Iron Mountain Incorporated (NYSE: IRM) saw its shares jump approximately 10% to $125.93 in Thursday afternoon trading after the records storage and data center real estate investment trust (REIT) reported a stronger-than-expected first quarter and raised its full-year 2026 revenue and cash-flow targets. The surge outpaced peers Digital Realty Trust, which gained about 3%, and Equinix, which slipped less than 1%.
Strong First-Quarter Results
The Portsmouth, New Hampshire-based company reported first-quarter revenue of $1.94 billion, a 21.6% increase from $1.59 billion in the prior-year period. Net income climbed sharply to $149 million from $16 million, while adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) rose 22.1% to $708 million. Adjusted funds from operations (FFO) — a key REIT cash-flow metric — came in at $1.43 per share, beating the consensus estimate of $1.26 from analysts polled by LSEG. Revenue also surpassed the $1.86 billion forecast.
Data Center and Digital Services Drive Growth
Management highlighted data centers, digital services, and asset lifecycle management (ALM) as primary growth drivers. Data center revenue surged 47% to $255 million during the quarter, while ALM revenue nearly doubled, jumping 92% to $232 million. Combined, these newer operations now account for more than 30% of total revenue, marking a significant strategic shift from Iron Mountain's traditional records storage business.
Chief Executive William Meaney noted that data-center leasing is "off to a strong start," with 32 megawatts leased through April. The company expects to bring 400 megawatts of capacity online and available over the next 24 months. Chief Financial Officer Barry Hytinen added that the company inked 22 megawatts in new leases during the first quarter, brought 24 megawatts online, and renewed 193 leases covering a total of 7 megawatts.
Asset Lifecycle Management Standout
The ALM segment, which involves decommissioning, sanitizing, and reselling used IT hardware, posted standout growth. Hytinen noted that memory prices, after climbing earlier in the quarter, have now leveled off but remain "meaningfully above last year." This dynamic supports higher resale prices for retired servers and components, boosting ALM revenue. Iron Mountain raised its full-year ALM target to $950 million, up by $100 million from the previous forecast.
Revised 2026 Outlook
The company lifted its 2026 revenue outlook to a range of $7.825 billion to $7.925 billion, up from the prior guidance of $7.625 billion to $7.775 billion. Adjusted FFO is now projected at $5.79 to $5.86 per share. The improved outlook reflects optimism around continued strong demand from artificial intelligence (AI) workloads and enterprise digital transformation projects.
Capital Spending and Risks
Iron Mountain spent $527 million on growth and recurring capital expenditures in the first quarter, with the majority allocated to data center investments. As of March 31, the company's net lease-adjusted leverage ratio stood at 4.8x. Risks flagged in its materials include the company's ability to cover capital spending, service its debt, absorb higher power costs, and navigate potential data-center outages — any of which could affect the outlook.
The company also announced a quarterly dividend of 86.4 cents per share, payable on July 3 to shareholders of record as of June 15.