Iron Mountain Conference Call Summary Company Overview - **Company**: Iron Mountain (NYSE: IRM) - **Date of Conference**: September 16, 2025 Key Industry Insights Records and Information Management (RIM) - RIM constitutes over 70% of Iron Mountain's business, maintaining strong pricing and volume growth despite being a slower-growing segment [4][5] - The company has achieved mid to upper single-digit revenue management or pricing action in RIM, with volume growth between 20 to 100 basis points per quarter [6] Growth Portfolio - The growth portfolio, including Asset Lifecycle Management, Data Centers, and Digital Solutions, has driven approximately 6% consolidated growth in top-line and bottom-line [5] - The growth portfolio is collectively growing in excess of 20% and is expected to continue [9] Data Centers - Iron Mountain has secured significant power capacity for future data center expansions, with plans to bring online 450 megawatts over the next 12 to 36 months [14] - The data center business is projected to approach $800 million in revenue for 2025, with expectations to exceed $1 billion in 2026 [19] - The company has seen a shift in customer focus back to their core data center offerings, moving away from large language model campuses [12][15] Asset Lifecycle Management (ALM) - ALM is primarily project-based, with significant growth potential as data center decommissioning increases due to the lifecycle of equipment [20] - There is a strong cross-sell opportunity between the core enterprise storage business and ALM, with only single-digit percentage crossover currently [21] Financial Performance Margins and Growth - The global RIM business has high incremental margins of 70% to 80%, while the Data Centers business has recently achieved EBITDA margins of over 50% [8] - Renewal spreads in the Data Centers business have been favorable, with increases of 10% to 20% [26] Capital Expenditure and Funding Strategy - Iron Mountain's capital-light core business generates substantial cash flow, allowing for funding of growth initiatives without excessive leverage [29] - The company has utilized sale-leasebacks and asset-level financing to support capital needs [29] Government Contracts - Iron Mountain has secured a five-year contract with the U.S. Department of Treasury for digitization of tax returns, valued at approximately $140 million [31][32] - The contract is expected to ramp up in volume, particularly during tax season, although no guidance has been provided for this year [33] Additional Considerations - The company emphasizes the importance of securing power for data centers, noting that it has become a significant constraint in recent years [28] - The decision cycle for data center leases remains stable, although there is a trend away from long-term commitments [16][18] This summary encapsulates the key points discussed during the Iron Mountain conference call, highlighting the company's strategic focus, financial performance, and growth opportunities within the industry.

Core Insights - Iron Mountain has transformed its business model to include high-growth sectors such as data centers, asset life cycle management, and digital solutions, which synergize with its legacy Records Information Management services [1][2] - The company boasts a client base of 240,000, with a customer retention rate exceeding 99%, indicating strong client loyalty and trust [1] Business Strategy - The company has strategically invested in areas that allow for future growth, focusing on cross-selling opportunities within its established client base [2] - The approach is built on a foundation of consistent revenue generation and strong service delivery, which clients have come to depend on [2]

Core Insights - Iron Mountain has transformed its business model to include high-growth sectors such as data centers, asset life cycle management, and digital solutions, which synergize with its legacy Records Information Management services [1][2] - The company boasts a client base of 240,000, with a customer retention rate exceeding 99%, indicating strong client loyalty and trust [1] Business Strategy - The company has strategically invested in areas that allow for future growth, focusing on cross-selling opportunities within its established client base [2] - The approach is built on a foundation of consistent revenue generation and strong service delivery, which clients have come to depend on [2]

Iron Mountain (NYSE:IRM) 2025 Conference Summary Company Overview - **Company**: Iron Mountain - **Date**: September 09, 2025 - **Speaker**: Barry Hytinen, CFO Key Points Industry and Business Transformation - Iron Mountain has diversified into high-growth sectors such as Data Centers, Asset Lifecycle Management (ALM), and Digital Solutions, alongside its legacy Records and Information Management services [3][4] - The company serves a client base of 240,000 with a customer retention rate exceeding 99% [3] Growth Metrics - Digital Solutions business is currently at a run rate of over $500 million, growing at a 20% CAGR [4] - ALM revenue was $38 million in 2021, projected to reach approximately $575 million this year, with 40% organic growth and 70% total growth last quarter [4][5] - Data Center revenue is expected to approach $800 million this year, with significant margin improvements [9][10] Market Opportunities - The market for Asset Lifecycle Management is fragmented, with many small vendors, presenting consolidation opportunities [6] - Data center business has 450 megawatts of operational capacity, with 98% leased, and an additional 200 megawatts under construction [10] Revenue Growth Projections - The growth portfolio (Data Centers, Digital Solutions, ALM) is expected to account for 25-28% of total revenue, up from 8-9% six years ago [11] - Data Center business is projected to grow by approximately 25% next year based on existing backlog [12] Legacy Business Performance - The legacy Records and Information Management business has shown slight positive organic growth, attributed to high customer retention and ongoing consolidation of share [20][21] - Average box lifecycle is 15 years, with slight annual growth expected [20][24] Revenue Management Program - The revenue management program has been in place for nine years, yielding mid to high single-digit growth from pricing increases [25][26] - The program is expected to remain sustainable, with minimal elasticity observed in client volume despite pricing actions [28][32] Data Center Business Insights - Data Center business grew 26% organically in Q2, with guidance for nearly 30% growth in the second half of the year [33] - The company has a high visibility on revenue generation due to signed leases from previous years [34][35] Challenges and Adjustments - A reduction in data center signings was noted, attributed to a shift in demand towards inference rather than large-scale AI training deployments [42][44] - The company anticipates a turnaround in leasing activity in the second half of the year [44] Asset Lifecycle Management Performance - ALM revenue growth was 42% year-over-year organically, with three-quarters of growth driven by volume [46] - Pricing in the ALM sector is expected to remain consistent, benefiting from increased demand in the secondary market [47] Digital Solutions and Government Contracts - The company is awaiting a decision from the U.S. Treasury Department on a five-year contract, currently operating on a month-to-month agreement [48][49] - There are ongoing efforts to pitch smaller opportunities to the government, which could provide additional growth [51] Capital Expenditure Trends - Iron Mountain plans to spend around $2 billion in CapEx this year, primarily for data center growth initiatives [52] - Future CapEx is expected to stabilize or slightly increase, depending on leasing activity [54][55] Conclusion Iron Mountain is strategically positioned for growth across its diversified business segments, with strong revenue projections and a focus on leveraging existing client relationships. The company is navigating challenges in the data center market while maintaining a robust performance in its legacy business and emerging sectors.

Core Insights - Iron Mountain Incorporated (IRM) shares have increased by 10.6% over the past six months, contrasting with a 5.2% decline in the industry [1][8] - The company benefits from strong cash flows in its storage and records management business, alongside a focus on the data center business, which supports growth [1][5] - Strategic acquisitions are being utilized to supplement organic growth [1][6] Financial Performance - In the second quarter, Iron Mountain reported adjusted funds from operations (AFFO) per share of $1.24, exceeding the Zacks Consensus Estimate of $1.19, and reflecting a year-over-year increase of 14.8% [2] - The company achieved a retention rate of 93% in its records management business during the second quarter of 2025 [4] - The Zacks Consensus Estimate for 2025 AFFO per share has been revised upward by 1.6% to $5.09 [3] Business Segments - The storage and records management business generates a steady stream of recurring revenues, primarily from monthly storage rental fees [4] - Data center revenues grew by 24% in Q2 2025, with a total operating portfolio of 450 MW that was 96% leased, and management anticipates nearly 30% growth in data center revenues for 2025 [5][8] Expansion Strategy - Iron Mountain is pursuing an aggressive expansion strategy that includes acquisitions and developments to enhance organic growth in storage revenues [6] - The company is also focusing on capital recycling through monetizing non-core assets and engaging in joint ventures and sale-leaseback transactions [6][9] Financial Health - As of June 30, 2025, Iron Mountain maintained a strong balance sheet with a weighted-average maturity of 4.5 years and a net lease-adjusted leverage of 5.0X, the lowest since its REIT conversion in 2014 [10] - The company announced a 10.6% increase in its cash dividend to 78.5 cents per share, supported by healthy operating performance and projected AFFO growth of 11.9% for 2025 [11]

Core Insights - Iron Mountain (IRM) is positioned to benefit from a recurring revenue model and expansion in the data center segment, supported by a strong balance sheet [1][5] - The company faces challenges from competition and high interest expenses [1][6][7] Revenue Performance - Iron Mountain's core storage and records management business generates steady recurring revenues, with organic storage rental revenues increasing by 9.2% year-over-year in Q2 2025, and an estimated 10.2% growth for the full year [2][8] - The Global Data Center Business achieved a revenue growth of 24% in Q2 2025, with projected data center revenues of nearly $800 million for 2025, indicating approximately 30% year-over-year growth [4][8] Expansion Efforts - The company is expanding its data center segment, including a strategic partnership with Ooredoo Group to acquire a minority stake in MENA Digital Hub, enhancing its capabilities in connectivity and colocation [3] - Iron Mountain's data center operating portfolio is expected to nearly triple from 450 MW to 1.3 GW once fully developed [4] Financial Position - As of June 30, 2025, Iron Mountain maintained a strong balance sheet with a net lease-adjusted leverage of 5.0X, the lowest since its REIT conversion in 2014 [5][8] - The company has a weighted-average maturity of 4.5 years, providing financial flexibility for growth opportunities [5] Competitive Landscape - The records and information management services industry is highly fragmented, leading to significant competition that may pressure margins due to aggressive pricing [6] - Despite a recent announcement of rate cuts by the Federal Reserve, high interest rates remain a concern, with a projected 13.2% increase in net interest expenses for 2025 [7]

Core Viewpoint - Iron Mountain Incorporated (NYSE: IRM) is rated as a hold for real estate investment trust (REIT) investors seeking long-term buy-and-hold investments, despite its strong performance in recent years [1]. Group 1 - The company has experienced significant growth over the past few years, indicating a positive trend in its performance [1]. - The valuation of Iron Mountain is a key consideration for investors, suggesting that while the company has performed well, its current valuation may warrant caution [1].

[PART I—FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%E2%80%94FINANCIAL%20INFORMATION) [ITEM 1. Unaudited Condensed Consolidated Financial Statements](index=4&type=section&id=ITEM%201.%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Unaudited condensed consolidated financial statements for Q2 2025 reflect revenue growth but a net loss, driven by increased operating expenses and foreign currency losses, with accompanying notes detailing key accounting policies and segment performance [Condensed Consolidated Financial Statements](index=5&type=section&id=Condensed%20Consolidated%20Financial%20Statements) Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Current Assets | $1,897,248 | $1,691,222 | | Total Assets | $20,176,789 | $18,717,115 | | Total Current Liabilities | $2,998,772 | $3,087,275 | | Long-term Debt, net | $14,818,175 | $13,003,977 | | Total Liabilities | $20,747,654 (Calculated) | $19,043,618 (Calculated) | | Total (Deficit) Equity | $(568,867) | $(304,674) | Condensed Consolidated Statements of Operations Highlights (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Total Revenues | $1,711,948 | $1,534,409 | $3,304,477 | $3,011,272 | | Operating Income | $259,896 | $230,294 | $514,190 | $475,917 | | Net (Loss) Income Attributable to Iron Mountain | $(44,921) | $35,783 | $(28,969) | $109,844 | | Diluted (Loss) Income Per Share | $(0.15) | $0.12 | $(0.10) | $0.37 | Condensed Consolidated Statements of Cash Flows Highlights (Six Months Ended June 30, in thousands) | Cash Flow Category | 2025 | 2024 | | :--- | :--- | :--- | | Cash Flows from Operating Activities | $572,425 | $512,215 | | Cash Flows from Investing Activities | $(1,350,810) | $(959,748) | | Cash Flows from Financing Activities | $882,868 | $369,291 | | Increase (Decrease) in Cash | $62,276 | $(78,533) | | Cash and Cash Equivalents, End of Period | $217,992 | $144,256 | [Notes to Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) - Goodwill increased from **$5.08 billion** at year-end 2024 to **$5.23 billion** as of June 30, 2025, primarily due to currency effects of **$129.8 million**[34](index=34&type=chunk) - Foreign currency transaction losses were a significant component of Other Expense (Income), Net, totaling **$87.2 million** for Q2 2025 and **$116.8 million** for the six months ended June 30, 2025, primarily due to the impact of changes in the British pound sterling and Euro exchange rates on intercompany balances[49](index=49&type=chunk) Segment Revenue (Six Months Ended June 30, in thousands) | Segment | 2025 | 2024 | | :--- | :--- | :--- | | Global RIM Business | $2,579,740 | $2,460,734 | | Global Data Center Business | $362,598 | $296,639 | | Corporate and Other | $362,139 | $253,899 | | **Total Consolidated** | **$3,304,477** | **$3,011,272** | - Under its "Project Matterhorn" transformation program, the company incurred **$105.1 million** in restructuring and other transformation costs in the first six months of 2025, with total costs reaching approximately **$483.6 million** since inception in September 2022, and the program is expected to be completed by the end of 2025[83](index=83&type=chunk)[84](index=84&type=chunk) [ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=30&type=section&id=ITEM%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses a 9.7% revenue increase for H1 2025, noting a net loss due to foreign currency, but strong Adjusted EBITDA growth of 13.6% and margin expansion, alongside segment performance, liquidity, and debt modifications [Results of Operations](index=35&type=section&id=Results%20of%20Operations) Revenue Growth Analysis (Six Months Ended June 30, 2025 vs 2024) | Revenue Type | Actual Growth | Constant Currency Growth | Organic Growth | | :--- | :--- | :--- | :--- | | Storage Rental | 8.5% | 9.0% | 9.0% | | Service | 11.6% | 12.0% | 8.4% | | **Total Revenues** | **9.7%** | **10.2%** | **8.8%** | - For the six months ended June 30, 2025, the company reported a **Net Loss of $27.1 million**, a significant decrease from a **Net Income of $111.6 million** in the prior-year period, largely driven by a **$117.1 million** negative swing in 'Other Expense (Income), Net', primarily from foreign currency losses[108](index=108&type=chunk)[121](index=121&type=chunk) - Despite the net loss, Adjusted EBITDA for the first six months of 2025 increased by **13.6%** to **$1.21 billion**, and the Adjusted EBITDA Margin improved by **130 basis points** to **36.6%**, driven by favorable overhead management[126](index=126&type=chunk)[127](index=127&type=chunk) [Segment Analysis](index=41&type=section&id=Segment%20Analysis) - **Global RIM Business:** For the first six months of 2025, segment revenue grew **4.8%** to **$2.58 billion**, driven by revenue management, and Segment Adjusted EBITDA Margin increased by **60 basis points** to **44.3%**[129](index=129&type=chunk)[132](index=132&type=chunk) - **Global Data Center Business:** For the first six months of 2025, segment revenue grew **22.2%** to **$362.6 million**, driven by new lease commencements and improved pricing, with Segment Adjusted EBITDA Margin expanding significantly by **860 basis points** to **51.6%**[133](index=133&type=chunk)[136](index=136&type=chunk) - **Corporate and Other:** For the first six months of 2025, revenue grew **42.6%** to **$362.1 million**, primarily driven by a **$43.5 million** contribution from recent acquisitions in the ALM business and organic growth from increased volume[137](index=137&type=chunk) [Liquidity and Capital Resources](index=44&type=section&id=Liquidity%20and%20Capital%20Resources) - Cash flow from operating activities increased by **$60.2 million** to **$572.4 million** for the first six months of 2025 compared to the prior year, mainly due to favorable working capital changes[141](index=141&type=chunk)[142](index=142&type=chunk) Capital Expenditures (Six Months Ended June 30, in thousands) | Category | 2025 | 2024 | | :--- | :--- | :--- | | Growth Investment Capital | $1,070,567 | $699,046 | | Recurring Capital | $62,877 | $65,713 | | **Total Capital Spend (accrual)** | **$1,133,444** | **$764,759** | - The company expects total capital expenditures of approximately **$1.95 billion** for the full year 2025, with **$1.8 billion** allocated for growth investments[145](index=145&type=chunk) - The company amended its Credit Agreement to increase its Term Loan A principal to **$500 million** and amended its AUD Term Loan to increase its principal to **400 million Australian dollars** and extend its maturity to 2030[151](index=151&type=chunk)[152](index=152&type=chunk) [ITEM 4. Controls and Procedures](index=49&type=section&id=ITEM%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting during the quarter - Based on an evaluation as of June 30, 2025, the CEO and CFO concluded that the company's disclosure controls and procedures are effective[164](index=164&type=chunk) - There were no changes in internal control over financial reporting during the quarter ended June 30, 2025, that have materially affected or are reasonably likely to materially affect these controls[166](index=166&type=chunk) [PART II—OTHER INFORMATION](index=51&type=section&id=PART%20II%E2%80%94OTHER%20INFORMATION) [ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=51&type=section&id=ITEM%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Iron Mountain did not sell any unregistered equity securities or repurchase common stock during the three months ended June 30, 2025 - No unregistered equity securities were sold during Q2 2025[169](index=169&type=chunk) - No shares of common stock were repurchased during Q2 2025[169](index=169&type=chunk) [ITEM 5. Other Information](index=51&type=section&id=ITEM%205.%20Other%20Information) No director or officer adopted, modified, or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during Q2 2025 - No director or officer adopted, modified, or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement in Q2 2025[170](index=170&type=chunk) [ITEM 6. Exhibits](index=51&type=section&id=ITEM%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including corporate governance documents, amendments to the stock incentive plan and credit agreement, and CEO/CFO certifications - Key exhibits filed include the Fourth Amendment to the 2014 Stock and Cash Incentive Plan and Amendment No. 6 to the Credit Agreement, dated June 18, 2025[172](index=172&type=chunk)

Core Viewpoint - Iron Mountain (IRM) has been upgraded to a Zacks Rank 2 (Buy), indicating a positive trend in earnings estimates which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system is based on changes in a company's earnings picture, which is crucial for predicting near-term stock price movements [2][4]. - An increase in earnings estimates typically leads to higher fair value calculations by institutional investors, resulting in buying or selling pressure that affects stock prices [4]. Iron Mountain's Earnings Outlook - The recent upgrade for Iron Mountain reflects an improvement in its underlying business, which is expected to drive the stock price higher as investors respond positively to this trend [5][10]. - The Zacks Consensus Estimate for Iron Mountain indicates an expected earnings per share of $5.01 for the fiscal year ending December 2025, with a 1.5% increase in estimates over the past three months [8]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a strong historical performance, particularly for Zacks Rank 1 stocks which have averaged a +25% annual return since 1988 [7]. - The upgrade of Iron Mountain to a Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, suggesting potential for market-beating returns in the near term [10].

Core Insights - Iron Mountain Incorporated (IRM) reported second-quarter adjusted funds from operations (AFFO) per share of $1.24, exceeding the Zacks Consensus Estimate of $1.19, marking a year-over-year increase of 14.8% [1][9] - The company's total revenues for the quarter reached $1.71 billion, surpassing the Zacks Consensus Estimate of $1.68 billion, and reflecting an 11.6% year-over-year growth [3][9] - IRM raised its full-year 2025 guidance for AFFO per share to a range of $5.04 to $5.13, up from the previous range of $4.95 to $5.05 [10] Financial Performance - Storage rental revenues amounted to $1,010 million, a 9.8% increase year over year, while service revenues rose 14.2% to $702 million [5] - The Global RIM business reported revenues of $1,323.8 million, growing 5.9% year over year, and the Global Data Center business saw revenues of $189.4 million, up 24% year over year [5][6] - Adjusted EBITDA increased by 15.4% year over year to $628.4 million, with an adjusted EBITDA margin expansion of 120 basis points to 36.7% [6] Balance Sheet and Cash Flow - As of June 30, 2025, IRM had cash and cash equivalents of $218 million, an increase from $155.3 million as of March 31, 2025 [7] - The company reported net debt of $15.48 billion, up from $14.87 billion as of March 31, 2025, with a weighted average interest rate of 5.7% [7] Dividend Announcement - Concurrently with the earnings release, IRM announced a cash dividend of 78.5 cents per share for the third quarter of 2025, payable on October 3 to shareholders on record as of September 15, 2025 [8] Guidance Revision - The revenue outlook for 2025 has been revised to a range of $6.79 billion to $6.94 billion, up from the previous range of $6.74 billion to $6.89 billion [11] - Adjusted EBITDA for 2025 is now anticipated to be between $2.52 billion and $2.57 billion, an increase from the prior range of $2.51 billion to $2.56 billion [11]