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Iron Mountain has raised its full-year revenue and earnings guidance after reporting stronger-than-expected second-quarter results, supported by growing demand for its data center business amid the expansion of AI services. The company recorded a sharp increase in data center leasing activity and continued strong growth across its data center, asset lifecycle management (ALM) and digital solutions businesses. It also exceeded analysts' revenue and AFFO expectations and announced a higher quarterly cash dividend, reflecting confidence in its business performance for the rest of the year.
Iron Mountain has increased its full-year revenue and earnings forecasts after reporting better-than-expected financial results for the second quarter, driven by strong demand for its data center business supporting artificial intelligence (AI) services.
The company, which provides physical records storage, data center services and IT asset lifecycle management solutions for enterprise and government clients, also witnessed a rise in its share price during pre-market trading following the announcement.
Its growth businesses, including data centers, Asset Lifecycle Management (ALM) and digital solutions, recorded a combined year-on-year growth of more than 50%. The ALM business offers services such as IT hardware decommissioning, secure data erasure and equipment resale, while digital solutions focus on managing and digitising enterprise information.
Data center leasing activity continued to strengthen during the past few months. Iron Mountain said it had leased 110 megawatts of data center capacity through the past week, compared with 32 megawatts reported a few months earlier, indicating growing customer demand for AI-ready infrastructure.
President and Chief Executive Officer William L. Meaney said the company was building momentum in its ALM and digital businesses through increased cross-selling and innovative solutions while also accelerating data center leasing activity.
For the second quarter, Iron Mountain reported revenue of USD 2.02 billion, surpassing analysts' average estimate of USD 1.97 billion, according to LSEG data. Adjusted funds from operations (AFFO) stood at USD 1.44 per share, compared with analysts' expectation of USD 1.19 per share.
Reflecting confidence in continued business growth, the company raised its full-year revenue guidance to a range of USD 7.940 billion to USD 8.010 billion, up from its earlier forecast of USD 7.825 billion to USD 7.925 billion.
Iron Mountain also increased its full-year AFFO per share guidance to USD 5.87 to USD 5.93, compared with its previous forecast of USD 5.79 to USD 5.86. The revised outlook is also above analysts' estimate of USD 4.99 per share.
The company additionally announced a quarterly cash dividend of USD 0.864 per common share, reflecting its continued focus on delivering shareholder returns alongside investments in expanding its data center platform.
Demand for AI infrastructure has been driving higher leasing activity across the global data center sector, with operators continuing to expand capacity to meet the computing requirements of cloud providers and enterprise customers. Iron Mountain has been steadily increasing its presence in this segment over the past few years as part of its strategy to diversify beyond its traditional records management business.
Source Reuters
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