Iron Mountain Shares Decline as Revenue Guidance Falls Below Forecasts Despite Q3 Earnings Beat

Iron Mountain Incorporated (NYSE:IRM) reported third-quarter adjusted earnings above analysts’ expectations, although its fourth-quarter and full-year revenue forecasts fell below consensus estimates.

The information management services company’s shares declined 3.41% in premarket trading following Wednesday’s announcement.

Adjusted earnings reached $0.64 per share, exceeding the consensus estimate of $0.61. Revenue increased 13.5% year over year to $2.0 billion, matching analysts’ expectations.

Quarterly EBITDA and Cash Flow Increase

Iron Mountain reported adjusted EBITDA of $748 million, an increase of 13.3% from the previous year and a quarterly record. The adjusted EBITDA margin was 37.6%.

Adjusted funds from operations (AFFO) rose 17% to $458 million, equivalent to $1.53 per share.

The company’s data centre, digital and asset lifecycle management businesses collectively recorded revenue growth exceeding 30% year over year.

Iron Mountain also signed 102 megawatts of data centre leases during the quarter, bringing total leasing activity for the year to date to 137 megawatts.

“We are pleased to report another record performance in the third quarter that exceeded our expectations,” said President and CEO William L. Meaney.

“Our outstanding results continue to reflect the combined strength of our physical records storage and growth businesses, supported by our team’s commitment to customer value creation and disciplined operational execution.”

Revenue Guidance Below Analyst Expectations

Iron Mountain forecast fourth-quarter revenue of approximately $2.03 billion, compared with analysts’ consensus estimate of $2.05 billion.

For the full year, the company expects revenue between $7.95 billion and $8.02 billion. The midpoint of approximately $7.99 billion is below the consensus forecast of $8.04 billion.

Fourth-quarter adjusted EBITDA is projected at approximately $780 million, with AFFO of around $473 million, or $1.57 per share.

Full-year adjusted EBITDA is expected to range from $2.95 billion to $2.98 billion, while AFFO is forecast between $1.78 billion and $1.80 billion, equivalent to $5.94 to $6.00 per share.

Quarterly Dividend Increased 15%

Iron Mountain announced a 15% increase in its quarterly dividend to $0.993 per share.

The increase follows quarterly growth in adjusted EBITDA and AFFO, alongside expanded activity in the company’s data centre and digital businesses.

Despite exceeding third-quarter earnings expectations, Iron Mountain’s revenue forecasts for the final quarter and full year remained below analysts’ estimates.

Iron Mountain stock price