The operator welcomes listeners to the Iron Mountain First Quarter 2024 Earnings Conference Call and introduces the speakers. Gillian Tiltman, Senior Vice President and Head of Investor Relations, provides a disclaimer and introduces the President and CEO, Bill Meaney, and the Executive Vice President and CFO, Barry Hytinen. Meaney discusses the company's strong financial results and attributes them to the success of Project Matterhorn and the team's dedication to providing top-quality solutions.

In the first quarter, Iron Mountain achieved its highest-ever revenue and adjusted EBITDA, thanks to its transformation into a solutions-based business through Project Matterhorn. The company's integrated product portfolio has led to strong growth in all business areas, driven by cross-selling and offering a broad range of products and services to its 240,000 customers. Examples of successful cross-selling include providing secure IT asset disposition solutions to an oil and energy customer and expanding solutions for a bank in the United Arab Emirates to include document capture and asset lifecycle management services.

Iron Mountain continues to support government and public sector organizations in their transformations, such as managing sensitive records for a U.K. government agency and digitizing physical records for a global customer in Morocco. Their InSight platform, which integrates artificial intelligence and machine-learning, has been chosen by a customer to improve compliance and operational efficiencies. In Australia, Iron Mountain has been tasked with digitizing land registry files dating back to the 1850s for a government agency. These solutions demonstrate Iron Mountain's expertise and success as a digital transformation partner.

The company secured a deal to manage a project in Victoria, showcasing their infrastructure, reputation, and expertise. They also signed leases with a global technology company, a cloud storage customer, and a global IT consulting firm for data center space. They also closed the acquisition of Regency Technologies, which has contributed to their strong growth in the Asset Lifecycle Management business. Overall, the company has seen strong organic growth in this quarter.

The company's ALM capabilities have allowed them to secure partnerships with a well-known food service brand, a global financial institution, and a multinational conglomerate company. These partnerships showcase their ability to provide secure and streamlined solutions for asset lifecycle management, leading to their highest quarterly revenue to date. The company's strong performance is attributed to their focus on meeting the needs of their customers.

In the first quarter, Iron Mountain exceeded expectations with record quarterly revenue of $1.48 billion, driven by 9% storage growth and 17% service growth. The company's total storage revenue was $885 million, up $75 million from last year, and total service revenue was $592 million, up $88 million. Data center storage revenue grew over 30% and organic service revenue increased by 10%. Adjusted EBITDA was $519 million, a 13% increase from last year, and the adjusted EBITDA margin remained consistent at 35.1%. This growth was driven by strong performance in all business units.

In the first quarter, the company's AFFO was $324 million or $1.10 per share, which exceeded expectations due to strong adjusted EBITDA and phasing of capital investments and taxes. The Global RIM business saw a 7% increase in revenue, driven by growth in storage rental and service revenue. The Global Data Center business also saw a 28% increase in revenue and a successful quarter for new and expansion leasing. The company also executed a $300 million green loan to support the construction of energy-efficient data centers. Asset lifecycle management also saw improved performance in both revenue and EBITDA.

In the first quarter, ALM revenue increased by 103% year-on-year, with Regency Technologies performing above expectations. The company also saw organic growth of 25% in ALM revenue, driven by improved component pricing and increased cross-selling. Capital expenditure for the quarter was $366 million, with a full-year target of $1.35 billion for growth and $150 million for recurring expenses. The company's net lease-adjusted leverage remained at 5.1 times and they expect to operate within their target range of 4.5 times to 5.5 times. The Board of Directors declared a quarterly dividend of $0.65 per share, with a payout ratio of 61%. Despite the impact of the strengthening U.S. dollar, the company is reiterating their full-year guidance and expects second quarter revenue of $1.5 billion, adjusted EBITDA of $535 million, AFFO of $310 million, and AFFO per share of $1.05.

Iron Mountain has had strong first quarter results and expects continued growth in 2024 due to their focus on Project Matterhorn objectives. The company's CEO thanks their team for their dedication and commitment. In the Q&A portion of the call, they were asked about their storage business and the decrease in organic revenue growth compared to the previous quarter. The CEO explains that the decrease was due to changes in price realization, but they are still pleased with the growth in volume for both records management and data centers. They expect pricing to ramp up throughout the year. The CFO also adds that the CEO's explanation is correct and that the company has a revenue management strategy in place.

The company experienced a shift in revenue management actions in the first quarter, with more actions taking place in March compared to the previous year. Despite this, Global RIM saw strong performance in storage rental revenue growth and total revenue growth. The company expects RIM volumes to remain steady or slightly increase, and their data center leasing guidance for the year is 100 megawatts. The pipeline for data center projects is also strong.

The company has a strong pipeline and expects another strong year in terms of volume, with a focus on data centers and AI applications. The ALM components are broken down into increased volume and improving pricing, with Regency recently acquired and performing well. The rest of the ALM business is also performing well, with a 25% increase on an organic basis.

The ALM segment exceeded expectations by $10 million in the first quarter. Both volume and price were up in the enterprise and hyperscale sectors, with component prices continuing to rise. The company expects this trend to continue, but has not factored in the high increases predicted by industry analysts. The volume is being driven by cross-selling and increased penetration with hyperscale clients. In terms of data centers, the company is underwriting to a minimum level that the market can bear, with a couple hundred basis points above historical cash and cash return. ALM is expected to see strong growth in certain regions, but more information will be provided by Barry.

The speaker discusses the performance of the company in the ALM market and mentions that they are seeing strong growth in all regions, thanks to cross-selling and partnerships. The speaker also mentions that they are pleased with the integration of Regency Technologies. A question is then asked about the organic growth in the ALM sector, to which the speaker responds that it was flat quarter-on-quarter, with a 25% growth rate compared to the previous year's revenue.

The speaker asks a question about the company's ability to deliver on time and on budget in their data center business. The CEO responds by stating that they have a strong track record of executing and that their leasing activity with hyperscale clients is a testament to this. The CFO adds that the data center business saw a slight increase in dollars quarter-to-quarter, and notes that some clients have recently requested to move their volume.

The company's data center business saw strong leasing in the first quarter, with hyperscale clients delaying remarketing to capture better pricing. This resulted in a mix in the legacy IT renew business, but the enterprise business is expected to continue growing. The company is within their multiyear plan for capital expenditures, and they are considering adding land capacity in new markets to support future growth.

The company has a fully funded plan to continue funding their growth, with the help of their traditional records management business and strong EBITDA growth. They are confident in their ability to continue funding their growth and have a pipeline to acquire more land for data center expansion. The team is doing a great job and they are currently in negotiations for multiple land parcels.

The company is planning to continue adding to its land bank and this is included in their capital spending. They have been working on a number of sovereign requirements and have found the competitive environment to be challenging. The CEO and the head of M&A will discuss the integration of Regency and the potential for further roll-ups. The company has a strong presence in both the United Kingdom and the United States.

The company has a strong presence in Germany and France, and they are focused on building relationships and expanding their business in those countries. They have experienced teams and a 24-month horizon for going after new business. They also have strong compliance measures in place. The integration of Regency Technologies is going well, and the team is ahead of plan in terms of operational efficiencies and improved capabilities. This is due to the expertise of the team they acquired from Regency Technologies.

The speaker discusses their recent visits to Iron Mountain facilities in Ohio and Atlanta, where they saw great processing and integration happening. They mention their focus on tuck-ins and their criteria for considering them, and express optimism about opportunities for growth both domestically and internationally as they expand their ALM capabilities. The call then concludes.

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