Simpson Thacher & Bartlett

ICBC TOWER, 35TH FLOOR

3 GARDEN ROAD, CENTRAL

HONG KONG

TELEPHONE: +852-2514-7600

FACSIMILE: +852-2869-7694

Division of Corporation Finance

U.S. Securities and Exchange Commission

100 F Street, N.E.

Washington, D.C. 20549

Attention:                                         Megan Akst, Senior Staff Accountant

Melissa Kindelan, Senior Staff Accountant

Re:                             GDS Holdings Limited
Form 20-F for the Fiscal Year Ended December 31, 2019
Filed April 17, 2020
File No. 001-37925

Ladies and Gentlemen:

On behalf of our client, GDS Holdings Limited, a company organized under the laws of the Cayman Islands (together with its subsidiaries, the “Company”), we respond to the follow-up comment contained in the letter from the staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”), dated October 7, 2020 (the “October 7 Comment Letter”), relating to the Company’s annual report on Form 20-F for the fiscal year ended December 31, 2019 filed with the Commission on April 17, 2020 (the “2019 20-F”).

Set forth below is the Company’s response to the Staff’s comment in the October 7 Comment Letter. The Staff’s comment is retyped below for ease of reference.

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DANIEL FERTIG ADAM C. FURBER YI GAO ADAM S. GOLDBERG MAKIKO HARUNARI IAN C. HO JONATHAN HWANG ANTHONY D. KING CELIA C.L. LAM JIN HYUK PARK KATHRYN KING SUDOL CHRISTOPHER K.S. WONG

RESIDENT PARTNERS

SIMPSON THACHER & BARTLETT, HONG KONG IS AN AFFILIATE OF SIMPSON THACHER & BARTLETT LLP WITH OFFICES IN:

 NEW YORK BEIJING HOUSTON LONDON LOS ANGELES PALO ALTO SÃO PAULO TOKYO WASHINGTON, D.C.

Form 20-F for the Fiscal Year Ended December 31, 2019

Item 3. Key Information
A. Selected Financial Data
Non-GAAP Measures, page 4

1.                                      We note the proposed revised disclosures provided in response to prior comment 1. Please further revise to clarify how the exclusion of certain expenses from adjusted gross profit provides a useful measure of your core operating performance. In this regard, in response to comment 1 in your letter dated August 28, 2020, you explained that depreciation and amortization is a fixed cost of the data centers that commences as soon as each data center enters service. You further indicated that since it usually takes several years for new data centers to reach high levels of utilization and profitability you may incur significant depreciation and amortization costs for data center assets which are still at an early stage. Please revise your disclosures to incorporate this information.

The Company respectfully acknowledges the Staff’s comment and undertakes to revise to clarify how the exclusion of depreciation and amortization, among other expenses, from adjusted gross profit provides a useful measure of the Company’s core operating performance. Below please find a draft of the Company’s proposed expanded disclosures as it intends to present it in future filings. In addition, for the Staff’s reference, the Company includes again in Appendix 1 hereto the amended reconciliations as the Company would present them in future filings going forward.

Proposed expanded disclosures:

“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 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 and accretion expenses for asset retirement costs), 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 and accretion expenses for asset retirement costs) and other non-cash expenses (primarily share-based compensation expenses) included in cost of revenue.

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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.

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 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 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 net interest expenses, incomes tax benefits, depreciation and amortization, accretion expenses for asset retirement costs, and share-based compensation expenses, each of which have been and may continue to be incurred in our business.”

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If you have any question regarding the responses contained in this letter, please do not hesitate to contact me at +852-2514-7660 or dfertig@stblaw.com.

Appendix

cc:                                William Wei Huang, Chief Executive Officer

Daniel Newman, Chief Financial Officer

Andy Wenfeng Li, General Counsel and Company Secretary

GDS Holdings Limited

Kevin Huang

Vivien Yang

KPMG Huazhen LLP

4

Appendix 1

Amended Reconciliations of Adjusted Gross Profit

The following table reconciles our Adjusted Gross Profit in the periods presented to the most directly comparable financial measure calculated and presented in accordance with U.S. GAAP, which is gross profit:

Definition: Adjusted Gross Profit is defined as gross profit (computed in accordance with U.S. GAAP), excluding: depreciation and amortization, accretion expenses for asset retirement costs and share-based compensation expenses.