Q2 2024 Iron Mountain Inc Earnings Call

Today's conference specialist by pressing Star then zero on your telephone keypad.

William Meaney: Thank you. Good morning.

After todays presentation, there will be an opportunity to ask questions.

Barry Hytinen: Let me out start with your second question, and Barry will follow up on the CAPEX relative to our Investor Day. So I think what you see for us hyper-scalers are always kind of not just the largest cloud providers, but the largest staffs providers as well, so people who need very, very large deployments in terms of megawatts of data center capacity, and usually these are global firms. So I'm not saying that we won't see some of those firms, some of the more newer firms that your high-line and come into that pool, but I would say that the barriers to the entry for these really very large hyper-scalers, just given the cost of leasing and building data centers, it is a fairly consolidated and tight group.

I ask you a question you May Press Star then one on your telephone keypad to withdraw.

Your question. Please press Star then two.

We will limit analysts to one question and you can rejoin the queue.

Speaker Change: [music].

Please note today's event is being recorded.

Speaker Change: I would now like to turn the conference over to joining Hilton Senior Vice President and head of Investor Relations. Please go ahead.

Speaker Change: Thank you Rocco good morning, and walk them through our second quarter of 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 Heightening Executive Vice President and Chief Financial Officer. After prepared remarks, we'll open up the.

Speaker Change: The lines for Q&A.

Speaker Change: Today's earnings materials contain forward looking statements, including statements regarding our expectations. All forward looking statements are subject to risks and uncertainties. Please.

Barry Hytinen: I'm not saying that there couldn't be people that break into it, but I think for the moment it's a pretty stable group. Slightly increasing as some of the staff players get bigger in their own right.

Speaker Change: 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 to differ from those in our forward looking statements. In addition, we.

Barry Hytinen: Alex, it's Barry. I would say a couple of thoughts about your question on the CAPEX views. We are continuing to see our data center business and actually the whole business run ahead of the expectations we shared at that Investor Day. As we talked about last quarter, for the first couple of years, we were well ahead. And if you look at what we're doing here this year, we're actually accelerating that level of beat. So we're generating more revenue, more EBITDA, and more cash generation. And certainly, we continue to lease more and faster than we were indicating at the time of the Investor Day.

Speaker Change: We use several non-GAAP measures when presenting our financial results. We have included the reconciliations to these measures in our supplemental financial information.

Speaker Change: So with that I'll turn the call over to Bill.

Bill: Thank you Gillian and thank you all for taking the time to join US today for our discussion a discussion of our second quarter results. As you saw in this morning's announcement this quarter delivered another record financial performance and exceeded our expectations, reflecting on these results I am incredibly proud of how our team consistently execute at a high level, putting our customer.

William Meaney: So, over time, I think it is possible that we may see a continued ramp in capital for data center, but I'll just note we're constructing to leases with some of the best quality tenants you could imagine in the hyper scalers. I mean, a couple of statistics: we're 96% leased in our operating portfolio. And in our underdevelopment construction portfolio, which is about 10% bigger than what we're operating, maybe even 15% bigger than we're operating, we're 96% leased on that as well on a pre-leased basis. So I will just underscore that when we are putting capital to work to build out our data center platform, it is because we have already signed contracts with clients, and we are very pleased with the level of returns that we have been generating on those deals.

Speaker Change: At the center of everything we do with our proven growth strategy. We are entering the back half of the year with strong momentum.

Speaker Change: We continue to see firsthand the power of project Matterhorn from our commercial teams, who are successfully leveraging our full suite of products and solutions to help position Iron Mountain has an ideal partner to our customers. This customer Centricity continues to power our results forward for both customers and our shareholders.

Speaker Change: Building on our track record of value creation for our shareholders and our strong positive outlook. Our board of directors has authorized an increase of our quarterly dividend by 10% to 71 five cents in line with our <unk> per share growth.

Speaker Change: I'll now turn to key developments during the quarter and how we executed on our growth strategy, which is aligned to our business segment segments. As a reminder, our strategic priorities are the following driving continued revenue growth in our physical storage Records management business, providing digitally enabled solutions for our 240.

Unknown Executive: Thank you.

Eric Luebchow: And our next question is from Eric Luke-Coat with Wells Fargo. Please go ahead. Thanks, appreciate it. Just to follow up on the data center conversation, I mean, just based on all the opportunity you've had, the outperformance on leasing year-to-date, maybe you could just talk about funding sources going forward. And given the fact your stock has been so strong this year, your equity cost of capital is significantly lower than has been in years past. This issuing equity enter the conversation going forward as you look at funding in the data center business.

Speaker Change: <unk> customers, which allows them to get true competitive advantage out of their physical and digital information.

Speaker Change: Delivering differentiated data center offerings, and offering top tier growth through our global scale and customer Trust.

Speaker Change: And advancing our asset lifecycle management services, which provides security maximum efficiency and an environmentally sound lifecycle management approach for our customers it assets.

William Meaney: Thank you. Thanks, Eric.

William Meaney: Let me start, and then Barry, and he want to chime in as well. But so first, we feel really good about if you're highlighting the growth and momentum that we're building in the data center business and not just in the cold-o, but more and more in the high-press scale, and the majority is coming from high-press scale. But, as Barry said, well over 90%, like over from 96%, is all pre-leased, and it's a fully funded plan, as we highlighted in an investor day. So we don't see any; we feel really good in terms of the way that we're able to fund the growth.

Speaker Change: To give you some examples of how we have recently applied our services on behalf of our customers, let's begin with our records management business.

Speaker Change: The first win I wish to highlight shows how our scalable solutions can solve for complex regulatory requirements and address changing customer needs a European based pharmaceutical company came to us in need of a global record retention schedule as the company was struggling to manage costs and meet regulatory requirements as part of our.

Speaker Change: <unk> partnership we are providing a fully managed suite of solutions, including policy Center upkeep Advisory services and a dedicated help desk for queries and a scalable and flexible way that can seamlessly adapt over time as their needs evolve.

Barry Hytinen: So we're happy in terms of the trajectory that we have without going out and raising equity.

Barry Hytinen: I think we have a plan that works. Eric, I would just add that you look, going forward, likely rates are probably coming down over time, so that makes it that much easier for us. And the business is so cash-generative from the core. And as you see, the global business continues to deliver outstanding results. So I think from standpoint of your point about the equity has risen a bit, that is true, but I think that's more a function of where it was. And if you look at us on a multiple versus the growth we're putting up, I think that bolsters the point Bill was just making as it relates to equity.

Speaker Change: Continuing with wins in our records management business I am, particularly excited to discuss a couple of digital wins. The first example to highlight is a major contract signed with a large financial institution the.

Speaker Change: The foundation of this win was based on upon multiple decades of a trusted relationship with the banks understanding of our truly differentiated approach to digitally managing and automating workflow.

Speaker Change: As a result, they selected iron mountain to serve as its partner for a long term transformation of its management of digital and physical documents.

Unknown Executive: Thank you.

Speaker Change: On the banks behalf Iron Mountain is transforming how it captures both digital and physical documents and their associated metadata across all lines of business, including non banking internal documents like finance and HR.

Shlomo Rosenbaum: Thank you very much.

William Meaney: I just wanted to touch on two items, if I may. One, just on ALM, are you seeing the hyperscalers starting to really open up the inventory of gear that they had in really starting to sell it, or are you still starting to see the hesitation in case prices rise more? What I'm trying to understand is, are they starting to actually dump the stuff that they've been holding onto?

Speaker Change: Our unique offering revolutionizing document processing services for both physical and digital documents. We have achieved this by employing our proprietary leading edge AI powered intelligent document processing built into our insight platform.

Speaker Change: Continuing with our digital business in Australia, we have secured a large deal with one of the country's biggest banks to provide our digital mailroom solution, which brings together our operational scale and digital capabilities Iron Mountain has been a trusted records management partner for over 20 years, and we built on that relationship to develop a comprehensive search.

Barry Hytinen: And then just second, just if you can comment, Barry, on the storage growth margin, it increased to like 20 basis plans sequentially, but the moving parts are very interesting, where you had like all other storage costs up like 10 million, but you had rent actually go down to them sequentially. Maybe we could talk about what the movements over there, how did rent go down and what are those other storage costs that are going up?

Speaker Change: This offering that will see us manage their physical mail room sites across Australia, and scan around 32 million images of year as we process mortgage documents checks vouchers and other banking documents are proven implementation methodology reassured the customer that we could execute a seamless transition of services and the innovation.

William Meaney: Good morning. So I'll take the question on the ALM, and then Barry can talk to you a little bit about the ends and takes on terms of storage costs. So on the ALM side, is the hyperscalers, the reticence that you might have seen last year that I think we commented from the hyperscalers was less to do with the pricing on the components. It was more the availability of new kit that they had to actually refresh their data centers. And I think you've seen all the reporting from some of the largest hyperscalers in the last couple of weeks that they're all ramping up their refresh of their data centers to bring in the most capable GPUs so that they are AI ready and they can build out some of their AI services.

Speaker Change: <unk> technology, we are deploying will help them to realize significant efficiencies in the years ahead.

Speaker Change: Moving to our data center business through the first half of the year, we leased 97 megawatts, which includes 66 megawatts this quarter due.

William L. Meaney: I'm particularly excited to discuss a couple of digital wins. On the bank's behalf, Iron Mountain is transforming how it captures both digital and physical documents and their associated metadata across all lines of business, including non-banking internal documents like finance and HR. Our unique offering revolutionizes document processing services for both physical and digital documents. We have achieved this by employing our proprietary, leading-edge, AI-powered intelligent document processing built into our Insight platform. Continuing with our digital business, in Australia, we have secured a large deal with one of the country's biggest banks to provide our digital mailroom solution, which brings together our operational scale and digital capabilities.

To discuss a couple of digital wins. The first example to highlight is a major contract signed with a large financial institution.

Speaker Change: Due to our strong pipeline, we feel confident we will exceed our original projection and now expect to lead lease 130 megawatts for the year.

The foundation of this win was based on upon multiple decades of a trusted relationship with the banks understanding of our truly differentiated approach to digitally managing and automating workflow.

Speaker Change: The speed of leasing in the first half of the year is thanks to the momentum that our team has built and our leasing pipeline.

As a result, they selected iron mountain to serve as its partner for a long term transformation of its management of digital and physical documents.

Speaker Change: We are an attractive partner to customers looking for infrastructure, which can support their very dense it workloads and associated with their AI enabled services here's some examples of wins during the quarter from our U S and U K markets.

William Meaney: So we do see an uptick, to your point, in the volume that we're getting from the hyperscalers, but it's driven more because they're refreshing their data centers to be more AI enabled, and they're able to get the latest GPUs from the suppliers, so they're able to accelerate some of that. So we do see a building volume from the hyperscalers right now in terms of decommissioning, which leads to, you know, more ALM volume in our business.

On the banks they have iron mountain is transforming how it captures both digital and physical documents and their associated metadata across all lines of business, including non banking internal documents like finance and HR.

Speaker Change: At our Western Pennsylvania location, we welcomed a new hyperscale customer with a seven year contract since signing the contract the customers already in discussions about potential expansion to some of our other campuses.

Speaker Change: Our unique offering revolutionize this document processing services for both physical and digital documents. We have achieved this by employing our proprietary leading edge AI powered intelligent document processing built into our insight platform.

Speaker Change: A good example of our continued and growing partnerships with some of the largest hyperscale is a recent wins this quarter with a single customer in both the U S and U K markets.

Barry Hytinen: Shlomo, it's Barry.

Barry Hytinen: Couple thoughts about the storage, rental growth margin. First of all, we were really pleased with that at 70 percent, and that being because really, if you look at our global rim business, it was up very nicely year on year. Of course, part of that revenue management part of that is the continued productivity that our operation teams are driving. And so the reason it was slightly down year on year is related to, as I talked about, our as well as data center. As we talked about sometimes before, data center is a lower growth margin, but it's, of course, a creative to our EBITDA margin.

Speaker Change: This customer has placed a 10 year contract for us with us for almost 25 megawatts of capacity at our London data Center campus and a 15 year contract for 36 megawatts at our data Center campus in Phoenix, Arizona.

William L. Meaney: Iron Mountain has been a trusted records management partner for over 20 years, and we built on that relationship to develop a comprehensive service offering that will see us manage the physical mailroom sites across Australia and scan around 32 million images a year as we process mortgage documents, checks, vouchers, and other banking documents.

Speaker Change: Also at our Phoenix campus, we have won a 10 year co location contract with one of Japan's largest banks, we will be writing 800 kilowatts of capacity to support the complete transformation of this customer's North American platform.

Speaker Change: Turning to our asset lifecycle management business, we continued to see established iron mountain customers seek new solutions from our ever expanding portfolio. A perfect example of this is how we expanded their relationship with an insurance company. It has been in Iron mountain customers since the late 19 fifties, having secured a small project.

William L. Meaney: Our proven implementation methodology reassured the customer that we could execute a seamless transition of services, and the innovative technology we are deploying will help them to realize significant efficiencies in the years ahead. A good example of our continued and growing partnerships with some of the largest hyperscalers, our recent wins this quarter with a single customer in both the U.S. and U.K. markets. This customer has placed a 10-year contract with us for almost 25 megawatts of capacity at our London Data Center campus and a 15-year contract for 36 megawatts at our Data Center campus in Phoenix, Arizona.

Barry Hytinen: And so as data center continues to ramp at a very fast rate, it has a little bit of a level of mix, but obviously it's very incremental. And on a sequential basis, you would expect on that all other storage costs there to be some power inflation as commencement begins to ramp and folks start to draw power as you know that that's a direct pass through. So it can actually also affect rates. So to have the storage growth margin up sequentially in light of that headwind is, we thought, very, very favorable about that. On the storage rent expense, it was down some sequentially, and that's thanks to our team's continued productivity around warehouse efficiencies.

Speaker Change: With them last year, our customers confidence in our capabilities and our delivery record has led them to make us their soul.

Speaker Change: Provider.

Speaker Change: Finally, I'd like to share a last example of a customer that has added our <unk> services to the Iron Mountain solutions from which they already benefit this.

Speaker Change: This global cloud based software company has asked us to manage an AUM program to securely destroyed remarket or recycle datacenter assets at more than 30 locations in North America, EMEA, Latin America, and the Asia Pacific regions.

Barry Hytinen: We have, as you would have seen over the last few quarters, reduced some of our warehouses and thereby gotten to a better expense position.

Speaker Change: Demonstrating we can provide a full service global <unk> offering is no small task, but our skilled and dedicated teams success successfully met the challenge.

Barry Hytinen: And the only other thing I'll mention is taking it up a level. Our gross margin in the quarter for the whole company was almost just under 56%. Now that's slightly down from last year, but two things to think about. One, we're absorbing the mix of issues, including the power that I mentioned in that number. It's really well on EBITDA in the quarter. And so we feel really good about where the gross margin is trending, and it's been ahead of our expectations. Thank you.

Speaker Change: We are now a proud partner for this customer alongside the records management and digital solutions that we already provide.

Speaker Change: To conclude we have thoughtfully and strategically curated a mountain range of best in class solutions, and an effective operating model under project Matterhorn.

Speaker Change: This quarter successes are a brief testament to the value of our strategy is already delivering and a window into the future. We are building at Iron Mountain.

William L. Meaney: Also, at our Phoenix campus, we have won a 10-year co-location contract with one of Japan's largest banks. We will be providing 800 kilowatts of capacity to support the complete transformation of this customer's North American IT platform. Demonstrating we can provide a full-service global ALM offering is no small task, but our skilled and dedicated teams successfully met the challenge. To conclude, we have thoughtfully and strategically curated a mountain range of best-in-class solutions and an effective operating model under Project Matterhorn.

Speaker Change: As we continue to expand our footprint of storage and services and deliver tailored innovative solutions for each of our customers I could not be more grateful for the hard work of our mountaineers.

Brendan Lynch: I have a next question for Eddie, how some Brendan Lawrence with Barclays. Please go ahead. Great. Thanks for taking my question. It came up a little bit already, but I'm the pricing front. Your organic currency growth was 7.7% for storage rentals. Up quarter to quarter, but down relative to the 2023 pace. I think you guys have one suggested the single digit pricing growth was possible over the next couple of years.

Speaker Change: Our strategy and execution is showing the way in delivering consistently strong revenue growth and the resulting financial model that delivers top tier growth in both our <unk> and our dividend.

Speaker Change: We have an energized team of experienced proven operators, who are committed to excellence and that gives us great confidence in our future.

Brendan Lynch: But you've been at high single digits for a few years now. Is a transition to the single digits occurring now, and how should we think about you guys pushing price as inflation waves?

Speaker Change: With that I'll turn the call over to Barry.

Barry: Thanks, Bill and thank you all for joining us to discuss our results I'll begin by providing an overview of our second quarter results and then go into more detail on each of our business segments before turning to our outlook for the third quarter a full year.

Barry Hytinen: Brendan, we were very pleased with the 7.7%. And I think, you know, at that level, you can see the amount of EBITDA the business generates since it's a highly productive portion of our company. And as it relates to trending, you know, we've indicated we feel like mid to upper single is the right kind of level over the longer term. And so I would say, you know, if trending in this vicinity is would be very positive to the business model going forward.

Barry: In the second quarter, our team achieved strong performance across all of our key financial metrics. We achieved record revenue of $1 five $3 4 billion up 13% on a reported basis, driven by 11% store growth and 17% service growth we.

Barry: We delivered 10% organic revenue growth.

Barry: Revenue was ahead of the expectations, we shared on our last call by more than $30 million.

William Meaney: Neil, the only thing I would add is that, you know, it isn't so much inflation-based anymore. It's really about the value that we're adding to our customers. So if you look at our traditional records management business, we've, we've over the last few years that added a portfolio services such as small smarts or smart reveal. And I highlighted in the call some of the governance and compliance consulting and systems that we're able to install around their hard records management. And you know, so we're really driving more value for our customers, and the customers, you know, see value in that.

Barry: Total storage revenue was $920 million up $89 million year on year.

Barry: Storage growth was driven by revenue management and continued strong commencement in our datacenter business.

Speaker Change: Total service revenue was $615 million up $87 million from last year, driven by strength in our asset lifecycle management and global rim businesses.

William L. Meaney: This quarter's successes are a brief testament to the value our strategy is already delivering and a window into the future we are building at Iron Mountain. As we continue to expand our footprint of storage and services and deliver tailored, innovative solutions for each of our customers, I could not be more grateful for the hard work of our mountaineers. We have an energized team of experienced, proven operators who are committed to excellence, and that gives us great confidence in our future. With that, I'll turn the call over to Barry.

Speaker Change: Adjusted EBITDA was $544 million, a new record up 14% year on year, driven by strong growth in global rim as well as data center and asset lifecycle management.

Barry Hytinen: So, you know, I think you can continue to expect that our pricing will remain some, you know, 403 to 400 basis points ahead of what you would think is normal inflation, but it's really driven by the value that our customers see from our services.

Speaker Change: Adjusted EBITDA margin was 35, 5% up 50 basis points year on year, which reflects improved margins across our business.

Barry Hytinen: Brandon, the only other thing I'll add is that at the start of the year, we had suggested global rim might be in the vicinity of 6% total growth for the year. And so year to date, we're running seven and a half on that business. So we continue to see out performance in global rim. Some of that is driven off of revenue management, also incremental service uptake of the sort that they'll just mentioned.

Speaker Change: <unk> was $321 million or $1 eight on a per share basis up $34 million.10, respectively from the second quarter of last year.

Speaker Change: This represents growth of 12% for <unk> and 10% for <unk> per share.

Barry A. Hytinen: Thanks, Bill. And thank you all for joining us to discuss our results. I'll begin by providing an overview of our second quarter results and then go into more detail on each of our business segments before turning to our outlook for the third quarter and the full year. In the second quarter, our team achieved strong performance across all of our key financial metrics. We achieved record revenue of $1.534 billion, up 13% on a recorded basis, driven by 11% storage growth and 17% service growth.

Speaker Change: This is ahead of the guidance, we provided for the second quarter driven by higher adjusted EBITDA as well as lower than expected cash taxes, which is included in our guidance for the third quarter.

Unknown Executive: Thank you.

Unknown Executive: And once again, if you do have a question, please press star, then one on your telephone keypad.

Speaker Change: The strength of the U S. Dollar continued to be a headwind in the quarter on a constant currency basis revenue was up 14% and <unk> was up 13%.

Jonathan Atkin: Today's next question comes from Jonathan Atkin with RBC. Please go ahead. Thanks, a couple of questions. Can you talk a little bit about ALM and to what extent Regency is sort of fully occupied, or do you have the opportunity within that set of assets to see more productivity? And then secondly on data centers, if there's anything to call out in terms of the lead times around construction and delivery and conversion of book to bill, thank you.

Speaker Change: Now turning to segment performance I'll start with our global rim business, which achieved revenue of $1 billion to $5 billion, an increase of $91 million year on year with strong organic revenue growth of seven 9%.

Barry A. Hytinen: We delivered 10% organic revenue growth. Revenue was ahead of the expectations we shared on our last call by more than $30 million. Total storage revenue was $920 million, up $89 million year on year. Storage growth was driven by revenue management and continued strong growth in our data center business. Adjusted EBITDA was $544 million, a new record, up 14% year-on-year, driven by strong growth in global RIM, as well as data center and asset life cycle management. Adjusted EBITDA margin was 35.5 percent, up 50 basis points year-on-year, which reflects improved margins across our business. AFFO was $321 million, or $1.08 on a per share basis, up $34 million and $0.10, respectively, from the second quarter of last year.

Speaker Change: Revenue management and positive volume trends drove organic storage rental growth of seven 7% our team delivered organic service revenue up eight 3%.

Speaker Change: Global <unk> adjusted EBITDA was $549 million, an increase of $50 million year on year.

Speaker Change: Global rim adjusted EBITDA margin was up 40 basis points sequentially, and 90 basis points from last year, driven by storage growth and continued productivity across our operations.

William Meaney: Good morning, John. Let me start with the data center piece, and then Barry can talk about Regency in more broadly the ALM business and operating leverage. So on the data center side, is you're right to highlight the lead times for a lot of the bill components, including the concrete panels or the actual physical construction of the shell. The good news is that we've been able to manage that and keep the lead times similar to historical norms and what our customers are expecting because, as we building scale and our data center business, we're standardizing across a lot of those components in market.

Speaker Change: Turning to global data center, the team delivered revenue of $153 million, an increase of $35 million year on year from a total revenue perspective, we achieved 24% organic growth.

Speaker Change: <unk> storage rental revenue growth was particularly strong at 27% driven by commencement and improved pricing.

Speaker Change: GAAP Mark to market in the second quarter was 12, 3% and was benefited by a single relatively large renewal. We continue to expect mark to market to be up mid to high single digit in the second half.

William Meaney: So, you know, across some of those like Europe versus the United States, you can't standardize as much, but within Europe, you can standardize a lot, and within the United States, you can standardize a lot, India, you can standardize a lot, etc. So we are doing that, and what that allows us to do is, as we get scale, to be much more flexible in terms of having the right equipment for the right customer and the right location. So we feel pretty good in terms of our ability to manage the supply chain and keep our timing, you know, intact.

Barry A. Hytinen: This represents growth of 12% for AFFO and 10% for AFFO per share. This is ahead of the guidance we provided for the second quarter, driven by higher adjusted EBITDA, as well as lower than expected cash taxes, which is included in our guidance for the third quarter. The strength of the U.S. dollar continued to be a headwind in the quarter.

Speaker Change: Datacenter adjusted EBITDA was $66 million, representing 23% growth.

Speaker Change: Turning to new and expansion leasing we signed 66 megawatts in the quarter, bringing total bookings for the first half 297 megawatts as Bill mentioned with our strong leasing and favorable outlook, we are increasing our full year projection to 130 megawatts.

Barry A. Hytinen: On a constant currency basis, revenue was up 14 percent and AFFO was up 13 percent. I'll start with our Global Rim business, which achieved revenue of $1.25 billion, an increase of $91 million year-on-year, with strong organic revenue growth of 7.9%. Revenue management and positive volume trends drove organic storage rental growth of 7.7%. Our team delivered organic service revenue up 8.3%. Global Rim Adjusted EBITDA was $549 million, an increase of $50 million year on year. Turning to Asset Lifecycle Management.

Speaker Change: The data center market continues to develop rapidly and with our strong and expanding hyperscale relationships our pipeline continues to grow.

Barry Hytinen: John, this is Barry. As it relates to Regency and the opportunity to continue to utilize and optimize further, it is definitely there.

Speaker Change: I am pleased to report that we have increased our land bank by 57 megawatts with those additions are total datacenter capacity can now be built out to 918 megawatts over time with 347 megawatt held for development.

Barry Hytinen: There is a lot of opportunity; we have considerable capacity to expand the business both in terms of what is already in place, as well as the opportunity to expand the footprint at relatively low cap acts, I might add.

Speaker Change: Strong organic revenue growth of seven 9% Rev.

Revenue management and positive volume trends drove organic storage rental growth of seven 7% our team delivered organic service revenue up eight 3%.

Speaker Change: Turning to asset lifecycle management.

Barry Hytinen: So it's a very positive situation to be having Regency get further utilized, which I expected to over time. And I will say we have a very highly capable team at Regency that there is no doubt can manage a much larger business and drive a tremendous amount of value for our shareholders.

Speaker Change: Global <unk> adjusted EBITDA was $549 million, an increase of $50 million year on year.

Speaker Change: Total <unk> revenue in the quarter was $90 million, an increase of 111% year on year and 30% on an organic basis, driven by both improved volume and pricing.

Speaker Change: Global rim adjusted EBITDA margin was up 40 basis points sequentially, and 90 basis points from last year, driven by storage growth and continued productivity across our operations.

Speaker Change: <unk> continues to be a key beneficiary of cross selling with over 95% of our bookings this quarter happening as a result of that initiative.

Speaker Change: Turning to global data center, the team delivered revenue of $153 million, an increase of $35 million a year on year from a total revenue perspective, we achieved 24% organic growth.

Unknown Executive: Thank you.

Shlomo Rosenbaum: And then I question some Shlomo Rosenbaum with people, please go ahead. Hi, thanks for squeezing me in for more. This is a little bit more of a technical one; also, just it looks like the real estate depreciation went up sequentially for like 14 million.

Speaker Change: The team at Regency technologies continues to deliver results ahead of our plan with revenue of $35 million in the quarter. We have seen our combination with regency resulted in expanded client relationships and improve profitability.

Barry Hytinen: Is there a major site that team on board during the court? Shlomo, you should expect the depreciation, of course, to continue to ramp with all of the capex we've been doing on data center, as well as some of our incremental new warehouses that we put in, as well as some of the digital innovation that we've been driving internally for some time now. So that's the primary driver, and it can knows that order.

Speaker Change: Turning to capital allocation, we remain focused on a disciplined approach to fund our growth initiatives and drive meaningful shareholder returns, while maintaining a strong balance sheet.

Speaker Change: Capital expenditures in the second quarter were $399 million with $362 million of growth and $37 million of recurring.

Speaker Change: Turning to the balance sheet with strong EBITDA performance, we ended the quarter with net lease adjusted leverage of 5.0 times, which is the lowest level. We have achieved since prior to the company's REIT conversion in 2014.

Unknown Executive: Thank you, and ladies and gentlemen, this concludes our questions of intercession and the Iron Mountain 2nd quarter of 2024, earning confidence fall. We thank you for attending in today's presentation.

Speaker Change: Turning to our dividend.

Speaker Change: On a trailing four quarter basis, our payout ratio is now 60% consistent with our target payout range and reflecting our positive outlook, we have increased our dividend 10%.

Unknown Executive: You may now disconnect your lines and have a wonderful day.

Speaker Change: Now turning to our projections.

Speaker Change: For the full year, we now expect to deliver results towards the high end of our guidance range on all metrics for the third quarter. We expect revenue of approximately $1 55 billion adjusted EBITDA of approximately $560 million <unk> of approximately $325 million.

Barry A. Hytinen: Total ALM revenue in the quarter was $90 million, an increase of 111% year-on-year and 30% on an organic basis, driven by both improved volume and price. The team at Regency Technologies continues to deliver results ahead of our plan, with revenue of $35 million in the quarter. We have seen our combination with Regency result in expanded client relationships and improved profitability. Capital expenditures in the second quarter were $399 million, with $360 million of growth and $37 million of recurring. Now, turning to our dividend.

Speaker Change: <unk> per share of approximately $1.10.

Speaker Change: In conclusion, our team delivered record results in the first half we continued to perform ahead of our long term growth objectives, and our outlook is strong I'd like to take this opportunity to thank all of our mountain years for their continued efforts to deliver on behalf of our customers and with that operator would you. Please open the law.

Speaker Change: <unk> for Q&A.

Speaker Change: Absolutely we will now begin the question and answer session.

Speaker Change: To ask a question with Star then one on the telephone keypad.

Speaker Change: You are using a speakerphone please pick up your handset before pressing the keys.

Speaker Change: Anytime Youre question has been addressed and you would like to withdraw your question. Please postpones them too.

Speaker Change: A lot of analysts to one question and you can rejoin the queue.

Speaker Change: At this time, we will pause for just a moment to assemble our roster.

Speaker Change: Today's first question comes from George Tong with Goldman Sachs. Please go ahead.

George Tong: Alright, thanks, good morning.

George Tong: Your <unk> business saw 30% organic revenue growth in the quarter can you discuss how much of the growth came from volumes versus pricing and.

Barry A. Hytinen: On a trailing four-quarter basis, our payout ratio is now 60%. Consistent with our target payout range and reflecting our positive outlook, we have increased our dividend by 10%. For the full year, we now expect to deliver results towards the high end of our guidance range on all metrics.

Speaker Change: Assumptions for component prices, you're baking into your guidance.

Speaker Change: Thanks, George and good morning, all let me handle the first part and then I'll, let Barry talk a little bit more about the pricing trends that we're seeing so first.

Speaker Change: Really pleased with the growth in.

Speaker Change: In the organic growth that you highlighted in our <unk> business. This quarter and you think about that about two thirds of that is driven by just pure volume and the other third is the price improvement that we've seen from the record lows that were 12 to 18 months ago. So we're really pleased with the progress, but I'd say most of the growth is from volume.

George Tong: And George from a standpoint of what we're seeing in our view for pricing going forward is as as you would know pricing continues to be expected to trend higher.

George Tong: We've been somewhat conservative with respect to our outlook for pricing because we've seen some variation between the spreads between new gear and secondary gear.

Speaker Change: Particularly so on memories widen some but frankly its narrow those spreads on other gear like drives so look it's a very positive outlook for our <unk> business because the team continues to win a lot of business to cross selling activity. We have is immense.

Operator: If you are using a speakerphone, 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. At this time, we will pause for just a moment to assemble our roster. And today's first question comes from George Tong with Golden Saks. Please go ahead.

Lamb: And we're expecting if you work through the guidance. We just gave for the third quarter and the implied for the fourth you should be expecting our <unk> business to be comping organically in the forties in the back half if not higher. So we're we're feeling really good and I guess I should just call out since you asked money Lamb, our regency businesses.

Unknown Executive: Thanks, George. And good morning.

Speaker Change: Doing phenomenal the team there continues to execute very very well we're seeing.

Speaker Change: Very strong productivity as a result of leveraging regency's capabilities in their utilization is going up thanks to historic Iron Mountain business, that's being processed by regency. So so thank you George.

William L. Meaney: I'll let me handle the first part, and then I'll let Barry talk a little bit more about the pricing trends that we're seeing. So first, we're really pleased with the growth in the organic growth that you highlighted in our ALM business this quarter. And you think about that, about two-thirds of that is driven by just pure volume. And the other third is the price improvement that we've seen from, you know, the record lows that were 1218 months ago. So we're really pleased with the progress, but I'd say most of the growth is in volume.

Speaker Change: Thank you and our next question today comes from Kevin.

Kevin: Yes. Please go ahead.

Kevin: Great Congratulations on the record results.

Speaker Change: Yes, I don't know if this is for Barry or.

Kevin: Can you reconcile kind of the.

Speaker Change: Two quarters would be relative to the reaffirmed guidance and just the optimism that it seems like it's scaling on the L. M side, just puts and takes around that.

Speaker Change: Yeah, Thanks, Kevin Good morning.

Speaker Change: We continue to feel very good as we just noted about our guidance.

Speaker Change: As you know we beat in the first quarter and we beat again here in the second quarter actually a wider beat than the first in our thought process is that.

Speaker Change: Somewhat conservative with respect to our outlook for pricing because we've seen some variation between the spreads between new gear and secondary gear.

Speaker Change: Things continue to trend very much in the right direction and that's why we pointed towards the higher end of our guidance range for the year I'll note FX continues to be a headwind. So youll see a stronger dollar would be an impact to our reported results in the third quarter probably of the order of the same magnitude as the second quarter, if not a little bit more like what youre seeing is.

Speaker Change: Particularly so on memory, it's widened some but frankly its narrow those spreads on other gear like drives so look it's a very positive outlook for our <unk> business because the team continues to win a lot of business. The cross selling activity. We have is immense.

Speaker Change: And we're expecting if you work through the guidance. We just gave for the third quarter and the implied for the fourth you should be expecting our <unk> business to be comping organically in the forties in the back half if not higher.

Speaker Change: Improving trends as compared to our initial outlook this year across the business global rim continues to perform really well.

Speaker Change: In the organic storage rental revenue growth accelerated in the quarter as we as we expected it to and as we forecasted last quarter and we continue to expect that to be in the seven to eight range in the back half and then in terms of the datacenter as we've talked about before that's a business that has a tremendous amount of it.

Speaker Change: So where we're feeling really good and I guess I should just call out since you asked about a L. M. R. Regency business is doing phenomenal. The team there continues to execute very very well we're seeing.

Speaker Change: <unk> ability in the in the near term and as we talked about the outlook for the long term. There is very robust in light of the leasing activity, we've had and I just mentioned along with George So I appreciate the question.

Operator: Thank you. And our next question today comes from Kevin McVeigh at UBS. Please go ahead.

Speaker Change: Thank you next question comes from Nate Crossett of <unk>. Please go ahead.

Speaker Change: Yeah.

Nate Crossett: Hey, good morning.

Nate Crossett: Just wondering what you're expecting in terms of overall room volumes for <unk> and the balance of the year.

Nate Crossett: And then can you I guess you already talked about your expectations for pricing growth. So should we assume that the organic revenue growth is seven <unk> in the back half.

Barry: Hi, Nate it's Barry.

Barry: Consistent with our outlook for the last many quarters, we continue to expect our volume physical volume to be flattish to slightly up and it continued that trend obviously in the second quarter and we have a.

Speaker Change: A favorable outlook for and again to be in that vicinity in the third in and in the fourth quarter. So we expect our volumes to be continuing to rise I'll. Just note we have never stored more physical volume than we are storing today and so that is I think a testament to the teams.

Speaker Change: Diligence as it relates to serving our customers and frankly the value we're driving for customers as they continue to trust us with their.

Speaker Change: Important assets in terms of organic growth in rim on the storage side, you've got it right. So the volume would be relatively small component of the growth and then the rest would be driven principally by revenue management and I will note that.

Speaker Change: And the organic storage rental revenue growth accelerated in the quarter as we as we expected it to and as we forecasted last quarter and we continue to expect that to be in the seven to eight range in the back half and then in terms of a data center as we've talked about before that's a business that has tremendous amount of <unk>.

Speaker Change: Our services business and global Ram continues to be benefited both on the traditional side, but also and going forward likely to be ramping some on the digital side because we the team in our digital solutions group just delivered the best bookings quarter, we've ever had in digital so that is.

Speaker Change: The ability in the in the near term and as we've talked about the outlook for the long term. There is very robust in light of the leasing activity, we've had and I just mentioned a L M with George So I appreciate the question.

Barry: Really nice performance by our commercial and digital teams. Thanks Nate.

Operator: Thank you. And our next question today comes from Nate Crossett at BNP. Please go ahead.

Nate Crossett: Thank you I don't know unfortunately for social Nate Crossett of <unk>. Please go ahead.

Barry: Hi.

Speaker Change: Thank you and our next question comes from Andrew Stott <unk> with Jpmorgan. Please go ahead.

Nate Crossett: Yeah.

Barry: Hi, This is Alex hutter on for Andrew Steinman.

Nate Crossett: Hey, good morning.

Nate Crossett: I'm just wondering what you're expecting in terms of overall room volumes for <unk> and the balance of the year.

Alex Hutter: You are all well today, a quick question on data Center Capex.

Speaker Change: And then maybe a quick follow up on data center Capex does the assumptions.

Speaker Change: Guys made at Investor day at your Investor event in 2022 still hold obviously, we're seeing notable pick up in the guided capex numbers from the hyper scaler.

Speaker Change: And then maybe a structural question has the.

Speaker Change: Pool of hyper scale or are those still say the same firms for you guys as three or four years ago or is there opportunity for some of these infrastructure software.

Barry: And.

Speaker Change: Hi, startups to also be hyper scaler in your book as well. Thank you.

Speaker Change: Good morning, Let me I'll start with your second question then.

Speaker Change: Barry will follow up on the Capex relative to our Investor day, So I think.

Speaker Change: What you see for US Hyperscale are always kind of not just the largest cloud providers, but the largest SaaS providers as well so people who need very very large deployments in terms of megawatts of data center capacity and usually these are global firms.

Speaker Change: Im not saying, we won't see some of those firms.

William L. Meaney: Our services business in GlobalRIM continues to benefit both on the traditional side, but also, going forward, likely to be ramping some on the digital side, because the team in our digital solutions group just delivered the best bookings quarter we've ever had in digital. So that is a really nice performance by our commercial and digital teams. Thanks, Nate.

Speaker Change: Some of the more.

Speaker Change: Newer firms that youre highlighting come into that that full but I would say that the barriers of entry for these really very large hyperscale is just given the cost of leasing and building data centers.

Speaker Change: It is a fairly consolidated.

Speaker Change: Tight group I'm, not saying that there couldnt be people that break into it but I think for the moment, it's a pretty stable group slightly increasing as some of the SaaS players get bigger in their own right.

Alex: Alex It's Barry.

Alex: I would say.

Speaker Change: A couple of thoughts about your question on the Capex views.

Speaker Change: We are continuing to see our data center business and actually the whole business run ahead of the expectations. We shared at that Investor day, as we talked about last quarter for.

Speaker Change: At Investor Day at your Investor event in 2022 still hold obviously, we're seeing notable pickup in the guided capex numbers from the hyper scaler.

Speaker Change: For the first couple of years, we were well ahead and if you look at what we're doing here. This year, we're actually accelerating that level of deep. So we're generating more revenue more EBITDA.

Speaker Change: And then maybe a structural question has the.

Speaker Change: Pool of hyper scale or are those still say the same firms for you guys as three or four years ago or is there opportunity for some of these infrastructure software.

Barry: And more cash generation.

Barry: And certainly we continue to lease more and faster than we were indicating at the time of the Investor day. So over time I think it is possible that we may see a continued ramp in capital for datacenter, but I'll just note.

Nate Crossett: <unk>.

Nate Crossett: <unk>.

Speaker Change: Hi, startups to also be hyper scaler in your book as well. Thank you.

William L. Meaney: Good morning. Let me start with your second question, and then Barry will follow up on the CapEx relative to our discussions yesterday. So I think what you see for us hyperscalers is not just the largest cloud providers but the largest SAP providers as well. So people who need very, very large deployments in terms of megawatts of data center capacity. And usually these are global firms. So I'm not saying that we won't see some of those firms, you know, come, you know, some of the more newer firms that you're highlighting come into that fold.

Speaker Change: Good morning, Let me I'll start with your second question then.

Nate Crossett: Barry will follow up on the Capex relative to our Investor day, So I think.

Barry: We're we're constructing to leases with some of the best quality tenants you could imagine in the Hyperscale or I mean, a couple of.

Barry: Statistics, we're 96% leased in our operating portfolio.

Barry: And in our under development construction portfolio, which is about 10% bigger than what we're operating maybe even 15% figure to more operating we're 96% leased on that as well on a pre lease basis. So.

Speaker Change: I will I will just underscore that when we are putting capital to work to build out our data center platform. It is because we have already signed contracts with clients and we are very pleased with the level of returns that we've been generating on those deals.

William L. Meaney: But I would say that the barriers to entry for these really, very large hyperscalers, just given the cost of leasing and building data centers, it's, it is a fairly consolidated and tight group. I'm not saying that there couldn't be people that break into it, but I think for the moment, it's a pretty stable group, slightly increasing as some of the SAS players get bigger in their own right.

Barry: Yeah.

Eric <unk>: Thank you and our next question comes from Eric <unk> with Wells Fargo. Please go ahead.

Eric: Thanks appreciate it just a follow up on the datacenter conversation I mean, just based on all the opportunity you had the outperformance on leasing year to date.

Eric <unk>: You could just talk about funding sources going forward.

Speaker Change: Given the fact your stock has been so strong this year your equity cost of capital is significantly lower than it has been in years past.

Speaker Change: Issuing equity enter the conversation going forward.

Speaker Change: As you look at funding of the data center business. Thank you.

Speaker Change: Thanks, Eric Let me, let me start and then Barry may want to chime in as well, but so first we feel really good about is you're highlighting the growth and momentum that we're building in the in the data center business and not just niccolo, but more and more in the in the Hyperscale and the majority is coming from Hyperscale, but as Barry said is.

Barry: Overnight well over 90% over 96% is all pre leased and it is a fully funded plan as we highlighted in Investor day. So we don't see any yeah. We feel really good in terms of the way that we're able to fund the growth and so we're happy in terms of the trajectory that we have without going out and raising equity.

Speaker Change: I think we have a plan that works.

Speaker Change: Eric I would just add that.

Eric: If you look going forward likely rates are probably coming down over time, so that makes it that much.

Speaker Change: <unk> year for us and the business is so cash generative from the core and as you see the <unk> business continues to.

Speaker Change: Well I will just underscore that when we are putting capital to work to build out our data center platform. It is because we have already signed contracts with clients and we are very pleased with the level of returns that we have been generating on those deals.

Barry: To deliver outstanding results. So I think from a standpoint of viewpoint about the equity has risen.

Speaker Change: A bit that is true, but I think thats more a function of where it was and if you look at us on a multiple versus the growth we're putting up.

Operator: Thank you. And our next question today comes from Eric Luebchow with Wells Fargo. Please go ahead.

Speaker Change: Thank you next question comes from Eric <unk> with Wells Fargo. Please go ahead.

Barry: I think that bolsters the point Bill was just making as it relates to.

Operator: Thanks, appreciate it. Just to follow up on the data center conversation, I mean, just based on all the opportunities you've had, the outperformance on leasing year to date, maybe you could just talk about, you know, funding sources going forward. And given the fact your stock has been so strong this year, your equity cost of capital is significantly lower than it has been in years past. Does issuing equity enter the conversation going forward? As you look at funding the data center business,

Eric: Thanks appreciate it just a follow up on the datacenter conversation I mean, just based on all the opportunity you have had the outperformance on what you've seen year to date, maybe you could just talk about funding sources going forward.

Bill: Equity thank you.

Barry: Thank you next question comes from Shlomo Rosenbaum with Stifel. Please go ahead.

Shlomo Rosenbaum: Hi, Thank you very much I just wanted to touch on two items, if I may one just on <unk>.

Shlomo Rosenbaum: Are you seeing the hyperscale or is starting to really open up.

Shlomo Rosenbaum: The inventory of gear that they had and really starting to sell it or are you still seeing the hesitation in case prices rates rise more with them.

Speaker Change: I understand is are they starting to actually delta.

Barry: Delta stuff that they've been holding onto and then just second just if you could comment Barry on the storage gross margin it increased by 20 basis points sequentially, but the moving parts are very interesting weird like all other storage cost up like 10 million, but you had went to actually go down 2 million sequentially. Maybe you could talk about what the movements over there how did wed go down and what are those other storage.

Barry: Costs that are that are going up.

Barry: Hi, good morning Shlomo.

Speaker Change: Take the question on the 11th and Barry can talk to you a little bit about the.

Speaker Change: And as it takes in terms of storage costs. So on the on the <unk> side is the Hyperscale is the reticence that you might have seen last year that I think we commented from the Hyperscale is was less to do with the pricing on the components. It was more of the availability of new kit that they had to actually refresh their datacenters and I think you've seen that all the <unk>.

Barry: <unk> from some of the largest hyperscale or is that in.

Barry: The last couple of weeks that they're all ramping.

Barry: Up there theyre refresh of their data centers to bring in the most capable gpus. So that they are AI ready and they can build out some of their AI services. So we do see an uptick to your to your point in the volume that we're getting from the Hyperscale or is that it's driven more because they're refreshing their data centers to be more AI.

Operator: Thank you. And our next question today comes from Shlomo Rosenbaum with Steeple. Please go ahead.

Speaker Change: Portions of that comes from Shlomo Rosenbaum with Stifel. Please go ahead.

Barry: <unk> and Theyre able to get the latest gpus from the suppliers. So they are able to accelerate some of that so we do see a building volume from the from the Hyperscale is right now in terms of decommissioning, which leads to more <unk> volume in our business.

Speaker Change: Hi, Thank you very much I just wanted to touch on two items. If I may one just on a L. M or are you seeing the hyper scale or is it starting to really open up.

Barry: Shlomo, it's Barry couple of thoughts about the storage rental gross margin.

Speaker Change: The inventory of gear that they had and really starting to sell it or are you still are starting seeing the hesitation in case prices raise rise more you know what I'm trying to understand is are they starting to actually delta.

Shlomo Rosenbaum: First of all we were really pleased with that at 70% and that being because.

Shlomo Rosenbaum: Really if you look at our global rim business. It was up very nicely year on year of course part of that revenue management part of that is the continued productivity that our operations teams are driving and so the reason it was slightly down year on year is related to as I talked about.

Barry: Our as well as data center as we talk about sometimes before data center has a lower gross margin, but it's of course accretive to our EBITDA margin and so as data center continues to ramp at a very fast rate it has a little bit of a.

Barry: Level of mix, but obviously, it's very incremental and on a sequential basis, you would expect on that all other storage cost there to be some power inflation as commencement begin to ramp and folks start to drop our as you know that that's a direct pass through so it can actually also affect.

Barry: Right so to have the storage gross margin up sequentially in light of that headwind is.

Barry: We thought very very favorable about that on the storage rent expense. It was down some sequentially and thats. Thanks to our team's continued productivity around.

Barry: Warehouse.

Barry: Efficiencies, we have as you would have seen over the last few quarters reduced some of our warehouses and thereby.

Barry: That in June to a better expense position.

Barry: And the only other thing I'll mention is taking it up a level our gross margin in the quarter for the whole company.

Unknown Executive: more ALM volume in our business.

Barry: Was almost just under 56% now that's slightly down from last year, but two things to think about one we're absorbing the mix issues, including the power that I mentioned in.

Barry: In that number and two we've added regency technologies, which is.

Speaker Change: If you look at our global rim business. It was up very nicely year on year of course part of that revenue management part of that is the continued productivity that our operations teams are driving and so the reason it was slightly down year on year is related to as I talked about.

Barry: Again, a mixed headwind on gross margin, but by the way regency performed extraordinarily well on EBITDA in the quarter and so we feel really good about where the gross margins trending and it's been ahead of our expectations.

Speaker Change: Thank you and our next question today comes from Brendan Lynch with Barclays. Please go ahead.

Speaker Change: Our as well as data center as we've talked about sometimes before data center has a lower gross margin, but it's of course accretive to our EBITDA margin and so as data center continues to ramp at a very fast rate it has a little bit of a.

Brendan Lynch: Great. Thanks for taking my question.

Brendan Lynch: It came up a little bit already but on the pricing front your organic constant currency growth was seven 7% for storage rentals up quarter to quarter, but down relative to the 2023 pace. Thank.

Speaker Change: Level of mix, but obviously, it's very incremental and on a sequential basis, you would expect on that all other storage cost there to be some power inflation as commencement begin to ramp and folks start to drop our as you know that that's a direct pass through so it can I actually also affected.

Speaker Change: Thank you guys have won suggested mid single digit pricing growth is possible over the next couple of years.

Speaker Change: But you've been at high single digits for a few years now is the transition to mid single digits occurring now and how should we think about you guys pushing price as inflation wanes.

Speaker Change: Brendan.

Brendan Lynch: Yes, we were very pleased with the seven 7% and I think at that level you can see the amount of EBITDA of the business generates since it's.

Brendan Lynch: Our highly productive portion of our company and as it relates to trending.

Speaker Change: We'd indicated we feel like mid to upper single is the right kind of level over the longer term and so I would say.

Speaker Change: Trending in this vicinity.

Speaker Change: Is would be very.

Speaker Change: Positive to the business model going forward.

Speaker Change: Yes, the only thing I would add is that it isn't so much inflation based anymore. It's really about the value that we're adding to our customers. So if you look at our traditional records management business is we've over the last few years have added a portfolio of services such as small smart sort smart reveal that I highlighted on the call some.

Speaker Change: The governance and compliance.

Speaker Change: Consulting and systems that we're able to install around their hard records management, and so we're really driving more value for our customers and the customers.

Speaker Change: <unk> value in that so I think you can continue to expect that our pricing will remain some.

Unknown Executive: Great, thanks for taking my question. It came up a little bit already, but on the pricing front, your organic constant currency growth was 7.7% for storage rentals, up quarter to quarter, but down relative to the 2020 free pace. I think you guys have long suggested mid-single-digit pricing growth is possible over the next couple of years.

Speaker Change: 403 to 400 basis points ahead of what you would think is normal inflation, but its really driven by the value that our customers see from our services.

Speaker Change: Brendan the only other thing I'll add is that at the start of the year. We had suggested global rim might be in the vicinity of 6% total growth for the year and so year to date, we're running.

Brendan Lynch: Seven and a half on on that business. So we continue to see outperformance in global ramp some of that is driven off of revenue management also incremental service uptake of the sort that bill just mentioned.

Speaker Change: Thank you once again, if you do have a question. Please press Star then one on your telephone keypad.

Speaker Change: Today's next question comes from Jonathan Atkin with RBC. Please go ahead.

Speaker Change: Thanks.

Jonathan Atkin: A couple a couple of questions.

Jonathan Atkin:

Jonathan Atkin: Can can you talk a little bit about.

Speaker Change: Yeah.

Speaker Change: And to what extent regency is sort of fully occupied or do you have the opportunity within that set of assets too.

Unknown Executive: Yeah, Neil, the only thing I would add is that you know, it isn't so much inflation based anymore It's really about the value that we're adding to our customers So if you look at our traditional records management business is we've we've over the last few years have added a portfolio Services such as small smart sort smart reveal. I highlighted on the call some of the governance and compliance Consulting and systems that were able to install around their hard records management And you know, so we're really driving more value for our customers and the customers, you know seed value in that So, you know, I think you can continue to expect that our you know, our pricing will remain some You know 400 three to four hundred basis points ahead of what you would think is normal inflation But it's really driven by the value that our customers see from our services

Speaker Change: See more productivity.

Speaker Change: And then secondly on data centers, if there's anything to call out in terms of.

Speaker Change: Lead times around construction and delivery.

Speaker Change: All of those services, such as small smart sort smart reveal and I highlighted on the call some of the governance and compliance.

Speaker Change: And the conversion of.

Speaker Change: Book to Bill Thank you.

John: Good morning, John Let me start with the data Center piece and then Barry can talk about regency and more broadly the SLM business and the operating leverage.

Speaker Change: Consulting and systems that we're able to install around their hard records management, and so we're really driving more value for our customers and the customers.

Speaker Change: On the datacenter side is you're right to highlight the lead times for a lot of the build components, including the concrete panels or the actual physical construction of the shell.

Speaker Change: See value in that so I think you can continue to expect that our pricing will remain some 403 to 400 basis points ahead of what you would think is normal inflation, but its really driven by the value that our customers see from our services.

Barry: The good news is that we've been able to manage that and keep the lead times.

Barry: Similar to historical norms, and what are our customers are expecting because as we building scale in our data center business, we're standardizing across those a lot of those components in market right. So across some of the like Europe versus the United States, you can't standardized as much but within Europe, you can standardize a lot in within the United States.

Speaker Change: Brendan the only other thing I'll add is that at the start of the year. We had suggested global rim might be in the vicinity of 6% total growth for the year and so year to date, we're running.

Speaker Change: So you can standardize a lot India you can standardize a lot et cetera. So we are doing that and what that allows us to do is as we get scale is too to be much more flexible in terms of having the right equipment for.

Speaker Change: For the right customer in the right locations. So we feel pretty good in terms of our ability to manage the supply chain.

Speaker Change: Keep our timing intact.

Barry: John This is Barry as it relates to regency and the opportunity to continue to utilize and optimize further it is definitely there. There is a lot of opportunity we have considerable capacity to expand the business. Both in terms of what is already.

Unknown Executive: ALM, and to what extent Regency is sort of fully occupied, or do you have the opportunity within that set of assets to see more productivity? And then, on data centers, if there's anything to call out in terms of lead times around construction and delivery and conversion of book to bill. Thank you.

Barry: In place as well as the opportunity to expand the footprint at relatively low capex I might add so it's a very.

Speaker Change: Positive <unk>.

Speaker Change: Situation to be having regency get further utilized which I expect it to over time and I will say, we have a very highly capable team at regency that there is no doubt can manage a much larger business and drive a tremendous amount of value for our shareholders.

Speaker Change: Thank you.

Speaker Change: One is from Shlomo Rosenbaum with Stifel. Please go ahead.

Shlomo Rosenbaum: Hi, Thanks for squeezing me in for one more this is a little bit more of a technical one also just it looks like the real estate depreciation went up sequentially for like $14 million was there a major site that came on board.

Speaker Change: During the quarter.

Speaker Change: Hello, Mo you should expect the depreciation of course to continue to ramp with all of the Capex, we've been doing on data center as well as some of our incremental.

Speaker Change: Of those components in market right. So you know across some of those like Europe versus the United States, you can't standardized as much but within Europe, you can standardize a lot in within the United States use a standardized a lot India you can standardize a lot et cetera. So we are doing that and what that allows us to do is as we get scale is to to be much more.

Mo: New warehouses that we put in as well as some of the.

Speaker Change: Digital innovation that we've been.

Speaker Change: <unk> been driving internally for some time now so that's the that's the primary driver and it's in those that order.

Speaker Change: Flexible in terms of having the right equipment.

Speaker Change: Okay. Thanks.

Speaker Change: For the right customer in the right location. So we feel pretty good in terms of our ability to manage the supply chain.

Speaker Change: Thank you.

Speaker Change: And gentlemen, this concludes the question and answer session and the Iron Mountain second quarter 2024 earnings Conference call.

Speaker Change: And keep our timing intact.

Operator: John.

Barry: John This is Barry as it relates to regency and the opportunity to continue to utilize and optimize further it is definitely there. There is a lot of opportunity we have considerable capacity to expand the business. Both in terms of what is already.

Speaker Change: Great. Thank you for attending today's presentation.

Speaker Change: You may now disconnect your lines and have a wonderful day.

Barry: In place as well as the opportunity to expand the footprint at relatively low capex I might add so it's a very.

Barry: Positive.

Operator: Hi, thanks for squeezing me in for one more. This is a little bit more of a technical one. Also, it looks like the real estate depreciation went up sequentially by like 14 million. Was there a major site that came on board during the course?

Speaker Change: [music] it looks like no one else is going to join this call.

Barry: Goodbye.