Iron Mountain Incorporated (IRM) Earnings & Analysis

Latest quarter

Iron Mountain reported Q2 FY2026 revenue of $2.0 billion, up 18.5% from $1.7 billion a year earlier. The company’s revenue, as the consensus counts it, was $2.0 billion against consensus revenue of $2.0 billion, and the company reported revenue 3.20% above the consensus. Iron Mountain reported adjusted EPS, as the consensus counts it, of $1.44, compared with consensus adjusted EPS of $1.40, or 2.86% above the consensus.

The company reported diluted EPS of $0.34, compared with −$0.15 in Q2 FY2025. Iron Mountain’s filing shows gross margin of 52.8%, down 3.2 percentage points from 55.9%, while operating margin was 18.4%, up 3.2 percentage points from 15.2%. Iron Mountain reported free cash flow of −$75.3 million, compared with −$181.6 million a year earlier.

Barry Hytinen said reported revenue rose 19% year over year, principally reflecting ALM hyperscale decommissioning results, while data-center revenue rose on lease commencements and pricing trends.

Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.

What management said on the call

William Meaney said Data Center, ALM and Digital collectively grew more than 50% in the quarter and accounted for 35% of second-quarter revenue. He said the Data Center business grew 39% and that Iron Mountain leased 13 megawatts in the quarter and another 75 megawatts in July, bringing year-to-date leasing to 110 megawatts. Meaney said the company expected approximately 325 megawatts of leasable capacity to energize over the next 24 months.

Hytinen said data-center revenue of $263 million increased 39% year over year, driven by lease commencements and positive pricing trends. He said renewal pricing produced cash and GAAP spreads of 12% and 14%, respectively, and that the segment’s adjusted EBITDA margin was 52.2%. Meaney said Iron Mountain signed a 25-megawatt July lease that fully leased its London 3 asset, while a 51-megawatt Mumbai contract had a 10-year term.

Meaney said ALM revenue grew 88% in the quarter and described enterprise ALM as the channel with the most consistent growth potential. He said enterprise ALM accounted for the majority of the business’s profitability and that cross-selling to Iron Mountain’s customers supported an expectation for annual growth of 25% or more for the foreseeable future. Hytinen said full-year ALM revenue was now expected to approach $1.0 billion and that the company acquired Groupe ATF to expand ALM capabilities in France and Belgium.

In response to analyst questions on data-center leasing, Meaney said Iron Mountain expected to meaningfully exceed its original 100-megawatt target for 2026, while noting that large leases can be uneven in timing. Hytinen said the company intended not necessarily to provide annual leasing guidance and instead highlighted its energization schedule as an indication of potential capacity. In response to questions about ALM acquisitions, Hytinen said Iron Mountain would use a 5x to 7x EBITDA multiple as its acquisition valuation discipline for ALM tuck-ins.

Hytinen said service-revenue growth created a mix headwind in the quarter, while the company’s updated outlook implied margin improvement over coming quarters. He said Iron Mountain’s transformation work included real-estate footprint changes, procurement, customer-care productivity and AI initiatives.

Guidance

Iron Mountain increased its FY2026 total-revenue guidance to $7.94 billion to $8.01 billion and its adjusted EBITDA guidance to $2.945 billion to $2.975 billion. The company increased its FY2026 AFFO outlook to $1.76 billion to $1.78 billion, or $5.87 to $5.93 per share. Iron Mountain said it expected Q3 2026 revenue of approximately $1.98 billion, adjusted EBITDA of approximately $745 million, and AFFO of approximately $440 million, or $1.47 per share. Hytinen said the company also raised its full-year ALM projection and expected revenue to approach $1.0 billion.