Iron Mountain Reports Third Quarter Results
Iron Mountain Incorporated (NYSE: IRM), a global leader in information management services, announces financial results for the third quarter of 2024. The conference call / webcast details, earnings c...
PORTSMOUTH, N.H.: Iron Mountain Incorporated (NYSE: IRM), a global leader in information management services, announces financial results for the third quarter of 2024. The conference call / webcast details, earnings call presentation and supplemental financial information, which includes definitions of certain capitalized terms used in this release, are available on Iron Mountain’s Investor Relations website. Reconciliations of non-GAAP measures to the appropriate GAAP measures are included herein.
Financial Performance Highlights for the Third Quarter of 2024
($ in millions, except per share data) |
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| Three Months Ended |
| Y/Y % Change |
| Year to Date |
| Y/Y % Change | ||||||||
| 9/30/24 |
| 9/30/23 |
| Reported $ |
| Constant Fx |
| 9/30/24 |
| 9/30/23 |
| Reported $ |
| Constant Fx |
Storage Rental Revenue | $936 |
| $859 |
| 9% |
| 9% |
| $2,740 |
| $2,500 |
| 10% |
| 10% |
Service Revenue | $622 |
| $530 |
| 17% |
| 18% |
| $1,828 |
| $1,561 |
| 17% |
| 17% |
Total Revenue | $1,557 |
| $1,389 |
| 12% |
| 13% |
| $4,569 |
| $4,061 |
| 13% |
| 13% |
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Net Income | $(34) |
| $91 |
| (137)% |
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| $78 |
| $158 |
| (51)% |
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Reported EPS | $(0.11) |
| $0.31 |
| (136)% |
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| $0.26 |
| $0.53 |
| (51)% |
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Adjusted EPS | $0.44 |
| $0.45 |
| (2)% |
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| $1.28 |
| $1.28 |
| — |
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Adjusted EBITDA | $568 |
| $500 |
| 14% |
| 14% |
| $1,631 |
| $1,436 |
| 14% |
| 14% |
Adjusted EBITDA Margin | 36.5% |
| 36.0% |
| 50 bps |
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| 35.7% |
| 35.4% |
| 30 bps |
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AFFO | $332 |
| $301 |
| 10% |
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| $977 |
| $884 |
| 11% |
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AFFO per share | $1.13 |
| $1.02 |
| 11% |
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| $3.30 |
| $3.01 |
| 10% |
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"We are pleased to report a very strong third quarter and continued strong momentum in the second half of 2024, resulting in all-time record Revenue, Adjusted EBITDA, and AFFO," said William L. Meaney, President and CEO of Iron Mountain. "Our team is making outstanding progress toward our accelerated growth objectives and our Project Matterhorn operating model continues to drive our business to greater heights by providing new and enhanced solutions for our customers."
- Total reported revenues for the third quarter were $1.6 billion, compared with $1.4 billion in the third quarter of 2023, an increase of 12.2%. Excluding the impact of foreign currency exchange ("Fx"), total reported revenues increased 12.5% compared to the prior year, driven by a 9.3% increase in storage rental revenue and a 17.6% increase in service revenue. Year to date, total reported revenues increased 12.5%, or 12.8% excluding the impact of Fx.
- Net Income for the third quarter was $(33.7) million, compared with $91.4 million in the third quarter of 2023. Unfavorable changes in foreign currency exchange rates resulted in an approximate $76.0 million dollar impact to Other Expense (Income), Net, year over year. Year to date, net income was $78.0 million, compared with $158.1 million in 2023.
- Adjusted EBITDA for the third quarter was $568.1 million, compared with $500.0 million in the third quarter of 2023, an increase of 13.6%. On a constant currency basis, Adjusted EBITDA increased by 13.9% in the third quarter, compared to the third quarter of 2023, driven by increased revenue in Global RIM, ALM, and data center. On a constant currency basis, year to date Adjusted EBITDA increased 13.9%.
- FFO (Normalized) per share was $0.79 for the third quarter, compared with $0.76 in the third quarter of 2023. Year to date, FFO (Normalized) per share was $2.31, compared with $2.19 in 2023, or an increase of 5.5%.
- AFFO was $332.0 million for the third quarter, compared with $301.2 million in the third quarter of 2023, an increase of 10.2% driven by improved Adjusted EBITDA. Year to date, AFFO was $976.6 million compared with $883.5 million, or an increase of 10.5%.
- AFFO per share was $1.13 for the third quarter, compared with $1.02 in the third quarter of 2023. Year to date, AFFO per share was $3.30, compared to $3.01 in 2023, or an increase of 9.6%.
Dividend
On November 6, 2024, Iron Mountain's Board of Directors declared a quarterly cash dividend of $0.715 per share for the fourth quarter. The fourth quarter 2024 dividend is payable on January 7, 2025, for shareholders of record on December 16, 2024.
Guidance
Iron Mountain affirmed full year 2024 guidance, and now expects to be on track to achieve the high end of full year 2024 guidance range; details are summarized in the table below.
| 2024 Guidance(1) | ||
| ($ in millions, except per share data) |
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| 2024 Guidance | |
| Total Revenue | $6,000 - $6,150 | |
| Adjusted EBITDA | $2,175 - $2,225 | |
| AFFO | $1,300 - $1,335 | |
| AFFO Per Share | $4.39 - $4.51 | |
(1) Iron Mountain does not provide a reconciliation of non-GAAP measures that it discusses as part of its annual guidance or long term outlook because certain significant information required for such reconciliation is not available without unreasonable efforts or at all, including, most notably, the impact of exchange rates on Iron Mountain’s transactions, loss or gain related to the disposition of real estate and other income or expense. Without this information, Iron Mountain does not believe that a reconciliation would be meaningful. |
About Iron Mountain
Iron Mountain Incorporated (NYSE: IRM) is a global leader in information management services. Founded in 1951 and trusted by more than 240,000 customers worldwide, Iron Mountain serves to protect and elevate the power of our customers’ work. Through a range of offerings including digital transformation, data centers, secure records storage, information management, asset lifecycle management, secure destruction and art storage and logistics, Iron Mountain helps businesses bring light to their dark data, enabling customers to unlock value and intelligence from their stored digital and physical assets at speed and with security, while helping them meet their environmental goals.
To learn more about Iron Mountain, please visit: www.IronMountain.com and follow @IronMountain on X (formerly Twitter) and LinkedIn.
Forward Looking Statements
We have made statements in this press release that constitute "forward-looking statements" as that term is defined in the Private Securities Litigation Reform Act of 1995 and other securities laws. These forward-looking statements concern our current expectations regarding our future results from operations, economic performance, financial condition, goals, strategies, investment objectives, plans and achievements.
These forward-looking statements are subject to various known and unknown risks, uncertainties and other factors, and you should not rely upon them except as statements of our present intentions and of our present expectations, which may or may not occur. When we use words such as “believes”, “expects”, “anticipates”, “estimates”, “plans”, “intends”, “projects”, “pursue”, “will” or similar expressions, we are making forward-looking statements. Although we believe that our forward-looking statements are based on reasonable assumptions, our expected results may not be achieved, and actual results may differ materially from our expectations. In addition, important factors that could cause actual results to differ from expectations include, among others: (i) our ability or inability to execute our strategic growth plan, including our ability to invest according to plan, grow our businesses (including through joint ventures or other co-investment vehicles), incorporate alternative technologies (including artificial intelligence) into our offerings, achieve satisfactory returns on new product offerings, continue our revenue management, expand and manage our global operations, complete acquisitions on satisfactory terms, integrate acquired companies efficiently and transition to more sustainable sources of energy; (ii) changes in customer preferences and demand for our storage and information management services, including as a result of the shift from paper and tape storage to alternative technologies that require less physical space; (iii) the costs of complying with and our ability to comply with laws, regulations and customer requirements, including those relating to data privacy and cybersecurity issues, as well as fire and safety and environmental standards; (iv) the impact of attacks on our internal information technology (“IT”) systems, including the impact of such incidents on our reputation and ability to compete and any litigation or disputes that may arise in connection with such incidents; (v) our ability to fund capital expenditures; (vi) the impact of our distribution requirements on our ability to execute our business plan; (vii) our ability to remain qualified for taxation as a real estate investment trust for United States federal income tax purposes; (viii) changes in the political and economic environments in the countries in which we operate and changes in the global political climate; (ix) our ability to raise debt or equity capital and changes in the cost of our debt; (x) our ability to comply with our existing debt obligations and restrictions in our debt instruments; (xi) the impact of service interruptions or equipment damage and the cost of power on our data center operations; (xii) the cost or potential liabilities associated with real estate necessary for our business; (xiii) unexpected events, including those resulting from climate change or geopolitical events, could disrupt our operations and adversely affect our reputation and results of operations; (xiv) failures to implement and manage new IT systems; (xv) other trends in competitive or economic conditions affecting our financial condition or results of operations not presently contemplated; and (xvi) the other risks described in our periodic reports filed with the SEC, including under the caption “Risk Factors” in Part I, Item 1A of our Annual Report. Except as required by law, we undertake no obligation to update any forward-looking statements appearing in this press release.
Reconciliation of Non-GAAP Measures
Throughout this press release, Iron Mountain discusses (1) Adjusted EBITDA, (2) Adjusted EPS, (3) FFO (Nareit), (4) FFO (Normalized), and (5) AFFO. These measures do not conform to accounting principles generally accepted in the United States (“GAAP”). These non-GAAP measures are supplemental metrics designed to enhance our disclosure and to provide additional information that we believe to be important for investors to consider in addition to, but not as a substitute for, other measures of financial performance reported in accordance with GAAP, such as operating income, net income (loss) attributable to Iron Mountain Incorporated or cash flows from operating activities (as determined in accordance with GAAP). The reconciliation of these measures to the appropriate GAAP measure, as required by Regulation G under the Securities Exchange Act of 1934, as amended, and their definitions are included later in this release.
Condensed Consolidated Balance Sheets (Unaudited; dollars in thousands) | |||
| 9/30/2024 |
| 12/31/2023 |
ASSETS |
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Current Assets: |
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Cash and Cash Equivalents | $168,515 |
| $222,789 |
Accounts Receivable, Net | 1,243,464 |
| 1,259,826 |
Prepaid Expenses and Other | 306,867 |
| 252,930 |
Total Current Assets | $1,718,846 |
| $1,735,545 |
Property, Plant and Equipment: |
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Property, Plant and Equipment | $11,549,081 |
| $10,373,989 |
Less: Accumulated Depreciation | (4,354,477) |
| (4,059,120) |
Property, Plant and Equipment, Net | $7,194,604 |
| $6,314,869 |
Other Assets, Net: |
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Goodwill | $5,198,460 |
| $5,017,912 |
Customer and Supplier Relationships and Other Intangible Assets | 1,276,963 |
| 1,279,800 |
Operating Lease Right-of-Use Assets | 2,591,238 |
| 2,696,024 |
Other | 489,518 |
| 429,652 |
Total Other Assets, Net | $9,556,179 |
| $9,423,388 |
Total Assets | $18,469,629 |
| $17,473,802 |
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LIABILITIES AND EQUITY |
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Current Liabilities: |
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Current Portion of Long-term Debt | $136,547 |
| $120,670 |
Accounts Payable | 586,793 |
| 539,594 |
Accrued Expenses and Other Current Liabilities | 1,288,176 |
| 1,250,259 |
Deferred Revenue | 294,545 |
| 325,665 |
Total Current Liabilities | $2,306,061 |
| $2,236,188 |
Long-term Debt, Net of Current Portion | 13,245,462 |
| 11,812,500 |
Long-term Operating Lease Liabilities, Net of Current Portion | 2,438,905 |
| 2,562,394 |
Other Long-term Liabilities | 277,588 |
| 237,590 |
Deferred Income Taxes | 233,484 |
| 235,410 |
Redeemable Noncontrolling Interests | 70,537 |
| 177,947 |
Total Long-term Liabilities | $16,265,976 |
| $15,025,841 |
Total Liabilities | $18,572,037 |
| $17,262,029 |
(Deficit) Equity |
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Total (Deficit) Equity | ($102,408) |
| $211,773 |
Total Liabilities and Equity (Deficit) | $18,469,629 |
| $17,473,802 |
Quarterly Condensed Consolidated Statements of Operations (Unaudited; dollars in thousands, except per-share data) |
