What happened
Shares of Chindata Group (CD) are seeing a strong bullish upswing Wednesday. The Chinese data-center's share price was up roughly 10% as of 11:30 a.m. ET this morning, according to data from S&P Global Market Intelligence.
Chindata published its first-quarter results before the U.S. market opened today, posting earnings that beat the market's expectations. The company posted earnings per American depositary share of $0.10 on revenue of $210.2 million, while the average analyst estimate had guided for the business to post a profit of only $0.04 in the quarter.
So what
Revenue climbed 56.8% year over year in the first quarter, and net income skyrocketed 167.5%. The company saw rising demand for its hyperscale data-center services, and margins for the quarter came in significantly above the market's expectations, even as it carried out new hyperscale construction projects.
Now what
Chindata kept its full-year sales target the same from its last update and guided for sales to come in between 5.88 billion Chinese yuan and 6.06 billion yuan -- or between $830 million and $850 million based on the current exchange rate. But improving margins led the company to raise its updated adjusted earnings before interest, taxes, deductions, and amortization (EBITDA).
Chindata previously targeted EBITDA of between $420 million and $440 million, but it now expects adjusted EBITDA to be between $436 million and $453 million. With that growth target, the company is now guiding for adjusted EBITDA to increase at least 31% year over year in the current quarter.
Chindata appears to be benefiting from surging demand related to artificial intelligence applications. With the artificial intelligence revolution still unfolding, the company could enjoy strong tailwinds as customers require more data storage and processing capabilities.
