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SEC Filings

10-Q
EQUINIX INC filed this Form 10-Q on 05/03/2019
Entire Document
 

Cost of Revenues. Our cost of revenues for the three months ended March 31, 2019 and 2018 were split among the following geographic regions (dollars in thousands):
 
Three Months Ended March 31,
 
% Change
 
2019
 
%
 
2018
 
%
 
Actual
 
Constant
Currency
Americas
$
285,659

 
42
%
 
$
265,141

 
43
%
 
8
%
 
10
%
EMEA
242,454

 
35
%
 
226,170

 
36
%
 
7
%
 
15
%
Asia-Pacific
153,917

 
23
%
 
131,119

 
21
%
 
17
%
 
20
%
Total
$
682,030

 
100
%
 
$
622,430

 
100
%
 
10
%
 
14
%
 
Three Months Ended
March 31,
 
2019
 
2018
Cost of revenues as a percentage of revenues:
 
 
 
Americas
44
%
 
44
%
EMEA
56
%
 
60
%
Asia-Pacific
54
%
 
56
%
Total
50
%
 
51
%
Americas Cost of Revenues. As compared to the three months ended March 31, 2018, cost of revenues for our Americas region for the three months ended March 31, 2019 included approximately $9.9 million incremental cost of revenues from the Infomart Dallas Acquisition. Excluding the impact from this acquisition, the increase in our Americas cost of revenues for the three months ended March 31, 2019 compared to the three months ended March 31, 2018 was primarily due to i) an increase in costs of custom service orders of $8.0 million and ii) an increase in bandwidth costs of $3.3 million. During the three months ended March 31, 2019, foreign currency fluctuations resulted in approximately $5.1 million of net 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 three months ended March 31, 2019 compared to the three months ended March 31, 2018. We expect Americas cost of revenues to increase as we continue to grow our business, including from the results of recent acquisitions.
EMEA Cost of Revenues. The increase in our EMEA cost of revenues was primarily due to (i) $17.8 million of higher other cost of sales, primarily consisting of costs of custom service orders and realized cash flow hedge losses and (ii) $10.1 million of higher utilities costs driven by IBX expansions, increased usage and price increases in London, the Netherlands and Frankfurt, partially offset by i) a decrease of $5.9 million in depreciation expense and (ii) $3.9 million lower outside services consulting fees. During the three months ended March 31, 2019, foreign currency fluctuations resulted in approximately $18.6 million of net favorable foreign currency impact to our EMEA cost of revenues primarily due to a generally stronger U.S. Dollar relative to the Euro and British Pound during the three months ended March 31, 2019 compared to the three months ended March 31, 2018. We expect EMEA cost of revenues to increase as we continue to grow our business.
Asia-Pacific Cost of Revenues. Cost of revenues for our Asia-Pacific region for the three months ended March 31, 2019 included approximately $11.2 million incremental cost of revenues from the Metronode Acquisition. Excluding the impact from the Metronode Acquisition, the increase in our Asia-Pacific cost of revenues for the three months ended March 31, 2019 as compared to the three months ended March 31, 2018 was primarily due to $11.7 million of higher utilities, rent and facility costs, primarily driven by expansions, higher rates and increased usage in Hong Kong, Japan and Singapore. During the three months ended March 31, 2019, foreign currency fluctuations resulted in approximately $3.9 million of net favorable foreign currency impact to our Asia-Pacific cost of revenues primarily due to a generally stronger U.S. Dollar relative to the Australian Dollar during the three months ended March 31, 2019 compared to the three months ended March 31, 2018. We expect our Asia-Pacific cost of revenues to increase as we continue to grow our business, including from the impact of the Metronode Acquisition.

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