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SEC Filings

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

 
Three Months Ended
March 31,
 
2019
 
2018
General and administrative expenses as a percentage of revenues:
 
 
 
Americas
23
%
 
23
%
EMEA
10
%
 
12
%
Asia-Pacific
8
%
 
9
%
Total
16
%
 
17
%
Americas General and Administrative Expenses. The increase in our Americas general and administrative expenses was primarily due to (i) $4.4 million of higher compensation costs, including general salaries, bonuses, stock-based compensation, and headcount growth (1,371 Americas general and administrative employees as of March 31, 2019 versus 1,252 as of March 31, 2018); (ii) $3.6 million of higher office, outside service consulting, and rent and facilities costs in support of our business growth and (iii) $4.4 million of higher depreciation expense associated with the implementation of certain systems, including data management and cloud exchange systems, to improve our billing processes and to support the integration and growth of our business. During the three months ended March 31, 2019, the impact of foreign currency fluctuations on our Americas general and administrative expenses was not significant when compared to average exchange rates for the three months ended March 31, 2018. We have been investing in our Americas general and administrative functions to scale our business 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 our 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. Our EMEA general and administrative expenses did not materially change during the three months ended March 31, 2019 compared to the three months ended March 31, 2018. The impact of foreign currency fluctuations on our EMEA general and administrative expenses for the three months ended March 31, 2019 was not significant when compared to average exchange rates of the three months ended March 31, 2018. We have been investing in our EMEA general and administrative functions as a result of our ongoing efforts to scale this region effectively for growth. Going forward, although we are carefully monitoring our spending, we expect our EMEA general and administrative expenses to increase in future periods as we continue to scale our operations to support our growth.
Asia-Pacific General and Administrative Expenses. Our Asia-Pacific general and administrative expenses did not materially change during the three months ended March 31, 2019 compared to the three months ended March 31, 2018. The impact of foreign currency fluctuations on our Asia-Pacific general and administrative expenses for the three months ended March 31, 2019 was not significant when compared to average exchange rates of the three months ended March 31, 2018. Going forward, although we are carefully monitoring our spending, we expect our Asia-Pacific general and administrative expenses to increase as we continue to support our growth, including the from impact of the Metronode Acquisition.
Acquisition Costs. During the three months ended March 31, 2019, we did not record a significant amount of acquisition costs. During the three months ended March 31, 2018, we recorded acquisition costs totaling $4.6 million, primarily in the EMEA and Americas regions.
Impairment Charge. During the three months ended March 31, 2019, we recorded an impairment charge of $14.4 million in the Americas region as a result of the fair value adjustment for the New York 12 ("NY12") data center, which was classified as a held for sale asset as of March 31, 2019. We did not have any impairment charges during the three months ended March 31, 2018.
Income from Operations. Our income from operations for the three months ended March 31, 2019 and 2018 was split among the following geographic regions (dollars in thousands):
 
Three Months Ended March 31,
 
% Change
 
2019
 
%
 
2018
 
%
 
Actual
 
Constant
Currency
Americas
$
90,011

 
32
%
 
$
101,736

 
45
%
 
(12
)%
 
(11
)%
EMEA
105,007

 
38
%
 
64,103

 
28
%
 
64
 %
 
78
 %
Asia-Pacific
84,490

 
30
%
 
60,036

 
27
%
 
41
 %
 
46
 %
Total
$
279,508

 
100
%
 
$
225,875

 
100
%
 
24
 %
 
29
 %

38