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SEC Filings

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

ended September 30, 2017. Over the past several years, we have been investing in our EMEA sales and marketing initiatives to further increase our revenues.
Asia-Pacific Sales and Marketing Expenses. The increase in our Asia-Pacific sales and marketing expenses was primarily due to (i) $2.5 million of incremental amortization expenses from the acquired intangible assets in connection with the Metronode Acquisition and (ii) $2.9 million of higher compensation costs, including sales compensation, general salaries and stock-based compensation and headcount growth. For the nine months ended September 30, 2018, the impact of foreign currency fluctuations on our Asia-Pacific sales and marketing expenses was not significant when compared to average exchange rates of the nine months ended September 30, 2017. Over the past several years, we have been investing in our Asia-Pacific sales and marketing initiatives and expect our Asia-Pacific sales and marketing expenses to continue to increase as we continue to grow our business, including the impact from the Metronode acquisition.
General and Administrative Expenses. Our general and administrative expenses 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
$
417,627

 
67
%
 
$
344,754

 
62
%
 
21
 %
 
22
 %
EMEA
137,673

 
22
%
 
152,016

 
27
%
 
(9
)%
 
(14
)%
Asia-Pacific
65,248

 
11
%
 
61,320

 
11
%
 
6
 %
 
4
 %
Total
$
620,548

 
100
%
 
$
558,090

 
100
%
 
11
 %
 
10
 %
 
 
Nine Months Ended September 30,
 
2018
 
2017
General and administrative expenses as a percentage of revenues:
 
 
 
Americas
23
%
 
22
%
EMEA
12
%
 
16
%
Asia-Pacific
9
%
 
10
%
Total
16
%
 
18
%
Americas General and Administrative Expenses. The increase in our Americas general and administrative expenses was primarily due to (i) $30.8 million of higher compensation costs, including general salaries, bonuses, stock-based compensation, and headcount growth (1,297 Americas general and administrative employees, including those from the Verizon Data Center Acquisition, as of September 30, 2018 versus 1,088 as of September 30, 2017); (ii) $13.6 million of higher office, rent and facilities costs and consulting expenses in support of our business growth and (iii) $22.8 million of higher depreciation expense associated with the implementation of certain systems, including revenue, data management and cloud exchange systems, to improve our quote to order and billing processes and to support the integration and growth of our business. During the nine months ended September 30, 2018, the impact of foreign currency fluctuations on our Americas general and administrative expenses was not significant when compared to average exchange rates for the nine months ended September 30, 2017. Over the course of the past year, we have been investing in our Americas general and administrative functions to scale this region effectively for growth, which has included additional investments in improving our back office systems. We expect our current efforts to improve our back office systems will continue over the next several years. Going forward, although we are carefully monitoring our spending, we expect Americas general and administrative expenses to increase as we continue to further scale our operations to support our growth, including these investments in our back office systems, investments to maintain our REIT qualification and recent acquisitions.
EMEA General and Administrative Expenses. The decrease in our EMEA general and administrative expenses was primarily due to (i) $23.1 million of lower amortization expense as a result of fully amortizing the TelecityGroup trade names during the third quarter of 2017; (ii) $6.1 million decrease due to realized cash flow hedge gains and (iii) $4.3 million lower outside services consulting expense, partially offset by an increase of $17.2 million of compensation expenses, including general salaries, bonuses, and stock-based compensation and headcount growth (807 EMEA general and administrative employees as of September 30, 2018 versus 744 as of September 30, 2017). For the nine months ended September 30, 2018, foreign currency fluctuations on our EMEA general and administrative expenses resulted in approximately $6.4 million of net unfavorable foreign currency impact to our EMEA general and administrative expenses primarily due to a generally weaker U.S. dollar relative to the Euro and British Pound during the nine months ended September 30, 2018 compared to the nine months ended September 30, 2017. Over the course of

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