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Press release from Business Wire

Equinix Reports Second Quarter 2012 Results

<ul> <li class='bwlistitemmargb'> <b>Reported revenues of $466.3 million, a 3% increase over the previous quarter and an 18% increase over the same quarter last year</b> </li> <li class='bwlistitemmargb'> <b>Increased full year 2012 revenue guidance to greater than $1,920.0 million and increased 2012 adjusted EBITDA guidance to greater than $880.0 million</b> </li> </ul>

Wednesday, July 25, 2012

Equinix Reports Second Quarter 2012 Results16:01 EDT Wednesday, July 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 June 30, 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 $466.3 million for the second quarter, a 3% increase over the previous quarter and an 18% increase over the same quarter last year. Recurring revenues, consisting primarily of colocation, interconnection and managed services were $442.6 million for the second quarter, a 3% increase over the previous quarter and an 18% increase over the same quarter last year. Non-recurring revenues were $23.7 million in the quarter. “Equinix delivered another strong quarter of financial results, which positions us well to meet our 2012 objectives,” said Steve Smith, president and CEO of Equinix. “Our ability to optimize data center capacity and operate efficiently as we expand our global footprint to meet customer demand, reinforces our leadership position and supports our long-term growth opportunity.” Cost of revenues were $233.2 million for the second quarter, a 4% increase over the previous quarter and an 8% increase over the same quarter last year. Cost of revenues, excluding depreciation, amortization, accretion and stock-based compensation of $87.0 million, which we refer to as cash cost of revenues, were $146.2 million for the second quarter, a 4% increase from the previous quarter and a 6% increase over the same quarter last year. Gross margins for the quarter were 50%, unchanged from the previous quarter and up from 45% 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%, unchanged from the previous quarter and up from 65% for the same quarter last year. Selling, general and administrative expenses were $128.5 million for the second quarter, a 3% increase over the previous quarter and a 25% increase over the same quarter last year. Selling, general and administrative expenses, excluding depreciation, amortization and stock-based compensation of $30.5 million, which we refer to as cash selling, general and administrative expenses, were $98.0 million for the second quarter, a 2% increase over the previous quarter and a 29% increase over the same quarter last year. Interest expense was $46.8 million for the second quarter, an 11% decrease from the previous quarter, primarily attributed to the settlement of the $250.0 million 2.50% convertible subordinated notes in April 2012, and a 24% 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 $17.4 million for the second quarter and income tax expense of $8.1 million in the same quarter last year. Net income attributable to Equinix for the second quarter was $36.4 million. This represents a basic net income per share attributable to Equinix of $0.76 and a diluted net income per share attributable to Equinix of $0.73 based on a weighted average share count of 48.0 million and 52.4 million, respectively, for the second quarter of 2012. Income from operations was $102.7 million for the second quarter, a 2% increase from the previous quarter and a 37% 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 second quarter was $222.1 million, a 3% increase over the previous quarter and a 22% 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 second quarter, were $196.5 million, of which $159.0 million was attributed to expansion capital expenditures and $37.5 million was attributed to ongoing capital expenditures. The Company generated cash from operating activities of $194.8 million for the second quarter as compared to $126.0 million in the previous quarter and $140.3 million for the same quarter last year. Cash provided by investing activities was $93.9 million in the second quarter as compared to cash provided by investing activities of $269.4 million in the previous quarter and cash used in investing activities of $209.7 million for the same quarter last year. Cash used in financing activities was $264.7 million for the second quarter, primarily attributed to the settlement of the $250.0 million 2.50% convertible subordinated notes in April 2012. As of June 30, 2012, the Company's cash, cash equivalents and investments were $823.0 million, as compared to $1,083.3 million as of March 31, 2012. In July 2012, the Company completed the acquisitions of ancotel GmbH, a data center provider headquartered in Frankfurt, Germany, for cash consideration of approximately $85.7 million and Asia Tone Limited, a data center provider headquartered in Hong Kong, for cash consideration of approximately $230.5 million. In July 2012, the Company drew down and used the proceeds from its $200.0 million senior secured term loan facility, which was completed in June 2012, to prepay and terminate outstanding term loan facilities of the Company's Asia-Pacific subsidiaries. Business Outlook For the third quarter of 2012, the Company expects revenues to be in the range of $492.0 to $498.0 million, including $13.0 to $15.0 million of revenue attributed to the Asia Tone and ancotel acquisitions which closed in July. The third quarter revenue includes approximately $4.0 million of negative foreign currency headwinds when compared to the exchange rates used in the second quarter. Cash gross margins are expected to range between 67% and 68%. Cash selling, general and administrative expenses are expected to range between $110.0 and $115.0 million. Adjusted EBITDA is expected to range between $220.0 and $222.0 million, including $4.0 to $6.0 million of adjusted EBITDA attributed to the Asia Tone and ancotel acquisitions, and also includes a $7.0 million increase in utilities expense due to higher seasonal rates and $2.0 million of negative currency headwinds. Capital expenditures are expected to be approximately $240.0 to $260.0 million, comprised of approximately $30.0 million of ongoing capital expenditures and $210.0 to $230.0 million of expansion capital expenditures. For the full year of 2012, total revenues are expected to be greater than $1,920.0 million, including approximately $30.0 million of revenue attributed to the Asia Tone and ancotel acquisitions, and also includes approximately $18.0 million of negative foreign currency headwinds compared to our previous annual guidance rates. Total year cash gross margins are expected to approximate 68%. Cash selling, general and administrative expenses are expected to range between $420.0 and $430.0 million. Adjusted EBITDA for the year is expected to be greater than $880.0 million, including approximately $10.0 million of adjusted EBITDA attributed to the Asia Tone and ancotel acquisitions, and also includes $8.0 million of negative currency headwinds. Capital expenditures for 2012 are expected to be in the range of $740.0 to $800.0 million, comprised of approximately $135.0 million of ongoing capital expenditures and $605.0 to $665.0 million for expansion capital expenditures. Company Metricsand Q2 Results Presentation The Company will discuss its results and guidance on its quarterly conference call on Wednesday, July 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, July 25, 2012, at 7:30 p.m. (ET) through August 25, 2012, by dialing 203-369-3024 (domestic and international) and reference the passcode (2012). In addition, the webcast will be available on the Investor Relations 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 900 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 EndedSix Months EndedJune 30,March 31,June 30,June 30,June 30,20122012201120122011   Recurring revenues $ 442,576 $ 429,621 $ 376,528 $ 872,197 $ 720,437 Non-recurring revenues   23,688     22,579     18,372     46,267     37,492   Revenues466,264452,200394,900918,464757,929   Cost of revenues   233,192     225,079     215,572     458,271     410,148   Gross profit   233,072     227,121     179,328     460,193     347,781     Operating expenses: Sales and marketing 47,764 46,571 37,063 94,335 70,699 General and administrative 80,723 78,425 65,681 159,148 128,282 Restructuring charges - - 103 - 599 Acquisition costs   1,919     1,027     1,615     2,946     2,030   Total operating expenses   130,406     126,023     104,462     256,429     201,610     Income from operations   102,666     101,098     74,866     203,764     146,171     Interest and other income (expense): Interest income 963 691 632 1,654 847 Interest expense (46,787 ) (52,818 ) (37,677 ) (99,605 ) (75,038 ) Other income (expense)   (1,844 )   (154 )   1,021     (1,998 )   3,132   Total interest and other, net   (47,668)   (52,281)   (36,024)   (99,949)   (71,059)   Income before income taxes54,99848,81738,842103,81575,112   Income tax expense   (17,358 )   (14,006 )   (8,109 )   (31,364 )   (19,234 )   Net income37,64034,81130,73372,45155,878   Net income attributable to redeemable non-controlling interests (1,193 ) (288 ) (3 ) (1,481 ) (3 )           Net income attributable to Equinix$36,447   $34,523   $30,730   $70,970   $55,875     Net income per share attributable to Equinix:   Basic net income per share (1) $ 0.76   $ 0.74   $ 0.65   $ 1.49   $ 1.20     Diluted net income per share (1) $ 0.73   $ 0.71   $ 0.64   $ 1.44   $ 1.18     Shares used in computing basic net income per share   48,016     46,955     46,924     47,485     46,688     Shares used in computing diluted net income per share   52,351     51,061     50,664     51,633     50,454               (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 $ 37,640 $ 34,811 $ 30,733 $ 72,451 $ 55,878 Net income attributable to non-controlling interests (1,193 ) (288 ) (3 ) (1,481 ) (3 ) Adjustments attributable to redemption value of non-controlling interests   -     209     -     -     -   Net income attributable to Equinix, basic 36,447 34,732 30,730 70,970 55,875 Interest on convertible debt   1,678     1,699     1,746     3,377     3,485   Net income attributable to Equinix, diluted $ 38,125   $ 36,431   $ 32,476   $ 74,347   $ 59,360               EQUINIX, INC.CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)(in thousands)(unaudited)       Three Months EndedSix Months EndedJune 30,March 31,June 30,June 30,June 30,20122012201120122011   Net income $ 37,640   $ 34,811   $ 30,733   $ 72,451   $ 55,878     Other comprehensive income (loss), net of tax: Foreign currency translation gain (loss) (49,207 ) 34,312 20,749 (14,895 ) 71,432 Unrealized gain (loss) on available for sale securities   (177 )   78     (5 )   (99 )   (26 ) Other comprehensive income (loss), net of tax:   (49,384 )   34,390     20,744     (14,994 )   71,406     Comprehensive income (loss), net of tax   (11,744)   69,201     51,477     57,457     127,284     Net income attributable to redeemable non-controlling interests (1,193 ) (288 ) (3 ) (1,481 ) (3 ) Other comprehensive income (loss) attributable to redeemable non-controlling interests   3,974     (1,059 )   (1,067 )   2,915     (1,067 )   Comprehensive income (loss) attributable to Equinix, net of tax$(8,963)$67,854   $50,407   $58,891   $126,214       EQUINIX, INC.CONDENSED CONSOLIDATED BALANCE SHEETS(in thousands)(unaudited)   AssetsJune 30,December 31,20122011   Cash and cash equivalents $ 654,096 $ 278,823 Short-term investments 115,465 635,721 Accounts receivable, net 169,812 139,057 Other current assets   70,219     182,156   Total current assets1,009,5921,235,757 Long-term investments 53,460 161,801 Property, plant and equipment, net 3,525,839 3,225,912 Goodwill 863,187 866,495 Intangible assets, net 138,199 148,635 Other assets   134,411     146,724   Total assets$5,724,688   $5,785,324     Liabilities and Stockholders' Equity   Accounts payable and accrued expenses $ 224,989 $ 229,043 Accrued property and equipment 119,703 93,224 Current portion of capital lease and other financing obligations 12,978 11,542 Current portion of loans payable 72,791 87,440 Current portion of convertible debt - 246,315 Other current liabilities   60,698     57,690   Total current liabilities491,159725,254 Capital lease and other financing obligations, less current portion 464,622 390,269 Loans payable, less current portion 141,504 168,795 Senior notes 1,500,000 1,500,000 Convertible debt 701,578 694,769 Other liabilities   282,350     286,424   Total liabilities   3,581,213     3,765,511     Redeemable non-controlling interests   75,854     67,601     Common stock 49 48 Additional paid-in capital 2,444,640 2,437,623 Treasury stock (37,166 ) (86,666 ) Accumulated other comprehensive loss (155,777 ) (143,698 ) Accumulated deficit   (184,125 )   (255,095 ) Total stockholders' equity   2,067,621     1,952,212     Total liabilities, redeemable non-controlling interests and stockholders' equity$5,724,688   $5,785,324           Ending headcount by geographic region is as follows:   Americas headcount 1,784 1,763 EMEA headcount 644 570 Asia-Pacific headcount   420     376   Total headcount   2,848     2,709           EQUINIX, INC.SUMMARY OF DEBT OUTSTANDING(in thousands)(unaudited)     June 30,December 31,20122011   Capital lease and other financing obligations $ 477,600 $ 401,811   Paris IBX financing 14,925 52,104 ALOG financing 14,546 10,288 Asia-Pacific financing   184,824   193,843 Total loans payable   214,295   256,235   Senior notes   1,500,000   1,500,000   Convertible debt, net of debt discount 701,578 941,084 Plus debt discount   68,158   78,652 Total convertible debt principal   769,736   1,019,736   Total debt outstanding $ 2,961,631 $ 3,177,782   EQUINIX, INC.CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(in thousands)(unaudited)                     Three Months EndedSix Months EndedJune 30,March 31,June 30,June 30,June 30,20122012201120122011   Cash flows from operating activities: Net income $ 37,640 $ 34,811 $ 30,733 $ 72,451 $ 55,878 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation, amortization and accretion 96,944 93,922 86,426 190,866 165,951 Stock-based compensation 20,549 19,103 18,318 39,652 33,853 Debt issuance costs and debt discount 4,902 8,107 8,325 13,009 15,609 Restructuring charges - - 103 - 599 Other reconciling items 984 2,857 3,074 3,841 4,637 Changes in operating assets and liabilities: Accounts receivable (14,864 ) (19,677 ) (19,409 ) (34,541 ) (16,310 ) Deferred tax assets, net 9,531 5,370 (2,507 ) 14,901 3,133 Accounts payable and accrued expenses 35,544 (33,737 ) 4,082 1,807 (9,524 ) Other assets and liabilities   3,552     15,237     11,203     18,789     4,292   Net cash provided by operating activities   194,782     125,993     140,348     320,775     258,118   Cash flows from investing activities: Purchases, sales and maturities of investments, net 279,621 346,366 30,979 625,987 28,794 Purchase of ALOG, less cash acquired - - (41,954 ) - (41,954 ) Purchases of real estate - - (9,042 ) - (23,993 ) Purchases of other property, plant and equipment (196,484 ) (145,490 ) (188,875 ) (341,974 ) (363,990 ) Other investing activities   10,743     68,557     (845 )   79,300     (94,983 ) Net cash provided by (used in) investing activities   93,880     269,433     (209,737)   363,313     (496,126) Cash flows from financing activities: Purchases of treasury stock - (13,364 ) - (13,364 ) - Proceeds from employee equity awards 6,013 30,460 8,929 36,473 24,597 Proceeds from loans payable - 8,909 55,264 8,909 77,917 Repayment of capital lease and other financing obligations (3,032 ) (2,826 ) (2,355 ) (5,858 ) (4,323 ) Repayment of mortgage and loans payable (10,170 ) (67,129 ) - (77,299 ) (10,102 ) Repayment of convertible debt (250,007 ) - - (250,007 ) - Other financing activities   (7,520 )   -     -     (7,520 )   (125 ) Net cash provided by (used in) financing activities   (264,716)   (43,950)   61,838     (308,666)   87,964   Effect of foreign currency exchange rates on cash and cash equivalents   (2,794 )   2,645     957     (149 )   5,075   Net increase (decrease) in cash and cash equivalents 21,152 354,121 (6,594 ) 375,273 (144,969 ) Cash and cash equivalents at beginning of period   632,944     278,823     304,466     278,823     442,841   Cash and cash equivalents at end of period$654,096   $632,944   $297,872   $654,096   $297,872     Supplemental cash flow information: Cash paid for taxes $ 5,031   $ 1,734   $ 6,651   $ 6,765   $ 6,825   Cash paid for interest $ 28,965   $ 63,336   $ 23,725   $ 92,301   $ 60,462     Free cash flow (1)$9,041   $49,060   $(100,368)$58,101   $(266,802)   Adjusted free cash flow (2)$9,041   $49,060   $(49,372)$58,101   $(200,855)               (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 $ 194,782 $ 125,993 $ 140,348 $ 320,775 $ 258,118 Net cash provided by (used in) investing activities as presented above 93,880 269,433 (209,737 ) 363,313 (496,126 ) Purchases, sales and maturities of investments, net   (279,621 )   (346,366 )   (30,979 )   (625,987 )   (28,794 ) Free cash flow (negative free cash flow) $ 9,041   $ 49,060   $ (100,368 ) $ 58,101   $ (266,802 )   (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) $ 9,041 $ 49,060 $ (100,368 ) $ 58,101 $ (266,802 ) Less purchase of ALOG, less cash acquired - - 41,954 - 41,954 Less purchases of real estate   -     -     9,042     -     23,993   Adjusted free cash flow (negative adjusted free cash flow) $ 9,041   $ 49,060   $ (49,372 ) $ 58,101   $ (200,855 )         EQUINIX, INC.CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - NON-GAAP PRESENTATION(in thousands)(unaudited)       Three Months EndedSix Months EndedJune 30,March 31,June 30,June 30,June 30,   2012     2012     2011     2012     2011     Recurring revenues $ 442,576 $ 429,621 $ 376,528 $ 872,197 $ 720,437 Non-recurring revenues   23,688     22,579     18,372     46,267     37,492   Revenues (1)   466,264     452,200     394,900     918,464     757,929     Cash cost of revenues (2)   146,233     140,586     137,558     286,819     260,189   Cash gross profit (3)   320,031     311,614     257,342     631,645     497,740     Cash operating expenses (4): Cash sales and marketing expenses (5) 38,756 38,186 29,261 76,942 56,365 Cash general and administrative expenses (6)   59,197     58,278     46,753     117,475     92,771   Total cash operating expenses (7)   97,953     96,464     76,014     194,417     149,136     Adjusted EBITDA (8)$222,078   $215,150   $181,328   $437,228   $348,604     Cash gross margins (9)   69%   69%   65%   69%   66%   Adjusted EBITDA margins (10)   48%   48%   46%   48%   46%   Adjusted EBITDA flow-through rate (11)   49%   81%   44%   68%   65%             (1) The geographic split of our revenues on a services basis is presented below:   Americas Revenues:   Colocation $ 215,288 $ 209,708 $ 187,840 $ 424,996 $ 364,036 Interconnection 56,273 54,646 48,164 110,919 94,086 Managed infrastructure 12,597 13,970 8,706 26,567 9,473 Rental   445     439     489     884     993   Recurring revenues 284,603 278,763 245,199 563,366 468,588 Non-recurring revenues   12,533     9,321     8,690     21,854     17,828   Revenues   297,136     288,084     253,889     585,220     486,416     EMEA Revenues:   Colocation 87,820 83,951 74,645 171,771 142,845 Interconnection 4,192 3,824 3,203 8,016 6,015 Managed infrastructure 3,262 3,414 3,481 6,676 6,679 Rental   336     344     177     680     295   Recurring revenues 95,610 91,533 81,506 187,143 155,834 Non-recurring revenues   7,087     9,803     7,105     16,890     14,816   Revenues   102,697     101,336     88,611     204,033     170,650     Asia-Pacific Revenues:   Colocation 49,651 47,117 39,101 96,768 75,440 Interconnection 7,794 7,320 5,818 15,114 11,159 Managed infrastructure   4,918     4,888     4,904     9,806     9,416   Recurring revenues 62,363 59,325 49,823 121,688 96,015 Non-recurring revenues   4,068     3,455     2,577     7,523     4,848   Revenues   66,431     62,780     52,400     129,211     100,863     Worldwide Revenues:   Colocation 352,759 340,776 301,586 693,535 582,321 Interconnection 68,259 65,790 57,185 134,049 111,260 Managed infrastructure 20,777 22,272 17,091 43,049 25,568 Rental   781     783     666     1,564     1,288   Recurring revenues 442,576 429,621 376,528 872,197 720,437 Non-recurring revenues   23,688     22,579     18,372     46,267     37,492   Revenues $ 466,264   $ 452,200   $ 394,900   $ 918,464   $ 757,929     (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 $ 233,192 $ 225,079 $ 215,572 $ 458,271 $ 410,148 Depreciation, amortization and accretion expense (85,320 ) (83,098 ) (76,515 ) (168,418 ) (147,115 ) Stock-based compensation expense   (1,639 )   (1,395 )   (1,499 )   (3,034 )   (2,844 ) Cash cost of revenues $ 146,233   $ 140,586   $ 137,558   $ 286,819   $ 260,189     The geographic split of our cash cost of revenues is presented below:   Americas cash cost of revenues $ 85,687 $ 83,307 $ 81,886 $ 168,994 $ 152,096 EMEA cash cost of revenues 37,392 35,353 36,217 72,745 70,708 Asia-Pacific cash cost of revenues   23,154     21,926     19,455     45,080     37,385   Cash cost of revenues $ 146,233   $ 140,586   $ 137,558   $ 286,819   $ 260,189     (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 $ 47,764 $ 46,571 $ 37,063 $ 94,335 $ 70,699 Depreciation and amortization expense (4,333 ) (4,350 ) (4,192 ) (8,683 ) (7,858 ) Stock-based compensation expense   (4,675 )   (4,035 )   (3,610 )   (8,710 )   (6,476 ) Cash sales and marketing expenses $ 38,756   $ 38,186   $ 29,261   $ 76,942   $ 56,365     (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 $ 80,723 $ 78,425 $ 65,681 $ 159,148 $ 128,282 Depreciation and amortization expense (7,291 ) (6,474 ) (5,719 ) (13,765 ) (10,978 ) Stock-based compensation expense   (14,235 )   (13,673 )   (13,209 )   (27,908 )   (24,533 ) Cash general and administrative expenses $ 59,197   $ 58,278   $ 46,753   $ 117,475   $ 92,771     (7) Our cash operating expenses, or cash SG&A, as defined above, is presented below:   Cash sales and marketing expenses $ 38,756 $ 38,186 $ 29,261 $ 76,942 $ 56,365 Cash general and administrative expenses   59,197     58,278     46,753     117,475     92,771   Cash SG&A $ 97,953   $ 96,464   $ 76,014   $ 194,417   $ 149,136     The geographic split of our cash operating expenses, or cash SG&A, is presented below:   Americas cash SG&A $ 65,969 $ 67,025 $ 49,499 $ 132,994 $ 98,311 EMEA cash SG&A 20,100 19,099 17,545 39,199 34,481 Asia-Pacific cash SG&A   11,884     10,340     8,970     22,224     16,344   Cash SG&A $ 97,953   $ 96,464   $ 76,014   $ 194,417   $ 149,136     (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 $ 102,666 $ 101,098 $ 74,866 $ 203,764 $ 146,171 Depreciation, amortization and accretion expense 96,944 93,922 86,426 190,866 165,951 Stock-based compensation expense 20,549 19,103 18,318 39,652 33,853 Restructuring charges - - 103 - 599 Acquisition costs   1,919     1,027     1,615     2,946     2,030   Adjusted EBITDA $ 222,078   $ 215,150   $ 181,328   $ 437,228   $ 348,604     The geographic split of our adjusted EBITDA is presented below:   Americas income from operations $ 67,242 $ 61,918 $ 49,072 $ 129,160 $ 96,391 Americas depreciation, amortization and accretion expense 62,329 60,421 57,246 122,750 110,728 Americas stock-based compensation expense 15,657 15,151 14,527 30,808 26,369 Americas restructuring charges - - 103 - 599 Americas acquisition costs   252     262     1,556     514     1,922   Americas adjusted EBITDA   145,480     137,752     122,504     283,232     236,009     EMEA income from operations 22,962 27,279 14,178 50,241 25,649 EMEA depreciation, amortization and accretion expense 18,329 17,312 18,512 35,641 35,356 EMEA stock-based compensation expense 2,673 2,164 2,147 4,837 4,442 EMEA acquisition costs   1,241     129     12     1,370     14   EMEA adjusted EBITDA   45,205     46,884     34,849     92,089     65,461     Asia-Pacific income from operations 12,462 11,901 11,616 24,363 24,131 Asia-Pacific depreciation, amortization and accretion expense 16,286 16,189 10,668 32,475 19,867 Asia-Pacific stock-based compensation expense 2,219 1,788 1,644 4,007 3,042 Asia-Pacific acquisition costs   426     636     47     1,062     94   Asia-Pacific adjusted EBITDA   31,393     30,514     23,975     61,907     47,134     Adjusted EBITDA $ 222,078   $ 215,150   $ 181,328   $ 437,228   $ 348,604     (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 %   71 %   68 %   71 %   69 %   EMEA cash gross margins   64 %   65 %   59 %   64 %   59 %   Asia-Pacific cash gross margins   65 %   65 %   63 %   65 %   63 %   (10) We define adjusted EBITDA margins as adjusted EBITDA divided by revenues.   Americas adjusted EBITDA margins   49 %   48 %   48 %   48 %   49 %   EMEA adjusted EBITDA margins   44 %   46 %   39 %   45 %   38 %   Asia-Pacific adjusted EBITDA margins   47 %   49 %   46 %   48 %   47 %   (11) We define adjusted EBITDA flow-through rate as incremental adjusted EBITDA growth divided by incremental revenue growth as follows:   Adjusted EBITDA - current period $ 222,078 $ 215,150 $ 181,328 $ 437,228 $ 348,604 Less adjusted EBITDA - prior period   (215,150 )   (198,131 )   (167,276 )   (389,759 )   (295,408 ) Adjusted EBITDA growth $ 6,928   $ 17,019   $ 14,052   $ 47,469   $ 53,196     Revenues - current period $ 466,264 $ 452,200 $ 394,900 $ 918,464 $ 757,929 Less revenues - prior period   (452,200 )   (431,312 )   (363,029 )   (848,913 )   (675,591 ) Revenue growth $ 14,064   $ 20,888   $ 31,871   $ 69,551   $ 82,338     Adjusted EBITDA flow-through rate   49 %   81 %   44 %   68 %   65 % Equinix Investor Relations Contacts:Equinix, Inc.Katrina Rymill, 650-598-6583krymill@equinix.comorEquinix, Inc.Jason Starr, 650-598-6020jstarr@equinix.comorEquinix Media Contacts:Equinix, Inc.Melissa Neumann, 650-598-6098mneumann@equinix.comorGolinHarris for Equinix, Inc.Liam Rose, 415-318-4380lrose@golinharris.com