Iron Mountain 2025 Q1 Earnings Misses Targets with Net Income Plunge

Iron Mountain (IRM) reported its fiscal 2025 Q1 earnings on May 01st, 2025. The company announced a 7.8% increase in total revenue to $1.59 billion from $1.48 billion in the previous year. However, it fell short of expectations with a significant 78.9% decline in net income to $16.23 million and an 80% drop in EPS to $0.05. Despite these setbacks, Iron Mountain raised its full-year guidance, projecting 11% revenue growth at the midpoint, reflecting a positive outlook driven by strong performance in its data center, digital, and asset lifecycle management businesses.

Revenue
Iron Mountain's revenue for the first quarter of 2025 reached $1.59 billion, reflecting a 7.8% year-over-year increase. The storage rental segment contributed $948.38 million, while the service segment generated $644.15 million. This growth was primarily driven by an 8.8% rise in storage rental revenue and a 10.2% increase in service revenue, excluding the impact of foreign currency exchange.

Earnings/Net Income
Iron Mountain's EPS plummeted by 80.0% to $0.05 from $0.25 in the same quarter last year. Concurrently, net income dropped 78.9% to $16.23 million from $77.03 million. This sharp decline indicates challenges in maintaining profitability, although the company boasts a strong resilience over the years.

Post-Earnings Price Action Review
Following the earnings report, Iron Mountain's stock price has shown resilience, edging up 2.07% during the latest trading day and climbing 7.65% over the full trading week. Backtest results indicate a positive correlation between earnings metrics and stock price, with revenue and net income outperforming diluted EPS in terms of market response. Revenue beats demonstrated a 66.67% win rate over 30 days, suggesting favorable market reactions to revenue outperformance. Similarly, net income showed a consistent win rate, while diluted EPS had a slightly lower impact. Overall, the market tends to respond positively to earnings beats, with revenue and net income leading in terms of effectiveness.

CEO Commentary
"We are pleased with our strong start to 2025, delivering another record performance in Revenue, Adjusted EBITDA, and AFFO in the first quarter and above our expectations," said William L. Meaney, President and CEO of Iron Mountain. He highlighted the robust growth across the company’s data center, digital, and asset lifecycle management businesses, which generated double-digit organic revenue gains. Meaney emphasized the effectiveness of the Matterhorn growth strategy in meeting customer needs and noted the positive outlook that prompted an increase in full-year financial guidance.

Guidance
Iron Mountain has raised its full-year 2025 guidance, now projecting total revenue between $6.740 billion and $6.890 billion, representing approximately 11% year-over-year growth at the midpoint. Adjusted EBITDA is expected to range from $2.505 billion to $2.555 billion, reflecting a 13% increase, while AFFO is anticipated to be between $1.480 billion and $1.510 billion, also around an 11% rise. AFFO per share is guided at $4.95 to $5.05, indicating a 10% year-over-year growth at the midpoint.

Additional News
In recent developments, Iron Mountain's Board of Directors declared a quarterly cash dividend of $0.785 per share for the second quarter, payable on July 3, 2025, to shareholders of record as of June 16, 2025. Additionally, the company has reaffirmed its commitment to its Matterhorn growth strategy, which focuses on expanding its data center, digital, and asset lifecycle management services. This strategic emphasis aligns with the company's efforts to meet evolving customer needs and capitalize on growth opportunities in these high-demand sectors.