← back to rankingIRM · Iron Mountain Incorporated
REIT - Specialty · mkt cap $38.2B · calls: Q1 FY2026 vs Q4 FY2025
33.0 conviction · conf-adj 33
conf 6/10 partial
enthusiasm:21.0 · trend:-5 · quantifies:5 · impact:0 · under_radar:0 · credibility:5 · business_impact:4 · disruption:0 · commitment:0 · confirmation:3
Enthusiasm latest 7 / prev 8 (falling)
IRM's AI story is bifurcated: (1) indirect infrastructure demand—hyperscaler inference/cloud/LLM cycles filling data centers and ALM decommissioning—and (2) direct product monetization via DXP as an "AI-powered" digitization/metadata platform in large enterprise and government deals. Management quantifies digital/DXP bookings and workload volumes (500M+ images; 20M+ records) and Treasury ramp dollars, but does not break out standalone AI revenue. Enthusiasm was higher in Q4 (explicit LLM cycle commentary, unstructured-data AI thesis, internal AI-for-efficiency) and slightly more operational in Q1, with no analyst-driven deep dive on AI economics in either call.
GROUNDED NEXT-FY IMPACT vs CONSENSUS
Grounded on actual base — revenue $6.9B · net income $0.1B · net margin 2.1% · diluted EPS 0.49
These are next-fiscal-year annual uplift estimates, not next-quarter numbers.
Aggregate next-FY est. rev uplift: 1.45% · next-FY EPS uplift: 4.0% · vs analysts: inline · priced in: high · confidence: 6/10
| Claim | Figure | Arithmetic | Next-FY Rev % | Next-FY EPS % |
|---|
DXP avg deal value >2x prior year
engagement · soft | more than double avg deal value (Q4 FY25) | Multiple ('>2x') with no dollar anchor; no prior-year deal-value base disclosed in any claim. Cannot translate to revenue; subsumed in digital-solutions line (claim 3). | | |
DXP deals secured at all-time high (count)
engagement · soft | all-time-high deal count (Q4 FY25) | Count metric only; no aggregate booking $ or per-deal value disclosed. Directionally supports digital growth but unanchored to dollars. | | |
Digital solutions revenue >$500M, >20% YoY (Q1 FY26)
revenue | $500M base; >20% growth | Digital FY25=$500M (disclosed). 20% FY26 growth -> +$100M incremental. rev_uplift=100*100M/6,901.737M=1.45%. Higher-margin services/software; X used 15% margin (eps 2.51%), Y used 25% (eps 4.19%) — both defensible, so 20% avg margin: incr NI=100M*0.20=$20M; EPS off adjusted base $596.97M (GAAP NI $144.6M/2.1% depressed)=100*20M/596.97M=3.35%. | 1.45 | 3.35 |
Asia FS contract: >500M images via DXP AI metadata extraction
engagement · soft | >500M images/files processed | Volume metric only; no contract TCV or annual revenue disclosed. Contributes to digital line but cannot be sized standalone. | | |
Brazil clinical contract: >20M medical records via DXP AI
engagement · soft | >20M records processed | Volume metric only; no contract $ disclosed. Subset of digital growth; not sizeable standalone. | | |
Treasury/IRS digital program: $45M 2026, >$100M from 2027
revenue | $45M in 2026 (vs ~$6M FY25) | FY26 outlook $45M; FY25 recognized ~$6M (disclosed). Incremental next-FY=45-6=$39M. rev_uplift=100*39M/6,901.737M=0.57%. At 20% incr net margin (avg of X 15%/Y 25%)->$7.8M; EPS=100*7.8M/596.97M=1.31%. FY27 step-up ($55M) excluded from next-FY. NOTE: subset of claim-3 digital growth — EXCLUDED from aggregate to avoid double-count. | 0.57 | 1.31 |
Treasury revenue recognized $6M Q4 / $9M Q1
revenue | $6M Q4 FY25; $9M Q1 FY26 | Phasing/run-rate evidence for same Treasury program (claim 6): $6M+$9M=$15M in two quarters, ~$30-36M annualized vs $45M guide. Confirms FY25 base=$6M (hard). Not additive; pcts null to avoid triple-count. | | |
Data center revenue growth 39% Q4 / 47% Q1
revenue · soft | 39%/47% growth; 30% in FY25 | SUPPLIER-side (selling DC capacity into hyperscaler AI buildout). Absolute DC revenue base NOT disclosed in any claim, so cannot compute rev_uplift per rules. X estimated ~3.6% off an ~$620M undisclosed base (invented base, low confidence); per disclosed-base rule left null. Excluded from adopter headline. | | |
Data center leasing target >100MW 2026 (32MW YTD)
revenue · soft | >100MW leased in 2026 | SUPPLIER-side capacity metric; no $/MW conversion disclosed, cannot translate to revenue. Supports DC supplier growth above. | | |
Internal AI tools for SG&A/operating leverage
productivity · soft | no figure; 'very early stages' | Explicitly unquantified, multiyear. No dollar or % isolated for the AI portion. Flows partly into the 40bps margin guide (claim 11) but not separable. | | |
FY26 EBITDA margin expansion +40bps (SG&A leverage cited)
cost | 40bps at FY26 guide midpoint | 40bps*FY26 consensus rev 7,918.21M=$31.7M incremental EBITDA. AI is one lever ('very early stages'); AI attribution ~29% (avg of X ~33%/Y 25%). EBITDA->NI flow-through 55% (REIT D&A) *(1-21% tax): 31.7M*0.29*0.55*0.79=$4.0M NI; EPS=100*4.0M/596.97M=0.67%. (X stored full 4.19% then took ~1/3 in aggregate; Y stored 0.58% attributed — reconciled here to the attributed figure.) | 0 | 0.67 |
Assumptions: EPS basis=adjusted/consensus NOT GAAP: GAAP NI $144.6M (2.1% margin, EPS ~$0.49) is depressed/distorted; consensus adjusted base ~$596.97M NI / $2.00 EPS (≈297.8M shares) used for all EPS%. Incremental net margin on digital/Treasury revenue=20% (avg of analyst X's 15% and Y's 25%; both above corporate adjusted ~8.6%, reflecting higher-margin services). Tax 21%. EBITDA->NI flow-through 55% on incremental margin (heavy REIT D&A). Phasing: digital +20% on $500M -> +$100M FY26; Treasury $45M FY26 less ~$6M FY25 = +$39M but TREATED AS SUBSET of the $100M digital growth (excluded from aggregate to avoid double-count); FY27 step-up excluded. 40bps EBITDA lever: ~29% attributed to AI given 'very early stages' framing and overlap with revenue-driven leverage. Aggregate EPS = digital 3.35% + AI-attributed EBITDA 0.67% ≈ 4.0%. Supplier-side DC growth sized off an undisclosed base -> nulled per disclosed-base rule and excluded from adopter headline.
Top line: Adopter-side AI lift is real but modest: ~1.45% FY26 revenue uplift ($100M incremental digital solutions on $500M base at >20% growth; Treasury/IRS $39M of that is a subset), and ~4.0% adjusted-EPS uplift (digital ~3.35% + AI-attributed margin expansion ~0.67%). Supplier-side data-center demand is materially larger but cannot be dollar-sized from disclosed claims and is excluded from the headline.
Bottom line: Digital revenue flow-through at 15% incremental net margin = ~$15M -> +2.51% on the $596.97M adjusted base. Management's +40bps FY26 EBITDA margin guide (~$31.7M EBITDA, ~$25M after-tax, +4.19% EPS if fully credited) is the larger bottom-line lever, but AI tools are explicitly 'very early' and just one contributor, so only ~1/3 (~+1.4%) is attributed to AI. Combined adopter EPS uplift ~+3.9%. Note the thin GAAP base ($144.6M NI) would inflate these to absurd %s — sizing strictly off the adjusted base keeps them honest.
Consensus already models FY26 revenue 6,861.6M -> 7,918.2M = +15.4% (+$1,056M) and EPS 2.00 -> 2.37 = +18.4%. The ~+1.45% adopter AI revenue (+$100M digital) is only ~9.5% of that $1,056M consensus increment, and the ~+3.9% adopter EPS lift is well within the +18.4% consensus EPS growth. Supplier-side DC growth (~+3.6%) is also embedded in the +15.4% top-line. The AI math points to NO upside above what consensus already assumes — it is a component of, not incremental to, the existing trajectory.
MODEL CONSENSUS (impact)
partial
Agree on structure, rev (1.45%), soft flags, exclusions. Margin and EBITDA-attribution assumptions averaged; supplier % nulled as base is undisclosed.
Conflicts reconciled
- digital eps_uplift_pct: X=2.51 (15% margin) vs Y=4.19 (25% margin) -> used 3.35 (20% avg margin, both defensible)
- treasury eps_uplift_pct: X=0.98 vs Y=1.63 -> used 1.31 (20% avg margin)
- EBITDA row eps_uplift_pct: X=4.19 (full, no flow-through) vs Y=0.58 (attributed) -> used 0.67 (avg ~29% AI attribution + 55% REIT flow-through)
- est_eps_uplift_pct: X=3.9 vs Y=4.76 -> used 4.0 (reconciled digital+EBITDA components)
- supplier_rev_uplift_pct: X=3.6 vs Y=null -> used null (DC base not disclosed in any claim; conservative per disclosed-base rule)
| Field | Opus 4.8 | GPT-5.5 |
|---|
| Rev uplift % | 1.45 | – |
| EPS uplift % | 3.9 | – |
| Priced in | high | – |
| vs analysts | inline | – |
| Confidence | 6 | – |
| Top line | Adopter-side AI lift is real but modest: digital solutions (DXP AI) at $500M growing >20% adds ~$100M next-FY = +1.45% of the $6,901.7M base. The Treasury/IRS program (+$39M incremental, +0.57%) sits inside that digital growth, not on top of it. The much larger headline growth — data-center revenue up 39%/47% feeding the AI buildout — is SUPPLIER-side (~+3.6%, undisclosed base) and is excluded from the adopter ranking. Net adopter topline AI signal: ~+1.45%. | – |
| Bottom line | Digital revenue flow-through at 15% incremental net margin = ~$15M -> +2.51% on the $596.97M adjusted base. Management's +40bps FY26 EBITDA margin guide (~$31.7M EBITDA, ~$25M after-tax, +4.19% EPS if fully credited) is the larger bottom-line lever, but AI tools are explicitly 'very early' and just one contributor, so only ~1/3 (~+1.4%) is attributed to AI. Combined adopter EPS uplift ~+3.9%. Note the thin GAAP base ($144.6M NI) would inflate these to absurd %s — sizing strictly off the adjusted base keeps them honest. | – |
| Reasoning | Consensus already models FY26 revenue 6,861.6M -> 7,918.2M = +15.4% (+$1,056M) and EPS 2.00 -> 2.37 = +18.4%. The ~+1.45% adopter AI revenue (+$100M digital) is only ~9.5% of that $1,056M consensus increment, and the ~+3.9% adopter EPS lift is well within the +18.4% consensus EPS growth. Supplier-side DC growth (~+3.6%) is also embedded in the +15.4% top-line. The AI math points to NO upside above what consensus already assumes — it is a component of, not incremental to, the existing trajectory. | – |
Rows highlighted where the two models disagreed.
QUANTIFICATIONS
DXP average deal value vs. prior year: more than double (Q4 FY2025, topline)
“The number of DXP deals secured in the fourth quarter was an all-time high and were at an average deal value more than double the prior year.”
DXP deals secured: all-time high (count) (Q4 FY2025, topline)
“The number of DXP deals secured in the fourth quarter was an all-time high and were at an average deal value more than double the prior year.”
Digital solutions revenue: eclipsing $500 million; >20% YoY growth in Q1 FY2026 (FY2025 / Q1 FY2026, topline)
“We achieved an all-time high for digital revenue in 2025 eclipsing $500 million driven by another year of double-digit growth.”
Images/files processed with DXP AI metadata extraction: over 500 million (Asia financial services contract (Q4 FY2025 win), topline)
“The solution incorporates DXP's AI capabilities to extract metadata from over 500 million images and digital files”
Medical records processed via DXP AI: over 20 million (Brazil clinical diagnostics contract (Q1 FY2026 win), topline)
“Iron Mountain's DXP platform, leveraging AI capabilities will process over 20 million medical records.”
Department of Treasury / IRS digital program revenue: $45 million in 2026; in excess of $100 million annually from 2027 (2026–2027+, topline)
“we have included $45 million of revenue related to this program in our 2026 outlook.”
Treasury contract revenue recognized: $6 million Q4 FY2025; $9 million Q1 FY2026 (Q4 FY2025 / Q1 FY2026, topline)
“we recognized approximately $9 million of revenue in the first quarter.”
Data center revenue growth (AI/cloud demand proxy): 39% Q4 FY2025; 47% Q1 FY2026 (Q4 FY2025 / Q1 FY2026, topline)
“Data center revenue increased 30% in 2025 including 39% in the fourth quarter.”
Data center leasing target: over 100 megawatts in 2026; 32 MW leased YTD through April (2026, topline)
“we anticipate a year where we lease over 100 megawatts in 2026”
Internal AI tools — SG&A / operating leverage: no dollar figure; "very early stages"; "multiyear opportunity" (2026+, bottomline)
“We are adopting AI tools to improve efficiency, get more operating leverage, and we are in the very early stages of that.”
EBITDA margin expansion (company-wide; AI tools cited as lever): 40 basis points at midpoint of 2026 guide (FY2026, bottomline)
“at the midpoint we are forecasting 40 basis points of additional EBITDA margin expansion. That will be benefited by SG&A leverage.”
PAST (realized)
- Q4 FY2025 — William Meaney: DXP Q4 deal count "an all-time high" with average deal value "more than double the prior year."
- Q4 FY2025 — William Meaney: 2025 digital revenue "eclipsing $500 million" with double-digit growth.
- Q4 FY2025 — William Meaney: Asia financial services win used "DXP's AI capabilities" on "over 500 million images and digital files."
- Q1 FY2026 — William Meaney: 2018 "Google Partner of the Year Award for AI and machine learning" (historical credential cited in Q1).
CURRENT (now)
- Q1 FY2026 — William Meaney: winning contracts on "DXP, our AI-powered digital solutions platform"; Brazil diagnostics deal "leveraging AI capabilities" on "over 20 million medical records."
- Q1 FY2026 — William Meaney / Barry Hytinen: hyperscaler "inference and cloud" / "cloud and AI deployments" driving data-center leasing and faster power ramp.
- Q4 FY2025 — William Meaney: hyperscalers "build out inference and cloud capacity"; active DXP pipeline and bookings momentum.
- Q4 FY2025 — Barry Hytinen: "adopting AI tools" internally for efficiency, "very early stages."
FORWARD (guidance)
- Q4 FY2025 — William Meaney: data center market "remain very strong" as hyperscalers build "inference and cloud capacity"; 2026 target ">100 megawatts" leased.
- Q4 FY2025 — William Meaney: 2026 digital growth from DXP wins and recurring base; Treasury program "$45 million" in 2026 ramping to ">$100 million" annually from 2027.
- Q4 FY2025 — William Meaney (Q&A): customers shifting from LLM focus back to "cloud buildout and inference" capacity needs.
- Q4 FY2025 — Barry Hytinen: "multiyear opportunity" for SG&A/operating leverage from AI tools.
- Q1 FY2026 — William Meaney: FedRAMP High for InSight will "fundamentally shift our competitive stance" for federal digital workloads.
TRACK RECORD — PROMISE vs DELIVERY
62/100 track record mixed 6 calls reviewed
Iron Mountain's quantified AI-adjacent pledges center on Treasury DXP digitization revenue phasing and data-center MW/revenue tied to AI workloads—not productized AI KPIs. They reliably hit DC revenue and near-term Treasury revenue milestones, but materially over-promised on 2025 MW leasing before quietly resetting the target, and the Treasury ramp now looks slower than the original 'majority in 2026' framing.
125 MW of new data-center leasing in 2025 to support AI/cloud workloads — promised Q4 FY2024
missed New leasing lagged badly through mid-2025; management cut the target to 30–80 MW in Q2 FY2025 and finished the year with a Q4 surge (43 MW signed), likely within the revised band but far below the original pledge.
~$140M Treasury DXP/AI digitization award with majority of revenue in 2026 — promised Q1 FY2025
partial Contract was superseded by a up-to-$714M five-year award in Q3 FY2025, but 2026 revenue guidance is $45M—well below a majority of the original $140M figure.
Data-center revenue ~$800M (~30% growth) in 2025 — promised Q2 FY2025
delivered Full-year 2025 data-center revenue rose 30%, matching the guidance given on that call.
Treasury program ~$2M revenue in Q3 2025 and ~$4M in Q4 2025 — promised Q3 FY2025
delivered Q4 FY2025 recognized $6M on the Treasury program, modestly ahead of the $4M expectation.
>$100M annual Treasury DXP/AI revenue from 2027 onward — promised Q4 FY2025
too-early Timeline not yet reached; Q1 FY2026 still guides $45M for 2026 with $9M recognized in Q1 as the ramp begins.
Lease >100 MW of data-center capacity in 2026 for AI inference/cloud buildout — promised Q4 FY2025
too-early Through April 2026 the company reported 32 MW leased year-to-date (22 MW in Q1 plus 10 MW in April), which is early but directionally on pace.
PRICED-IN (REFINED)
HIGH (already in)Est. revisions rising · Fwd P/E 64.1 · EV/Sales 8.0x
AI claim maps to Global Data Center Business, Global Records and Information Management Business
Six-month rating counts are unchanged but still heavily skewed to buy, while price targets stepped up (all-time ~105.5 to last-year ~128.6 to last-quarter ~135) with the stock near ~128.5, and consensus embeds double-digit revenue and EPS growth through 2027. Forward P/E ~64x and EV/Sales ~8x are rich for a mature specialty REIT, so the market is already paying a premium. AI-related upside would most plausibly flow through the data center and records/information management segments, where that growth and multiple expansion are already reflected.
COVERAGE — ENTHUSIASM TRAJECTORY + CATALYSTS
7Q4 FY20248Q1 FY20258Q2 FY20258Q3 FY20258Q4 FY20257Q1 FY2026
AI enthusiasm across 6 calls — trend → flat
DXP AI grew from ML metadata wins to agents and Treasury-scale deals, then held steady as a digital growth pillar.
RECENT AI CATALYSTS & NEWS
BUSINESS IMPACT - QUALITATIVE MATERIALITY
6/10 qualitative impact moderate medium-term · mixed evidence
Where AI matters: DXP digitization & internal efficiency
Adopter-side AI is real in DXP/Treasury (~$500M digital, quantified workloads) but is only ~1–2% of consolidated revenue with no standalone AI P&L; hyperscaler DC/ALM lift is large but supplier-side and excluded from this score.
Caveats: Public narrative conflates supplier-side AI/cloud DC demand with adoptive product upside; Treasury ramp slower than early majority-in-2026 framing; GenAI may compress digitization/metadata pricing and accelerate secular box-volume decline; Internal AI-for-SG&A still very early with no hard savings disclosed
AI DISRUPTION / CANNIBALIZATION RISK tailwind · 3/10
Core economics are recurring physical custody/compliance storage, not billable labor GenAI deflates; AI may commoditize scanning/metadata over time but does not automate away regulated box storage near term.
OPTIONS / MARKET STRUCTURE
option liquidity: fair
proxy inputs — dollar-ADV $193M · beta 1.227 · px $128.46
source: proxy (no options chain on FMP)
FMP /stable/ exposes no options-chain endpoint on this key, so ATM IV, bid-ask spread and open interest are unavailable. Liquidity below is a PROXY from dollar-ADV, beta and price level (a stand-in for option depth), not measured option-market data.
CONFIRMATION — INSIDERS · 13F · LANGUAGE
Mixed — insiders selling, institutions adding, management language 4/10 measured.
INSIDERS selling 37 open-market sell(s) vs 0 buy(s) — net distribution
INSTITUTIONS (13F) adding as of 2026-03-31: 183 new / 101 closed positions; 583 increased / 344 reduced; institutional ownership -2.12pp; +76 net 13F holders
MGMT LANGUAGE 4/10 measured AI barely featured; strongest stance is deal-level DXP/automation wins with volumes, not firm AI strategy or investment.
commit “We continue to win traditional projects and new contracts across industry verticals for DXP, our AI-powered digital solutions platform.”
commit “Iron Mountain's DXP platform, leveraging AI capabilities will process over 20 million medical records.”
commit “deploy our Smart Sort solution across 6 U.S. locations. We will process more than 2 million files”
VERBATIM AI QUOTES
“Industry demand remains very strong with hyperscalers continue to build out inference and cloud capacity.”
— William Meaney, Q1 FY2026
“We continue to win traditional projects and new contracts across industry verticals for DXP, our AI-powered digital solutions platform.”
— William Meaney, Q1 FY2026
“And we won another Google Partner of the Year this month for media and entertainment, adding to the 2018 Google Partner of the Year Award for AI and machine learning.”
— William Meaney, Q1 FY2026
“Iron Mountain's DXP platform, leveraging AI capabilities will process over 20 million medical records.”
— William Meaney, Q1 FY2026
“As our clients continue to experience very strong growth in cloud and AI deployments, we are seeing their usage ramp faster.”
— Barry Hytinen, Q1 FY2026
“We expect the data center market will remain very strong in the coming years as hyperscalers build out inference and cloud capacity.”
— William Meaney, Q4 FY2025
“We are seeing solid demand for traditional projects and are winning new contracts across industry verticals for DXP, our AI-powered digital solutions platform.”
— William Meaney, Q4 FY2025
“The number of DXP deals secured in the fourth quarter was an all-time high and were at an average deal value more than double the prior year.”
— William Meaney, Q4 FY2025
“The solution incorporates DXP's AI capabilities to extract metadata from over 500 million images and digital files to improve the quality and accuracy of the customer's database as well as provide secure digital storage and advanced backup services.”
— William Meaney, Q4 FY2025
“Our leading AI technology that allows our customers to treat unstructured data in a structured manner, robust security standards, deep regulatory expertise, and ability to deliver a scalable solution aligned with the customer's strategic priorities were instrumental in securing this award and displacing incumbent providers.”
— William Meaney, Q4 FY2025
“we see a lot of the folks that were focused on large language models in the last year are now going back to making sure they have enough for their cloud buildout and inference.”
— William Meaney, Q4 FY2025
“We are adopting AI tools to improve efficiency, get more operating leverage, and we are in the very early stages of that.”
— Barry Hytinen, Q4 FY2025
ANALYST QUESTIONS ON AI
Q (Q1 FY2026, Adam Parrington (Stifel, for Shlomo Rosenbaum)): Meta recently announced they'll be extending the use of life of non-AI servers in some cases to 7 years due to server supply availability. How would a move like that in the industry impact the ALM business in your view?
A: William Meaney: lengthening refresh cycles tied to memory supply shortages, not AI vs. non-AI per se; more OEM demand for used memory harvested from decommissions; more component-harvesting project work for cloud buildouts. Barry Hytinen: modest useful-life changes unlikely to slow ALM given massive ongoing infrastructure refresh.
Q (Q4 FY2025, Nathan Crossett (BNP)): How much from the Department of the Treasury contract this year and ramp; anything on SG&A for 2026?
A: William Meaney / Barry Hytinen: $45M in 2026 ramping to $100M+ in 2027; FedRAMP High on InSight/DXP for federal SaaS. Barry Hytinen (SG&A): "We are adopting AI tools to improve efficiency, get more operating leverage, and we are in the very early stages of that. There is a multiyear opportunity to drive SG&A leverage and operating leverage across the company."