Drivers for record Q3 revenue included two acquisitions and strong growth in the company’s asset lifecycle management business. | Bandersnatch/Shutterstock
Information management company Iron Mountain reported record third-quarter revenue of $1.56 billion, higher by 12% on the year, and attributed the results to double-digit growth in its asset lifecycle management business as well as two acquisitions.
Looking ahead, CEO Bill Meaney said the company expects continued strength in data center decommissioning, especially among hyperscalers – companies such as Amazon AWS and Google Cloud – as they refresh equipment to take advantage of AI.
Although Meaney and Chief Financial Officer Barry Hytinen acknowledged that much of the growth was due to increases in acquisition-related volumes, Hytinen said profitability from the asset lifecycle management segment is “up a lot. So we’re very pleased with the way our ALM business is trending.” They expect the portfolio including the asset lifecycle management and data center businesses to grow by more than 20% for “a long period of time,” he added.
Hytinen said the company expects component pricing to continue trending up, though price spreads between new and secondhand parts have varied. For example, the price spread for new memory versus secondhand has been wider than for other components. However, “we’re not really predicating our guidance on a really meaningful increase in component pricing.”
The total asset lifecycle management business brought nearly $103 million of revenue in the quarter, an increase of 145% on the year, driven by double-digit growth from data center decommissioning and expansion in Iron Mountain’s enterprise business. Hytinen said the Regency Technologies acquisition represented $36 million of that total and recent Australian acquisition APCD accounted for $3 million, so organic Q3 revenue for asset lifecycle management was about $64 million, higher by 52% on the year.
In the call, Iron Mountain announced it had acquired acreage in Richmond, Virginia, to develop data center capacity. Since then the company has announced an additional site, adding a combined 350 megawatts of planned capacity. The planned capacity for the sites will bring the company’s total data center capacity above 1.2 gigawatts.
In September, Iron Mountain confirmed to E-Scrap News it was acquiring ITAD firm Wisetek, and the company formally announced the acquisition during the November earnings call. In addition to this year’s acquisitions, Iron Mountain previously acquired ITRenew in 2022.
The company, headquartered in Boston, includes its ITAD operations in the asset lifecycle management segment, along with a separate business providing technical expertise in storing and handling fine art.
Overall adjusted operating earnings before interest, taxes, depreciation and amortization – known as EBITDA, a way of measuring profitability – for Q3 reached a record $568 million, higher by 14% on the year, driven by growth in its global records management, asset lifecycle management and data center businesses. Adjusted EBITDA margin rose to 36.5%, up 0.5% year on year.
As a result of the strong quarter, the company expects to reach the high end of its full-year guidance, which is $6.15 billion for total revenue and $2.23 billion for adjusted EBITDA.
Looking ahead, Meaney said the company expects revenue growth to accelerate in the fourth quarter, both on the year and from the previous quarter, “so we feel really good about the setup as we go into 2025.”