GDS Holdings Ltd (NASDAQ: GDS), a leading developer and operator of high-performance data centers in China, saw its stock surge 5.15% in Tuesday's trading session. The significant uptick comes on the heels of the company's release of its robust first-quarter 2025 financial results, which demonstrated a remarkable turnaround to profitability.

The company reported a net income of RMB764.1 million (US$105.3 million) for Q1 2025, a stark contrast to the net loss of RMB344.9 million in the same period last year. This translates to earnings per share of RMB3.44, significantly surpassing analysts' expectations of a RMB0.91 loss per share. The dramatic improvement in profitability was reflected in the net income margin, which reached an impressive 28.1% compared to a net loss margin of 14.2% in Q1 2024.

Adding to the positive sentiment, GDS Holdings reported strong top-line growth, with net revenue climbing 12.0% year-over-year to RMB2,723.2 million (US$375.3 million). The company's adjusted EBITDA increased by 16.1% to RMB1,323.8 million (US$182.4 million), resulting in an improved adjusted EBITDA margin of 48.6%. Furthermore, GDS Holdings successfully completed its first data center ABS (Asset-Backed Securities) transaction in China, which the company states will provide more financing flexibility. These factors collectively contributed to the stock's significant rise, as investors responded positively to the company's strong performance and strategic initiatives in the expanding Chinese data center market.