Iron Mountain (NYSE:IRM) released first-quarter financial results and hosted an earnings call on Thursday. Read the complete transcript below.
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Access the full call at https://events.q4inc.com/attendee/171810269
Summary
Iron Mountain reported exceptional first-quarter 2026 results with a 22% year-over-year increase in revenue, adjusted EBITDA, and AFFO, driven by growth in data center, ALM, and digital businesses.
The company achieved 17% organic growth, the highest in over 25 years, with significant contributions from data center revenue, which rose 47%, and ALM business revenue, which increased by 92%.
Iron Mountain increased its full-year financial outlook, anticipating sustained revenue and earnings growth, and highlighted notable wins in government and commercial sectors, including a major contract with the U.S. Department of Treasury.
The digital solutions business saw over 20% growth, and the company was recognized as a Google Partner of the Year in Media and Entertainment.
The company continues to expand its government business, supported by achieving FedRAMP high authorization for its digital services suite, enabling pursuit of high-value federal contracts.
Management expressed confidence in continued double-digit growth, highlighting strong customer engagement in data centers and significant leasing activities.
Iron Mountain reported a record first-quarter operating cash flow, raised its projection for retained cash flow, and declared a quarterly dividend, maintaining a strong balance sheet and leverage ratio.
Full Transcript
OPERATOR
Good morning and welcome to The Iron Mountain first quarter 2026 earnings conference call. All participants will be in listen only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today’s presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad and to withdraw your question, please press star then two. We will limit analysts to one question and you can rejoin the queue. Please note this event is being recorded. I would now like to turn the conference over to Mark Roop, Senior Vice President of Investor Relationship. Please go ahead.
Mark Roop (Senior Vice President of Investor Relations)
Thanks, Rocco. Good morning, everyone and welcome to our first quarter 2026 earnings conference call. Joining us today are Bill Meaney, our President and Chief Executive Officer, and Barry Heitman, our Executive Vice President and Chief Financial Officer. After our prepared remarks, we’ll open the lines for Q and A. Today’s call will include forward looking statements which are subject to risks and uncertainties. For a discussion of the major risk factors that could cause our actual results to differ from these statements, please refer to today’s earnings materials, including the Safe harbor language on slide 2 of the earnings presentation and our annual and quarterly reports on Form 10K and 10Q. Each of these items, as well as reconciliations of non GAAP financial measures referenced during this call can be found on our investor relations website.
Bill Meaney (President and Chief Executive Officer)
With that, I’ll turn the call over to Bill. Thank you Mark and thank you all for joining us today to discuss our fInternal Revenue Servicest quarter results. As you saw in this morning’s release, we are off to an incredibly strong start to 2026. Our fInternal Revenue Servicest quarter results were exceptional above our expectations with 22% year over year growth for revenue adjusted EBITDA and AFFO, our team’s execution of our growth plans and consistent delivery of value to our customers and continues to drive the record performance across our business. FInternal Revenue Servicest quarter organic growth of 17% is the highest rate we’ve achieved in more than 25 years. The outstanding results were driven by our growth business of data, data center, Asset Lifecycle Management (ALM) and digital, which grew more than 50% in the quarter and now exceed more than 30% of our total revenue. Moreover, our highly recurring physical records storage business delivered its best quarterly growth in years and is well on track to deliver its 38th consecutive year of organic storage rental growth. I’m also impressed with our commercial team’s progress in accelerating cross selling efforts in Asset Lifecycle Management (ALM) and digital. We had a very strong quarter of bookings across the business which sets us up well for the balance of the year. Following this strong performance and continuing the momentum into the second quarter, we are pleased to increase our full year financial outlook. Let me now share some of the highlights from the quarter and the confidence this provides as we look to sustain industry leading revenue and earnings growth in 2026 and beyond. Data center revenue increased 47% in the fInternal Revenue Servicest quarter. Industry demand remains very strong with hyperscalers continue to build out inference and cloud capacity. This has led to significant customer engagement across our portfolio and given our 400 megawatts of available to lease capacity energized over the next 24 months. We leased approximately 22 megawatts in the fInternal Revenue Servicest quarter and another 10 megawatts in April, positioning us at 32 megawatts leased year to date. We drove substantial growth in our asset lifecycle management business in the fInternal Revenue Servicest quarter with a 92% increase in revenue. This was fueled by a strong showing in both our enterprise and and decommissioning businesses, the later of which was mainly pricing beyond the favorable component price envInternal Revenue Serviceonment. The underlying strength of our business is being driven by our compelling and differentiated customer value proposition which continues to yield new customer wins and deeper expansion within our existing base. Our digital solutions business achieved record fInternal Revenue Servicest quarter revenue growing greater than 20% year over year. We continue to win traditional projects and new contracts across industry verticals for DXP, our AI powered digital solutions platform. Additionally, we won another Google Partner of the Year this month for Media and Entertainment, adding to the 2018 Google Partner of the Year award for AI and Machine learning and we also executed very well operationally. We drove expanded profitability across the business. We with adjusted EBITDA increasing 22%, we are still in the early phases of our long term growth journey and our opportunity has never been more clear and tangible. We operate in large and Growing markets with $170 billion Total addressable market and we continue to invest and execute growth strategies to fully capitalize on our opportunity. Now let me share some recent wins that illustrate the strength of our synergistic business model and commercial momentum. I want to start with providing an update on our government business. From the outset, we fInternal Revenue Servicemly believe that Iron Mountain was positioned to be a major beneficiary of efficiency and productivity efforts for governments across the world. Building on last year’s important award from the Department of Treasury, I am pleased to share that fInternal Revenue Servicest quarter bookings in the public sector were our second best in our company’s history. We are significantly expanding our government business across the world and and especially here in the US Let me highlight two of these wins. For one agency we will provide advanced digitization solutions to process millions of records and we will also securely manage over 29,000 cubic feet of physical documents. And for another agency, we are providing services for pathology operations including storage and tracking claims folders. We are just getting started and the outlook for additional government wins is promising. Our positive trajectory is supported by the federal certification for our Digital Services suite through the achievement of Federal Risk and Authorization Management Program (FedRAMP) high authorization for Insight. This will fundamentally shift our competitive stance for digital services within the US Public sector allowing us to pursue high value mission critical workloads across the federal landscape. To be sure our commercial momentum is in recent wins extend far beyond the government sector. Let me share some other wins across our business in records management, our insurance team signed a new deal with a Canadian insurance company to deploy our Smart Reveal solution where we will process more than 1 million files currently stored with us. We also signed a new multi year agreement with a global law fInternal Revenue Servicem to deploy our SmartSort solution across six US locations. We will process more than 2 million files and onboard an additional 60,000 cubic feet of physical storage, ensuring the customer effectively manages its complex compliance and fiduciary requInternal Revenue Serviceements. In digital solutions, we won an important new multi year agreement with a leading Brazilian clinical diagnostics fInternal Revenue Servicem. Iron Mountain’s DXP platform, leveraging AI capabilities will process over 20 million medical records. DXP will be fully integrated with the customer systems to reduce manual efforts, eliminate errors and ensure compliance for time sensitive clinical results. And we won a new contract with a US Healthcare center to improve patient data visibility. The win cuts across multiple lines of our services including SmartSort for more than 600,000 medical records and in digital solutions for nearly 12 million images. In our data center business, we cross sold to an existing Asset Lifecycle Management (ALM) decommissioning customer and leased to them our entInternal Revenue Servicee 16 megawatt Miami site as part of a 10 year contract to support expansion of its cloud platform. We also leased approximately 6 megawatts to enterprise customers in Q1 and in April we are pleased to have leased 10 megawatts in Amsterdam to a major global cloud player who is new to our portfolio and with whom we are having encouraging discussions regarding interest across our data center footprint. Turning to asset lifecycle management business, we are uniquely positioned as the industry leader with strong competitive advantages including our full service capabilities, unmatched global scale, reputation for security and ability to deliver exceptional value to our customers. This is translating into growth in the number and size of deals we are winning across our enterprise. In our data center decommissioning business. Let me highlight some of our wins A new multi year agreement with a global advertising company that consolidated its highly fragmented vendor base and selected Iron Mountain as its sole enterprise wide Asset Lifecycle Management (ALM) services partner. As part of the deal we will manage and secure decommissioning and remarketing of IT assets across more than 30 countries. We cross sold to one of our existing data center customers working to Recycle and reuse 75,000 IT hardware items across the US, Europe and APAC. And we signed a multi year agreement with a global technology leader to securely decommission, sanitize and remarket 60,000 drives. In conclusion, our team is delivering exceptional results. We are still in the early phases of our tremendous long term growth opportunity. Our set of services delivering differentiated value to our customers gives us high confidence in continued double digit consolidated top and bottom line growth across cycles. I would like to express my gratitude to my global colleagues for theInternal Revenue Service unwavering commitment and to our customers. I especially want to thank our colleagues in the Middle east who demonstrate the best of the Mountaineer culture as they navigate a challenging time in keeping themselves and families safe whilst continuing to serve our customers in the region. The exceptional stewardship provided by our Mountaineers to more than 240,000 customers remains a cornerstone of our ongoing success. With that, I’ll turn the call over
Barry Heitman (Executive Vice President and Chief Financial Officer)
to Barry Thanks Bill and thank you all for joining us to discuss our results. As you’ve heard this morning, we’re off to a strong start to the year. Our team delivered record first quarter performance across all of our key financial metrics, underscoring the significant momentum we have in the business in terms of the first quarter. Revenue of $1.94 billion was up $344 million year on year. This this was well ahead of the projection we provided on our last call, driven by continued strength across our business as compared to last year. Revenue increased 22% on a reported basis, 19% on a constant currency basis and 17% on an organic basis, while the change in foreign exchange (FX) rates contributed approximately $40 million in revenue year on year. I would like to note that this was slightly below what we had assumed in our outlook as the dollar strengthened following our last call. Looking at the $80 million revenue upside in the quarter, this was driven by outperformance in our ALM records management and data center businesses. Total storage revenue was $1.1 billion, up $146 million or 15% year on year. Total service revenue was $841 million, up $197 million or 31% from last year. Adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $708 million increased $128 million or 22% year over year. This exceeded the projection we provided on our last call by $23 million, driven by the revenue upside and operational efficiency. Adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) margin was 36.6%, an increase of 20 basis points from last year. Our margin performance was particularly impressive, especially when considering the substantial growth in our services revenue which naturally drives a mix headwind. Adjusted Funds From Operations (AFFO) was $426 …
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