Good afternoon and welcome to the Equinix 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 would like to remind you that some of the statements that 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 March 2, 2015. 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 explicit 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 would also like to remind you that we post important information about Equinix on the Investor Relations page of our website. 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, Chief Operating Officer, who's dialing in (1:45). 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 one. At this time, I'll turn the call over to Steve. Stephen M. Smith - President, Chief Executive Officer & Director: Okay. Thank you, Katrina, and good afternoon and…

Great. Thanks, Steve, and good afternoon to everyone. Well as they say, the only thing better than a strong Q4 and a recurring revenue model is following it up with a strong Q1, and our Q1 results represent a great start to 2015. Our global interconnected platform continues to deliver strong gross and net bookings and this drives leverage across each of our regions. Our key operating metrics remained solid, such as net cabinets billing, MMR per cabinet and the MMR churn rate. And our interconnection trends remain very positive too, both nominally, but more importantly, the value that they bring to the health of our ecosystems. Interconnection revenues now represent 17% of our global recurring revenues, a 17% year-over-year increase with strength across each of our regions. Also, our key operating margins continued to improve. Each of our gross profit, cash gross profit, adjusted EBITDA and operating profit experienced a nice step-up this quarter. The result, a strong revenue pull-through and lower than planned costs. We remain pleased with our performance, while consistent with our comments from the last earnings call, we do plan to continue to invest in our go-to-market strategy and other key initiatives through the end of this year. Yet, given the success of the first quarter, as Steve will discuss shortly, we're now able to increase our adjusted EBITDA guidance on a currency-neutral basis by $17 million for the year. So, one additional comment before I get into the earnings slides; we're very pleased to have completed our first quarter operating and reporting as a REIT and of course, this includes the issuance of our first quarterly recurring cash dividend. We continue to expect to receive our favorable PLR in 2015 and look forward to sharing the news with you when received. Now moving to…

Thank you. We will now begin the question-and-answer session. And we have our first question coming from the line of Amir Rozwadowski from Barclays. Sir, your line is open.

Thank you very much and good afternoon, folks. Stephen M. Smith - President, Chief Executive Officer & Director: Hey, Amir.

I was wondering if you could talk a bit about sort of margin progression here. I mean obviously, there's been a lot of puts and takes: the conversion to the REIT reinvestment and supporting channel expansion. Obviously, if we look at particularly on adjusted basis with your EBITDA guidance there is a tick-up in expectation. Just trying to think about sort of how the longer term progress margins are particularly when we look at sort of where your longer term targets were and how we should think about the trajectory and the ability to get that level?

I think it's a great question, Amir. I mean so, most fundamentally we're very much committed as a company to driving towards our 50% EBITDA margin target or better and clearly, we showed a little bit of momentum when we issued our guidance at the first part of this year assuming when you adjusted for currency. And then coming out of the first quarter, we're able to moderate that up slightly as well. So very pleased with the direction in which it's going. I'd tell you though as you sort of step back, Q2 – in my comments I said, look, SG&A you should expect it to be relatively flat quarter-over-quarter. So, as a result, what I think you're going to get as you sort of progress through the year absent some of the timing issues that we're going to see in Q2 is a bias towards an upward trend through the latter part of fiscal year 2015. And that positions us very good as we go into 2016. My only comment would then be to continue to look at and assess where we need to make investments and to the extent that we can create value and further the business opportunity we have in front of us, we'll continue to make those investments. So I don't want to pre-commit to where 2016 will be, but suffice it to say the direction is very, very positive as we exit 2015.

So perhaps a quick follow-up there; if we think about 2016 then from a directional perspective, given some of the moving factors that have impacted you folks in – or expected to impact you folks in 2015, should we expect that sort of directional upward bias?

We certainly believe there's an upward bias, but again we want to reserve the right similar to what we did this year. We took some of the money that we were going – that we were in fact saving from the REIT project and we decided to put it back into the business because it made infinite sense to go invest in our go-to-market strategy and all the components around that. Again, as we look into 2016, we'll make that decision as we get closer to time but my message to you would be right now there's an upward bias as we exit the year.

Thank you very much for the incremental color.

Thank you. And we have the next question coming from the line of Jonathan Schildkraut. Sir, your line is open.

Good evening. Thanks for taking the questions, two if I may. First, in terms of the revenue outlook for the year, given the 1Q report in the midpoint of the 2Q guide implies a fairly slow ramp in the third quarter and fourth quarter, I don't know, maybe $11 million or $12 million sequential net revenue growth. So I was just wondering if there's any sort of churn or other things in that number as we look out the remainder of the year that should – that we should be aware of? And then as a second question, you've had another strong quarter of bookings here, and I'm wondering if you might update us on sort of your visibility, level of confidence and so looking into the future, commencement lag, things like that, that allow you to raise the guide for the remainder of the year? Thanks.

Good questions, Jonathan, let me take the first one and then I'll perhaps pass it to Steve or Charles for the second. I think first and foremost when you look at our guide for Q2 on a revenue basis, when you adjust for currency, so take out the benefit of the hedge that's sitting in revenues in Q1 and you adjust for basically the forward exchange rate, you're looking at about a 3% quarter-over-quarter increase. And so we're happy with where we sit with Q2. As we look into Q3 and Q4 similar to what – as we came out of last year, we're less comfortable in predicting the amount of non-recurring activity that we have in the latter half of the year. And that's what we experienced this quarter. Part of the reason for the over-performance is we saw – we did more non-recurring activities than originally anticipated. And I'd tell you that we hold that – we're holding that path forward, sort of bypass through for the latter part of the year as well. That coupled with the fact that there is some seasonality in, just in our booking activity. So there's a little bit of churn that we know that's forthcoming and yet I feel very comfortable with the 2% to 2.5% range and probably biased more towards again the lower end of the range, but relative to where we've come from we'll have slightly more elevated churn in the latter part of the year based on what we see. And then the last part is just timing, timing of when we install, and there's a recognition as we roll out our global, our global systems. Like anything, that can create some level of drag and we're just being a little bit conservative right now, until we…

No. I think you hit most of the key ones from my perspective. I would say that one of the things that is not evident; we did make some adjustments to our sales structure and territory alignment and account allocations in the first quarter, which inevitably creates a little bit of drag. And yet, I think we powered through that, delivered strong results. And the objective of that alignment was really to ensure that we continue to capture the momentum that we're seeing in the cloud ecosystem overall, both on the supply side with cloud service providers, and on the demand side, if you will, or the buy side with enterprises. And those two verticals are generating about 60% of our new logos, continued strong momentum in bookings and new wins there, and as Steve said, the key metrics like funnel size, conversion, rep productivity, book-to-bill interval, all looking solid.

Thanks for taking the questions, guys.

Thanks, Jonathan. Stephen M. Smith - President, Chief Executive Officer & Director: Thanks, Jonathan.

Thank you. We have our next question coming from the line of Simon Flannery from Morgan Stanley. Sir, your line is open. Simon Flannery - Morgan Stanley & Co. LLC: Great. Thanks so much, and thanks a lot for the new disclosure. It's very helpful. I'm looking at page 25, the same-store operating performance and you've broken out the stabilized and expansion. As you mentioned earlier, the stabilized return on gross PP&E was 33%. The expansion is 19%, up from 15%, a nice year-over-year improvement. Perhaps you could just talk us through how the 19% evolves over time. Is that tied to utilization and is it reasonable to think that that becomes 33% over – or something else, four years or five years in, gets up to that sort of stabilized level? So any color around that would be great.

Simon, just so I'm making sure that you and I are looking at the same thing, so when you're looking at the percent growth year-over-year, when you talk about the 19% in the expansion, is that what you want us to refer to? Simon Flannery - Morgan Stanley & Co. LLC: It's the cash return on gross PP&E, the last column on that page.

Okay. Okay. Generally from our perspective, I think there's a couple of things. Clearly, as you think about our stabilized assets, again those are assets that have been – all phases have been open for more than one year, and effectively that one year for us is January 1 – starting January 1, 2014, looking at that relative to the expansion activity. Our sense is when you think about expansion, because an expansion could be two, three and, in some cases, four more phases, you can appreciate that the net sort of the drag, if you will, perhaps taking on that full obligation whether it's a lease, whether it's the land and other related costs. Until you get more to more fully utilize, you're not going to get the economic return that you're looking for relative to a stabilized asset. So as a result, this is a path, if you will, that's very consistent with our expectation, recognizing there's a relatively large portfolio of assets. There's 31 assets in the expansion bucket. They're going to be at all different levels of delivery, if you will. And so probably leaving it with you, I think you're going to see that number move up and towards the 33% as we continue to pass time and then fully utilize those assets. And the other thing I'd leave you with is the team has done a very good job over the years recognizing stabilized assets are only 84% utilized, the team does a very good job of optimizing the assets. So not only do I continue to expect the expansion to move up, quite openly we also expect the stabilized to move up into the right as well. Simon Flannery - Morgan Stanley & Co. LLC: Great. That's helpful. Thank you.

Yeah, the only color I might add to it, Simon, is that I think there's – if you look at the mix of the stabilized asset group there and the expansion asset group there, there would certainly be no reason to believe that the long-term performance would be meaningfully different since they're likely to have similar mixes. And so it's just a matter in some cases if they're very large, large-scale projects, it may take a longer period because they're multi-phases of investment but would trend towards that endpoint. Simon Flannery - Morgan Stanley & Co. LLC: Great. Thanks.

Thank you. And we have our next question coming from the line of David Barden from Bank of America. Sir, your line is open.

Hey, guys. Good quarter. Thanks for taking the questions. I guess two if I could. Just, Keith, number one on the dividend, obviously we don't see the QRS or kind of have a picture of where the growth trajectory for the QRS which is going to fuel the dividend growth is. Could you kind of address what we should be expecting on that front and whether you have an appetite to reflect the QRS growth in a quarterly or annual fashion in the dividend? And then the second question on the balance sheet, we've dipped now below the long term leverage target; if you went back to the midpoint, we could buy back 5% of the stock. You've been very cautious about using the balance sheet as you kind of went into the reprocess, because there were obviously reasons to kind of be cautious and keep dry powder, but what can we expect Equinix is going to do for shareholders in terms of using that balance sheet on a go-forward basis? Thanks.

Two very good questions, David. Let me start with the dividend. I think first and foremost, as you know, when we issued our dividend at roughly $1.69 per share on a quarterly basis and we said annualize that at $6.76 per share, or roughly a 3% yield where the stock was trading at the time, and so we're very, very comfortable with that, recognizing this is the transitional year for us as a company, transition in the sense that we're being very mindful of the assets that should be inside the Q and those assets that sit outside in the T, primarily to limit the amount of taxes we pay and certainly at the same time meet the REIT requirements. So what I would like to leave you with at least for 2015 is right now make the assumption at least for next quarter that we're going to hold things stable. As we look forward, as you think a little bit about the assets that sit outside of the Q, so you have Canada, Australia, Singapore, and Hong Kong, which are the big four, that's going to give us the flexibility to change, if you will, the dynamics in what that dividend will be, in addition though to effecting the growth. It's fair to say that a lot of the assets, particularly Europe, which most of Europe sits inside the Q, that's going to continue to grow. And as we said on a currency adjusted basis it grew 19% this quarter over same quarter last year, and all of last year grew at 21% over the prior year. So we're very confident and comfortable that we think that there's going to be good, if you will, growth in the Q, so that that allows us to continue to manage, if…

Great. Thanks, Keith.

Thank you.

Thank you. And our next question is coming from the line of Michael Rollins from Citi. Sir, your line is open.

Hi. Thanks for taking the questions. Just two if I could, one follow-up and an additional question. So when you're talking about I think the utilization of the stabilized assets and the opportunity to increase utilization on the expansion assets, where do you see the long-term utilization for stabilized assets? What's the mature level that you think on average each asset can get to? And then secondly, if you could talk a little bit more – at the beginning of the call, I think, Steve, you mentioned that part of the revenue growth in the quarter was based on some favorable pricing. I'm curious if you can go into little bit more depth as to where you saw the pricing and maybe what was different about this quarter maybe relative to the last few quarters in terms of the pricing commentary? Thank you.

So let me take the first one, then I'll pass it to Steve and Charles for the second one. As it relates to stabilized assets, right now as I said we're at 84% utilized. I think for all intents and purposes we would target between we think 90% or greater, and realistically somewhere between 90% and 95% is a realistic assumption that we should be able to drive our utilization level to. I think that's an area of comfort, Michael, that over a period of time recognizing some of these assets we're very selective in how we fill them up. And what I mean by that, if it's a network dense asset and we don't have a lot of incremental capacity, we're willing to let that asset sit there for a period of time looking for the right customer with the right application to go into that asset. And so once we get there, I think it's reasonable to assume you're 90%-plus utilized. Stephen M. Smith - President, Chief Executive Officer & Director: And on the revenue growth and favorable pricing, Mike, I'll just give you a little color, and maybe Keith and Charles might have something to add. But I mentioned in my comments in the beginning that yield across all regions continues to be strong, and actually, our global yields was up $40 or 2% quarter-on-quarter on a constant currency basis. So that was roughly 0.5% in the Americas, 2% in Asia and Europe, so pretty strong pricing in the regions, primarily because of the focus that our sales and marketing teams have on targeting specific workloads and focusing our value propositions around that type of application workload. And as – historically as we've always mentioned, blended in with that, where appropriate we're pursuing larger magnetic footprints that are helping the overall ecosystem value. And you should expect us to continue to compete for those, that'll advance our cloud agenda, but generally speaking we're doing a very good job of qualifying and bringing the right types of workloads into the right locations, and that's served us very well from a churn perspective and that's served us very well from a MRR per cab, and we expect it to remain firm, going forward.

Thanks.

All right. Thank you. And our next question is from Jonathan Atkin from RBC. Sir, your line is open.

Yes. I wonder if you could comment on M&A, just given some of the recent news around (47:04-47:09) and then, thinking about kind of the European Telecity Interxion situation. Any reaction from your customer, any commercial changes that you're seeing (47:18-47:23)? Stephen M. Smith - President, Chief Executive Officer & Director: Jonathan, we did not hear all of that. I think I have the gist of your question, which was to comment on M&A and the activity we see around the world. Is that the gist of it?

Yeah. M&A, and then specifically whether your European business is seeing any impacts from the pending deal going on in Europe between Interxion and Telecity. Stephen M. Smith - President, Chief Executive Officer & Director: Yeah, sure. Sure. I'll start and maybe Charles, you might – if you have anything to add, please jump in here. Fair to say, guys, that we have our eyes on the same consolidating activity that you're all reading about in our industry. We're still focused, as I mentioned last quarter, on our inorganic strategy to extend our current leadership position around cloud and network density, secondly around scaling our platform, and then third around enhancing our interconnection position. So we're always evaluating options to accomplish those three objectives, and we'll continue to do that. And if there was a transaction that might complement that strategy and create significant shareholder value, you should feel confident that we'll consider it. But in terms of our Europe business, we're continuing to be very pleased with what's going over there. And our results off last quarter and certainly this quarter, as we mentioned in previous calls, our business in Europe grew 21% last year. And on a first quarter year-on-year basis grew 19% in this first quarter. So our European business, because it's connected to a global platform, is growing faster than the broader EU market. And as you also heard we have significant momentum on interconnection in Europe. So all in all, yes, we're watching this stuff and our business in Europe we're very happy with.

And then on the cloud growth, I'm interested, is that becoming more indexed towards top five global platforms? Or is that more diversified or becoming more diversified to smaller cloud operations? Stephen M. Smith - President, Chief Executive Officer & Director: Charles, do you want...

I'll take that, Steve. I think it's a combination of those things. We certainly see strong momentum with I would say the top six to eight cloud providers that I think you would immediately think of. And they are – most of them are deploying now with us in anywhere from 8 to 16-plus markets around the world. And we're seeing significant activity, not only in their deployments but I think more excitingly cross-connect activity and Cloud Exchange activity driving interconnection back to those clouds from within our facilities, which is really the essence of the sort of building the cloud ecosystem. And so – but then we also are really seeing good new logo capture and growth with existing new logos in a bit more of the longer tail around cloud service providers in a variety of forms. And so I think it's both, and I think both are really critically important because I think that what we're seeing is that those big magnets like an Azure or an AWS are often the catalyst for somebody to say, yes, I need high bandwidth secure connectivity into these cloud providers as I begin to move workloads into the cloud. But then they – as they evolve their hybrid cloud they really want access to a much broader range of cloud services as quickly and cost-effectively as possible and the ability to seamlessly and efficiently move workloads across various cloud providers. So both seeing good momentum and both critical to long-term health of the ecosystem.

Thank you very much.

All right. Thank you. And we have our last question coming from the line of Tim Horan from Oppenheimer. Sir, your line is open. Tim K. Horan - Oppenheimer & Co., Inc. (Broker): Thanks, guys. Do you expect the average size of the customer to keep getting – maybe start getting smaller at this point as you move more to the enterprise market? It seems like you've kind of focused on the major cloud providers the last couple years, building up the cloud exchanges and, correct me if I'm wrong, but I'm assuming enterprises are now starting to use you guys to connect to these exchanges. And I guess have we hit the tipping point with enterprises? Thanks.

Yeah, I'll start, Steve, and if you or Keith want to jump in. I would say yes. I think that the business will trend that way over time. I wouldn't say we've reached a tipping point per se in that I think we have a lot – are in the very early innings of enterprise adoption of hybrid cloud. But again, we're seeing good momentum. Our lighthouse accounts are showing very strong land-and-expand type performance with some of our key customers, starting with two to three locations and rapidly expanding in their Performance Hub implementations to 6, 10, even 20 sites. And so what I think we will see is an extremely favorable trend for us, which is average deal size for a new – or average implementation size perhaps trending somewhat down, although balanced in part by the fact that we're going to continue to selectively pursue strategic large footprint type activity where it's really accretive to the strategy. But I think, we will see average implementation size trend down as we really gain some traction in the enterprise, both through our direct force and our channel. But interestingly, I think that the – we'll begin – we'll be able to grow those customers over time and so see the average billing volume for a customer continue to be strong. So I do think we will see that trend. I think it's a very favorable trend potentially for our yield over time. But I think it's still very early days. Tim K. Horan - Oppenheimer & Co., Inc. (Broker): Thank you.

Thank you. We still have a next question coming from the line of Mike McCormack from Jefferies. Sir, your line is open.

Hey, guys. Thanks. Maybe, Keith, just a clarification on some of the cost being brought into Q2, which I'm assuming are in the guide. But the utilities, the discretionary spend, and the merit increases, I assume that's all part of the guidance, the $308 million? And then secondly, the interest expense decrease and revised capital interest, can you just give us a little more clarity on that?

Sure. Yeah, Mike, you're dead on. Just as we look to Q2, so not only do we have the merit increases that took effect in March, so we see that, if you will, the cost associated with that moving into Q2 and beyond, we have all the new head count, so all the – of the new hires. Then we have a higher utility line coming in in Q2 as well. As you know, typically from a seasonal perspective, our highest cost of utility comes in the second quarter and the third quarter in the Americas region. And so we're absorbing roughly another, if my memory serves, it's another $6 million to $8 million of utilities in the second quarter relative to what we were going to spend in Q1. And then there's – we're continuing to progress with our integration of the ALOG investment. And so we spent about $1 million in Q1 on the ALOG integration and so we expect to spend more in Q2 also with the rollout of our eco initiative. All that to say is there's some timing and, therefore, that's why you see – despite that you see some step downs costs that we had in Q1 will be replaced with costs that I just talked about in Q2. And then we think that we can hold our SG&A relatively flat for the rest of the year. As it relates then to just the net interest expense my reference to the fact that there's a certain amount of interest that gets capitalized into our assets and it was roughly a $12 million change from what we previously disclosed. And because of that, although you see an improving AFFO the real value of the AFFO increase at this stage of the game was the improved operating performance. $10 million was really to capitalization and that, of course, that has no meaning. Even though our AFFO payout ratio goes down, there is no fundamental shift that really took place because that capitalized interest it gets treated differently for tax purposes. So that's the primary reason for the interest step down.

Okay. Thanks, guys.

Yeah.

Thank you. And our very last question coming from the line of Colby Synesael from Cowen & Company. Sir, your line is open. Colby A. Synesael - Cowen & Co. LLC: Great. Thank you for fitting me in. So I just want to talk about the competitive landscape for a moment. It seems like there's just a lot going on, whether it's some of the wholesale guys trying to offer more retail products, everybody I guess to some degree trying to offer some form of interconnection whether it's with Open IX or their own exchanges, increasing demand it seems like for colocation facilities in Tier 2 markets, even metered power to some degree seeming to squeeze into the sub-500 kW type deals. I was wondering if you could just comment on what if any impact you're seeing from some of these trends that I just mentioned. And then the second thing is as customers do start to ask for more flexibility in what they want from you, whether it's in terms of what we'd refer to as wholesale space or bigger space or perhaps even different power requirements, is it going to require that you start to be more flexible in how you build your facilities? And could that over time change the cost on a per megawatt basis that you're investing when you build out a facility? Thanks. Stephen M. Smith - President, Chief Executive Officer & Director: Yeah. We're seeing all those things, Colby. Charles, do you want to take a crack and I'll...

Yeah. I'll jump in, you guys can add color. You're right. Steve's absolutely right. We're seeing all those things at some level, although what I would argue is that continued – we've said over and over again we're focused on getting the right applications, right customers with the right applications into the right assets. And that really centers around this sort of ecosystem-centric strategy. And so I think if we're disciplined in that strategy I think that we see that the dynamics of the – some of the competitive things that you're – that you referenced have a much lesser or more marginal impact on our business. I think that you're right, certainly wholesalers – some of the wholesalers are indicating a desire to – and offer smaller footprints and begin to dabble in the retail space. As I've said on a number of calls before, the requirements to operate a world-class at-scale retail business and the investments necessary to do that are substantial. And I think what we're finding is that customers who really need the application performance, the global reach, the mission critical reliability for these retail-type applications are typically choosing Equinix based on the superior value delivered. And so while I think there's probably some, as I've said, minor overlap between our businesses in terms of workloads that could be pursued by those types of players, if we're consistent and disciplined in our strategy I think we're seeing relatively limited impact. You mentioned Open IX and a broader desire for people to talk about it and try to offer interconnection. I think that's also true, but I think the substance that we see in the market as compared to the hype and the PR, we see a big difference between those things. And I think we feel…

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