IRON MOUNTAIN INC files 10-Q: quarterly report (10-Q)

The following discussion and analysis of our financial condition and results of operations for the three and six months ended June 30, 2026 should be read in conjunction with our Condensed Consolidated Financial Statements and Notes thereto for the three and six months ended June 30, 2026, included herein, and our Consolidated Financial Statements and Notes thereto for the year ended December 31, 2025, included in our Annual Report on Form 10-K filed with the United States Securities and Exchange Commission ("SEC") on February 12, 2026 (our "Annual Report").

• our ability or inability to execute our strategic growth plan, including our ability to invest according to plan, grow our businesses (including through joint ventures or other co-investment vehicles), incorporate alternative technologies (including artificial intelligence) into our business, achieve satisfactory returns on new product offerings, continue our revenue management, expand and manage our global operations, complete acquisitions on satisfactory terms, integrate acquired companies efficiently and transition to more sustainable sources of energy;

• changes in customer preferences and demand for our storage and information management services, including as a result of the shift from paper and tape storage to alternative technologies that require less physical space or services activity;

• the costs of complying with and our ability to comply with laws, regulations and customer requirements, including those relating to data privacy and cybersecurity issues, as well as fire and safety and environmental standards, and regulatory and contractual requirements under government contracts;

• the impact of attacks on our internal information technology ("IT") systems, including the impact of such incidents on our reputation and ability to compete and any litigation or disputes that may arise in connection with such incidents;

• our ability to fund capital expenditures;

• the impact of our distribution requirements on our ability to execute our business plan;

• our ability to remain qualified for taxation as a real estate investment trust for United States federal income tax purposes ("REIT");

• changes in the political and economic environments in the countries in which we operate and changes in the global political climate;

• our ability to raise debt or equity capital and changes in the cost of our debt;

• our ability to comply with our existing debt obligations and restrictions in our debt instruments;

• the impact of service interruptions or equipment damage and the cost of power on our data center operations;

• the cost or potential liabilities associated with real estate necessary for our business;

• unexpected events, including those resulting from climate change or geopolitical events, could disrupt our operations and adversely affect our reputation and results of operations;

• fluctuations in commodity prices;

• competition for customers;

• our ability to attract, develop, and retain key personnel;

• deficiencies in our disclosure controls and procedures or internal control over financial reporting;

• other trends in competitive or economic conditions affecting our financial condition or results of operations not presently contemplated; and

• the other risks described in our periodic reports filed with the SEC, including under the caption "Risk Factors" in Part I, Item 1A of our Annual Report.

Except as required by law, we undertake no obligation to update any forward-looking statements appearing in this report.

Part I. Financial Information

OVERVIEW

The following discussions set forth, for the periods indicated, management's discussion and analysis of financial condition and results of operations. Significant trends and changes are discussed for the three and six months ended June 30, 2026 within each section. Trends and changes that are consistent for both the three and six month periods are not repeated and are discussed on a year to date basis only.

GENERAL RESULTS OF OPERATIONS—KEY TRENDS

• Our organic storage rental revenue growth is primarily driven by revenue management in our Global RIM Business segment, where we expect volume to be relatively stable in the near term, as well as by growth in our Global Data Center Business segment, primarily driven by lease commencements.

• Our organic service revenue growth is primarily driven by new and existing digital offerings, traditional records management services and services in our asset lifecycle management ("ALM") business, all of which we expect to grow in the near term and benefit our organic service revenue growth in 2026 .

• We expect continued total revenue and Adjusted earnings before interest, taxes, depreciation and amortization ("EBITDA") growth in 2026 as a result of our focus on new product and service offerings, cross-selling opportunities, innovation, customer solutions and market expansion in line with our growth strategies.

Cost of sales (excluding depreciation and amortization) and Selling, general and administrative expenses for the six months ended June 30, 2026 consists of the following:

COST OF SALES SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

Part I. Financial Information

NON-GAAP MEASURES ADJUSTED EBITDA

We define Adjusted EBITDA as net income (loss) before interest expense, net, provision (benefit) for income taxes, depreciation and amortization (inclusive of our share of Adjusted EBITDA from our unconsolidated joint ventures), and excluding certain items we do not believe to be indicative of our core operating results, specifically:

EXCLUDED

• Acquisition and Integration Costs (as defined below) • Restructuring and other transformation • Loss (gain) on disposal/write-down of property, plant and equipment, net (including real estate) • Other expense (income), net • Stock-based compensation expense • Intangible impairments

Adjusted EBITDA Margin is calculated by dividing Adjusted EBITDA by total revenues. We also show Adjusted EBITDA and Adjusted EBITDA Margin for each of our reportable segments under "Results of Operations – Segment Analysis" below.

Adjusted EBITDA excludes both interest expense, net and the provision (benefit) for income taxes. These expenses are associated with our capitalization and tax structures, which we do not consider when evaluating the operating profitability of our core operations. Adjusted EBITDA does not include depreciation and amortization expenses, in order to eliminate the impact of capital investments, which we evaluate by comparing capital expenditures to incremental revenue generated and as a percentage of total revenues. Adjusted EBITDA and Adjusted EBITDA Margin should be considered in addition to, but not as a substitute for, other measures of financial performance reported in accordance with accounting principles generally accepted in the United States of America ("GAAP"), such as operating income (loss), net income (loss) or cash flows from operating activities.