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Press release from Business Wire

Equinix Reports First Quarter 2012 Results

<ul> <li class='bwlistitemmargb'> <b>Reported revenues of $452.2 million, a 5% increase over the previous quarter and a 25% increase over the same quarter last year</b> </li> <li class='bwlistitemmargb'> <b>Increased full year 2012 revenue guidance to greater than $1,890.0 million and increased 2012 adjusted EBITDA guidance to greater than $860.0 million</b> </li> </ul>

Wednesday, April 25, 2012

Equinix Reports First Quarter 2012 Results16:01 EDT Wednesday, April 25, 2012 REDWOOD CITY, Calif. (Business Wire) -- Equinix, Inc. (Nasdaq:EQIX), a provider of global data center services, today reported quarterly results for the quarter ended March 31, 2012. The Company uses certain non-GAAP financial measures, which are described further below and reconciled to the most comparable GAAP financial measures after the presentation of our GAAP financial statements. Revenues were $452.2 million for the first quarter, a 5% increase over the previous quarter and a 25% increase over the same quarter last year. Recurring revenues, consisting primarily of colocation, interconnection and managed services were $429.6 million for the first quarter, a 5% increase over the previous quarter and a 25% increase over the same quarter last year. Non-recurring revenues were $22.6 million in the quarter. “Our strong first quarter results reflect growth in all three regions, which is being propelled by strong secular trends in mobility, cloud computing and data management, leaving us well positioned to achieve our 2012 objectives,” said Steve Smith, president and CEO of Equinix. “Global ecosystems being formed inside Equinix reflect these trends as well as our unique position to power the global digital economy.” Cost of revenues were $225.1 million for the first quarter, a 2% decrease over the previous quarter and a 16% increase over the same quarter last year. Cost of revenues, excluding depreciation, amortization, accretion and stock-based compensation of $84.5 million, which we refer to as cash cost of revenues, were $140.6 million for the first quarter, a 2% decrease from the previous quarter and a 15% increase over the same quarter last year. Gross margins for the quarter were 50%, up from 47% for the previous quarter and up from 46% for the same quarter last year. Cash gross margins, defined as gross profit before depreciation, amortization, accretion and stock-based compensation, divided by revenues, for the quarter were 69%, up from 67% for the previous quarter and up from 66% for the same quarter last year. Selling, general and administrative expenses were $125.0 million for the first quarter, a 7% increase over the previous quarter and a 30% increase over the same quarter last year. Selling, general and administrative expenses, excluding depreciation, amortization and stock-based compensation of $28.5 million, which we refer to as cash selling, general and administrative expenses, were $96.5 million for the first quarter, an 8% increase over the previous quarter and a 32% increase over the same quarter last year. Interest expense was $52.8 million for the first quarter, a 4% decrease from the previous quarter and a 41% increase over the same quarter last year, primarily attributed to the $750.0 million 7.00% senior notes offering in July 2011. The Company recorded income tax expense of $14.0 million for the first quarter and income tax expense of $11.1 million in the same quarter last year. Net income attributable to Equinix for the first quarter was $34.5 million. This represents a basic net income per share attributable to Equinix of $0.74 and a diluted net income per share attributable to Equinix of $0.71 based on a weighted average share count of 47.0 million and 51.1 million, respectively, for the first quarter of 2012. Income from operations was $101.1 million for the first quarter, a 22% increase from the previous quarter and a 42% increase over the same quarter last year. Adjusted EBITDA, defined as income or loss from operations before depreciation, amortization, accretion, stock-based compensation, restructuring charges and acquisition costs, for the first quarter was $215.2 million, an increase of 9% over the previous quarter and a 29% increase over the same quarter last year. Capital expenditures, defined as gross capital expenditures less the net change in accrued property, plant and equipment in the first quarter, were $145.5 million, of which $102.4 million was attributed to expansion capital expenditures and $43.1 million was attributed to ongoing capital expenditures. The Company generated cash from operating activities of $126.0 million for the first quarter as compared to $187.6 million in the previous quarter and $117.8 million for the same quarter last year. Cash provided by investing activities was $269.4 million in the first quarter as compared to cash used in investing activities of $194.6 million in the previous quarter and cash used in investing activities of $286.4 million for the same quarter last year. Cash used in financing activities was $44.0 million for the first quarter. As of March 31, 2012, the Company's cash, cash equivalents and investments were $1,083.3 million, as compared to $1,076.3 million as of December 31, 2011. In April 2012, virtually all of the holders of the 2.50% $250.0 million convertible subordinated notes converted their notes. The Company settled the $250.0 million in aggregate principal amount of the 2.50% convertible subordinated notes, plus accrued interest, in $253.1 million of cash and approximately 623,000 shares of the Company's common stock. Business Outlook For the second quarter of 2012, the Company expects revenues to be in the range of $466.0 to $468.0 million, which includes $3.0 million of negative foreign currency headwinds. Cash gross margins are expected to approximate 68%. Cash selling, general and administrative expenses are expected to range between $100.0 and $104.0 million. Adjusted EBITDA is expected to be between $212.0 and $214.0 million, which includes a $3.0 million increase in professional fees and $1.0 million of negative currency headwinds. Capital expenditures are expected to be approximately $240.0 to $260.0 million, comprised of approximately $40.0 million of ongoing capital expenditures and $200.0 to $220.0 million of expansion capital expenditures. For the full year of 2012, total revenues are expected to be greater than $1,890.0 million, which includes $9.0 million of negative foreign currency headwinds. Total year cash gross margins are expected to approximate 67%. Cash selling, general and administrative expenses are expected to range between $390.0 and $420.0 million. Adjusted EBITDA for the year is expected to be greater than $860.0 million, which includes a $10.0 million increase in professional fees and $4.0 million of negative currency headwinds. Capital expenditures for 2012 are expected to be in the range of $700.0 to $800.0 million, comprised of approximately $135.0 million of ongoing capital expenditures and $565.0 to $665.0 million for expansion capital expenditures. Company Metricsand Q1 Results Presentation The Company will discuss its results and guidance on its quarterly conference call on Wednesday, April 25, 2012, at 5:30 p.m. ET (2:30 p.m. PT). A simultaneous live Webcast of the call will be available on the Equinix investors website located at www.equinix.com/investors. To hear the conference call live, please dial 210-234-8004 (domestic and international) and reference the passcode (EQIX). A presentation to accompany the call as well as the Company's Non-Financial Metrics tracking sheet, will also be available on the website. A replay of the call will be available beginning on Wednesday, April 25, 2012, at 7:30 p.m. (ET) through May 25, 2012, by dialing 203-369-1363 (domestic and international) and reference the passcode (2012). In addition, the webcast will be available on the investors section of the Company's website over the same time period. No password is required for the replay or the webcast. About Equinix Equinix, Inc. (Nasdaq: EQIX) connects businesses with partners and customers around the world through a global platform of high performance data centers, containing dynamic ecosystems and the broadest choice of networks. Platform Equinix connects more than 4,000 enterprises, cloud, digital content and financial companies including more than 700 network service providers to help them grow their businesses, improve application performance and protect their vital digital assets. Equinix operates in 38 strategic markets across the Americas, EMEA and Asia-Pacific and continually invests in expanding its platform to power customer growth. http://www.equinix.com. Non-GAAP Financial Measures Equinix provides all information required in accordance with generally accepted accounting principles (GAAP), but it believes that evaluating its ongoing operating results may be difficult if limited to reviewing only GAAP financial measures. Accordingly, Equinix uses non-GAAP financial measures, such as adjusted EBITDA, cash cost of revenues, cash gross margins, cash operating expenses (also known as cash selling, general and administrative expenses or cash SG&A), adjusted EBITDA margins, free cash flow and adjusted free cash flow to evaluate its operations. In presenting these non-GAAP financial measures, Equinix excludes certain items that it believes are not good indicators of the Company's current or future operating performance. These items are depreciation, amortization, accretion of asset retirement obligations and accrued restructuring charges, stock-based compensation, restructuring charges and acquisition costs. Legislative and regulatory requirements encourage use of and emphasis on GAAP financial metrics and require companies to explain why non-GAAP financial metrics are relevant to management and investors. Equinix excludes these items in order for Equinix's lenders, investors, and industry analysts who review and report on the Company, to better evaluate the Company's operating performance and cash spending levels relative to its industry sector and competitors. Equinix excludes depreciation expense as these charges primarily relate to the initial construction costs of our IBX centers and do not reflect our current or future cash spending levels to support our business. Our IBX centers are long-lived assets, and have an economic life greater than 10 years. The construction costs of our IBX centers do not recur and future capital expenditures remain minor relative to our initial investment. This is a trend we expect to continue. In addition, depreciation is also based on the estimated useful lives of our IBX centers. These estimates could vary from actual performance of the asset, are based on historic costs incurred to build out our IBX centers, and are not indicative of current or expected future capital expenditures. Therefore, Equinix excludes depreciation from its operating results when evaluating its operations. In addition, in presenting the non-GAAP financial measures, Equinix excludes amortization expense related to certain intangible assets, as it represents a cost that may not recur and is not a good indicator of the Company's current or future operating performance. Equinix excludes accretion expense, both as it relates to its asset retirement obligations as well as its accrued restructuring charges, as these expenses represent costs which Equinix believes are not meaningful in evaluating the Company's current operations. Equinix excludes stock-based compensation expense as it primarily represents expense attributed to equity awards that have no current or future cash obligations. As such, we, and many investors and analysts, exclude this stock-based compensation expense when assessing the cash generating performance of our operations. Equinix excludes restructuring charges from its non-GAAP financial measures. The restructuring charges relate to the Company's decision to exit leases for excess space adjacent to several of our IBX centers, which we did not intend to build out, or our decision to reverse such restructuring charges or severance charges related to the Switch and Data acquisition. Equinix excludes acquisition costs from its non-GAAP financial measures. The acquisition costs relate to costs the Company incurs in connection with business combinations. Management believes such items as restructuring charges and acquisition costs are non-core transactions; however, these types of costs will or may occur in future periods. Our management does not itself, nor does it suggest that investors should, consider such non-GAAP financial measures in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. However, we have presented such non-GAAP financial measures to provide investors with an additional tool to evaluate our operating results in a manner that focuses on what management believes to be our core, ongoing business operations. Management believes that the inclusion of these non-GAAP financial measures provides consistency and comparability with past reports and provides a better understanding of the overall performance of the business and its ability to perform in subsequent periods. Equinix believes that if it did not provide such non-GAAP financial information, investors would not have all the necessary data to analyze Equinix effectively. Investors should note, however, that the non-GAAP financial measures used by Equinix may not be the same non-GAAP financial measures, and may not be calculated in the same manner, as that of other companies. In addition, whenever Equinix uses such non-GAAP financial measures, it provides a reconciliation of non-GAAP financial measures to the most closely applicable GAAP financial measure. Investors are encouraged to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measure. Equinix does not provide forward-looking guidance for certain financial data, such as depreciation, amortization, accretion, stock-based compensation, net income (loss) from operations, cash generated from operating activities and cash used in investing activities, and as a result, is not able to provide a reconciliation of GAAP to non-GAAP financial measures for forward-looking data. Equinix intends to calculate the various non-GAAP financial measures in future periods consistent with how they were calculated for the periods presented within this press release. Forward Looking StatementsThis press release contains forward-looking statements that involve risks and uncertainties. Actual results may differ materially from expectations discussed in such forward-looking statements. Factors that might cause such differences include, but are not limited to, the challenges of acquiring, operating and constructing IBX centers and developing, deploying and delivering Equinix services; unanticipated costs or difficulties relating to the integration of companies we have acquired or will acquire into Equinix; a failure to receive significant revenue from customers in recently built out or acquired data centers; failure to complete any financing arrangements contemplated from time to time; competition from existing and new competitors; the ability to generate sufficient cash flow or otherwise obtain funds to repay new or outstanding indebtedness; the loss or decline in business from our key customers; and other risks described from time to time in Equinix's filings with the Securities and Exchange Commission. In particular, see Equinix's recent quarterly and annual reports filed with the Securities and Exchange Commission, copies of which are available upon request from Equinix. Equinix does not assume any obligation to update the forward-looking information contained in this press release.Equinix and IBX are registered trademarks of Equinix, Inc. International Business Exchange is a trademark of Equinix, Inc.EQUINIX, INC.CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(in thousands, except per share data)(unaudited)           Three Months EndedMarch 31,December 31,March 31,   2012     2011     2011     Recurring revenues $ 429,621 $ 410,734 $ 343,909 Non-recurring revenues   22,579     20,578     19,120   Revenues452,200431,312363,029   Cost of revenues   225,079     229,340     194,576   Gross profit   227,121     201,972     168,453     Operating expenses: Sales and marketing 46,571 45,322 33,636 General and administrative 78,425 71,674 62,601 Restructuring charges - 1,295 496 Acquisition costs   1,027     805     415   Total operating expenses   126,023     119,096     97,148     Income from operations   101,098     82,876     71,305     Interest and other income (expense): Interest income 691 754 215 Interest expense (52,818 ) (55,151 ) (37,361 ) Other income (expense)   (154 )   1,383     2,111   Total interest and other, net   (52,281)   (53,014)   (35,035)   Income before income taxes48,81729,86236,270   Income tax expense   (14,006 )   (13,769 )   (11,125 )   Net income34,81116,09325,145   Net loss (income) attributable to redeemable non-controlling interests (288 ) 1,717 -       Net income attributable to Equinix$34,523   $17,810   $25,145     Net income per share attributable to Equinix:   Basic net income per share (1) $ 0.74   $ 0.36   $ 0.54     Diluted net income per share (1) $ 0.71   $ 0.35   $ 0.53     Shares used in computing basic net income per share   46,955     47,235     46,451     Shares used in computing diluted net income per share   51,061     48,083     47,219               (1) The net income attributable to Equinix used in the computation of basic and diluted net income per share attributable to Equinix is presented below:   Net income $ 34,811 $ 16,093 $ 25,145 Net loss (income) attributable to non-controlling interests (288 ) 1,717 - Adjustments attributable to redemption value of non-controlling interests   184     (837 )   -   Net income attributable to Equinix, basic 34,707 16,973 25,145 Interest on convertible debt   1,699     -     -   Net income attributable to Equinix, diluted $ 36,406   $ 16,973   $ 25,145     EQUINIX, INC.CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)(in thousands)(unaudited)           Three Months EndedMarch 31,December 31,March 31,   2012     2011     2011     Net income $ 34,811   $ 16,093   $ 25,145     Other comprehensive income (loss), net of tax: Foreign currency translation gain (loss) 34,312 (21,549 ) 50,683 Unrealized gain (loss) on available for sale securities   78     253     (21 ) Other comprehensive income (loss), net of tax:   34,390     (21,296 )   50,662     Comprehensive income (loss), net of tax   69,201     (5,203)   75,807     Net loss (income) attributable to redeemable non-controlling interests (288 ) 1,717 - Other comprehensive income attributable to redeemable non-controlling interests   (1,059 )   (1,986 )   -     Comprehensive income (loss) attributable to Equinix, net of tax$67,854   $(5,472)$75,807     EQUINIX, INC.CONDENSED CONSOLIDATED BALANCE SHEETS(in thousands)(unaudited)       AssetsMarch 31,December 31,   2012     2011     Cash and cash equivalents $ 632,944 $ 278,823 Short-term investments 283,910 635,721 Accounts receivable, net 158,561 139,057 Other current assets   98,608     182,156   Total current assets1,174,0231,235,757 Long-term investments 166,437 161,801 Property, plant and equipment, net 3,387,369 3,225,912 Goodwill 879,914 866,495 Intangible assets, net 145,350 148,635 Other assets   131,252     146,724   Total assets$5,884,345   $5,785,324     Liabilities and Stockholders' Equity   Accounts payable and accrued expenses $ 194,516 $ 229,043 Accrued property and equipment 125,250 93,224 Current portion of capital lease and other financing obligations 11,961 11,542 Current portion of loans payable 75,361 87,440 Current portion of convertible debt 249,474 246,315 Other current liabilities   61,521     57,690   Total current liabilities718,083725,254 Capital lease and other financing obligations, less current portion 402,911 390,269 Loans payable, less current portion 144,582 168,795 Senior notes 1,500,000 1,500,000 Convertible debt 698,159 694,769 Other liabilities   291,060     286,424   Total liabilities   3,754,795     3,765,511     Redeemable non-controlling interests   69,071     67,601     Common stock 48 48 Additional paid-in capital 2,490,401 2,437,623 Treasury stock (99,031 ) (86,666 ) Accumulated other comprehensive loss (110,367 ) (143,698 ) Accumulated deficit   (220,572 )   (255,095 ) Total stockholders' equity   2,060,479     1,952,212     Total liabilities, redeemable non-controlling interests and stockholders' equity$5,884,345   $5,785,324                   Ending headcount by geographic region is as follows:   Americas headcount 1,788 1,763 EMEA headcount 602 570 Asia-Pacific headcount   393     376   Total headcount   2,783     2,709     EQUINIX, INC.SUMMARY OF DEBT OUTSTANDING(in thousands)(unaudited)       March 31,December 31,20122011   Capital lease and other financing obligations $ 414,872 $ 401,811   Paris IBX financing 16,800 52,104 ALOG financing 17,323 10,288 Asia-Pacific financing   185,820   193,843 Total loans payable   219,943   256,235   Senior notes   1,500,000   1,500,000   Convertible debt, net of debt discount 947,633 941,084 Plus debt discount   72,103   78,652 Total convertible debt principal   1,019,736   1,019,736   Total debt outstanding $ 3,154,551 $ 3,177,782   EQUINIX, INC.CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(in thousands)(unaudited)                 Three Months EndedMarch 31,December 31,March 31,   2012     2011     2011     Cash flows from operating activities: Net income $ 34,811 $ 16,093 $ 25,145 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation, amortization and accretion 93,922 94,683 79,525 Stock-based compensation 19,103 18,472 15,535 Debt issuance costs and debt discount 8,107 8,356 7,284 Restructuring charges - 1,295 496 Other reconciling items 2,857 4,526 1,563 Changes in operating assets and liabilities: Accounts receivable (19,677 ) 3,238 3,099 Deferred tax assets, net 5,370 4,632 5,640 Accounts payable and accrued expenses (33,737 ) 45,274 (13,606 ) Other assets and liabilities   15,237     (8,948 )   (6,911 ) Net cash provided by operating activities   125,993     187,621     117,770   Cash flows from investing activities: Purchases, sales and maturities of investments, net 346,366 1,400 (2,185 ) Purchases of real estate - (4,073 ) (14,951 ) Purchases of other property, plant and equipment (145,490 ) (190,160 ) (175,115 ) Other investing activities   68,557     (1,792 )   (94,138 ) Net cash provided by (used in) investing activities   269,433     (194,625)   (286,389) Cash flows from financing activities: Purchases of treasury stock (13,364 ) (86,666 ) - Proceeds from employee equity awards 30,460 3,189 15,668 Proceeds from loans payable 8,909 4,701 22,653 Repayment of capital lease and other financing obligations (2,826 ) (3,022 ) (1,968 ) Repayment of mortgage and loans payable (67,129 ) (1,556 ) (10,102 ) Other financing activities   -     (29 )   (125 ) Net cash provided by (used in) financing activities   (43,950)   (83,383)   26,126   Effect of foreign currency exchange rates on cash and cash equivalents   2,645     (1,313 )   4,118   Net increase (decrease) in cash and cash equivalents 354,121 (91,700 ) (138,375 ) Cash and cash equivalents at beginning of period   278,823     370,523     442,841   Cash and cash equivalents at end of period$632,944   $278,823   $304,466     Supplemental cash flow information: Cash paid for taxes $ 1,734   $ 1,985   $ 174   Cash paid for interest $ 63,336   $ 28,846   $ 36,737     Free cash flow (1)$49,060   $(8,404)$(166,434)   Adjusted free cash flow (2)$49,060   $(4,331)$(151,483)               (1) We define free cash flow as net cash provided by operating activities plus net cash provided by (used in) investing activities (excluding the net purchases, sales and maturities of investments) as presented below:   Net cash provided by operating activities as presented above $ 125,993 $ 187,621 $ 117,770 Net cash provided by (used in) investing activities as presented above 269,433 (194,625 ) (286,389 ) Purchases, sales and maturities of investments, net   (346,366 )   (1,400 )   2,185   Free cash flow (negative free cash flow) $ 49,060   $ (8,404 ) $ (166,434 )   (2) We define adjusted free cash flow as free cash flow (as defined above) excluding any purchases or sales of real estate and acquisitions as presented below:   Free cash flow (as defined above) $ 49,060 $ (8,404 ) $ (166,434 ) Less purchases of real estate   -     4,073     14,951   Adjusted free cash flow (negative adjusted free cash flow) $ 49,060   $ (4,331 ) $ (151,483 )   EQUINIX, INC.CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - NON-GAAP PRESENTATION(in thousands)(unaudited)             Three Months EndedMarch 31,December 31,March 31,   2012     2011     2011     Recurring revenues $ 429,621 $ 410,734 $ 343,909 Non-recurring revenues   22,579     20,578     19,120   Revenues (1)   452,200     431,312     363,029     Cash cost of revenues (2)   140,586     143,504     122,631   Cash gross profit (3)   311,614     287,808     240,398     Cash operating expenses (4): Cash sales and marketing expenses (5) 38,186 37,085 27,104 Cash general and administrative expenses (6)   58,278     52,592     46,018   Total cash operating expenses (7)   96,464     89,677     73,122     Adjusted EBITDA (8)$215,150   $198,131   $167,276     Cash gross margins (9)   69%   67%   66%   Adjusted EBITDA margins (10)   48%   46%   46%   Adjusted EBITDA flow-through rate (11)   81%   47%   103%               (1) The geographic split of our revenues on a services basis is presented below:   Americas Revenues:   Colocation $ 209,708 $ 202,840 $ 176,196 Interconnection 54,646 52,383 45,922 Managed infrastructure 13,970 12,476 767 Rental   439     463     504   Recurring revenues 278,763 268,162 223,389 Non-recurring revenues   9,321     9,341     9,138   Revenues   288,084     277,503     232,527     EMEA Revenues:   Colocation 83,951 80,174 68,200 Interconnection 3,824 3,600 2,812 Managed infrastructure 3,414 3,401 3,198 Rental   344     238     118   Recurring revenues 91,533 87,413 74,328 Non-recurring revenues   9,803     7,835     7,711   Revenues   101,336     95,248     82,039     Asia-Pacific Revenues:   Colocation 47,117 43,686 36,339 Interconnection 7,320 6,789 5,341 Managed infrastructure   4,888     4,684     4,512   Recurring revenues 59,325 55,159 46,192 Non-recurring revenues   3,455     3,402     2,271   Revenues   62,780     58,561     48,463     Worldwide Revenues:   Colocation 340,776 326,700 280,735 Interconnection 65,790 62,772 54,075 Managed infrastructure 22,272 20,561 8,477 Rental   783     701     622   Recurring revenues 429,621 410,734 343,909 Non-recurring revenues   22,579     20,578     19,120   Revenues $ 452,200   $ 431,312   $ 363,029     (2) We define cash cost of revenues as cost of revenues less depreciation, amortization, accretion and stock-based compensation as presented below:   Cost of revenues $ 225,079 $ 229,340 $ 194,576 Depreciation, amortization and accretion expense (83,098 ) (84,289 ) (70,600 ) Stock-based compensation expense   (1,395 )   (1,547 )   (1,345 ) Cash cost of revenues $ 140,586   $ 143,504   $ 122,631     The geographic split of our cash cost of revenues is presented below:   Americas cash cost of revenues $ 83,307 $ 84,664 $ 70,210 EMEA cash cost of revenues 35,353 36,677 34,491 Asia-Pacific cash cost of revenues   21,926     22,163     17,930   Cash cost of revenues $ 140,586   $ 143,504   $ 122,631     (3) We define cash gross profit as revenues less cash cost of revenues (as defined above).   (4) We define cash operating expenses as operating expenses less depreciation, amortization, stock-based compensation, restructuring charges and acquisition costs. We also refer to cash operating expenses as cash selling, general and administrative expenses or "cash SG&A".   (5) We define cash sales and marketing expenses as sales and marketing expenses less depreciation, amortization and stock-based compensation as presented below:   Sales and marketing expenses $ 46,571 $ 45,322 $ 33,636 Depreciation and amortization expense (4,350 ) (4,308 ) (3,666 ) Stock-based compensation expense   (4,035 )   (3,929 )   (2,866 ) Cash sales and marketing expenses $ 38,186   $ 37,085   $ 27,104     (6) We define cash general and administrative expenses as general and administrative expenses less depreciation, amortization and stock-based compensation as presented below:   General and administrative expenses $ 78,425 $ 71,674 $ 62,601 Depreciation and amortization expense (6,474 ) (6,086 ) (5,259 ) Stock-based compensation expense   (13,673 )   (12,996 )   (11,324 ) Cash general and administrative expenses $ 58,278   $ 52,592   $ 46,018     (7) Our cash operating expenses, or cash SG&A, as defined above, is presented below:   Cash sales and marketing expenses $ 38,186 $ 37,085 $ 27,104 Cash general and administrative expenses   58,278     52,592     46,018   Cash SG&A $ 96,464   $ 89,677   $ 73,122     The geographic split of our cash operating expenses, or cash SG&A, is presented below:   Americas cash SG&A $ 67,025 $ 59,881 $ 48,812 EMEA cash SG&A 19,099 18,853 16,936 Asia-Pacific cash SG&A   10,340     10,943     7,374   Cash SG&A $ 96,464   $ 89,677   $ 73,122     (8) We define adjusted EBITDA as income from operations plus depreciation, amortization, accretion, stock-based compensation expense, restructuring charges and acquisition costs as presented below:   Income from operations $ 101,098 $ 82,876 $ 71,305 Depreciation, amortization and accretion expense 93,922 94,683 79,525 Stock-based compensation expense 19,103 18,472 15,535 Restructuring charges - 1,295 496 Acquisition costs   1,027     805     415   Adjusted EBITDA $ 215,150   $ 198,131   $ 167,276     The geographic split of our adjusted EBITDA is presented below:   Americas income from operations $ 61,918 $ 57,145 $ 47,319 Americas depreciation, amortization and accretion expense 60,421 59,597 53,482 Americas stock-based compensation expense 15,151 14,669 11,842 Americas restructuring charges - 1,295 496 Americas acquisition costs   262     252     366   Americas adjusted EBITDA   137,752     132,958     113,505     EMEA income from operations 27,279 17,466 11,471 EMEA depreciation, amortization and accretion expense 17,312 19,776 16,844 EMEA stock-based compensation expense 2,164 2,119 2,295 EMEA acquisition costs   129     357     2   EMEA adjusted EBITDA   46,884     39,718     30,612     Asia-Pacific income from operations 11,901 8,265 12,515 Asia-Pacific depreciation, amortization and accretion expense 16,189 15,310 9,199 Asia-Pacific stock-based compensation expense 1,788 1,684 1,398 Asia-Pacific acquisition costs   636     196     47   Asia-Pacific adjusted EBITDA   30,514     25,455     23,159     Adjusted EBITDA $ 215,150   $ 198,131   $ 167,276     (9) We define cash gross margins as cash gross profit divided by revenues.   Our cash gross margins by geographic region is presented below:   Americas cash gross margins   71 %   69 %   70 %   EMEA cash gross margins   65 %   61 %   58 %   Asia-Pacific cash gross margins   65 %   62 %   63 %   (10) We define adjusted EBITDA margins as adjusted EBITDA divided by revenues.   Americas adjusted EBITDA margins   48 %   48 %   49 %   EMEA adjusted EBITDA margins   46 %   42 %   37 %   Asia-Pacific adjusted EBITDA margins   49 %   43 %   48 %   (11) We define adjusted EBITDA flow-through rate as incremental adjusted EBITDA growth divided by incremental revenue growth as follows:   Adjusted EBITDA - current period $ 215,150 $ 198,131 $ 167,276 Less adjusted EBITDA - prior period   (198,131 )   (191,628 )   (148,947 ) Adjusted EBITDA growth $ 17,019   $ 6,503   $ 18,329     Revenues - current period $ 452,200 $ 431,312 $ 363,029 Less revenues - prior period   (431,312 )   (417,601 )   (345,244 ) Revenue growth $ 20,888   $ 13,711   $ 17,785     Adjusted EBITDA flow-through rate   81 %   47 %   103 % Equinix Investor Relations:Equinix, Inc.Katrina Rymill, 650-598-6583krymill@equinix.comJason Starr, 650-598-6020jstarr@equinix.comorEquinix Media:Equinix, Inc.Melissa Neumann, 650-598-6098mneumann@equinix.comorGolinHarris for Equinix, Inc.Liam Rose, 415-318-4380lrose@golinharris.com