IRM Q2 AFFO Beats Estimates on Data Center and ALM Growth, '26 View Up

In response to the above results, IRM shares were trading close to 3% higher in today’s pre-market session.

IRM's Revenue Mix Supports Broad Growth

Storage rental revenues rose 12.3% year over year to $1.13 billion. Service revenues increased 27.4% to $894.5 million, underscoring the growing contribution from faster-expanding offerings outside the traditional records storage business.

Organic revenues jumped 16.8% on a constant-currency basis, excluding acquisitions and divestitures. Organic storage rental growth was 11.3%, while organic service growth reached 24.8%, showing that internal execution rather than deal activity drove most of the quarter’s expansion.

Iron Mountain's RIM Business Stays Resilient

Global Records and Information Management revenues increased 8.3% to $1.43 billion. Storage rental revenues in the segment rose 6.6%, while service revenues advanced 10.9%, supported by revenue management, digital solutions and continued customer activity.

The segment generated adjusted EBITDA of $620.8 million compared with $586.3 million a year earlier. Its adjusted EBITDA margin contracted 100 basis points to 43.3%, as faster service growth carried a different margin profile than the highly recurring storage business.

Global storage volume reached a record 747.9 million cubic feet, up from 735.8 million a year ago. Storage facility utilization improved to 81.6% from 80.6%, while the records management retention rate increased 40 basis points to 93.4%.

IRM's Data Center Momentum Strengthens

Global Data Center revenues climbed to $262.9 million from $189.4 million. Storage rental revenues grew 37.5%, and the segment’s adjusted EBITDA increased to $137.3 million, with margin expanding 140 basis points to 52.2%.

Iron Mountain signed 13 megawatts of new and expansion leases during the quarter. Leasing reached 110 megawatts through July after an additional 75 megawatts were signed following quarter-end. The company also cited a backlog supporting $370 million of revenue growth beyond 2026 before including the July leasing.

The operating portfolio had 528.5 leasable megawatts and was 97.1% leased. Management expects roughly 325 megawatts of available-to-lease capacity to become energized over the next 24 months as it works toward total developable capacity of approximately 1.4 gigawatts.

Iron Mountain's ALM and Digital Engines Expand

Corporate and Other revenues surged 67.4% to $332.6 million. Service revenues rose 73.7%, reflecting strong asset lifecycle management performance across enterprise solutions and data center decommissioning.

ALM revenues increased 88% on a reported basis and 82% organically. Management also highlighted record digital revenues and growing traction for Insight DXP, its artificial intelligence-powered platform, including a multi-year managed-services agreement spanning 45 countries.

IRM's Costs and Balance Sheet Remain Manageable

Total operating expenses increased 14% to $1.66 billion, slower than revenue growth. Operating income advanced 43.7% to $373.5 million, though adjusted EBITDA margin declined 90 basis points to 35.8%, partly reflecting the mix shift toward rapidly growing service businesses.

Net lease-adjusted leverage remained at 4.8 times, within management’s target range of 4.5-5.5 times. Cash and cash equivalents were $204.8 million at quarter-end, while net debt totaled about $17.28 billion.

Iron Mountain Raises 2026 Outlook

Iron Mountain raised its full-year AFFO per share forecast to $5.87-$5.93 from the earlier guided range of $5.79-$5.86. The midpoint implies approximately 14% growth, supported by continued momentum across records management, data centers, digital solutions and ALM. The Zacks Consensus Estimate is pinned at $5.85, which lies below the projected range.

The board also declared a quarterly dividend of 86.4 cents per share, payable on Oct. 2 to shareholders of record as of Sept. 15.

IRM’s Zacks Rank

IRM currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other REITs

Digital Realty Trust DLR reported second-quarter 2026 core FFO per share, excluding net promote, of $2.13, up 13.9% from a year ago. The figure surpassed the Zacks Consensus Estimate by 7.6%. Strong bookings, a record backlog and sharp renewal rent increases supported the quarter.

Prologis PLD reported second-quarter 2026 core FFO per share of $1.63, outpacing the Zacks Consensus Estimate of $1.53. Results reflected strengthening demand, disciplined execution and expanding capabilities across logistics, data centers and energy.

Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.

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