GDS has generated negative free cash flow in eight of the last ten quarters, with capital expenditures consuming 40.4% of revenue in Q2 2026, demonstrating a capital-intensive model where investment needs dwarf operating cash generation.
GDS Holdings Limited (GDS) cash flow statement — 12-year operating, investing & financing cash flows
| Metric | TTM | Dec'25 | Dec'24 | Dec'23 | Dec'22 | Dec'21 | Dec'20 | Dec'19 | Dec'18 | Dec'17 | Dec'16 | Dec'15 | Dec'14 |
|---|
| Cash from Operations | 3.57B | 3.37B | 1.94M | 2.07B | 2.86B | 1.2B | 320.89M | 293.44M | -12.91M | -174.61M | -150.23M | -80.3M | 27.94M |
| Operating CF Margin % | - | 29.44% | 0.02% | 20.74% | 30.65% | 15.37% | 5.59% | 7.12% | -0.46% | -10.8% | -14.23% | -11.41% | 5.97% |
| Operating CF Growth % | 159.18% | - | -99.91% | -27.74% | 137.9% | 274.39% | 9.35% | 2372.94% | 92.61% | -16.23% | -87.09% | -387.43% | - |
| Net Income | 3.74B | 959.36M | 3.3M | -4.29B | -1.27B | -1.19B | -669.21M | -442.08M | -430.27M | -326.9M | -276.41M | -98.58M | -130M |
| Depreciation & Amortization | 3.54B | 3.57B | 3.35B | 3.63B | 3.22B | 2.66B | 1.66B | 1.14B | 741.51M | 378.13M | 227.35M | 145.41M | 82.75M |
| Stock-Based Compensation | 244.02M | 283.38M | 296.49K | 336.62M | 290.81M | 391.27M | 333.69M | 189.76M | 105.88M | 59.84M | 64.17M | 4.06M | 27.33M |
| Deferred Taxes | 0 | -97.26M | -181.58K | -295.93M | -99.15M | -48.46M | -89.74M | -50.17M | -36.6M | -11.62M | -10.62M | -10.59M | -5.02M |
| Other Non-Cash Items | -3.59B | -1.44B | -3.35B | 3.17B | 37.26M | 202.33M | 110.7M | 100.16M | 63.83M | 48.1M | 3.7M | -11.91M | -26.51M |
| Working Capital Changes | -364.22M | 93.98M | -543.7K | -484.86M | 674.09M | -809.89M | -1.02B | -646.26M | -457.25M | -322.16M | -158.41M | -120.59M | 79.39M |
| Change in Receivables | 0 | 116.55M | -665.88K | -156.33M | -678.83M | -669.55M | -465.19M | -342.19M | -157.71M | -134.63M | -79.38M | -37.65M | -11.85M |
| Change in Inventory | 0 | 0 | 0 | 0 | 0 | 0 | -692.71M | -359.33M | -303.71M | -285.72M | -119.56M | -89.9M | 80.95M |
| Change in Payables | 0 | 5.43M | -15.63K | 17.98M | 189.71M | 35.5M | 119.16M | 22.54M | 25.29M | 33.9M | 43.84M | -5.15M | -6.76M |
| Cash from Investing | -4.69B | -3.04B | -8.76M | -6.33B | -11.27B | -13.69B | -9.38B | -5.13B | -4.73B | -2.04B | -1.15B | -731.9M | -523.75M |
| Capital Expenditures | -4.43B | -4.69B | -3.17M | -6.25B | -7.8B | -9.88B | -8.02B | -4.55B | -4.26B | -1.76B | -987.7M | -732.98M | -248.35M |
| CapEx % of Revenue | 36.17% | 41.05% | 0.03% | 62.81% | 83.68% | 126.37% | 139.76% | 110.44% | 152.5% | 108.91% | 93.54% | 104.17% | 53.03% |
| Acquisitions | 5.2B | 3.04B | 0 | -133.81M | -3.47B | -3.81B | -1.36B | -578.61M | -475.07M | -275.61M | -159.36M | 0 | 27.41M |
| Investments | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Other Investing | -1.73B | 80.54M | -6.76M | 61.3M | 6.24M | 1.41M | 4.5M | -30.7M | -1M | -6.03M | -42M | 1.07M | -302.81M |
| Cash from Financing | 2.89B | 6.11B | 17.06M | 3.14B | 4.86B | 8.12B | 20.14B | 8.36B | 4.88B | 2.35B | 2.13B | 1.13B | 1.06B |
| Debt Issued (Net) | 0 | 4.35B | 629.15K | 3.24B | 4.98B | 9.03B | 3.18B | 2.38B | 3.82B | 1.79B | 1.04B | 1.17B | 126.88M |
| Equity Issued (Net) | 0 | 1.02B | 0 | 0 | 0 | 2.08M | 15.97B | 5.92B | 0 | 0 | 0 | 0 | -119.66M |
| Dividends Paid | 0 | -54.12M | -54.17K | -53.92M | -51.58M | -49.22M | -65.49M | -25.01M | 0 | 0 | -76.5M | 0 | 0 |
| Share Repurchases | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | -23.3M | -119.66M |
| Other Financing | 2.89B | 789.08M | 16.48M | -44.86M | -68.45M | -865.06M | 1.06B | 81.41M | 1.05B | 566.61M | 1.16B | -44.69M | 1.05B |
| Net Change in Cash | 1.9B | 6.35B | 10.22M | -964.13M | -3.14B | -4.47B | 10.52B | 3.69B | 337.15M | 62.13M | 886.82M | 317.74M | 558.15M |
| Free Cash Flow | -859.47M | -1.33B | -1.23M | -4.19B | -4.95B | -8.68B | -7.7B | -4.26B | -4.27B | -1.93B | -1.14B | -813.28M | -220.41M |
| FCF Margin % | -7.01% | -11.61% | -0.01% | -42.07% | -53.03% | -111% | -134.16% | -103.32% | -152.96% | -119.71% | -107.76% | -115.58% | -47.06% |
| FCF Growth % | -125.04% | - | 99.97% | 15.31% | 43.02% | -12.72% | -80.78% | 0.27% | -120.74% | -70.03% | -39.92% | -268.98% | - |
| FCF per Share | -3.31 | -6.46 | -0.01 | -22.82 | -27.02 | -47.79 | -46.89 | -30.89 | -34.50 | -19.73 | -30.44 | -16.84 | -64.71 |
| FCF Conversion (FCF/Net Income) | -0.23x | 3.54x | 0.00x | -0.48x | -2.25x | -1.01x | -0.47x | -0.66x | 0.03x | 0.53x | 0.54x | 0.81x | -0.21x |
| Interest Paid | 0 | 1.68B | 2.1M | 2.06B | 1.8B | 1.54B | 1.11B | 841.39M | 633.06M | 358.75M | 228.68M | 81.22M | 55.15M |
| Taxes Paid | 0 | 561.92M | 389.84K | 302.72M | 343.35M | 252.07M | 211.61M | 17.03M | 3.37M | 1.37M | 5.64M | 853K | 443K |
Quick answers to the most common questions about buying GDS stock.
GDS Holdings Limited (GDS) generated $3.37B in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
GDS Holdings Limited (GDS) reported negative free cash flow of $1.33B in 2025, indicating capital requirements exceeded cash from operations.
GDS Holdings Limited (GDS) spent $4.69B on capital expenditures in 2025. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.
In 2025, GDS Holdings Limited (GDS) returned $54.1M to shareholders via cash dividends. This shows the company's commitment to returning capital to its equity investors.
Key Metrics
Top Statement Risk
Persistent negative free cash flow
Earnings Quality Masked by Non-Cash Items
The volatile relationship between net income and operating cash flow, with OCF/NI ratios swinging from -11.97 to 1.69, suggests reported earnings are heavily distorted by non-cash items and do not reflect underlying cash generation.
The massive Q1 2026 net income of $2.6B against operating cash flow of only $447.7M indicates a significant non-operating gain, likely from an asset sale or fair value adjustment, which inflates earnings without supporting cash flow. Conversely, quarters with negative net income often show positive operating cash flow, highlighting the disconnect between accrual accounting and cash reality. This pattern warrants scrutiny of the quality and sustainability of reported profits.
Chronic FCF Burn Amid Aggressive Expansion
GDS has generated negative free cash flow in eight of the last ten quarters, with cumulative FCF deficits exceeding $3.5 billion, indicating its growth strategy is consuming far more cash than its operations generate.
The company's FCF margin has been negative in most periods, reaching a low of -53.3% in Q2 2024, which is unsustainable without continuous external financing. The brief positive FCF in Q2 2026 ($161.8M) appears to be an anomaly driven by a large working capital inflow, not a structural improvement. This trajectory confirms the prior income statement finding that growth is not translating into cash profitability.
Capital Intensity Consumes All Operating Cash
Capital expenditures have consistently consumed 23% to 119% of revenue, with the latest quarter at 40.4%, demonstrating a capital-intensive model where investment needs dwarf operating cash generation.
The CapEx/Rev ratio is persistently high, often exceeding 40%, which is typical for a data center operator in a growth phase but leaves minimal cash for debt service or shareholder returns. The Q2 2024 CapEx of $3.2B against revenue of $2.7B is particularly alarming, suggesting a major acquisition or construction push that was not funded by operations. This level of investment is only viable with strong external financing or asset sales.
Working Capital Swings Provide Temporary Relief
Significant working capital inflows, such as the $628.8M in Q2 2026, have periodically offset operating cash flow deficits, but these are volatile and unreliable as a source of sustained liquidity.
The working capital changes are erratic, swinging from a $1.0B outflow in Q1 2026 to a $628.8M inflow in Q2 2026. This volatility suggests inconsistent collection cycles or timing of payables, which can mask underlying operational cash flow weakness. Investors should not rely on these swings to fund the company's massive capital expenditure program.
Acquisitions and CapEx Drive All Cash Outflows
Capital deployment is overwhelmingly directed toward acquisitions and capital expenditures, with net acquisition outflows totaling over $4.3 billion in the last ten quarters, leaving no capacity for dividends or buybacks.
The company has spent heavily on acquisitions, with notable outflows in Q1 2026 ($2.7B) and Q3 2025 ($1.7B), which aligns with its international expansion strategy. This aggressive M&A, combined with relentless CapEx, explains the chronic FCF deficit. The complete absence of dividends or share repurchases confirms that all available cash is being reinvested for growth, a strategy that increases financial risk if returns on invested capital disappoint.
Cash Flow Obscured by Acquisition Accounting
The cash flow statement may obscure the true cost of growth, as large acquisition outflows and volatile working capital movements can mask the underlying cash burn from core operations.
The reported operating cash flow includes significant non-cash depreciation ($850.9M in Q2 2026) and is subject to large swings from working capital, which can make the core business appear more cash-generative than it is. Furthermore, the massive acquisition spending is a use of cash that is not reflected in operating metrics but is critical to understanding the company's liquidity needs. The absence of share-based compensation in the cash flow data is also notable, as it is a significant non-cash expense that would otherwise reduce reported operating cash flow.