, RMB364.9 million and RMB290.2 million (US$41.5 million) in 2023, 2024 and 2025, respectively; ● net revenue for provision of outsourcing and other services to the VIEs and their subsidiaries of RMB7,312.8 million, RMB7,792.6 million and RMB8,711.1 million (US$1,245.7 million) in 2023, 2024 and 2025, respectively; ● net revenue for services provided to discontinued operations, mainly including commission and procurement services fees of RMB1.7 million and RMB38.2 million in 2023 and 2024, respectively; ● net revenue for services provided to our company of RMB9.1 million (US$1.3 million) in 2025; and ● other sales, which mainly represented the equipment sales, to the VIEs and their subsidiaries, of RMB17.7 million, RMB56.7 million and RMB9.8 million (US$1.4 million) in 2023, 2024 and 2025, respectively. (3)Net revenue of the VIEs disclosed above comprises of the following items: ● net revenue for provision of services and sales of equipment to third parties of RMB9,489.5 million, RMB9,919.0 million and RMB11,142.1 million (US$1,593.3 million) in 2023, 2024 and 2025, respectively, which is the net revenue of VIEs and their subsidiaries disclosed in Note 2(a) to our consolidated financial statements; 158 Table of Contents ● net revenue for provision of construction services, research and development services, colocation and managed services and equipment sales to the non-VIE subsidiaries of RMB213.3 million, RMB167.2 million and RMB133.1 million (US$19.0 million) in 2023, 2024 and 2025, respectively. (4) Net revenue of our company in the years ended December 31, 2023, 2024 and 2025 mainly represents the service fees charged to the non-VIE subsidiaries, discontinued operations and DayOne after it was deconsolidated. (5) To eliminate the above intra-group transactions and our company’s equity in gain or loss of subsidiaries, the VIEs and their subsidiaries. Selected Condensed Consolidated Balance Sheets Information ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, 2025 ​ ​ Our ​ ​ ​ Non-VIE ​ ​ ​ VIEs and their ​ ​ ​ Consolidation ​ ​ ​ Consolidated ​ ​ ​ ​ company ​ ​ ​ subsidiaries ​ ​ ​ subsidiaries ​ ​ ​ adjustments ​ ​ ​ Total ​ ​ (in thousands of RMB) Assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Current assets ​ ​ ​ ​ ​ Cash and cash equivalents 3,009,874 ​ 6,754,642 ​ 4,541,442 ​ — ​ 14,305,958 Accounts receivable, net of allowance for credit losses — ​ 38,768 ​ 2,428,590 ​ — ​ 2,467,358 Other current assets 687,911 ​ 655,177 ​ 431,092 ​ (39) ​ 1,774,141 Total current assets excluding amounts due from the entities within the Group 3,697,785 ​ 7,448,587 ​ 7,401,124 ​ (39) ​ 18,547,457 Property and equipment, net (1) — ​ 36,507,657 ​ 1,573,740 ​ (27,573) ​ 38,053,824 Goodwill — ​ 5,187,717 ​ — ​ — ​ 5,187,717 Deferred tax assets — ​ 287,606 ​ 103,381 ​ 232 ​ 391,219 Long-term investments in equity investees 9,164,612 ​ 887,736 ​ — ​ — ​ 10,052,348 Other non-current assets (1) — ​ 7,475,826 ​ 292,389 ​ (2,282) ​ 7,765,933 Total assets excluding investments, loans and amounts due from the entities within the Group 12,862,397 ​ 57,795,129 ​ 9,370,634 ​ (29,662) ​ 79,998,498 Investments, loans and amounts due from the entities within the Group (2) 26,420,808 ​ 8,547,835 ​ 2,219,717 ​ (37,188,360) ​ — Total assets ​ 39,283,205 ​ 66,342,964 ​ 11,590,351 ​ (37,218,022) ​ 79,998,498 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities, Mezzanine Equity and Equity ​ ​ ​ ​ ​ ​ ​ ​ ​ Current liabilities ​ ​ ​ ​ ​ ​ ​ ​ ​ Short-term borrowings and current portion of long-term borrowings (3) ​ — ​ 2,472,225 ​ 282,433 ​ 197,076 ​ 2,951,734 Accounts payable 930 ​ 1,540,456 ​ 390,791 ​ — ​ 1,932,177 Finance lease and other financing obligations, current — ​ 648,156 ​ 48,986 ​ — ​ 697,142 Other current liabilities 107,882 ​ 913,967 ​ 525,457 ​ — ​ 1,547,306 Total current liabilities, excluding amounts due to the entities within the Group 108,812 ​ 5,574,804 ​ 1,247,667 ​ 197,076 ​ 7,128,359 Long-term borrowings, excluding current portion — ​ 23,097,133 ​ 266,266 ​ (186) ​ 23,363,213 Convertible bonds payable 12,144,371 ​ — ​ — ​ — ​ 12,144,371 Finance lease and other financing obligations, non-current — ​ 6,251,591 ​ 802,388 ​ — ​ 7,053,979 Other non-current liabilities — ​ 2,412,128 ​ 159,387 ​ — ​ 2,571,515 Total liabilities, excluding amounts due to the entities within the Group 12,253,183 ​ 37,335,656 ​ 2,475,708 ​ 196,890 ​ 52,261,437 Amounts due to the entities within the Group (2) (3) 190,347 ​ 36,179,271 ​ 8,246,495 ​ (44,616,113) ​ — Total liabilities 12,443,530 ​ 73,514,927 ​ 10,722,203 ​ (44,419,223) ​ 52,261,437 Total mezzanine equity 1,056,663 ​ — ​ — ​ — ​ 1,056,663 Total equity (deficit) 25,783,012 ​ (7,171,963) ​ 868,148 ​ 7,201,201 ​ 26,680,398 Total liabilities, mezzanine equity and equity 39,283,205 ​ 66,342,964 ​ 11,590,351 ​ (37,218,022) ​ 79,998,498 ​ 159 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, 2024 ​ ​ ​ ​ Our ​ ​ ​ Non-VIE ​ ​ ​ VIEs and their ​ ​ ​ Consolidation ​ ​ ​ Consolidated ​ ​ company ​ subsidiaries ​ subsidiaries ​ adjustments ​ Total ​ ​ (in thousands of RMB) Assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Current assets ​ ​ ​ ​ ​ Cash and cash equivalents 1,498,062 ​ 4,510,777 ​ 1,858,820 ​ — ​ 7,867,659 Accounts receivable, net of allowance for credit losses — ​ 25,296 ​ 2,996,660 ​ — ​ 3,021,956 Other current assets 54,910 ​ 338,571 ​ 329,975 ​ — ​ 723,456 Total current assets excluding amounts due from the entities within the Group 1,552,972 ​ 4,874,644 ​ 5,185,455 ​ — ​ 11,613,071 Property and equipment, net (1) — ​ 38,361,913 ​ 1,895,324 ​ (53,104) ​ 40,204,133 Goodwill — ​ 5,886,379 ​ — ​ — ​ 5,886,379 Deferred tax assets ​ — ​ 322,037 ​ 58,970 ​ 267 ​ 381,274 Long-term investments in equity investees 7,537,604 ​ 6,951 ​ — ​ — ​ 7,544,555 Other non-current assets(1) 61 ​ 7,633,291 ​ 388,649 ​ (2,785) ​ 8,019,216 Total assets excluding investments, loans and amounts due from the entities within the Group 9,090,637 ​ 57,085,215 ​ 7,528,398 ​ (55,622) ​ 73,648,628 Investments, loans and amounts due from the entities within the Group (2) 24,778,969 ​ 6,515,232 ​ 2,185,432 ​ (33,479,633) ​ — Total assets 33,869,606 ​ 63,600,447 ​ 9,713,830 ​ (33,535,255) ​ 73,648,628 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities, Mezzanine Equity and Equity ​ ​ ​ ​ ​ ​ ​ ​ ​ Current liabilities ​ ​ ​ ​ ​ ​ ​ ​ ​ Short-term borrowings and current portion of long-term borrowings (3) 1,435,924 ​ 2,402,957 ​ 404,801 ​ 97,967 ​ 4,341,649 Accounts payable 1,066 ​ 2,089,567 ​ 502,672 ​ — ​ 2,593,305 Finance lease and other financing obligations, current — ​ 590,999 ​ 45,153 ​ — ​ 636,152 Other current liabilities 121,665 ​ 1,015,895 ​ 369,432 ​ — ​ 1,506,992 Total current liabilities, excluding amounts due to the entities within the Group 1,558,655 ​ 6,099,418 ​ 1,322,058 ​ 97,967 ​ 9,078,098 Long-term borrowings, excluding current portion — ​ 21,507,145 ​ 399,043 ​ (203) ​ 21,905,985 Convertible bonds payable 8,576,583 ​ — ​ — ​ — ​ 8,576,583 Finance lease and other financing obligations, non-current — ​ 6,750,459 ​ 851,192 ​ — ​ 7,601,651 Other non-current liabilities — ​ 2,645,285 ​ 172,393 ​ — ​ 2,817,678 Total liabilities, excluding amounts due to the entities within the Group 10,135,238 ​ 37,002,307 ​ 2,744,686 ​ 97,764 ​ 49,979,995 Amounts due to the entities within the Group (2) (3) 195,666 ​ 35,934,659 ​ 6,208,573 ​ (42,338,898) ​ — Total liabilities 10,330,904 ​ 72,936,966 ​ 8,953,259 ​ (42,241,134) ​ 49,979,995 Total mezzanine equity 1,080,656 ​ — ​ — ​ — ​ 1,080,656 Total equity (deficit) 22,458,046 ​ (9,336,519) ​ 760,571 ​ 8,705,879 ​ 22,587,977 Total liabilities, mezzanine equity and equity 33,869,606 ​ 63,600,447 ​ 9,713,830 ​ (33,535,255) ​ 73,648,628 (1) The consolidation adjustments are to eliminate the unrealized profit primary for (a) sales of equipment from non-VIE subsidiaries to the VIEs and their subsidiaries, (b) the construction services provided by the VIEs and their subsidiaries to the non-VIE subsidiaries and (c) the capitalized research and development services provided by the non-VIE subsidiaries to the VIEs and their subsidiaries. (2) Equity method has been used to account for our company’s investments in the subsidiaries. The consolidation adjustments are to eliminate intra-group balances in respect of investment, loans and other amounts due from and due to the entities within the Group. (3) Certain non-VIE subsidiaries discounted without recourse the accounts receivable from certain VIE subsidiaries with banks. Such arrangement is in substance a financing from banks on a consolidated basis. The consolidation adjustments are to recognize the borrowing from banks. ​ 160 Table of Contents Selected Condensed Consolidated Cash Flows Information ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, 2025 ​ ​ ​ ​ ​ ​ VIEs and ​ ​ ​ ​ ​ ​ Our ​ Non-VIE ​ their ​ Consolidation ​ Consolidated ​ ​ ​ ​ company ​ ​ ​ subsidiaries ​ ​ ​ subsidiaries ​ ​ ​ adjustments (1) ​ ​ ​ Total ​ ​ (in thousands of RMB) Net cash (used in) provided by operating activities (1) ​ (230,172) ​ 2,751,109 ​ 844,806 ​ (489) ​ 3,365,254 Net cash (used in) provided by investing activities (1) (2) ​ (1,555,792) ​ (4,542,689) ​ 2,177,111 ​ 881,371 ​ (3,039,999) Net cash provided by (used in) financing activities (2) 3,357,658 ​ 4,004,407 ​ (375,167) ​ (880,882) ​ 6,106,016 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, 2024 ​ ​ ​ ​ ​ ​ VIEs and ​ ​ ​ ​ ​ ​ Our ​ Non-VIE ​ their ​ Consolidation ​ Consolidated ​ ​ ​ ​ company ​ ​ ​ subsidiaries ​ ​ ​ subsidiaries ​ ​ ​ adjustments (1) ​ ​ ​ Total ​ ​ (in thousands of RMB) Net cash (used in) provided by operating activities of continuing operations ​ (274,168) ​ 2,500,421 ​ (5,129) ​ (1,462) ​ 2,219,662 Net cash used in operating activities of discontinued operations ​ — ​ (281,297) ​ — ​ — ​ (281,297) Net cash (used in) provided by operating activities (1) ​ (274,168) ​ 2,219,124 ​ (5,129) ​ (1,462) ​ 1,938,365 Net cash provided by (used in) investing activities of continuing operations ​ 208,016 ​ (1,473,249) ​ (236,574) ​ (338,554) ​ (1,840,361) Net cash used in investing activities of discontinued operations ​ — ​ (6,920,177) ​ — ​ — ​ (6,920,177) Net cash provided by (used in) investing activities(1)(2) ​ 208,016 ​ (8,393,426) ​ (236,574) ​ (338,554) ​ (8,760,538) Net cash provided by (used in) financing activities of continuing operations ​ 1,348,792 ​ (1,181,940) ​ (332,573) ​ 340,016 ​ 174,295 Net cash provided by financing activities of discontinued operations ​ — ​ 16,883,042 ​ — ​ — ​ 16,883,042 Net cash provided by (used in) financing activities(2) 1,348,792 ​ 15,701,102 ​ (332,573) ​ 340,016 ​ 17,057,337 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, 2023 ​ ​ ​ ​ ​ ​ VIEs and ​ ​ ​ ​ ​ ​ Our ​ Non-VIE ​ their ​ Consolidation ​ Consolidated ​ ​ ​ ​ company ​ ​ ​ subsidiaries ​ ​ ​ subsidiaries ​ ​ ​ adjustments (1) ​ ​ ​ Total ​ ​ (in thousands of RMB) Net cash (used in) provided by operating activities of continuing operations ​ (68,805) ​ 2,197,441 ​ 235,448 ​ (4,808) ​ 2,359,276 Net cash used in operating activities of discontinued operations ​ — ​ (294,019) ​ — ​ — ​ (294,019) Net cash (used in) provided by operating activities (1) ​ (68,805) ​ 1,903,422 ​ 235,448 ​ (4,808) ​ 2,065,257 Net cash used in investing activities of continuing operations ​ (1,285,317) ​ (3,416,796) ​ (86,336) ​ 272,859 ​ (4,515,590) Net cash used in investing activities of discontinued operations ​ — ​ (2,827,863) ​ — ​ — ​ (2,827,863) Net cash used in investing activities(1)(2) ​ (1,285,317) ​ (6,244,659) ​ (86,336) ​ 272,859 ​ (7,343,453) Net cash provided by (used in) financing activities of continuing operations ​ 622,659 ​ 937,895 ​ (25,567) ​ (268,051) ​ 1,266,936 Net cash provided by financing activities of discontinued operations ​ — ​ 2,892,824 ​ — ​ — ​ 2,892,824 Net cash provided by (used in) financing activities(2) 622,659 ​ 3,830,719 ​ (25,567) ​ (268,051) ​ 4,159,760 (1) The consolidation adjustments represent the elimination of intra-group payments from the non-VIE subsidiaries to one of the VIE’s subsidiaries, for the construction services rendered. 161 Table of Contents (2) The consolidation adjustments are primarily to eliminate (a) our company’s investment in, loans and advances to the non-VIE subsidiaries with (b) the capitals, advances and loans received by the non-VIE subsidiaries from our company. B. Liquidity and Capital Resources Our primary sources of liquidity have been net proceeds from operations, cash flow from short-term and long-term borrowings, issuance of debt and equity securities, including in our initial public offering, follow-on public offerings, private placement (including convertible preferred shares) and convertible bonds, which have historically been sufficient to meet our working capital and substantially all of our capital expenditure requirements. Historically, we also have had finance lease and other financing obligations. As of December 31, 2025, we had cash and cash equivalents of RMB14,306.0 million (US$2,045.7 million). In addition, as of December 31, 2025, total short-term debt was RMB3,648.9 million (US$521.8 million), comprised of short-term borrowings and the current portion of long-term borrowings of RMB2,951.7 million (US$422.1 million) and the current portion of finance lease and other financing obligations of RMB697.1 million (US$99.7 million). As of the same date, total long-term debt was RMB42,561.6 million (US$6,086.2 million), comprised of long-term borrowings (excluding current portion) of RMB23,363.2 million (US$3,340.9 million), the non-current portion of finance lease and other financing obligations of RMB7,054.0 million (US$1,008.7 million) and convertible bonds payable of RMB12,144.4 million (US$1,736.6 million). As of December 31, 2025, the unused amount of working capital and project financing credit was RMB3,563.4 million (US$ 509.6 million). Based on our current level of operations and available cash, we believe that we have sufficient liquidity to fund our current obligations, projected working capital requirements, debt service requirements and capital spending requirements at least for the next 12 months. However, we may require additional cash resources due to changing business conditions or other future developments, including any investments or acquisitions we may decide to selectively pursue. If our existing cash resources are insufficient to meet our requirements, we may seek to sell equity or equity-linked securities, debt securities, borrow from banks or dispose our assets. We cannot assure you that financing will be available in the amounts we need or on terms acceptable to us, if at all. The sale of additional equity securities, including convertible debt securities, would result in additional dilution to our shareholders. The incurrence of indebtedness and issuance of debt securities would result in debt service obligations and could result in operating and financial covenants that restrict our operations and our ability to pay dividends to our shareholders. If we were unable to obtain additional equity or debt financing as required, our business, operations and prospects and our ability to maintain our desired level of revenue growth may suffer materially. As a holding company with no material operations of our own, we are a corporation separate and apart from our subsidiaries and the consolidated VIEs and, therefore, provide for our own liquidity. We conduct our operations primarily through our mainland China subsidiaries, the VIEs and their subsidiaries in mainland China. As a result, our ability to pay dividends and to finance any debt we may incur depends upon dividends paid by our subsidiaries. If our mainland China subsidiaries, or any newly formed mainland China subsidiaries, incur debt on their own behalf in the future, the instruments governing their debt may restrict their ability to pay dividends to us. In addition, our mainland China subsidiaries are permitted to pay dividends to us only out of their respective retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. Under applicable PRC laws and regulations, our mainland China subsidiaries are each required to set aside a portion of their after-tax profits each year to fund certain statutory reserves, and funds from such reserves may not be distributed to us as cash dividends except in the event of liquidation of such subsidiaries. ​ 162 Table of Contents Our main sources of cash funding for the VIEs and their subsidiaries have included intercompany loans and cash advances from GDS Holdings, our subsidiaries and cash generated from operations. In the years ended December 31, 2023 and 2025, GDS Holdings and our subsidiaries did not provide any additional intercompany loans to the VIEs and their subsidiaries and the VIEs and their subsidiaries did not repay any existing intercompany loans to GDS Holdings and our subsidiaries. In the year ended December 31, 2024, GDS Holdings and our subsidiaries did not provide any additional intercompany loans to the VIEs or their subsidiaries and the VIEs and their subsidiaries repaid RMB132.0 million of existing intercompany loans to GDS Holdings and our subsidiaries. As of December 31, 2023, 2024 and 2025, the VIEs and their subsidiaries held cash and cash equivalents of RMB2,451.5 million, RMB1,858.8 million and RMB4,541.4 million (US$649.4 million), respectively. In the year ended December 31, 2023, our company, through the intermediate holding companies, made capital contribution or provided intercompany loans to the non-VIE subsidiaries of RMB1,285.3 million. In the year ended December 31, 2024, GDS Holdings received repayments from discontinued operations of RMB1,059.0 million and made capital contributions or provided intercompany loans to other non-VIE subsidiaries of RMB851.0 million. In the year ended December 31, 2025, our company, through the intermediate holding companies, made capital contribution or provided intercompany loans to the non-VIE subsidiaries of RMB889.0 million (US$127.1 million). PRC entities need to appropriate reserve funds of 10% before distributing earnings until such reserve reaches 50% of paid in capital. Except as otherwise disclosed elsewhere in this annual report, there was no restriction or limitation on our company’s ability to receive earnings from our subsidiaries or to distribute them to U.S. investors during the years ended December 31, 2023, 2024 and 2025. Likewise, there was no restriction or limitation on the consolidated VIEs to settle obligations under the consolidated VIE contractual arrangements. As of December 31, 2025, certain subsidiaries, the VIEs and their subsidiaries had retained earnings of RMB5,502.9 million (US$786.9 million) in aggregate. No dividend or distribution was made through our subsidiaries or consolidated VIEs to our company during the years ended December 31, 2023, 2024 and 2025. The PRC government imposes controls on the convertibility of the Renminbi into foreign currencies and, in certain cases, the remittance of currency out of mainland China. We receive substantially all of our revenues in Renminbi. Under our current corporate structure, GDS Holdings may rely on dividend payments from our mainland China subsidiaries to fund any of our cash and financing requirements. Under China’s existing foreign exchange regulations, our mainland China subsidiaries are able to make payments of current accounts, such as dividends, to their offshore holding companies, in foreign currencies, without prior approval from SAFE, by complying with certain procedural requirements. However, approval from appropriate government authorities will be required where Renminbi is to be converted into foreign currency and remitted out of mainland China to pay capital expenses such as the repayment of loans denominated in foreign currencies. There is no requirement imposed on investors to complete registration or obtain approval from appropriate government authorities before they can receive dividend payments from GDS Holdings. See “Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in the People’s Republic of China—Restrictions on currency exchange may limit our ability to utilize our net revenue effectively.” These statutory limitations affect, and future covenant debt limitations might affect, our mainland China subsidiaries’ ability to pay dividends to us. As of December 31, 2025, our cash and cash equivalents and restricted cash were deposited in major financial institutions located in mainland China, Hong Kong, Macau, Singapore and the United States. We currently believe that such limitations on payment in foreign currencies will not impact our ability to meet our ongoing short-term cash obligations although we cannot assure you that such limitations will not affect our ability in the future to meet our short-term cash obligations and to distribute dividends to our shareholders. See “Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in the People’s Republic of China—We rely to a significant extent on dividends and other distributions on equity paid by our principal operating subsidiaries to fund offshore cash and financing requirements” and “—Statutory Reserves.” ​ 163 Table of Contents We do not plan for our mainland China subsidiaries to pay dividends in the foreseeable future and we intend for those subsidiaries to retain any future earnings for use in the operation and expansion of our business in mainland China. Accordingly, our ability to pay dividends and finance debt will be affected by this current plan. In the future, we may take advantage of financing options available to us in connection with any dividend payments we may make or repayments of any offshore indebtedness we may incur. For example, we may fund dividend payments through offshore debt, whether unsecured or secured by the assets of our onshore consolidated entities. In order to service offshore debt, we may rely upon financing options through the capital markets, including issuances of equity or debt securities, the proceeds of which we may use to service offshore debt. Pursuant to the PRC Enterprise Income Tax Law, a withholding tax rate of 10% currently applies to dividends paid by a PRC “resident enterprise” to a foreign enterprise investor, unless any such foreign investor’s jurisdiction of incorporation has a tax treaty with China that provides for preferential tax treatment. Accordingly, if in the future our mainland China subsidiaries that are considered “resident enterprises” pay dividends to the Hong Kong subsidiary that holds such mainland China subsidiary, any such dividend may be subject to a withholding tax of 10%. Such withholding tax rate may be lowered to 5% if a Hong Kong resident enterprise owns no less than 25% of a PRC enterprise. However, the 5% withholding tax rate does not automatically apply and certain requirements must be satisfied. See “Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in the People’s Republic of China—We may not be able to obtain certain benefits under the relevant tax treaty on dividends paid by our mainland China subsidiaries to us through our Hong Kong subsidiary.” As a result of these laws, rules and regulations relating to statutory reserves, foreign exchange conversion and withholding taxes described above, our subsidiaries, the VIEs and their subsidiaries incorporated in mainland China are restricted in their ability to transfer a portion of their respective net assets to their offshore holding companies as dividends, loans or advances. As of December 31, 2025, the restricted net assets were RMB26,248.4 million (US$3,753.5 million), including those of the VIEs and their subsidiaries of RMB356.5 million (US$51.0 million) and our subsidiaries of RMB25,891.9 million (US$3,702.5 million), which mainly consisted of paid-in registered capital. The following table sets forth a summary of our cash flows for the years indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2023 ​ 2024 ​ 2025 ​ ​ ​ ​ RMB ​ ​ ​ RMB ​ ​ ​ RMB ​ ​ ​ US$ ​ (in thousands) Net cash provided by operating activities from continuing operations 2,359,276 ​ 2,219,662 ​ 3,365,254 ​ 481,225 Net cash used in operating activities from discontinued operations (294,019) ​ (281,297) ​ — ​ — Net cash provided by operating activities 2,065,257 ​ 1,938,365 ​ 3,365,254 ​ 481,225 Net cash used in investing activities from continuing operations (4,515,590) ​ (1,840,361) ​ (3,039,999) ​ (434,714) Net cash used in investing activities from discontinued operations (2,827,863) ​ (6,920,177) ​ — ​ — Net cash used in investing activities (7,343,453) ​ (8,760,538) ​ (3,039,999) ​ (434,714) Net cash provided by financing activities from continuing operations ​ 1,266,936 ​ 174,295 ​ 6,106,016 ​ 873,148 Net cash provided by financing activities from discontinued operations ​ 2,892,824 ​ 16,883,042 ​ — ​ — Net cash provided by financing activities ​ 4,159,760 ​ 17,057,337 ​ 6,106,016 ​ 873,148 Effect of exchange rate changes on cash and cash equivalents and restricted cash ​ 154,302 ​ (13,592) ​ (83,774) ​ (11,980) Net (decrease) increase in cash and cash equivalents and restricted cash ​ (964,134) ​ 10,221,572 ​ 6,347,497 ​ 907,679 Cash and cash equivalents and restricted cash at beginning of year ​ 8,882,066 ​ 7,917,932 ​ 8,093,530 ​ 1,157,359 Cash and cash equivalents and restricted cash at end of year ​ 7,917,932 ​ 18,139,504 ​ 14,441,027 ​ 2,065,038 Less: cash and cash equivalents and restricted cash of discontinued operations at end of year or deconsolidation date ​ (420,610) ​ (10,045,974) ​ — ​ — Cash and cash equivalents and restricted cash of continuing operations at end of year 7,497,322 ​ 8,093,530 ​ 14,441,027 ​ 2,065,038 ​ 164 Table of Contents Operating Activities Cash provided by operating activities from continuing operations was RMB3,365.3 million (US$481.2 million) in 2025, primarily due to net income of RMB959.4 million (US$137.2 million), adjusted primarily for (i) depreciation and amortization of RMB3,459.3 million (US$494.7 million), primarily relating to our data center property and equipment, (ii) impairment losses of long-lived assets of RMB1,561.2 million (US$223.3 million), (iii) share-based compensation expenses of RMB283.4 million (US$40.5 million), (iv) Operating lease cost relating to prepaid land use rights of RMB108.4 million (US$15.5 million), (v) amortization of debt issuance and commitment cost of RMB96.7 million (US$13.8 million) and (vi) changes in working capital, partially offset by (vii) gain on deconsolidation of subsidiaries of RMB2,364.1 million (US$338.1 million), (viii) share of results of equity method investees of RMB715.9 million (US$102.4 million), and (ix) deferred tax benefits of RMB97.3 million (US$13.9 million). Changes in working capital primarily consisted of (i) a decrease in accounts receivable of RMB502.0 million (US$71.8 million), partially offset by (ii) an increase in VAT recoverable of RMB388.9 million (US$55.6 million) mainly as a result of capital expenditures and (iii) an increase in other current assets of RMB119.4 million (US$17.1 million). Cash provided by operating activities from continuing operations was RMB2,219.7 million in 2024, primarily due to net loss from continuing operations of RMB770.9 million, adjusted primarily for (i) depreciation and amortization of RMB3,243.0 million, primarily relating to our data center property and equipment, (ii) share-based compensation expenses of RMB296.5 million, (iii) amortization of debt issuance and commitment cost of RMB110.7 million and (iv) operating lease cost relating to prepaid land use rights of RMB110.1 million, partially offset by (v) deferred tax benefits of RMB181.6 million, (vi) net gain on disposal of property and equipment of RMB31.7 million and (vii) changes in working capital. Changes in working capital primarily consisted of (i) an increase in accounts receivable of RMB665.9 million and (ii) an increase in VAT recoverable of RMB115.8 million mainly as a result of capital expenditures, partially offset by (iii) a decrease in other current assets of RMB109.8 million, (iv) an increase in accrued expenses and other payables of RMB104.0 million, and (v) a decrease in other non-current assets of RMB70.8 million. Cash provided by operating activities from continuing operations was RMB2,359.3 million in 2023, primarily due to net loss of continuing operations of RMB3,926.0 million, adjusted primarily for (i) depreciation and amortization of RMB3,368.5 million, primarily relating to our data center property and equipment, (ii) impairment losses of long-lived assets of RMB3,013.4 million, (iii) share-based compensation expenses of RMB336.6 million, (iv) amortization of debt issuance and commitment cost of RMB140.6 million and (v) operating lease cost relating to prepaid land use rights of RMB107.0 million, partially offset by (vi) deferred tax benefits of RMB295.9 million and (vii) changes in working capital. Changes in working capital primarily consisted of (i) an increase in VAT recoverable of RMB388.3 million mainly as a result of capital expenditures, (ii) an increase in accounts receivable of RMB106.5 million, partially offset by (iii) a decrease in other current assets of RMB39.5 million. Investing Activities Net cash used in investing activities from continuing operations was RMB3,040.0 million (US$434.7 million) in 2025, which was primarily due to (i) the payments for purchase of property and equipment and land use rights of RMB4,691.1 million (US$670.8 million) for the development of our data centers, (ii) net payments acquisitions and investments of RMB791.5 million (US$113.2 million) and (iii) purchases of time deposits of RMB674.9 million (US$96.5 million), partially offset by (iv) receipts from disposal of equity investments and subsidiaries of RMB3,037.0 million (US$434.3 million), and (v) the proceeds from sale of property and equipment of RMB80.5 million (US$11.5 million). Net cash used in investing activities from continuing operations was RMB1,840.4 million in 2024, which was primarily due to (i) the payments for purchase of property and equipment and land use rights of RMB3,169.3 million for the development of our data centers and (ii) net payments for acquisitions and investments of RMB82.8 million, partially offset by (iii) receipts of loan repayments from discontinued operations of RMB1,168.8 million, (iv) the proceeds from disposal of property and equipment of RMB203.9 million and (v) proceeds from disposal of subsidiaries of RMB39.0 million. Net cash used in investing activities from continuing operations was RMB4,515.6 million in 2023, which was primarily due to (i) the payments for purchase of property and equipment and land use rights of RMB3,194.0 million for the development of our data centers, (ii) net payments for acquisitions and investments of RMB346.5 million and (iii) payments for investments and loans to discontinued operations of RMB1,017.3 million, partially offset by (iv) the proceeds from disposal of property and equipment of RMB18.6 million, and (v) proceeds from disposal of equity investments and subsidiaries of RMB23.6 million. 165 Table of Contents Financing Activities Net cash provided by financing activities from continuing operations was RMB6,106.0 million (US$873.1 million) in 2025, which was primarily due to (i) proceeds from borrowings of RMB12,546.6 million (US$1,794.1 million), (ii) proceeds from convertible bonds of RMB3,852.9 million (US$551.0 million), (iii) net proceeds from issuance of ordinary shares of RMB1,015.7 million (US$145.2 million), (iv) capital contribution from non-controlling shareholders of RMB776.7 million (US$111.1 million) and (v) proceeds from other financing arrangements of RMB180.0 million (US$25.7 million), partially offset by (iv) repayment of borrowings of RMB11,311.8 million (US$1,617.6 million), (v) payment under finance lease and other financing obligations of RMB626.7 million (US$89.6 million), (vi) payment for purchase of property and equipment through vendor financing of RMB113.1 million (US$16.2 million) and (vii) payment of debt issuance cost of RMB80.4 million (US$11.5 million). Net cash provided by financing activities from continuing operations was RMB174.3 million in 2024, which was primarily due to proceeds from borrowings of RMB6,655.9 million and proceeds from other financing arrangements of RMB200.0 million, partially offset by repayment of borrowings of RMB6,026.8 million, payment under finance lease and other financing obligations of RMB545.9 million, payment of debt issuance cost of RMB54.8 million and payment of redeemable preferred shares dividends of RMB54.2 million. Net cash provided by financing activities from continuing operations was RMB1,266.9 million in 2023, which was primarily due to proceeds from borrowings of RMB6,244.5 million, proceeds from issuance of convertible bonds of RMB3,926.7 million and proceeds from other financing arrangements of RMB220.0 million, partially offset by repayment of borrowings of RMB5,746.8 million, repayment of convertible bonds payable of RMB2,128.3 million, payment under finance lease and other financing obligations of RMB986.9 million, payment of debt issuance cost of RMB187.1 million, payment of redeemable preferred shares dividends of RMB53.9 million and payment of deferred contingent consideration for acquisitions of RMB21.2 million. Statutory Reserves Under applicable PRC laws and regulations, enterprises in mainland China are required to provide for certain statutory reserves. Pursuant to such laws and regulations, we may pay dividends only out of our after-tax profits, if any, determined in accordance with PRC accounting standards and regulations. Further, we are required to allocate at least 10% of our after-tax profits to fund the general reserve until such reserve has reached 50% of our registered capital. In addition, we may also set aside, at our or our Board’s discretion, a portion of our after-tax profits to fund the employee welfare and bonus fund. These reserves may only be used for specific purposes and are not distributable to us in the form of loans, advances, or cash dividends. As of December 31, 2023, 2024 and 2025, PRC entities had RMB225.9 million, RMB316.7 million and RMB397.8 million (US$56.9 million), respectively, in their statutory reserves. Capital Expenditures We had capital expenditures for continuing operations, excluding payments related to acquisitions and investments and payments for purchase of time deposits, of RMB3,175.4 million, RMB2,965.4 million and RMB4,610.6 million (US$659.3 million) in 2023, 2024 and 2025, respectively. Our capital expenditures were primarily for the purchase of equipment, prepaid land use rights reported in investing activities in the consolidated financial statements and leasehold-improvement of data centers. Our capital expenditures have been primarily funded by net cash provided by financing activities. ​ Holding Company Structure As a holding company with no material operations of our own, we are a corporation separate and apart from our subsidiaries and the VIEs and, therefore, provide for our own liquidity. We conduct our operations primarily through our mainland China subsidiaries, the VIEs and their subsidiaries in mainland China. As a result, our ability to pay dividends and to finance any debt we may incur depends upon dividends paid by our subsidiaries. If our mainland China subsidiaries, or any newly formed mainland China subsidiaries, incur debt on their own behalf in the future, the instruments governing their debt may restrict their ability to pay dividends to us. In addition, our mainland China subsidiaries are permitted to pay dividends to us only out of their respective retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. Under applicable PRC laws and regulations, our mainland China subsidiaries are each required to set aside a portion of their after-tax profits each year to fund certain statutory reserves, and funds from such reserves may not be distributed to us as cash dividends except in the event of liquidation of such subsidiaries. 166 Table of Contents For the years ended December 31, 2023, 2024 and 2025, the VIEs and their subsidiaries contributed 97.0%, 96.1% and 97.5%, respectively, of our total net revenue. Project Financing Structure Our data center projects are financed with both equity and debt. We typically capitalize a portion of our data center project’s funding requirement with proceeds raised from financing offshore that is injected into mainland China as registered capital through each of our data center project-specific legal entities. Under SAFE and PRC regulations, registered capital for each legal entity can only be used for its own business use or project-designated purposes, which also follows under its registered business scope. Once the registered capital is injected into mainland China, it is often difficult to remit the proceeds back offshore or to lend it to our other onshore subsidiaries. Thus, we inject registered capital only as needed throughout the development phase of the data center project to remain flexible with our offshore capital. Concurrently, we capitalize each data center project through onshore project-specific loan facilities from banking or other financial institutions in mainland China to finance the remaining capital required in completing the data center project. Under this arrangement, each data center’s estimated cash flows are matched and committed to service its own debt obligations during the term of its loan facilities. In conjunction with the registered capital injected, we sometimes inject a portion of our offshore capital to our onshore project entities through shareholder’s loans. In these instances, we utilize the shareholder’s loans as a temporary bridge to capitalize our projects until project-specific loan facilities have been obtained. Once the project loans are in place, subject to the agreement by lending bank(s), the shareholder’s loans are repaid back offshore. Convertible Senior Notes due 2025 On June 5, 2018, we issued and sold convertible senior notes due in 2025, or the 2025 Notes, in an aggregate principal amount of US$300 million, which bear interest at a rate of 2% per year, payable on June 1 and December 1 of each year, beginning on December 1, 2018. The 2025 Notes will mature on June 1, 2025, unless earlier redeemed, repurchased or converted in accordance with their terms. The 2025 Notes are subject to repurchase by us, at the option of the holders, on June 1, 2023 at a repurchase price equal to 100% of the principal amount of the Notes to be repurchased, plus accrued and unpaid interest. The 2025 Notes may be converted into our ADSs, at the option of the holders, at an initial conversion rate of 19.3865 of our ADSs per US$1,000 principal amount of notes, or approximately 5,815,950 ADSs, representing 46,527,600 Class A ordinary shares, assuming conversion of the entire US$300 million aggregate principal amount at the initial conversion rate. In June 2023, we repurchased approximately US$299,910,000 aggregate principal amount of the 2025 Notes. Pursuant to the indenture dated as of June 5, 2018 relating to the 2025 Notes by and between our company and The Bank of New York Mellon, as trustee, each holder had the right, at the option of such holder, to require us to repurchase all of such holder’s 2025 Notes or any portion thereof that is an integral multiple of US$1,000 principal amount for cash on June 1, 2023. The repurchases were consummated through holders’ exercise of their repurchase right. The repurchased 2025 Notes were canceled accordingly. 2025 Notes in the aggregate principal amount of US$80,000 remained outstanding after such repurchases and was fully repaid in June 2025 upon maturity. 167 Table of Contents Series A Convertible Preferred Shares In March 2019, Ping An Overseas Holdings made an investment in us, and we issued 150,000 Series A convertible preferred shares to an affiliate of Ping An Overseas Holdings for a total consideration of US$150 million. Pursuant to the terms of the investment, during the first eight years from their issuance date, the convertible preferred shares accrue a minimum 5.0% per annum dividend, payable quarterly in arrears, in cash or in kind in the form of additional convertible preferred shares, at our option. As of the eighth anniversary of the issuance date, the convertible preferred shares accrue a 7.0% per annum minimum dividend, payable quarterly in arrears, in cash only, which dividend rate will further increase by 50 basis points per quarter thereafter for so long as any convertible preferred shares remain outstanding. If the aggregate amounts of dividend on its ordinary shares are higher than the cumulative preferred share dividends over the four consecutive quarters, the holders of preferred shares have the right to receive the dividend in an amount equal to the dividend paid to the holders of ordinary shares (treating each holder of convertible preferred shares as being the holder of the number of Class A ordinary shares into which such holder’s convertible preferred shares would be converted if such shares were converted at the end of each period). The convertible preferred shares are convertible into 33,707,864 Class A ordinary shares at the option of their holder, at a conversion rate corresponding to a conversion price of US$35.60 per ADSs, representing a premium of 13.3% to the volume weighted average price of our ADSs for the 30 trading days immediately preceding the date of signing the definitive agreement, subject to customary anti-dilution adjustments. Assuming conversion of all the Series A convertible preferred shares held by its affiliate, Ping An Overseas Holdings would have beneficially owned 2.1% of our Class A ordinary shares as of March 31, 2026. We have the right to trigger a mandatory conversion at our election, beginning on March 15, 2022, provided certain conditions are met, including our Class A ordinary shares achieving a specified price threshold of 150% of the conversion price for a specified period. Holders will not have any redemption right or put option over the convertible preferred shares, except upon (i) the occurrence of a change of control, or (ii) our ADSs ceasing to be listed for trading on any of the New York Stock Exchange, the Nasdaq Global Select Market or the Nasdaq. Assuming that either of the two foregoing events occurred on December 31, 2025 and that all holders exercised their redemption right to require our Company to purchase all of the convertible preferred shares, the total purchase price would have been RMB1.1 billion (US$0.2 billion) and total cash would have been reduced by the same amount in the event of such redemption. After eight years, we will have certain rights in connection with the redemption of the convertible preference shares at 100% of their face value, plus accrued and unpaid dividends. Convertible Senior Notes due 2029 On March 8, 2022, we issued and sold US$620 million in aggregate principal amount of convertible senior notes due in 2029, or the 2029 Notes, to Sequoia China Infrastructure Fund I, STT GDC, and an Asian sovereign wealth fund with which we have a strategic relationship. On May 29, 2024, in connection with an internal portfolio rationalization by STT GDC, all the 2029 Notes previously held by STT GDC were transferred to STT Garnet. The 2029 Notes bear interest at rate of 0.25% per year, payable on each March 8 and September 8, commencing on September 8, 2022. The 2029 Notes will mature on March 8, 2029, unless earlier redeemed, repurchased or converted in accordance with their terms. The 2029 Notes are subject to repurchase by us, at the option of the holders, on March 8, 2027 at a repurchase price equal to 100% of the principal amount of the Notes to be repurchased, plus accrued and unpaid interest. The 2029 Notes may be converted into our ADSs, at the initial conversion price of US$50 per ADS, corresponding to an initial conversion rate of 20 ADSs (or 160 Class A ordinary shares) per US$1,000 principal amount of the Notes, or approximately 12,400,000 ADSs, representing 99,200,000 Class A ordinary shares, assuming conversion of the entire US$620 million aggregate principal amount at the initial conversion rate. Holders may convert their notes into our ADSs or Class A ordinary shares at their option at any time prior to the close of business on the third scheduled trading day (or the fifth scheduled trading day, if the converting holder elects to receive Class A ordinary shares in lieu of ADSs) immediately preceding the maturity date. 168 Table of Contents Convertible Senior Notes due 2030 On January 20, 2023 we issued and sold US$580 million in aggregate principal amount of convertible senior notes due in 2030, or the 2030 Notes, to various private equity funds and institutional investors, including a sovereign wealth fund. The 2030 Notes bear interest at rate of 4.50% per year, payable on each July 31 and January 31, commencing on July 31, 2023. The 2030 Notes will mature on January 31, 2030, unless earlier redeemed, repurchased or converted in accordance with their terms. The 2030 Notes are subject to repurchase by us, at the option of the holders, on January 31, 2028 at a repurchase price equal to 100% of the principal amount of the Notes to be repurchased, plus accrued and unpaid interest. The 2030 Notes may be converted into our ADSs, at the initial conversion price of US$24.50 per ADS, corresponding to an initial conversion rate of 40.8163 ADSs per US$1,000 principal amount of the Notes, or 23,673,454 ADSs, representing 189,387,632 Class A ordinary shares, assuming conversion of the entire US$580 million aggregate principal amount at the initial conversion rate. Holders may convert their notes into our ADSs or Class A ordinary shares at their option at any time prior to the close of business on the third scheduled trading day (or the fifth scheduled trading day, if the converting holder elects to receive Class A ordinary shares in lieu of ADSs) immediately preceding the maturity date. Ordinary Shares On May 30, 2025, we completed our underwritten registered public offering of 5,980,000 ADSs, representing 47,840,000 Class A ordinary shares, at a public offering price of US$24.50 per ADS, and reflecting the exercise in full by the underwriters of their option to purchase 780,000 additional ADSs, representing 6,240,000 Class A ordinary shares. We received net proceeds of approximately US$141.4 million, after deducting underwriting commissions and offering expenses. Also on May 30, 2025, we completed a registered public offering of 6,000,000 ADSs, representing 48,000,000 Class A ordinary shares, or the delta placement of borrowed ADSs at a public offering price of US$24.50 per ADSs, which we lent to an affiliate of the underwriter in the abovementioned ADS offering, such affiliate being the ADS Borrower, pursuant to an ADS lending agreement with such ADS Borrower. The ADS Borrower or its affiliate received all of the proceeds from the sale of the borrowed ADSs. We did not receive any proceeds from the delta placement of borrowed ADSs but received from the ADS Borrower a nominal lending fee, which was applied to fully pay up the Class A ordinary shares underlying the borrowed ADSs. The borrowed ADSs were sold concurrently with the pricing of the belowmentioned offering of 2.25% convertible senior notes due 2032 and the abovementioned offering of 5,980,000 ADSs, which offerings also closed on May 30, 2025. We were informed by the ADS Borrower that it or its affiliates intended to use the short position resulting from the delta placement of the borrowed ADSs to facilitate privately negotiated derivatives transactions related to the notes. Convertible Senior Notes due 2032 On May 30, 2025, we completed our offering of US$550 million aggregate principal amount of 2.25% convertible senior notes due 2032 (including full exercise of the initial purchasers’ option to purchase additional notes), raising approximately US$534.7 million in net proceeds to us after deducing underwriting commissions and other offering expenses. The notes were offered in a private offering to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act. The notes will mature on June 1, 2032, unless earlier redeemed, repurchased or converted in accordance with their terms prior to such date. The 2032 notes are subject to repurchase by GDS at the option of the holders on 1 June 2029 at a repurchase price equal to 100% of the principal amount of the Notes to be repurchased, plus accrued and unpaid interest. Prior to the close of business on the business day immediately preceding December 1, 2031, the notes will be convertible only upon satisfaction of certain conditions and during certain periods. On or after December 1, 2031 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert their notes at their option at any time. Upon conversion, we will pay or deliver, as the case may be, cash, the ADSs or a combination of cash and ADSs, at our election. Holders may also elect to receive Class A ordinary shares in lieu of any ADSs deliverable upon conversion, subject to certain procedures and conditions set forth in the terms of the notes. The notes may be converted at an initial conversion rate of 30.2343 ADSs per US$1,000 principal amount of notes (equivalent to an initial conversion price of approximately US$33.08 per ADS), which rate is subject to the occurrence of certain events, or 16,628,865 ADSs, representing 133,030,920 Class A ordinary shares, assuming conversion of the entire US$550 million aggregate principal amount at the initial conversion rate. 169 Table of Contents Series B Convertible Preferred Shares In February 2026, we completed a private placement of 300,000 Series B convertible preferred shares to Huatai Capital Investment Limited for a total consideration of US$300 million. Pursuant to the terms of the investment, during the first six years from their issuance date, the convertible preferred shares accrue a minimum 3.75% per annum dividend, payable quarterly in arrears, in cash or in kind in the form of additional convertible preferred shares, at our option. As of the sixth anniversary of the issuance date, the convertible preferred shares accrue a 6.75% per annum minimum dividend, payable quarterly in arrears, in cash only, which dividend rate will further increase by 50 basis points per quarter thereafter for so long as any convertible preferred shares remain outstanding. The convertible preferred shares will be convertible into our Class A ordinary shares at the option of their holder, at a conversion rate corresponding to a conversion price of approximately US$54.43 per ADS, subject to customary anti-dilution adjustments, such as the issuance of ordinary shares as dividend or a subdivision or combination of ordinary shares. Prior to conversion, the holders of the convertible preferred shares are entitled to the number of votes per convertible preferred share equal to the number of Class A ordinary shares into which each such convertible preferred share is convertible into. Therefore, such holders of the convertible preferred shares will be able to vote on all matters at general meetings of our shareholders, voting together with the holders of ordinary shares as a single class. Upon exercise in full of the conversion rights attached to the convertible preferred shares at the conversion price, a total of approximately 5,512,072 ADSs (or 44,096,580 ordinary shares) will be issued. Assuming conversion of all the Series B convertible preferred shares, Huatai Capital Investment Limited would have beneficially owned 2.7% of our Class A ordinary shares as of March 31, 2026. The convertible preferred shares will not be convertible at any time on or prior to March 31, 2027. From April 1, 2027 until September 30, 2031, if the last closing price for twenty of thirty days at the end of the calendar quarter is greater than 130% of the conversion price, the holder shall have the right to convert in the following calendar quarter. We may redeem the convertible preferred shares at our election, beginning on February 13, 2029, provided certain conditions are met, including our ADS trading price achieving a specified price threshold of 150% of the conversion price for at least twenty trading days in any period of thirty consecutive trading days. The convertible preferred shares will not be redeemable before February 6, 2032, except in connection with certain trigger events as described above. On or after February 6, 2032, we may redeem all but not part of the convertible preferred shares at our option, at a redemption price per share equal to 100% of their face value, and including accrued and unpaid dividends. The holder of the convertible preferred shares has the option to require us to repurchase any convertible preferred shares held in the event of a fundamental change (as defined in the terms of the convertible preferred shares and including delisting or change or control), at a repurchase price per share equal to 100% of their face value, and including accrued and unpaid dividends. If the holder elects to convert the convertible preferred shares (instead of requiring us to repurchase) upon the occurrence of a fundamental change or other redemption rights of ours (other than the redemption right on or after February 6, 2032), the conversion rate will be subject to make-whole adjustments. Upon any voluntary or involuntary liquidation, dissolution or winding up of our company, after satisfaction of all liabilities and obligations to our creditors, holders of the Series B convertible preferred shares will enjoy a liquidation preference over our ordinary shareholders of the greater of (i) stated value of the shares plus accrued but unpaid dividends; and (ii) the payment the holder would have been entitled to had it converted into ordinary shares immediately prior to such liquidation. The holder shall not transfer title to the Series B convertible preferred shares for so long as it remains outstanding. Series A Convertible Preferred Shares Issued by DayOne In March 2024, our then-consolidated subsidiary, DigitalLand Holdings Limited (now known as “DayOne”), that acted as the holding company for GDS’s international data center assets and operations, entered into definitive agreements for certain institutional private equity investors (the “Series A Investors”) to subscribe for US$587 million of Series A convertible preferred shares (the “Series A”) newly issued by DayOne. In June 2024, DayOne entered into amendments to the definitive agreements for the Series A convertible preferred shares new issue initially announced in March 2024, as a result of which the new issue has been upsized from US$587 million to US$672 million at the same pre-money equity valuation. The Series A subscription price implies a pre-money equity valuation for DayOne of US$750 million. Post-closing and on an as-converted basis, GDS owned approximately 52.7% of the equity interest of DayOne in the form of ordinary shares. The remaining 47.3% equity interest was held in the form of Series A shares by the Series A Investors, including Hillhouse, Rava Partners, Boyu, Princeville Capital, Tekne Capital, among others. DayOne established an equity incentive plan which provides for the grant of options exercisable for such number of ordinary shares representing up to 15% of its issued share capital as of the closing at the Series A subscription price. GDS and certain Series A Investors have the right to appoint directors to the Board of DayOne proportionate with their ownership. Each Series A share is entitled to one vote and will be convertible into one ordinary share of DayOne at any time at the holder’s option. All Series A shares will automatically convert into ordinary shares of DayOne at, or following, completion of DayOne’s IPO, subject to certain conditions. 170 Table of Contents Series B Convertible Preferred Shares Issued by DayOne In October 2024, our then-consolidated subsidiary, DayOne further entered into definitive agreements for certain institutional private equity investors, including Coatue Management and The Baupost Group, to subscribe for US$1.0 billion of Series B convertible preferred shares newly issued by DayOne. In December 2024, DayOne entered into amendments to the definitive agreements for the Series B convertible preferred shares new issue initially announced in October 2024, as a result of which the new issue has been upsized from US$1.0 billion to US$1.2 billion at the same pre-money equity valuation. The upsize was mainly committed by renowned new investors, including the SoftBank Vision Fund and Kenneth Griffin, CEO of Citadel. The Series B subscription price implied a pre-money equity valuation for DayOne of approximately US$2.5 billion. The Series B subscription price per share represented a 75% premium to the subscription price for the Series A new issue which DayOne entered into during March 2024. As of December 31, 2025, following the initial closing of DayOne’s Series C equity financing, we owned an equity interest in DayOne of 30.1%. As of the date of this annual report, following the closing of the upsizing of DayOne’s series C equity financing and DayOne’s repurchase of a portion of our shares in DayOne, we owned an equity interest in DayOne of approximately 19.9%. DayOne established an additional equity incentive plan which, together with its existing equity incentive plan, provides for the grant of options exercisable for such number of ordinary shares representing up to 15% of DayOne’s share capital in issue at closing. GDS and certain Series B investors have the right to appoint directors to the Board of DayOne proportionate with their ownership. Each Series B share is entitled to one vote and will be convertible into one ordinary share of DayOne at any time at the holder’s option. All Series B shares will automatically convert into ordinary shares of DayOne at, or following, completion of DayOne’s IPO, subject to certain conditions. Loans and borrowings As of December 31, 2024 and 2025, we had short-term borrowings of RMB1,798.5 million with weighted average interest rate of 6.39%, and RMB411.4 million (US$58.8 million) with weighted average interest rate of 2.20%, respectively, and long-term borrowings (including current portion) of RMB24,449.1 million with weighted average interest rate of 4.12%, and RMB25,903.5 million (US$3,704.2 million) with weighted average interest rate of 3.90%, respectively, taking into consideration of debt issuance costs relating to the facilities. Our company, through one or more of our subsidiaries, the VIEs and their subsidiaries entered into secured and unsecured loan agreements with various financial institutions for project development and working capital purpose with terms ranging from one to fifteen years. More specifically, the terms of these secured loan facility agreements generally include one or more of the following conditions. If any of the below conditions were to be triggered, we could be obligated to notify the lender or repay any loans outstanding immediately or on an accelerated repayment schedule. See “Item 3. Key Information—D. Risk Factors—Risks to Our Business and Industry—Our substantial level of indebtedness could adversely affect our ability to raise additional capital to fund our operations, expose us to interest rate risk to the extent of our variable rate debt and prevent us from meeting our obligations under our indebtedness.” The secured loan facilities can be divided into onshore project loan facilities and offshore project loan facilities. Below are the terms and conditions for onshore project loan facilities: ● our company and GDS Investment Company are not or cease to be, directly or indirectly, the legal and beneficial owner of 100% of equity interests of, and have the power (whether by way of ownership of shares, proxy, contract, agency or otherwise) to control, GDS Investment Company (in the case of our company), GDS Beijing, GDS Suzhou and the relevant borrowing subsidiaries; ● Management HoldCo ceases to, directly or indirectly, own at least 100% of the equity interests of, and have the power to control, GDS Beijing or GDS Suzhou; ● GDS Beijing, GDS Suzhou and the relevant borrowing subsidiaries cease to, directly or indirectly, be the legal and beneficial owner of 100% of equity interests of, and have the power (whether by way of ownership of shares, proxy, contract, agency or otherwise) to control, their consolidated subsidiaries; 171 Table of Contents ● GDS Holdings is not or ceases to be, directly or indirectly, the legal and beneficial owner of all equity interests held by it in the relevant borrowing subsidiaries, or have the power (whether by way of ownership of shares, proxy, contract, agency or otherwise) to control the relevant borrowing subsidiaries; ● there are changes in the shareholding structure of a principal operating subsidiary of ours, as defined in the relevant loan facility agreement; ● there are changes in the controlling shareholders or the beneficial owners of the relevant borrowing subsidiaries which could have a material adverse effect on their performance of the loan facility agreements; and ● the IDC license of GDS Beijing, the borrowing subsidiaries, other affiliated entities or the authorization by GDS Beijing to one such subsidiary to operate the data center business and provide IDC services under the auspices of the IDC license held by GDS Beijing, is cancelled or fails to be renewed on or before the expiry date. There are certain other events in the loan facility agreements the occurrence of which could obligate us to notify the lender or repay any loans outstanding immediately or on an accelerated repayment schedule, including, among others, if our borrowing subsidiary fails to use the loan in accordance with the use of proceeds as provided in the loan facility agreement, the borrowing subsidiary violates or fails to perform any of its commitments under the loan facility agreement, or if we fail to maintain our shares listed on at least one of the following stock exchanges before the maturity date under the relevant loan facility agreement: (i) Nasdaq; or (ii) The Singapore Exchange Securities Trading Limited; or (iii) the Hong Kong Stock Exchange; or (iv) any other stock exchange acceptable to the lender. The terms of these loan agreements also include cross default provisions which could be triggered if our company (i) fails to repay any financial indebtedness in an aggregate amount equivalent to or exceeding RMB50 million (US$7.1 million), when due or within any originally applicable grace period; (ii) fails to repay any financial indebtedness or perform any of its obligations under any agreement which could have a material adverse effect on its performance of the loan facility agreements; (iii) fails to repay any financial indebtedness raised with any financial institution; or (iv) fails to perform any loan facility agreement with any financial institution which could result in immediate or accelerated repayment of the financial indebtedness or downgrading of the borrowing subsidiary by any credit rating agency administered by the PBOC in accordance with the regulations promulgated by PBOC governing loan market rating standards. As of December 31, 2025, our company was in compliance with all of the abovementioned covenants. As of December 31, 2025, we had total working capital and project financing credit facilities of RMB28,329.5 million (US$4,051.1 million) from various financial institutions, of which the unused amount was RMB3,563.4 million (US$509.6 million). As of December 31, 2025, we had drawn down RMB24,766.1 million (US$3,541.5 million) under these loan facilities, of which RMB406.8 million (US$58.2 million), net of debt issuance costs of RMB3.2 million (US$0.5 million) was recorded in short-term borrowings and RMB24,307.9 million (US$3,476.0 million), net of debt issuance costs of RMB48.2 million (US$6.9 million), was recorded in long-term borrowings, respectively. Drawdowns from these credit facilities are subject to the approval of the relevant lending financial institution and are subject to the terms and conditions of each loan agreement. Below is a summary of the abovementioned secured and unsecured borrowings, which are in RMB and USD denominations: RMB Loans ​ ​ ​ ​ ​ ​ ​ Total Credit Facility as of ​ Total Drawdown Amount as of Purpose ​ ​ ​ December 31, 2025 (RMB (US$) million) ​ ​ ​ December 31, 2025(3) (RMB (US$) million) Data Centers(1) 27,740.1 ($3,966.8) ​ 24,176.7 ($3,457.2) Corporate(2) 412.2 ($58.9) ​ 412.2 ($58.9) ​ USD Loans ​ ​ ​ ​ ​ ​ ​ Total Credit Facility as of ​ Total Drawdown Amount as of Purpose ​ ​ ​ December 31, 2025 (US$ million) ​ ​ ​ December 31, 2025(3) (US$ million) Data Centers(1) 25.2 ​ 25.2 (1)Refers to loans for which the use of proceeds is for development and acquisition of new data centers and related operating costs. (2)Refer to loans for which the use of proceeds is for working capital and general corporate purposes. (3)Drawdown amount does not deduct debt issuance costs of RMB51.4 million (US$7.4 million) in total. 172 Table of Contents The following table sets forth our short-term and long-term borrowings as of December 31, 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Payment due by period ​ ​ ​ ​ ​ ​ ​ ​ Less than ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ More than 5 ​ ​ ​ ​ Total ​ ​ ​ 1 year ​ ​ ​ 1-3 years ​ ​ ​ 3-5 years ​ years ​ ​ (in thousands of RMB) Short-term borrowings(1) ​ 410,000 ​ 410,000 ​ — ​ — ​ — Long-term borrowings(1) ​ 24,356,084 ​ 2,468,483 ​ 6,020,365 ​ 5,571,355 ​ 10,295,881 (1) Refers to loans from financial institutions for data center project financing, working capital and general corporate purposes. Does not include interests or debt issuance costs. C. Research and Development, Patents and Licenses, etc. Sourcing and Development See “Item 4. Information on the Company—B. Business Overview—Data Center Sourcing and Development.” Intellectual Property See “Item 4. Information on the Company—B. Business Overview—Innovation, Technology and Intellectual Property.” D. Trend Information Please refer to “—A. Results of Operations” for a discussion of the most recent trends in our services, sales and marketing by the end of 2025. In addition, please refer to discussions included in such Item for a discussion of known trends, uncertainties, demands, commitments or events that we believe are reasonably likely to have a material effect on our net sales and operating revenues, income from continuing operations, profitability, liquidity or capital resources, or that would cause reported financial information to be not necessarily indicative of our future operating results or financial condition. E. Critical Accounting Policies and Estimates We prepare our financial statements in conformity with U.S. GAAP, which requires us to make judgments, estimates and assumptions. We continually evaluate these estimates and assumptions based on the most recently available information, our own historical experience and various other assumptions that we believe to be reasonable under the circumstances. Since the use of estimates is an integral component of the financial reporting process, actual results could differ from our expectations as a result of changes in our estimates. An accounting policy is considered critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time such estimate is made, and if different accounting estimates that reasonably could have been used, or changes in the accounting estimates that are reasonably likely to occur, could materially impact the consolidated financial statements. We believe that the following accounting policies involve a higher degree of judgment and complexity in their application and require us to make significant accounting estimates. The following descriptions of critical accounting policies, judgments and estimates should be read in conjunction with our consolidated financial statements and other disclosures included in this annual report. Consolidation of VIEs We account for entities qualifying as VIEs in accordance with Financial Accounting Standards Boards, or FASB, Accounting Standards Codification Topic 810, Consolidation, or ASC 810. Our operations are primarily conducted through the VIEs and their subsidiaries, to comply with relevant PRC laws and regulations, which prohibit foreign investment in companies that are engaged in data center-related businesses. Individuals acting as nominee equity holders hold the legal equity interests of Management HoldCo on our behalf. The equity holders of Management HoldCo are Hui Zhou (senior vice president, public affairs and Northern China business), Yan Liang (executive vice president, data center operation and delivery), Kejing Zhang (executive vice president, sales and service), Andy Wenfeng Li (general counsel, compliance officer, and company secretary) and Qi Wang (senior vice president, cloud and network business). Management HoldCo holds the legal equity interests of GDS Beijing and GDS Shanghai on our behalf. 173 Table of Contents A series of contractual arrangements, including equity interest pledge agreements, shareholder voting rights proxy agreements, exclusive technology license and service agreements, intellectual property rights license agreements, exclusive call option agreements and loan agreements, collectively referred to as “VIE Arrangements,” were entered among GDS Investment Company, GDS Beijing, GDS Shanghai and Management HoldCo, as well as among GDS Investment Company, Management HoldCo and the equity holders of Management HoldCo. Through these agreements, Management HoldCo and the equity holders of Management HoldCo have granted all their legal rights, including voting rights, dividends rights, and disposition rights, of their equity interests in Management HoldCo, GDS Beijing and GDS Shanghai to us. Accordingly, Management HoldCo and the equity holders of Management HoldCo do not have (i) rights to make decisions about the activities of Management HoldCo, GDS Beijing and GDS Shanghai or (ii) rights to receive the expected residual returns of Management HoldCo, GDS Beijing and GDS Shanghai. Under the terms of the VIE Arrangements, we have (i) the right to receive service fees on a yearly basis at an amount equivalent to all of the net profits of Management HoldCo, GDS Beijing and GDS Shanghai under the exclusive technology license and service agreements when such services are provided; (ii) the right to receive all dividends declared by Management HoldCo, GDS Beijing and GDS Shanghai and the right to all undistributed earnings of Management HoldCo, GDS Beijing and GDS Shanghai; (iii) the right to receive the residual benefits of the Management HoldCo, GDS Beijing and GDS Shanghai through its exclusive option to acquire 100% of the equity interests in Management HoldCo, GDS Beijing and GDS Shanghai, to the extent permitted under PRC law; and (iv) the right to require the shareholders of Management HoldCo, GDS Beijing, GDS Beijing’s subsidiaries and GDS Shanghai to appoint the PRC citizen (s) as designated by us to act as such shareholder’s exclusive attorney-in-fact to exercise all shareholder rights, including, but not limited to, voting on all matters of Management HoldCo, GDS Beijing, GDS Beijing’s subsidiaries and GDS Shanghai requiring shareholder approval, disposing of all or part of the shareholder’s equity interest in Management HoldCo, GDS Beijing and GDS Shanghai, and appointing directors and executive officers. In accordance with ASC 810, we have a controlling financial interest in Management HoldCo, GDS Beijing and GDS Shanghai because we have (i) the power to direct activities of Management HoldCo, GDS Beijing and GDS Shanghai that most significantly impact their economic performance; and (ii) the right to receive expected residual return of Management HoldCo, GDS Beijing and GDS Shanghai that could potentially be significant to Management HoldCo, GDS Beijing and GDS Shanghai. The significant judgments used and assumptions made in our determination that we are the primary beneficiary of Management HoldCo, GDS Beijing and GDS Shanghai were the terms of the VIE Arrangements and our financial support to Management HoldCo, GDS Beijing and GDS Shanghai. Accordingly, we have included the financial statements of Management HoldCo, GDS Beijing and GDS Shanghai in our consolidated financial statements. Our PRC legal counsel, based on its understanding of the relevant laws and regulations, is of the opinion that each of the contracts among our consolidated mainland China subsidiaries, the consolidated VIEs and their shareholders is valid, legally binding and enforceable in accordance with its terms. However, there are uncertainties regarding the interpretation and application of PRC laws and future PRC laws and regulations. Any changes in PRC laws and regulations that affect our ability to control our VIEs may preclude us from consolidating these companies in the future. In our opinion, the likelihood of deconsolidation of the VIEs is remote based on current facts and circumstances. Revenue Recognition We recognize revenue as we satisfy a performance obligation by transferring control over a good or service to a customer. For each performance obligation satisfied over time, we recognize revenue over time by measuring progress toward complete satisfaction of that performance obligation. If we do not satisfy a performance obligation over time, the performance obligation is satisfied at a point in time. Revenue is measured as the amount of consideration to which we expect to be entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties. For contracts with customers that contain multiple performance obligations, we account for individual performance obligations separately if they are distinct or as a series of distinct obligations if the individual performance obligations meet the series criteria. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. The transaction price is allocated to the separate performance obligation on a relative standalone selling price basis. The standalone selling price is determined based on overall pricing objectives, taking into consideration market conditions, geographic locations and other factors. 174 Table of Contents We derive substantially all of our revenue from the delivery of colocation services and managed services, including managed hosting services and managed cloud services. Contracts with customers for colocation services and managed services include (i) those provide for variable considerations that are primarily based on the usage of such services, and revenues on such contracts are recognized based on the agreed usage-based fees as the actual services are rendered throughout the contract term; and (ii) those provide for a fixed consideration over the contract service period, and revenues on such contracts are recognized on a straight-line basis over the term of the contract. In certain colocation and managed hosting service contracts, we agree to charge customers for their actual power consumption. Relevant revenue is recognized based on actual power consumption during each period. In certain other colocation and managed hosting service contracts, we specify a fixed power consumption limit each month for customers. If a customer’s actual power consumption is below the limit, no additional fee is charged, while if its actual power consumption is above the limit, we charge the customers additional power consumption fees calculated based on the portion of actual power consumption exceeding the limit, multiplied by a fixed unit price, which is determined based on market price and does not provide customers with rights to acquire additional goods or services. Accordingly, relevant revenue is recognized each month based on actual additional power consumption fees. Our colocation service and managed service contracts with customers contain both lease and non-lease components. We elected to adopt the practical expedient which allows lessors to combine lease and non-lease components and account for them as one component if i) they have the same timing and pattern of transfer; and ii) the lease component, if accounted for separately, would be classified as an operating lease. In addition, we have performed a qualitative analysis to determine that the non-lease component is the predominant component of our revenue stream as the customer would ascribe more value to the services provided rather than to the lease component. Therefore, the combined component is accounted for in accordance with the current revenue accounting guidance (“ASC 606”). For contracts that do not meet the criteria for the practical expedient, the lease component is accounted for in accordance with the current lease accounting guidance (“ASC 842”), which is immaterial for the years ended December 31, 2023, 2024 and 2025. Revenue recognized for colocation or managed hosting and cloud services delivered is recorded within accounts receivable if we have an unconditional right to the consideration. Otherwise, it is recorded as contract assets. We generally bill the customer on a monthly or quarterly basis in arrears. Cash received in advance from customers prior to the delivery of the colocation or managed hosting and cloud services is recorded as deferred revenue. Equity method investments Our investments in entities in which we can exercise significant influence but do not own a majority equity interest or control are generally accounted for under the equity method of accounting. Equity method investments are initially measured at cost, except for the retained investments in the common stock of an investee (including a joint venture) in a deconsolidation transaction which are initially measured at fair value. Key estimates and assumptions used to determine the fair value include the amount and timing of future expected cash flows, and discount rate. Basis differences are the differences between our initial cost of the investment and our proportionate share of the individual assets and liabilities of the investee (historical carrying value). When an investee meets the definition of a business, any excess of the initial cost of the investment over the proportional fair value of the assets and liabilities of the investee is recognized as equity method goodwill, which is included in the equity method investment on the consolidated balance sheets. Equity method investments are subsequently adjusted for our share of the income and losses of the investees and adjustments related to (i) elimination of intra-entity profits and losses, (ii) amortization of any basis differences subject to amortization, (iii) our share of changes in the investee’s capital and other comprehensive income. Our proportionate share of the income or loss from its equity method investment is recorded in others, net on the consolidated statement of operations as the amount is immaterial for the years ended December 31, 2023 and 2024. Our proportionate share of the income or loss from its equity method investment is recorded in share of results of equity method investees on the consolidated statement of operations for the year ended December 31, 2025. Our proportionate share of other comprehensive income is recorded in other comprehensive income. We review our investment periodically to determine if any investment may be impaired considering both qualitative and quantitative factors that may have a significant impact on the investees’ fair value. We did not record any impairment losses related to our equity method investment for the years ended December 31, 2023, 2024 and 2025. 175 Table of Contents Goodwill Goodwill is an asset representing the future economic benefits arising from other assets acquired in the acquisition that are not individually identified and separately recognized, which is the excess of the purchase price over the fair value of the net tangible and intangible assets acquired in the acquisition. Goodwill is not deductible for tax purposes. Goodwill acquired in a business combination is assigned to reporting units that are expected to benefit from the synergies of the combination. When we reorganize our reporting structure in a manner that changes the composition of one or more of its reporting units, goodwill is reassigned to the reporting units affected using a relative fair value allocation approach. When a portion of a reporting unit that constitutes a business is to be disposed of, goodwill associated with that business is included in the carrying amount of the business in determining the gain or loss on disposal. The amount of goodwill to be included in that carrying amount is based on the relative fair values of the business to be disposed of and the portion of the reporting unit that will be retained. Goodwill is not amortized but is tested for impairment annually or more frequently if events or changes in circumstances indicate that it might be impaired. Goodwill is tested for impairment at the reporting unit level on an annual basis and between annual tests if an event occurs or circumstances change that would more-likely-than-not reduce the fair value of a reporting unit below its carrying value. These events or circumstances could include a significant change in macroeconomic conditions, the industry and market considerations, cost factors, overall financial performance, other relevant entity-specific events, and events affecting a reporting unit and share price. Application of the goodwill impairment test requires judgment, including the identification of the reporting unit, assignment of assets and liabilities to the reporting unit, assignment of goodwill to the reporting unit, and determination of the fair value of each reporting unit. We have the option to perform a qualitative assessment to determine whether it is more-likely-than-not that the fair value of a reporting unit is less than its carrying value prior to performing the goodwill impairment test. If it is not more-likely-than-not that the fair value of a reporting unit is less than its carrying amount, the goodwill impairment test is not required. If the goodwill impairment test is required, the fair value of the reporting unit is compared with its carrying amount (including goodwill). If the fair value of the reporting unit is less than its carrying amount, an impairment loss shall be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. For the years ended December 31, 2024 and 2025, the Company performed qualitative assessments and evaluated all abovementioned factors to conclude that it was not more-likely-than-not the fair value was less than the carrying amount of the reporting unit. Therefore, no further quantitative impairment testing on goodwill was performed for the years ended December 31, 2024 and 2025. Due to the changing market conditions and fluctuations in the share price of the Company, the Company performed quantitative assessment for the year ended December 31, 2023. The Company estimated fair value using the income approach. The fair value determined using the income approach was compared with comparable market data and reconciled, as necessary. No impairment losses were recorded for goodwill for the years ended December 31, 2023, 2024 and 2025. Impairment of Long-Lived Assets We test long-lived assets (including property and equipment, prepaid land use rights, operating lease right-of-use assets and intangible assets subject to amortization) for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. If the carrying amount of an asset group exceeds its estimated undiscounted future cash flows, an impairment loss is recognized in the amount of the excess of the asset group’s carrying value over its fair value. We determine the fair value of the data center assets based on the higher of the forecasted discounted cash flows expected to result from the data center assets’ operations and eventual disposition and the price market participants would pay to sub-lease and acquire the remaining data centers assets. As of each relevant measurement date, the fair value of asset groups, if determined to be impaired, were measured under income approach. Significant inputs used in the income approach primarily included sales price and utilization rates used to estimate the forecasted undiscounted cash flows expected to result from the data center assets’ operation, and discount rate. For purposes of impairment testing of long-lived assets, we have concluded that an individual data center is the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. When an impairment loss is recognized, it is allocated to the assets of the group on a pro rata basis using the relative carrying amounts of those assets, except that the loss allocated to an individual long-lived asset of the group shall not reduce the carrying amount of that asset below its fair value whenever that fair value is determinable without undue cost and effort. 176 Table of Contents For the year ended December 31, 2023, impairment losses for the Company’s data centers’ long-lived assets of RMB3,013.4 million were recognized. For the year ended December 31, 2025, impairment losses of RMB1,561.2 million (US$223.3 million) were recognized, which were mainly due to lower sales price and slower move-in of certain data centers with fixed lease terms. No impairment loss was recorded for the year ended December 31, 2024. Share-based Compensation We adopted an equity incentive plan in July 2014, or the 2014 share incentive plan, for the granting of share options to key employees, directors and external consultants in exchange for their services. The total number of shares that may be issued under the 2014 share incentive plan is 29,240,000 ordinary shares. We adopted a second equity incentive plan in August 2016, or the 2016 share incentive plan, for the granting of share options and other equity awards to key employees and directors in exchange for their services. The maximum aggregate number of shares which may be subject to equity awards under the 2016 share incentive plan is 56,707,560 shares, provided, however, that such maximum aggregate number of shares shall be automatically increased on the first day of each fiscal year (i.e., January 1 of each calendar year) during which the 2016 share incentive plan remains in effect to three percent (3%) of our then total issued and outstanding shares, if and whenever the shares which may be subject to equity awards under the 2016 share incentive plan accounts for less than one and half percent (1.5%) of our then total issued and outstanding shares. We account for the compensation cost from share-based payment transactions with employees based on the grant-date fair value of the equity-classified awards. The grant-date fair value of the award is recognized as compensation expense, net of forfeitures, over the period during which an employee is required to provide service in exchange for the award, which is generally the vesting period. When no future services are required to be performed by the employee in exchange for an award of equity instruments, and if such award does not contain a performance or market condition, the cost of the award is expensed on the grant date. We recognize compensation cost for an award with only service conditions that has a graded vesting schedule on a straight-line basis over the requisite service period for each separately-vesting portion of the award, provided that the cumulative amount of compensation cost recognized at any date at least equals the portion of the grant-date value of such award that is vested at that date. Awards granted to employees with performance conditions attached are measured at fair value on the grant date and are recognized as the compensation expenses, net of forfeitures, over the performance period when the performance goal becomes probable to achieve. We also adjust the compensation cost based on the probability of performance goal achievement at the end of each reporting period. The rewards are earned upon attainment of identified performance goals. Awards granted to employees with market conditions attached are measured at fair value on the grant date and are recognized as the compensation expenses, net of forfeitures, over the estimated requisite service period, regardless of whether the market condition has been satisfied if the requisite service period is fulfilled. We account for forfeitures when they occur. Compensation cost previously recognized are reversed in the period the award is forfeited before completion of the requisite service period. Share-based payment transactions with nonemployees in which goods or services are received in exchange for equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. Cancellation of an award accompanied by the concurrent grant of a replacement award is accounted for as a modification of the terms of the cancelled award (“modified award”). The incremental compensation cost is measured as the excess of the fair value of the modified award over the fair value of the original award at the modification date. Therefore, as result of the modification, the Company recognizes share-based compensation that comprising (i) the amortization of the incremental compensation cost resulting from the modification over the term of the modified award and (ii) the amortization of any unrecognized compensation cost of the original award over the term of the modified award. The fair value of the restricted shares granted is estimated on the date of grant using the Monte Carlo simulation model. Inputs used included risk-free rate of return, volatility, expected dividend yield, share price at grant date and expected term. 177 Table of Contents Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and net operating losses and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is provided for deferred tax assets for which it is more likely than not that the related tax benefits will not be realized. The evaluation is based on our estimate of the future taxable income. The future taxable income incorporates our best estimates of utilization rates of relevant data centers based on historical utilization rates and our business plans. Such key assumptions are sensitive to variation, such that minor changes could have an impact on the evaluation of the realizability of the deferred tax assets. We recognize the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. Recently Issued Accounting Standards In November 2024, the FASB issued Accounting Standards Update (“ASU”) 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which required disclosure, in the notes to financial statements, of specified information about certain costs and expenses. The ASU is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. It should be applied either (1) prospectively to financial statements issued for reporting periods after the effective date of this ASU or (2) retrospectively to any or all prior periods presented in the financial statements. We will adopt the disclosure requirements from annual reports for fiscal year ending December 31, 2027 and are currently in the process of evaluating the disclosure impact on our consolidated financial statements. In November 2024, the FASB issued ASU 2024-04, Debt—Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments, which clarified the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion. Under the amendments, to account for a settlement of a convertible debt instrument as an induced conversion, an inducement offer is required to provide the debt holder with, at a minimum, the consideration (in form and amount) issuable under the conversion privileges provided in the terms of the instrument. This ASU also made additional clarifications to assist stakeholders in applying the guidance. This ASU also clarified that the induced conversion guidance applies to a convertible debt instrument that is not currently convertible as long as it had a substantive conversion feature as of both its issuance date and the date the inducement offer is accepted. This ASU is effective for all entities for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. Early adoption is permitted for all entities that have adopted the amendments in ASU 2020-06. This ASU permits an entity to apply the new guidance on either a prospective or a retrospective basis. We adopted the standard in the first quarter of 2026 and the adoption of the standard did not have a significant impact on our consolidated financial statements. In July 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, which provide a practical expedient that in developing reasonable and supportable forecasts as part of estimating expected credit losses, all entities may elect a practical expedient that assumes that current conditions as of the balance sheet date do not change for the remaining life of the asset. This ASU is effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. Early adoption is permitted in both interim and annual reporting periods in which financial statements have not yet been issued or made available for issuance. An entity that elects the practical expedient and the accounting policy election, if applicable, should apply the amendments in this ASU prospectively. We adopted the standard in the first quarter of 2026 and the adoption of the standard did not have a significant impact on our consolidated financial statements. 178 Table of Contents In December 2025, the FASB issued ASU 2025-10, Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities, to improve generally accepted accounting principles by establishing authoritative guidance on the accounting for government grants received by business entities. The amendments establish the accounting for a government grant received by a business entity, including guidance for (1) a grant related to an asset and (2) a grant related to income. The guidance is effective for fiscal years beginning after December 15, 2028, with early adoption permitted, and it can be applied using one of the following approaches: (1) a modified prospective approach; (2) a modified retrospective approach and (3) a retrospective approach to all government grants. We will adopt the standard from fiscal year ending December 31, 2029 and are currently in the process of evaluating the impact on our consolidated financial statements. ​