The operator welcomes participants to the Iron Mountain Third Quarter 2023 Earnings Conference Call and introduces the speakers. The call will include discussion of forward-looking statements and non-GAAP measures. CEO Bill Meaney highlights the company's record quarterly results and credits their success to the dedication of their employees and commitment to serving customers.

In the third quarter, the company achieved record revenue and EBITDA, thanks to their growth strategy, Project Matterhorn. They saw a 10% organic growth in storage rental revenue and over 20% in their data center business. They also had a significant customer win in the U.K. with a government agency, showcasing their trust and confidence in Iron Mountain. In Digital Solutions, they are gaining momentum by providing technology-enabled solutions to new and existing customers.

The company's success in providing digital solutions is due to their ability to offer a unified end-to-end solution, operate at scale in complex environments, and drive business outcomes through their artificial intelligence platform. They have recently won a contract to digitize and preserve media rights for a major technology company, showcasing their cross-selling efforts. They have also secured a deal to digitize public services for a government agency in Europe to help with post-COVID-19 recovery efforts.

Iron Mountain was awarded a contract by a customer due to their specialized solution and ability to quickly scale. They are also working with the U.S. Citizen and Immigration Services to reduce backlog and improve efficiency. In their asset life cycle management business, they have seen stable pricing and have signed an agreement to acquire Regency Technologies. This acquisition will add operational scale and enhance their capability in secure and circular solutions for end-of-life IT assets.

Iron Mountain has had several successful wins in the ALM space this quarter, including a major deal with a global technology company, a long-term contract with a U.S. insurance company, and a five-year contract with a leading pharmaceutical retailer. These wins were made possible by the company's strong relationships, global footprint, expertise, and reputation for data security and chain of custody. The company's solutions have also helped change customers' perceptions and support their sustainability goals.

The company has extended their partnership with a retailer to help them meet their environmental goals by creating new virgin plastic. They have also signed a deal with a Fortune 500 technology company for capacity at their Northern Virginia campus, and a deal with a North American cloud services customer for capacity at their Frankfurt data center. The company has exceeded their projected leasing numbers for the year and is continuing to expand their data center business.

In the third quarter, the company achieved strong results, including record revenue and EBITDA. They have repurposed a facility in Miami for data center use, acquired more land and power, and increased their total data center capacity. The company's Matterhorn initiative and customer-first approach continue to drive sales growth. The team's hard work and dedication have led to a 8% year-on-year revenue growth and a 10% increase in organic storage rental revenue. Service revenue remained consistent year-over-year and slightly improved sequentially.

The company's service revenue has been impacted by component price declines, but excluding the ALM business, there was a 9% constant currency revenue growth. Adjusted EBITDA reached a new record of $500 million, driven by revenue management and data center commencements. Adjusted EBITDA margin also improved, exceeding projections. AFFO was in line with projections but would have been higher on the same foreign exchange rates used in August. The global RIM business saw an 8% increase in revenue, while the data center business saw a 22% increase in organic storage rental revenue. Adjusted EBITDA for both segments also increased.

In the third quarter, the company signed 65 megawatts in leases, bringing the total bookings for the year to 120 megawatts. The weighted average lease expiration has increased to 8.1 years, and the company is seeing positive momentum in cross-selling. Market-to-market was up over 11%, while churn was only 1%. Revenue for asset life cycle management was consistent with projections, and ALM bookings have been ahead of projections. The company is also seeing indications of component pricing beginning to recover, with memory pricing rising nearly 15% on a sequential basis since the end of the third quarter.

The company has announced their pending acquisition of Regency Technologies, which they see as a strategic fit for their expanding customer base. The purchase price is $200 million and is expected to close late this year or early 2024. The company also invested $322 million in the third quarter, with a focus on growth and recurring investments. They ended the quarter with their lowest leverage level in a decade and have declared a quarterly dividend of $0.65 per share. The company remains dedicated to their disciplined approach to capital allocation and is reiterating their full year guidance.

The company expects strong revenue growth in the fourth quarter due to revenue management actions and improving trends in ALM. Adjusted EBITDA and AFFO are also expected to increase. The team is praised for their efforts in driving growth. Inflation has not affected the company's ability to use revenue management, and they do not expect any changes in this trend.

The article discusses customer retention and revenue management at a company, with a slight improvement in customer retention and the implementation of revenue management actions leading to sequential growth in the fourth quarter. The company also mentions positive organic service revenue growth and the performance of a recently acquired business, Regency, which has seen mid-single digit growth in the last few months.

The company has seen single-digit growth in the past few months and expects continued growth in the future. Volume has been consistent and is expected to increase slightly year after year. Service revenue is also expected to increase, with the second quarter being the hardest comparison due to previous year's revenue being significantly higher. The ALM business is expected to improve in the third quarter, and project revenue in digital and global records services will also contribute to increased service revenue.

The company is optimistic about the fourth quarter's revenue due to improved ALM performance and modest pricing improvements. They are also targeting $900 million in revenue for ALM in 2026, with continued growth in volume.

The company is seeing a 15% improvement in memory pricing, which is a positive sign for their revenue. The recent acquisition of Regency will allow them to expand into OEM channels and increase their value from recycling products. In the last quarter, the company saw strong revenue growth in their global RIM business, driven by revenue management and positive mix. Going forward, there will be more revenue management actions in the fourth quarter. The company's ALM business trajectory is also expected to improve.

The speaker is discussing the current volume trends in the company's business, specifically in relation to the recent acquisition of Regency. They mention that there has been a strong increase in volume from enterprise customers, but the hyperscale segment has been impacted by pricing trends. The speaker also mentions that there has been strong double-digit growth in incoming volume year-to-date.

The pricing for recycling services has improved, and the addition of new customers and partnerships with OEM manufacturers will help Regency accelerate sales and expand their capabilities in refurbishing and reselling IT equipment. This will complement the contracts that have already been signed.

The company expects to close the acquisition of Regency by the end of the year or early next year and add it to their model. Regency is expected to generate over $100 million in revenue and is projected to continue growing. The business has been stable and did not experience the same downturn as the ALM business. The company sees potential for synergy by bringing Iron Mountain Enterprise clients to Regency for service. The EBITDA margin for Regency is in the low to mid-20s and has potential for expansion. The team at Regency is highly regarded and has strong relationships with clients. The company is also optimistic about the overall performance of the ALM business.

The company is experiencing incremental bookings in the enterprise and hyperscale markets, as well as extending OEM relationships. They have signed important relationships in the OEM vertical, but it takes longer to generate revenue. The balance sheet has been impacted by recent interest rate changes, and they are seeing higher yields on data center deals. The CEO will discuss financing options, while the speaker will talk about the strength of pricing in the data center market.

The company has seen significant growth in their data center business, with cash-on-cash returns increasing from 7-8% to 9% or higher. They expect CapEx for the year to be around $1.3 billion due to the high demand for data centers and the team's success in securing contracts. The company is constructing to contract rather than spec, with a focus on long-term leases and higher pricing. As a result, they have extended lease expirations to over eight years and are confident in their returns and growth in the data center market.

In response to a question about converting a storage facility in Miami to a data center, the operator explains that the existing building will be scrapped and the land will be used for the data center. This will result in a 15% cost reduction and a faster entry into the market. The company is constantly evaluating potential locations for data centers, with about 15-20% of their properties under consideration at any given time.

The speaker mentions that the deployment in Miami is suitable for edge deployments and secondary cities, and it is just the beginning of many more to come. The operator then concludes the call.

This summary was generated with AI and may contain some inaccuracies.