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SEC Filings

10-Q
EQUINIX INC filed this Form 10-Q on 11/02/2018
Entire Document
 

Asia-Pacific Revenues. Revenues for our Asia-Pacific region for the nine months ended September 30, 2018 included approximately $31.7 million of incremental revenues from the Metronode Acquisition, which closed in April 2018. Our revenues from Japan and Singapore, the largest revenue contributors in the Asia-Pacific region for the period, combined represented approximately 61% and 63%, respectively, of the regional revenues during the nine months ended September 30, 2018 and 2017. Excluding revenues attributable to the Metronode Acquisition, our Asia-Pacific revenue growth was primarily due to (i) approximately $42.9 million of revenue generated from our recently-opened IBX data center expansions in the Hong Kong, Sydney, Melbourne, Singapore and Osaka metro areas and (ii) an increase in orders from both our existing customers and new customers during the period. During the nine months ended September 30, 2018, foreign currency fluctuations resulted in approximately $11.9 million of net favorable foreign currency impact to our Asia-Pacific revenues primarily due to a generally weaker U.S. dollar relative to Japanese Yen and Singapore Dollar during the nine months ended September 30, 2018 compared to the nine months ended September 30, 2017.
Cost of Revenues. Our cost of revenues for the nine months ended September 30, 2018 and 2017 were split among the following geographic regions (dollars in thousands):
 
Nine Months Ended September 30,
 
% Change
 
2018
 
%
 
2017
 
%
 
Actual
 
Constant
Currency
Americas
$
829,118

 
43
%
 
$
680,942

 
44
%
 
22
%
 
23
%
EMEA
685,473

 
35
%
 
538,661

 
34
%
 
27
%
 
20
%
Asia-Pacific
419,949

 
22
%
 
353,921

 
22
%
 
19
%
 
17
%
Total
$
1,934,540

 
100
%
 
$
1,573,524

 
100
%
 
23
%
 
21
%
 
Nine Months Ended September 30,
 
2018
 
2017
Cost of revenues as a percentage of revenues:
 
 
 
Americas
45
%
 
43
%
EMEA
59
%
 
55
%
Asia-Pacific
56
%
 
57
%
Total
51
%
 
50
%
Americas Cost of Revenues. As compared to the nine months ended September 30, 2017, cost of revenues for our Americas region for the nine months ended September 30, 2018 included approximately $104.5 million incremental cost of revenues from the Verizon Data Center Acquisition and the Infomart Dallas Acquisition. Excluding the impact from these acquisitions, the increase in our Americas cost of revenues for the nine months ended September 30, 2018 compared to the nine months ended September 30, 2017 was primarily due to (i) $13.9 million higher depreciation expense primarily due to our IBX data center expansion activity; (ii) $12.7 million of higher repair and maintenance, taxes, licenses, insurance, and other cost of sales in support of our business growth; (iii) $4.9 million of higher rent and facility costs due to new fuel cell leases and IBX growth and (iv) $11.8 million of higher compensation costs, including general salaries, bonuses and stock-based compensation and higher headcount growth (1,185 Americas cost of revenues employees, excluding those from the Verizon Data Center Acquisition, as of September 30, 2018 versus 1,090 as of September 30, 2017). During the nine months ended September 30, 2018, foreign currency fluctuations resulted in approximately $10.4 million of favorable foreign currency impact to our Americas cost of revenues primarily due to a generally stronger U.S. dollar relative to the Brazilian Real during the nine months ended September 30, 2018 compared to the nine months ended September 30, 2017. We expect our Americas cost of revenues to increase as we continue to grow our business, including results from recent acquisitions.
EMEA Cost of Revenues. Cost of revenues for our EMEA region for the nine months ended September 30, 2018 included approximately $39.3 million incremental cost of revenues from the IO, Itconic, and Zenium acquisitions. Excluding the impacts from these acquisitions, the increase in our EMEA cost of revenues was primarily due to (i) $37.6 million of higher utilities costs driven by IBX expansions, increased usage and price increases; (ii) $16.8 million of higher office expenses, rent and facility costs, and repair and maintenance primarily due to an increase in expansion activity and usage due to our business growth; (iii) $4.6 million of higher outside services consulting and taxes, licenses and insurance; (iv) $41.8 million of higher depreciation expense, primarily driven by expansion activity in Dubai, Amsterdam, London, Frankfurt and Paris and (v) $16.4 million of higher compensation costs, including general salaries, bonuses and stock-based compensation and higher headcount growth (1,288 EMEA cost of revenues employees, excluding those from the Itconic and Zenium acquisitions, as of September 30, 2018 versus 1,167 as of September 30, 2017), partially offset by a $11.6 million reduction in other cost of sales, primarily due to realized cash flow

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