IRON MOUNTAIN INC

IRON MOUNTAIN INC. Annual Report: A Year of Strategic Growth and Digital Transformation

Iron Mountain Inc. achieved significant financial and strategic milestones in the past fiscal year, driven by its foundational records management business and substantial growth in its Global Data Center segment. The company reported total revenues of approximately $5.6 billion, an 8% increase year-over-year. Adjusted EBITDA grew 10% to $2.1 billion, and strong operations generated Net Income of $380 million, a substantial improvement from the previous year.

Business Overview: Iron Mountain Inc. leads the global storage and information management services industry, serving diverse sectors. The company provides solutions through several key segments: physical and digital information management, data center services, and specialized asset management. It helps organizations manage, protect, and optimize their information assets throughout their lifecycle.

Key Financial Highlights:

• Revenue Growth: Total revenue reached $5.6 billion, fueled by 15% growth in the Global Data Center business and steady contributions from Global Records and Information Management. Storage rental revenue comprised approximately 60% of total revenue, with services contributing the remaining 40%.
• Profitability: The Adjusted EBITDA margin improved to 37.5%, reflecting efficient operations and strategic pricing.
• Cash Flow: Strong operating cash flow of $1.2 billion supported strategic investments and dividend payments. Free Cash Flow before discretionary investments was $750 million.

Business Segment Performance:

• Global Records and Information Management (RIM): This foundational segment, spanning North America, Europe, Latin America, and Asia Pacific, continued to generate stable revenue from physical and digital record storage and services. While physical storage remains a cornerstone, the company emphasized digital transformation, helping clients convert physical archives into accessible digital formats. Within this segment, Media and Archive Services specializes in the secure, climate-controlled storage and management of valuable media assets for entertainment, historical, and corporate clients.
• Global Data Center Business: This segment served as a primary growth engine, expanding its footprint and service offerings like co-location, interconnection, and cloud services. Revenue grew significantly, driven by increased demand for secure, scalable data infrastructure. The company strategically invested in expanding its global data center capacity, adding 50 megawatts during the year.
• Corporate and Other: This segment includes specialized services such as Fine Arts storage (secure, climate-controlled storage for high-value art and collectibles) and Asset Lifecycle Management (ALM), providing secure disposition, data destruction, and recycling services for IT assets, ensuring data security and environmental compliance.

Financial Health:

• Capital Structure: The company maintained a disciplined balance sheet with approximately $12.5 billion in total debt. Key debt maturities are staggered, with significant senior notes due between 2025 and 2032. It uses interest rate and currency swaps to manage financial risk.
• Liquidity: Strong operating cash flow and access to capital markets provide financial flexibility to fund operations, strategic investments, and debt obligations. The company actively manages its capital structure to optimize its cost of capital and maintain adequate liquidity.

Future Outlook: Iron Mountain's strategy rests on three pillars:

1. Optimizing its core RIM business through digital solutions and enhanced service offerings.
2. Accelerating growth in its Global Data Center segment through strategic expansions and new offerings.
3. Leveraging its global platform to deliver integrated information management solutions.

Committed to sustainability, the company aims for carbon neutrality in its operations by 2040. It plans future investments to enhance digital capabilities, expand data center capacity, and explore new markets, driving long-term value. The company anticipates continued growth in its strategic segments, focusing on delivering long-term shareholder value.

Competitive Position: Iron Mountain holds a leading competitive position in global information management and data center industries, distinguished by its extensive global footprint, trusted brand, and comprehensive service offerings. In records management, its scale, security protocols, and integrated physical and digital solutions differentiate it from smaller, regional competitors. In the data center market, the company competes on its secure, compliant, and scalable infrastructure, strategic locations, and customer service, facing both established global providers and specialized regional players. Its ability to offer integrated solutions across physical and digital information lifecycles provides a unique competitive advantage.

Key Risks to Consider: Investors should consider several key risks:

• The accelerating shift from physical to digital information.
• Intense competition in both records management and data center markets.
• Managing its substantial debt, including exposure to interest rate fluctuations.
• Potential data security breaches.
• The impact of global economic conditions and regulatory changes on operations and financing costs.
• Challenges in successfully integrating acquisitions and managing global operations.
• Changes in technology, customer preferences, and regulatory environments, which could impact service demand.