Core Viewpoint - The presentation features Barry Hytinen, EVP and CFO of Iron Mountain, highlighting his experience and the company's focus on business and information services [1][2]. Company Overview - Barry Hytinen has been with Iron Mountain for approximately 6 years, indicating stability in leadership [1]. Industry Context - The event is part of a broader engagement with industry leaders, showcasing the importance of executive insights in understanding market dynamics [2].

Summary of Iron Mountain Conference Call Company Overview - **Company**: Iron Mountain - **Key Speaker**: Barry Hytinen, EVP and CFO Industry Insights - **Growth Portfolio**: - Growth businesses have increased from 15% of revenues in 2021 to approximately 28% in 2023, with an exit rate potentially reaching 30% [3][4] - Key areas of growth include digital solutions, data centers, and asset lifecycle management (ALM) [3][4] Core Business Highlights - **Digital Solutions**: - The digital business unit has evolved into a software as a service platform called DXP, which enhances cost savings and efficiencies for clients [5][6] - The platform is designed to convert unstructured data into structured formats, with applications across various client sectors [6] - **Data Center Business**: - Initially started with secure co-location services, now expanded significantly as clients shift workloads to the cloud [7][8] - The data center segment is experiencing continuous growth, driven by client demand for secure and efficient data management solutions [8] - **Asset Lifecycle Management (ALM)**: - ALM revenue grew from $38 million in 2021 to an estimated $600 million in 2023, indicating a strong market opportunity [9][10] - The total addressable market (TAM) for ALM is estimated at $30 billion, with Iron Mountain being the leading player [11][12] - The enterprise segment of ALM is growing at mid to high single digits, while the hyperscale segment is experiencing high single to low double-digit growth [13][18] Market Dynamics - **ALM Market Size**: - The enterprise ALM segment constitutes approximately 75% of the $30 billion TAM, while hyperscale accounts for 25% [12][15] - Iron Mountain holds about 60% of its ALM revenue from the enterprise segment, significantly outpacing competitors [13][14] - **Data Center Construction**: - Iron Mountain does not build on speculation; current construction projects are based on signed leases with large clients [22][23] - The company has a notable amount of construction in progress, with significant projects in Northern Virginia, Madrid, Amsterdam, and London [25][26] Recent Contracts and Opportunities - **U.S. Treasury Contract**: - Iron Mountain secured a $714 million contract over five years to assist the U.S. Treasury in digitizing tax processing, expected to ramp up during tax season [30][32] - The contract positions Iron Mountain favorably for future government contracts and showcases the capabilities of its DXP platform [35][36] Financial Performance and Strategy - **Retention Rates**: - The core Global Records and Information Management (RIM) business has seen a modest uptick in retention rates despite price increases, indicating strong client relationships [39][40] - **Capital Allocation**: - Iron Mountain has significantly increased capital deployment, particularly in the data center segment, with expectations of strong revenue growth [42][43] - The company maintains a dividend payout ratio target of low 60% of AFFO, with a history of consistent dividend increases [45][46] Key Takeaways - **Durability of Core Business**: The core business remains stable and capital-light, allowing for continued growth with minimal capital investment [49] - **ALM Growth**: The ALM segment is experiencing robust growth, with a focus on consolidation and providing consistent service globally [50] Conclusion Iron Mountain is strategically positioned for growth across its digital solutions, data center, and ALM segments, with a strong focus on client needs and market consolidation. The recent contract with the U.S. Treasury further enhances its growth prospects and showcases its capabilities in digital transformation.

Group 1 - Baron Real Estate Fund delivered a strong performance in Q3 2025, appreciating 10.25% compared to the MSCI US REIT Index's 4.49% and the MSCI USA IMI Extended Real Estate Index's 5.65% [1] - The fund highlighted Iron Mountain Incorporated (NYSE:IRM) as a new REIT position, citing its compelling valuation and attractive long-term growth prospects [3] - Iron Mountain's revenue increased by 13% to $1.8 billion in Q3 2025, indicating strong operational performance [4] Group 2 - Iron Mountain's stock experienced a one-month return of -4.36% and a 52-week loss of 12.79%, closing at $101.15 per share with a market capitalization of $29.899 billion on November 11, 2025 [2] - Despite acknowledging Iron Mountain's potential, the company believes certain AI stocks present greater upside potential and less downside risk [4] - Iron Mountain is not among the 30 most popular stocks among hedge funds, with 47 hedge fund portfolios holding its shares at the end of Q2 2025, up from 40 in the previous quarter [4]

Core Insights - Iron Mountain Incorporated (IRM) is a global leader in information management with a market cap of $30.2 billion, specializing in secure storage and management of physical and digital assets [1] Financial Performance - For FY2025 Q3, IRM reported a revenue increase of 12.6% year-over-year to $1.75 billion, driven by strong demand in storage and services [4] - Storage rental revenue rose by 10% to $1.03 billion, while service revenue increased by 16% to $721 million [4] - Adjusted EBITDA reached a record $660 million, up 16%, with a margin expansion of 110 basis points [5] - The company's AFFO increased by 17% to $1.32 per share, with analysts projecting a 154.8% year-over-year increase to $4.51 per share for the current fiscal year [5][6] Market Performance - IRM shares have declined by 13.9% over the past year, underperforming the S&P 500 Index, which gained 14.1% [2] - Year-to-date, IRM shares are down 3.8%, compared to the S&P 500's 16.4% return [2] - The company has also struggled against the Real Estate Select Sector SPDR Fund's 4.2% decline over the past 52 weeks [3] Analyst Ratings - Among 11 analysts covering IRM, the consensus rating is a "Moderate Buy," with eight "Strong Buy" ratings, one "Moderate Buy," one "Hold," and one "Strong Sell" [6] - JPMorgan's Andrew Steinerman raised the price target for IRM to $111 from $100, maintaining an "Overweight" rating [7]

Financial Performance - For the nine months ended September 30, 2025, the company reported a net income of $59.1 million, compared to a net loss of $33.7 million for the same period in 2024[107]. - Adjusted EBITDA for the nine months ended September 30, 2025, was $1.87 billion, an increase from $1.63 billion in the same period of 2024, reflecting a growth of approximately 14.5%[107]. - Reported fully diluted earnings per share (EPS) for the three months ended September 30, 2025, was $0.28, compared to a loss of $0.11 for the same period in 2024[110]. - Adjusted EPS for the nine months ended September 30, 2025, was $1.48, up from $1.28 in the same period of 2024[110]. - Net income for the three months ended September 30, 2025, was $86,241, a significant increase of 356.2% from a net loss of $33,665 in the prior year[118]. - For the nine months ended September 30, 2025, total revenues were $5,058,570, a 10.7% increase from $4,568,630 in the same period of 2024[118]. Revenue Growth - Organic storage rental revenue growth is primarily driven by revenue management in the Global RIM Business segment, with stable volume expected in the near term[104]. - The company anticipates continued total revenue and Adjusted EBITDA growth for the remainder of 2025 and into 2026, supported by new product and service offerings[104]. - Storage rental revenue for the three months ended September 30, 2025, was $1,032,897, reflecting a 10.4% increase from $935,701 in the same period of 2024[120]. - Service revenue for the three months ended September 30, 2025, increased by 16.0% to $721,196 compared to $621,657 in the same period of 2024[120]. - The company experienced a $73 million increase in service revenue due to recent acquisitions in its ALM business during the nine months ended September 30, 2025[121]. Costs and Expenses - Total cost of sales for the nine months ended September 30, 2025, was $2,256,980, an increase of $249,364 or 12.4% compared to $2,007,616 in 2024[122]. - Labor costs for the three months ended September 30, 2025, increased by $38,487 or 14.6% to $302,986 from $264,499 in 2024[122]. - Selling, general and administrative expenses for the nine months ended September 30, 2025, totaled $1,055,441, up by $49,209 or 4.9% from $1,006,232 in 2024[124]. - Interest expense, net rose by $82.4 million to $609.5 million for the nine months ended September 30, 2025, compared to $527.1 million in the prior year[131]. - Depreciation expense increased by $65.6 million or 14.0% for the nine months ended September 30, 2025, compared to the prior year[126]. Project Matterhorn - The company incurred approximately $530.9 million in restructuring and transformation costs related to Project Matterhorn from its inception through September 30, 2025[98]. - The company expects to complete Project Matterhorn by December 31, 2025, aiming to optimize its global operating model[98]. Capital Expenditures and Investments - Total capital expenditures for the nine months ended September 30, 2025, amounted to $1,755.4 million, a significant increase from $1,173.9 million in 2024[155]. - Growth investment capital expenditures reached $1,542.4 million, up from $1,072.4 million in the previous year, indicating a 43.7% increase[155]. - The company expects total capital expenditures of approximately $1,950.0 million for the year ending December 31, 2025, with $1,800.0 million allocated for growth investments[155]. Financial Health and Ratios - The net total lease adjusted leverage ratio was 5.0, below the maximum allowable of 7.0, indicating compliance with financial covenants[170]. - The fixed charge coverage ratio stood at 2.5, exceeding the minimum allowable of 1.5, demonstrating strong financial health[170]. Risks and Challenges - The company has faced various risks, including changes in customer preferences and compliance costs related to data privacy and cybersecurity[96]. - The company’s ability to service or refinance its indebtedness is subject to various economic and regulatory factors[171]. Cash Flow and Liquidity - Cash flows from operating activities for the nine months ended September 30, 2025, were $840,001,000, an increase of $74,900,000 compared to $765,128,000 in 2024[151]. - Cash and cash equivalents at the end of the period for September 30, 2025, were $195,210,000, up from $168,515,000 in 2024[151]. Debt and Financing - Long-term debt as of September 30, 2025, totaled $16,193.6 million, with a net long-term debt of $15,494.2 million after accounting for the current portion[159]. - Net proceeds of approximately $1,390.7 million from the issuance of Euro Notes were recorded[166]. - The UK Revolving Credit Facility was fully drawn at 140.0 million British pounds sterling as of September 30, 2025, with an interest rate of 6.1%[165]. Derivative Instruments - The company utilizes interest rate swap agreements to hedge against changes in interest rates on floating rate indebtedness[172]. - Unrealized gains and losses from interest rate and cross-currency swap agreements are recognized as assets and liabilities, respectively, in accumulated other comprehensive items[172][176].

Core Insights - Iron Mountain Incorporated (IRM) reported third-quarter adjusted funds from operations (AFFO) per share of $1.32, exceeding the Zacks Consensus Estimate of $1.29, marking a year-over-year increase of 16.8% [1][9] - Total quarterly revenues reached $1.75 billion, slightly below the Zacks Consensus Estimate of $1.76 billion, but reflecting a year-over-year improvement of 12.6% [2][9] Revenue Breakdown - Storage rental revenues amounted to $1.03 billion, up 10.4% year over year, with an estimated figure of $1.04 billion [3] - Service revenues increased by 16% from the prior-year quarter to $721.2 million, surpassing the estimate of $709.6 million [3] - Global RIM business revenues grew 6.2% year over year to $1.34 billion, slightly below the estimate of $1.36 billion [3] - Global Data Center business reported revenues of $204.1 million, rising 33.2% year over year, exceeding the estimate of $192.1 million [4] Profitability Metrics - Adjusted EBITDA rose 16.2% year over year to $660.4 million, with the adjusted EBITDA margin expanding by 110 basis points to 37.6% [4] - Interest expenses increased by 12.7% year over year to $209.7 million [4] Balance Sheet Position - As of September 30, 2025, the company had $195.2 million in cash and cash equivalents, down from $218 million as of June 30, 2025 [5] - Net debt increased to $16.11 billion from $15.48 billion, with a weighted average interest rate of 5.6% and an average maturity of 4.6 years [5] Dividend Announcement - IRM announced a cash dividend of 86.4 cents per share for the fourth quarter of 2025, representing a 10% increase over the previous dividend, payable on January 6, 2026 [6][9]

Financial Data and Key Metrics Changes - The company reported record financial performance with revenue increasing 13% to $1.8 billion, adjusted EBITDA growing 16% to $660 million, and AFFO rising 18% to $393 million [3][15][24] - Adjusted EBITDA margin improved to 37.6%, up 110 basis points year-on-year, reflecting enhanced margins in data center and asset lifecycle management (ALM) businesses [16][22] - AFFO per share increased 17% to $1.32, marking another all-time quarterly record [16] Business Line Data and Key Metrics Changes - The global records and information management (RIM) business achieved record quarterly revenue of $1.34 billion, up 6% year-on-year, driven by revenue management and higher digital revenue [15][17] - Data center revenue surged 33% year-on-year to $204 million, with organic storage rental growth increasing 32% [18][19] - ALM revenue increased 65% year-on-year to $169 million, with 36% organic growth attributed to strong operational execution [20][21] Market Data and Key Metrics Changes - The data center market remains robust, with leasing activity picking up as hyperscale customers focus on building out inference and cloud capacity [9][34] - The company has a pre-leasing backlog and strong pipeline, with 450 megawatts available for sale over the next 18-24 months [10][41] Company Strategy and Development Direction - The company is focused on sustaining industry-leading revenue and earnings growth, with a portfolio of growth businesses expected to contribute nearly 30% of total revenue by the end of 2025 [5][6] - Recent acquisitions, such as ACT Logistics, are aimed at strengthening market leadership in ALM and expanding capabilities [11][21] - The company is committed to maintaining a strong balance sheet while investing in high-return opportunities that drive double-digit growth [22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustaining data center revenue growth, projecting over 25% growth in 2026 based on currently signed leases [4][10] - The company anticipates continued strong performance in the ALM business, with expectations of approximately $600 million in revenue for the year [30] - Management highlighted the importance of customer relationships and operational execution in driving future growth [6][13] Other Important Information - The board of directors authorized a 10% increase in the quarterly dividend, marking the fourth consecutive year of dividend growth [7][22] - The company secured a significant long-term contract with the U.S. Department of the Treasury valued at up to $714 million, expected to ramp linearly over five years [8][26] Q&A Session Summary Question: Can you talk more about the planned phasing of revenues for the Treasury contract? - Management indicated that the contract will ramp linearly with slight growth, influenced by seasonal tax volumes [26] Question: What are the expectations for the ALM business regarding volume versus price? - Management confirmed strong performance in ALM, with volume-led growth and some increases in component pricing expected to influence future growth rates [30][31] Question: Can you elaborate on the data center pipeline and demand? - Management noted a marked uptick in leasing activity from hyperscale customers, with a strong pipeline for the next 450 megawatts of capacity [34][41] Question: What drives client decisions to shift leasing locations? - Management explained that customer needs dictate such decisions, emphasizing a customer-centric approach [50][54] Question: What are the expectations for volumes and pricing in the RIM storage business? - Management anticipates continued organic volume growth and revenue management actions in the mid-single-digit range [58]

Financial Data and Key Metrics Changes - The company reported record financial performance with revenue increasing 13% to $1.8 billion, Adjusted EBITDA growing 16% to $660 million, and AFFO rising 18% to $393 million [3][14][15] - Adjusted EBITDA margin improved by 110 basis points to 37.6%, reflecting enhanced profitability in the Data Center and Asset Lifecycle Management (ALM) businesses [15][22] Business Line Data and Key Metrics Changes - The global Records and Information Management (RIM) business achieved record quarterly revenue of $1.34 billion, up 6% year-on-year, driven by revenue management and higher digital revenue [15][16] - Data Center revenue increased by 33% year-on-year to $204 million, with organic storage rental growth at 32% [17][18] - ALM revenue surged 65% year-on-year to $169 million, with 36% organic growth attributed to strong operational execution and enterprise volume [19][20] Market Data and Key Metrics Changes - The data center market remains robust, with leasing activity picking up as hyperscale customers focus on building out cloud capacity [9][10] - The company expects over 25% growth in data center revenue for 2026 based on currently signed leases [4][10] Company Strategy and Development Direction - The company is focused on sustaining industry-leading revenue and earnings growth, with a portfolio of growth businesses expected to contribute nearly 30% of total revenue by the end of 2025 [5][6] - Recent acquisitions, such as ACT Logistics, are aimed at strengthening market leadership in ALM and expanding capabilities [11][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining strong revenue growth, supported by a solid pipeline and pre-leasing backlog in the data center segment [10][42] - The company anticipates continued strong performance in the fourth quarter, projecting revenue of approximately $1.8 billion, an increase of 14% year-on-year [22][23] Other Important Information - The board of directors authorized a 10% increase in the quarterly dividend, marking the fourth consecutive year of dividend growth [7][21] - The company has a total addressable market of $165 billion for its services, indicating significant growth opportunities ahead [13] Q&A Session Summary Question: Details on the $714 million contract with the U.S. Department of the Treasury - Management indicated that revenue from the contract will ramp linearly over five years, with seasonal peaks during tax season [25] Question: Insights on the ALM business performance - The ALM business is expected to deliver approximately $600 million in revenue this year, driven by strong enterprise volume and pricing trends [29][30] Question: Data center pipeline and demand outlook - Management noted a marked increase in leasing activity from hyperscale customers, with a strong pipeline for the next 24 months [34][42] Question: Forward-looking CapEx targets - The company plans to gradually increase CapEx in line with the pre-leased backlog and high-return contracts [47][49] Question: Expectations for RIM storage business volumes and pricing - The company anticipates continued organic volume growth in physical storage, with revenue management actions expected to yield mid-single-digit growth [59][61] Question: Revenue mix and gross margin movements - Management confirmed that the sequential decline in gross margins was primarily due to a mix effect, particularly in the data center segment [63]

Financial Data and Key Metrics Changes - The company reported record financial performance with revenue increasing 13% to $1.8 billion, adjusted EBITDA growing 16% to $660 million, and AFFO rising 18% to $393 million [2][15][22] - Adjusted EBITDA margin improved by 110 basis points to 37.6% year-on-year, reflecting enhanced profitability in data center and asset lifecycle management (ALM) businesses [15][21] Business Line Data and Key Metrics Changes - The global records and information management (RIM) business achieved record quarterly revenue of $1.34 billion, up 6% year-on-year, driven by revenue management and higher digital revenue [15][16] - Data center revenue surged 33% year-on-year to $204 million, with organic storage rental growth increasing 32% [17][18] - ALM revenue increased 65% year-on-year to $169 million, with 36% organic growth attributed to strong operational execution and enterprise volume [19][20] Market Data and Key Metrics Changes - The data center market remains robust, with leasing activity and pipeline growth driven by hyperscale customers focusing on cloud capacity [8][9] - The company has a pre-leasing backlog and a strong pipeline, with 450 megawatts available for sale over the next 18-24 months [9][40] Company Strategy and Development Direction - The company aims to sustain industry-leading revenue and earnings growth, with a focus on expanding its growth portfolio, which is expected to contribute nearly 30% of total revenue by the end of 2025 [4][12] - Recent acquisitions, such as ACT Logistics, are intended to strengthen market leadership in ALM and expand geographic footprint [10][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining data center revenue growth, projecting over 25% growth in 2026 based on signed leases [3][9] - The company anticipates continued strong performance in the fourth quarter, with revenue expected to reach approximately $1.8 billion, reflecting a 14% increase year-on-year [21][22] Other Important Information - The board of directors authorized a 10% increase in the quarterly dividend, marking the fourth consecutive year of dividend growth [5][20] - The company secured a significant five-year contract with the U.S. Department of the Treasury valued at up to $714 million, which is expected to ramp linearly with seasonal volume peaks [7][24] Q&A Session Summary Question: Can you talk more about the planned phasing of revenues for the Treasury contract? - Management indicated that the revenue will ramp linearly with slight growth, influenced by tax season volume [24] Question: What are the expectations for the ALM business regarding volume versus price? - Management confirmed strong performance in ALM, with 36% organic growth expected to continue, driven by enterprise volume [28] Question: Can you elaborate on the data center pipeline and demand? - Management noted a marked uptick in demand from hyperscale customers, with a strong pipeline for cloud buildout and inference [31] Question: What drives client decisions to shift leasing locations? - Management explained that customer needs dictate such decisions, emphasizing a customer-centric approach [48][52] Question: What are the expectations for volumes and pricing in the RIM storage business? - Management anticipates continued organic volume growth and mid-single-digit revenue management actions for the upcoming quarter [56]

Core Insights - Iron Mountain (IRM) reported quarterly earnings of $1.32 per share, exceeding the Zacks Consensus Estimate of $1.29 per share, and showing significant growth from $0.42 per share a year ago, resulting in an earnings surprise of +2.33% [1] - The company posted revenues of $1.75 billion for the quarter ended September 2025, slightly missing the Zacks Consensus Estimate by 0.09%, but up from $1.56 billion year-over-year [2] - Iron Mountain has underperformed the market, with shares down about 1.7% year-to-date compared to the S&P 500's gain of 15.1% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $1.37 on revenues of $1.81 billion, and for the current fiscal year, it is $5.09 on revenues of $6.87 billion [7] - The estimate revisions trend for Iron Mountain was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market [6] Industry Context - The Business - Information Services industry, to which Iron Mountain belongs, is currently in the top 41% of over 250 Zacks industries, suggesting a favorable outlook compared to the bottom 50% [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]