Iron Mountain Incorporated

Good morning, and welcome to the Iron Mountain First Quarter 2023 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, then zero, on your telephone keypad. 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. 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 Jillian Tiltman, Senior Vice President and Head of Investor Relations. Please go ahead.

Thank you, Sarah. Good morning and welcome to our first quarter 2023 earnings conference call. On today's call, we will refer to materials available on our investor relations website. We are joined here today by Bill Meany, President and Chief Executive Officer and Barry Heitnin, our Executive Vice President and Chief Financial Officer. After prepared remarks, we'll open up the lines for Q&A. Today's earnings materials contain forward-looking statements, including statements regarding our expectations. All forward-looking statements are subject to risks and uncertainties. Please refer to today's earnings materials, the Safe Harbor language on slide two, and our annual report, on our quarterly report on Form 10-Q for a discussion of the major risk factors that could cause our actual results to differ from those in our forward-looking statements. In addition, we use several non-GAAP measures when presenting our financial results. We have included the reconciliations to these measures in our supplemental financial information. With that, I'll turn the call over to Bill.

Thank you, Jillian, and thank you all for taking the time to join us today. our team delivered another quarter of record results for the first quarter of 2023, exceeding our expectations. This performance reflects the resonance of our expanded product portfolio, our unmatched customer relationships, and the strength of our dedicated team. On a reported basis in the first quarter, we achieved our highest ever quarterly revenue of $1.31 billion, yielding 7.5% total organic revenue growth an EBITDA of $461 million. We continue to be encouraged by the increased demand for our services across key markets, fueling these results as well as the success of Project Matterhorn, enabling our commercial teams to offer our customers access to the widest range of solutions in our company's history. We delivered organic storage rental revenue growth of 11% in the first quarter, and we drove high teens' organic growth in both our data center and digital services businesses. As we introduced last year with Project Matterhorn, our steady build-out of new products and services, as well as growth in these underlying markets, continues to accelerate us on our growth trajectory path. I would like to take this opportunity to highlight how we have been serving our customers with our solutions-based approach and our offerings across the mountain range. Beginning with records management, we won significant new business in the United Kingdom with a major global industrial and aerospace company signing a contract valued at 40 million pounds sterling. Following more than a year of conversations, the team entered into a bespoke 10-year agreement providing the customer with several hundred thousand cubic feet of secure physical data storage, document digitization, and management across multiple secure locations radio frequency identification tagging for additional security, and a dedicated on-site team of experts working to Iron Mountain's industry-leading standards. I am pleased we could offer such a comprehensive solution that allows the customer to both digitize their data and protect their business. We are now discussing additional opportunities with the same customer in other European countries, North America, and Asia. In total, the potential contract value over 10 years is approximated to be 90 million pounds sterling. Another win that highlights our ability to sell the entire mountain range involves a state historical society, which turned to both Iron Mountain and our fine arts storage business, Crozier, for help in preserving the history of its cultural heritage center, which is home to its underground archives and museums. With budget as a key consideration for this customer, our unique solution was focused on reducing costs whilst leveraging our expertise and innovation to challenge the customer to think differently. Our combined art, library, archives, and logistics expertise enabled our team to deliver a solution that met the state's needs. Also in the quarter, a financial services company based in Australia, a longstanding customer of Iron Mountain, turned to us for help with their compliance issues after being impressed by the information we presented at a Policy Center webinar back in 2021. Our suite of digital enablement solutions and software, including the Insight platform, will provide the customer with increased visibility into its archives, digital copy of selected records, auto generation of metadata, and auto redaction of personal identifiable information. Success stories such as this highlight the value we provide customers in not only moving data from physical to digital storage, but also improving the methods and capability to utilize the data. Another digital win was with the U.S. Department of Veterans Affairs. The U.S. Congress has requested that the VA advance the production of complete and accurate veteran records in a timely fashion, driving the need for digitization of historical veteran documents, which are often dispersed across multiple storage locations. The customer required an experienced digital partner to increase their scanning capacity and also provide facility oversight, chain of custody logistics, and secure storage. The unique aspects provided by our high security Boyers, Pennsylvania facility combined with the skill of our staff were key contributing factors to winning the deal. This is just the beginning of our work to aid in the delivery of medical records to enhance patient care of veterans. Also in digital solutions, we had a key win with an existing customer, His Majesty's Courts and Tribunal Service on a digital mailroom solution to automate the indexing and classification elements of the mailroom function. The service, which will reduce the cost and time of processing court applications, will be delivered from our Haudenosaunee location, where we have a well-established digitization and BPO facility. Turning to asset lifecycle management, or ALM, we divide this business into three verticals. The first of these is the hyperscale decommissioning business that we acquired from ITRenew. our volumes grew in excess of 30% in this vertical year over year, reflecting our market-leading platform, the strength of our existing customer relationships, and our ability to win more new logos. Revenue is down, however, reflecting the record low pricing the market has seen since the end of 2022 on both new and used components. In our enterprise iPad vertical, we've been gratified to see more synergies with our existing customers. Since we have relationships with over 225,000 customers across our wider business, the opportunity to cross-sell our enterprise ITAD services has never been greater. The last of these verticals is the technology manufacturers. Here we are winning business both in terms of servers as well as end-user devices. We have invested in our sales force and obtained specific expertise in the OEM space, setting us up for success. This indirect relationship to decommission end-user products is a huge market opportunity. Examples of recent wins in the ALM business include a contract with an existing global asset management company to perform on-site hard disk and solid state disk erasure and destruction, whilst maximizing value from data center and corporate end-user assets. Continuing with ALM, a large global risk management company sought services to decommission two complete and two partial data centers. A combination of our strong existing relationship and performance, including guidance from a dedicated program manager, our remarketing solutions and capabilities, and the ease of the use of our ALM portal contributed to the win. Finally, let's turn to our data center business. We are pleased to have finished the first quarter of 2023 with 52 megawatts of new leases signed with a single hyperscale customer signing two deals for a total of 44 megawatts. You will recall that our guidance for the year is 80 plus megawatts, so to have leased over half of our target in the first quarter alone is a triumph of our team. In terms of the co-location wins this past quarter, one win I would like to highlight is with an existing U.S. federal home loan customer who sought to expand into a new data center market for disaster recovery options and selected our VA2 data center in Manassas, Virginia. The customer was impressed with the tour of our Virginia campus and the custom solution we developed to meet their needs. With their positive past experience with our data center services, We've bundled this expanded solution with a renewal at another of our data center sites. Also in the quarter, our team announced a win with a fleet management company, which for years has explored moving their internal on-site data center infrastructure to co-location. Our ability to provide a custom solution in our VA2 data center, including direct internet access, smart hands, and cross-connects, resulted in a powerful solution for them in the continuation of an important relationship that has the potential to expand to a disaster recovery solution at our New Jersey data center. Also noteworthy is a substantial win with an existing major semiconductor chip manufacturer who's taking advantage of all the mountain range has to offer. The customer was seeking a data center partner to host their internal development cloud environment and our data center and commercial sales teams work closely to deliver a solution at our Arizona site, leveraging the customer's existing relationship. All three of these wins that I have noted are with long-standing customers demonstrating our ability to source premium co-location deals with customers with whom we have had trusted relationships for decades. To conclude, we are more enthusiastic than ever about the growth in our business and our ability to offer our customers expanded and innovative solutions to meet their ever-evolving needs. Project Matterhorn is bearing fruit, and we continue to make great strides as our team climbs towards the highest peaks of our journey. With that, I'll turn the call over to Barry.