Iron Mountain Incorporated

Good morning and welcome to the Iron Mountain fourth quarter 2025 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing star 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 that this event is being recorded. I would now like to turn the conference over to Mark Rupp, Senior Vice President of Investor Relations. Please go ahead.

Thanks, Chloe. Good morning, everyone, and welcome to our fourth quarter 2025 earnings conference call. Joining us today are Bill Meany, 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&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 two of the earnings presentation, and our annual and quarterly reports on Form 10-K and 10-Q. 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.

With that, I'll turn the call over to Bill. Thank you, Mark, and thank you all for joining us today to discuss our fourth quarter and full-year results. We are pleased to report another record performance in the fourth quarter above our expectations, delivering all-time highs in 17% year-over-year growth for revenue, adjusted EBITDA, and AFFO. Organic revenue increased 14% in the quarter, driven by broad-based strength and record results across our business segments. The very strong performance concluded an exceptional year for Iron Mountain in 2025, marking our fifth consecutive year of record results in double-digit growth. For the full year, revenue increased 12% to $6.9 billion. Adjusted EBITDA grew 15% to $2.6 billion, and AFFO increased 15% to $1.5 billion. These outstanding results reflect our team's steadfast commitment to delivering innovative solutions for our customers and the strong returns we are generating from our growth investments across the business. Let me share some of the highlights from this record year and the momentum this provides underwriting our expectations to sustain industry-leading revenue and earnings growth into 2026 and beyond. We continue to capitalize on robust data center industry demand. Data center revenue increased 30% in 2025, including 39% in the fourth quarter. We expect the data center market will remain very strong in the coming years as hyperscalers build out inference and cloud capacity. With 43 megawatts leased in the fourth quarter, we enter 2026 with strong momentum in leasing and have great assets in prime markets. Our confidence in sustaining strong data center growth is supported by our current backlog, which we expect to drive more than 25% revenue growth in 2026. And on top of this, we expect another year of 20% plus growth in 2027. Moreover, we anticipate a year where we will release over 100 megawatts in 2026, further adding to our backlog. This confidence is driven by the conversations we are having with our customers around our land bank which includes 400 megawatts of available capacity that is expected to energize over the next 24 months, half of which is expected to energize in the next 18 months. And we are driving substantial growth in our asset lifecycle management business. ALM revenue increased 63% in total in 2025, including 40% on an organic basis. And we ended the year on a high note with 56% organic growth in the fourth quarter, driven in part by higher component remarketing revenue. In 2025, we increased the number of Fortune 1000 customers utilizing our ALM services to 360. This is up from 270 in the prior year. And importantly, we have significant room to grow within these existing customers. Looking ahead, we are focused on capitalizing on the large opportunities in the ALM market, and we expect this to be a multi-billion dollar business for Iron Mountain in the future. Furthermore, we are off to a strong start in 2026, benefiting from recent commercial wins, increased customer penetration, and higher component remarketing revenue. And our digital solutions business continues to build momentum. We achieved an all-time high for digital revenue in 2025, eclipsing $500 million, driven by another year of double-digit growth. We are seeing solid demand for traditional projects and are winning new contracts across industry verticals for DXP, our AI-powered digital solutions platform. The number of DXP deals secured in the fourth quarter was an all-time high and we're at an average deal value more than double the prior year. The outlook is equally as promising as the DXP pipeline continues to grow. In 2026, we expect to maintain strong digital growth supported by our new project wins in growth in our underlying recurring business, which is now more than 40% of our digital revenue. Collectively, these three growth businesses of data center, ALM, and digital grew more than 30% in 2025 to nearly $2 billion in revenue. They accounted for two-thirds of our growth, or eight percentage points of growth, on a consolidated basis. This growth portfolio provides an important tailwind in supporting our plan for double-digit top and bottom-line growth well into the future, which will only build as the growth portfolio continues to become a larger mix of the overall enterprise. I also want to highlight the strength and importance of our highly recurring legacy physical storage business. This high margin, nearly $5 billion business, serves as a strong foundation for Iron Mountain. It drives substantial cash flow and funds growth investments across the business. It is also central to our cross-selling opportunity as this is where we originally built our more than 240,000 customer relationships, including 950 of the 1,000 largest global companies. In 2025, the physical storage business achieved record revenue growing at a mid-single-digit rate, consisted with our long-term expectations. This year's performance marked our 37th consecutive year of organic storage rental revenue growth. And looking ahead, we remain totally committed to growing this business through our innovation around how we help our customers get more value from the information we store on their behalf, as well as our revenue management strategy. This continues to prove a winning strategy by yielding consistent volume growth coupled with an increase in our value add driven by our approach to this important service line. We have great confidence in delivering on this in 2026, and we have already set into motion many of our key initiatives. In addition to our growth achievements, we also executed very well operationally. We drove expanded profitability across the business with adjusted EBITDA increasing 15% in margin improving 90 basis points at the enterprise level as compared to last year. So as you can see, I am very proud of our team's performance in 2025, and we are entering 2026, our 75th anniversary, with incredibly strong momentum. And yet, despite all of our recent success, what is even more compelling is that we are still in the early phases of our longer-term growth journey. we are just still scratching the surface of the $170 billion total addressable market for our services. We look forward to 2026 being another record year for Iron Mountain, and this is reflecting our guidance outlook. Now let me share some recent commercial wins that illustrate the strength of our synergistic business model and support our conviction in sustaining double-digit revenue growth. First, in records management, in North America, we secured a significant multi-year extension with a leading global healthcare provider operating more than 2,000 locations. We will pick up an additional 550,000 cubic feet of records, as well as deliver a comprehensive suite of information governance solutions. Our longstanding relationship, improving track record, global footprint, deep compliance expertise, and ability to deliver meaningful value to the customer were key factors in securing this deal. In Europe, we secured a multi-year agreement with a major UK government department to provide records management solutions. Iron Mountain was selected based on the strength of our established relationship, proven reliability, deep understanding of regulatory requirements, and ability to drive measurable operational efficiency for the customer. I would also like to highlight a very important win in our media and archival services business. A leading global media and entertainment company and partner of ours for more than 15 years engaged us to securely store and preserve more than 1600 high value media assets across multiple geographies. Iron Mountain's unmatched global reach, technical expertise, and proven track record in managing complex media archives were key advantages in winning this large and competitively bid deal. In our digital solutions business, a leading Asia financial services company with more than 1,000 locations selected Iron Mountain to support its digital modernization efforts through a multi-year agreement building on an existing 10-year records management relationship. This transformative software-only deal launches in four key markets with plans to expand across 16 additional markets, replacing the customer's legacy enterprise data management platform with DXP. The solution incorporates DXP's AI capabilities to extract metadata from over 500 million images and digital files to improve the quality and accuracy of the customer's database, as well as provide secure digital storage and advanced backup services. Our leading AI technology that allows our customers to treat unstructured data in a structured manner, robust security standards, deep regulatory expertise, and ability to deliver a scalable solution aligned with the customer's strategic priorities. These were instrumental in securing this award and displacing incumbent providers. And as it relates to our work with the Department of Treasury, we continue to execute under this new agreement. We expect 2026 will be a ramp up year. We have already established ourselves as the leading partner to the Treasury for these services. As the department manages through complexity of this significant project, we have included $45 million of revenue related to this program in our 2026 outlook. Now let me turn to our data center business. Our strong partnerships with many of the largest hyperscalers drove new leasing in the fourth quarter, and they remain actively interested in all of our key data center developments. At our Northern Virginia campus, we won a 15-year contract for 28 megawatts of capacity, from a major hyperscaler supporting the continued expansion of its cloud platform. In addition, as we discussed in November, an existing hyperscale customer leased our entire 36 megawatt Chicago site as part of a 10-year contract transferring and expanding the customer's previous lease in London. Also this quarter, another major hyperscaler leased two megawatts in our Phoenix campus, as well as 600 kilowatts in our Madrid campus. Turning to our asset lifecycle management business, in the U.S., a large financial institution selected Iron Mountain to provide secure IT asset disposition services for end-of-life network equipment and telephones across over 2,000 branch locations. The deal represents a cross-sell building on our longstanding partnership for records management and digital solutions. Our established track record of providing customer value, along with our reputation for security, compliance, and ability to operate at scale across the US were important factors in winning this business. Successful cross-selling was also key to winning a deal with a Fortune 100 healthcare technology company to manage the secure recovery, audit, and compliant disposition of more than 11,000 employee devices. Our unique capability to rapidly deploy comprehensive end-to-end ITAD logistics while mitigating operational risk and compliance exposure, were determining factors in the customer's decision. We are optimistic that this newly expanded relationship will deliver significantly more opportunities in the future. And a global IT infrastructure services provider has engaged Iron Mountain to support its data center decommissioning and asset remarketing initiatives for more than 30,000 deployed IT assets across North America. This multi-year deal builds on our established records management and digital solutions relationship. Our ability to deliver scalable, compliant, and cost-effective solutions was a key differentiator in displacing incumbent providers. In conclusion, I want to thank my fellow Mountaineers across the world for their continued dedication in serving our customers. Our Mountaineers' best-in-class stewardship of our more than 240,000 customers continues to be a key factor in our success. As you heard today, we are delivering exceptional results, have incredibly strong momentum across the business, and remain in the early phases of executing against our tremendous long-term growth opportunity. With that, I'll turn the call over to Barry.