Good afternoon and welcome to the Equinix First 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.

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'll be 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 26, 2018. 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 IR 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 encourage you to check our website regularly for the most current available information. With us today are Peter van Camp, Equinix's 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. In the interest of wrapping this call within an hour, we'd like to ask these analysts to limit any follow-on questions to just one. At this time, I'll turn the call over to PVC.

Thank you, Katrina. Good afternoon and welcome to our first quarter earnings call. It's good to be joining all of you as we share our strong results for the start of 2018. As we come up on our 20th anniversary, we are excited to post our 61st quarter of consecutive revenue growth as we continue to cultivate powerful digital ecosystems on a global scale. With our recent acquisitions, we are now the market leader in 16 out of the 24 countries in which we operate, reflecting the size, scale and reach that we've built around the world. We serve 47% of the Fortune 500 and our penetration continues to tick up as new customers evolve their digital infrastructures, presenting an expanded opportunity set for us to target. Turning to the results of the quarter, our differentiated platform continues to drive financial performance. As depicted on slide 3, first quarter revenues were $1.216 billion, up 10% over the same quarter last year. Adjusted EBITDA was $580 million for the quarter, up 11% over the same quarter last year, while AFFO growth was 13% year-over-year. These growth rates are on a normalized and constant currency basis. Our metrics across MRR per cabinet, cross-connect additions, new customer acquisition and stabilized asset growth were all healthy. And our channel program had another strong quarter with 19% of our bookings originating from the channel and an outsized contribution to our strong new logo performance. Interconnection revenues continue to outpace colocation, growing 16% year-over-year on a normalized and constant currency basis, reinforcing the foundational importance of interconnection in today's hybrid and multi-cloud architectures. For the full year, we see solid fundamentals as global infrastructure demand continues and we have a strong pipeline. Platform Equinix continues to scale as we have effectively doubled the size of our…

Thanks, PVC, and good afternoon to everyone. I'd like to start by highlighting that we had yet another solid start to a year. We had strong bookings with particular strength in both our EMEA and APAC regions, in part due to the level of imports received from the Americas region, a reflection of our global selling capabilities and the benefit of a global platform. Our Q1 metrics included strong interconnection performance, increased provisioned port capacity, and firm MRR per cabinet, both by region and on a consolidated basis. And we continued to accentuate the key points of differentiation between our business and our peers, including investing in new products and services, scaling our sales force as our business grows, and supporting a broader initiative around customer experience. Our investment decisions allow us to continue to separate ourselves from our competitors, as we pursue this differentiated business opportunity that we see in front of us. For 2018, we're guiding to revenue growth of 9% including the Verizon assets. This guidance includes a meaningful step up in bookings and revenue on a much larger base, while driving more cash flow to the business as reflected in both our adjusted EBITDA and AFFO. In April, we closed the Metronode and Infomart Dallas transactions. The Metronode acquisition makes Equinix the market leader in Australia with a national footprint and a customer base that includes strong government traction. Metronode continued to experience strong momentum through the close of the transaction. And our guidance now assumes an annualized revenue run rate of approximately $50 million with adjusted EBITDA margins of greater than 50%. The ten IBX assets in the Metronode portfolio, nine of which are owned, provide incremental land for future expansions. The current Metronode footprint is highly utilized at greater than 90% and we will…

Thanks, Keith. In closing, we continue to deliver solid results growing at a healthy pace, investing in future capabilities and showing strong performance as we increase our interconnection penetration, traction with a Global 2000 customer and a firm MRR per cabinet. The demands of digital transformation continue to be a major force in the market and we are seeing a meaningful transition as both service provider and enterprise customers adopt hybrid and multi-cloud as the IT architecture of choice. We are uniquely positioned to help customers navigate this transition and are boosting our competitive edge through investment in go to market efforts, and the evolution of the reach, scale and capabilities of our highly differentiated global platform. We have targeted and are pursuing this expanding opportunity set and are scaling our global platform to meet the demand fueled by a strong sales pipeline to drive our regions for the remainder of the year. So, let me stop here and Charlotte, let's open it up for questions.

Thank you. We will now begin the question-and-answer session. The first question comes from Frank Louthan from Raymond James. Your line is now open. Frank Garreth Louthan - Raymond James & Associates, Inc.: Great, thank you. So walk us through a little bit through the expansion opportunities in Europe. I mean at the beginning of the year, you updated some CapEx, a lot of which was due to that, maybe give us an idea there. And then give us an idea of what sort of expansion capabilities are left in Culpeper and Miami specifically as you look at trying to grow those Verizon assets a little more. Thanks.

Sure, Frank. Let me start and the others perhaps can jump in. First and foremost, as you can see, we still have 30 projects that are currently underway. The European theater is our fastest growing region and so from our perspective, recognizing the majority of the investment's going to go into what we call the flat markets, so Frankfurt, London, Amsterdam and Paris. It's a reflection of basically the momentum that we're seeing in. And so as we exit sort of Q1, I think you're going to really see the majority of that benefit coming through sort of the middle of the year, through the back end of the year as we continue to install our customers. And I'm sorry I've now forgotten the second part of your question.

It's Culpeper and Miami.

Oh, that's right. And as it relates to Culpeper and Miami, Miami for all intents and purposes, is are relatively untapped opportunity for – it was an untapped opportunity that we wanted to realize. There's roughly 3,000 available cabinets coming out of it now for the Americas and we've started the first major build. We did a small build to create a little bit more capacity, but we're really looking forward to that incremental build and one of the things that was really interesting is we talk about the core markets related to the Verizon assets. The majority of those assets are greater than 90% or near 90% utilized and as a result, we need that capacity to continue to scale. Now we made some minor refinements to the utilization rates of the Verizon assets. It's roughly 82% from the 87% we talked about in the last quarter. That all said though when you look at the markets that we really want to develop and we're putting capital to work at those top five markets that PVC alluded to and so we're eager to get to the Miami market and create more capacity, also in the Culpeper market because the pipeline is healthy and supportive of that expansion opportunity. Frank Garreth Louthan - Raymond James & Associates, Inc.: And is there a major expansion in Miami within the same building or is it just near...

Actually, it's the same building and what's interesting is only the first part of – there is a multitude of opportunities for us there. As I said, it's roughly a – think of it as a potential incremental 3,000 plus cabinets in the NAP of the Americas. So, it's in our expansion tracking sheet. Frank, you also noticed that we had a small build as I said through the last quarter of 2017, but we really are looking forward to the build out, it's roughly – (29:04) was just showing me here, roughly 1,100 cabinets will be available in Q3. And part of the reason that we talked about the Verizon assets again, we're going through if you will, the – we refer to it as pre-close customer terminations and some churn and we're making some very prudent assumptions in the go-forward basis and what we should expect. But one of the things that we want you to walk away is the recognition that the majority of our growth is going to come from these core markets. And that inventory is not going to be available until the second half of the year, hence why we've decided to say let's hold the Verizon assets flat through the remainder of the year pending that and also recognizing that we'll continue to make some assumptions on churn through the remaining part of the year. Frank Garreth Louthan - Raymond James & Associates, Inc.: Great.

Yeah. Just a final note, Frank, on Miami as you may recall, it is a very dense interconnection hub that also is the destination for all the routes down to South America. So it largely had no room to expand, so a great opportunity into the Verizon acquisition was to create that room because this will be certainly a site that will have a strong fill rate against it once we have the capacity in place. Frank Garreth Louthan - Raymond James & Associates, Inc.: Okay. Great. Thank you very much.

Our next question comes from Phil Cusick from JPMorgan. Your line is now open.

Phil?

Sorry. As I look at the pace of CapEx, I expect we'll be building through the year. One, is that fair? And two, does that lead to next year being a fairly heavy investment year as well?

Well, as you can see, I mean, the – what's interesting on the expansion tracking sheet that we shared with you Phil is that the majority of – the vast majority of the build will take – will have assets opening up through the second half of the year. And again just sort of eyeballing it's roughly 22,000 to 23,000 cabinets. But we do anticipate that some of that will also spill into 2019. Again, there will be facts and circumstances specific as you know we're now servicing a 52 market portfolio. We're going to look at our fill rates. We spend a lot of energy breaking that down, looking at not only the pipeline, the empirical fill rates, but also the competitive dynamics in the market. And we'll update you on our thinking for 2019 in the – probably in the not too distant future. I'm not sure we'll be able to do it by Analyst Day, but certainly as we get to back end of the year you'll get a good sense of what we're thinking about for 2019. Suffice it to say though with the momentum that we see in the pipeline opportunity, you would expect – you should expect us to continue to invest meaningfully on the CapEx line.

Sure. And is it more challenging to build in Europe? It just seems like the capacity is coming on a little later on that side than in the U.S.

I wouldn't say, it's any more difficult. Again it's market specific as you can probably appreciate. It depends on the regulatory environment, the compliance requirements, the ability to get available contractors. Some markets, like a Tokyo market, could be a bit more difficult than other markets. But Europe in and of itself has not historically been a tough market and because we're building a lot adjacent to our existing facilities contiguous to our assets or in close proximity, it makes it a lot easier for us to build out in that market. And then as you can see, the majority of the assets again in the expansion tracking sheet that are going to be built are the London, Frankfurt, Amsterdam, and Paris market. And we've had some pretty strong experience over the not too distant future building out in those markets. Where it takes you a little bit longer is if it's a first phase build because you're building it from the ground up and that of course takes a lot of work as you are developing the land and you're building the core and shelf, but from that point forward it becomes relatively cookie cutter-ish.

Great. Thanks, Keith.

Our next question comes from Jonathan Atkin from RBC. Your line is now open.

Good afternoon. I wondered, Keith, if you could provide further details around the financings structures that you kind of mentioned in the script around hyperscale, and are they kind of – are they unique to certain regions or countries or might it be kind of global in nature? Thanks.

Yeah, Jonathan, we want to spend a lot of energy in this, between Charles and we probably will take this on in a much more healthy way at the Analyst Day, but suffice to say we are thinking – we're probably thinking more specific to our market or region. We don't have a global view. I think, it's tough recognizing that we might have different investors investing in different theaters with us and as a result the structures can be a little bit different. What's really important here is we want to take this opportunity, we're going to be very strategic about it, and we're going to try and push as much of that off balance sheet as possible and enjoy the benefits of the investment, yet partnering up with others to use capital and put leverage on it, so it makes sense for the business and it doesn't allows us to continue to focus on our retail business. That give us some time on the Analyst Day, and we'll probably have that a little bit more fleshed out for you.

Right. To a degree it sounds like your choice of location, your next locations could be influenced by financial considerations then?

Well, I think, it's more about – sorry, Charles and I were just deciding who is going to take this one. Let me just say the first part is, look there's plenty of financing opportunities out there for us. So, our constraint is not going to be about our financing.

Yeah, I mean, I agree. I think we're going to go to the market opportunity based on what the customer demand is, and which investments and projects we think are accretive to our leadership position in the cloud enabled enterprise ecosystem. And so and we are building a very robust funnel of those opportunities. We've got a very positive response from the customer set. Jim now is – Jim Smith is now on board as a full-time employee, we're really energized about that he's bringing an exceptional experience and skillset to the table. So we're building funnel quickly and we're not going to let, I think, the financing get in the way of what we're going to – what we're going to – how we're going to respond to the market opportunity. So – but I would say as Keith said, it's likely that it's going to be a number of underlying structures and those may have slightly different characteristics based on the profile of both our existing and future assets in those markets. And ideally what we want to get to is a situation where we have a highly responsive agile capability to respond to these hyperscale requirements. The ones that we think are strategic, but do that without a lot of balance sheet exposure. And I think, we're tracking well against that objective, and like Keith said you'll hear more about that as we get to Analyst Day.

And then just quickly on integration on Infomart Dallas. Is there any kind of implication for the Americas cross-connect trends that we might see now that you own the entire building? And then on Verizon, I appreciate you're giving utilization number there, 82%, are you marketing the vacated space, is there demand for it and might there be a different customer profile for that absorption versus your traditional product? Thanks.

Well, certainly there will be growth as we start to expand in interconnection in Dallas. And so we'll see a lot of value to our density there and bringing that to more customers as they come onboard, but we are the interconnection hub in the Infomart already. So you'll see continued growth out of us and as we expand more customers will come through it but it's not a differently acquired set of interconnection services that we've gotten there.

And Jonathan I think I'd just add on to what PVC says, what's really important here is there's really a separation between what we're doing with the Metronode acquisition, which is – which really has to be wholly integrated versus the Dallas – or the Infomart Dallas which is more of an asset purchase, right. And integrations are a lot easier for us in that asset relative to a 10-building operating business in Australia. And in both cases, we're holding on top of our integration efforts. We're excited about where we sit and I think we'll give you a little bit of the details around what we think we can accomplish this year. But as we continue to invest around these assets, I think that's going to give us an opportunity for continued growth in that portfolio and that asset.

And what was the second part of your question, again, Jonathan?

Yeah. Yeah. The vacant Verizon space and to what extent that's being marketed? Are you seeing interest, any sort of different profile that – of customer that might go into that vacated space versus legacy Equinix IBX?

Yeah, I mean, we position it, as we've always made clear we sell as a platform, right. So we want to quickly integrate assets into the portfolio and then position those across the customer base globally and ensure that all the sales teams are selling those. So individual assets appeal to different use cases, that's not a distinction of Verizon. That's true of our assets as well. And so, I think we are – we're marketing those very effectively, the team is up to speed on how to position those. We are seeing good gross demand and bookings into those facilities. And in fact what I would highlight is, is that the flat guide for Verizon revenue through the remainder of the year is an artifact of the, of sort of what are – what we're finding in terms of churn related to some of the pre-close sort of cancellations that were there as we sorted through that, and just a prudent assessment on our part of kind of what we ought to imply about growth. And so – but not a reflection of, I think, a lack of demand there because we are seeing solid bookings into those facilities.

Thank you.

Sure.

Our next question comes from Simon Flannery from Morgan Stanley. Your line is now open. Simon Flannery - Morgan Stanley & Co. LLC: Great. Thank you very much. Just wondering, if there was any update on the board's search for a permanent CEO. And also on the U.S. MRR per cabinet, and the interconnect volumes, I think, you referenced the moved to 100-gig. Can you just talk a little bit more about the puts and takes driving that versus some of the strength you've seen in other regions? Thank you.

Yeah. First on the new CEO appointment, there's really no update there. Just as a team we're continuing to pursue our 2018 opportunity. And so nothing new to add, I think you're going to just assume, I'll continue in the seat for a few quarters here. And besides that on interconnection, it has been interesting. We saw a solid interconnection uptick this quarter, in revenue seeing it 16% year-over-year. And of course that was in the face of a 100-gig. 100-gig showing up more in the United States than anywhere else, because certainly the dense interconnect or Internet interconnection that we have here is a reason for it doing as well as it is, and we're seeing good growth in ports of a 100-gig, but still nice to see interconnection as a whole growing as strongly as it is in the face of that.

Yeah. Just a little incremental color there, Simon, we – there's actually a relatively small number of players, who have the sort of traffic profile that warrants the sort of the investment in 100-gig optics. And so what we're seeing is those where, there is a strong economic justification to make that investment. They're sort of leading the way on surprisingly and many of those are well, well through their migration. So I think we still got a little bit to go in terms of seeing some of that headwind but what we do and I'm sure this will not be surprising to you but we look very closely at the gross adds, as well as kind of what the term profile is. And what we want to make sure is that we're seeing sustained gross demand and that is in fact the case. And so in fact, I would argue that we're seeing a more robust and more diverse use case portfolio for interconnection broadly, both at the physical layer in terms of cross-connects and at the virtual layer now with ECX. And so, I think really all-in-all a very good story there relative to the interconnection portfolio and how it's performing. We did a quartiles analysis which sort of showed what our concentration of interconnection was and how it was changing over time and a lot of goodness in that analysis as we looked at really key – sort of new robust long-term use cases we think driving this new demand profile, including private cloud connectivity. And a much longer tail of enterprise customers now finding utility in private interconnection even at the physical layer and they often start at a virtual with ECX and then as they aggregate traffic or have a different performance requirement, then they move to the cross-connect. And there's just nobody that can – and then having the Internet, the IX as well, there's just nobody that can sort of respond to that full profile the way we can. So very excited about how the interconnection business is performing overall. Simon Flannery - Morgan Stanley & Co. LLC: Great. That's helpful. Thanks.

Our next question comes from Colby Synesael from Cowen and Company. Your line is now open.

Great. Thank you. Two if I may. First off, on Americas cabinet adds, they're negative in the quarter, and I'm just trying to get a better sense how much of that came from the Verizon assets and what's going on there. And I think you may have mentioned some delayed installs. Just trying to get a better understanding of the various components that drove that number. And then secondly as it relates to the HIT business, in the past quarter you had mentioned some notable wins. I'm just curious if there's any other big wins that occurred in the first quarter and if so if you could break out by geography, however detailed you want. Thank you.

So, Colby, just on the Americas cabinet adds, so you'll see in our tracking sheets or non-financial where it's actually 400 net adds in the quarter. Where we had made some comment is we made a slight adjustment to the opening balance of the Verizon assets. And so that might be skewing your calculation and so we took that number down and went from 87% utilization down to the 82% I referred to. But when you look at the core business non-Verizon, it was really 400 net adds in the quarter. And then the other question was...

Yeah, well, and just let me finish on that one. That's, again, as we've said, that is really a timing artifact. We had a really strong quarter last quarter on cabinet adds. We've had sort of some of this lumpiness in that profile and generally chalk that up to timing. You have to really look at I think on cabinet adds over a sort of multi-quarter period and sort of draw a trend line into that. So no alarm from our perspective as to the health of the cabinet adds, so that's that one. The second one was with regard to HIT. We did have a win, some wins that we had talked about. We are actively engaged in deal discussions for both projects that are hyperscale oriented into some existing facilities, but now really starting to ramp up, where we're talking about deals that are going to go into dedicated HIT facilities. And so as we said, there's probably just a couple of projects that we're doing now, Paris 8 being there and then some other European centric projects that we're looking at that will start to roll out in the near future. And again, we're in active discussions with anchor customers to start to take up some of that demand. So no new net wins to report, but I think I would characterize it as exceptionally healthy funnel and great progress in terms of winning the kinds of deals that we want to win.

And just to clarify on the Americas cabinets, so is it fair to say then that the Verizon portfolio, those cabinets remain I guess flat based on the new accounting. And is the 400 that you added, that was basically I guess we'll call traditional Equinix?

Yes.

Okay. Yes, organic business.

Yes.

That's right. Yeah.

Okay, great. Thank you.

You bet.

Our next question comes from Amir Rozwadowski from Barclays. Your line is now open.

Thank you very much and good afternoon folks.

Hey, good afternoon.

I wanted to touch base on sort of the M&A landscape. We hear commentary from other players in the market. There seems to suggest that some of the private company valuations are a bit high at the moment and may temper some of the M&A activity levels. What are your thoughts on sort of potential for additional inorganic growth from your perspective?

Well, I think that's a very fair point and certainly private equity's interest in our recent Infomart acquisition was evident in the end price as well as probably Metronode as well. So some of that is out there. I won't speak to the rest of the M&A activity in the industry, but I think where we'll be focused for a period of time here, will be more towards new markets that might be interesting, that just complement the reach of the platform or are valuable for customers and that strategic benefit. So ultimately there may be some of that influence in play, but a place we've wanted to be and haven't quite found the right answer, but will always have an eye on it is something like India, and maybe South Korea as another market that could be interesting to us. But again these are more extending the platform versus something that is more transformational like a Telecity we did a couple years ago, Verizon this past year.

That's very helpful. And then a follow-up question perhaps for Keith. If we think about sort of the leverage ratio and where your longer term targets of 3 to 4 times are, I mean, if we adjust for the senior notes, seems like you're above that target ratio right now. How should we think about sort of your progress to continue to bring you within that target range? And should you pursue additional M&A, how should we think about further financing?

Yeah. Amir, that's a great question. So maybe adding on to what PVC said, you know again, a lot of what we're looking at today as a company as we think next M&A is going to be a new market opportunity or a tuck-in acquisition. As you can appreciate with two transactions that we just closed in April, we'll go out in different forms and different levels of integration, eight different integrations that are ongoing now. And so as a company we're going to continue to focus on integrating the assets and bringing efficiency. As it relates to our capital structure, we're pro forma to the – pro forma the two transactions that closed in April were 4.5 times levered, our Q1 adjusted EBITDA. Clearly with the continued growth of the business that number is going to decrease, as we continue to scale the business. We've always taken a very prudent view on maximizing shareholder value, using both debt and equity, where appropriate. As a company, we want to maintain our goal of appropriate leverage, but not too much leverage, making sure that we have – or making sure that at some point in time, we'll get to our aspiration of becoming an investment-grade rated company. Albeit today, I'm not sure, I'm not sure with the 4.5 times leverage here that that's within the next 12 months, but we still have a stated objective to become investment grade. Again we'll be using our capital structure as effectively, as we can, and in some cases as Charles alluded to earlier on, we'll partner with others off balance sheet to continue to grow other elements of the opportunity set without using our balance sheet. So bottom line, I think, it's a reasonable expectation over the not too distant future that you should see us get more towards our stated target of 4 times leverage, that's at the top end of the range. As we continue to scale the business over the next three to five years. I think, it's reasonable to assume that leverage will be very, very much within our target ranges. And with our aspiration of getting to investment grade, I think we'll put ourselves in a good position with a very balanced view on capital.

Thanks very much for giving the color.

Our next question comes from Vincent Chao from Deutsche Bank. Your line is now open.

Hey, good afternoon, everyone. Just going back to the Verizon performance and some of the reductions in the guidance for that, I was just curious, I mean, you kept your overall churn guidance basically flat on a quarterly basis. I mean, should we interpret that as the rest of the business is doing a bit better than previously expected, absent some of the terminations at Verizon?

Well, Vin, part of the Verizon assets in and of themselves, it's slightly elevated churn. As you recall, I might recall when we first acquired the Verizon assets we started out with $450 million guide and then we added in the affiliated revenues. By the time we exited last year of 2017 we were roughly a $540 million revenue business. As part of that we always said that there is an element of churn that we know that we're going to experience and we had sales reserves that we had put in place. What you're experiencing now is the churn that we were guiding to a while back that we just had not yet experienced. And as a result that roughly – that low single-digit growth that we were expecting in fiscal year 2018 we're going to now hold it flat. Again we think that's very prudent, but as Charles and PVC alluded to we have a very strong bookings pipeline – sorry, pipeline with the Verizon assets. We've seen strong gross bookings. We feel we've got a handle on what we're looking at as it relates to Verizon, as a result with our churn being at 2.4% this quarter and holding our average flat. Again, recognizing it's within the scope of what we already had anticipated this year, so I would say that, if you're saying that this is going up a little bit then it's suffice to say then the organic business is going down a little bit. But overall there's no meaningful change in the churn that we were modeling for the year. And so I feel comfortable we'll put ourselves in a good position to not only again hold the revenue flat, there's roughly $15 million, $20 million adjustment to our guidance for Verizon this year. And I think as we exit the year you're going to see us not only because we fully integrated, I think, the assets, but because of the investments in the core markets you're going to see solid growth coming out of 2018 on top of those Verizon assets.

Okay. Thanks. And then just another question more on the construction side. We've already heard from many REITs that construction costs are going up sort of on the order of maybe 5% or 6% from an inflationary perspective. When I look at the pipeline that you have outlined and the spending that you have planned for the year, I guess how much of that is fixed in terms of deals, covered by some sort of contract or is there a risk of that going higher because of just overall inflation?

As a company we have a pretty good – we have a very large and deep pipeline of construction activity. We have great relationships with our vendors, our providers. From our perspective, we think we get an – we have an opportunity, that's probably broader than most given the investments that we're making. That all said, there's inflationary pressures, and it's going to be market and material specific. As a company we're building contingencies when we give guidance to take into consideration, pricing fluctuations. But overall we're working real hard to drive down our average cost to build, and some of that comes from different construction techniques, part of it different design specific. And also ways to run the IBXs more efficiently after they've been built. So overall I'd just say it'll be facts and circumstances specific and again, we've got a – I think, we have a handle on it, and you shouldn't feel that there'd be any meaningful change to our guidance because of what is perceived to be cost increases.

Okay. Thank you.

Our next question comes from Robert Gutman from Guggenheim Securities. Your line is now open.

Hi. Thanks for taking the question. Two questions, actually. One, given the timing of the cabinet deliveries in Europe, and the scale as well, and weighted to the second half, should we be assuming an acceleration in recurring revenue growth on a year-over-year basis, because it's been stable for the past several quarters at about 12%. I just want to know if you expected or should we expect it to accelerate? And after that, I just have one more.

I think, when it comes to the European, we'll call the recurring revenue stream, certainly you're going to see an opportunity as to fill up that capacity. And as a result, by filling up the capacity in a more timely fashion, you should see some level of acceleration, there's some periodic blips that we experienced this quarter, where we – the revenues in EMEA was only growing just over 12% year-over-year. I think, there's an opportunity to see that number go up certainly as you get to the back end of the year.

Thanks. And the second question regards the 6% growth in stabilized assets. It's been coming from cross-connect and power density. I don't know the proportions of each. But really on the power density side, is there – in stabilized assets is there a flexibility to continue to add power density?

Absolutely, I mean, no different than adding an incremental cross-connect, as customers put more infrastructure into a given cabinet or a cage environment, they'll draw increased power, and so it's managing the relationship of the physical space with the power capacity. And so in both cases, we have been and historically have worked very hard to optimize our assets. And so you will get more power draw from those stabilized assets as you will get more interconnection.

Yeah. And occasionally we even take on specific projects in assets, particularly assets with a slightly longer vintage to say, hey, can we – as we make upgrades, can we improve the power density of the facility and therefore accommodate more power in certain cases. So those are certainly levers available to us in the business.

Great. Thank you.

Our last question comes from Michael Rollins from Citi Research. Your line is now open.

Hi. Thanks for taking the questions. Two, if I could. First, I was wondering if you can maybe give us a little bit of a preview in terms of how the company is thinking about the longer term revenue growth opportunity when you take into account the number of acquisitions that you've done since the last update. And secondly, if you look at the growth rate guidance at about 9% including Verizon for 2018 on an organic basis. Can you give us a sense of how much stronger some of the regions are versus the others, and maybe just give us a sense of where each region is shaking out within the totality of the guidance? Thanks.

Sure. I'll just react to the first part. Obviously with some of the bigger acquisitions we've done like a Verizon and different growth rates that does add to the size of the overall business. And so when you think about go forward growth, it definitely has an impact. Certainly, we feel very good about our thinking this year, how we relate to even market growth rates and continuing to outpace growth rates for retail colocation, Mike, so continued on a positive track in that direction. Well, that will give you a better sense of growth as we get to Analyst Day and we'll outline a CAGR for the coming year, so I think it will be helpful to you on that regard. And then what was the second half? Keith, did you get it?

Regional color across the...

Yeah, growth for regional color.

Yeah. Well obviously, as we've said EMEA has been performing very well and contributing at a higher growth rate. Asia on a smaller number continues to hit bookings and doing very, very well, contributing to our overall growth rate as well and solid in Americas.

Yeah.

I don't know, Charles, do you want to add any color to that or...?

Yeah. I think, yeah, little bit of the normal dynamics, you're seeing which is Americas is a larger and more mature market. The other markets are tending to follow in terms of some of the activities in terms of penetration and other factors that are both – driving both demand and potential substitution effects, et cetera. So, there's – I think, we are – we continue to see exceptional health in EMEA, our competitive position there is outstanding. Our pipeline of projects is strong. Our sales pipeline is strong. So continued strong results in the EMEA market. APAC has good underlying secular forces driving those markets and again Americas a little bit starting to see, a little bit of dip in growth rates. We still think we're growing ahead of the market in Americas. But what we're seeing from our – what we think are the most credible estimates of market growth in the Americas is more in the 5.5% range and we're growing the business meaningfully above that and we're doing that with a return profile and a yield profile that is head and shoulders above the rest. And so there's pockets of headwinds, probably across all markets in certain cases, but we're staying very disciplined about what deals we're pursuing, continuing to focus on use cases where we bring distinctive value, and therefore can preserve returns and pricing over time, but that's a little color on across the regions.

And if I could just one other follow-up, with all the development that you've laid out in your development schedule, is the goal to increase organic growth in 2019 over 2018?

(1:01:47). Thank you for the question, but we really like to spend more energy thinking about that and we'll be updating you on the June 20 Analyst Day on our thinking both as well as the organic business and certainly the inorganic business, and there's a recognition that over the last few years, we've been buying assets that have been slower growing than the overall organic business. And so we want to give you color on what that means and how does it look on a go forward basis as we take you out five years from 2018 through 2022.

Thank you.

Okay.

Thanks, everyone.

Great. That concludes our Q1 call. Thank you for joining us.

Thanks.

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