Iron Mountain's Q1 2025: Unpacking Contradictions in Data Center Demand, Tariffs, and Leasing Confidence

Market for leasing and data center construction tariff exposure, customer demand and pipeline strength, data center leasing activity and confidence in guidance, data center revenue growth, data center leasing demand and pricing strategy are the key contradictions discussed in Iron Mountain's latest 2025Q1 earnings call



Record Revenue and Earnings Growth:
- Iron Mountain reported all-time high quarterly revenue of $1.6 billion for Q1 2025, representing an 8% year-over-year growth, and record first quarter adjusted EBITDA of $580 million, an increase of 12% compared to last year.
- The growth was driven by strong performance in key business units, including data center, digital solutions, and asset lifecycle management, which grew over 20% in the quarter.

Data Center Leasing and Expansion:
- The company's data center revenue increased by over 20% year-over-year, driven by more than 24% organic storage growth, with an 11% increase in revenue from new leasing.
- The growth was supported by strong demand, a robust leasing backlog, and the expectation of 125 megawatts of new leasing throughout the year.

Asset Lifecycle Management (ALM) Strength:
- Iron Mountain's ALM revenue saw a 44% year-over-year increase, with a significant 22% organic growth and a notable improvement in profitability.
- Success in the ALM segment was attributed to winning large-scale enterprise and hyperscale deals, a strong focus on enterprise channel growth, and market tailwinds from robust data center development.

Digital Solutions and Cross-selling Success:
- The company's digital solutions revenue achieved record results, driven by the success of the InSight Digital Experience Platform (DXP) and increased cross-selling through bundled solutions.
- Growth was supported by customer consolidation to single vendors and the integration of multiple solutions, enhancing the overall value of Iron Mountain's offerings.