Iron Mountain delivered a record performance in Q4 2025, with revenue increasing 17% year-over-year to $1.84 billion and Adjusted EBITDA growing 17% to $705 million, achieving a record-high EBITDA margin of 38.3%. For the full year, revenue rose 12% to $6.9 billion, driven by robust growth in Data Centers (+30%), Asset Lifecycle Management (+63%), and Digital Solutions. The company issued strong 2026 guidance, projecting revenue of $7.7 billion (+12% YoY) and AFFO per share growth of 11%, underpinned by expectations for >25% Data Center revenue growth and 35% ALM growth. Management highlighted 43 megawatts of data center leasing in Q4 and significant cross-selling success, positioning the company for sustained double-digit expansion.
| Metric | Value | Change |
|---|---|---|
| Q4 Revenue | $1.84 billion | +17% YoY |
| Q4 Adj. EBITDA | $705 million | +17% YoY |
| Q4 AFFO per Share | $1.44 | +16% YoY |
| FY 2025 Revenue | $6.9 billion | +12% YoY |
| Data Center Q4 Rev | $237 million | +39% YoY |
| ALM Q4 Revenue | $190 million | +70% YoY |
| Net Leverage | 4.9x | Improved |
Iron Mountain is capitalizing on the AI/hyperscaler buildout, with Data Center revenue up 39% in Q4. Management noted a shift in customer conversations from large language models back to cloud and inference capacity. With 43MW leased in Q4 and 400MW of capacity expected to energize over the next 24 months, the company is positioned for sustained growth, targeting >25% revenue growth in this segment for 2026.
The Asset Lifecycle Management (ALM) business has emerged as a major growth engine, with total revenue increasing 63% in 2025 and 56% organically in Q4. Management views this as a future 'multibillion dollar business,' driven by cross-selling to the existing base of 950 Fortune 1000 customers and winning new logos. The 2026 outlook implies 35% growth to $850 million.
Digital Solutions revenue exceeded $500 million in 2025, driven by the AI-powered DXP platform. Management secured an all-time high number of DXP deals in Q4 at double the average value of the prior year. A significant win with a leading Asia financial services firm to replace a legacy platform validates the displacement strategy and the scalability of the digital offering.
The U.S. Department of the Treasury contract represents a significant long-term catalyst. While revenue was modest in 2025, guidance includes $45 million for 2026 with expectations to exceed $100 million annually by 2027. Management highlighted their unique FedRAMP High certification as a competitive moat for further federal business.
Capital allocation remains disciplined, with the Board raising the dividend 10% and targeting a payout ratio in the low 60s. Despite planning for $2.0 billion in growth CapEx (primarily data centers), net leverage improved to 4.9x, the lowest since 2014. Management emphasized a 'pre-leasing' strategy to mitigate risk before commencing construction.
Gross margin pressure was evident in Q4, with total gross margin down slightly due to a 200 basis point increase in lower-margin services revenue penetration. While services margins improved sequentially, the mix shift away from high-margin storage could pressure overall profitability if the high-growth, lower-margin segments expand faster than anticipated.
The ALM business, while growing rapidly, is partially dependent on 'hyperscale decommissioning' cycles, which management acknowledged can be lumpy. The 56% organic growth in Q4 was aided by strong memory pricing, which may not persist at current levels indefinitely, introducing volatility to future revenue streams.
Management adopted a 'conservative' stance on the 2026 revenue guidance for the Treasury contract ($45 million), citing the complexity of the government's outsourcing ramp. Any delays in the federal government's transition timeline could create a shortfall relative to the high end of investor expectations for this specific growth vector.
Foreign exchange (FX) impacted sequential storage revenue comparisons in Q4 due to a stronger dollar. While FX is expected to be a modest benefit in 2026, currency volatility remains a factor given Iron Mountain's significant global footprint.
Overall: Management exhibited extremely high confidence and enthusiasm throughout the call, frequently using superlatives like 'record,' 'all-time highs,' and 'incredibly strong momentum.' They were specific about growth drivers and provided detailed guidance, suggesting strong visibility into 2026 performance.
Confidence: HIGH - Management provided precise numbers for 2026 (e.g., >100MW leasing, specific revenue targets) and spoke definitively about market demand ('We expect the data center market will remain very strong').
$7.625B - $7.775B (+12% YoY at midpoint)
$2.875B - $2.925B (+13% YoY at midpoint)
$5.69 - $5.79 (+11% YoY at midpoint)
>$1.0B (>25% YoY growth)
~$850M (~35% YoY growth)
Hedging & Uncertainty: Management used very little hedging regarding the core business, employing definitive language such as 'We expect,' 'We are confident,' and 'We anticipate.' However, regarding the Treasury contract, they used qualifiers like 'conservative outlook' and 'ramp-up year' to manage expectations on the timing of revenue recognition. They also hedged slightly on ALM hyperscale revenue by calling it a 'current market trend' that depends on decommissioning cycles.
We are just still scratching the surface of the $170 billion total addressable market. - William L. Meaney, CEO
We feel really good that we have 400 megawatts being energized in the next 24 months. - William L. Meaney, CEO
We are projecting further EBITDA margin expansion in 2026. - Barry A. Hytinen, CFO
We have no restructuring charges in our plan at all. - Barry A. Hytinen, CFO
We expect to grow revenue at a double-digit rate for the foreseeable future. - Barry A. Hytinen, CFO
Analyst Sentiment: Analysts were highly engaged, asking detailed questions about specific growth drivers like ALM pricing, Data Center pipeline visibility, and the Treasury contract ramp. The tone was inquisitive but generally positive, seeking to validate the sustainability of the record growth rates.
Management Responses: Management was direct and data-rich, readily providing specific figures (e.g., memory pricing impact of $15M-$20M, specific MW targets). They effectively defended margin structures and explained the mix shift without sounding defensive.
Data center pipeline and land bank availability in Northern Virginia, London, and India.
ALM organic growth drivers and the balance between enterprise and hyperscale revenue.
Gross margin trends and the impact of service mix on overall profitability.
M&A strategy, specifically the reluctance to buy data centers versus tuck-in acquisitions for ALM.
The ramp schedule and revenue recognition for the Department of the Treasury contract.
SG&A leverage and the use of AI tools to improve efficiency.
Iron Mountain is successfully executing its pivot from a legacy storage REIT to a high-growth data center and digital solutions platform. The Q4 results and 2026 guidance demonstrate that the transformation is accelerating, with Data Center and ALM becoming significant revenue drivers. The 12%+ revenue growth and 13% EBITDA growth guidance for 2026 are exceptional for a REIT. The valuation support comes from the visible backlog (400MW energizing) and the cross-selling engine within the massive customer base. The dividend hike and leverage reduction further de-risk the story.
Hyperscalers are shifting focus from LLM training to cloud/inference capacity, driving sustained demand for Iron Mountain's capacity.
Strong pricing in memory/components is driving revenue upside in ALM, reflecting a robust market for hardware recycling/refurbishment.
The Treasury contract win indicates a trend of federal agencies outsourcing complex data management to certified private sector partners.