Good afternoon, and welcome to the Equinix Fourth Quarter Earnings Conference Call. [Operator Instructions]. 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.

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 November 3, 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 is Equinix' policy not to comment on its financial guidance during the quarter unless it is done through an explicit public disclosure. In addition, we will 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 reason why the company uses these measures in today's press release on Equinix' IR page at www.equinix.com. We have 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 encourage you to check our website regularly for the most current available information. With us today are Peter Van Camp, Equinix' Interim 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. [Operator Instructions]. At this time, I'll turn the call over to PVC.

Thank you, Katrina. Good afternoon, and welcome to our fourth quarter earnings call. It's good to be joining all of you as we share our strong results for both the quarter and the full year. As I believe everyone is aware, I have assumed the role of CEO for an interim period. I'm fortunate to have held both the roles of CEO and Executive Chairman over my 17 years here at Equinix. And I've had the privilege of working alongside our leadership team, playing an active role in their efforts, our strategy and every major decision the company has made in this time frame. As we look forward, it's our opportunity to accelerate digital transformation and our position as the underlying platform and stewards of our customers' digital infrastructure that has me so excited about our future. I'm thankful that I can play a meaningful role in assuring our momentum continues as we outpace our industry. Turning to our performance. We just delivered our 60th consecutive quarter of revenue growth, a longer track record than any current S&P 500 company, and we're well on our way to deliver over $5 billion of revenues in 2018. We are investing more than ever before in our organic business, growing our strategy, services and innovation team to support new products and services, adding more quota-bearing sales heads as our business grows and supporting a broader initiative around customer experience. We continue to grow our global platform, adding 19,000 cabinets across 23 projects in 2017 and have a very active construction pipeline going forward. With more than 9,800 customers, we now serve 46% of the Fortune 500 and 1/3 of the Forbes Global 2000, with more to come as we continue to attract and add customers, transforming their digital businesses. Interconnection and ecosystems remain…

Great. Thanks, PVC. Good afternoon to everyone. We had a great finish to the year delivering on our best-ever bookings quarter with particular strength in our cloud and network verticals. Also as PVC mentioned, we had record bookings in both our EMEA and APAC regions, highlighting the value of our global platform. With 2017 now behind us, I also want to take this opportunity to highlight that we continue to track against our 2016 Analyst Day financial objectives to deliver healthy organic compounded revenue growth with strong flow-through to AFFO and AFFO per share. Additionally, our M&A activities, including the Verizon asset acquisition, have been accretive to our core financial metric being AFFO per share. At the same time, we've built strength into our balance sheet, raising both debt and equity to maximize the long-term value for our shareholders. We're putting more capital to work than ever before, building capacity across our markets while enhancing our products and services. This will drive future profitable growth while accentuating the key points of differentiation between our business and that of our peers. I'll now review the full year 2017 results and offer some high-level commentary on 2018. Then I'll toggle to the fourth quarter highlights. Note that our 2018 guidance does not yet include the results of either Metronode or the Infomart acquisition, both of which are expected to close by mid-2018. Also, do note that we've adopted the new revenue standard, ASC 606, the impact of which is highlighted on Slide 12. And just one final note. All growth rates in this section are normalized and constant currency. So starting with revenues. We recorded revenues just under $4.4 billion for 2017, an 11% year-over-year growth rate, reflecting strong demand and an expanding market opportunity. In 2018, we'll deliver meaningful step-ups in…

Thanks, Keith. Now I'd like to summarize our strategy, so please refer to Slide 18. This year, we plan to invest behind our market momentum and build wisely on our global leadership position. We will continue to press our advantage and deliver value for customers that will be very hard for others to replicate. We will invest further in our work to catch the next wave, responding to key market trends that will fuel digital transformation and shape our future as a company. And as we grow, we'll scale the company foundation for the next decade. Our strategy is well aligned with our evolving industry and fueled by strong secular forces. We are responding to this exceptional opportunity by rolling out new initiatives around hyperscale infrastructure, delivering innovative new services, connecting our IBXs around the globe and pursuing targeted acquisitions that build interconnection density and enhance asset ownership. Integrating these acquisitions into Equinix has been demanding at times, but we have honed our integration capability and view it as a significant competitive advantage and essential to our larger efforts to build out a consistent global platform. We will continue our strategic and ongoing support of the enterprise and cloud, and we will be spending more time targeting and investing in ecosystems that will create the most value for Equinix and our customers. We believe interconnection will become even more important for our customers in the years to come, so we're working to ensure that this value proposition is as strong as ever. And as we grow, we must put even more emphasis on how we develop and scale our people, processes and systems to fuel not only our current position but the future state as well. So in closing, we've achieved a number of significant milestones around interconnection, innovation and acquisitions in 2017, and we see solid fundamentals coming into 2018. As we approach our 20th anniversary and reflect on what we've built, we remain true to our core principles of delivering a global platform for our customers' infrastructure. We have a clear vision of our strategy and opportunities ahead and are looking forward to another successful year. So let me stop there, and we'll open it for questions.

[Operator Instructions]. The first question comes from Colby Synesael with Cowen and Company.

Two questions if I may. First one, it looks like 2018 is shaping up to be a greater investment year than perhaps what The Street was expecting. Can you just talk more about what the opportunity -- or how that's going to position you as we exit 2018? We're seeing obviously some depression in the margins, but is this meant to help sustain growth perhaps greater than 10% as we go into those outer years? Any sense on when we can get back to that 50% EBITDA margin? Just trying to get a better understanding what the payoff is, if you will, of the investments that you're making so that we can kind of look a little bit beyond 2018. And then secondly, just from a modeling perspective, I appreciate that you'll give us more information later on. But can you give us just a little bit of color on what the EBITDA margin is for Infomart and for Metronode just for -- so we could start to think about that?

Why don't I start, take the first part of the question, Colby? As it relates to the investment, when we talk about sort of -- there's 2 components to it. There's the capital investment that we're making, which gives you a sense that as we talked about, we have 30 projects underway. Once we close the 2 transactions, we're going to be in 52 markets. So no surprise, we're seeing our utilization levels go up, and therefore, we're making investments. And a number of those investments will be what I would call first phase sites, and that's from a capital perspective. The other thing, I think, that's important to note is that we are going to invest around the HIT program that PVC alluded to. Again, a portion of that CapEx certainly will be dedicated to that. When you think about the OpEx side of the equation, again, recognizing we're going to grow -- we've said that absent Verizon, the organic business is going to grow greater than 10%. And so that is a greater than. So I want to leave you with that thought. But the second part is we're going to deliver -- when you think about the core business, we're going to deliver a flat margin at 48.2% when you adjust for integration costs. And embedded in that 48.2% is basically the implication of Itconic, which will erode our margins by 30 basis points. And so again, to your question, that's a roughly 35% margin business. But the other part of which I don't think is fully appreciated, we're going to invest in customer-focused, growth-orientated -- oriented investments, and so it's going to be the SSI initiatives, so Strategy, Services and Innovation around Charles and his teams. It's going to be around customer experience and the initiatives…

Itconic.

Yes. The Itconic deal, again, that margin is, as I said, roughly 35%. When you then get into the discussion around both Metronode in Australia and then the Infomart in Dallas, right now, the margin profile is going to be relatively consistent when it comes to the Infomart deal. We're going to update that as we get -- as we move to the close. As it relates to the Metronode, as PVC alluded to, it's over -- it's in 6 markets. It's slightly -- it will be slightly dilutive at the outset, but we would expect that, that business would get ultimately to the Asia Pacific level of margin.

The next question comes from Tim Horan with Oppenheimer.

Can you give a little bit more color on the pricing environment out there and possibly what you're seeing from the hyperscale guys? Obviously, there was a lot of growth from them, but how do they kind of compare to your base? And what are you kind of hearing from them?

Tim, it's Charles. Yes, I mean, I think I would characterize the overall pricing environment as disciplined, and we're seeing firm pricing. And of course, our focus, as you guys know, is more on yield. And so -- but I would say even spot pricing in the -- particularly in the retail space is firm. Supply and demand seem to be imbalanced globally across all of our markets, and we don't really see significant instability relative to spot pricing. So I think we're able to win the targeted deals and then add yield to those deals over time with interconnection and power, and that's really what fuels the business. Specifically as it relates to hyperscale, undoubtedly, that's a more competitive market. It is a somewhat less differentiated market and therefore substantially more price-competitive. And that's why I think we've said that we are going to be selective about our participation in that market. But we do believe that working with those key hyperscale partners, continuing to enhance our relationship with them, deepening the linkages between our platforms and making sure that we are being responsive to their needs and having that as part of our portfolio is important. But it is -- it's clearly a more competitive market. But then we're also going to be looking to build dedicated facilities that are, as we said in the script, tuned to those requirements, meaning substantially lower cost to build. And therefore, I think we can deliver reasonable returns on those. And then on a blended basis, given that hyperscale is not going to be a big portion of our total revenue, continue to deliver very attractive blended returns.

And Charles, just quick a follow-up on the interconnection between the data centers. How do you kind of manage the channel conflict with the long-haul providers? Net neutrality has been such a key component of your strategy for such a long period. What are they kind of saying to you at this point?

Yes, that continues to be the case. I think the depth of interconnection or depth of network density that exists in our facilities and the value that provides to not only our enterprise customers but to the service providers themselves as they seek to serve those enterprise customers is extremely important to us. Candidly, what we've seen is they've been -- there's been a clear understanding of why our customers might look to take advantage of the connectivity between our data centers in order to meet those needs. And the focus of the NSPs is really to provide that broader network connectivity value proposition to the enterprise customers. And in fact, what we're finding is the NSPs themselves are finding opportunities to leverage the fabric and engaging with us on how their SDN strategies, for example, can be furthered by deploying inside of Platform Equinix and leveraging the fabric on their own. So I would say to date, the response has been very, very positive, and that ranges across the really large partners and incumbents through the longer tail of service providers. And so today, it's been a very positive response and we continue to see very much a win-win in the market.

The next question comes from Jonathan Atkin with RBC Capital Markets.

So on Infomart, I was interested, just as a point of clarification, the land adjacent to it, that comes as part of the transaction? Or was that a separate asset that you already had or bought separately?

Yes, Jonathan, the land did come as a part of the acquisition. So we've already been very thoughtful about just making sure all the compliance is in place so we can build. And so that will certainly help the returns over time in what we see as a really good market.

So on that topic, the other -- the Infomart, the company had other assets that you could have bought. And given that you're selling hyperscale and given kind of the customer profile in San Jose and Portland and Ashburn, I just wondered why you -- if you would have considered buying the entire company rather than just Dallas.

Well, we did. Obviously, we would have taken a look at the total asset. But frankly, the most strategic part and interesting piece of it all was the Infomart in Dallas, and so we didn't push as hard for the remaining assets. And there was nothing unique or different from a strategic level value in those other assets whereas now that we have Infomart Dallas, really when you think about it, the interconnection and network routes to everything to the southern half of the Americas kind of flow to Equinix. And so the Infomart Dallas became the real interesting objective as we looked at this business.

So as you develop the HIT product, there'll be more, I guess, expansion put. And I wondered, is there kind of a limit on the number of metros in which you would consider offering wholesale at this point?

No, I don't think we have any bright lines in that regard, Jonathan, although I would say that I think what we do is we look at the individual dynamics of a metro in terms of interconnection, in terms of competitive intensity, in terms of enterprise concentration and therefore the opportunity for us to serve and cultivate the cloud ecosystem in that market. And those all play into our level of appetite, I think, to play in hyperscale in each market. And so I think there are a significant number of markets around the world in which we would see that as an attractive opportunity. And I also would say that I don't see it as out of the question for us to potentially use hyperscale as an entry strategy into other markets if the conditions were right and we could derisk an investment by having that -- by having significant anchor tenants in that, courtesy of the hyperscale initiative. So no magic number. I think there is a pretty significant number of our markets around the world. We commented that we have a large number where we're already generating $100 million-plus in revenue. I would say that's a clear list that would be appropriate for us to consider and then again, using it as a market entry strategy, not at all out of the question.

That latter part is quite interesting. And then finally, on Itconic, I wonder, are there any kind of early learning space on the managed services business that you acquired there and kind of the cloud on-ramp aspect of it?

For the first quarter, we did a little bit better in Q4 than we originally anticipated. We're still in the process of integrating the asset. That asset will get integrated through the 2018 time frame. No surprise to you, we have a number of assets around the world, including part of the Itconic business that is managed services-oriented. And we're putting more energy behind that global focus. But it's still a little bit early for us to make any broader comment. It is still -- as you recognized, it was only 17 million between Itconic and the Istanbul 2 acquisition for the quarter. So we still have a lot of work to do. But we're excited about the broadening of the platform and to that part of the Continental Europe. And so stay tuned on this one.

Yes, I'd also offer, Jonathan, very interesting company in that they were quite focused on helping their customers in the sort of journey to the hybrid cloud as the architecture of choice. So they were well positioned, had good relationships with the hyperscalers themselves, have some interesting value propositions in services in their portfolio, which we're taking a hard look at. And I think we're already going to integrate our Equinix Professional Services, who is actively serving customers in that regard with what they were doing there in their market. And so that work is underway. And then from a managed services perspective, as you know, we've had a number of assets that have come in over the years that have managed services business. And we sort of sorted through what the right way to handle those services are. But they're somewhat dilutive to the margin profile but often an important part of the local market dynamics. So we'll continue to evaluate those in the same way we've done with prior acquisitions.

The next question comes from Michael Rollins with Citi Investment Research.

I was wondering, Keith, if you could talk a bit about the nonrecurring revenue in terms of what drove the strength in 4Q and more about your expectations for why that's going to fall in 2018. I think in prior guides that you've given, you also thought at times, it would slow down, and it's been a line item that I think it's fair to say has outperformed some of your prior expectations. So maybe what's going into it next year? And what are the activities that might drive a change in that expectation?

Sure. It's a great question, Michael. First and foremost, recognizing nonrecurring revenue in its very nature tends to be lumpy and does not recur. And although we are stepping up year-over-year, we're just not expecting the same level of growth. Having said that, there's nothing to prevent us from having that. There's always one-off or discrete items that happen on the nonrecurring line, and we saw a lot of that take place in the fourth quarter. As you saw, we're well above -- on an FX-neutral basis, well above the top end of our guidance range, and part of that was absolutely due to nonrecurring activity. So we're just taking a much more prudent view on what to assume on a go-forward basis. But again, there's nothing to prevent us from realizing the same outcome. We just don't want to make that assumption from the get go, particularly as you -- as we came off a very, very strong quarter of nonrecurring revenue being 6.5% of our total revenues in the fourth quarter. So from a guidance perspective, we've said the business will grow at greater than 10%. It is being marginally diluted by the amount of nonrecurring revenue and also the Verizon assets needing to -- at 87% utilization, the need for incremental capacity and the fact that we're still working through the conversion of those customers onto Equinix contracts. We're taking a prudent view that we're going to have a greater than that number for you. And that's why we're just stepping back and making sure that we put ourselves in a position to deliver against our expectations for 2018. And if we can do better, then you're going to see that come through the results, particularly on the nonrecurring line.

And is there a way to think about -- as you look at the investments in sales and distribution for 2018, what do you expect to get out of your direct organization in terms of improvement in sales productivity versus the opportunities on the indirect side?

Well, certainly, the investment is about continuing to reach the enterprise. And as we've talked about before on prior calls, Mike, there has been a little longer sales cycle to that. But ultimately, we're going to add 60 heads to 427, I think, strong go-to-market force. So a sizable uptick in that. But we just feel now is the time, particularly behind the investments we're making this year, to continue to drive the direct organic sales activity. Now that said, we saw great growth in the channel, getting to the 19% this year over last year at 15%. So you'll continue to see the channel absorb a bigger piece of it. But ultimately, I think the direct sales force is still the critical channel. And as we go out generating demand and helping all these enterprise customers find their path to the cloud, that investment is going to be an important thing to continue our growth.

The next question comes from Phil Cusick with JPMorgan.

This is Richard for Phil. I figure I'll take another shot at it. Given that the expansion plans are for late second half '18 and the level of it, it seems like, to Colby's point, that things could start accelerating at the end of the year and into next year. And then the Verizon assets, you said, were kind of single-digit growth. It seems like you would expect those to go to an Equinix level, 10-plus percent. Are we looking at this the wrong way? Or is it just level of conservatism?

Richard, I mean, let me just validate the comment you made. Clearly, when you look at the results and what we're guiding to in Q1 and what I've talked about from an SG&A investment perspective for Q2 and beyond, the natural output of that would be an accelerating revenue line and the moderating spend line partly because of the seasonal costs in Q1. So the conclusion that you would see acceleration coming at the back end of the year does make sense. But it's also coupled with the fact that we're building 30 projects. We have 30 projects underway, many of them -- we've denoted this on our expansion tracking sheet, 5 of those projects are Verizon asset projects and very important markets. They're 87% utilized. I'd hate for you to walk away thinking that the Verizon assets can get to the same level of growth as the overall Equinix business because number one, they're highly utilized assets; number two, you have to recognize that we're going to be very disciplined about how we fill up that capacity over a period of time. But the overall business -- again, we're selling a global platform here. The overall business, we believe we can accelerate that top line growth, particularly as we absorb the impact of the Verizon churn, as we build out capacity. And if you take a more aggressive view on the investments we're making around strategy, services and innovation, customer experience and quota-bearing heads, all of that bodes well to an accelerating departure from '18 into '19.

And then a quick question on the Paris 8 dedicated hyperscale build. Can you give us a little more color on that? And is the future phase capacity reserved already for that customer? Or can that be given to other customers?

No, we have -- so the Paris 8 facility is the first dedicated hyperscale build, different design obviously in terms of allowing a lower sort of cost point into that facility. It is not -- we have a very deep sort of pipeline of opportunity, both in terms of customers that are already in our existing Paris facilities. But that is -- that capacity is there and available for customers. But we do have a deep pipeline of opportunities to sell into there.

The next question comes from John Hodulik with UBS.

A follow-up to Richard's question. Is there a target in terms of cost per megawatt for dedicated hyperscale facilities like Paris 8? And maybe if you could give us a sense, I mean, how many of these type of facilities would you expect to have, I mean, sort of rough numbers, I mean, over the next 5 years? I mean, should we be thinking of sort of one in every major market where you operate? And then I guess more philosophically, is this hyperscale business an attractive business on its own given the pricing you're currently seeing in that end of the market? Or is it sort of -- does it stand on its own? Or is it just expected to drive value and drive further growth on the colo side?

A lot there. Let me try to get all of them. Relative to price point or cost point, I think we probably are looking at 7,000 a kilowatt or south of that and continue to sort of chip away at that in terms of making sure that we can deliver all the functionality requirements to continue to be differentiated in that market yet continue to deliver attractive returns on those facilities in their own right. As to the number, we're not going to -- we're not forecasting any specific number there. What we have said is that we've kind of sort of allocated several hundred million of the CapEx guide that you see in the -- in our guidance towards this. Not all of that might be spent in '18, but then again, we also may use some of our existing capacity toward hyperscale-type requirements. So it's a little bit of a tough one to fully tease apart. But we're not -- we haven't specifically guided on that. I think it's going to be -- what we said is we're going to go in. We're going to do these initial builds on balance sheet because we can do them most expeditiously and learn from them. And then we'll reevaluate the level of support we will want to provide to that business going forward. And I think going forward, it would probably be highly likely that we would be augmenting on-balance sheet with some sort of off-balance sheet activity, whether in the form of project financing, capital recycling, JVs, any number of other possible alternatives there. But again, we'll have to guide you guys to that in terms of timing and extent of that as we go. So I think those were the key items there in terms of what your ask was.

And sorry, I just want to add one thing to what Charles said. I think it's important to understand that when you think about the guide that we have for this year, we've made virtually no assumption on HIT revenue for 2018. And so that's another opportunity for us to continue to show upward momentum on the revenue line. But again, there's not much in the way of assumptions in the 2018 plan.

John, there was one other one that I want to make sure I hit, and that was your question of is this is an attractive business in its own right. And I want to be clear. The answer is it kind of -- it depends. Is there a capital pool available out there that is willing to apply its capital to sort of mid-teens returns with this risk profile and finds that interesting and acceptable? Yes. And -- but relative to Equinix and to our opportunity here, we have what we think is a significant and expanding depth of market opportunity where we're going to -- we can provide substantial returns that are substantially superior to that. And so doing this is more a means to an end. I made that clear on the last call, that this isn't about a belief that somehow we're tapping out our retail interconnection-oriented ecosystem-driven market and therefore need to go grab for a piece of the hyperscale pie. This is instead about saying we believe strongly in the cloud ecosystem as a fundamental long-term growth driver for the premium retail interconnection-driven opportunity and therefore are going to put these projects in place where we think those are accretive to that strategy. And so we'll figure out what the right level is to accomplish that strategic objective, but that is very clearly our goal. That doesn't mean other people aren't going to enter the market and fight over the big hyperscale opportunity that we think is out there. And I'm sure we'll run into it along the way, but we believe we've got a differentiated value proposition due to the breadth of our portfolio, the depth of our interconnection assets, our relationship with the hyperscalers, the integration between our cloud exchange and those cloud platforms and the resources, frankly, that are necessary to support that strategy, which others simply can't do.

The next question comes from Sami Badri with Credit Suisse.

So a little bit more of a follow-up regarding the dedicated hyperscale. So what is the, I want to say, estimated number of deals specific to hyperscale deals do you think you'll be doing each of these years? Is this going to be a 10 a year? Are you looking to only do 1 or 2 here and there? Is it going to be specifically targeted to Europe or Asia? Maybe can you just give us a little more color on the strategy for specifically dedicated hyperscale?

Yes. As I said, we haven't really sized it. I think that we do anticipate that it would be a global business. We think there's sort of meaningful opportunity, particularly in Europe right now, and Europe has been a very robust market. We are taking advantage of the leader position -- leadership position we've commanded post-Telecity to really accelerate our growth in the European market. So we do see probably the greatest opportunity in that market near term. Behind that, I would say Asia, we think, there absolutely is an opportunity to serve hyperscale requirements in that market as that continues to deliver very strong growth opportunity for the hyperscalers and then Americas behind that. But there is still opportunity here where we think we have strong interconnection value propositions, and the metro strategies really support the hyperscale investment. We'll actively look at that both in North America as well as in South America. So again, we aren't giving any specific numbers. As I said, I think there's probably a dozen or more markets that represent very real and appropriate markets for us to consider investing in. And probably, we would tend to build hyperscale facilities at a size that are going to support a handful of deals into those -- into each of those facilities through a couple of phases. And so that's probably about all the color we'd probably be comfortable with at this point other than to say we've allocated a few hundred million to that on balance sheet to get to a point where we can come back and give you more clarity. I'd expect we're going to be able to do that probably at Analyst Day and start to give you a little better frame on that.

Got it. And then the second question is regarding Europe. Looking through 2018 and the current general market observations that you've been seeing, is the market strengthening or softening? And maybe can you give us more color on pricing supply and demand dynamics? Maybe you could just comment on both aspects of that so we can get a better idea what's going on there.

Well, I'll just say first, Europe had a great finish to the year, actually a great growth year. And we continue to see solid momentum there. Obviously, as we said, a lot of the capital next year will be going into Europe because they have been getting to a higher and higher rate of utilization. The Telecity transaction actually gave us a lot of good headroom to grow. And through that momentum in Europe, we've largely been filling that up, which is why so much capital will be sent there this year.

And the last question comes from Vincent Chao with Deutsche Bank.

Just a quick question going back to the investments that have been made this year. You've obviously taken down quite a few acquisitions in the recent past. Just curious, maybe tying in with Steve's departure as well, I mean, should we expect that pace to continue? Or should we be in more of a digestion mode from an acquisition perspective?

No, I think as we talked about the strategy, we're going to continue to press our advantage. But I know we've done a lot of acquisitions, but we've been very selective about their strategic value and what they've meant to us. Clearly, broadening our footprint in EMEA was a meaningful one, and also Metronode in Australia giving us such a strong position in that market. Those made a lot of sense. And we'll continue to see those and look at them going forward. As you just think about '18 and even with Steve's departure, as you mentioned it, the operating plan, the strategy and everything we're pursuing this year has been set and in place. So ultimately, I think it's a business as usual year with the leadership team being very focused in carrying out the plan that's in place. So I wouldn't look for dramatic changes in our thinking or how we're approaching our opportunity.

Okay. And then just maybe going back to the Infomart. I mean, it sounds like maybe high 40s EBITDA margin if I interpreted your comment there correctly, Keith. It's a very high multiple going in. Obviously, there's a lot of expansion capacity on top of that. I'm just curious, how are you thinking about the additional cost to build out that 40 megawatts? And how are you thinking about sort of the returns here given the sort of high going-in valuation?

I think first and foremost, as we said, 12 months from closing, we'll make it an AFFO-accretive transaction. The real value for us is what Steve and Charles -- pardon me, PVC, there's a Freudian, what PVC and Charles alluded to was the fact that we're going to invest right in our strategy. And the Dallas market is a very strong market both for enterprise and then just globally from a colocation perspective. And so being able to build contiguous to that space is going to be very important to us. And we believe we can drive immense intrinsic value to the business and to the shareholders by building out that capacity. We recognize that it is a high-value deal, but our belief is, number one, that we're going to get the returns and we're going to develop a strategy that will drive value to the bottom line over the not-too-distant future.

Yes, Vince, I might just add. I think you have to sort of telescope out a little bit and put a broader lens on the Infomart Dallas transaction in that you combine a set of things, which is now our NOTA asset, combined with the Infomart asset, combined with our leadership position in Brazil, combined with the depth of the enterprise market in Dallas and now add in our appetite to add hyperscale to the mix in terms of some of that potential capacity, and you have to sort of stir all of that together and say what does that mean in terms of creating long-term ecosystem value and continuing to position to be the partner of choice in building out hybrid cloud, multi-cloud to the enterprise market in the U.S. and in the South America. And I think when you add all those things together and you take the current strength of our overall position, I think we feel very good about the transaction, our ability to digest it, integrate it and move it forward and create value.

Got it. And since I'm the last questioner here, maybe could you just give an update on the transition post Steve's departure, where you're at with the search, any comment on sort of how morale is and things like that at the organization?

Sure. Well, I'll start and I'll look at Keith and Charles and Katrina, but we actually just had, two weeks ago, our annual global kickoff. So the whole go-to-market engine was together to really get educated as well as motivated for 2018. So this was a great launch to the year, and I think all the heads are turning in the right direction. So it was a very, I think, strong experience for the team as well as the leadership team because we were all there as a part of it. That said, I think the first thing to understand is that, and this would be my -- this is going to be my focus as well, the near term is all about executing on our plan for 2018. As I said earlier, with the strategy, the operating plan in place, again, it's a business as usual opportunity. Some of that is enabled by the fact that certainly I've had a good working relationship with the team for some time. So this is blending well so far. We do have now a subcommittee in the board that's been appointed. I'll chair that and so the board's objectives here, well, one obviously being the best choice for selecting a CEO. But also note that the board's interests are aligned with keeping this operating plan going, and they'll be very focused on ensuring we have a smooth transition to continue to support that as the year unfolds. And so maybe it's kind of a unique luxury, but we do have the opportunity to be as diligent as we need to, thoughtful and thorough as we really solve for this over the quarters to come. So I think we're in a very good position to manage the process but not yet ready to make any further comments on timing. And we're all busy at work.

Great. Thank you. That concludes our Q4 call. Thank you for joining us.

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