Old boxes are funding data center growth
- The old records business is still the cash engine.
- Q2 2026 revenue grew 19% to $2.03 billion, with 17% organic growth.
- The growth portfolio now makes up 35% of total revenue.
- Data Center leasing hit 110 megawatts, passing the full year target early.
- ALM guidance rose again and is expected to approach $1 billion for 2026.
Growth is real, but price remains a hurdle
Iron Mountain used to be a simple records storage story. Companies paid it to hold boxes of paper, tapes, and files in secure warehouses. That business still matters because it brings in steady rent like revenue and has high switching costs.
The bigger story now is growth. In Q2 2026, total revenue grew 19% to $2.03 billion, and organic growth was 17%. The growth portfolio, which includes Data Centers, Asset Lifecycle Management, and Digital Solutions, collectively grew over 50%. These businesses now account for 35% of total revenue.
Data Center demand is running exceptionally hot. Leasing reached 110 megawatts in the first seven months of the year, beating the initial 100 megawatt target for the entire year. ALM is also surging, with revenue up 88% in the second quarter.
The catch is price and balance sheet risk. Net lease adjusted leverage improved to 4.8x, the best level in over a decade in the internal view, but total debt is still large. The stock also already prices in a lot of the growth story, so strong execution may not be enough if investors demand a cheaper entry point.
Boxes pay for servers
Iron Mountain makes money in two main ways: storage rental and services. Storage rental includes physical records and data center space. Services include shredding, scanning, workflow tools, and asset lifecycle work.
The core Global RIM business is the anchor. Customers store sensitive records with Iron Mountain and do not move them often. That makes the revenue sticky and gives the company room to raise prices over time.
Cash from RIM helps fund faster growth areas. Data Centers need large upfront spending, including planned 2026 capital expenditures of about $2.2 billion. ALM is less about buildings and more about safely collecting, wiping, recycling, and reselling used IT hardware.
This model breaks if growth spending gets ahead of signed demand. Management says it avoids speculative data center builds, but the test is whether pre leasing keeps pace with the expanded pipeline.
What Iron Mountain sells
Global Records and Information Management
This is the old records business. It stores physical documents, manages records, and handles secure destruction.
Data Center
Iron Mountain leases data center space to enterprises and hyperscalers. Demand is tied to cloud, AI, and the need for power backed computing capacity.
Asset Lifecycle Management
ALM helps customers dispose of old servers and devices safely. Iron Mountain can harvest parts, recycle equipment, and resell components into supply chains.
Digital Solutions
This unit scans documents and helps customers manage digital workflows. A FedRAMP high authorization for InSight has opened more government opportunities.
Q2 2026 revenue mix
The mix uses Q2 2026 management commentary where the Growth Portfolio (Data Centers, ALM, and Digital) accounted for 35% of total revenue.
What could go wrong
Debt stays heavy
High impact · Medium oddsLeverage improved to 4.8x, but Iron Mountain still carries large absolute debt. Higher rates or weaker cash flow could make refinancing and growth spending more costly.
Data center buildout outruns demand
High impact · Medium oddsThe company expects about $2.2 billion of capital expenditures in 2026. That spending can create value if leases are signed before capacity comes online. It can hurt returns if tenant demand slows or projects run late.
ALM volumes shift with hardware cycles
Medium impact · Medium oddsALM depends on companies and hyperscalers refreshing IT gear. If customers keep servers for longer, disposal volumes can be delayed. Management is trying to offset this by harvesting used memory and selling it back to OEM supply chains.
Valuation leaves little room
Medium impact · High oddsThe operating story is better than it was, but the market already rewards the company for growth. If Data Center or ALM growth slows, the stock could fall even if the core RIM business remains steady.
In one breath
Is Iron Mountain a data center company now?
Not fully. The growth portfolio is up to 35% of total revenue, but the core records business is still the main cash engine.
Why does Iron Mountain benefit from AI?
AI needs more computing power, which supports demand for data center capacity. AI hardware upgrades also create old servers and parts that can flow through Iron Mountain ALM business.
What is ALM at Iron Mountain?
ALM means Asset Lifecycle Management. Iron Mountain collects old IT equipment, wipes data, recycles or resells parts, and helps customers prove the process was secure.
What is the biggest risk for IRM stock?
The main risk is that growth spending and debt stay high while demand slows. Valuation is also a risk because the stock already reflects a strong growth outlook.
