Byte contributes nearly 70% of the business, but Data Center DayOne’s US IPO faces lukewarm reception?

The IPO journey of global data center enterprises has begun to encounter setbacks.

On October 21, market sources reported that Singapore-based data center operator DayOne Data Centers (“DayOne”) is considering adjusting its US IPO plan, possibly reducing the fundraising target from up to $5 billion to between $2.5 billion and $3 billion, and may even delay the listing.

Not long ago, on October 5, DayOne had just publicly filed its F-1 prospectus with the SEC, aiming to list on Nasdaq. Previously, the company was once seeking a listing valuation of approximately $20 billion.

In recent years, DayOne has rapidly expanded by capitalizing on the demand from large tech clients, attracting investments from prestigious institutions such as Coatue and Hillhouse Capital.

DayOne primarily develops, constructs, and operates hyperscale data centers for major internet and cloud computing enterprises, providing basic infrastructure including data hall space, power supply, and cooling.

Specifically, DayOne typically acquires land and power resources based on client requirements, builds data centers, and collects fees through long-term service contracts, with most customer agreements lasting 10 to 15 years.

As large tech firms accelerate their overseas business deployment, DayOne’s business has rapidly expanded.

In 2025, DayOne achieved $484 million in revenue, up 171.9% year-on-year. Entering 2026, revenue growth further accelerated, generating $512 million in the first half, a 238% increase, exceeding the entire annual revenue of 2025 in just half a year.

This was mainly driven by the sequential delivery of data centers in locations such as Johor, Malaysia, Batam Island, Indonesia, and Thailand. As of the end of June this year, DayOne's data centers entering the billing phase reached a capacity of 666MW, more than tripling from 213MW in the same period last year.

Major clients have been the key drivers of this expansion. The prospectus reveals that DayOne’s largest customer is a technology company operating a leading global short video platform, contributing 69.4% and 69.2% of revenue in 2025 and the first half of 2026, respectively.

According to a report from The Information, this client is ByteDance.

However, despite the rapid revenue growth, DayOne’s profitability remains under pressure.

The prospectus shows that net losses attributable to ordinary shareholders were $369 million for 2025 and $82 million for the first half of 2026.

One important reason for the widened loss in 2025 was share-based payments. The company recognized $342 million in share-based compensation over the year, with $339 million accounted for under selling, general, and administrative expenses.

Compared with accounting losses, the financial pressure resulting from DayOne's continuous expansion and whether significant investments can be converted into stable future cash flow may be the real focus of the capital markets.

In the first half of 2026, DayOne’s expenditure on fixed assets, land use rights, and construction-related advance payments reached $3.11 billion—about six times its revenue for the same period—while net cash flow from operating activities was only $14.01 million.

As of the end of June this year, DayOne’s total assets stood at $12.836 billion, with total liabilities of $6.497 billion and an asset-liability ratio of 50.62%. Interest-bearing borrowings amounted to $4.426 billion.

Moreover, in addition to this debt, DayOne’s balance sheet also includes a substantial amount of mezzanine equity totaling $6.364 billion, mainly arising from convertible preferred shares issued during previous Series A, B, and C rounds of financing.

These preferred shares carry special exit and liquidation preferences. According to the prospectus, if an IPO is not completed by the end of 2030, a majority of qualifying shareholders are entitled to request the company to initiate a formal exit arrangement.

While this does not mean shareholders are entitled to demand direct repayment of all preferred share investments from DayOne, if the listing cannot be completed for an extended period, the company could still face the pressure of investor exit arrangements.

This IPO was originally expected to provide funding for DayOne’s next phase of expansion, but the potential reduction in fundraising now presents additional challenges for its subsequent financing plans.

In reality, DayOne is not alone. On October 9, Australian data center company Firmus, backed by Nvidia, shelved its previously planned $5 billion IPO. Earlier, it had sought an equity valuation of $30.6 billion, but its limited track record in project operations, high debt levels, and ambitious future construction plans raised investor concerns.

Soon after, Blackstone-owned data center operator AirTrunk also postponed its planned REIT listing in Singapore, which was originally aimed at raising approximately $1.5 billion.

From Firmus to AirTrunk to DayOne, a string of data center companies have successively revised their listing plans, indicating that the capital market is becoming more cautious about high valuations, asset-heavy expansion, and future investment returns.