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    IRM
    Earnings call· Jun 2026(Q2 FY26)

    IRON MOUNTAIN Q2 FY26 earnings call IRM

    Aug 5, 2026 Source

    Executive summary

    Iron Mountain Q2 FY26 — Record Performance Driven by Growth Businesses and Strong Data Center Leasing

    Iron Mountain delivered record Q2 FY26 results, driven by exceptional performance in its data center, ALM, and digital businesses, which now comprise 35% of consolidated revenue. The company raised its full-year financial outlook, reflecting strong execution and continued momentum, particularly in data center leasing and ALM expansion, while maintaining a disciplined capital allocation strategy. Management highlighted the unique end-to-end solution offered to hyperscalers and the significant growth potential in the enterprise ALM market.

    Highlights

    5

    • Revenue increased 19% year-over-year to $2.03 billion, approximately $65 million ahead of projections.

    • Adjusted EBITDA grew 16% year-over-year to $727 million, exceeding projections by $12 million.

    • AFFO per share increased 16% year-over-year to $1.44, $0.04 ahead of projections.

    • Data Center business grew 39% in the quarter, with 30 megawatts leased in Q2 and an additional 75 megawatts in July, bringing year-to-date leasing to 110 megawatts.

    • Asset Life Cycle Management (ALM) revenue grew 88% year-over-year, exceeding projections by $45 million, with enterprise ALM growing over 60% organically.

    Concerns

    2

    • Foreign exchange rates contributed approximately $14 million less to revenue year-on-year than assumed in the outlook due to dollar strengthening.

    • Hyperscale decommissioning revenue included a $30 million timing benefit from projects hyperscalers accelerated into the quarter.

    Guidance & targets

    11
    CategoryTargetConfidence
    Full-year 2026 Revenue
    $7.94 billion to $8.01 billion
    high materiality
    High
    Full-year 2026 Adjusted EBITDA
    $2.945 billion to $2.975 billion
    high materiality
    High
    Full-year 2026 AFFO
    $1.76 billion to $1.78 billion
    high materiality
    High
    Full-year 2026 AFFO per share
    $5.87 to $5.93
    high materiality
    High
    Q3 2026 Revenue
    approximately $1.98 billion
    medium materiality
    High
    Q3 2026 Adjusted EBITDA
    approximately $745 million
    medium materiality
    High
    Q3 2026 AFFO
    approximately $440 million
    medium materiality
    High
    Q3 2026 AFFO per share
    $1.47
    medium materiality
    High
    Full-year ALM revenue
    approach $1 billion
    medium materiality
    High
    2027 IRS deal revenue
    in excess of $100 million
    medium materiality
    High
    Full-year 2026 Data Center leasing
    meaningfully exceed original 100 megawatts
    high materiality
    High

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    Global RIM
    Achieved a quarterly record for revenue, marking the third consecutive quarter with over $100 million of year-on-year revenue growth. Strong performance in both storage and services, driven by the Digital business.
    Organic growth: 7%Storage revenue growth (reported): 7%Storage revenue growth (organic): 5%Services revenue growth (reported): 11%Services revenue growth (organic): 9%Digital business growth: >25%Adjusted EBITDA margin: 43%
    		$1.4 billion8% reported—$621 million Adjusted EBITDA
    Global Data Center
    Strong revenue growth driven by lease commencements and positive pricing trends. Significant leasing activity in Q2 and July, with strong renewal pricing.
    New leases signed (Q2): 13 megawattsLease commencements (Q2): 25 megawattsRenewed leases (Q2): 189 leases totaling 4 megawattsRenewal pricing spread (cash): 12%Renewal pricing spread (GAAP): 14%Adjusted EBITDA growth: 41%Adjusted EBITDA margin: 52.2%Adjusted EBITDA margin (like-for-like power): up >100 bps sequentially
    		$263 million39%—$137 million Adjusted EBITDA
    Asset Life Cycle Management (ALM)
    Exceeded projections by over $45 million, driven by both enterprise and hyperscale decommissioning channels. Solid improvement in margins due to improved operating performance and acquisition synergies. Includes a $30 million timing benefit from accelerated hyperscaler projects.
    Organic revenue growth: 82%Enterprise ALM organic growth: >60%Data center decommissioning revenue growth: >100% YoY
    		$288 million88%——

    Operational metrics

    27
    Total Revenue
    $2.03 billionup 19% year-on-year
    Q2 FY26

    Record-breaking second quarter results.

    Adjusted EBITDA
    $727 millionup 16% year-on-year
    Q2 FY26

    New record, driven by better-than-expected revenue growth and cost discipline.

    AFFO
    $433 millionup 17% year-on-year
    Q2 FY26

    Strong performance in the quarter.

    AFFO per share
    $1.44up 16% year-on-year
    Q2 FY26

    Strong performance in the quarter.

    FX impact on revenue
    $14 millionbelow outlook
    Q2 FY26

    Contribution to revenue year-on-year.

    ALM hyperscale decommissioning timing benefit
    $30 million
    Q2 FY26

    Partially drove data center decommissioning revenue increase.

    Enterprise ALM organic growth
    >60%
    Q2 FY26

    Enterprise channel continued its strong trajectory.

    Data center decommissioning revenue growth
    >100%year-on-year
    Q2 FY26

    Driven partially by accelerated projects.

    Memory prices
    elevatedcompared to last year
    Q2 FY26

    Price environment for memory components.

    Dividend per share
    $0.864
    Q2 FY26

    Declared quarterly dividend.

    AFFO payout ratio
    60%
    trailing 4-quarter

    Reflects capital allocation strategy.

    Growth CapEx
    $553 million
    Q2 FY26

    Capital investments in high-return opportunities.

    Recurring CapEx
    $38 million
    Q2 FY26

    Capital investments.

    Net lease adjusted leverage
    4.8xlowest level since pre-REIT conversion in 2014
    Q2 FY26

    Strong balance sheet with strong EBITDA performance.

    Bond issuance
    $1.5 billion
    Q2 FY26

    Successfully issued new bond aligned with strategy.

    Physical volume growth
    2.5 million cubic feetsequential basis
    Q2 FY26

    Physical volume continues to grow nicely.

    Physical volume annual growth expectation
    slightly up to maybe 50 basis points
    annual

    Consistent performance expected for physical volume.

    Retention rate
    increasedover the last several quarters
    Q2 FY26

    Pleased with client satisfaction.

    IRS deal revenue
    $15+ millionup from $9 million in Q1
    Q2 FY26

    Digital business continued to grow, ramping faster than expected.

    Group ATF revenue contribution
    $7 million
    H2 FY26

    Expected contribution from the recently acquired Group ATF.

    Group ATF EBITDA margin
    low 20s
    annual

    Typical for enterprise opportunities.

    Group ATF acquisition multiple
    5 to 7x
    acquisition

    Consistent with tuck-in acquisition algorithm.

    Enterprise ALM full year revenue
    a little over $600 millionup north of 50% vs last year
    FY26

    Very strong growth in the enterprise ALM business.

    Enterprise ALM growth (last 5-6 years)
    15 or 20 fold
    last 5-6 years

    Very strong historical growth.

    Hyperscale data center decommissioning TAM growth
    from $3 billion to about $6 billionexpected to double
    next 4-5 years

    Driven by massive growth and continuous renewal of data centers.

    Digital business recurring revenue
    >45%
    Q2 FY26

    Underpins long-term growth momentum.

    Growth businesses revenue contribution
    35%up 750 basis points as compared to last year
    Q2 FY26

    Data center, ALM, and digital businesses collectively.

    Industry KPIs

    1
    MetricValueDetails
    Bookings leasing volume signed110 megawattsMW

    Orderbook & backlog

    2
    Leasable capacity expected to energize325 megawattsQ2 FY26

    Expected over the next 24 months.

    India future development capacity100 megawattsQ2 FY26

    Additional capacity in Mumbai.

    Deals & partnerships

    9
    Group ATFExpands ALM capabilities and offering in France and Belgium.high teens millions of revenue annually

    Closed right at the end of July / technically August 1. Consistent with strategy to add to ALM platform and deepen presence in key markets.

    Leading global financial institutionDeploy smart sort solution to process 10 million files as part of a building relocation.

    Contract won in Records Management in the U.S.

    Leading fintech company3-year global managed services agreement to deliver intelligent intake management across 45 countries.3 years

    Contract won in Digital Solutions in the U.K.

    Long-standing financial services customerDigitize 40 million images into DXP leveraging policy center solution to automate records retention and destruction.

    Contract won in Digital Solutions in Australia, ensuring robust governance through a paperless environment.

    Major global hyperscalerLeased 51 megawatts in Mumbai as part of a 10-year contract.10 years

    Signed in July, positioning Iron Mountain well in the rapidly growing India hyperscale data center market.

    Long-standing business services customerMultiyear global ALM program to manage their IT assets annually across North America, EMEA, and APAC.multiyear

    Another example of a customer standardizing with Iron Mountain across the world, building on single vendor consolidation wins.

    Australian government department3-year agreement for the secured disposition of 100,000 IT assets annually.3 years

    Won due to proven scale, security standards, and local partnership strength.

    [indiscernible] Cloud customerDecommission and remarket tens of thousands of IT assets and conduct on-site shredding of drives.

    Selected in ALM decommissioning business in Europe due to market-leading position and global reach.

    Leading financial institutionSelected as their decommissioning partner across Canada.

    Builds on existing exclusive partnership in the U.S.

    Risks & headwinds

    3
    Foreign exchange impact on revenueQ2 FY26

    $14 million less than assumed in outlook

    Mitigation: Not explicitly stated, but management noted the dollar strengthened.

    Timing benefit from accelerated hyperscaler projectsQ2 FY26

    $30 million

    Mitigation: Not explicitly stated as a mitigation, but acknowledged as a pull-forward of revenue.

    Lumpiness of large data center leasesOngoing

    Not quantified, but acknowledged as inherent to large hyperscale deals.

    Mitigation: Management is shifting focus to the energization schedule of capacity (325 MW over 24 months) as a more consistent indicator.

    What to watch in Q3 FY26

    5

    Data Center Leasing Momentum

    next quarter / FY26
    Current110 megawatts YTD (Q2 + July)
    TargetContinued strong leasing, meaningfully exceeding 100 MW original target

    Why it matters

    Sustained data center leasing is critical for converting the significant pipeline of leasable capacity into revenue and driving overall growth.

    As we sit here today, after the strong leasing that we've had in the first half of the year will include in July, we have 325 megawatts that remain will be energized in the next 24 months.

    Q&A highlights

    5

    What does the data center leasing pipeline look like beyond July, and which campuses are seeing demand?

    Management stated they have 325 megawatts of leasable capacity expected to energize over the next 24 months, with a strong pipeline in Richmond, Europe, and India. They feel good about the momentum and expect to meaningfully exceed their original 100 MW leasing target for 2026.

    “As we sit here today, after the strong leasing that we've had in the first half of the year will include in July, we have 325 megawatts that remain will be energized in the next 24 months.”

    asked by Eric Luebchow · answered by William Meaney

    2 min read6 chapters

    Detailed Narrative

    01

    Growth Business Momentum

    Iron Mountain's data center, ALM, and digital businesses collectively grew over 50% in Q2, contributing 35% of consolidated revenue, an increase of 750 basis points year-over-year. This strong performance from growth businesses complements the consistent mid-single-digit growth delivered by the traditional physical storage business, underpinning the company's long-term double-digit revenue and earnings growth trajectory.

    02

    Data Center Expansion and Leasing Success

    The data center business achieved 39% year-over-year growth. The company leased 30 megawatts in Q2 and an additional 75 megawatts in July, bringing year-to-date leasing to 110 megawatts. With strong industry demand, particularly for AI inference capacity, Iron Mountain is well-positioned with approximately 325 megawatts of leasable capacity expected to energize over the next 24 months, including significant pipeline in Richmond, Europe, and India.

    03

    ALM Strategic Focus and Market Opportunity

    ALM revenue surged 88% year-over-year, driven by over 60% organic growth in the enterprise channel and over 100% growth in data center decommissioning. The enterprise channel, representing 75% of the $35 billion ALM market, is characterized by consistent, recurring client activity and strong operating leverage, with expected annual growth of 25%+. The hyperscale decommissioning market is projected to double from $3 billion to $6 billion over the next 4-5 years.

    04

    Digital Solutions and DXP Platform Traction

    The Digital Solutions business maintained strong momentum, achieving record quarterly revenue with continued double-digit organic growth. The AI-powered DXP platform is gaining significant traction, with the recurring nature of the digital business now accounting for over 45% of its revenue. Forrester recognized Iron Mountain's Incyte DXP as a top provider for genic AI functionality, data privacy, and platform breadth.

    05

    Strategic Acquisitions and Global Reach

    Iron Mountain recently acquired Group ATF, expanding its ALM capabilities and offerings in key markets like France and Belgium. This acquisition aligns with the company's strategy to provide a complete global ALM solution, leveraging its established brand, client relationships, and logistics infrastructure to cross-sell services and deepen penetration among existing customers across multiple geographies.

    06

    Operational Excellence and Transformation Initiatives

    The company is driving operational efficiencies through a broad transformation program focused on customer-focused growth, operational excellence, modernization, and AI integration. Initiatives include optimizing physical services, improving real estate footprint for transportation savings, enhancing procurement capabilities, and increasing efficiency in customer care, all contributing to margin improvement and capacity for future growth.

    AI-generated summary of the company’s earnings call. Not investment advice.