Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended September 30, 2024 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition Period from to Commission file number 1-13045 IRON MOUNTAIN INCORPORATED (Exact Name of Registrant as Specified in Its Charter) Delaware 23-2588479 (S ...

Iron Mountain Incorporated (IRM) reported third-quarter 2024 adjusted funds from operations (AFFO) per share of $1.13, beating the Zacks Consensus Estimate of $1.11.Results reflect solid performances in the storage and service segments and the data center business. However, higher interest expenses in the quarter acted as a dampener. The company reaffirmed its outlook for 2024.Quarterly total revenues of $1.56 billion surpassed the Zacks Consensus Estimate by just 0.06%.On a year-over-year basis, AFFO per s ...

Iron Mountain (IRM) reported $1.56 billion in revenue for the quarter ended September 2024, representing a year-over-year increase of 12.2%. EPS of $1.13 for the same period compares to $0.45 a year ago.The reported revenue compares to the Zacks Consensus Estimate of $1.56 billion, representing a surprise of +0.06%. The company delivered an EPS surprise of +1.80%, with the consensus EPS estimate being $1.11.While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- a ...

Core Viewpoint - Iron Mountain Incorporated (IRM) is expected to report third-quarter 2024 results on November 6, with anticipated year-over-year growth in revenues and funds from operations (FFO) per share [1] Financial Performance - In the last reported quarter, IRM delivered a surprise of 1.89% in adjusted FFO per share, driven by strong performances in storage, service segments, and data center business, although higher interest expenses negatively impacted results [2] - Over the trailing four quarters, IRM's FFO per share exceeded the Zacks Consensus Estimate three times, with an average beat of 2.84% [3] Revenue Growth - The third quarter is likely to show gains from core storage and records management operations, with the storage rental segment expected to grow due to effective revenue management and steady volume growth [3] - Demand for traditional services and strong market needs for connectivity and colocation space are likely to have positively impacted service revenue and data center leasing activity [4] Projections - The Zacks Consensus Estimate for storage rental revenues is $928.99 million, up from $858.66 million year-over-year, while service revenues are estimated at $626.76 million, an increase from $529.52 million [6] - Total quarterly revenues are projected at $1.56 billion, reflecting a 12.12% increase from the prior-year quarter [7] - The consensus estimate for quarterly AFFO per share is $1.11, indicating a 12.12% growth from the previous year, while IRM expects AFFO per share of $1.10 [8] Interest Expenses - Interest expenses for the third quarter are estimated to rise by 16.5% year-over-year, which may pose challenges for financing new acquisitions or developments [7][5] Earnings Prediction - The current Earnings ESP for IRM is -0.54%, with a Zacks Rank of 2, indicating that the model does not predict a surprise in FFO per share for this quarter [9][10]

Core Insights - Iron Mountain (IRM) is expected to report quarterly earnings of $1.11 per share, reflecting a 12.1% increase year-over-year, with revenues projected at $1.56 billion, also up 12.1% from the previous year [1] - The consensus EPS estimate has been adjusted upward by 0.2% over the past 30 days, indicating a positive reassessment by analysts [1][2] Revenue Estimates - The consensus estimate for 'Revenues- Storage Rental Revenue' is $928.99 million, indicating an 8.2% year-over-year increase [3] - 'Revenues- Service Revenue' is estimated at $626.76 million, showing an 18.4% increase year-over-year [4] - 'Global Data Center Business- Total Revenues' is projected to be $155.34 million, reflecting a 21.8% increase from the prior year [4] - 'Global Data Center Business- Storage Rental' is expected to reach $149.61 million, indicating a 21% year-over-year increase [5] - 'Global Data Center Business- Service' is forecasted at $5.03 million, suggesting a 29.6% increase year-over-year [5] - 'Corporate and Other- Total Revenues' is estimated to be $127.46 million, reflecting a significant 63.4% increase from the previous year [6] - 'Global RIM Business- Total Revenue' is projected at $1.27 billion, indicating a 7.4% year-over-year increase [6] Service Revenue Estimates - 'Corporate and Other- Service' is expected to reach $112.73 million, indicating an 80.2% increase from the prior year [7] - 'Global RIM Business- Storage Rental' is projected at $766.85 million, reflecting a 6.6% increase year-over-year [7] - 'Corporate and Other- Storage Rental' is estimated to be $16.31 million, indicating a 5.7% increase from the previous year [7] EBITDA and Market Performance - Analysts expect 'Global Data Center Business- Adjusted EBITDA' to be $65.75 million, compared to $53.22 million reported in the same quarter last year [8] - Iron Mountain shares have returned +4.5% over the past month, outperforming the Zacks S&P 500 composite, which saw a -1% change [8]

Core Viewpoint - Iron Mountain Incorporated (IRM) is positioned to benefit from its recurring revenue model and expansion into the data center business, supported by a diversified tenant base and a healthy balance sheet [1][2]. Business Model - IRM operates as a real estate investment trust (REIT) with stable core storage and records management businesses, primarily generating revenue from fixed periodic storage rental fees, ensuring a steady stream of recurring revenues [2][3]. Revenue Growth - In Q2 2024, IRM's organic storage rental revenue increased by 10.1% year-over-year, driven by revenue management in its Global RIM Business and growth in its Global Data Center Business [3][4]. - The company anticipates a year-over-year increase of 9.6% in storage rental revenues for 2024 [3]. Tenant and Revenue Diversification - IRM serves over 240,000 clients across various industries, with no single customer accounting for more than 1% of its revenues in 2023, indicating a well-diversified revenue base [4]. Expansion Efforts - The company is expanding its data center segment to complement its storage performance, with strong demand for connectivity and colocation space expected to drive growth in this area [5][6]. - In the first half of 2024, IRM leased 97 megawatts of data center capacity and now expects to lease 130 megawatts for the year, exceeding its original projection of 100 megawatts [6]. Financial Performance - Over the past three to five years, IRM recorded a funds from operations (FFO) per share growth of 16.32%, significantly outperforming the industry's average of 4.34% [7]. - The Zacks Consensus Estimate for IRM's 2024 FFO per share is $4.49, indicating a 9% year-over-year growth [8]. Balance Sheet and Cash Flow - As of June 30, 2024, IRM maintained a healthy balance sheet with $2.3 billion in total liquidity and no significant debt maturities until 2027, providing financial flexibility for growth [9]. - The company's current cash flow growth is projected at 4.46%, compared to a 4.03% decline for the industry, with a trailing 12-month return on equity of 595.44% [10].

REITs have been in recovery mode. The National Association of Real Estate Investment Trusts (NAREIT) recently released performance data for REITs. The sector has delivered a strong return this year. REITs outperformed the market in the third quarter, rising 16.8%. That continued their strong run over the past year, with the FTSE Nareit All Equity REIT Index rallying 39.1%. That's a strong return for a sector known for paying high-yielding dividends. The average REIT currently yields around 4%, compared to l ...

Core Business Performance - Iron Mountain's shares have increased by 30.1% over the past three months, outperforming the industry growth of 18.6% [1] - The company benefits from stable and resilient core storage and records management businesses, which contribute to its growth trajectory [2] - In Q2 2024, organic storage rental revenues rose by 10.1% year-over-year, driven by revenue management in its Global RIM Business and growth in its Global Data Center Business [6] Revenue and Client Base - Iron Mountain serves over 240,000 clients across various industries, with no single customer accounting for more than 1% of its revenues in 2023, indicating a well-diversified revenue base [7] - The company expects a year-over-year increase of 9.6% in storage rental revenues for 2024, with projected growth of 8.6% and 9.6% for 2025 and 2026, respectively [6] Data Center Expansion - The data center segment achieved a revenue growth of 29.4% in Q2 2024, leasing 66 megawatts of capacity in the quarter [9] - Management has revised its leasing expectations for the year from 100 megawatts to 130 megawatts due to a strong pipeline [9] Financial Strength - Iron Mountain had total liquidity of approximately $2.3 billion as of June 30, 2024, with a weighted average maturity of five years and no significant debt maturities until 2027 [10] - The company's net total lease-adjusted leverage was 5.0X in Q2 2024, the lowest since its REIT conversion in 2014 [10] Dividend Policy - In August 2024, Iron Mountain announced a 10% increase in its cash dividend to 71.5 cents per share, reflecting its commitment to solid dividend payouts [12] - The adjusted AFFO growth projection for 2024 is 9.8%, indicating a sustainable dividend increase given the company's healthy operating platform [12] Analyst Sentiment - Analysts are optimistic about Iron Mountain, with the Zacks Consensus Estimate for 2024 adjusted funds from operations (AFFO) per share revised upward to $4.49 [4]

Core Business Insights - The company identifies its core business as a "financial beast," characterized by a high gross margin of over 70% and the ability to drive mid- to high single-digit growth primarily through pricing strategies [2] - The business is mature and generates significant cash flow with minimal capital expenditures required, enhancing its financial stability [2] Sustainability and Growth - There is a common misconception regarding the sustainability of the business model; however, the company reports that volume remains flat to slightly up, with growth driven mainly by price increases [3] - The company maintains a strong relationship with its customers, as most continue to provide new boxes of documents, indicating ongoing demand for its services [3]

Iron Mountain Incorporated Conference Call Summary Company Overview - **Company**: Iron Mountain Incorporated (NYSE: IRM) - **Date of Conference**: September 24, 2024 - **Participants**: - Bill Meaney - Chief Executive Officer - Barry Hytinen - Chief Financial Officer - Jonathan Atkin - RBC Capital Markets Key Points Core Business Insights - The core business is described as a "financial beast" with a gross margin of over 70% and mid- to high single-digit growth driven primarily by price increases rather than volume growth [4][5] - The company has a stable customer base, with many customers continuing to send new boxes of documents, although some are reducing the volume sent [5][6] - Average pricing for storage has increased from $0.25 to approximately $0.40 per cube, indicating a willingness from customers to pay more for added services and security [7][8] Growth and Market Expansion - The total addressable market has expanded from $10 billion to approximately $150 billion over the past decade, with significant investments made in adjacent areas such as intelligent document processing and data centers [10][12] - India is highlighted as a key growth market, with significant potential for expansion in both physical volume and digital services [15][18] - The company is focusing on highly regulated markets such as healthcare and financial services, which are expected to drive growth [17] Data Center Business - The data center business is experiencing strong demand, with a current operating capacity of 265 megawatts and 97% leased, while under construction is an additional 305 megawatts [28] - The company is focused on building a land bank in India and other parts of Asia, with a bullish outlook on the opportunities in these regions [22][23] - The leasing strategy involves long-term contracts with hyperscalers, which are expected to provide stable revenue streams [29][30] Financial Performance and Projections - The company aims for a 9% annual growth in AFFO per share, translating to similar growth in dividends [12][13] - The asset life cycle management segment is projected to grow significantly, with a target of $900 million by 2026, currently running at sub-$400 million [41][44] - The company is actively pursuing acquisitions in the fragmented asset life cycle management space to enhance growth [43][44] Customer Retention and Market Trends - Customer retention rates remain high, with expectations of low churn and favorable mark-to-market spreads on lease renewals [40] - The company is adapting to changing customer preferences, including different deal structures and financing arrangements to optimize returns [33][36] Conclusion - Iron Mountain is positioned for continued growth through strategic investments, market expansion, and a focus on high-margin services. The emphasis on regulated industries and emerging markets like India, combined with a robust data center strategy, supports a positive outlook for the company's future performance [12][18][22]