IRM - Earnings call transcript Q4 2021 | Iron Mountain Incorporated

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning, and welcome to the Iron Mountain Fourth Quarter 2021 Earnings. [Operator Instructions]. Please note, this 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 go ahead.

Gillian Tiltman

Emily. you, Thank welcome call. and fourth XXXX quarter Good to conference earnings morning, our On materials refer Investor will today's we call, to Relations available website. our on

and refer Please statements the our Barry to earnings subject statements, our Form statements. We to could uncertainties. Executive Officer. are actual to President contain on After joined the and and safe here cause forward-looking the we'll X by XX-K of including Q&A. Financial results Meaney, are expectations. forward-looking language that open Today's differ remarks, annual up materials today's today and harbor Chief risk discussion regarding Officer; for risks materials, on factors All from major our our our Hytinen, President and for those Slide prepared Executive lines forward-looking a Vice statements Bill report Chief in earnings

presenting In measures use results. when non-GAAP financial addition, several our we

supplemental to We And reconciliations Bill. have I'll included to with the in these financial the over that, information. turn call our measures

William Meaney

and thank time join taking to you for all today. Gillian, us you, Thank

to relationships, renewed to first with world a each have and dedicated pleased and reflective historically year. are Mountaineers' continued now the with have every our our revenue invigorated with teams. recently our both the the are performance growth. deep record record and and put our Omicron profitability commitment. the model the our are We to full the fourth around most high focus testament And These offerings, customers broad Mountaineers variant, day on associated and challenges of resilient results for business customer quarter delivered Despite our pandemic and

that all to our by remarks by overnight the Ukraine. we Mountaineers, I the begin my Speaking in events about are saddened wish stating

customers in it time, Yet given in all let many discussion our and at in deals the current Our our million. events ever year. with revenue ways same we inappropriate am there thoughts $XXX Mountaineer XX Ukraine. X.X% their it begin financial of our and $X.XX living Europe, results the record remarkable the prayers for of yielding With backdrop. In with fellow us, revenue this billion, working families discussing our and Mountaineers and I quarterly our are and sure in growth our highest record our of that, achieved the of keeping fourth EBITDA total is spirit. and organic quarter, me of with

services we billion increased year, full the achieved by of nearly These EBITDA $X.X demand For for of across and our billion. fueled markets. revenue key $X.X results were record

referred organic now storage drove For with disposition, the or We asset as transformation volume of year, full offerings, digital and secure trends. double-digit including data center combined benefit in reflecting X.X%, cycle inside we life of digital management. our delivered growth positive IT ALM, services rental growth pricing revenue continued to

to billion January. digital this This is services acquisition pleased will we the growing our announced capping XX% in in acquisition momentum, that trajectory to of quarter closed in growth. in are Further also year. of our in Our market, ITRenew, over and accelerate ALM XX% the per off businesses $XX report growth ALM an over build December, growing which year fourth continue success area, to excellent recent and the

but carbon custody important to largest this their serve in destroyed This in economy leading division and wiped of assure fast-growing circular end some most that world neutrality. and and also their of space the the data capabilities innovative expanded Mountain's customers our expanded includes bringing ALM platform data also IT XX% recycled directly ALM IRM's with responsible are a customers' helps of terms to only complements practices. base XXX,XXX in X,XXX ALM On in created a division recycling, expanded newly center division and goals provide assets, our this consistent a historical way. our benefit point, the will base, the cradle-to-grave countries. both way, companies in any last life This us Our customers' Fortune global from business, XX business which of is assets strongly our ESG Iron by are not customer for best XX,XXX security loyal at of will for This around in enlarged activities our ALM ESG our XXXX. secure supported of ITAD facilities absorb line. more IT Mountaineers and chain across our offerings This customer the

of these total in services insights addressable center, some has with machine I our taken billion in build-out on expansions $XX you to the of loyal has we how markets happy last well our last Mountain years, have new capitalize in products TAM and to how our many have previously customer growth of services the from decades. our the ALM I Our as are serving and year and growth now ahead, learning-driven am to analytics invest now $XXX which as underlying continue base been shared data data and TAM, products report X these a opportunities the investments $XX recent for market, to billion. Iron or billion. to examples over continued just some taken of in in to

with ever-expanding an together behind in solutions, synergistic drive the scale, fuel our growth. continued of in set customer-centric acceleration building reach and global the of much and Our is

in of how diverse success offerings our been share service. we've few customers' a me Let and empowering customer unmatched our solution growth through examples

enables engineering of effectively relevant In backfile this digitization information of where a digital entertainment services, learning a assets. to manufacturing complexities, efficiency and amongst insight superb deliver understanding ITAR to our of customer million International tasked Traffic order records our organization, engineering ensure archives just learning-trained we help our example company designs, or into to of engineering in recent a this digitization Iron large from our technology maintaining is new and ITAR-compliant to XXX% designs critical were also company learning global is globe. organization technological our with engineering across customers and us environment. as capabilities, to classification machine and InSight store, to known data, aerospace implemented Our compliance our GRO. our end, its collaboration other over use this ITAR. success. utilize identify To platform achieve our win We of with AWS data we developed this million, analytic engines goal and in and and whilst operating machine solution sought to with company, company machine most XX government positioned and to to project compliance and Regulations initiative refine but aerospace deal cloud using model uniquely an historical Mountain Moreover, with with not the over auto support $XX this the to classify the Arms partner a being assist won storage

our with Phase win was the processed, for over of agency X a splitting process the branch. for records and proprietary us worth highlighting techniques advanced U.S. automated learning, contract based for pattern of processing reels high rely projects, X customer's and This Phase that originally to which key on volume expectations, Iron future awarded from was needing contract contract vendors or XXX,XXX our OCR Mountain few. been documents, recognition first billion cases, Another extracting the helped to be to microfilm X all a to have We mailroom, processing enabled digital name awarded needing microfilm a analysis. contract use due invoice unique process our concluded surpassed processing microfilm exclusive scale, technique, select learning including to These is to customer but machine machine and reels the the extraction have information differentiate solution at on of and the branch the innovations from a claims win also competition. federal X scalability QA offer government. this technology planned The for applying

a transformation scan millions authority operate with development annual our relinquish solve disconnected in consolidating the Another legacy to of recent back required operating Iron to the upload Repository. digitally the to information having support Data assets wish to is production records were of all U.K. gas and to their of their example we physical Sea. they order obligations wells to in undertaken to National We've to with resulting amounts They're oil U.K.'s a able significant XXX sift platform, problem digital their to dollars working of how whilst digital is the abandon. regulatory license their information of partnership in silos meet in data Using savings. and on North to enormous company Mountain and archive the InSight data and customers

partnership foundation comprehensive storage museum the and to of to We long-term an in division, for recently ground, of years they Services built Motion we a ideal division, a Mountain's meet Arts support came support won excited contract Museum provide up Entertainment Iron Crozier upon evolving back operations services of were match. Moving Fine to proud and and above were the logistical of Academy their Pictures. through where our based us that trust Crozier needs from many solutions

was our wins the bookings to Recall business. year turning in data for XX Now center target that our megawatts.

This XX-megawatt nearly the are over with data expected is lease the lease announced phases alone. This to to fourth in of megawatts in in pleased We our Virginia XX of quarter year megawatts through new with from December. leases the have center mid-XXXX. finished signed XX leases in commence Manassas, mid-XXXX includes

to from to on strategically that see megawatts, partnering from meet is Based VAX commitment individual facility indicative design megawatts previously. customers XX XX base. data our for we This ability meet requirements. support strong of with solutions comprehensive our our our expect demand center and to plans, up lease We to to their now that reflects the demand customer current continue existing

additions With megawatts. our in to XXX portfolio, capacity of now these and excess changes other is total our

annual recognized leadership focus us has we be years, many sustainability been an and progress This for XXXX. to Finally, commitments for produced around outlining important continue since for having our ESG. reports our

Global climate the have our launch included: to in which were net Sustainability emissions EVXXX Compact commitment customers the Group's recently, to global reach Google a expand original vehicle to More when data carbon Some allows co-signer pledge we centers we line reductions initiative data XX/X have were power we by key XXXX. to achieve XXX% their using Pass, on signatories the our carbon-free in generated milestone in data and centers; commitment provider green-powered our Green UN with by of carbon our to in center in our and of back is a of report their program, XXXX. our to our one reached REXXX announced, electricity; Power zero electrifying past we footprint addition renewables; we were to the of Climate recognitions of joined fleet

ESG and reduction carbon future first whilst the commercial science-based suspect us gas America's growing absolute is Since out, our companies. our emissions and towards were we progress our baseline greenhouse real most We they XXXX that from top believe goals. list make establishing our over made In a summary, have initiatives have amongst major Newsweek's the reduced XXX responsible We by business. on targets, ranked XX% we our stand factor being of growth bright. of ahead our

our Barry. as customer We are with to momentum another that years ahead. portfolio expand to are we and this deep turn I'll this powerful needs. relationships, and building With and our that, provide And evolving of mountain the we our call strong performance on as year the meet our customers' our growth footprint, can momentum we range we confident over continue portfolio records ascend set

Barry Hytinen

and us we to provided on our performance, joining discuss thank our strong results. call. you our quarter, the exceeding the In last for delivered fourth expectations Bill, Thanks, team

X.X%. X.X% in ahead Revenue was of I grew commitment basis, like high results, up the expectations million Mountaineers year-on-year to the moment with strengthening $X.XX a take a and and billion U.S. Before of of dollar the the our to their total I end $XX Iron quarter. On headwind would dive organic revenue a previously of despite dedicated for we continued thank Mountain. to performance our shared into outstanding reported revenue more being

and asset a by momentum in quarter. accelerate commencements. the management. or continued total strong data XX.X% growth and X-year X.X% growth service the center of solutions building, $XX in digital example we our reflecting to organic revenue quarter, in cycle are Organic an storage revenue As basis, continued pricing on our revenue life million strong grew driven Organic increased the

pre-pandemic from revenue even still with $XX increase last transportation services levels, As XX% Adjusted our this with year. were EBITDA $XXX nearly associated performance. was traditional million, more are we an million down pleased from of

of our fourth expectations. a AFFO productivity, In cases, strong $X.XX, million we exceeded the high of additional and by $X quarter per up last basis, the year. pricing result headwind. $XXX our driven significantly despite on high expectations by a and FX share quarter of from As respectively, exceeded flow-through end EBITDA $XX fourth end million $X.XX the was or both of million

of of the Now Revenue our XX% exceeding guidance high an basis reported let an achieved a the both of on increased EBITDA year. billion, basis. a X% year-on-year or to me increase briefly full $X.X on share end guidance. $XXX We in X% $X.XX ranges. organic XX% per constant full million summarize on year-on-year. billion year currency cases, $X.XXX basis, and increased year billion Adjusted $X.XX to over our full increased AFFO

a $XX on storage with million year-on-year, management our reported delivered Now expectations EBITDA year. up focus growth from Global solid and trends of in increased last revenue let's volume revenue reflecting and or volume RIM organic X.X% total X.X% was $XXX of consumer million, line business reflects basis, points last billion, the for or of was On an year. $X.XX pricing $XX our of adjusted basis year Constant our physical fourth EBITDA strength and year-on-year. basis productivity. turn revenue the rental and continued to an X% X%. adjacent our an With on was the million RIM volume currency businesses, increase from Adjusted growth an quarter organic XXX on and Global margin increase trends. in positive revenue segment performance. basis quarter, In

center to data our business. global Turning

Our XX in quarter. megawatts team booked the

year, the at megawatts. full exceeding year in guidance came significantly of our For full megawatts, bookings XX XX

pleased historical XXXX, with Frankfurt, To in excluding megawatts are in very give context, XXXX. performance. XX in XXXX We the joint leasing megawatts team's venture some and leased we megawatts XX our XX in

projections. quarter year-over-year. and terms we was fourth year-on-year, revenue growth projected, grew sharply line our service XX% Storage of revenue and In in up to as accelerated XX% revenue, with

half reminder, we joint includes Frankfurt in As to venture. second are the revenue service our a fit-out providing services

large We in the expect that margin will completed service early be strong component, with with sequentially EBITDA activity Even commencements. XXXX. increased

year In both pleased XX revenue are range data and growth performance, retail center lease continued We our with in to XX% We expect represent our colocation. XXXX, hyperscale which terms and annual megawatts, has in of pipeline a center data project we bookings to storage. strengthen, growth. percent of would year we good to full growth With high very with our to commencements, bookings we higher mix, With center up XXXX. recent year-on-year and for teens revenue. visibility full have even pricing on rates improved modestly compared year margin strong to be prior and expect data the

Project to Summit. Turning

team This adjusted $XX year-on-year the million benefit. of EBITDA delivered quarter, incremental

Summit For the $XXX full million benefits. delivered compared as XXXX, to year, of

was were $XX expect of million growth Total of year-on-year in million, million $XXX which $XXX We another benefit expenditures $XX capital was and million continue XXXX. to recurring.

total XXXX, of For which growth $XXX the we center million, million. In expenditures data expect development. be approximately total $XXX full were $XXX to expenditures capital related capital was year, capital million to

CapEx, data that. about of development approximately center million X/X We growth representing are projecting of with $XXX

CapEx expect $XXX We recurring million. approach to

recycling. capital to Turning

view As $XXX a assets proceeds, to industrial $XX and we have the our the to before, said market the million. as backdrop, full means as capital. fourth quarter, upsized growth in supplement we of approximately million year highly we that bringing our With recycling generated program for attractive

our quarter the last balance with and sheet. leverage compared line improved net Turning of We quarter. ended to projection adjusted X.Xx, in the to with lease modestly

As are said of to X.X our to range X.Xx. we long-term we leverage have committed before,

tick transaction, closing we the of leverage the quarter. in For first to modestly up XXXX, the expect ITRenew with

community, resulting would fixed cash to in levels. like milestone in you position, perspective, seen, The performance our our as our days collective notes be at Also, and announce I in cycle. sales strong to driving valet strong fast-growing storage. $X.XX support December, exit target our levels We similarly expect From financial focused the transaction. in also to to to income successfully valet joint completed an to our has important a a year-on-year improving team collections, X-day declared a strong venture recently recognize have paid our April. team may our per on of improvement year from With are market. quarterly pleased dividend range. XX-year In focused improvement we sized for business Board cash the share ITRenew issued outstanding early pre-pandemic within resulted our of a from support thanks to MakeSpace unconsolidated our strategic related storage merger with the consumer on Clutter, the Directors

brand, expect single continue storage business, in the will Iron services focus considerable our nearly will ownership the synergies. to natural interest a combination be entity. benefits, We and the reach a Mountain to including combined of broader will Clutter, and on provide result XX%

are total to our the We excited about and lie ahead continued benefit physical expect volume. that opportunities

outlook. Now turning to our

For expect billion year $X.XXX currently to we the full XXXX, revenue of $X.XXX billion.

to in of EBITDA be XX%. adjusted growth range of expect guidance growth to XX% revenue EBITDA $X.X We of $X.XX and At the our a represents midpoint, billion. billion

expect to billion the to year-on-year of We at which $X.XX point. growth in midpoint be X% AFFO the $X.XXX range represents billion,

AFFO in $X.XX per to a be share $X.XX. range expect We of to

Our will year-on-year. slightly physical be guidance consistent organic assumes global to volume positive

will to them a of revenue taken that we of note those as already will the been will and the significant you expect actions end be speak And We all place today. of benefit, have in quarter. be majority by management I nearly the

seeing we activity a service across business, continuation solutions ALM strong in planning mentioned, our with the our year. combined digital in the organic a Bill in for As we are are trends and recovery slight

Our acquisition guidance of from our the also ITRenew. contribution assumes

the of results including closed we in the at our end months deal we the As guidance. January, of are XX

dollar with revenue million estimate approximately exchange in $XXX Our from $XX year-on-year revenue million that half. headwinds first the vast majority the foreign ITRenew. of guidance will the result approximately U.S. of We of in stronger includes to

and well benefits. In Project from of EBITDA, as revenue Summit line terms the include expectations our as from benefit the contribution top management ITRenew growth,

Our software EBITDA U.S. escrow business, assumes from inflation, stronger our and recent increased the spend, quarter. which also of the rent dollar in guidance a leaseback sale outlook innovation we second prudent the transactions, for sold late divestiture

the ongoing felt be share With during closing for quarter, the as first would the well the as associated the transaction market our expectations of we helpful the to the with it in volatilities pandemic quarter. ITRenew

billion. revenue of We be to expect total $X.X excess in

be to EBITDA million. $XXX expect We approximately

be in our to AFFO expect In We of well. is summary, executing million. team excess $XXX

continues build our across pipeline expand, continues momentum and to to business. Our

with the has and XXXX. strong expect this investments Thanks addressable brand market Our in to ability We that, collective to And to grown our significantly enter over please confident feel years, together several and line higher customer operator, last of to we for the growth. continue very in levels our expand. Q&A. we our as positioned feel open team's we efforts, position relationships, well innovation, with deliver

Operator

Instructions]. [Operator

comes from today Our Sheila McGrath Evercore. from first question

Sheila McGrath

The of EBITDA targeting think little I you revenue in if momentum growth we that margin growth. services, if that was drivers in XXXX could very strong. should XXXX? And as more give about to on how wondering you're the it's detail compared the is in a more us XXXX

William Meaney

Thanks for the question.

EBITDA that little I'll all, where of first impact I I'll talk has. comment Barry the the margin, a growth then revenue comes. So bit And let about, on think the

in And we think driven have by momentum saw to the you I that had kind things. XXXX that So XXXX in was XXXX. the we X same see continue to momentum of

business globe. the our First GRO a solid foundation from very across all, of

center, are includes cycle that continues areas, uses digitization the intelligence, the machine And single-digit which of in asset in acceleration our management. life new low platform continued acceleration drive then as to InSight growth profitable. well which data terms and a as that platform, artificial everything learning So the highly

be that double-digit see still those service areas. we new in to growth So strong

margin the have EBITDA of terms So a that's in in see And Barry, with where revenue the we comment growth. what progression. of of those of maybe, associated want it, that to some but different does terms fuel you

Barry Hytinen

for question. the Thanks

total X add really great services. a to Bill's feel would as out the positioned On comments see margin. you're well. high-teens fact things fair improve, out, the bit get you to that mid- But So quite and a where and we're and call saw we're The that's have about forward, that EBITDA Iron ITRenew. in business we From probably underneath to of you, a of that's X the see profits EBITDA a to when margin, there's results, about by more to it upper our program. are down, if revenue contribution But right, our seeing we have relates the building I driven what planning contribution business, disclosures, you'd would posture, revenue kind I'd year. margin mix this core that you management are as planning of pricing feel is purposes, in from seen of margins probably I strong very going back see very Mountain points. ends using the we most as you assumed were that kind continuing and but say recent you prior will model is the that of we're to that good our for so actually and

well, Our phenomenally you've that center benefit we margin and business is as is seen, forward. move doing data a as

the be coming I mentioned our remarks, the data modestly storage a As our center revenue to of data we growth side of out center up of lot profitability business. prepared as year-to-year expect in

continue the very thanks million contributions. strong more or our roll contributions to to Summit Of have course, from in. $XX We'll team's Summit,

would noticed at margins seeing recent results most high gross our that our You very have are levels. margins services from EBITDA and

basis strong up continue the XXX I to XXX, the service we year-on-year like of will points margin think out going can expect quarter. forward. in fourth very that core You see

feel I Sheila, very positioned, the and well question. appreciate we So

Operator

Our Stifel. next comes Shlomo question from from Rosenbaum

Shlomo Rosenbaum

significant revenue. well. the sequentially you've services very strong still what it's as You much could that be and talk wins that of services how improvement? might gross margin versus margin new Frankfurt services you maybe on And Can services that talk got. some just pretty improvement the off coming back last a Barry, was maybe just business about Maybe drove I then versus about could margin. the back you piggy the comment had

coming from particularly talk it's that. If wage managing you about and inflation could the you're face of inflation how and in and where

Barry Hytinen

Okay. Thanks, Shlomo. I appreciate that.

-- thing is as those you since of the not mentioned revenues sort services almost So on I'll -- first is you of because really those that on pass-through coming tell Frankfurt from think it's business. are

hit see Project that's been a margins. our the as reasons coming That move why said And has lot a therefore, our it's service muted. that's more up coming early In reasons and, storage services one as general we data of through in the bit less quarters But of to center a the has you'll of a finishing where as up of core. data fact, one expect year-on-year that's likely very we little for margin operations contribution the those is beneficial. been out few more 'XX, from margin just to coming productivity our revenue out our now, said, center. Summit quite And and from be we've

that's solutions very mix it's was points incremental It about basis services Bill XXX up, nicely. revenue say operating gross be and well. cycle our year-on-year. our digital management on just very That basis as XXX to think I sequentially. our contributing management. saw lot some there's would up There's strong life And spoke line is also You there. points margin some asset our a I leverage.

about mentioned terms -- inflation. in you of So

year, As at I with what will outlook. reiterate, we've prudent last I been think this said, I our is time

while more a productivity fixed inflation, program, the out And say a we're to amount benefit guidance is took in all know, amount our fall year. seeing economy, there I what together of the our we as and revenue line. certainly structure in we at bottom to to a considerable we currently and posture have inflation of last healthy would than the of level management similar have of working pricing more with look our drive We that our embedded seeing

So we and Shlomo, where the good positioned in currently, are to with feel guide very services we about total. respect

William Meaney

that -- Yes. see Shlomo, I value-added. in other really because the services The services, It's more add, uptick frankly, and we're or machine more the the doing. the quite of component well you mentioned mean, some thing only more we're I and the thing you not doing, is digitization simple ML our would I business of just it. an of learning auto that classification have scanning. work know

time be about I'm that not wouldn't So as all long margins business such which the that, on have on effect which that expansive piece good And see so business. we just our high-margin It pricing generally trying and not has naturally is there's a we're higher well, inflation expansion. say for heard the for selling is an a people new street, high-margin to an higher blase to that, is business for almost analytical some margins it it's our because it's projects Barry margin. action because our were all, relatively talk inflation as component the well, almost but has I us said, margin. you've obviously of a attract -- now about And

good -- the feel it's we're progression we So about that yes, getting.

Operator

Our from Credit McVeigh Kevin next comes Suisse. from question

Kevin McVeigh

sizable Barry, about -- as step-up feels Congratulations your center, XXXX? free that's Ukrainian well. in with on a but data I thoughts around this ITRenew help think because if you we but missed should which employees it, and like can cash CapEx, obviously said our flow us in you how

Barry Hytinen

Yes. Thanks, Kevin. Appreciate the question.

So first up on CapEx.

total Growth all that. data the are CapEx of increase. right, center getting And is out is is $XXX that you point Our million capital that as guide of $XXX you million. basically

win that of XXXX. So thing we about from as That's in up from a seen the the very million in sense our continuing at is strong The $XXX great necessity -- the leasing because center and is, strong and had we've million. are CapEx development pipeline course, you've the about are planning $XXX to data we world. -- have build to that we the team deals continuing around it's

cash pleased while So with a the up, I'll the are of free standpoint, the all that center be flow is note now, will data Kevin. Summit we're our planning. very CapEx way us team costs From behind

little more bit And I ITRenew having free So achieve year, million revenue through your had growth which as it, as we of more services there's the you our look over the model. go model, growth a cash this in about Summit, before costs but that of in there's course, business. Have you'll think $XXX get cash in find business think and considerable -- with taxes, if at some away services you you flow -- to last year.

So cash forward as look forward. showing We I strength to the appreciate the you move the in we question. flow

Operator

line Goldman Sachs. question Tong next the of from Our comes George from

George Tong

you the key new expect disposition you're grow in The business to Can leaning elaborate that secure to and ALM IT how you typically asset strong drivers your double digits. industry grown growth? on has on support quickly what

William Meaney

George, thanks, question. So the for

of book you is kind synergistic we as that strong community, teens, a XXs noticed, and continue evolution. with really or by kind We're kind team. of kind to in building, of center say, exposure forward, very of to been getting was had quarters had strong high the the frankly, quite see XX%, the rate that quickly it terms because our in couple where has growth ITRenew impressed of effects direct We business of roughly, XX%. going low how hyperscale up So data double-digit, we've which

more came -- -- But sensitive, general it's having traditional the ITRenew a discussions assets, standpoint already financial traction ITRenew making a IT between industry, those as is dispose security side, bringing about is disposed that's in our as services, we're of folks other sure talking to we're way they the getting the that center their our or the by think is point, team important. finding you way that from both data that and team to hyperscalers. we're insurance becoming well what customers, if beyond that more your environmentally and they whether team data So we're on even additional the then across

of continue we're we'll terms to into the through the we're we organic that XX% happy update upper together. that I growth platform teens we putting to growth rates as in really see an which X did but expanded with go So the similar we touching we're, already progress, teams from getting you the category. let's now past And synergies that, say, have to -- year, said this

Operator

Fargo. Wells comes question from next from Our Luebchow Eric

Eric Luebchow

to data is year. leasing Barry, center wanted this on megawatts XX the said that touch think target outlook I the I for business. So you

good that larger you means wins. and some So pretty hyperscale probably had visibility

could on space? that changes in traditional larger And sales. outlook side, inflationary return the this on or based any more center capital then supply data the maybe versus disaggregate you talk spend higher maybe the return the into in So about year enterprise targets impacts or any hyperscale chain on

William Meaney

me expect that more the visibility. side the think I let have folks, the to of and retail -- further. side can do kind But start comment I'll mean, a I the -- I you with can colo right, -- Barry leasing be the I think in year. hyperscale the then you of So or continue would with be mean, that you're megawatts activity, teens

So we like that business.

XX this megawatts, year, to making new past We're entrant guiding in look We see almost in years then that a good on of we're really excited megawatts. few the year, deal continue flow hitting coming if is or ago, kind side. we're to the were And very also you and relatively pipeline the this hyperscale. really, we a at progress. same XX the thing that another about results clearly, And

kind volume, So retail. and typical where we're the rest even little starting would and look like say, from from you're I maybe a getting in bit to space center XX% the of to what the player colocation more data more of like, XX% a hyperscale industry

Barry Hytinen

is only see very level that would we see The industry I inflation as in some good we also some other level of thing -- add pricing. you've participants, cost, heard while from

mark-to-market expect to not up, be if to than we so better And flat that.

good well pleased positioned. year-on-year. margin to the to be new are very expect be say And in pricing And of to I'm able we feel rising terms deals. We we seeing

the for thanks question. So

Operator

[Operator Instructions].

comes question Andrew Steinerman the from of JPMorgan. from next line Our

Andrew Steinerman

that give you us Barry, is more hoping revenue guide. revs could acquisitions was still ITRenew I as organic a that did I headwind. 'XX million you is bit growth assume $XX million revenue an and well. you FX definitely of heard I $XXX constant the is currency from this other for little

for if guide, would be so revenue that could us you it organic helpful. and for And total out the kind give growth of us just 'XX

Barry Hytinen

Andrew. Yes. disaggregate I'll for Thanks, it you.

be year-on-year. of of benefit $XX M&A So about in The net all activity million you XXXX for our $XXX working million ITRenew. is would of other with

higher, would in business might lot. be our folks And you back might thinking remind that have -- So that, just not software did June. and a escrow sell we been be I'll that

in acquisition then headwind So that's also data we small small did and bought center the small we a to acquisition -- relatively Mid revenue, and a Frankfurt in the East. in the

all in $X of because with that, we second about FX And and year-on-year. the net And million, million that about and looking $X quarter million yesterday. revenue. as From about it's about business, of incremental is standpoint, as million high that $XX million a headwind, was that the it's a third. profit in escrow before it's $XX EBITDA the business margin of you're of all first the EBITDA balance kind an is the that's then only kind talked about So of quarter, of from of about software for $X

EBITDA So $XX about headwind. that's -- or and of million so

mentioned, through the your So It's benefited very it's pricing. that very the strength and services data on the have way. at Bill XX% And would XX% growing being side of and up area there solutions visibility by we strong, top storage least the that, business to our probably center by with up And being that strength if work organic. the strong you fact XXs. get digital you in on the we're that to

Andrew. feel positioned. we very well you, So Thank

Operator

McGrath from question Evercore. from Sheila next question is a Our follow-up

Sheila McGrath

components called offering that contracts different of wondering you Bill, prepared of you of was win business Mountain's offering if legacy business? other Yes. wins traditional any customers. if what Iron you were the part those storage with the mix number government a the remarks can and us I was of contracts. just help that your with helped Or in understand out

William Meaney

the And of couple ago. question. to Thank weeks for Sheila, from a you, a trip actually, got just I D.C. back

I've of for facilities I kind physical you a their storage of U.S. government-approved that no. And So partner the with operating in say been recognition Yes, as brand right, and have federal I trusted documents, would think the also digital actually auto documents actually the yes very has federal providing form being service, taking of recent in analytics of been us are That not said, strong. classification behalf some government already been storing these on brand, that that it's because have we the been know. we're the terms -- years, digital extremely for government. highlighting around many contracts

digital understanding trust Iron more going the that brand and So the we're with and purely wouldn't associated working of with and the underestimate the security forward more effect services. I providing Mountain. of the halo But is

Operator

next Our from a Shlomo Stifel. follow-up is question question from Rosenbaum

Shlomo Rosenbaum

you've think ask I question about I didn't changes Bill, the volume it missed if RIM you a quarter-to-quarter.

and There's So there a projects little. strong it I records points in there of was should document destruction Were slight quarter? I just sequential of between a thinking be bring retention. in to quarter decline, XX Or like that up want also quarter? in decline basis movements about the terms how the any looks that

William Meaney

first of -- No. morning, this thought you your taken had So I I I all, voice. notice asleep guess someone were so

weaker. offset records the as of is if physical progression would So it's actually terms first you adjacent our been is that of all, actually, sequentially, say trends. business in because I of consumer stronger, improvement business other other and with areas volume, watching an of our terms I stabilization. not And is management management the negative as the a for this and more say And the seeing thing flattening trends a business you've than right, actually yes, long records management. in said, that, storage time. would really getting the -- I and those you're in that pleased in only the areas derivative volume, total we're storage you And start And wears we're business drag second slight indeed, a through, of kind records effect. really seeing on notice

in of their housekeeping. because, little uptick fall kind our do generally, see spring housecleaning like of an as quarter people fourth always in business in destructions the of You bit kind do it's they their a

So some specifically didn't or see that's the you like to just we every Barry, less more this we see year. that do trend. about talk And might I year. want But -- didn't of -- more that of generally.

Barry Hytinen

opposed at Yes. usually basis is XXXX I to management because was points. you year-end Bill look and it's retention that, the thanks a that the look sequentially The versus on as for just to only thing basis question, of add And making. points up number, that I records the actually if would at the Shlomo, rate again year-over-year XX

And out you it's that is volume that a you look up. disaggregate up was thing And coming rental full data revenue of the storage I because, about both it -- good that the is in -- is on in X/X And actually finished very center of on from the feel as the we guess quarter. trends that of X.X% terms the our revenue would where out of improvement retention I X/X coming coming record look at So year up organic know, core rate improved organic if well in of volume year. an core, organic as actually the year basis growth. terms as only of when our X/X and add pricing other the was -- growth basis, is you

So things trending. we are feel very where good about

you to up volume question. again to our expect be the Thank We consistent for in XXXX.

Operator

from Eric Fargo. a next follow-up Luebchow Wells Our question from is

Eric Luebchow

capital outlook I the allocation touch So to on this just year. wanted for

then AFFO starting outlook, dividend funding a again? the based in to be embedded Barry, any as expect the sales from said acquisitions? do we that range within grow asset the be mechanism? on just any to consider At would should mid-XXs you'll per additional the payout you strong leverage that. but point in expect wanted was what ratio. Do And to know year-end, Should by share So you what a you incremental

Barry Hytinen

in points Okay. there. Thanks, few A Eric.

Let answer me those.

additional any year. M&A our guidance aren't We for in this embedding

that. be shouldn't for we So planning

within and year As we to committed said very leverage that range get it. our leverage range, before, we're into the we'll back and

would model, I for In would of recycling. be terms say of put the I capital additional $XXX in planning things million to like something

rates mentioned prepared We've cap rates even seen in sub-X. the I As remarks, phenomenal. there cap the are

at capital these we very it in the to good there. environment rates. very about interest monetizing building opinion, cap very, very great us And are transactions doing And have allocation we're in leaseback strategic So it's generally a out just that our sale enables because while the that as essentially be really ownership-like plan. reminder, favorable,

the AFFO we've that In right, to terms of be to end long just of ratio, our about kind above mid-XXs guidance, for increase. at that dividend And be the mid-XXs payout term. said point, your at over the looking that we'd be our question year. the you're we'd low is a the of target by in repeatedly And

that same almost level. be in through approaching the -- REIT per scenarios sort therefore, we'd future with share. of And expecting rising fact, certain minimum in AFFO be as be you rate to the that at So under would dividends the under probably

Operator

concludes Conference today's the Iron Mountain Earnings presentation. XXXX for question-and-answer session Call. Thank This you and attending Quarter Fourth our

You may now disconnect.

Gillian Tiltman	SVP & Head, IR
William Meaney	President, CEO & Director
Barry Hytinen	EVP & CFO
Sheila McGrath	Evercore ISI
Shlomo Rosenbaum	Stifel, Nicolaus & Company
Kevin McVeigh	Crédit Suisse
George Tong	Goldman Sachs Group
Andrew Steinerman	JPMorgan Chase & Co.
Eric Luebchow	Wells Fargo Securities

Iron Mountain (IRM) 24 Feb 222021 Q4 Earnings call transcript