Q1 2024 Iron Mountain Incorporated Earnings Call
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Operator: Good morning, and welcome to the Iron Mountain First Quarter 2024 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 stars 1 and 2. We will limit analysts to one question, and then you can rejoin the queue. Please note, today's event is being recorded. I would now like to turn the conference over to Gillian Tiltman, Senior Vice President and Head of Investor Relations. Please come ahead.
Speaker Change: Good morning, and welcome to the Iron Mountain first quarter 2024 earnings Conference call.
Speaker Change: All participants will be in listen only mode.
Speaker Change: Should you need assistance. Please signal a conference specialist by pressing Star then zero on your telephone keypad.
After todays presentation, there will be an opportunity to ask questions.
Speaker Change: I'll ask a question you May press Star then one on your telephone keypad.
Speaker Change: To withdraw your question. Please press Star then two.
Speaker Change: We will limit analyst to one question and then you can rejoin the queue.
Speaker Change: Please note today's event.
Speaker Change: <unk>.
Speaker Change: I would now like to turn the conference over to Julian Tobin Senior Vice President and head of Investor Relations. Please go ahead.
Gillian Tiltman: Thanks, Rocco. Good morning and welcome to our first quarter 2024 earnings conference call. On today's call, we will refer to materials available on our Investor Relations website. We are joined here today by Bill Meaney, President and Chief Executive Officer, and Barry Hytinen, our Executive Vice President and Chief Financial Officer.
Julian Tobin: Thanks Rocco.
Julian Tobin: Morning, and welcome to our first quarter 2024 earnings conference call on today's call, we will refer to the materials available on our Investor Relations website.
Julian Tobin: I'm joined here today by Bill Meaney, President and Chief Executive Officer, and Barry Heightening, Our executive Vice President and Chief Financial Officer. After prepared remarks, we'll open up the lines for Q&A.
Gillian Tiltman: After prepared remarks, we'll open up the lines for Q&A. Today's earnings materials contain forward-looking statements, including statements regarding our expectations. All forward-looking statements are subject to risks and uncertainties. Please refer to today's earnings materials, the safe harbor language on slide two, and our quarterly report on Form 10-Q for a discussion of the major risk factors that could cause our actual results to differ from those in our forward-looking statements. In addition, we use several non-GAAP measures when presenting our financial results. We have included reconciliations to these measures in our supplemental financial information. And with that, I'll turn the call over to Bill.
Julian Tobin: Today's earnings materials contain forward looking statements, including statements regarding our expectations. All forward looking statements are subject to risks and uncertainties. Please refer to today's earnings materials. The safe Harbor language on slide two in our quarterly report on Form 10-Q for a discussion of the major risk factors that could cause our actual results.
Julian Tobin: The person that was in our forward looking statements. In addition, we use several non-GAAP measures when presenting our financial results. We have included the reconciliation to these measures in our supplemental financial information with that I'll turn the call over to Bill.
William L. Meaney: Thank you, Gillian, and thank you all for taking the time to join us today. We are pleased to report that our team has delivered outstanding results for the first quarter of 2024, achieving another set of all-time highs for revenue and profitability. Our continued progress is evidence of the success of Project Matterhorn and our team's commitment to delivering best-in-class solutions. On a reported basis, in the first quarter, we achieved our highest-ever quarterly revenue of $1.48 billion, representing 12% year-over-year growth, and a new first-quarter adjusted EBITDA record of $519 million, delivering 13% year-over-year growth.
William L. Meaney: Thank you Julian and thank you all for taking time to join US today. We're pleased to report that our team has delivered outstanding results for the first quarter of 2020 for achieving another set of all time highs for revenue and profitability. Our continued progress as evidence of the success of project Matterhorn and our team's commitment to delivering best in class solutions.
William L. Meaney: On a reported basis in the first quarter, we achieved our highest ever quarterly revenue of $1.48 billion, representing 12% year over year growth and a new first quarter adjusted EBITDA record of $519 million delivering 13% year over year growth.
William L. Meaney: Project Matterhorn has successfully transformed Iron Mountain into a solutions-based business with a commercial organization that offers a broad range of products and services to meet the evolving needs of our customers. This integrated product portfolio drives strong growth across all business areas through our integrated solutions, combining storage with truly differentiated services. Now, I'd like to take you through some pivotal wins this quarter.
William L. Meaney: Project Matterhorn has successfully transformed iron mountain into a solutions based business with a commercial organization that offers a broad range of products and services to meet the evolving needs of our customers. This integrated product portfolio drive strong growth across all business areas through our integrated solutions combining store.
William L. Meaney: Orange with truly differentiated services now I'd like to take you through some pivotal wins this quarter.
William L. Meaney: Let's begin with records and information management. The strength and longevity of the relationships we have built with our 240,000 customers are leading to further opportunities to offer more solutions from our portfolio to meet our customers' needs. An excellent example of this cross-selling is in the oil and energy sector, where a U.S.-headquartered customer with a presence in 75 countries initially selected Iron Mountain to securely manage its data containing geological information. Thanks to our expanded range of solutions and a deep understanding of the customer's needs, we are now also providing a secure IT asset disposition solution. Another example of our strength and ability to cross-sell and provide more solutions for our customers is in the United Arab Emirates.
William L. Meaney: Let's begin with records and information management.
William L. Meaney: The strength and longevity of the relationships, we have built with our 240000 customers is leading to further opportunities to offer more solutions from our portfolio to meet our customers' needs. An excellent example of this cross selling is in the oil and energy sector, where a U S headquartered customer with a presence in 75.
William L. Meaney: Five countries initially selected iron mountain to securely manage its data containing geological information.
William L. Meaney: Thanks to our expanded range of solutions and a deep understanding of the customer's needs. We are now also providing a secure I T asset disposition solution.
William L. Meaney: Another example of our strength and ability to cross sell and provide more solutions for our customers is in the United Arab Emirates for the past two years, we have been partnering with a prominent bank to provide records management services for a growing volume of documents.
William L. Meaney: For the past two years, we have been partnering with a prominent bank to provide records management services for a growing volume of documents. With this customer's need to comply with regulations from the UAE Central Bank, we secured an agreement to extend our solutions. These now include Document Capture and Asset Lifecycle Management (ALM) services. We continue to see opportunities to support government and public sector organizations with their transformations, helping them to increase efficiency and demonstrate value for money for the services they provide to their citizens.
William L. Meaney: With this customer's need to comply with regulations from the UAE Central Bank, we secured an agreement to extend our solutions.
William L. Meaney: These now include document capture and asset lifecycle management or a L. M services.
William L. Meaney: We continue to see opportunities to support government and public sector organizations with their transformations, helping them to increase efficiency and demonstrate value for money for the services they provide to their citizens.
William L. Meaney: A recent example of this is in the UK, where we have a long-term relationship with a government agency that trusts us to store approximately 18 million records. This customer awarded Iron Mountain a contract to manage documents that must be retained whilst legal proceedings are ongoing.
William L. Meaney: A recent example of this is in the U K, where we have a long term relationship with a government agency. They trust us to store approximately 18 million records. This.
William L. Meaney: This customer awarded our Iron Mountain a contract to manage documents it must be retained well it's legal proceedings are ongoing.
William L. Meaney: Our proven ability to manage records effectively for this customer and a number of other government organizations in the UK demonstrates we have the skills, capabilities, and experience to successfully manage sensitive projects like this. Turning to our digital business, a global customer that provides automation solutions has asked us to digitize its physical records in Morocco. Our Insight platform, which, as you will recall, fully integrates both artificial intelligence and machine learning, will enable this customer to simplify their current use of multiple information systems and content formats.
William L. Meaney: Our proven ability to manage records effectively to this customer and a number of other government organizations in the U K demonstrates we have the skills capabilities and experience to successfully manage sensitive projects like this.
William L. Meaney: Turning to our digital business a global customer that provides automation solutions has asked us to digitize its physical records in Morocco.
William L. Meaney: Our insight platform, which as you will recall fully integrates both artificial intelligence and machine learning will enabled this customer to simplify their current use of multiple information systems and content formats insight will enable them to derive greater value from their information, whilst improving their compliance and driving greater off.
William L. Meaney: Insight will enable them to derive greater value from their information whilst improving their compliance and driving greater operational efficiency. The customer's confidence in our solution is a testament to our team's clear understanding of our customers' needs, as well as our proven track record of success as a digital transformation partner. Staying with Digital Solutions, an Australian government agency asked Iron Mountain to digitize approximately 250,000 land registry files dating back to the 1850s for government-owned real estate in the state of Victoria.
William L. Meaney: Racial efficiencies.
William L. Meaney: The customers confidence in our solution is a testament to our team's clear understanding of our customers' needs as well as our proven track record of success as a digital transformation partner stay.
William L. Meaney: Staying with digital solutions, an Australian government agency asked Iron Mountain to digitize approximately 250000 land registry files dating back to the 18 fifties for government owned real estate in the state of Victoria.
William L. Meaney: Our solution will ensure that these vital historical records are preserved both physically and digitally, enabling efficient access for land managers, potential developers, and government departments. Our infrastructure, reputation, and expertise, including our ability to meet a requirement to manage the entire project within the state of Victoria, were key differentiators that enabled us to secure this deal. Moving next to our data center business, we continue to be pleased by the strength and rapid growth of this business and how we can support more customers with the capacity we are creating at our facilities around the world. Today, I want to highlight three examples of leases we signed this quarter.
William L. Meaney: Our solution will ensure that these vital historical records are preserved both physically and digitally enabling efficient access for land managers potential developers and government departments.
William L. Meaney: Our infrastructure reputation and expertise, including our ability to meet a requirement to manage the entire project within the state of Victoria were key differentiators that enabled us to secure this deal.
William L. Meaney: First, we signed a 24-megawatt, 12-year contract with a global technology company for data center space at our Manassas, Virginia, campus. This is an existing North American records customer that required space in Virginia to support their high-performance computing needs and to expand their footprint. Also this quarter, we leased four megawatts with an existing Global Cloud Storage customer.
William L. Meaney: Moving next to our data center business, we continue to be pleased by the strength and rapid growth of this business and how we can support more customers with the capacity we are creating at our facilities around the world today I want to highlight three examples of leases we signed this quarter.
William L. Meaney: First we have signed a 24 megawatt 12 year contract with a global technology company for data Center space at our Manassas, Virginia campus.
William L. Meaney: This is an existing north American records customer that required space in Virginia to support their high performance computing needs and to expand their footprint.
William L. Meaney: So this quarter, we leased four megawatts with an existing global cloud storage customer the customer relayed to us that our excellent customer service was a key determinant in their decision to expand their footprint with us.
William L. Meaney: The customer relayed to us that our excellent customer service was a key determinant in their decision to expand their footprint with us. Additionally, in our data center business, we are pleased to welcome a global IT consulting firm as a new customer. They chose us in order to be in close proximity to their clients, as well as to meet their demanding connectivity requirements. Turning to Asset Lifecycle Management, we are pleased to share that this quarter we closed the acquisition of Regency Technologies. The Regency leadership team has already made strong contributions to our ALM efforts, both commercially and operationally, and have integrated well into our company. Moreover, Regency adds eight complementary locations to our U.S. network.
William L. Meaney: Additionally, in our datacenter business, we are pleased to welcome a global consulting firm as a new customer they chose us in order to be in close proximity to their clients as well as to meet their demanding connectivity requirements.
William L. Meaney: Turning to asset lifecycle management, we are pleased to share that this quarter, we closed the acquisition of Regency technologies.
William L. Meaney: The Regency leadership team have already made strong contributions to our a O M efforts, both commercially and operationally and have integrated well into our company. Moreover.
William L. Meaney: Moreover, regency adds a complementary locations to our U S network.
William L. Meaney: Moving to ALM more broadly, we are pleased with strong organic growth in the business driven by a combination of increased volume and component price recovery leading to a strong quarter. As we continue to build our ALM capabilities, I wish to share several examples of how ALM enables us to offer more solutions to new and existing customers. A well-known food service brand has signed an agreement with Iron Mountain in the Netherlands to recycle its decommissioned IT assets.
William L. Meaney: Moving to a L. M. More broadly we are pleased with strong organic growth in the business driven by a combination of increased volume and component price recovery, leading to a strong quarter as.
William L. Meaney: As we continue to build our E. L M capabilities I wish to share several examples of how alien enables us to offer more solutions to new and existing customers.
William L. Meaney: A well known foodservice brand has signed an agreement with Iron mountain in the Netherlands to recycle their decommissioned I T assets.
William L. Meaney: Data security was paramount in their decision to partner with Iron Mountain, as well as our ability to be at any of their in-country locations within 48 hours. Also, in this quarter, an existing Iron Mountain Global Financial Institution customer signed a program deal to manage their secure ITAD recycling and remarketing requirements, including their remote workplace inventory for over 400 sites nationwide. The customer wanted a single vendor approach to streamline their asset lifecycle management.
William L. Meaney: Data security was Paramount in their decision to partner with Iron Mountain as well as our ability to be at any of their in country locations within 48 hours.
William L. Meaney: So in this quarter and existing Iron Mountain Global financial institution customer signed a program deal to manage their secure iPad recycling in remarketing requirements, including their remote workplace inventory for over two 400 sites nationwide.
William L. Meaney: The customer wanted a single vendor approach to streamline their asset lifecycle management.
William L. Meaney: We worked with them on a unique solution that created process and workflow enhancements integrated with their existing asset management systems and lowered their overall cost through the remarketing initiative. The program supports all of their corporate locations with both on and off-site ALM services. Finally, a multinational conglomerate company has signed a deal with us to manage its ALM needs for data center decommissioning, as well as for their end-user devices. Due to the customer's significant growth through acquisition, they had accumulated a significant amount of legacy data center and end-user device equipment that needed to be securely decommissioned.
William L. Meaney: We worked with them on a unique solution that created process and workflow enhancements integrated with their existing asset management systems and lowered their overall cost or the remarketing initiatives.
William L. Meaney: The program supports all of their corporate locations with both on and off site L. M services.
William L. Meaney: Finally, a multinational conglomerate company has signed a deal with us to manage it's a L. M needs for data center decommissioning as well as their end user devices due.
William L. Meaney: Due to the customers significant growth through acquisition. They had accumulated a significant amount of legacy data center and end user device equipment that needed to be securely decommissioned.
William L. Meaney: We were pleased to be able to provide a holistic, global solution backed by our secure chain of custody in order to meet their needs. To conclude, I am very proud of the strong results our mountaineers continue to deliver. Our consistently strong performance, including our ability to achieve our highest quarterly revenue to date, is evidence of the increasing heights we are achieving as part of our Matterhorn climb. At the core of this continued strong performance is our customers.
William L. Meaney: We were pleased to be able to provide a holistic global solution backed by our secured chain of custody in order to meet their needs.
William L. Meaney: To conclude I am very proud of the strong results. Our mountaineer has continued to deliver our.
William L. Meaney: Our consistently strong performance, including our ability to achieve our highest quarterly revenue to date is evidence of the increasing heights, we are achieving as part of our Matterhorn climb.
William L. Meaney: At the core of this continued strong performance is our customers all of US at Iron Mountain are humbled by the trust, which more than two 400 and 240000 organizations around the world, including 95% of the Fortune 1000 have enough in our increased portfolio of services.
William L. Meaney: All of us at Iron Mountain are humbled by the trust that more than 240,000 organizations around the world, including 95% of the Fortune 1000, have in us through our increased portfolio of services. We look forward to continuing our growth journey as we deliver our best in class and integrated solutions to our clients and create value for our shareholders. With that, I'll turn the call over to Barry.
William L. Meaney: We look forward to continuing our growth journey as we deliver our best in class and integrated solution to our clients and create value for our shareholders with that I'll turn the call over to Barry.
Barry A. Hytinen: Thanks, Bill, and thank you all for joining us to discuss our results. In the first quarter, our team continued our track record of strong performance, exceeding the expectations we've provided on our last call. We achieved record quarterly revenue of $1.48 billion, up 12% on a reported basis, driven by 9% storage growth and 17% service growth. On an organic basis, revenue grew 8%. Revenue was nearly $30 million ahead of the expectations we shared on our last call, driven by stronger performance in both our global rim and our asset lifecycle management businesses.
Barry A. Hytinen: Thanks, Bill and thank you all for joining us to discuss our results.
Barry A. Hytinen: In the first quarter, our team continued our track record of strong performance exceeding the expectations, we provided on our last call.
Barry A. Hytinen: We achieved record quarterly revenue of $1 $4 8 billion up 12% on a reported basis, driven by 9% storage growth and 17% service growth on an organic basis revenue grew 8%.
Barry A. Hytinen: Revenue was nearly $30 million ahead of the expectations, we shared on our last call driven by stronger performance in both our global rim and our asset lifecycle management businesses.
Barry A. Hytinen: Total storage revenue of $885 million, up $75 million year-on-year, was driven by solid performance from both GlobalRIM and Data Center. Total service revenue of $592 million was up $88 million from last year, reflecting strength in global RIM and digital, as well as a strong contribution from our recently closed acquisition of Regency Technologies. For me, two key highlights in the quarter are first, data center storage revenue exceeded 30% growth year on year. And second, our organic service revenue growth accelerated to 10% year on year, primarily driven by improved performance in our asset lifecycle management business. Adjusted EBITDA was $519 million, an increase of $58 million from last year.
Barry A. Hytinen: Total storage revenue of $885 million up $75 million year on year was driven by solid performance from all global rim and datacenter.
Barry A. Hytinen: Total service revenue of $592 million was up $88 million from last year, reflecting strength in global rim and digital as well as strong contribution from our recently closed acquisition of Regency technologies.
Barry A. Hytinen: For me to key highlights in the quarter, our first data center storage revenue exceeded 30% growth year on year and second our organic service revenue growth accelerated to 10% year on year, primarily driven by improved performance in our asset lifecycle management business.
Barry A. Hytinen: Adjusted EBITDA was $519 million, an increase of $58 million from last year.
Barry A. Hytinen: This constitutes growth of 13% both on a reported and constant currency basis year on year, driven by strong contributions across all business units. Adjusted EBITDA margin was 35.1%, consistent year-on-year driven by revenue management and cost productivity, offset by net. AFFO was $324 million or $1.10 on a per share basis, a $29 million and $0.09, respectively, from the first quarter of last year. This was ahead of the expectations we shared on our last call as a result of the upside in adjusted EBITDA, as well as the phasing of both recurring capital investments and cash taxes, which is incorporated into our guidance for the second quarter. Now, turning to segment performance.
Barry A. Hytinen: This constitutes growth of 13% both on a reported and constant currency basis year on year, driven by strong contributions across all business units.
Barry A. Hytinen: Adjusted EBITDA margin was 35, 1% consistent year on year, driven by revenue management and cost productivity offset by mix.
Barry A. Hytinen: <unk> was $324 million or $1 10 on a per share basis up $29 million and ninth respectively from the first quarter of last year.
Barry A. Hytinen: This was ahead of the expectations, we shared on our last call as a result of the upside in adjusted EBITDA as well as phasing of both recurring capital investments and cash taxes, which is incorporated into our guidance for the second quarter.
Barry A. Hytinen: Now turning to segment performance in.
Barry A. Hytinen: In the first quarter, our global rim business delivered revenue of $1.21 billion, an increase of $84 million from last year. On a reported and organic basis, revenue grew 7%. Storage rental revenue growth of 6% reflects our focus on revenue management and consistent volume trends. We delivered service revenue growth of 10% driven by traditional services and digital solutions.
Barry A. Hytinen: In the first quarter, our global rim business delivered revenue of $1 to $1 billion, an increase of $84 million from last year on a reported and organic basis revenue grew 7% storage rental revenue growth of 6% reflects our focus on revenue management and consistent volume trends.
Barry A. Hytinen: We delivered service revenue growth of 10% drip drip.
Barry A. Hytinen: Driven by traditional services and digital solutions.
Barry A. Hytinen: Global Rim Adjusted EBITDA was $526 million, an increase of $48 million year-on-year. Turning to our global data center business, we achieved revenue of $144 million, and an increase of $32 million and 28% year-on-year. Data Center Adjusted EBITDA was $62 million, or 22% growth from the first quarter of 2023. Turning to new and expansion leasing, we had a successful quarter with the team signing 30 megawatts with strong cross-selling activity. Our data center pipeline is robust across the markets we serve.
Barry A. Hytinen: Global rim, adjusted EBITDA was $526 million, an increase of $48 million a year on year.
Barry A. Hytinen: Turning to our global data center business, we achieved revenue of $144 million, an increase of $32 million and 28% year on year.
Barry A. Hytinen: Datacenter adjusted EBITDA was $62 million or 22% growth from the first quarter of 2023.
Barry A. Hytinen: Turning to new and expansion leasing we had a successful quarter with the team signing 30 megawatts with strong cross selling activity.
Barry A. Hytinen: Our data center pipeline is robust across the markets. We serve in Phoenix, where we are only leased in our first few sites. We have now commenced construction on our third site and have a considerable pipeline of opportunities to fill it.
Barry A. Hytinen: In Phoenix, where we are fully leased at our first two sites, we have now commenced construction on our third site and have a considerable pipeline of opportunities to fill it. In support of our data center strategy and consistent with our sustainability commitments, we were pleased to execute our first green loan in April. This $300 million financing was well received and considerably oversubscribed. Proceeds will be used to support the construction of energy-efficient data centers in Northern Virginia. Turning to Asset Life Cycle Management
Barry A. Hytinen: In support of our datacenter strategy and consistent with our sustainability commitments. We were pleased to execute our first green loan in April this $300 million financing was well received and considerably oversubscribed proceeds will be used to support the construction of energy efficient data centers in northern Virginia.
Barry A. Hytinen: Turning to asset lifecycle management.
Barry A. Hytinen: In the first quarter, we delivered improved performance for both revenue and EBITDA. Total ALM revenue in the quarter was $84 million, an increase of 103% year-on-year. Regency Technologies performed ahead of our expectations in the quarter with revenue of $32 million. While we are only one quarter into the integration, we are very pleased with the acquisition and are already seeing more benefits than planned in terms of cross selling, increased capabilities, and improved operational efficiency.
Barry A. Hytinen: In the first quarter, we delivered improved performance for both revenue and EBITDA.
Barry A. Hytinen: Total <unk> revenue in the quarter was $84 million, an increase of 103% year on year.
Barry A. Hytinen: Regency technologies performed ahead of our expectations in the quarter with revenue of $32 million.
Barry A. Hytinen: While we are only one quarter into the integration. We are very pleased with the acquisition and are already seeing more benefit than planned in terms of cross selling increase capabilities and improved operational efficiencies.
Barry A. Hytinen: On an organic basis, ALM revenue increased 25% year-on-year, driven by both improved component pricing and increased volume from our strong cross-selling activity. Turning to capital, in the first quarter, we invested $366 million, of which $337 million was growth and $29 million was recurring. Our full-year capital expenditure target remains $1.35 billion of growth and $150 million of recurring. Turning to the balance sheet, with strong EBITDA performance, we ended the quarter with net lease-adjusted leverage of 5.1 times. As a reminder, this remains at the lowest level in the past decade.
Barry A. Hytinen: On an organic basis <unk> revenue increased 25% year on year, driven by both improved component pricing and increased volume from our strong cross selling activity.
Barry A. Hytinen: Turning to capital in the first quarter, we invested $366 million of which 337 million was growth and $29 million was recurring.
Barry A. Hytinen: Our full year capital expenditure target remains $1.35 billion of growth and $150 million of recurring.
Barry A. Hytinen: Turning to the balance sheet with strong EBITDA performance, we ended the quarter with net lease adjusted leverage of five one times as a reminder, this remains at the lowest level in the past decade.
Barry A. Hytinen: We expect to operate within our target leverage range, which is 4 12 to 5 12 times. Our board of directors declared our quarterly dividend of $0.65 per share to be paid in early July. On a trailing four-quarter basis, our payout ratio is now 61%, at the lower end of our long-term target range of low to mid-60s percent. Now, turning to our forecast. With our positive outlook, we are pleased to reiterate our full-year guidance despite the impact of the strengthening U.S. dollar.
Barry A. Hytinen: We expect to operate within our target leverage range, which is four and a half to five and a half times.
Barry A. Hytinen: Our board of directors declared a quarterly dividend of <unk> 65 per share to be paid in early July.
Barry A. Hytinen: On a trailing four quarter basis, our payout ratio is now 61% at the lower end of our long term target range of low to mid <unk> percent.
Speaker Change: And now turning to our forecast.
Speaker Change: With our positive outlook, we are pleased to reiterate our full year guidance. Despite the impact of the strengthening U S dollar.
Barry A. Hytinen: Our forecast today includes current FX rates, which results in an incremental headwind of approximately $25 million to revenue and approximately $10 million to adjusted EBITDA through the remainder of the year as compared to our initial guidance. For the second quarter, we expect
Speaker Change: Our forecast today includes current FX rates, which resulted in an incremental headwind of approximately $25 million to revenue and approximately $10 million to adjusted EBITDA through the remainder of the year as compared to our initial guidance.
Speaker Change: For the second quarter, we expect.
Barry A. Hytinen: Revenue of approximately $1.5 billion, adjusted EBITDA of approximately $535 million, AFFO of approximately $310 million, and AFFO per share of approximately $1.05. In summary, we are pleased to have delivered strong first quarter results, and we expect continued growth in 2024 as a result of our focus on Project Matterhorn objectives. I would like to take this opportunity to once again thank our entire team for their continued dedication and commitment to Iron Mountain and our clients. And with that operator, would you please open the line for Q&A?
Speaker Change: Revenue of approximately $1 5 billion adjusted EBITDA of approximately $535 million a S. A thought was approximately $310 million and <unk> per share of approximately $1.05.
Speaker Change: In summary.
Speaker Change: We are pleased to have delivered strong first quarter results and we expect continued growth in 2024 as a result of our focus on project Matterhorn objectives.
Speaker Change: I would like to take this opportunity to once again, thank our entire team for their continued dedication and commitment to iron mountain and our clients.
Speaker Change: With that operator would you. Please open the line for Q&A.
Speaker Change: Okay.
Operator: Absolutely! If you would like to ask a question, please press star then 1 on your telephone keypad. If you are using a speaker phone, please pick up your handset before pressing the keys. If at any time your question has been answered and you would like to withdraw your question, please press star then 2. We will limit analysts to one question, and then you can rejoin the queue. At this time, we will pause momentarily to assemble our roster. And today's first question comes from George Tong with Goldman Sachs. Please go ahead.
Speaker Change: Absolutely.
Speaker Change: To ask a question. Please press Star then one on your telephone keypad.
Speaker Change: If youre using a speakerphone please pick up your handset before pressing the keys.
Keen Fai Tong: And for that anytime a question has been addressed and you would like to withdraw your question. Please press Star then two.
Speaker Change: We will limit analysts to one question and then you can rejoin the queue.
Speaker Change: At this time, we will pause momentarily to assemble our roster.
William L. Meaney: And today's first question comes from George Tong with Goldman Sachs. Please go ahead.
Keen Fai Tong: Hi, thanks. Good morning.
Alright, thanks, good morning within the storage business organic revenue growth.
Keen Fai Tong: Step to seven 5% in the quarter compared to about 10, 5% in <unk>.
Keen Fai Tong: Presumably most of that was driven by changes in price realizations and volumes are generally stable and storage can you talk a little bit about what you're seeing with your revenue management strategy and you lose traction with price realization in the quarter and expectations for the remainder of the year.
William L. Meaney: Within the storage business, organic revenue growth stepped to 7.5% in the quarter compared to about 10.5% in 4Q. Presumably, most of that was driven by changes in price realization since volumes are generally stable in storage. Can you talk a little bit about what you're seeing with your revenue management strategy and your latest attraction with price realization in the quarter and expectations for the remainder of the year?
Keen Fai Tong: Thanks, George and spill and.
Speaker Change: Joining the call. The so let me let me start with kind of a macro view. So we were really very pleased with our storage. Both in terms of the records management as well as in the datacenter side because you can see we're continuing to to grow we'd never stored on the traditional side or the the records management side, we've never stored more documents than we do.
Speaker Change: Two today. So we're really pleased with the continued strength of the of the volume and the growth in the volume on the datacenter side in terms of pricing you can that you can appreciate that we are as we go through the year.
William L. Meaney: That ramp so you should think about that as being kind of the low point, but I don't know Barry you might want to add a little bit more color to it hi, George good morning, and thanks for that question.
Barry A. Hytinen: So let me start with kind of a macro view. So we're really very pleased with our storage, both in terms of records management as well as in the data center side, because you can see we're continuing to grow. We've never stored on the traditional side or the records management side; we've never stored more documents than we do today. So we're really pleased with the continued strength of the volume and the growth in the volume on the data center side. In terms of pricing, you can appreciate that as we go through the year, that price ramps up. So you should think about that as being kind of the low point.
William L. Meaney: Thanks, George. It's Bill, and I appreciate you joining the call.
William L. Meaney: Bill has got it right there on on the revenue management within global rim. The timing of revenue management actions year on year is such that there was a bit of a shift in.
Bill: In the first quarter last year, we had more of the revenue management actions in place right at the beginning of the year and this year, we're back to a more normal cadence of kind of this.
Bill: March timeframe generally speaking in terms of getting them all into the market and realized as it relates to.
Bill: How it performed though in global rim for storage rental revenue growth, that's actually to be clear ahead of our expectations on on the lines, you're asking about and in total we delivered seven 5% total revenue growth in global rim Youll recall last quarter, we mentioned that our guide for the whole year, assuming global room at about 6%. So we're.
Barry A. Hytinen: But I know, Barry, you might want to add a little bit more color to it. Hi, George. Good morning.
Bill: Starting very well there was upside in global rim, principally driven off of services, but a little bit ahead as I mentioned on storage rental and of course datacenters off to a really strong start so we feel very well positioned with respect to where we started the year George out on both revenue management total storage revenue as well as the.
Barry A. Hytinen: Hi George, good morning, and thanks for that question. Bill's got it right there on revenue management within Global Rim. The timing of revenue management actions year on year is such that there was a bit of a shift in the first quarter. Last year, we had more revenue management actions in place right at the beginning of the year. And this year, we're back to our more normal cadence of kind of the March time frame, generally speaking, in terms of getting them all into the market and realized as it relates to how they performed, though, in Global Rim for storage rental revenue growth.
Barry A. Hytinen: It's actually, to be clear, ahead of our expectations on the lines you're asking about. And in total, we delivered seven and a half percent total revenue growth in Global Rim. You'll recall last quarter we mentioned that our guide for the whole year assumed Global Rim at about six percent. So we're starting very well. There was upside in Global Rim, principally driven by services, but a little bit ahead, as I mentioned, on storage rental.
Speaker Change: Full enterprise results. Thanks.
Barry A. Hytinen: Okay.
Barry A. Hytinen: And, of course, data centers are off to a really strong start. So we feel very well positioned with respect to where we started the year, George, on both revenue management, total storage revenue, as well as the full enterprise results. Thank you. And our next question today comes from Nate Crossett with BMP. Please go ahead. Hey, thank you. Good morning.
Nathan Daniel Crossett: Thank you. And our next question today comes from Nate Crossett with BNP. Please go ahead.
Barry A. Hytinen: And our next question today comes from Nate Crossett with BNP. Please go ahead.
Nathan Daniel Crossett: Maybe just
Nathan Daniel Crossett: Hey, Thank you good morning.
Nathan Daniel Crossett: Maybe just a follow up to that what is your expectation for rim volumes for <unk> and the balance of the year.
Nathan Daniel Crossett: And then data center leasing guidance is it still 100 megawatt and maybe you can just talk about the pipeline.
Nathan Daniel Crossett: The center.
William L. Meaney: Okay, thanks Nate. I'll give you the, in terms of volume, we continue to be a rock-solid business in terms of RIM volume, and we continue to see that flatten slightly. So, you know, we don't see any change, and you can see that in our supplemental, we don't see any change in that trend, and we continue to feel really good about that. And in terms of the pipeline for data centers, it's extremely strong. You can see we're off to a good start.
Nathan Daniel Crossett: Okay. Thanks, Nate I'll give you the in terms of volume. We continue you know it's a it's a.
William L. Meaney: Rock solid business in terms of the print volume and we continue to see that to flat to slightly up. So we don't see any change and you can see that in our supplemental we don't see any change in that trend and we continue to feel really good about that and in terms of the pipeline on data center.
Speaker Change: It's extremely strong as you can see we're off to a good start we guided 100 megawatts for the full year.
William L. Meaney: We guided for 100 megawatts for the full year. We're 30 megawatts in the first quarter, and we have a very strong pipeline, as Barry alluded to in terms of Arizona, for instance, in terms of building out the third site in Phoenix. But across the globe, we have a very, very strong pipeline. So, we're expecting another very strong year benefiting from the, you know, the strong macro environment around data centers, especially with the growth around AI applications. Yeah, and Nate, the only one.
William L. Meaney: Our 30 megawatts in the first quarter and we have a very strong pipeline as Barry alluded to in terms of Arizona for instance in terms of building out the third site in Phoenix, but across the globe. We have very very strong pipeline. So we're expecting another very strong year benefiting from the strong macro environment around data centers, especially.
William L. Meaney: With the growth around AI applications.
Barry A. Hytinen: And Nate, Barry, the only thing I would add is, building on Bill's point there at the beginning on volume, we are forecasting for volume to be up in the second quarter versus the first quarter and consistent to slightly up for the full year. As we've been saying for some time, we're well on track with that forecast. And just as a reminder, we have never stored more physical volume than we are storing today. Thank you, and our next
William L. Meaney: And Nate the only this is Barry the only thing I would add is building on to Bill's point there at the beginning on volume we are forecasting for volume to be up second quarter versus the first quarter and consistent to slightly up for the full year as we've been saying for some time, we are well on track with that forecast and just as a reminder.
Barry A. Hytinen: We have never stored more physical volume and we are storing today.
Brendan James Lynch: Thank you. And our next question today comes from Brendan Lynch with Barclays. Please go ahead.
Speaker Change: Thank you and our next question today comes from from the wounds with Barclays. Please go ahead.
Brendan James Lynch: Great. Thanks for taking the questions maybe.
Brendan James Lynch: Maybe we could start just by disaggregated, the a O M components between increased volume and improved pricing.
Barry A. Hytinen: Hi Brendan, it's Barry. Thanks for that question. If we look at total ALM, we had $84 million in revenue. Now Regency, which, as you know, we just recently acquired, was just over $32 million in revenue, as I mentioned in my prepared remarks. So that, and by the way, that was a very good performance.
Brendan James Lynch: Hi, Brennan, it's Barry Thanks for that question. If we look at total a L. M. We had $84 million of revenue now regency, which as you know we just recently acquired was just over $32 million of revenue as I mentioned on the prepared remarks, so that and by the way that was very good performance.
Barry A. Hytinen: So that's on a run rate of nearly let's call. It 130, Youll recall last quarter I mentioned that embedded in the midpoint of our guidance. It was for regions should be about $1 15, and so we are well on track with respect to that line.
Barry A. Hytinen: In terms of enterprise and Hyperscale R. R.
Barry A. Hytinen: So that's on a run rate of nearly, let's call it 130. You'll recall last quarter, I mentioned that embedded in the midpoint of our guidance was for Regency to be about 115, with the rest of our ALM businesses performing quite well. As I mentioned, on an organic basis, ALM was up 25%, which was stronger than we expected. And I should note that ALM, in total, was about $10 million ahead of the expectations we had baked into our first quarter guidance.
Barry A. Hytinen: Rest of our <unk> business is performing quite well as I mentioned on an organic basis.
Barry A. Hytinen: AUM was up 25%, which was stronger than we expected and I should note that a L. M. In total was about $10 million ahead of the expectations, we have baked into our first quarter guidance. So it was a meaningful portion of the upside for the total enterprise and Hyperscale getting directly to your question now volume and price were both.
Barry A. Hytinen: So it was a meaningful portion of the upside for the total. In enterprise and piper scale, getting directly to your question now, volume and price were both up, and we saw component pricing rising through the quarter with more of the increase late in the quarter. So as we sit here today in April, component prices have continued to rise as compared to where they were in the first quarter. And in our outlook, we continue to be, I think prudent with our expectations that that is likely to continue to rise, although we haven't baked in the kind of some of the levels of increase that you've seen from some of the industry analysts, which are very robust increases as we move through the remainder of the year.
Barry A. Hytinen: And we saw component pricing us rising through the quarter with more of the increase late in the quarter. So as we sit here today in April.
Barry A. Hytinen: Component prices have continued to rise as compared to where they were in the first quarter and in our outlook. We continue to be I think prudent with our expectations that that is likely to continue to rise, although we haven't baked into kind of some of the levels of increase that you've seen from some of the industry analysts, which are very robust increases as we move through the remainder of the year.
Barry A. Hytinen: Volume is being driven by our strong cross-selling activity and increased penetration with hyperscale clients as it relates to decommissioning. In both cases, we see that continuing to trend up over time. So we're feeling really good about the way ALM is starting to track.
Barry A. Hytinen: Volume is being driven by our strong.
Barry A. Hytinen: Cross selling activity and increased our penetration with hyperscale clients as it relates to decommissioning in both cases, we see that continuing to trend up over time. So we're feeling really good about the way a L. M is starting to track with it. Thank you.
Jonathan Atkin: Thank you. And our next question today comes from Jon Atkin with RBC. Please go ahead.
Barry A. Hytinen: Thank you and our next question today comes from Jon Atkin with RBC. Please go ahead.
William L. Meaney: Thanks. So a question on data centers and a question on, I guess, ALM. So on data centers for some of your newer expansions where you might end up doing, you know, built-to-suits or single-tenant, what are the unlevered yields now that you are kind of underwriting to? What would be kind of a minimum level that you think the market will bear? And then for ALM, I just wondered which regions you think you could see outsized growth in. Thank you.
Jonathan Atkin: Thanks, So a question on data centers and a question on <unk>.
William L. Meaney: Yes, I guess, so on data centers for.
William L. Meaney: Some of your newer expansions, where you might end up doing build to suits or single tenant what what are the unlevered yields now that you are.
William L. Meaney: Underwriting and what would be kind of a minimum level that you think the market will bear.
William L. Meaney: And then for <unk> I.
William L. Meaney: I, just wondered which regions do you think you could see.
William L. Meaney: Outsize growth in thank you.
William L. Meaney: Okay, so maybe I'll start, John, and then Barry can give you some more color on ALM. On the data center side, I think we covered pretty much what we said in the last quarter. We see those trends continuing. So think of it as a couple hundred basis points above, you know, the historical cash on cash return. So you're kind of looking at the 9 to 10 on hyperscale, and then you're, you know, I guess your question was more around hyperscale.
Speaker Change: Okay. So maybe I'll I'll start John and then Barry can give you some more color on a L. M. On the datacenter side I think I think we covered it pretty much what we said in the last quarter, we see those trends continuing so think of it as a couple of hundred basis points above.
William L. Meaney: Yeah, you know the historical cash on cash return, so you're kind of looking at the nine to 10 on Hyperscale and then you're right.
William L. Meaney: I guess your question was more around Hyperscale. So if you think about it in terms of cost of capital.
William L. Meaney: So if you think about it in terms of cost of capital, then we've, you know, basically it's slightly ahead of what we've seen in the cost of capital with the run-up in interest rates. So the spreads are still positive in terms of the cost of finance, in terms of what we've gotten for cash on cash returns on the new leasing that we're doing, and that's, you know, due to the macro environment, as you know very well, in terms of it's a very, very strong market for data centers, and we see that in our results.
William L. Meaney: Then we've basically it's slightly ahead of what we've seen in the cost of capital with the run up in interest rates. So the spreads are still positive in terms of the cost of our finance in terms of what we've gotten for cash on cash returns on the on the new leasing that we're doing and that's due to the macro environment.
William L. Meaney: Very well in terms, it's a very very strong market for data center and we see that in our results.
Barry A. Hytinen: Jon, hi, it's Barry on the ALM question as it relates to where we might see continued outsized performance. I don't want to come across as promotional, but it's basically all regions, you know, because we are seeing ALM component pricing rise on a global basis. And we're seeing continued volume growth around the world, particularly in the US, thanks to our continued cross-selling to some of our largest Fortune 1000 type clients, as well as partnering together with the great team at Regency Technologies.
William L. Meaney: John Hi, its theory on the a L. M question as it relates to where we might see continued outsized performance I don't want to come across promotional but it's basically all regions.
Barry A. Hytinen: 'cause we are seeing a L M. A component pricing rise on a global basis, and we're seeing continued volume growth around the world, particularly in the U S. Thanks to our continued cross selling to our some of our largest four.
Barry A. Hytinen: Fortune 1000 type clients as well as partnering together with the great team at Regency technologies, we're seeing strong growth there and I think that will continue for some time as you know the <unk> market is very large is highly fragmented and we think we have a.
Barry A. Hytinen: We're seeing strong growth there, and I think that will continue for some time. As you know, the ALM market is very large and highly fragmented, and we think we have a huge opportunity in that space. And I just want to underscore that we're really, really pleased with the way the Regency combination is already unfolding, even in this early stage of the integration. So, Jon.
Barry A. Hytinen: Huge opportunity in that space and I just want to underscore that we're really really pleased with the way. The regency combination is already unfolding even in this early stage of the integration. So thanks John.
Jon: Thank you and as a reminder, if you'd like to ask a question. Please press Star then one.
Andrew Steinerman: Thank you, and as a reminder, if you'd like to ask a question, please press star then 1. Our next question comes from Andrew Steinerman with J.P. Morgan. Please go ahead.
Barry A. Hytinen: Our next question comes from Andrew Steinman with Jpmorgan. Please go ahead.
Alexander Eduard Maria Hess: Yes, hi, this is Alex Hess on for Andrew Steinerman. Maybe two quick questions if you'll allow them. On the ALM side, it appears that sort of, you know, if my math is right, that quarter on quarter, so 4Q23 to 1Q24, sort of organic growth was about flat. Is that right? You know, maybe $25 million, 25% growth times the year-ago growth rate or year-ago revenue number for ALM? And then, if I think about it, you know, maybe, and maybe I'll let you answer that, and then I'm, hopefully you don't mind if I ask a maybe more longer-term oriented question.
Andrew Steinerman: Yes, Hi, this is Alex on for Andrew Steinman, maybe two quick questions if you'll allow.
Alexander Eduard Maria Hess: L. M side. It appears that sort of you know if my math is right that quarter on quarter. So for Qs 23 to $1 24.
Alexander Eduard Maria Hess: That's sort of the org.
Alexander Eduard Maria Hess: Organic growth was about flat.
Alexander Eduard Maria Hess: Right you know, maybe 25 million to 20.
Alexander Eduard Maria Hess: 100% gross times, a year ago growth rate a year ago revenue number for L. M.
Alexander Eduard Maria Hess: And then if I think about you know maybe and maybe I'll, let you answer that and then hopefully you don't mind, if I ask a maybe more longer term oriented question.
Alexander Eduard Maria Hess: Go ahead with the longer term, and so we'll have them both. All right.
Alexander Eduard Maria Hess: They'll have with the longer term and so we'll have them both.
Alexander Eduard Maria Hess: All right, sounds good. So on the more longer-term oriented question, I just wanted to know, like, how do you think about your ability to sort of deliver on time and on budget with your in your data center business? And, you know, maybe how that's benchmarked against your peers.
Speaker Change: Alright, it sounds good.
Alexander Eduard Maria Hess: So on the more longer term oriented question I just wanted to know how do you think about your ability to sort of deliver on time on budget with and your data Center business.
Alexander Eduard Maria Hess: Maybe how that that's benchmarked against your peer group.
William L. Meaney: Okay, I'll deal with the longer term, and then I'll let Barry talk to you about the sequential quarter to quarter on the ALM side. So, on the data center business, I think you can see that we're, you know, continuing to drive, you know, strong deployments across all of our campuses. So, you know, we don't see any change in terms of our ability to both plan and execute that.
Speaker Change: Okay, well, let me I'll deal with the longer term and then I'll, let Barry.
Barry: Talk to you about the sequential quarter over quarter to quarter on the a L. M side. So on the I mean, the data center business I think you can see that we're continuing to drive strong deployments across all of our campuses.
Barry: So we don't see any change in terms of our ability to both.
William L. Meaney: <unk> and execute that that's you know and you can see that in our leasing activity because as you can imagine, especially with the hyperscale clients.
William L. Meaney: And that's, you know, and you can see that in our leasing activity. Because, as you can imagine, especially with the hyperscale clients, and, you know, most of our leasing over the last 12 months has been, the vast majority has been with hyperscale. You can imagine that's a key component for them to decide who they're going to go to is our ability to actually execute on time and on budget, which is, you know, managing the supply chain.
William L. Meaney: Most of our leasing over the last 12 months has been you know the vast majority has been with Hyperscale you can imagine that's a key component to them to decide who they gotta go to is our ability to actually execute on time on budget.
William L. Meaney: Which is managing also the supply chain. So if anything we see even though the demand is really really strong right now in data center.
William L. Meaney: So, if anything, we see even though the demand is really, really strong right now in data centers, we see that the planning's gotten a little bit simpler, his supply chain is more normalized, albeit though there's very, very strong demand. So we're blessed with a very good construction team, and our customers' trust is, in a big part, exactly what you're talking about.
William L. Meaney: We see that the plantings that had gotten a little bit simpler has supply chain is more normalized, albeit though this you know very very strong demand. So.
William L. Meaney: We're blessed with a very good construction team and our customers Trust us and a big part exactly what you're talking about.
Barry A. Hytinen: And Alex, it's Barry. Thanks for that question. You're doing the math right. It was up slightly on a dollar basis in Q2Q. And I'll just note that, as we said last quarter, on the decommissioning side, we had some clients last quarter that wanted to move some of their volume that they had been sitting on for some time. So there was a little bit of timing there.
William L. Meaney: And Alex it's Barry Thanks for that question.
Barry A. Hytinen: Youre doing the math right. It was up slightly on a dollar basis Q to Q and I'll just note that as we said last quarter on the <unk>.
Barry A. Hytinen: <unk> side, we had some clients last quarter that wanted to move some of their volume that they had been sitting on for some time. So there was a little bit of timing there and frankly I think we also saw in light of the way pricing was moving both from the end of the fourth quarter through the first quarter of that.
Barry A. Hytinen: And frankly, I think we also saw in light of the way pricing was moving both from the end of the fourth quarter through the first quarter that some of our hyperscale clients were actually deferring some of the remarketing until later in the quarter in light of the fact that they wanted to, like we did as well, capture the better pricing that we'd been seeing. As I mentioned earlier, the pricing really did ramp up later in the quarter and continues to this day.
Barry A. Hytinen: All of our Hyperscale clients, we're actually deferring some of the remarketing until later in the quarter in light of the fact that they wanted to like we did as well capture the better pricing that we've been seeing as I mentioned earlier the pricing really didn't ramp later in the quarter and continues so the trends in that business are quite good.
Barry A. Hytinen: So the trends in that business are quite good, and what that results in is we have a little bit of a mix in the legacy IT renewal business. I will note, however, that the enterprise business was up nicely on a sequential basis. And of course, in light of the cross-selling activity and the bookings that we've been talking about in that business, and knowing that it's not the kind of remarketing, it's just very straight service oriented, I am expecting the enterprise business to continue to grow quarter to quarter and, frankly, the hyperscale as well. So thanks for that, Alex.
Barry A. Hytinen: And what that results in us we had a little bit of mix in the legacy I T renew business. Although I will note. However that the enterprise business was up nicely on a sequential basis and of course in light of the cross selling activity in the bookings that we've been talking about in that business.
Barry A. Hytinen: And knowing that it is not that kind of remarketing. It's just very straight service oriented I am expecting the enterprise business to continue to grow quarter to quarter and frankly, the hyperscale as well so thanks for that Alex.
Barry A. Hytinen: Yeah.
Eric Thomas Luebchow: Thank you. And our next question today comes from Eric Luebchow with Wells Fargo. Please go ahead.
Barry A. Hytinen: Our next question today comes from Eric Hugel with Wells Fargo. Please go ahead.
Eric Thomas Luebchow: All right, great. Thanks for taking the time to answer the question. Just to follow back on the data center business, you know, obviously, you have a high-class problem with most of your footprint pretty leased up. So how should we think about future data center CapEx given the strong leasing in the quarter? And how are you thinking about, you know, either additional markets or areas where you might need to add land capacity so that you have, you know, a further runway to grow the business beyond this year? Thanks.
Eric Thomas Luebchow: Hi, great. Thanks for taking the question.
Eric Thomas Luebchow: Just to follow back on the datacenter business.
Eric Thomas Luebchow: You know obviously you have a high class problem with most of your footprint pretty lean stuff. So how should we think about.
Eric Thomas Luebchow: You know future data center Capex.
Eric Thomas Luebchow: Given the strong leasing in the quarter and how are you thinking about you know either additional markets or areas, where you might need to add land capacity. So that you have you know a further runway to grow the business beyond this year.
William L. Meaney: Thanks, Eric, for the question. Yeah, so I think, let me kind of break your question down into two parts. From a capital standpoint, we're, you know, very much within our multi-year plan that we laid out at Investor Day. So, you know, in terms of our ability to fund it, as I said earlier, we have, you know, a fully funded plan, and that, you know, we don't see any issues between the strength that we have in our traditional records management business, which generates, as you know, tons of cash that we then, after paying the dividend, actually plow into data centers and growth areas.
Speaker Change: Thanks, Eric for the question Yeah. So I think let me kind of break out your question in two parts from a capital standpoint, we're very much within our multi year plan that we laid out at the Investor day. So you know in terms of our ability to fund it as I said.
William L. Meaney: Earlier is that we are fully funded plan and that we don't see any issues between the strength that we have in our traditional records management business that generates as you know tons of cash that we then.
William L. Meaney: After paying the dividend, we actually plow into data center and growth areas and then of course, the strong growth. We're getting at EBITDA gives us plenty of debt capacity to continue to fund that growth. So in terms of the funding side of it.
William L. Meaney: And then, of course, the strong growth we're getting at EBITDA gives us plenty of debt capacity to continue to fund that growth. So, in terms of the funding side of it, as you say, it's a high-class problem, but you can imagine, even when we were, you know, putting the plans together, and we do our budgets, we look at upside and downside in terms of demand. So, we're pretty comfortable that we can continue to fund the growth that we're seeing.
William L. Meaney: As you say, it's a high class problem, but you can imagine even when we were you know putting the plans together and we do our budgets as we look at upside and downside in terms of demand and so we're pretty comfortable that we can continue to to fund the growth that we're seeing in terms of the you know the.
William L. Meaney: In terms of the, you know, the footprint, you're right to point out that, you know, we're going to be, you know, full and, for instance, in our Manassas campus fairly soon, and we've talked about that we're already starting construction on our third campus or our third data center in Phoenix, and, you know, we're building out the Madrid campus, we're adding to the Amsterdam campus, London So, you're right to point that out, but I think you can imagine that we feel very confident that we have in our pipeline to acquire more land that's in excess of the 100 megawatts, for instance, that we guided this year.
William L. Meaney: Youre right to point out that you know we're going to be.
William L. Meaney: Full and for instance, in our Manassas campus fairly soon and and we've talked about that we're already starting construction on our third campus or a third data center in Phoenix.
William L. Meaney: We're building out the Madrid campus, we're adding to the Amsterdam campus, London, three start off with one data center or an hour and three we have two data centers in Frankfurt, So you're right to point that out, but I think you can imagine that we right now we feel very confident that we have in our pipeline to acquire more land that's in excess of the 100 megawatts.
William L. Meaney: Instance, that we guided this year. So we feel really good about the land bank.
William L. Meaney: So, we feel really good about the land bank strategy that we have in terms of what we have in the acquisition pipeline for land over the next, you know, for the rest of the year that will be ahead of our leasing activity.
William L. Meaney: The strategy that we have in terms of what we have in the acquisition pipeline for land.
William L. Meaney: Over the next year.
Speaker Change: For the rest of the year that will be ahead of our leasing activity, yes, Eric I would just add on that.
William L. Meaney: And thank you for the compliment by the way on the on how the data center business is continuing to progress. The team has done a phenomenal job, but I would just add on that we have multiple land parcels that we are in active negotiations with we were looking at multiple sites and importantly.
Barry A. Hytinen: The data center business is continuing to progress. The team's doing a phenomenal job, but I would just add that we have multiple land parcels that we are in active negotiations with. We are looking at multiple sites, and importantly, that is embedded in our capital spending, that we've been planning, as Bill alluded to, to continue to add to the land bank kind of continuously, year in and year out. So that's embedded in the capital. Thanks.
Barry A. Hytinen: That is embedded in our capital spending that we've been planning as bill alluded to to continue to add to the land bank kind of continuously year in and year out so that's embedded in that and the capital. Thanks.
Jonathan Atkin: Thank you, and our next question comes from Jon Atkin with RBC.
Barry A. Hytinen: Thank you and our next question comes from Jon Atkin with RBC. Please go ahead.
Jonathan Atkin: Thanks. Just a follow-up on, I guess, two questions of your time. So, you mentioned a lot of sovereign requirements, and I'm just interested in how competitive you find that space in terms of the RFP activity. And, again, similar to my other question earlier, is there a particular region where you see more of those sorts of things perhaps presenting opportunities?
Jonathan Atkin: Thanks, just a follow up on.
Jonathan Atkin: I guess two follow ups superior time so.
Jonathan Atkin: You mentioned a lot of sovereign requirements and I'm just interested in how competitive you find that space in terms of the RFP activity and again similar to my other question was.
Jonathan Atkin: Earlier.
Jonathan Atkin: Or.
Jonathan Atkin: Particular region, where you see more of those sorts of things.
Jonathan Atkin: Perhaps presenting opportunities and then we move.
Jonathan Atkin: Sure.
Speaker Change: John John just before you go into the next question, we had a little interference with the signal can you repeat the first part of the question or maybe just give us the first question again.
Jonathan Atkin: And then the other question will be about... John, just before you go into the next question, we had a little interference with the signal. Can you repeat the first part of the question, or maybe just give us the first question again? Yeah, how competitive are you finding these sovereign requirements? You know, I don't know if these are formal RFPs in each case, but if you can talk a little bit about the competitive environment and then future opportunities, and then the particular regions where you see more growth ahead in the public sector.
Jonathan Atkin: Yeah, how competitive are you finding these sovereign requirements.
Jonathan Atkin: I don't know these are formal rfps in each case, but if you can talk a little bit about that.
Jonathan Atkin: Kind of an environment and then future opportunities are there particular regions, where you see.
Jonathan Atkin: More growth ahead.
Jonathan Atkin: <unk>.
Jonathan Atkin: And kind of the public sector.
Jonathan Atkin: And then the second question was more around ITAD, and you mentioned the integration of Regency. How complex are those integrations, and is it too soon to think about doing more of those types of tokens for ALM?
Jonathan Atkin: And then the second question is more around iPad and you mentioned the integration of our region and see how how complex are those integrations and is it too soon to think about doing more of those types of tuck ins or.
Jonathan Atkin: Thanks.
William L. Meaney: Okay, thanks, John. I'll take the question in terms of government contracting. And Barry, as you know, runs our M&A shop, and so I'll let him talk about both the integration with Regency as well as the pipeline in terms of further roll-ups. I think in terms of the sovereign contracting or government side of the business that we work for, we work with a number, as you notice that, you know, I highlighted a couple this time with the United Kingdom.
Speaker Change: Okay. Thanks, John I'll take the question in terms of government contracting and Barry as you know runs our M&A shop, and so I'll, let him talk about both the integration with reached today as well as the pipeline in terms of further rollouts I think in terms of the sovereign contracting our government side of the business is that we.
William L. Meaney: Work for we worked with a number as you as you noticed that I highlighted a couple of ish. This time with the United Kingdom, we do quite a bit and are in the United States, who else do quite a bit in other parts of Germany, including products and then in.
William L. Meaney: We do quite a bit in the United States. We also do quite a bit in other parts of Germany, including France and in, yeah, other parts of Europe, France and Germany. And you're right, the relationships: first of all, it's like anything else, it's relationship building to make sure that you get into the queue. And you're right to point out that many times these things last, you know, 12 months.
William L. Meaney: Yes, that's right, so Europe, France, and Germany, and Youre right. The relationships you first of all.
William L. Meaney: Like anything else, it's a relationship building to make sure that you get into the queue and you are right to point out that many times. These things laughs 12 months in other words, they start talking to you before they get into the budgets and the budgets for the following year and you go through a tender process, but we feel pretty good about I mean, we've got.
William L. Meaney: In other words, you know, they start talking to you before they get into the budgets and the budgets for the following year, and you go through a tender process. But, you know, we feel pretty good about it. I mean, we've got teams that are very experienced at that. I think it's actually an opportunity for us because, you know, we pick our spots that we decide to play because you do have to have, you know, a 24-month horizon when you're going after that kind of business.
William L. Meaney: Teams that are very experienced at that I think it's actually an opportunity for us because you can imagine we pick our places the places that we decided to play because you do have to have a 24 month horizon when you're going after that kind of business. So we typically go to the.
William L. Meaney: So we typically go to both the parts of government and the governments or states where we think that there's enough of a volume to do so. So I think there's more for us to do, and we're continuing to add to our teams in that area. And of course, you have to put very strong compliance around it, right? So, but it is a strong part of our business, and it continues to grow. And it's a strong part of all of our businesses. It's not just the records management side of the digital side includes data center.
William L. Meaney: Both the parts of government and the governments or states, where we think that there's a enough of a volume to do it. So I think there's more for us to do and we're continuing to add to our teams in that area and of course, you have to put very strong compliance around it right. So but it is a strong part of our business and it continues to grow and its a strong.
William L. Meaney: Yeah, and if all of our businesses is not just on the records management or the digital side includes data center.
Barry A. Hytinen: John, hey, it's Barry. Thanks for that question on the integration and tuck-ins. The first thing I'd say is the integration is going very well. No integration, I would ever say, is easy because, of course, combinations of companies are – it is complex.
Barry A. Hytinen: John Hey, it's Barry. Thanks.
William L. Meaney: John Hey, it's Barry Thanks for that question on the integration and tuck ins.
Barry: First thing I'd say is the integration is going very well.
Barry: No integration I would ever say, it's easy because of course, a combinations of companies or it is complex. However, I think our team is doing a very very good job and I alluded to in the script that we are we are ahead of plan and we are seeing more benefits in terms of operational efficiencies driving better margin.
Barry A. Hytinen: However, I think our team is doing a very, very good job, and I alluded to in the script that we are ahead of plan and we are seeing more benefits in terms of operational efficiencies, driving better margins, and improved capabilities. And that's credit to the team we picked up at Regency Technologies because they have a best-in-class capability as it relates to processing and recycling. And Bill and I were recently at our largest facility in Ohio with the team at Regency Technologies.
Barry A. Hytinen: <unk> improved capabilities and.
Barry A. Hytinen: That's credit to the team we picked up at Regency technologies, because they have a best in class capability as it relates to processing and recycling and Bill and I were recently in our largest facility in Ohio with the team at Regency technologies, we saw a lot of great.
Barry A. Hytinen: We saw a lot of great processing going on, a really dedicated team. I was at our Atlanta Regency facility last week and saw the integration underway, and we continue to see a lot of incremental capacity to utilize as we build out our ALM customer base. And as it relates to additional tuck-ins, I would say now that we've built the platform for both hyperscale decommissioning as well as combined with Regency, tuck-ins are definitely something we are continuing to look at.
Barry A. Hytinen: A lot of great processing going on really dedicated team I was in our Atlanta Regency facility last week and saw the integration underway in it and and.
Barry A. Hytinen: We continue to see a lot of incremental capacity to utilize as we build out our E. L M customer base.
Barry A. Hytinen: And as it relates to additional tuck ins I would say now that we built a platform of both hyperscale decommissioning as well is.
Barry A. Hytinen: Combining with regency.
Barry A. Hytinen: You know tuck ins are definitely something we are continuing to look at it is to use your phrase. It is not too early to be considering them. We have a we have a list but of course.
Barry A. Hytinen: To use your phrase, it is not too early to be considering them. We have a list, but, of course, everything is facts and circumstances driven. We like to make sure we're getting things at a very appropriate multiple and that we can see clear growth aligned with our business and that it will be incremental to our franchise. But I think that there are opportunities both in the U.S. and throughout the world, actually, as we build out our ALM capability to be a global partner to our large client base. Thanks, John.
Barry A. Hytinen: Greetings facts and circumstances, driven we we like to make sure we're getting things at a very appropriate multiple and that we can see clear growth aligned with our business and that it will be incremental to our franchise.
Barry A. Hytinen: But I think that there are opportunities both in the U S and throughout the world actually as we build out our E. L M capability to be a global partner to our large client base. Thanks John.
Barry A. Hytinen: Okay.
Operator: This concludes today's question and answer session and the Iron Mountain First Quarter 2024 Earnings Conference Call. Thank you for attending today's presentation. You may now disconnect your lines and have a wonderful day.
Barry A. Hytinen: So there's a question and answer session.
Operator: Well in the first quarter 2024 earnings conference call.
Operator: Thank you for attending today's presentation. You may now disconnect your lines and have a wonderful.
Operator: [music].