EQUINIX INC

Previous wording

We provide a global, vendor-neutral data center, interconnection and edge solutions platform with offerings that aim to enable our customers to reach everywhere, interconnect everyone and integrate everything. Global enterprises, service providers and business ecosystems of industry partners rely on our IBX data centers and expertise around the world for the safe housing of their critical IT equipment and to protect and connect the world's most valued information assets. They also look to Platform Equinix® for the ability to directly and securely interconnect to the networks, clouds and content that enable today's information-driven global digital economy. Our recent IBX data center openings and acquisitions, as well as xScale TM data center investments, have expanded our total global footprint to 264 IBXs, including 20 xScale data centers and the MC1 data center that are held in unconsolidated joint ventures, across 72 markets around the world. We offer the following solutions:

Current wording

We provide a global, vendor-neutral data center, interconnection and edge solutions platform with offerings that aim to enable our customers to reach everywhere, interconnect everyone and integrate everything. Global enterprises, service providers and business ecosystems of industry partners rely on our IBX data centers and expertise around the world for the safe housing of their critical IT equipment and to protect and connect the world's most valued information assets. They also look to Platform Equinix® for the ability to directly and securely interconnect to the networks, clouds and content that enable today's information-driven global digital economy. Our recent IBX data center openings and acquisitions, as well as xScale TM data center investments, have expanded our total global footprint to 268 IBXs, including 20 xScale data centers and the MC1 data center that are held in unconsolidated joint ventures, across 73 markets around the world. We offer the following solutions:

Previous wording

Our interconnected data centers around the world allow our customers to increase information and application delivery performance to users, and quickly access distributed IT infrastructures and business and digital ecosystems, while significantly reducing costs. Our global platform and the quality of our IBX data centers, interconnection offerings and edge solutions have enabled us to establish a critical mass of customers. As more customers choose Platform Equinix for bandwidth cost and performance reasons, it benefits their suppliers and business partners to colocate in the same data centers. This adjacency creates a “network effect” that enables our customers to capture the full economic and performance benefits of our offerings. These partners, in turn, pull in their business partners, creating a "marketplace" for their services. Our global platform enables scalable, reliable and cost-effective interconnection that increases data traffic exchange while lowering overall cost and increasing flexibility. Our focused business model is built on our critical mass of enterprise and service provider customers and the resulting "marketplace" effect. This global platform, combined with our strong financial position, has continued to drive new customer growth and bookings.

Current wording

Our interconnected data centers around the world can allow our customers to increase information and application delivery performance to users, and quickly access distributed IT infrastructures and business and digital ecosystems, while significantly reducing costs. Our global platform and the quality of our IBX data centers, interconnection offerings and edge solutions have enabled us to establish a critical mass of customers. As more customers choose Platform Equinix for bandwidth cost and performance reasons, it benefits their suppliers and business partners to colocate in the same data centers. This adjacency creates a “network effect” that enables our customers to capture the full economic and performance benefits of our offerings. These partners, in turn, pull in their business partners, creating a "marketplace" for their services. Our global platform enables scalable, reliable and cost-effective interconnection that increases data traffic exchange while lowering overall cost and increasing flexibility. Our focused business model is built on our critical mass of enterprise and service provider customers and the resulting "marketplace" effect. This global platform, combined with our strong financial position, has continued to drive new customer growth and bookings.

Previous wording

Historically, our market was served by large telecommunications carriers who bundled their products and services with their colocation offerings. The data center market landscape has evolved to include private and vendor-neutral multi-tenant data center ("MTDC") providers, hyperscale cloud providers, managed infrastructure and application hosting providers, and systems integrators. It is estimated that Equinix is one of more than 2,200 companies that provide MTDC offerings around the world. Each of these data center solutions providers can bundle various colocation, interconnection and network offerings and outsourced IT infrastructure solutions. We are able to offer our customers a global platform that reaches 33 countries with the industry’s largest and most active ecosystem of partners in our sites, proven operational reliability, improved application performance and a highly scalable set of offerings.

Current wording

Historically, our market was served by large telecommunications carriers who bundled their products and services with their colocation offerings. The data center market landscape has evolved to include private and vendor-neutral multi-tenant data center ("MTDC") providers, public and private cloud providers, managed infrastructure and application hosting providers, and systems integrators. It is estimated that Equinix is one of more than 2,200 companies that provide MTDC offerings around the world. The global MTDC market is highly fragmented. Each of these data center solutions providers can bundle various colocation, interconnection and network offerings, outsourced IT infrastructure solutions and managed services. We believe that this outsourcing trend has accelerated and is likely to continue to accelerate in the coming years, especially in light of the movement to digital business, the use of multiple cloud service providers, and the adoption of AI. We are able to offer our customers a global platform that reaches 34 countries with the industry’s largest and most active ecosystem of partners in our sites, proven operational reliability, improved application performance and a highly scalable set of offerings.

Previous wording

Our cabinet utilization rate represents the percentage of cabinet space billed versus total cabinet capacity, which is used to measure how efficiently we are managing our cabinet capacity. Our cabinet utilization rate varies from market to market among our IBX data centers across our Americas, EMEA and Asia-Pacific regions. Our cabinet utilization rates were approximately 77% and 82%, as of June 30, 2024 and 2023, respectively. We continue to monitor the available capacity in each of our selected markets. To the extent we have limited capacity available in a given market, it may limit our ability for growth in that market. We perform demand studies on an ongoing basis to determine if future expansion is warranted in a market. In addition, power and cooling requirements for most customers are growing on a per unit basis. As a result, customers are consuming an increasing amount of power per cabinet. Although we generally do not control the amount of power our customers draw from installed circuits, we have negotiated power consumption limitations with certain high power-demand customers. This increased power consumption has driven us to build out our new IBX data centers to support power and cooling needs twice that of previous IBX data centers. We could face power limitations in our IBX data centers, even though we may have additional physical cabinet capacity available within a specific IBX data center. This could have a negative impact on our ability to grow revenues, affecting our financial performance, results of operations and cash flows.

Current wording

Our cabinet utilization rate represents the percentage of cabinet space billed versus total cabinet capacity, which is used to measure how efficiently we are managing our cabinet capacity. Our cabinet utilization rate varies from market to market among our IBX data centers across our Americas, EMEA and Asia-Pacific regions. Our cabinet utilization rates were approximately 78% and 80%, as of September 30, 2024 and 2023, respectively. We continue to monitor the available capacity in each of our selected markets. To the extent we have limited capacity available in a given market, it may limit our ability for growth in that market. We perform demand studies on an ongoing basis to determine if future expansion is warranted in a market. In addition, power and cooling requirements for most customers are growing on a per unit basis. As a result, customers are consuming an increasing amount of power per cabinet. Although we generally do not control the amount of power our customers draw from installed circuits, we have negotiated power consumption limitations with certain high power-demand customers. This increased power consumption, which we expect to accelerate with the adoption of AI, has driven us to build out our new IBX data centers to support power and cooling needs twice that of previous IBX data centers. We could face power limitations in our existing IBX data centers, even though we may have additional physical cabinet capacity available within a specific IBX data center, and in our ability to expand our footprint in existing and new markets. This could have a negative impact on our ability to grow revenues, affecting our financial performance, results of operations and cash flows and the growth opportunities presented by the adoption of new technologies, including AI.

Previous wording

To serve the needs of the growing hyperscale data center market, including the world's largest cloud service providers, we have entered into joint venture partnership arrangements across our Americas, EMEA and Asia-Pacific regions to develop and operate xScale data centers.

Current wording

To serve the needs of the growing hyperscale data center market, including the world's largest cloud service providers and increased demand driven in part by the adoption of AI, we have entered into joint venture partnership arrangements across our Americas, EMEA and Asia-Pacific regions to develop and operate xScale data centers.

Previous wording

Strategically, we will continue to look at attractive opportunities to grow our market share and selectively improve our footprint and offerings. As was the case with our recent expansions and acquisitions, our expansion criteria will be dependent on a number of factors, including but not limited to demand from new and existing customers, quality of the design, power capacity, access to networks, clouds and software partners, capacity availability in the current market location, amount of incremental investment required by us in the targeted property, automation capabilities, developer talent pool, lead-time to break even on a free cash flow basis and in-place customers. Like our recent expansions and acquisitions, the right combination of these factors may be attractive to us. Depending on the circumstances, these transactions may require additional capital expenditures funded by upfront cash payments or through long-term financing arrangements in order to bring these properties up to our standards. Property expansion may be in the form of purchases of real property, long-term leasing arrangements or acquisitions. Future purchases, construction or acquisitions may be completed by us or with partners or potential customers to minimize the outlay of cash, which can be significant.

Current wording

Strategically, we will continue to look at attractive opportunities to grow our market share and selectively improve our footprint and offerings. As was the case with our recent expansions and acquisitions, our expansion criteria will be dependent on a number of factors, including but not limited to demand from new and existing customers, power availability and capacity, quality of the design, access to networks, clouds and software partners, capacity availability in the current market location, amount of incremental investment required by us in the targeted property, automation capabilities, developer talent pool, lead-time to break even on a free cash flow basis and in-place customers. Like our recent expansions and acquisitions, the right combination of these factors may be attractive to us. Depending on the circumstances, these transactions may require additional capital expenditures funded by upfront cash payments or through long-term financing arrangements in order to bring these properties up to our standards. Property expansion may be in the form of purchases of real property, long-term leasing arrangements or acquisitions. Future purchases, construction or acquisitions may be completed by us or with partners or potential customers to minimize the outlay of cash, which can be significant.

Previous wording

Our business is primarily based on a recurring revenue model comprised of colocation and related interconnection and managed infrastructure offerings. We consider these offerings recurring because our customers are generally billed on a fixed and recurring basis each month for the duration of their contract, which is generally one to five years in length, and thereafter automatically renews in one-year increments. Our recurring revenues have comprised more than 90% of our total revenues during the past three years. In addition, during the past three years, more than 90% of our monthly recurring revenue bookings came from existing customers, contributing to our revenue growth. Our largest customer accounted for approximately 3% of our recurring revenues for both the three and six months ended June 30, 2024 and 2023. Our 50 largest customers accounted for approximately 36% of our recurring revenues for the three and six months ended June 30, 2024 and 37% of our recurring revenues for the three and six months ended June 30, 2023.

Current wording

Our business is primarily based on a recurring revenue model comprised of colocation and related interconnection and managed infrastructure offerings. We consider these offerings recurring because our customers are generally billed on a fixed and recurring basis each month for the duration of their contract, which is generally one to five years in length, and thereafter automatically renews in one-year increments. Our recurring revenues have comprised more than 90% of our total revenues during the past three years. In addition, during the past three years, more than 90% of our monthly recurring revenue bookings came from existing customers, contributing to our revenue growth. Our largest customer accounted for approximately 3% of our recurring revenues for both the three and nine months ended September 30, 2024 and 2023. Our 50 largest customers accounted for approximately 36% of our recurring revenues for the three and nine months ended September 30, 2024 and 37% of our recurring revenues for the three and nine months ended September 30, 2023.

Previous wording

Americas Revenues. During the six months ended June 30, 2024, Americas revenues increased by $133 million or 8% (7% on a constant currency basis). Growth in Americas revenues was primarily due to:

Current wording

Americas Revenues. During the three months ended September 30, 2024, Americas revenues increased by $45 million or 5% (6% on a constant currency basis). Growth in Americas revenues was primarily due to:

Previous wording

EMEA Revenues. During the three months ended June 30, 2024, EMEA revenues increased by $34 million or 5% (and also 5% on a constant currency basis). Growth in EMEA revenues was primarily due to:

Current wording

EMEA Revenues. During the three months ended September 30, 2024, EMEA revenues increased by $34 million or 5% (3% on a constant currency basis). Growth in EMEA revenues was primarily due to:

Previous wording

Asia-Pacific Revenues. During the three months ended June 30, 2024, Asia-Pacific revenues increased by $30 million or 7% (12% on a constant currency basis). Growth in Asia-Pacific revenues was primarily due to:

Current wording

Asia-Pacific Revenues. During the three months ended September 30, 2024, Asia-Pacific revenues increased by $61 million or 14% (15% on a constant currency basis). Growth in Asia-Pacific revenues was primarily due to:

Previous wording

Americas Cost of Revenues. During the three months ended June 30, 2024, Americas cost of revenues increased by $18 million or 4% (5% on a constant currency basis). The increase in our Americas cost of revenues was primarily due to:

Current wording

Americas Cost of Revenues. During the three months ended September 30, 2024, Americas cost of revenues increased by $28 million or 7% (8% on a constant currency basis). The increase in our Americas cost of revenues was primarily due to:

Previous wording

•$9 million of higher depreciation driven by IBX data center expansions;

Current wording

•$8 million of higher depreciation driven by IBX data center expansions;

Previous wording

•$6 million of higher rent and facilities costs; and

Current wording

•$7 million of higher rent and facilities costs; and

Previous wording

EMEA Cost of Revenues. During the six months ended June 30, 2024, EMEA cost of revenues increased by $55 million or 7% (and also 7% on a constant currency basis). The increase in our EMEA cost of revenues was primarily due to higher utilities costs as a result of increases in power costs and higher utility usage in Germany, the Netherlands and the United Kingdom, partially offset by decreases in power costs and lower utility usage in France.

Current wording

EMEA Cost of Revenues. During the three months ended September 30, 2024, EMEA cost of revenues decreased by $32 million or 8% (and also 8% on a constant currency basis). The decrease in our EMEA cost of revenues was primarily due to lower utilities costs as a result of decreases in power costs in the United Kingdom and France.

Previous wording

Asia-Pacific Sales and Marketing Expenses. Our Asia-Pacific sales and marketing expense did not materially change during the three months ended June 30, 2024 as compared to the three months ended June 30, 2023.

Current wording

Asia-Pacific Sales and Marketing Expenses. During the three months ended September 30, 2024, Asia-Pacific sales and marketing expense increased by $10 million or 37% (36% on a constant currency basis). The increase in our Asia-Pacific sales and marketing expense was primarily due to higher bad debt expense.

Previous wording

Americas General and Administrative Expenses. During the three months ended June 30, 2024, Americas general and administrative expenses increased by $27 million or 10% (and also 10% on a constant currency basis). The increase in our Americas general and administrative expenses was primarily due to:

Current wording

Americas General and Administrative Expenses. During the three months ended September 30, 2024, Americas general and administrative expenses increased by $23 million or 9% (and also 9% on a constant currency basis). The increase in our Americas general and administrative expenses was primarily due to:

Previous wording

•$8 million of higher depreciation expenses associated with back-office systems to support the growth of our business.

Current wording

•$13 million of higher depreciation expenses associated with back-office systems to support the growth of our business; and

Previous wording

•approximately $12 million of incremental revenues generated from IBX data centers which opened within the twelve months ended June 30, 2024; and

Current wording

•$12 million of higher office expenses primarily due to additional software and support services.

Previous wording

Gain or Loss on Asset Sales. During the six months ended June 30, 2024, we recorded a gain of $18 million, primarily related to the sale of the Silicon Valley 12 ("SV12") data center. During the six months ended June 30, 2023, we did not record a significant amount of gain or loss on asset sales.

Current wording

Gain or Loss on Asset Sales. During the three months ended September 30, 2024 and 2023, we did not record a significant amount of gain or loss on asset sales.

Previous wording

Americas Income from Operations. During the three months ended June 30, 2024, Americas income from operations increased by $45 million or 66% (67% on a constant currency basis), primarily due to higher revenues as a result of non-recurring services provided to our joint ventures, IBX data center expansion activity and organic growth, as described above.

Current wording

Americas Income from Operations. During the three months ended September 30, 2024, Americas income from operations decreased by $21 million or 24% (19% on a constant currency basis), primarily due to higher depreciation expense and other costs to support business growth, partially offset by higher revenues as a result of our IBX data center expansion activity and organic growth, as described above.

Previous wording

EMEA Income from Operations. During the six months ended June 30, 2024, EMEA income from operations increased by $5 million or 1% (4% on a constant currency basis), primarily due to higher revenues as a result of IBX data center expansion activity and organic growth, as described above.

Current wording

EMEA Income from Operations. During the three months ended September 30, 2024, EMEA income from operations increased by $50 million or 30% (26% on a constant currency basis), primarily due to higher revenues as a result of IBX data center expansion activity and organic growth, and lower utilities costs as described above.

Previous wording

Asia-Pacific Income from Operations. During the six months ended June 30, 2024, Asia-Pacific income from operations increased by $85 million or 38% (44% on a constant currency basis), primarily due to higher revenues as a result of non-recurring services provided to our joint ventures and lower utility costs, as described above.

Current wording

Asia-Pacific Income from Operations. During the three months ended September 30, 2024, Asia-Pacific income from operations increased by $15 million or 12% (14% on a constant currency basis), primarily due to higher revenues as a result of non-recurring services provided to our joint ventures and IBX data center expansion activity, partially offset by increased costs to provide non-recurring services, as described above.

Previous wording

Interest Income. Interest income was $53 million, with an annualized yield of 6.07%, for the six months ended June 30, 2024 and was $43 million, with an annualized yield of 3.61% for the six months ended June 30, 2023. The increase was primarily due to interest income earned on the AMER 2 Loan. See Note 4 within the Condensed Consolidated Financial Statements.

Current wording

Interest Income. Interest income was $35 million, with an annualized yield of 5.32%, for the three months ended September 30, 2024 and was $23 million, with an annualized yield of 3.93%, for the three months ended September 30, 2023. The increase was primarily due to interest income earned on time deposits as well as on the AMER 2 Loan further described in Note 5 within the Condensed Consolidated Financial Statements.

Previous wording

Interest Expense. Interest expense increased to $110 million for the three months ended June 30, 2024 from $100 million for the three months ended June 30, 2023, primarily due to the issuance of 2.875% Swiss Franc Senior Notes due 2028 in the third quarter of 2023 and the issuance of 5.500% Senior Notes due 2034 in the current quarter. During the three months ended June 30, 2024 and 2023, we capitalized $9 million and $6 million, respectively, of interest expense to construction in progress. See Note 8 within the Condensed Consolidated Financial Statements.

Current wording

Interest Expense. Interest expense increased to $117 million for the three months ended September 30, 2024 from $102 million for the three months ended September 30, 2023, primarily due to debt issuances in 2024, including 5.500% Senior Notes due 2034, 3.650% Euro Senior Notes due 2033 and 1.558% Swiss Franc Senior Notes due 2029. During the three months ended September 30, 2024 and 2023, we capitalized $9 million and $6 million, respectively, of interest expense to construction in progress. See Note 9 within the Condensed Consolidated Financial Statements.

Previous wording

Other Expense. We did not record a significant amount of other expense during the three months ended June 30, 2024 and 2023.

Current wording

Other Income or Expense. We did not record a significant amount of other income or expense during the three months ended September 30, 2024 and 2023.

Previous wording

For the three months ended June 30, 2024 and 2023, we recorded $47 million and $37 million of income tax expense, respectively. Our effective tax rates were 13.5% and 15.3% for the three months ended June 30, 2024 and 2023, respectively. The decrease in the effective tax rate for the three months ended June 30, 2024 as compared to the same period in 2023 was mainly driven by the full valuation allowance position of our U.S. TRSs, resulting from losses in the prior period.

Current wording

For the three months ended September 30, 2024 and 2023, we recorded $54 million and $20 million of income tax expense, respectively. Our effective tax rates were 15.4% and 6.8% for the three months ended September 30, 2024 and 2023, respectively. The increase in the effective tax rate for the three months ended September 30, 2024 as compared to the same period in 2023 was primarily due to the reversal of uncertain tax positions of approximately $13 million in 2023 resulting from the settlement of tax audits in the EMEA region.

Previous wording

Americas Adjusted EBITDA. During the three months ended June 30, 2024, Americas adjusted EBITDA increased by $58 million or 15% (and also 15% on a constant currency basis), primarily due to higher revenues as a result of non-recurring services provided to our joint ventures, IBX data center expansion activity and organic growth, as described above.

Current wording

Americas Adjusted EBITDA. During the three months ended September 30, 2024, Americas adjusted EBITDA increased by $22 million or 5% (7% on a constant currency basis), primarily due to higher revenues as a result of IBX data center expansion activity and organic growth, partially offset by an increase in costs to support business growth, as described above.

Previous wording

EMEA Adjusted EBITDA. During the six months ended June 30, 2024, EMEA adjusted EBITDA increased by $30 million or 5% (and also 5% on a constant currency basis), primarily due to higher revenues as a result of IBX data center expansion activity and organic growth, as described above.

Current wording

EMEA Adjusted EBITDA. During the three months ended September 30, 2024, EMEA adjusted EBITDA increased by $62 million or 20% (19% increase on a constant currency basis), primarily due to higher revenues as a result of our IBX data center expansion activity and organic growth, and lower utilities costs as described above.

Previous wording

Asia-Pacific Adjusted EBITDA. During the three months ended June 30, 2024, Asia-Pacific adjusted EBITDA increased by $48 million or 23% (28% increase on a constant currency basis), primarily due to higher revenues as a result of non-recurring services provided to our joint ventures and lower utility costs, as described above.

Current wording

Asia-Pacific Adjusted EBITDA. During the three months ended September 30, 2024, Asia-Pacific adjusted EBITDA increased by $28 million or 13% (14% increase on a constant currency basis), primarily due to higher revenues as a result of non-recurring services provided to our joint ventures and IBX data center expansion activity, partially offset by increased costs to provide non-recurring services, as described above.

Previous wording

Revenues. Our revenues for the six months ended June 30, 2024 and 2023 were generated from the following revenue classifications and geographic regions ($ in millions):

Current wording

Revenues. Our revenues for the nine months ended September 30, 2024 and 2023 were generated from the following revenue classifications and geographic regions ($ in millions):

Previous wording

Americas Revenues. During the three months ended June 30, 2024, Americas revenues increased by $76 million or 9% (and also 9% on a constant currency basis). Growth in Americas revenues was primarily due to:

Current wording

Americas Revenues. During the nine months ended September 30, 2024, Americas revenues increased by $178 million or 7% (and also 7% on a constant currency basis). Growth in Americas revenues was primarily due to:

Previous wording

EMEA Revenues. During the six months ended June 30, 2024, EMEA revenues increased by $70 million or 5% (6% on a constant currency basis). Growth in EMEA revenues was primarily due to an increase in orders from both our existing customers and new customers during the period and approximately $17 million of incremental revenues generated from IBX data centers which opened within the twelve months ended June 30, 2024.

Current wording

EMEA Revenues. During the nine months ended September 30, 2024, EMEA revenues increased by $104 million or 5% (and also 5% on a constant currency basis). The increase in EMEA revenues was primarily due to an increase in orders from both our existing customers and new customers during the period and approximately $19 million of incremental revenues generated from IBX data centers which opened within the twelve months ended September 30, 2024.

Previous wording

Asia-Pacific Revenues. During the six months ended June 30, 2024, Asia-Pacific revenues increased by $66 million or 8% (12% on a constant currency basis). Growth in Asia-Pacific revenues was primarily due to:

Current wording

Asia-Pacific Revenues. During the nine months ended September 30, 2024, Asia-Pacific revenues increased by $127 million or 10% (13% on a constant currency basis). Growth in Asia-Pacific revenues was primarily due to:

Previous wording

Cost of Revenues. Our cost of revenues for the six months ended June 30, 2024 and 2023 by geographic regions was as follows ($ in millions):

Current wording

Cost of Revenues. Our cost of revenues for the nine months ended September 30, 2024 and 2023 by geographic regions was as follows ($ in millions):

Previous wording

Americas Cost of Revenues. During the six months ended June 30, 2024, Americas cost of revenues increased by $71 million or 9% (and also 9% on a constant currency basis). The increase in our Americas cost of revenues was primarily due to:

Current wording

Americas Cost of Revenues. During the nine months ended September 30, 2024, Americas cost of revenues increased by $99 million or 8% (9% on a constant currency basis). The increase in our Americas cost of revenues was primarily due to:

Previous wording

•$12 million of higher utilities costs, primarily driven by increases in power costs and higher utility usage.

Current wording

•$19 million of higher utilities costs, primarily driven by increases in power costs and higher utility usage;

Previous wording

Asia-Pacific Cost of Revenues. During the six months ended June 30, 2024, Asia-Pacific cost of revenues decreased by $20 million or 4% (0% on a constant currency basis). The decrease in our Asia-Pacific cost of revenues was primarily due to lower utilities costs, driven by decreases in power costs and lower utility usage in Hong Kong, Japan and Singapore.

Current wording

The increase was partially offset by lower utilities costs, driven by decreases in power costs and lower utility usage in Hong Kong, Japan and Singapore.

Previous wording

Sales and Marketing Expenses. Our sales and marketing expenses for the six months ended June 30, 2024 and 2023 by geographic regions were as follows ($ in millions):

Current wording

Sales and Marketing Expenses. Our sales and marketing expenses for the nine months ended September 30, 2024 and 2023 by geographic regions were as follows ($ in millions):

Previous wording

EMEA Sales and Marketing Expenses. Our EMEA sales and marketing expense did not materially change during the six months ended June 30, 2024 as compared to the six months ended June 30, 2023.

Current wording

EMEA Sales and Marketing Expenses. Our EMEA sales and marketing expense did not materially change during the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023.

Previous wording

Americas Sales and Marketing Expenses. During the six months ended June 30, 2024, Americas sales and marketing expenses increased by $20 million or 7% (and also 7% on a constant currency basis). The increase in our Americas sales and marketing expenses was primarily due to an increase in compensation costs including salaries, bonuses and stock-based compensation, attributable to headcount growth.

Current wording

Asia-Pacific Sales and Marketing Expenses. During the nine months ended September 30, 2024, Asia-Pacific sales and marketing expense increased by $12 million or 15% (17% on a constant currency basis). The increase in our Asia-Pacific sales and marketing expenses was primarily due to an increase in bad debt expense and compensation costs including salaries, bonuses and stock-based compensation, attributable to headcount growth.