Iron Mountain(US:IRM)2025-11-05 21:13Financial 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].