Iron Mountain
Recurring storage-rental annuity (per-box, multi-decade retention, contractual annual price escalators) plus services (shredding, digitization, ALM) and a capital-intensive colocation data center development platform leased to enterprises and hyperscalers.
Earnings, margins, COGS & capex
FY2025 was a record year: $6.9B revenue (+12.2%), Adjusted EBITDA $2.574B (+15%, 37.3% margin), AFFO $1.541B / $5.17 per share. GAAP net income is thin at $152M because heavy depreciation and interest weigh on a REIT running a build-heavy data center program. The story is the mix shift: growth businesses (data centers, digital solutions, ALM) grew 30%+ and now ~28% of revenue, funded by the sticky physical-records annuity. Q1 2026 accelerated (+21.6% revenue, AFFO/share $1.43) and management raised FY2026 guidance.
Income statement — where each revenue dollar goes
% of revenueOf every $1 of revenue, ~30¢ is cost of goods and ~53¢ operating expense, leaving ~17¢ of operating profit (~2¢ net).
Revenue trend
Margins
+~90 bps YoY, improving
stable
depressed by D&A + interest
+~13% growth guided
COGS structure
Cost base is dominated by real estate occupancy (warehouse + data center facilities), labor for services (transport, shredding, digitization), and power for data centers. Storage rental is high-margin and scales with minimal incremental cost; services and ALM carry lower margins. Rising data center power and construction costs are the key COGS pressure as that segment scales.
Capex
Two tiers: maintenance/recurring capex is small (~$147M FY2025), but growth capex — chiefly data center construction — is large and deliberate, taking total capex well above $1.5B. Company reports more than 400MW of capacity energizing over the next 24 months (200MW+ in the next 18 months). This growth capex is what suppresses GAAP FCF and drives external funding needs (recent senior-notes issuance).
Latest earnings
Beat — record results; management raised FY2026 revenue and AFFO guidance
FY2026 raised to revenue $7.825-7.925B (~14% midpoint) and AFFO $1.735-1.755B ($5.79-5.86/share, ~13% growth), up from the prior $7.625-7.775B / $1.705-1.735B set in Feb 2026
- Q1 2026 revenue
- $1.94B (+21.6%)
- Q1 2026 Adjusted EBITDA
- $708M (+22.1%)
- Q1 2026 AFFO
- $426M / $1.43 per share (+22%)
- Organic revenue growth
- +17.2%
- Q1 2026 data center revenue
- $255M (+47% YoY)
- Net lease-adjusted leverage
- 4.8x Q1 2026 (best since 2014 REIT conversion)
- Quarterly dividend
- $0.864/share ($3.456 annualized, ~2.9% yield)
Growth drivers
- Data centers — revenue expected to exceed $1B in 2026; Q4 2025 grew 39% (FY2025 DC revenue +30%, 52% adjusted EBITDA margin); backlog supports 25%+ growth in 2026; 400MW+ of capacity energizing over 24 months
- Digital solutions — document digitization / content services riding enterprise data and AI-readiness demand
- Asset Lifecycle Management (ALM) — secure IT asset decommissioning / resale (Q1 2026 ALM revenue +92% YoY), benefiting from data center refresh cycles
- Contractual price escalators on the physical-records annuity — inflation-linked storage price increases with minimal volume churn
- Cross-sell of the huge installed records-storage customer base into digital and ALM services
Reported financials — SEC EDGAR
Audited GAAP figures pulled from SEC filings · latest filing 2026-02-12. The audited primary-source spine — not financial advice.
Revenue — annual (GAAP)
Margins & balance sheet — FY’25
Bull & bear
A cash-gushing records annuity is being reinvested into a data center growth engine at scale, and the market rewards the accelerating double-digit growth with a premium multiple.
- The physical-records book is a rare annuity — decades-long retention, near-zero churn, contractual price escalators — that grows revenue with almost no incremental capital and funds the rest
- Growth businesses (data centers, digital, ALM) are ~28% of revenue and compounding 30%+ (ALM +92% and DC +47% in Q1 2026); data center revenue crosses $1B in 2026 with backlog visibility into 2027
- Guidance was raised after a strong Q1 2026 (+21.6% revenue, +22% AFFO) — momentum and management credibility are intact
- Leverage is at its healthiest since the 2014 REIT conversion (4.8x net lease-adjusted), giving room to keep funding the DC build
- REIT structure returns a growing ~2.9%-yield dividend while AFFO/share compounds low-teens
A highly levered, capital-hungry business flattered by AFFO adjustments, trading around ~20x forward AFFO where any growth stumble or rate move hurts.
- GAAP net income is razor-thin ($152M) — the bull case leans entirely on AFFO, which adds back heavy real D&A and other items
- Debt is ~$16.4B and net-debt/Adjusted-EBITDA is ~6.3x; the flattering 4.8x is a net-lease-adjusted metric, and continued senior-notes issuance signals ongoing funding needs
- Data center growth is capital-intensive and pits IRM against much larger specialists (Equinix, Digital Realty) and hyperscaler self-build — margins and returns could compress
- Valuation (~20x FY2026 AFFO, EV/EBITDA ~17-18x) is rich for a REIT and leaves little margin of safety if growth decelerates
- Core physical-records volumes are in slow secular decline; the story only works if DC/digital/ALM keep outrunning it, and higher-for-longer rates simultaneously pressure both financing costs and the REIT multiple
What it is worth
AFFO multiple and EV/EBITDA cross-check (REIT-appropriate), triangulated with the growth-mix premium
~$85-95
growth decelerates or rates stay high, GAAP earnings weakness and elevated (~6x+) leverage draw scrutiny, and the AFFO multiple compresses toward mid-teens; revisits the lower half of the 52-week range.
~$120-130
AFFO grows to ~$5.8-5.9/share as guided, multiple holds ~20x; total return driven by AFFO growth plus the ~2.9% dividend.
Low-to-mid-$140s+ — sustained 25%+ data center growth into 2027, AFFO/share compounding low-teens, and a maintained (or expanded) premium multiple as the growth mix crosses ~1/3 of revenue; re-rating toward pure-play DC peers.
At ~$117-122/share on FY2026 AFFO guidance of $5.79-5.86, IRM trades ~20-21x forward AFFO. EV (~$35B equity + ~$16.4B debt = ~$51B) against ~$2.9B FY2026 Adjusted EBITDA is ~17-18x EV/EBITDA — a premium to legacy storage REITs, reflecting the data center/digital growth mix. Dividend yield ~2.9%. The premium is defensible only if DC/digital/ALM keep compounding 20%+ and leverage stays contained.
SWOT
Strengths
- Physical records annuity is extraordinarily sticky — multi-decade retention, high switching costs, contractual annual price escalators, low churn; funds everything else
- Diversified into higher-growth data centers, digital, and ALM — mix shift lifts the whole company's growth rate to double digits
- Global scale and blue-chip / government customer base built over decades; hard to replicate the physical footprint
- Net lease-adjusted leverage at 4.8x (Q1 2026, best since REIT conversion) gives more balance-sheet room than at any point since 2014
Weaknesses
- Thin GAAP net income ($152M FY2025) and reliance on AFFO adjustments to show cash strength — sensitive to interest and D&A
- Very capital-intensive data center build consumes operating cash and requires continuous external funding (debt/equity)
- High absolute debt load (~$16.4B) — net-debt/Adjusted-EBITDA ~6.3x despite the favorable 4.8x net-lease-adjusted metric
- Core physical-storage volumes face long-run secular decline as paper records digitize
Opportunities
- Data center demand supercharged by AI/cloud — backlog supports 25%+ growth in 2026 with continued growth signaled into 2027; 400MW+ to energize
- ALM tailwind from hyperscaler and enterprise hardware refresh cycles and data-sanitization compliance needs
- Cross-sell digital + ALM into the vast installed records-storage base
- Inflation-linked pricing lets the annuity keep growing revenue even on flat/declining box volumes
Threats
- Rising / higher-for-longer interest rates raise financing costs on a highly levered, build-heavy model and pressure REIT valuations
- Data center competition from far larger, better-capitalized specialists (Equinix, Digital Realty) and hyperscaler self-build
- Secular decline of physical paper records if it outpaces price escalators and new-vertical growth
- Execution / funding risk if data center construction costs or power availability tighten
Moats, dependencies & bottlenecks
Moats
Retrieving, re-indexing, and re-warehousing decades of boxed records elsewhere is costly and risky; customers stay for decades and absorb annual price escalators.
Global warehouse network and chain-of-custody built over 70+ years; a new entrant cannot economically replicate it.
Moderate-Strong Regulated industries and governments choose IRM for auditable custody and secure destruction — reputation is the product.
400MW+ of secured, energizing capacity is valuable in a power-constrained market, but here IRM competes against far larger specialists.
Dependencies
Data center build and refinancing depend on continued access to debt at manageable rates; rising rates raise cost and constrain the model.
Data center growth is gated by grid power availability and cost; scarcity could slow the 400MW+ energize plan.
Backlog and leasing assume sustained AI/cloud-driven colocation demand; a capex pullback would hit the growth thesis.
The annuity's growth depends on contractual price increases exceeding secular box-volume erosion.
Advantages
- Self-funding flywheel: a low-capital annuity generates the cash to build capital-intensive growth assets
- Enormous, loyal, blue-chip and government customer base to cross-sell into
- Contractual, inflation-linked pricing on the core storage book
- Land bank and secured power give a foothold in a supply-constrained data center market
Weaknesses
- High absolute leverage and dependence on external funding
- Thin GAAP earnings; cash story rests on AFFO adjustments
- Core physical business in slow secular decline
- Sub-scale in data centers versus Equinix / Digital Realty
Bottlenecks
- Power availability and interconnection timelines for new data center capacity
- Balance-sheet capacity / cost of capital to fund the capital-intensive DC build
- Construction cost inflation and supply of build-ready land near demand
- Talent and execution capacity to scale a colocation development platform against entrenched specialists
Top signals & trends
Top signals
Revenue guide to $7.825-7.925B and AFFO to $1.735-1.755B — management confidence and momentum.
Multi-year visibility on the growth engine; DC revenue crossing $1B in 2026 with 400MW+ energizing.
Improved balance-sheet health supports continued investment.
Ongoing debt-funded growth raises interest cost and leverage-risk concerns.
Reported profitability is a fraction of revenue and lags the cash-metric growth story.
Trends
Primary tailwind behind IRM's fastest-growing segment; supports leasing and land-bank monetization.
Erodes physical box volumes long-term but creates digital-solutions and ALM revenue IRM can capture.
Drives ALM demand for secure, auditable IT asset decommissioning and resale.
Raises financing costs on a levered build model and pressures REIT valuations.
Constrains growth but makes IRM's secured power/land more valuable.
Ecosystem & competitor graph
Suppliers feed the company; customers pull from it. Line thickness shows the strength of each tie (supply-chain dependency, customer earnings contribution). Hover to isolate a tie.
Electricity supply is the gating input for data center capacity.
General contractors, cooling, and electrical gear for the DC build-out.
Fund the capital-intensive growth program via senior notes and credit facilities.
Core records-storage, digitization, and shredding customers across regulated industries.
Large, sticky records-management and secure-custody demand.
Data center colocation tenants driving the DC growth backlog.
Compliance-driven records retention and secure destruction.
Global colocation/interconnection leader; far larger and more focused data center specialist.
Wholesale/hyperscale data center REIT; direct competitor for IRM's DC growth ambitions.
Infrastructure REIT with data centers (CoreSite); adjacent competition for digital-infra capital and tenants.
Enterprise content/information management software — competes with IRM's digital solutions push.
Document management / secure shredding services overlap in the physical-services segment.
Owns Shred-it via Stericycle — a direct competitor in secure destruction/shredding.
Largest privately held records-and-information-management competitor in physical storage; direct rival to IRM's core.
Reverse-logistics and IT lifecycle players overlapping with IRM's ALM segment.