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.

Thanks, Bill, and thank you all for joining us to discuss our results. As you've heard this morning, we delivered exceptional performance across the business in 2025 and entered 2026 with strong momentum. In terms of the fourth quarter, we achieved record quarterly results across all key financial metrics. Revenue of $1.84 billion was up $262 million year on year. This was well ahead of the projection we provided on our last call driven by strength across our business and particularly in our ALM business. As compared to last year, revenue increased 17% on a reported basis, 15% on a constant currency basis, and 14% on an organic growth basis in the quarter. Total storage revenue was $1.06 billion, up $119 million, or 13% year on year. Total service revenue was $782 million, up $143 million, or 22% from last year. With the strong services growth, gross margin in the quarter was modestly down from last year, entirely the result of mix. As we have talked about before, our services revenue has lower gross margin and services increased in penetration by 200 basis points as compared to last year. I will also note that our services gross margin expanded over 100 basis points year over year and was up 350 basis points from the third quarter. This is an excellent accomplishment and resulted from strong execution by our operations team. And from an expense perspective, we achieved great operating leverage, delivering our lowest SG&A expense ratio in many, many years. Adjusted EBITDA of $705 million expanded $100 million, or 17% year-on-year. This was $15 million ahead of the projection we provided on our last call, driven by higher revenue and operational efficiency across the business. Adjusted EBITDA margin was 38.3%, which is the highest level we have ever reported for this metric so far. And as you will see in our guidance, we are projecting further EBITDA margin expansion in 2026. AFFO was $430 million, up $62 million. This represented an increase of 17% as compared to last year. And AFFO on a per share basis was $1.44, up 16% to last year, and was 5 cents ahead of the projection we gave on our last call. Now let me summarize briefly the full year, which marked our fifth consecutive year of record results across all key financial metrics. Stepping back when compared to our initial outlook for the year, we exceeded the high end of our guidance for revenue and adjusted EBITDA by approximately $100 million and $50 million, respectively. Revenue of $6.9 billion increased 12% on both a reported and constant currency basis. Adjusted EBITDA increased 15% year-on-year to $2.57 billion, an increase of $338 million. AFFO increased over 15% to $1.54 billion, or $5.17 on a per share basis. Now, turning to segment performance. In our global RIM business in the fourth quarter, we achieved record quarterly revenue of $1.37 billion and an increase of $115 million. Reported growth was 9%, including organic growth of 7% year-on-year. Storage revenue growth increased 7% on a reported basis and up 5% on an organic basis. We were very pleased with our core physical performance, which as you know, includes our box and consumer storage businesses. It was up 8% year on year and up quarter over quarter. Now, I will call out that you will see that our total RIM storage revenue was down very slightly from the third quarter. This was attributable to two items. The US dollar was stronger quarter over quarter. And secondly, we recognized lower data management revenue following a particularly strong performance in the third quarter. Global RIM service revenue grew 12% with organic growth of 10% in the quarter. This strong growth was driven primarily by our digital business and core records management services. Turning to the treasury contract that Bill mentioned, we recognized $6 million of revenue in the fourth quarter, modestly ahead of the expectation we shared on our last earnings call. For 2026, we are using a conservative outlook as we're in the first year of this multi-year contract and have included $45 million of revenue in our guidance. Looking out to 2027 and beyond, we expect to generate in excess of $100 million in revenue annually. Global Ring Adjusted EBITDA increased $43 million to $622 million, yielding an adjusted EBITDA margin of 45.3%. Turning to our Global Data Center business, we achieved revenue of $237 million in the fourth quarter, an increase of $67 million, or 39% year-on-year, driven by lease commencements and positive pricing trends. In the fourth quarter, we signed 43 megawatts of new leases, immense 41 megawatts of leases, and we renewed 176 leases totaling 4 megawatts. Pricing remains strong with renewal pricing spreads of 9% and 12% on a cash and GAAP basis respectively. Fourth quarter data center adjusted EBITDA was $122 million, up $34 million year on year, resulting in an adjusted EBITDA margin of 51.5%. For 2026, We expect more than $1 billion in data center revenue, which represents an increase of more than 25% year-on-year, together with segment EBITDA margin up year-on-year in every quarter. Turning to asset lifecycle management, total ALM revenue was $190 million, an increase of 78 million, or 70% year-over-year. This exceeded the projection we provided on our last call by $30 million, driven equally by hyperscale and enterprise businesses. On an organic basis, our team grew revenue $64 million or 56% growth. This was achieved through broad strength across the ALM business. Within enterprise, we continue to win new logos and increase penetration with our existing customers. Our recent acquisitions of Premier Surplus and ACT Logistics are performing well, contributing $14 million to revenue in the quarter. And from a profitability perspective, we are pleased with the team's execution in driving continued improvement, expanding margins. For 2026, we expect $850 million in ALM revenue, which represents about 35% year-on-year growth, together with expanding margins. Turning to capital allocation, we remain focused on growing our dividend and investing in high return opportunities that drive double digit growth while maintaining our strong balance sheet. Our board of directors declared our quarterly dividend of 86.4 cents per share to be paid in early April. Now, as a reminder, this is 10% higher than the comparable quarterly dividend last year. Our commitment is to continue growing our dividend, building on four consecutive years of increases, while we maintain a target payout ratio in the low 60s as a percentage of AFFO per share. In terms of capital investments, we invested $525 million of growth CapEx and $43 million of recurring CapEx in the fourth quarter. For 2026, we are planning for capital expenditures to be slightly down from last year, with $2.0 billion in growth capital and $150 million in recurring CapEx. Now, as investors know, Our data center strategy is focused on pre-leasing before commencing meaningful construction. Turning to the balance sheet, with strong EBITDA performance, we ended the quarter with net lease-adjusted leverage of 4.9 times, slightly better than our expectation. This represents our lowest leverage level achieved since prior to the company's reconversion in 2014. For 2026, we expect to end the year at similar levels to year-end 2025. And now turning to our outlook for the full year 2026. As you've heard from us today, we are very pleased with the momentum we've built in the business and have line of sight to another year of double-digit growth. For 2026, we expect total revenue to be within the range of $7.625 to $7.775 billion, which represents year-on-year growth of 12% at the midpoint. On an organic constant currency basis, This represents growth of 10%. We expect adjusted EBITDA to be within the range of $2.875 billion to $2.925 billion, which represents year-on-year growth of 13% at the midpoint. We expect AFFO to be within the range of $1.705 billion to $1.735 billion, which represents year-on-year growth of 12% at the midpoint. And we expect AFFO per share to be $5.69 to $5.79. This represents year-on-year growth of 11% at this point. I want to provide a couple of points for modeling. We expect FX to be a benefit to full-year revenue by approximately $75 million. And last year's acquisition is to contribute revenue of approximately $45 million. And turning to the first quarter, we expect... Revenue of approximately $1.855 billion, an increase of 16% to last year. On an organic constant currency basis, excluding FX and last year's acquisitions, this equates to 12% growth to last year. Adjusted EBITDA of approximately $685 million, an increase of 18% to last year. We expect AFFO of approximately $415 million, an increase of 19% to last year. and AFFO per share of approximately $1.39, an increase of 19% to last year. Before concluding, I would like to provide an update as compared to our long-term targets. As you will remember, in late 2022, we set 2026 financial targets for revenue and EBITDA of $7.3 billion and $2.5 billion, respectively. Unlike for like FX rates used to establish these targets, our 2026 guidance for revenue and adjusted EBITDA is approximately $8.1 billion and $3.0 billion respectively. This represents five-year CAGRs in excess of 12% for revenue and 13% for EBITDA. With the large and highly fragmented markets we address, together with only 5% of our customers currently buying from more than one of our business units, We expect to grow revenue at a double-digit rate for the foreseeable future. I would like to express my thanks to our entire team for their focus and dedication to serving our customers and their commitment to Iron Mountain. And with that, operator, would you please open the line for Q&A?

Thank you. We will now begin the question and answer session. To ask a question, you may press star then one on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. We will limit analysts to one question, and you can rejoin the queue. At this time, we will pause momentarily to assemble our roster. The first question today comes from Eric Lubko with Wells Fargo. Please go ahead.

Great. I appreciate the question. Good morning, guys. Can we maybe touch a little bit on the data center pipeline? Obviously, it's encouraging to hear you talk about a 100 megawatt plus opportunity ahead of you. Maybe you could talk about some of the markets where you're tracking larger deals and your degree of confidence in some of the activity and leasing conversations you've had.

It'd be great to hear about that. Thank you. Good morning, Eric, and thanks for the questions. Yeah, I mean, first of all, we feel like we're going really into the year with very strong momentum based on the over 40 megawatts of leasing we did in the fourth quarter. And you can imagine, you know, leasing 40 megawatts in the fourth quarter if you're having a number of conversations about a number of sites with your key customers. And, you know, the sites are not surprising to you. If you look at the 400 megawatts that we have energizing over the next two years, it's The sites that are attracting a lot of interest are continued northern Virginia, because we still have some capacity that will be coming online there. Richmond, which we have over 225 megawatts of capacity coming online before the end of 27. Madrid, obviously, is a hot market. Our London campus, which we did that swap where a customer wanted to swap out of London for going in and taking all of Chicago, the London, you know, we put that back on the market. And, of course, that's very attractive both to hyperscalers, but also the retail market in London is extremely strong and obviously has very high yields. So we have a number of conversations both around retail and wholesale there and then India. Right. So the Indian market is getting more and more momentum. So and we have a lot of capacity coming online again there in the next two years. So, you know, across the board, you know, the conversations really started picking up in fourth quarter, which you could see in the leasing activity we did in the fourth quarter. We feel really good. The fact that, you know, we have 400 megawatts being energized in the next 24 hours. And we see a lot of the folks that were focused on large language models in the last year are now going back to making sure they have enough capacity for their cloud build-out and inference.

The next question comes from Toby Sommer with Truist. Please go ahead.

Thank you. I'd like to ask you a question about ALM. Give us some more color about the momentum you're seeing in that business for organic growth this year, and then the opportunity for you to really maybe broaden your footprint through acquisitions as this turns into a truly global business.

Thanks for the question, Toby. Let me kind of start off in terms of the conversations we're having with the customers and the cross-selling capability. And then Barry can give you a little bit more color in terms of how that's showing up in the financials. But if you noticed in the Fortune 1000, effectively the 950, is we were really pleased with the number of logos that we added this year. I mean, it's over 20% increase in the number of logos. But the thing that's important, we're well excess of over 300 of our largest customers that are now buying our services. But even those were just scratching the surface. So if you think about it, we're really growing the business amongst the largest, most complex, most regulated companies in the world in two dimensions. One is, you know, we're now building and displacing their previous suppliers in many cases, and there's more growth just within those customers. But then, of course, we continue to build momentum in the customers that we're not serving, that we already are serving in other business lines. So the momentum and the growth, both in terms of expanding and existing customers, but as well as adding new logos, is continuing to build.

Yeah. Toby, I'll just add that First of all, we feel great about the ALM business. You know, we're operating in a very large fragmented market and we're clearly driving growth. And I'll say, you know, if you look at this year, the $850 million of revenue that we just guided to, that includes just about $20 million of inorganic. And it has... If you work through math, you'd find that our enterprise business, we're forecasting to be upwards of 20 percent organic growth. So and the balance being in our hyper business, where, as we talked about before, that is tends to be more of a project based business and business. And of course, as I mentioned in some of the remarks in December at an investor conference, pricing in that part of the market has been beneficial. And we're kind of using current market trends as it relates to the dynamics of hyperscale decommissioning in this forecast. So I would say there's a tremendous amount of opportunity for us in ALM, both in hyperscale and in enterprise markets. And so we appreciate the question. Thank you.

The next question comes from George Tong with Goldman Sachs. Please go ahead.

Hi, thanks. Good morning. In your ALM business, revenue grew 56% organically in the fourth quarter. Can you talk about how much of that growth came from volumes versus pricing and what you're assuming for pricing contributions in your 2026 ALM outlook?

Yeah. George, I'll take that one. So if you recall, in December, I was speaking at an investor conference. I mentioned that memory pricing in particular, and I think that's what you're specifically speaking about, because that's where the industry has seen some pricing trends. that pricing in memory was running 15 plus million ahead of what we had provided for our fourth quarter guidance at that point in the middle of December. And we did a little bit better than that, probably 15 to $20 million versus our original guide for the fourth quarter on pricing related to memory. As you know, Hyperscale represents generally about 40% of our ALM business. It was a little bit higher than that in the fourth quarter, but for the full year, it was at 40%. And memory tends to be between 40% and 50% of the revenue. And we're kind of at the higher end of that kind of percentage in light of where pricing has been. I'll tell you, pricing has continued to be strong here in the early part of the year. And what we're doing with our current forecast is we're assuming that that kind of, we're kind of continuing to use current market conditions as it relates to pricing and volume going forward. The other thing I'll give you is that in total, you heard us right, 57 plus percent organic growth in the quarter. Our enterprise business was very strong as well. So it was very balanced mix across the business. The outperformance, as I mentioned, the prepared remarks George was equally split between hyperscale and enterprise, so we're feeling quite good about where we are.

The next question comes from Shlomo Rosenbaum with Stifle. Please go ahead.

Hi, this is Adam for Shlomo. Could you dive a little bit deeper into the gross margin trends in the services business? And you mentioned some of the puts and takes of what that was, but let me just talk about it in a little more detail. It would be helpful. Thank you.

Okay, Ben, thanks for that one. so as i talked about before our total gross margin um is naturally uh affected by mix right because our storage uh business is a higher gross margin as as investors know and our services margin is is um more services oriented in that way and so the important thing to note about our services gross margin in the quarter is it was up over 100 base points and on a sequential basis up 350. And the thing I'll point out there, Ben, is that our services margins are improving across the company. And so our services margins within global RIM improved year on year meaningfully. They improved meaningfully within ALM. And Data Center doesn't have a lot of services, but it was also very strong. And so our view is that our teams are executing quite well, and that's a function of both strong execution, operating leverage, and a little bit of pricing on the services lines as well. And we think that that trend can continue with respect to our services gross margin. The other thing I'll note is while our gross margin on storage, I mentioned the prepared remarks, was down slightly, that was all due to mix. Because even within the global rim business, the storage gross margin was up year on year. And so what's happening there is, as I've talked about before, as data center becomes a larger and larger portion of our business, It's got a slightly diluted gross margin to our storage average, but, of course, it's got a very accretive EBITDA margin to our global company. So, you know, we were very pleased with the margin performance across the company, both within storage and service. Thanks, Deb.

The next question comes from Jonathan Atkin with RBC Capital Markets. Please go ahead.

Yes, I wonder if you could maybe just talk about M&A, landscape as it pertains to, I suppose, both ALM as well as data centers.

Thanks. I'll start, John. Thanks for the question, and Barry may want to add something. But I think, first of all, let me deal with on the data center side, and I think you and I have talked about this before, is We don't really see ourselves active in the M&A market for data center. We have done some. We did the IO data center. We did the Evo in the U.S. We did EvoSwitch in Europe. And we did the WebWorks acquisition in India. But all those were Brownfield, what I call Brownfield acquisitions. And it was when we were in the early days entering those geographies and it was really buying a platform and platform, not just in terms of an asset with capacity to lease, but also a team that understood those markets. So I wouldn't expect us to be a big acquirer or M&A in the data center assets. We feel pretty good about the teams that we have. We feel pretty good about the platforms we have in those geographies. And, you know, with 400 megawatts, are ready to be energized over the next 24 months, we feel really good about being able to grow that business on a purely organic basis. On the ALM side, and this is an area where I'll also ask Barry to comment further, is we continue to see that as an attractive market. You know, we're already in 40 markets. Some of those markets, we actually use partners, which is a way of actually understanding the opportunity to do further acquisitions to build out our footprint in those markets. But we operate in 61 countries, right? And our customers, you know, one of the big differentiators when we're winning a new business, uh, from, you know, new, or I would say, um, adding an existing logo, the ALM services to that logo. Like I commented on the, uh, the 90 additional customers we picked up this year in the fortune 1000 is one of the things is our global footprint. So you can imagine that we want to be able to service our customers in all 61 countries around the globe. And a big part of that is, you know, our M and a engine, but Barry, you may want to comment further.

Yeah. So, John, I would say, first and foremost, I just want to underscore that business is growing on an organic basis tremendously. And we've got a long runway there as we continue to penetrate our client base. And as we land at clients, when new logos expand considerably. So that's a long term friend that I think is very much a tailwind to growth in the company. On M&A in particular, just to supplement some of Bill's comments, I'll just note our corporate development team and our ALM teams are consistently and kind of constantly looking at opportunities as one of the largest players, if not the undisputed largest player really in the space. We generally get a chance to see kind of any asset that's out there that might have a willingness to sell. As we talked about before, we don't tend to predict when we might make a next acquisition in light of just the dynamics of how M&A works. But I'll reiterate that in this market, we kind of see mid to high single digits as a multiple of EBITDA. And with our ability to synergize those down, that quickly gets to below five times. And so it's a very positive way for us to continue to grow and supplement the organic growth that the team is delivering. Thanks, John.

The next question comes from Andrew Steinerman with J.P. Morgan. Please go ahead.

Hi, Barry. As we're building out our 26 cash flow waterfalls we do every year, could you tell us if there's any meaningful restructuring charges to consider for 26? And then also you noted that CapEx is down year over year. Maybe a little more color on that and refresh us how that splits between growth and maintenance CapEx and any other kind of call-outs that would be helpful in your cash flow assumptions for 26.

Okay. sure thing andrew thank you for that so um on restructuring charges let me be very clear about this we won't have any matterhorn restructuring we have no restructuring charges in our plan at all so from a just as a reminder our matterhorn plan for restructuring ended last year and so that generates a considerable amount of incremental cash flow for investment slash less debt required to do our funding plans, Andrew. And it's, I think, a key point. And our business is going to generate operating cash flow between, let's say, $1.5 and $2 billion. And we feel really good about where we're positioned. As it relates to CapEx, of the estimate I gave, call it the 2.2, it is $1.50 or so of recurring cash And the balance is obviously growth with the vast majority of that upwards of in excess of, you know, we're in the vicinity of 1.8 of that will be data center specifically, if not more. And when I mentioned that it'd be slightly down and I also alluded to the fact that we're very focused on pre-leasing, I'll just note that the situation is such that we've provided for in our guidance for our ability to commence construction on assets in excess of the level of what our guidance is. And what I specifically mean by that is I would imagine we would not necessarily spend to this level unless we were actually pre-leasing more than we just projected you know we said we do at least 100 if not more megawatts and so we're very focused on pre-leasing it just to reiterate that and this um allocation for capital deployment more than accommodates that level and then as it relates to any other tidbits the other thing i would give you on cash flow is for affo purposes From a cash interest standpoint, I'd be planning for somewhere in the vicinity of like $905 million for the full year. And that's just sort of the mechanics of taking the fourth quarter run rate. We had $207 million on that line. Annualizing that and then adding some incremental for borrowings in the fourth quarter as well as borrowings across the year. And you pretty much get right to that number. And then cash taxes, I am assuming that will be up some, you know, let's call it up about probably in the vicinity of 20 million year on year. That may be conservative, but in light of the really phenomenal growth we're seeing in services, particularly in ALM, I thought it was prudent to plan for a little bit more. So in both of those cases, they're at a point where it, works into our AFFO guidance such that I feel very confident in the way we've guided for AFFO Andrew. Thank you.

Again, if you have a question, please press star then one. The next question comes from Brendan Lynch with Barclays. Please go ahead.

Great. Good morning. Thanks for taking my question. I wanted to follow up on RIM organic constant currency storage growth of about 5.2%. I think, Barry, you mentioned that there was some impact from lower data management revenue and maybe some consumer storage effects. Can you just kind of unpack that a little bit more and maybe tell us what is factored into your expectation for 2026?

Okay, so I'll start with the first part. The consumer business was right in line with what we expected, Brandon, just to mention that first and foremost. So that wasn't a factor in the quarter. What was the factor in the quarter on a sequential basis was First of all, the dollar was stronger. So that cut into our growth rate some, you know, if you look at third quarter versus fourth quarter. Data management, though, another point, and I know, you know, you cover us closely, but for others, I'll just point out, in our 10 Ks and our 10 Qs, we have a table that shows our, you know, records and information management business. It shows our data management information. It shows ALM, et cetera. And so for those who are tracking it at a detailed level, they would have noticed that in the third quarter, we had a particularly strong comp in data management. And that business tends to be fairly steady, but it can oscillate quarter to quarter some. And you've seen that over the many quarters of disclosure that we have out there on data management. So when you look at our total grow results, which is what you're looking at when you're asking that question, It's the combination of the physical business, the box consumer business, as well as data management. So why do I tell you all that? Well, I think most times when investors are talking to me about our physical business, they're talking about our traditional box business and how that's going. And that business is very healthy. I mean, it was up 8% in total. Our total physical business was up 8% year on year, was up in excess of about 1% on a sequential basis, despite the FX. And volumes have continued to be trend very well. So as it relates to what we're forecasting for the business, we are expecting it to be up in that same mid single digit rate that we've expected for some time. A couple other tidbits for you. All of the revenue management actions that we anticipated taking are now fully in the marketplace. Sometimes that, as you know, moves around month to month, year on year. So everything, we got all of those actions essentially in in January. So that'll, from a timing perspective, that'll help the first quarter a little bit because it's a little bit earlier than last year's revenue management actions. That'll play out over the first half as it relates to year on year. And we, since people often ask me, I'll just say we are very much expecting another year of modest growth in terms of organic physical volume. Thank you.

The next question comes from Nate Crossett with BNP. Please go ahead.

Hey, good morning. I think you might have said it in the prepared remarks, but can you just go over again how much you're expecting from the DOT contract this year and how that ramps over time? And then also, I don't think you guys give G&A guidance. So is there anything you can note on that for us in 2026? Thank you.

Good morning, Nate. So I'll start with the Department of Treasury. And Barry, you chime in if you want to add more color. We expect this year for it to be about at least $45 million as the Department of Treasury starts ramping up, because you can imagine they're in a process of outsourcing from doing everything in-house to outsourcing. The one thing is we feel really good about that number, and that number will build. And as Barry said, we expect it to next year be around $100 million, which would be more kind of consistent with the annual run rate that we would expect from that contract and the feedback we're getting from the Department of Treasury. We're getting very, very positive feedback on our ability to execute on their behalf. We already have a FedRAMP certification on moderate, but we're also in the final approvals for FedRAMP high, and we're the only vendor that's at that stage in terms of FedRAMP certification. Just so you know, FedRAMP certification is an important certification when you're providing services to the federal government in terms of your SaaS platform. So this is based on our Insight SaaS platform, which is a part of our DXP platform. So we feel really good, both in terms of our technology clearing these important hurdles to serve the federal government, as well as the feedback we're getting from the customer. And, you know, as we always expected, is 2026 will be a bit of a ramp as they're beginning their outsourcing curve. Because, as you know, with these things, they don't generally just flick a switch. It takes a little bit of time to move people across.

Nate, I'll add just a couple of points on Treasury and then come to your other question. I think we positioned ourselves in a very prudent way as it relates to this contract in our guidance. In the fourth quarter, we delivered about $6 million of revenue. In the first quarter, I would expect that to ramp up some. And then from a HABS standpoint, I would expect the 45 to kind of be generally split kind of evenly. Now, I'll tell you that that is purely, the 45 level is purely being conservative and prudent based on the things that Bill was just speaking to in terms of the ramp up and how they outsource. We fully expect the business to be generating in excess of 100 million in 2027 and beyond. And it may be, you know, well beyond 100 as we continue to demonstrate our capabilities to the government. So we're we're feeling quite good about the contract. And I'll just note, we continue to work with the federal various federal agencies about additional opportunities to support government efficiency. So we feel very good about what we're doing with our digital solutions. And I'll just add on to your second question. From an SG&A standpoint, first thing I would point out is in our guidance, you should see that at the midpoint, we're forecasting for 40 basis points of additional EBITDA margin expansion. that will be benefited by SG&A leverage. And our teams here across the company and across the businesses are working to of continuing to transform the business. And we are adopting some AI tools to improve efficiency, to get more operating leverage. And frankly, I think we're just in the very early stages of that. So there is a multi-year opportunity to drive SG&A leverage and operating leverage across the company. And I look forward to reporting that to you over the next few years. Thank you.

This concludes our question and answer session and the Iron Mountain fourth quarter 2025 earnings conference call. Thank you for attending today's presentation. You may now disconnect. You have been removed from the call. Goodbye.