Good afternoon, and welcome to the Equinix Third Quarter Earnings Conference Call. All lines will be able to listen-only, until we open for questions. Also, today's conference is being recorded. If anyone has objections, please disconnect at this time. I'd now like to turn the call over to Katrina Rymill, Vice President of Investor Relations. You may begin.

Thank you. Good afternoon, and welcome to today's conference call. Before we get started, I'd like to remind everyone that some of the statements we're making today are forward-looking in nature and involve risks and uncertainties. Actual results may vary significantly from those statements and may be affected by the risks we identified in today's press release and those identified in our filings with the SEC, including our most recent Form 10-K, filed on February 27, 2017, and 10-Q filed on August 4, 2017. Equinix assumes no obligation and does not intend to update or comment on forward-looking statements made on this call. In addition, in light of Regulation Fair Disclosure, it's Equinix's policy not to comment on its financial guidance during the quarter, unless it is done through an exclusive public disclosure. In addition, we'll provide non-GAAP measures on today's conference call. We provide a reconciliation of those measures to the most directly comparable GAAP measures, and a list of the reasons why the company uses these measures in today's press release on the Equinix Investor Relations page at www.equinix.com. We've made available on the IR page of our website a presentation designed to accompany this discussion, along with certain supplemental financial information and other data. We'd also like to remind you that we post important information about Equinix on the IR page from time-to-time and we encourage you to check our website regularly for the most current available information. With us today are Steve Smith, Equinix's CEO and President; Keith Taylor, Chief Financial Officer; and Charles Meyers, President of Strategy, Services, and Innovation. Following our prepared remarks, we'll be taking questions from sell-side analysts. In the interest of wrapping this call up in an hour, we'd like to ask these analysts to limit any follow-on questions to just…

Thanks, Steve. Good afternoon to everyone. I'd like to start by highlighting that we had another very solid quarter of bookings across our entire platform. As planned, we had our highest gross bookings production this quarter with particular records in both the EMEA and Asia-Pacific regions, as well as our network vertical. And our net bookings were consistent with our expectations. Our key operating metrics remained strong including firm MRR per cabinet. Also, we had a nice step up in net cabinets billing and net cross-connect additions. We continue to extend our platform reach and depth with strategic acquisitions, and our recently completed Itconic transaction marks our 20th acquisition to-date. The strategic rationale for the Verizon asset acquisition continues to play out strengthening our global market leadership and giving us additional capacity to meet customer demand. These assets continued to be accretive to our operating margins including adjusted EBITDA and AFFO, and we're working hard to reduce the level of MRR churn previously experienced in this business. As we progress with the integration and asset level reviews, we continue to take a prudent view on our needs for sales reserves and estimates for forward-looking churn. The Americas sales force is delivering a combined strong performance with higher than planned bookings into the Verizon assets. Overall, we've raised our key guidance results to reflect the strength of our platform including raising revenue specifically attributed to the Verizon assets. For integration costs we're updating our guidance to $54 million for 2017, which includes $22 million of costs related to the Verizon asset acquisition, $30 million related to Telecity and Bit-isle and $2 million for our Itconic and Istanbul 2 expansions. Now turning to the third quarter. Q3 was another strong quarter of operating performance. As depicted on slide 5, Global Q3 revenues…

Okay. Thanks, Keith. So in closing, we continue to deliver solid performance this year. Our strategy is working and we are executing at a high rate as we expand the depth, scale and reach of Platform Equinix and see continued momentum in existing and emerging ecosystems. The metrics that reflect our unique value continue to increase, including our multi-region customer deployments, traction with Fortune 500 customers and interconnection penetration. We are accelerating the growth of our ecosystems by bringing more network and cloud service providers to Platform Equinix, expanding the growth of our indirect channel and enhancing our product set to position our company to deliver even greater value to our customers going forward. So let me stop here, and we'll open it up for questions. I'll turn it over to you, Christine.

Thank you. At this time we'll begin the Q&A session. And our first question is from Frank Louthan of Raymond James. Your line is now open. Frank Garreth Louthan - Raymond James & Associates, Inc.: Great. Thank you very much. Just looking at some of the logos that you're highlighting, typically the names out of China, how meaningful a change is that in these names, you're seeing a big shift there, and then sort of a follow up on with Asia. Talk to us a little about the traction from the Bit-isle transaction. How is that tracking relative to the expectations with that acquisition? Thanks.

Okay, Frank. This is Steve. Why don't I start and then Keith and Charles can add here. So the logos that we refer to out of China, we're spending a dedicated amount of time with the large hyperscalers in China that are now expanding on a global basis. And so we have been over the last several quarters starting to win footprint with companies like Tencent, Baidu, Alibaba et cetera that are expanding their footprint, access nodes, network nodes, more compute around the world to enable their commerce enablement around the world. So we've been on that journey for quite some time and this quarter was another great quarter of wins with those three, for example, but there's others. We have very small teams in Korea and also in Beijing, where we don't have assets today that are working with companies in those markets, South Korea that are exporting deals out around the world. So we had some pretty good wins this quarter also at South Korean companies and companies from Beijing, that are deploying infrastructure around the world. So the cross-border activity is working very, very well for us. Anything else on the logos from China, guys?

Well, I would add one more on the China, I think, which is – and it's not unique to China, but it is that this is a typical pattern for us, which is when we often work with players, in their home market, often they don't have an immediate need for us. They may either own data center assets or they may have other partners that they're using. But, we go in with that global value proposition and as they expand our business globally, they need somebody to help them do that. And we've been very successful in winning these customers, not only in their content digital media businesses, but in their cloud aspirations, and that's been a major impact. And now, what happens and this happens a lot is we win that business, gain credibility with them and then often come back to the home market and are able to win business due to our extended relationship. And so, that's definitely something we're seeing.

And Frank, let me just finish off with the question on Bit-isle. Clearly, as Steve alluded to we've almost fully integrated the Bit-isle asset and no surprise given our messaging we've been very pleased with the combination of that asset into our Japanese business. We've been able to sell off a number of the subsidiaries and assets that they own, that were not core to our go forward plan. So when you look across if you will the Japanese platform, we've been extremely pleased with how we performed and in fact, what we've seen is an actual uptick in Japanese activity across that broader platform, so we will continue to invest in the market and all I can say right now is we're very pleased with that transaction and we're happy we closed it. Frank Garreth Louthan - Raymond James & Associates, Inc.: Okay. Great. Thank you very much.

Next question is from Phil Cusick of JPMorgan, your line is now open.

Hey, guys. Thanks. It looks like the Verizon acquisition is going even better than expected. Can you dig more into what's driving that upside? It sounds like churn mitigation in particular is helping?

Yeah, Phil, there is a number of things that are certainly going well with the transaction. One of the things we said in the last earnings call, we continue to keep some level of conservatism or prudence in our guidance on a go-forward basis, is that we're seeing less churn and we've had to use less sales reserves than historically planned, so that's certainly a positive. But, I think the flip side is that we're selling, we're actually seeing gross activity where we're selling more into the business than we originally planned. We're selling across that platform, as you know there is 600 net new customers. We're building out infrastructure where we can. We've recently announced an additional build in Miami's NAP of the Americas, the Denver asset as we're creating a lot of opportunity for ourselves. At the same time, we're putting a lot of focus on these assets, so when you take up sales force like we have, combine it with the Verizon assets and our assets, you have an opportunity to do better. And so, when we started out offering guidance, it's just fair to say that we're conservative, we took a view that we wanted to understand the business better. For the very first time, those customers are getting invoices from Equinix on an un-bundled basis relative to what they experienced with Verizon. And so, we're delighted with where we ended the quarter, $137 million of revenues that annualizes out to just under $550 million. But, we're taking a view for Q4 that we're still going to be in that ZIP code of $130 million to $140 million of revenue for the fourth quarter and that's why we're holding our position because of our concerted view, our prudent view on incremental churn potential and/or the need for higher sales reserves.

It seems like your gross....

Yeah. I might add two things. One, asset acquisitions like this – we're finding is a really ideal scenario in that, you don't have to do a sales force integration, move accounts around, figure out who's on first base, et cetera. Instead, you take the assets in, you say this is available capacity, we enable our sales team to come up to speed on that quickly, and begin selling into it aggressively. And we definitely saw that. In fact, I think we probably were a bit surprised at how effective the sales force was in immediately positioning these assets to their customers. And obviously, there's some tremendously high-quality assets in that portfolio. And then you combine that with the fact that now these customers who had their services with the provider who they were questioning their long-term commitment to that business are now in a position of saying this is a customer who's absolutely committed to this, it's central to what they do, it's the only thing they do, they're the market leader, and they have an increased level of confidence to go ahead and spend behind that. And those two things in combination I think have really fueled the acquisition's performance.

Got it. Thank you.

Thank you. And our next question is from Sami Badri of Credit Suisse. Your line is now open. Sami Badri - Credit Suisse Securities (USA) LLC (Broker): Hi. Thank you for the question. So, so far you've announced multiple data center facilities that have direct subsea cable landing point connections. Could you give us a better idea on the economics of these facilities? So, for instance, can you charge customers higher rates at these locations versus the rest of the IBXs?

Well, this is Steve. Let me just kind of give you a baseline of there's – we've mentioned this in previous calls that there is some 40 to 50 subsea cable projects that have been going on for several quarters. We've announced several wins to date. Our intent around these is to help land these cables that today the technology is so advanced they can bring them further inland to where our data centers are located. We look very attractive because we have so many data centers located around the world. And once they turn these cables on, some of it will be dedicated, some of it would be undedicated, and the notion is that we can charge – we can obviously monetize space, power, and interconnection as they move that traffic around the world. So it's a very good win for us to land these things initially, but then when they finally turn these cables on, we're going to be able to interconnect that information and all that social media traffic and mobile traffic that all these hyperscalers are predicting are going to traverse the earth over the next decade. So a lot of the business is to come.

Yeah. It's a classic ecosystem play for us, right, which is we typically aren't going to generate the superior returns on the magnets themselves. It's on the ecosystem around that and a lot of these facilities are either in and of themselves or directly tethered to broader network, because this traffic comes in and, by the way, intercontinental traffic continues to explode because of the global nature of the economy. And so now once that data reaches the shores of where it's headed, it needs to be distributed cost effectively and efficiently, and that's really where we shine. And so I think that what we're able to do is monetize around those things and continue to attract people as a strategic point of aggregation. Sami Badri - Credit Suisse Securities (USA) LLC (Broker): Got it, got it. And then on Equinix Cloud Exchange, I was hoping you could give us an idea on how big this service as a percent of revenues currently is? Is it accelerating as a percent of total revenues currently?

Yes. It's definitely accelerating. We have not broken it out, and I think we'll continue to evaluate whether that's appropriate to do. But it is definitely growing faster. If you look at interconnection overall 17%, which is clearly over-indexing, and Cloud Exchange is beginning to become a material contributor to the overall performance of the interconnection business. So, yeah, we're very pleased with that. It is a central hook in terms of being in the bag of our sales teams. When they go and say, 'Hey, are you implementing hybrid and multi-cloud as the architecture of choice? Let us talk to you about how Cloud Exchange can fit into that picture.' And so we're seeing really good momentum, both in terms of ports sold and particularly importantly, virtual circuits on those ports and traffic on the virtual circuits. So we monitor all of those things and all of those metrics continue to trend very nicely for us. Sami Badri - Credit Suisse Securities (USA) LLC (Broker): Got it. All right. Thank you, guys.

Thank you. And our next question is from Vincent Chao of Deutsche Bank. You line is now open.

Yeah. Hey, guys. Just wanted to go back to the Verizon question for a second. It sounds like things are going quite well there. Guidance does imply a bit of a downturn in the fourth quarter, and I know there is some conservatism baked in, but just curious if there is anything specifically that's known that would cause that decline quarter-over-quarter?

Yeah, Vincent, I think very similar to what we did last quarter. As you know, we were running at a little bit higher level than what we guided to and no different this quarter. We're only two quarters into billing the customers. We're in the process of collecting those invoices. As I said on the prior question, the customers are receiving for the very first time unbundled invoices from Equinix. And as a result, as we work with the customers to make sure that we pay, we're agreeing all the terms and conditions and, if you will, the detailed line items, this is just us taking a prudent view as we look forward. And if I can then sort of analogize it to this acquisition to an acquisition we did in 2010 with Switch & Data, it took us almost 2.5 years to fully inventory all the assets. And so this is a process that we will be working with our local teams, to make sure we inventory them, yet at the same time as we invoice the customers, we want to make sure there's an appropriate reserve in-place for future potential churn but also sales reserves for things that are uncollectible. And again, this is us just being prudent with our guidance recognizing we are running a little bit faster than we've guided for Q4.

Okay. Thanks for that. And then just maybe another question. Last quarter we spent some time talking about another wave or second wave of hyperscalers or hyperscale demand. It sounds like you did pretty well with that category this quarter. Could you potentially elaborate a little bit on how you are looking to change, how you approach that second wave, and try to capture it going forward?

Yeah, Vincent. This is Charles. So we see continued sustained demand from hyperscalers. I mean, we're having great success in selling them on various elements of their architecture. Our particular focus has always been on their network nodes and their private interconnection nodes, which we think are a central piece of building the cloud ecosystem and creating magnetism and fueling the ecosystem strategy that we have been so successful with. We also, though, are seeing continued large footprint demand particularly from the hyperscalers. And as you know, we've been pretty selective about that business in the past, but we're hearing those hyperscalers, say 'Look, we really would like you to step up and provide some of those elements of our architecture in key locations for us as in our partner of choice, as an infrastructure partner of choice for us.' And we believe that stepping up and being more aggressive in that with a very select set of customers is the appropriate move for us. Their architectures are evolving in ways that we want to make sure that we're anticipating and staying in front of. We really feel like we need to maintain centrality in the cloud ecosystem, and these players, the ones that as you might imagine, are the ones we're focused on, are shaping that ecosystem quite aggressively. And so, what we're going to do is we're going to say, 'Look, we will work with you. We'll allocate some of our capital towards large footprint demand with those customers. We will optimize design construction, and deployment of those facilities to meet their needs. And then we'll be creative about how we finance that in terms of probably some combination over time of both on balance sheet and off balance sheet financing, which gives us the leverage that we need to serve those needs. So that's what we're up to. We're continuing to staff a team to help us do that effectively. The response from those customers has been extremely positive. And so we'll keep you updated as we continue to progress with that.

Okay. Thanks, guys.

Thank you. And our next question is from Michael Rollins of Citi. Your line is now open.

Hi. Thanks for taking the question. I was curious if you could expand a bit more on what you were describing in terms of the interconnection products that you're looking to beta. And if you could talk a bit about the enterprise experience in your facilities of using the cloud and what you're seeing in terms of the evolving interconnection density from that? Thanks.

Yes, Mike, I'll comment on that one and I think probably all of us having spent a lot of time with customers can comment on some of the enterprise applications that we're seeing really fuel the demand and particularly strengthen our new logo capture, which as you saw, we set records across all of our verticals in that regard. But starting with your question relative to the interconnection product portfolio, as you might imagine, we bring some very unique strengths to the table in terms of geographic coverage as well as cloud density. And what we've been hearing from our customers is, 'Look, we want to take full advantage of that. And so that's really what we've gone to work on and sharpened our pencil about saying, 'How do we provide ubiquity of access to the cloud destinations that our customers need from a geographic standpoint and from a cloud destination standpoint? And how do we make that as easy to use and consume as possible?' And so I'll kind of just leave it there and tell you, those are the areas of focus that we have in terms of extending the portfolio, and I would ask you to sort of keep your eyes out for more formal announcements that will be coming towards the end of this quarter.

And, Mike, on your second question, I'll give you just a sense of some of the use cases that we're starting to see come in from the industry verticals. In the enterprise, we're seeing use cases that are around migrating to the hybrid cloud as you would expect as much as much positioning as we do with that. We've got retailers that are really pushing hard into digital commerce and creating the stores of the future. We have pharmaceutical companies that are deploying our performance hubs and looking for real-time analytics and data management capability. In the financial industry, it's across the board. We've got connecting to multiple cloud cases, we've got investment firms that are doing that. They're deploying our performance hubs to extend their reach across multiple regions. In the cloud industry we're seeing all kinds of use cases from the cloud providers from security to storage to compute to governments that are actually using us around the world for all kinds of things, from healthcare applications to back to the security to DDoS and WAF capabilities, and they're finding that inside of our data centers with our partners and with us partnering with the providers of those services. Network probably is – we had a very good quarter as we mentioned in finance and network, with the networks they're upgrading their backbones and they're moving to SDN and NFV, and so we're starting to see deployments towards a 100-gig and the networks are really starting to extend reach around the world with us for next-generation deployment of services, all oriented towards their capability to work with their cloud providers closer. So we're seeing all kinds of use cases. We're studying them hard, and we're really starting to dig into the top verticals that are really – that find the Equinix value proposition, a great place to drive cost out, and get higher performance.

Steve, one more I might mention is that honestly it has been a little surprising to me the strength of it has been manufacturing. We've seen incredible demand from manufacturing companies who are looking to do a variety of things ranging from supply chain management activities to data management to industrial Internet type use cases. And so that's a pretty exciting area for us. And then one more comment, which would be I would say that we're seeing a higher propensity – a better success with what I would consider horizontal use cases. And so the good news about that is we're able to educate our sales teams on those use cases with a little bit of a vertical wrapper around it, but go send them out with something they understand well and that seems to be getting resonance across a wide variety of verticals. And so we definitely have both our sales teams and our solution architect teams who have some good vertical expertise, but horizontal use cases seem to be the wave right now.

Thanks very much.

And our next question is from Simon Flannery of Morgan Stanley. Your line is now open. Simon Flannery - Morgan Stanley & Co. LLC: Great. Thanks very much. You talked a bit about channel partners becoming more important getting up to about 19%. Where do you think that could go over time and what are the economics for you driving business through their channel versus directly. And then maybe just one, we talked a lot about the Chinese Internet providers. What's your thoughts about expanding in China? You've obviously continued to work in Shanghai, but in two other markets there. Thanks.

I'll start with the channel. Charles, maybe you could chime in. So the channel has progressed nicely. We'll probably set a goal next year that will drive us into the 20%s, Simon. I don't think we know the upper limit of what percentage our channel can deliver. It's 19% now. We've had 14 quarters of sequential growth with our channel. So bookings grew 42% year-on-year and 10% quarter-on-quarter through the channel. We've really shifted the focus to resellers. We actually had about 143 new logos come from our resellers this quarter, and we're creeping up towards 430-odd new logos year-to-date through the resellers and through the channel partners. So it's working very well, and I would tell you that our expectations are to – it's 19% today. It's going to move into the 20%, the low 20%.We haven't set a goal out there publicly on where we want this to go, but it's increasing every quarter. Simon Flannery - Morgan Stanley & Co. LLC: And are the economics similar from direct business?

Yeah, they are. I mean when you really look at it, you may have a particular right now where we're probably doing a bit more of sell-with activity than pure sell through. They might be a little higher in that you may be paying an end user rep to engage and co-sell with a channel partner. But when you really look at customer lifetime value and the cost of sale therefore in the context of a fairly long contract with strong margins, the incremental cost of sale is fairly small. So I would say on balance, they're similar economics. I would say that since enterprise is really over-indexing in growth and we really have a business that is – service providers continue to be very strong for us across a range of cloud service providers, networks, others. But on the enterprise side, I would say I think they could eventually be – the majority of our bookings could come through the channel on the enterprise side as offerings mature in the market and they're able to pull them through more effectively.

And then, Simon, in China, China, we have six assets today that are in the Shanghai region in a joint venture partner that we've announced that we're working on to work with us closely to accommodate the licensing requirements we need to go deeper into the market. Our aspirations are to move up to the Beijing market over time. We have a very good joint venture partner that we're finalizing the terms. We've announced that company. It's a company called Datang and they are very well connected into the government circles and are providing us all the partnership benefits that you would expect to work with local companies. Most of the traffic we're still seeing coming into PRC is inbound enterprise multinationals that need a safe pair of hands in China when they're setting up operations and majority of our business still is multinational traffic coming in. That will change over time as we get deeper into the partnership with Datang and we start to take on some local companies. Simon Flannery - Morgan Stanley & Co. LLC: And is Beijing something that could happen in 2018?

Yes, it could very well happen in '18.We're working hard on- our partner has access to land and to buildings and all the required things you need to move into a market like that. So it could very well happen in 2018. Simon Flannery - Morgan Stanley & Co. LLC: Great. Thank you.

Thank you. Our next question is from Colby Synesael of Cowen & Co. You line is now open. Colby Synesael - Cowen & Co. LLC: Great. Two questions, if I may. One, the Americas cross connect number was relatively low for the second quarter in a row, at least when we look back over the several quarters before that. Just trying to get if there's something structural or something that's changed there to get a sense of how we should be thinking about that going forward. And then secondly, as it relates to the two announced deals Zenium and Itconic, how many other opportunities really around the world do you see like that right now and how aggressive do you guys want to be right now in starting to roll some of those out? It seems like right now might be a good opportunity to kind of just push on that a little bit?

Colby, maybe I'll comment on the Americas cross connects and let Keith and Steve add to that and address the M&A question. But overall, I would say that we continue to be very pleased with sort of the interconnection performance. Obviously 17% year-over-year growth on interconnection is really demonstrating strong performance in this area and speaks to I think the depth of our value proposition in that. Having said that, the cross connect counts probably three things that I would comment on: one, we are seeing some implementation of a 100 gig from our most sophisticated players who are implementing optics and would be able to aggregate traffic and groom their cross connect population and that does create some churn on the cross connect, but it increases the overall sort of traffic and throughput on the platform, which we think is a good thing over time. And so we are seeing some of that. We're also seeing the backend of I think some of the industry consolidation, which has been rampant in networks over the last several years . It takes them time to sort of integrate their core nodes and sort of groom traffic. And so we're seeing some of that. But what we really keep our eye on is gross, right, because you are going to see some churn on for some of these other reasons, but gross has been – continue to be very strong which to us says, look, the end demand for private connectivity continues to be strong. And so that's what we're seeing there. And then finally, I would say those numbers don't reflect ports on the cloud exchange and VCs on those ports, and those are an increasingly popular way for people to gain the interconnection value that they need. So, those things all probably play into some degree. But on balance 5,700 is a number we're pretty pleased with. And again and when you really look at the revenue growth and how our customers react to our interconnection value proposition, we couldn't be happier.

And on the M&A front, Colby, I would tell you that still the top priority for this team is reaching new markets and extending our networking and cloud platform to extend it into Equinix is the top priorities. The markets are the same. We're looking in Southeast Asia, we're looking in South Korea, India, South Africa deeper into Latin America. That's where the regional teams have activity going, corporate development activity. I would tell you there's no shortage of opportunities. We're going to qualify and be very targeted, but if it moves the needle for us on new market or moves the needle for us on network and cloud density, it'll be of interest and we'll probably have a look. I don't know Keith if you'd add anything there.

Perfect. Colby Synesael - Cowen & Co. LLC: Great. Thank you.

Thank you. And our next question is from Lukas Hartwich of Green Street Advisors. Your line is now open.

Thanks. Good afternoon, guys. What percentage of undersea cable landings are in your own facilities and how do you think about the owned versus lease question when trying to land those deals?

Owned versus leasing, you want to start on that, Keith?

Yeah. I think the first and foremost, let me take it to the highest level. Our view is always having fully economic control of the asset or any other asset that we'd like to wholly own. But there are certainly some of these markets where we will not have the opportunity to own the asset yet, having those subsea cables extending to that leased asset is just as valuable to us as it is into our owned assets. And I think that's most important. And I don't actually have the breakdown between the owned and leased, breakdown between the subsea cables that have already landed. But suffice it to say that is an area that we will continue to focus on to the extent that we can have more owned assets which is an objective of the company, that will bode well for what you're looking for.

And on the wins to-date on the question, Lukas, we actually have around 28 metros that would be cable landing enabled meaning that our IBXs were close enough to the coast to be able to support a cable landing station deployment. We've announced publicly that we've won 15 today, there's eight in operation and seven are under construction, meaning they're deploying and getting ready to setup. So per the earlier question, many of these cables have not yet even been turned on yet. These are all funded by the biggest hyperscalers in the world with their desire to have more capacity for all this traffic that's going to traverse the Earth over the coming decade. So, the turn up of these things will continue to happen. There's another 20 to 30 more projects that we are aware of that are ongoing and we're pursuing with business development teams. So, this is a high priority for us.

Great. And then, just to follow-up, with leverage at the higher end of your target range. How do you weigh either growing organically to bring that down or tapping the ATM?

Well, again, we have really strong capital structure today. We're at the high end of our range, we're previously above that high end of the range. Just through sheer scale, the cash flow attributes of our business are very, very strong. And just by growth, it will continue to bring that leverage ratio down. Having said that, we want to make sure we define what our best and best source of capital is to fund our future growth. We'll continue to use leverage where appropriate. We have $1.6 billion of cash in the balance sheet, we have an untapped line of credit. We do have an approved ATM that we previously announced. But right now, our use is really going to be the cash on the balance sheet and making sure that we can continue to scale the business in the most efficient way to drive the maximum value to our shareholders. And just recognizing that, I like the position we are in, because as we continue to scale, we're creating more theoretical debt capacity for ourselves. And yet at the same time it's increasing the cash flow in the business that allows us to reinvest given the low payout ratio of 43%.

Great. Thank you.

Thank you. And our next question is from Jonathan Atkin of RBC. Line is now open.

Thanks. So I was interested if you can talk a little bit about your pipeline, over the next 18, 24 months for land purchases under sites where you currently lease. And then, just kind of bigger picture, as we think about the margin trajectory, obviously, when you do M&A, it can interrupt the margin expansion, what is keeping you from at some point readily surpassing the 50% threshold and heading towards say mid 50% margins or higher? Thanks.

Let me take the first one and I'm looking at Steve and Charles maybe for the second one or I'm happy to jump in, but look, no surprise to you Jonathan. We are actively acquiring buildings and contiguous land in and around those buildings. If it make senses that we will continue to do that, we'll do as much of it as we can. We are highly focused on what we call the top-tier markets. Think of that as sort of the 10, 15, you can probably even go up to 20 markets around the world where we want to make sure that we control our future destiny. We've also had a committed objective to get to more than 50% of our revenues coming from assets that are owned. So not only acquiring the land for our future growth but acquiring the land underneath the buildings in which we operate today is an objective of ours. And so over some period of time, you'll see that that number will continue to move up. But the most important thing I want you to walk away is that we are actively looking to acquire land in our core markets adjacent to or at least proximate to our existing facilities.

Yeah. I'll tackle the second one. I mean I think Amir actually asked the same question last time if memory serves, but I do think that there is natural margin expansion available to us in the business as we continue to scale. And so I think, we see some of that. As you said M&A has the occasional sort of blip in terms of interrupting that expansion trajectory. But the one thing I would say is, and we've been consistent I think in this, which is we view our own (5n6:43) as maximizing sustainable intrinsic value creation for the business. And we think there's a lot of opportunity out there right now, and we're investing behind that opportunity. If you look for example at what we did in terms of kind of the adjustment in our organization to continue to tackle new growth areas for the business, and what my new SSI team is trying to go after, those are areas where we'll continue to invest behind to ensure that our service portfolio is responding to customer needs, and positioning us not only for near-term performance, but for long-term sustainable growth. And so that's why we've been reluctant to put any different marker out there. I think we're continuing to progress towards margin expansion, and we'll make a balanced assessment of when we believe we should drop that through the bottom-line versus when we believe we're going to get a really significant return on that investment by putting it into future growth. So I think we're continuing on that march, but hesitant to sort of change how we view the long-term markers.

And then finally on interconnect, on your website there's a product sheet that talks about your traditional Internet exchange product, and there's a number of blue dots across the globe that says coming soon around – basically putting in I would suspect kind of your peering exchange in those metros. And is that potentially going to be material driver of acceleration in your interconnect business or is that just sort of an amenity that is less important than say bilateral cross connects?

Yeah, I mean I would say that we try to think about the overall interconnection offering and make sure that it's being responsive to the broad needs of our customers. I don't know that any geographic expansion, we would do particularly on the IX is going to be "needle mover." But I do think that what it does is positions us to effectively serve the full range of a customer requirement and what we have and it is quite unique is a combination of both geographic reach and product portfolio depth and interconnection which is really unmatched. And so you said look, a large complex global multinational, one, they need the geographic coverage, but two, they want to take it from the buffet, IX direct connectivity in the form of Layer 1 cross-connects, ECX at Layer 2, Layer 3 and nobody else can provide that full portfolio. So, again, I'd urge you to sort of stay tuned to how we're evolving the interconnection portfolio and you'll hear more about that through the course of the year.

Thank you.

Thank you. Our next question is from John Hodulik of UBS. Your line is now open.

Okay. Great. Thanks guys. You saw a nice uptick in the cabinet adds in the quarter really across all markets. Now I know you don't guide to it and it's a fairly lumpy number, but given all the development and footprint expansion, is this sort of a good level that we could expect sort of going forward? And then if you could maybe point out one or two drivers, I mean on the call here you've mentioned probably a dozen that's driving the business, but if there's one or two that you could point out, maybe they're different in sort of each region, but is it accelerating pace of outsourcing or demand from the hyperscalers, anything you could point to that sort of drove that uptick particularly this quarter would be great? Thanks.

For the cabinet adds.

Yeah, I think first and foremost 4,500 net cabinet adds clearly is, one, if not our highest, I think it's out highest bookings quarter ever vis-à-vis the net cabinets billing. I'd tell you that as you aptly pointed out, it does ebb and flow. One of the comments we made in our prepared remarks was the pipeline is extremely strong. And so, no surprise to you as we plan to have continued record bookings, because we're scaling the business. We'd expect that number to continue to be significant. The other part I said is, we believe that we're going to continue to consume a lot of those cabinets. Hence the number of projects that we are building around the world as we said, we've got 22 active projects across 16 markets, and recognizing some of the comments made by Charles around hyperscaler and the opportunity that's in front of us. I think you're going to see that number continue to be relatively higher than what we've experienced before. But I want to reserve the right that it is inherently chunky. And so, we're going to see sometimes it will move upwards and other times it will step back just based on the timing of the deployments.

And John, I would point back to what Charles talked about earlier on these horizontal use cases. So, it would be a combination of everything underneath an umbrella, most companies today are moving their businesses to a digital enablement model. So they're moving some applications to the hybrid multicloud architecture, they're optimizing their networks, they're transforming them. They're moving more data to distribute it around the world where the people and customers are, so they need more analytics out of the edge. They're moving their communications capabilities all over the world, their data centers are consolidating, so many enterprises are getting out of the data center business, moving some applications to the public cloud, moving some to the colo and keeping some on-premise. The concept that the edge computing model is underpinning a lot of these requirements we're seeing, so it's a combination of those things that we see across multiple industries.

And, as you might have noticed, large CSPs, as you might have noticed this earnings season, are growing their business very well and they are significant customers of ours and we continue to benefit from that growth.

Great. Thanks, guys.

Thank you. And our last question is from Robert Gutman of Guggenheim Securities. Your line is now open.

Thanks for taking the question. So, when you mentioned large footprint deployments for hyperscalers earlier, I was just curious what scale of deployment you mean in terms of megawatts or what size of deployments or range are you talking about there? And secondly, are you able to provide a churn number that would exclude the sort of a core churn number that would exclude churn in the acquired assets?

I'll take the first one. And then maybe, Keith, you can comment on the second one there. So large footprint, it is little bit of a terminology challenge which is – we probably still are doing – several years ago, we'd probably consider anything over 250 kilowatts sort of large footprint. That started to probably elevate in terms of what sort of average deployment sizes are for certain things, but when I'm talking about the hyperscale initiative in particular, we're talking more about sort of multi-megawatt, probably 3 megawatt to 5 megawatt or more in a single implementation, not a single phase, but in one implementation that comes over a relatively short period of time, and so when we're talking about hyperscale that's kind of the scale of what we're thinking of. We will talk about doing large footprint within the context of our retail business that might be 300 kilowatts, 500 kilowatts, maybe even up to 1 megawatt, but we usually accommodate that within our retail footprint and within the underwriting that we've done for those assets already. So those are distinct things in our view in terms of large footprint which we're accommodating within our current assets. And then hyperscale which again I would say 2 megawatts to 3 megawatts to 5 megawatts or more over a relatively short period of time.

Robert, on the churn question the easy answer this quarter is (1:04:45) somewhat consistent with what we reported on an overall basis. So on the acquisitions are relative – or the inorganic versus the organic is roughly the same.

Okay. Great. Thanks.

Great. Thank you. That concludes our Q3 call. Thank you for joining us.

And that concludes today's conference. Thank you for your participation. You may now disconnect.