Iron Mountain Incorporated (IRM) | The Buildout — AI Infrastructure
The Verdict
Iron Mountain manages information across physical and digital systems, operates data centers, and decommissions or resells IT hardware. It matters to the AI buildout because hyperscalers need inference-ready data center capacity today and will later need to refresh higher-value AI gear; a single customer relationship can cross both sides.
| Market Cap | — |
| Revenue (TTM) | $7.2B |
| Revenue Growth | +15.6% |
| EBITDA Margin (TTM) | 32.2% |
| Net Debt | $19.5B |
| Earnings Beats | 7 of 7 |
| P/E (TTM) | — |
| EV/EBITDA (TTM) | — |
What We Like
- Data Center + ALM + Digital reached 35% of Q2 revenue, up 750 basis points year over year, and contributed 14 percentage points of consolidated growth.
- Data center leasing hit 110 MW through July, already beyond the original 100 MW full-year target, with 325 MW expected to energize over the next 24 months.
- ALM revenue rose 88% in Q2 to $288 million; management now expects full-year ALM to approach $1 billion, up from an initial $850 million guide.
- Global RIM delivered its third consecutive quarter of more than $100 million year-over-year revenue growth, and physical storage volume is at an all-time high.
- Leverage held at 4.8x net lease-adjusted, the lowest since before the 2014 REIT conversion, while first-half operating cash flow reached $888 million.
What We’re Watching
- Energization risk: the 325 MW 24-month schedule could slip on long lead times for data center equipment or power/construction issues not disclosed in IRM materials.
- ALM timing: Q2 ALM growth included a disclosed $30 million pull-forward; the clean run-rate is lower.
- Memory pricing: prices are elevated but no longer uniformly rising; ALM growth is becoming more volume-dependent.
- Data center lumpiness: Q2 itself had only 13 MW of signings before July's 75 MW, making quarterly cadence hard to read.
The evidence points to a strengthening business direction: the growth businesses are a larger share of revenue, guidance has been raised twice, and cash flow is inflecting. The main risk is that the data center story now depends on an energization schedule and ALM on volatile hyperscale timing. The open question is whether IRM can convert the 110 MW signed into commenced capacity on schedule and keep ALM near the 'approach $1 billion' full-year guide without further pull-forwards.
Earnings Beat
Iron Mountain reported revenue of $1,936.1 million in Q1 FY2026, up 21.6% year over year, with gross margin of 54.0%. The standout was ALM revenue of $232 million, up 92% reported, while data center revenue rose 47% to $254.7 million.
| Metric | Q1 FY2026 | Q4 FY2025 | Q1 FY2025 | YoY |
|---|---|---|---|---|
| Revenue | $1.9B | $1.8B | $1.6B | +21.6% |
| Gross margin | 54.0% | 55.4% | 55.4% | -140bps |
| EBITDA | $587M | $653M | $494M | +18.8% |
| EPS | $0.48 | $0.30 | $0.05 | +793.6% |
| Asset Lifecycle Management revenue | $232M | n/a | n/a | +92% reported y/y |
| Data Center revenue | $254.7M | n/a | n/a | +47% reported y/y |
the highest rate in more than 25 years— William Meaney, CEO, April 30, 2026
Management tone: Management's tone was confident and execution-focused. It described the quarter as record, cited 17% organic growth as the highest rate in more than 25 years, and raised full-year revenue, EBITDA, AFFO, and ALM guidance after one quarter. It repeatedly pointed to cross-sell and the synergistic business model.
Management Guidance
Management raised FY2026 guidance to revenue of $7.825B–$7.925B, adjusted EBITDA of $2.925B–$2.965B, AFFO of $1.735B–$1.755B, and AFFO per share of $5.79–$5.86. It raised ALM revenue guidance to $950M and said data center leasing would be 'meaningfully above' the original 100 MW target.
Trajectory
Revenue is accelerating: Q1 FY2026 revenue of $1,936.1 million was up 21.6% year over year, and the Q2 call put growth businesses at 35% of revenue. Gross margin compressed to 54.0% as lower-margin service and ALM revenue grew faster; product cost of sales rose 88.3% year over year. Operating income stepped up while EBITDA margin was stable, consistent with the mix shift management described.
The Model
The model's locked projections are revenue of $7,950 million and EBITDA of $2,584 million (32.5% margin) for FY+1, and revenue of $9,035 million and EBITDA of $2,982 million (33.0% margin) for FY+2. The near-term view is anchored to management's raised full-year guide of $7.94–$8.01 billion; the FY+2 view assumes continued double-digit growth across the data center, ALM, and digital businesses.
| Metric | FY2025 | Next FY (E) | Following FY (E) |
|---|---|---|---|
| Revenue | $6.9B | $8.0B | $9.0B |
| YoY Growth | — | +15.2% | +13.6% |
| EBITDA | $2.2B | $2.6B | $3.0B |
| EBITDA Margin | 32.4% | 32.5% | 33.0% |
Projections are the median of 5 independent model runs.
Management raised FY2026 guidance to revenue of $7.825B–$7.925B, adjusted EBITDA of $2.925B–$2.965B, AFFO of $1.735B–$1.755B, and AFFO per share of $5.79–$5.86. It raised ALM revenue guidance to $950M and said data center leasing would be 'meaningfully above' the original 100 MW target.
What Could Go Right — and Wrong
- All 325 MW of leasable capacity energizes on the 24-month schedule and converts the 110 MW signed into commenced leases.
- ALM reaches the 'approach $1 billion' FY2026 guide without another timing pull-forward.
- The Treasury/IRS contract scales from $15-plus million in Q2 to over $100 million annually in 2027+.
- Cross-sell accelerates: more ALM customers lease data center capacity as in the 16 MW Miami deal.
- Physical storage volume keeps growing and Global RIM extends its run of more than $100 million quarterly year-over-year growth.
- The 325 MW energization schedule slips on long lead times for data center equipment or un-disclosed power/construction constraints.
- Memory prices roll over, making ALM more volume-dependent and slowing reported growth.
- Data center leasing stalls after July's 75 MW; Q2 itself had only 13 MW of signings.
- Service and ALM mix keeps pressuring gross margin, with Q1 service gross margin at 34.4% versus 68.9% for storage rental.
- The $1.5 billion 6.25% bond adds fixed interest expense, and continued dollar strength would reduce reported growth.
Looking Ahead
The next 12 months center on the Q3 2026 report, H2 ALM delivery toward 'approach $1 billion', and the 325 MW energization schedule. Groupe ATF is expected to contribute about $7 million in H2, additional revenue management actions are expected to lift storage in H2, and the Treasury/IRS contract is expected to ramp from $45 million in FY2026 to over $100 million annually in 2027+.
- Q3 2026Q3 2026 earnings report — Tests ALM after $30M Q2 pull-forward; guided revenue ~$1.98B and EBITDA ~$745M.
- H2 2026Groupe ATF contribution — Expected ~$7M contribution; tests France/Belgium ALM expansion.
- H2 2026Revenue management actions — Additional cohort actions expected to lift storage revenue.
- Next 24 months325 MW energization — Leasable capacity expected to energize; equipment lead times are a risk.
- FY2026ALM full-year target — Approach $1B target tests enterprise and hyperscale decommissioning.
- 2027+Treasury/IRS ramp — Contract expected to exceed $100M annually in 2027+.
Financials
Annual Summary
| Metric | FY2024 | FY2025 | TTM | YoY |
|---|---|---|---|---|
| Revenue | $6.2B | $6.9B | $7.2B | +12.2% |
| Gross Margin | 56.1% | 55.4% | 55.0% | 73bps |
| EBITDA | $1.9B | $2.2B | $16.2B | +14.9% |
| EBITDA Margin | 31.7% | 32.4% | 32.2% | +75bps |
| Net Income | $180M | $145M | $272M | -19.7% |
| Free Cash Flow | −$657M | −$932M | −$195M | — |
| Net Cash | — | — | — | — |
Key Ratios (Trailing)
- P/E TTM—
- EV/EBITDA TTM—
- EV/Revenue TTM—
- Price/FCF TTM—
- Gross Margin (TTM)55.0%
- EBITDA Margin (TTM)32.2%
- Net Margin (TTM)3.8%
- ROIC5.6%
- FCF Conversion-26.9%
- SBC / Revenue2.0%
The Company
Iron Mountain is a REIT organized around Global RIM, Global Data Center, and Corporate and Other, which is primarily Asset Lifecycle Management. It serves more than 240,000 customers in 61 countries, including about 95% of the Fortune 1000. Management groups Data Center, ALM, and Digital as the growth businesses; those three were 35% of Q2 revenue, up 750 basis points year over year.
It operates 1,343 facilities — 232 owned and 1,111 leased — totaling approximately 98.6 million square feet. The company's operating model spans records storage, data center capacity, and IT hardware decommissioning, which management describes as an end-to-end life-cycle solution for hyperscale customers. No single customer accounted for more than approximately 3% of FY2025 revenue.
Business Segments
Competitive Landscape
The provided source material does not name direct competitors; it includes an unnamed infrastructure-REIT peer cohort of 12 companies used only for forward EV/EBITDA comparison. Management's differentiation is the claim that IRM is the 'only provider of a complete end-to-end life cycle solution for the hyperscale marketplace.' The company's consolidated customer base is diversified, with no single customer above about 3% of revenue.
Supply Chain
IRM sits between data center equipment/power suppliers and hyperscale, government, and enterprise customers. The source found no neighbor transcript that named IRM directly; upstream and competitive reads are inference rather than verified relationships.
More on IRM: Earnings recap