Iron Mountain Inc.

Overview Key strengths Key risks Leading position in rented storage space and information management services Aggressive financial policy that relies on debt to fund large growth capital expenditure (capex) and shareholder distributions Strong profitability, with S&P Global Ratings-adjusted EBITDA margin in the low-40% area Multiyear restructuring initiatives such as Project Matterhorn reduce S&P Global Ratings-adjusted EBITDA and keep leverage elevated above 6x High rate of reoccurring revenue, with high switching cost, and multiyear contracts Asset lifecycle management business is exposed to computer component price volatility Fast-growing data center segment, with high percentage of leased or pre-leased capacity Secular decline of paper records could pose a long-term threat to records management segment Iron Mountain Inc.'s (IRM) leverage increased to 6.5x for

...Although the company's leverage (S&P Global Ratings-adjusted) rose to 6.5x in the third quarter of 2023, we expect it will decrease to 6.1x-6.2x in 2024. Iron Mountain Inc.'s (IRM) leverage increased to 6.5x for the 12 months ended Sept. 30, 2023, from 6.1x at the end of 2022, primarily due to higher restructuring costs and weak performance from the company's IT Renew asset lifecycle management business. Although we expected increased restructuring costs related to the company's Project Matterhorn growth plan, ITRenew has significantly underperformed expectations in large part due to steep component pricing declines and slower turnover of data center servers from supply-chain delays. S&P Global Ratings forecasts the ITRenew business will gradually recover over the next 12 months. We believe pricing for components such as memory chips began to increase in the second half of 2023 and will spur growth in the segment in 2024. We expect leverage will improve over the next 12 months because performance...

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