Earnings call transcript Q4 2022

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Operator

Good morning and welcome to the Iron Mountain Fourth Quarter 2022 Earnings Conference Call. All participants will be in listen-only mode. [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

Sarah. Thanks and fourth everyone conference XXXX to call. welcome morning quarter our earnings Good we materials refer Investor today’s will On call, to Relations available website. our on

and the Barry We Executive Officer. President After joined here we’ll by Q&A. Financial Meany, are open remarks, up today and Chief Officer, for our Hytinen, President and prepared Executive lines Vice Bill Chief

statements. today’s Safe risks statements could to differ forward-looking results statements All language earnings Today’s from and Please X, annual our uncertainties. regarding forward-looking and materials the factors discussion actual contain XX-K report forward-looking expectations. the earnings refer Slide in on on that those to subject major our risk Harbor for statements, to materials, of including our cause are a Form our

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

included the supplemental these measures to information. reconciliations in financial We our have

call with to over Bill. turn I’ll And that, the

William Meany

Julian. Thank you time today. taking for us you, join And to thank the all

pleased quarter to delivered are product for full customer our performance business results reflective portfolio, record exceptional relationships, the synergistic broad team. model, These of and We committed are deep the fourth have and both year.

moments Before we relay in the I our few of performance, how would Syria. and and dive Turkey like by a take deeply drivers I saddened the feeling are to earthquakes all strong devastating into to recent

is region of challenging employees living colleagues in their thoughts our in and our navigate Our are as prayers number the and are committed they this mountaineers, And customers and we working families security supporting The with all of one fellow the time. and to our region. priority. safety our

revenue Iron In has proud and of of record EBITDA quarter our achieved the million had billion quarterly total to our $XXX adjusted another begin report performance. recent me organic XX%. year. XX.X% discussion I yielding let $X.XX up we growth revenue fourth outstanding am Mountain that Now

of with $X.X a so we and provide EBITDA full XX% of our $X.X is billion, services performance across AFFO relationships XX% delivered innovation the our adjusted our them representing and billion close to products meet XX%, can record of customers This Revenue with billion, expanded and commitment direct of the to $X.X and result needs. growth results their of year, we respectively. For board.

full and organic growth X%, growth another organic our pricing reflecting capping off storage delivered We center year, as digit the For double asset we data revenue business management combined benefit of of volume well areas lifecycle positive digital business, rental services continued year. with our as drove trends. excellent in

build and customer to with of model centric our Matterhorn last global and unveiled Excellence consistent accelerated with together an suite Our ever-expanding synergistic the continued we solutions, reach drive scale autumn. fuels growth

enabling customer a offer. Let me how customer’s we diverse success solutions and the service we've our through few growth and examples of unmatched share been

Beginning reported with per been management, we document taking in year management customer has customer sell covering from to ALM, a cross XX-year which substantial provider, large win for and secure a data management, our an business million than The non-records Mountain XX records million a storage contract more years. healthcare services resulted with report, win $X.X non-profit digitization records this annually. $X of new Iron

cross and position and broad increased strategic a offerings able would services our of solutions, years our such and not with sold solidified wallet as our this but management to broad been our services for we new Today, Just solutions customer. unable of range a partner. the and we tenured ago, few records a provide long trusted services we have only share to

cost over We its process mortgage effective a vast Bank also a develop provided of manage U.S. inventory files. for solution to a million and XX large to simple

this facility team new new in business a will government pack, work, obligations, agencies. in we dedicated to Melbourne. the Government. This drive Through Mountain cost largest XXX,XXX quarter will cost. reducing compliance the and to have risk partnership want mitigating Iron to considerable Australia's Also our stringent data we one enter involves Australian savings meeting cartons transport of serving and

In branch of a government. Digital would highlight key win like I is a to Solutions, federal the with U.S.

solution a As of source a enormous our in we with original the the of and another than strategic to less data digitize result microfilm. digitize of capture. best-in-breed automate development result machine the the to XXX,XXX auto to the have XXX,XXX success reels executed of customer project contract year, reels AI of of sole microfilm is prescribed classify This a follow win on learning

our electronics needed equipment meet an introduced recall to extensive rapid regulatory we navigate with by win was recall. early further avoid worked partner efficient response single medical Matterhorn. ramifications. and and we required and turnaround a global times addition, an several The to offerings product a delivered large a also in seeking new model of operating order customer global partner. The commercial requirements with of service to tight In legal and includes that assist contact and the the manufacturer single success Project customer illustrates medical The with point

technology business, a ALM, selected to Mountain which unique to partner. imaging, its win Iron insurance noteworthy they this ALM Turning as attrition redeployment another the the secure consequently, customer dedicated partner management wiping, constant year, asset and Due health quarter the to was with nature of the of provide seeking collection, has lifecycle and were provider, their assets. of storage dedicated throughout a course

previous our with team, led Iron combined Mountain The solutions and mutual success. our with to experience strong customers positive

part the contract to this this Matterhorn is one technology we our client, Moreover, in the largest commercial and solutions another is of of we of the services ease cross ALM commercial driving set mountain with renewed proud This especially contract illustrates success and to strength engagement that and in are our around renewal is our reporting sell fourth companies quarter. increased world. the range. focus the Our largest of our and And across challenges resolve of example collection, Klein. ability our use, This tracking. say team

the area business. this years proud the have XX are of demonstrates for and with the our past longevity We relationship, of of continuation them in which for potential worked this

the be and total excited by the management in asset lifecycle encouraged to market continue We category. addressable

Despite well COVID-XX continues we the lockdowns enduring Klein, as growth. spite to as this, ITAD moves In business and perform Matterhorn on to of a to year in China. continue this faced result we have legacy focus headwinds our on accelerate this our we momentum of gain

we of the in business our the megawatts. from quarter, and to XXX fourth gone our pleased XX customers, to both quarter we and third guidance colocation expressed megawatts This our and potential turning leasing. recent center our tremendous opportunity footprint. of of most strength with past have data finished in year successfully years, XX of exceeding area Finally, the the significant growth see business, original hyperscale to target are serving and leases continue completed megawatts several new signed our megawatts center to In of XXX data we has over strength for booking

will will center our and would our customer. customer One Virginia of our remarks. centers several Arizona. space to at program, With lease X XXX large strategic Iron prioritize bookings provide our other we our business in existing six customer megawatt with lease of to continue a locations XX% with data in long-term which in share Fortune to has a like data that year-on-year excluding in service details has I X, which Barry existing his win growth, expansion Phoenix capital capacity Mountain relationship expand with The in is needed lines, Global an campus across more

Mumbai. announced to for robust expand forward providing expansion, and superb carrier customers. them to supporting the our partnered which data network country, customer backed was future the center hotels company most delivery data and by network power win in a presence their joint we connectivity Phoenix a ecosystem flexibility Mumbai-X look in our we their with They Mumbai-X center is our were required Our connected to our the team able robust of reliable for venture their a center, our able growth. which provide. infrastructure, global for Also to content We to quarter, leverage in one in data at the

in customer across confident listen expertise our segments within in buying support a center who customers and market meet regulatory cross meet team its structures demonstrated ability customers Network their leveraged to our one yet and and our ways involves proficiency German to our to to ability ability The the our the network needs. This to existing excellent with data their highlight banks. felt new German largest team's data center needs. is in high of our and another to resulted win Financial competition team the environment our regulated Frankfurt. to their excellent example with relationship find sell Another a This standards, in partnership highly of business

dedication a which fuel growth customer foundation, established is continue am has growth. I to delivering completed Matterhorn, Matterhorn The trajectory strong to team, transformation our drive reorganization of our already proud built is and which and excellence. of to ambitions. foundation will and unmatched incredibly It our this continue our which solutions, by greatest our XXXX in conclude, relationships our realize initiation through the and dedicated we To double-digit

line momentum XXXX, Barry in will opportunities double-digit year the toward growth Turning ahead detail our to speak this will expected. ahead. about continue for drive guidance another year with top the

we are as goals with climb Project sight beyond. Our and well on Matterhorn within

turn Barry. over call that, I'll to With the

Barry Hytinen

results. today Thanks for joining Bill. to And us thank you all our discuss

of tragedy to earthquakes like echo I Turkey the Bill and sentiments Before with in would to the begin, Syria. regard I

financials XX.X% to expectations Turning stronger billion of the reported strong the adjusted quarter, our or continued of On performance excluding basis, and delivering effects fourth a revenue for exceeding the XX.X% dollar. of year-on-year $X.XX both the in our grew U.S. AFFO. team trend EBITDA

the the Total which when storage Revenue the is our November. XX% was shared key third and grew a organic reported represents sequential revenue A line highlight in quarter revenue, with XX.X%. organic improvement in XXX points. basis we in of we grew quarter expectations

focus Adjusted a and million to by XX% mountain on year-on-year million results driven reported increased growth performance our on $XXX revenue EBITDA constant strong $XXX on XX% of service team was up commercial reflect and their basis. new products in These currency the entire Total XX% XX%. basis range the of solutions. record a and of selling organic up

resulted using management was in As compared basis XX November, the quarter points the at we were headwind time several driven rates mix. better EBITDA. incremental strengthened guidance, to revenue margin Adjusted and of of projected we in at EBITDA sequentially an improved dollars XX.X% and fourth the in to last million than by the which adjusted dollar our

basis or partially is a $XXX now was of $X.XX fourth quarter well incorporated of year. of due AFFO which share projections, was a $XX respectively ahead million $XX to cash This into million, per $X.XX guidance. the and our timing of million on nearly the item, last from tax our XXXX

reported a a on $X.XX the AFFO Now, year-on-year, let million summarize billion, of the Adjusted XX% results our basis. briefly to on to last share given exceeding increased per guidance. projections $X.X increased full currency billion XX% call. billion, our basis. and EBITDA briefly XX% year-on-year of I a Revenue financial basis on me increase $X.XX year. would or like increased $X.XXX $XXX an compare our on to to XX% constant

FX As had headwind we the throughout we noted of have year, initially more a than rates planned. have been

our we EBITDA fact, AFFO exceeded in share. our in In had for of would AFFO using guidance have we of high rates February the XXXX, the same end FX and per projections

of effects This basis, performance. delivered management. On adjusted million from stronger basis. RIM organic an X% or segment driven of last quarter, by the year revenue increase RIM million, year-on-year revenue business million of constant excluding of our $XX Now increase U.S. a was an XX% a XX%. currency $XXX Global $X.XX In EBITDA increased increase equates on turning $XX the Global the reported an to dollar. billion, to fourth revenue

we XX% Turning and global reported currency center the report quarter. year-on-year a a XX% are data successful we to delivered revenue growth total year-on-year constant on perspective to another basis. our on business, From pleased basis

in of for As revenue. out provided million those a second approximately half resulted our of the we fourth joint fit the in services unique XXXX In quarter $X Frankfort of reminder XXXX, services venture.

of center a revenue more a Excluding revenue out back in on to run our normalized excess services data XX%. grew now And those basis, service we rate. are like-for-like total fit

Our grew revenue data XX% a on center or year-on-year XX% constant storage currency basis.

we updated of well completed the projection the year. leasing, full new and quarter, to our for is for expansion and the full This in fourth XXX megawatts leasing of ahead year. XX XXX Turning

With bookings our represents our lease in XX% year. XX for we and Excluding the customer we or relationships XX year. the the leased Virginia, suit project for growth. bill pipeline to XXXX, leasing of This our more full large megawatts for increasing megawatts full depth

into early platform markets. closed the We the fourth data our transaction in November, And new continuing in to as expand center are quarter. data discussed we Madrid we center

results to to approximately our pleased asset our year. growth are legacy full And that with business, of pipeline. we to report lifecycle for Turning strong we seen we have grew the our be the ITAD management XX% which business continue happy in

planning the continued For decommission are we business, with in impact from the hyperscale COVID-XX for portion year conservatively an of expectation China. the

revenue example, revenue is the our ALM at assumed we total have from year-on-year. For business midpoint consistent guidance of range, our

we reminder, two on first first our fourth market quarters in As With anticipate ALM through the quarter a transaction growth quarter our lock of the intense of the we performance XXXX. down for IT XXXX year planning naturally in impact year, we China. the of better and have as will ramping the of rate are January. performing sharply decommissioning with in renew more And first slowed consistent be the the was in as some half organic anniversary downs through following that, revenue we business the XXXX to

capital, full the to invested Turning year million for $XXX of million recurring. capital of growth $XXX and we XXXX

the and $XXX million XXXX be of of growth, with of recurring. to capital development approximately we For that vast million expenditure dedicated project datacenter majority to $XXX

EBITDA Turning projections than versus of strong adjusted balance to adjusted times our quarter last quarter. and improvement the X.X net an sheet. better leverage with the With we performance, ended lease

lowest it marks this think is levels noting I XXXX. since worth our leverage

X.X range, to to As our times. expect said within which we have is target we before, X.X operate leverage times

at year XXXX. to end we similar expect the levels exit year XXXX to For

Our board range low $X.XX trailing mid target in quarter to declared be early long-term of April. percent. per to XXs paid On is now payout our four quarterly our of approaching dividend share our of a directors basis, ratio XX%

Now year the for let me of share XXXX. our full projections

XX% $X.X to XX%. year-on-year. represents revenue billion consistent which expect On between be growth rates X% growth $X.X billion, range to and this the implies of FX We total within to X% of

the to adjusted expect be X% midpoint. billion which represents range EBITDA within $X.XXX We at growth to $X.XX the billion, of year-on-year

at On consistent the midpoint. X% FX rates, this of implies growth

growth We be the be growth within X% year-on-year billion billion, rates, midpoint. expect would On consistent X% to at of this AFFO to $X.XXX at which the FX $X.XX represents the range midpoint.

be midpoint. share to X% represents growth X% on We this to at $X.XX of expect $X. per AFFO be consistent and the at the This midpoint, growth FX rates would

million on timing Our share of the AFFO XXXX AFFO from and the quarter I cash previously guidance quarter of represents metrics. item for tax two per of fourth of mentioned both into the includes first growth approximately approximate both $XX the XXXX. This points

to I guidance. better would commentary some to help like investors share understand our

In current FX our in rates are terms we for projections using of XXXX.

note would some headwind be the to U.S. further to more of nearly in dollar year. these FX pronounced for we the revenue the like to expect has headwind full million first be currently will While weakened FX a year. I $XX that half the levels at recently, a

I will this already significant continue actions planned have management implemented And have point. for benefit. we expect in note been majority a of the We the at XXXX will be revenue to vast

And expect $XXX of of EBITDA $X.X turning we billion, revenue approximately million, share of to AFFO million, of adjusted per first approximately quarter, in excess $X.XX. AFFO and $XXX approximately the

to recent this once team for thanks conclude, are outlined and dedication, our serving growth strong have to we my customers we ambitions commitments. delivering to take again at our our like delivered opportunity To on realizing our collective I'd pleased to XXXX day. continued our year a investor entire and express in are their that

Q&A? open And the you line please with that will for operator,

Operator

George now will ahead. question Instructions] Sachs. Our Please Tong begin Goldman go the [Operator from with session. first We question-and-answer comes

George Tong

XX% the you're organic in you Hi, morning. with XQ, growth year-over-year thanks, organic Services revenue growth services, from to decelerated Can takes but double XQ. XX% and digits in discuss at in puts remained the growth revenue good respect trends? seeing

William Meaney

George. Yes. No, thanks,

we're all, growth, continued last of we started with first So especially Matterhorn just the pleased year. very where

increase year revenue in you through in progress. and overall the total growth, terms an as if So look of growth the organic we terms of at

very So pleased. we're

when had year question a To recall, of one on at service fit-out in year-over-year Frankfurt. data if we biggest you center ago, factors the your for comparison, specific you're terms in the big is the looking of

the biggest look growth in you was the of you drop that's slight that noticeable terms at I factor. Barry, but that drop to when factor if the double-digit year-over-year, want So that don't still or biggest add anything. know,

Barry Hytinen

last projections the Yes George, that thing the signaled our because, as services. in we is it obviously quarter, when line had other only we to I'd anniversary set I course, over add, the was knew suppose, we that fit-out we right with expectations of

as just very management. disposition incremental I we've there. the pleased some legacy like got we will we So business things tell IT I pipeline digital prepared way and benefit look revenue performed. ramping, in services on good that you have nice mentioned our with very will And is we forward, pipeline remarks, as very solutions, we're from the asset And see

feel Thanks we very positioned, So for the question. well George.

Operator

next Credit The go Kevin Suisse. ahead. Please from McVeigh with comes question

Kevin McVeigh

Great, thanks.

was if seems offsets? was an where in offsets management on revenue the it know the is the looked like obviously, else? good were or incremental headwind the Because I revenue Barry, pretty as EBITDA, FX just were anything but don't So ITRenew. for this

Barry Hytinen

I Kevin. provide just question, there. color our a and the little would for with expectations, more ITRenew performed I'll consistent say actually Thanks

experiencing seeing it fact, ITRenew in stabilized year. positive. a a or before, As had slightly on we've declining everyone quarter, lockdowns we as actually basis, up we with was said in view the sequential And which last the through China, is in that were experiencing fourth we been

off, -- to prudent there. I with our for because the have probably are, you've are forward going press, we as of continue to challenges being a in while think, COVID lot the expectations continues ITRenew they Now with restrictions China seen

optimistic. we meaningfully develop the And so cautiously we seen are haven't but yet, market

the quarter business the consistent the then with planning first and the quarter So revenue ramping fourth for for we our expectations of to are over levels ALM course be year.

rest that supplemental the the have out, strong in contribution you were business pointing to seen relates it from report. you the As had would very of revenue management, we as

nicely ramped that because remarks, we in market. through fact, revenue relates here very well are In management our the we as move essentially feel I And of mentioned as as actions management in a basis. XXXX sequential on already positioned all revenue it to

good feel we are very, very So how trending. about things

was performance business. The really other center which our thing out, call I'd nice data a was in

You saw be expectation. bookings standpoint storage of strong XXs on side, a the and of high growth ahead the rate from continue to also very our

So that gives terms in of I'll the strong XXXX very tell you us continues to generation. into visibility revenue pipeline And build.

So appreciate the Thanks, question. Kevin.

Operator

Our Steinerman with Andrew next ahead. question comes Please JPMorgan. from go

Andrew Steinerman

Barry. Hey

of could the like revenue the is guide. Just just the and sake And indicate you're of what for your quarter you constant XXXX precision, at definitely midpoint currency organic it seems faster just growth dynamic for maybe expecting of the quarter feel compared go growth to unless and like already you've first maybe full kind or you first over that. addressed quarter year after that more first

Barry Hytinen

Okay.

So $XX there probably think of the of have I first about quarter. million Andrew, something the to to full the the relates year, a couple vast approaching going it how that we majority that of to in for be points challenge as first mentioned quarter. When is for you, FX

million, are something year. now that where rates a think we'll I revenue even So $XX-plus first more from in versus quarter probably last like based the on of just than FX headwind have maybe

our rate this from to that thing organic quarter. is will go growth thinking The be other that of standpoint into a about ITRenew,

In you the at January. we last end know, as that closed of fact, transaction

million for $XX last it's modeling so this your ITRenew I mentioned mind year, on since have may be quarter, in about, March. that it planning second million to it it, last then sequential about the it for the don't call million giving in And I'm consistent I a you was $XX February purposes, number year. And And organic quarter. that's essentially $XX basis, vicinity. and and was

substance have from about improve to you model, through if any of And you're growth. have revenue in will really, the acquisition the don't numbers. see additional a of any you work at there, couple impact that organic that continue to going year. think I organic So point, through point to But numbers, the round

essentially at think to pencil growth. close constant So the I of very And model. you're the currency that out on for that you

Operator

with from comes [Operator next Instructions] Our go Rosenbaum Shlomo ahead. Please Stifel. question

Adam Parrington

And Hi, it's what should the for What was the Adam investors XXXX? pricing in quarter? lift Parrington for expect Shlomo.

Barry Hytinen

the XX%. Organic overall, probably It noticed. for storage revenue you strong, XX.X%. growth was Thank you question. very it on was was And as

than It the being planned year. for And full the the as we volume a our year. on basis, had better sequential a so very just on for with down that nice X.X% by slightly we way, metric and contribution, was projection up full

that So ramp it shows the we've been year. you through seeing the

to the not of be the to for terms continue what be expect revenue XXXX, In at year, very of in nice range bit contributor management a and a we've probably we light in least whole -- in little higher got mid-single for thinking digit if market.

things little quite feel that from good we what the a to perspective, good since there, about I are. from very we year full perspective, we and projection the we And add volume asking, you expect for a continuing it volume see XXXX goes And a similar were also are question did year. to would last bit where guess trends I'll to

question. consistent something you to like Thank for up. So the slightly

Operator

Thank for fourth XXXX question-and-answer quarter Iron call. This Mountain and you concludes attending earnings conference session the our presentation. today's

may You disconnect. now

Iron Mountain (IRM) 23 Feb 232022 Q4 Earnings call transcript