Iron MountainIRM

The company reported record results for the second quarter, with revenue reaching about 2 billion dollars. This was an 18 percent jump from last year and ahead of what analysts expected. Profits also improved, with net income of 106 million dollars compared to a loss in the same period last year.

The real momentum is in the digital shift. The data center and digital services arms grew more than 50 percent. Most notably, the company leased 110 megawatts of data center capacity so far this year, with a huge 75-megawatt chunk signed in July alone. This rapid leasing helps prove the company can successfully turn its physical storage empire into a digital one, which is why management raised its financial goals for the rest of 2026.

See the full quarter, and how our tracked metrics did

Source: 8-K filing

Key highlights

• Data center leasing surge: The company has already secured 110 megawatts of new data center leases through July, which easily passes its annual target of 100 megawatts with months to spare. Large deals in July alone accounted for 75 megawatts of this total, showing that the shift from physical boxes to digital storage is happening much faster than in previous years.
• Service revenue growth acceleration: Revenue from services grew 27% to $894 million this quarter, and this part of the business is now growing more than twice as fast as the core storage segment. This shift is critical because it shows Iron Mountain is successfully cross-selling digital solutions and asset management to its existing base of 240,000 customers.
• Organic revenue holding strong: Organic revenue, which measures growth from existing locations without the help of acquisitions, rose 16.8% compared to a year ago. This level of growth is more than double the company's long-term target of 7% and confirms that price increases are being accepted by customers even as the company moves into new digital markets.
• Profit margins slightly compressed: The adjusted EBITDA margin, a measure of core operating profitability, fell to 35.8% from 36.7% a year ago. While the company is earning more total profit, the cost of sales grew 27% this quarter as Iron Mountain spends more to support its rapidly expanding digital and asset lifecycle services.
• Raised full year guidance: Management raised its full year revenue outlook to a new range of $7.94 billion to $8.01 billion, up from a previous midpoint of $7.88 billion. The company also expects to generate between $5.87 and $5.93 in cash flow per share for the year, reflecting its confidence that the current leasing momentum will translate into steady rent payments.

Our take: This was a standout quarter that proves the company is no longer just a warehouse for paper records. Exceeding the annual data center leasing goal in just seven months is the defining win here, and it significantly de-risks the long-term shift toward digital. While the faster growth has temporarily weighed on profit margins, the raised full year outlook suggests the business is hitting a profitable stride.