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Iron Mountain (IRM) Beats on Q2 AFFO & Revenues, Reaffirms View
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Iron Mountain Incorporated (IRM - Free Report) reported second-quarter adjusted funds from operations (AFFO) per share of 94 cents, surpassing the Zacks Consensus Estimate by a whisker. Moreover, the figure improved 1.1% on a year-over-year basis, attributable to improved adjusted EBITDA.
Shares of the company have lost 2.99% in the pre-market trading session, reflecting broader market concerns.
Iron Mountain’s results reflect solid performance in the storage segment and the data-center business. However, higher operating expenses in the quarter were a concern. The company reaffirmed its outlook for 2023.
Quarterly total revenues of $1.36 billion beat the Zacks Consensus Estimate of $1.35 billion. The reported figure increased 5.3% year over year.
According to William L. Meaney, president and CEO of Iron Mountain, “We are pleased to have delivered strong performance in the second quarter, resulting in all-time record Revenue and Adjusted EBITDA. The resilience of our business model and the success of Project Matterhorn are fueling our sustained growth trajectory.”
Behind the Headlines
Storage rental revenues were $830.8 million in the second quarter, up 10.3% year over year. We had estimated quarterly storage rental revenues of $798.7 million.
Service revenues increased 4.5% sequentially but fell 1.7% from the prior-year quarter to $527.2 million. Our estimate for the same was pegged at $553.9 million.
In the reported quarter, operating expenses flared up 15% year over year to $1.15 billion.
The Global Data Center business reported revenues of $118 million in second-quarter 2023, rising 17.9% year over year.
The adjusted EBITDA improved 4.6% year over year to $475.7 million in the quarter. The adjusted EBITDA margin contracted 30 basis points to 35%.
Balance Sheet Position
IRM exited the second quarter with $149.5 million of cash and cash equivalents, up from $146.4 million as of Mar 31, 2022.
Dividend Update
Concurrently, IRM announced a 5.1% increase in its quarterly cash dividend to 65 cents per share from 61.85 cents paid out earlier for the third quarter of 2023. The dividend will be paid out on Oct 5 to its shareholders on record as of Sep 15, 2023.
2023 Guidance
Iron Mountain reaffirmed its guidance for 2023.
The company projects an AFFO per share of $3.91-$4.00 for the full year. The Zacks Consensus Estimate for the same is currently pegged at $3.96, which lies within the company’s guided range.
Revenues are estimated to be $5,500 -$5,600 million, while adjusted EBITDA is anticipated to be $1,940-$1,975 million.
Healthpeak Properties, Inc. reported second-quarter 2023 FFO as adjusted per share of 45 cents, beating the Zacks Consensus Estimate by a whisker. The reported figure improved 2.3% from the year-ago quarter.
Results reflected better-than-anticipated revenues. Moreover, year-over-year improvement in same-store portfolio cash (adjusted) net operating income (NOI) was witnessed across the portfolio. PEAK revised its 2023 outlook.
Welltower Inc.’s (WELL - Free Report) second-quarter 2023 normalized FFO per share of 90 cents surpassed the Zacks Consensus Estimate of 86 cents. The reported figure improved 4.7% from the prior-year quarter’s actual.
Results reflected better-than-anticipated revenues. The total same-store net operating income (SSNOI) increased year over year, driven by SSNOI growth in the seniors housing operating (SHO) portfolio. Welltower also raised its guidance for 2023 normalized FFO per share.
Equinix Inc.’s (EQIX - Free Report) second-quarter 2023 AFFO per share of $8.04 surpassed the Zacks Consensus Estimate of $7.51. The figure improved 6.1% from the prior-year quarter.
EQIX’s results reflect steady growth in colocation and inter-connection revenues on the back of strong demand for digital infrastructure. The company also raised its AFFO per share guidance for 2023.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
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Iron Mountain (IRM) Beats on Q2 AFFO & Revenues, Reaffirms View
Iron Mountain Incorporated (IRM - Free Report) reported second-quarter adjusted funds from operations (AFFO) per share of 94 cents, surpassing the Zacks Consensus Estimate by a whisker. Moreover, the figure improved 1.1% on a year-over-year basis, attributable to improved adjusted EBITDA.
Shares of the company have lost 2.99% in the pre-market trading session, reflecting broader market concerns.
Iron Mountain’s results reflect solid performance in the storage segment and the data-center business. However, higher operating expenses in the quarter were a concern. The company reaffirmed its outlook for 2023.
Quarterly total revenues of $1.36 billion beat the Zacks Consensus Estimate of $1.35 billion. The reported figure increased 5.3% year over year.
According to William L. Meaney, president and CEO of Iron Mountain, “We are pleased to have delivered strong performance in the second quarter, resulting in all-time record Revenue and Adjusted EBITDA. The resilience of our business model and the success of Project Matterhorn are fueling our sustained growth trajectory.”
Behind the Headlines
Storage rental revenues were $830.8 million in the second quarter, up 10.3% year over year. We had estimated quarterly storage rental revenues of $798.7 million.
Service revenues increased 4.5% sequentially but fell 1.7% from the prior-year quarter to $527.2 million. Our estimate for the same was pegged at $553.9 million.
In the reported quarter, operating expenses flared up 15% year over year to $1.15 billion.
The Global Data Center business reported revenues of $118 million in second-quarter 2023, rising 17.9% year over year.
The adjusted EBITDA improved 4.6% year over year to $475.7 million in the quarter. The adjusted EBITDA margin contracted 30 basis points to 35%.
Balance Sheet Position
IRM exited the second quarter with $149.5 million of cash and cash equivalents, up from $146.4 million as of Mar 31, 2022.
Dividend Update
Concurrently, IRM announced a 5.1% increase in its quarterly cash dividend to 65 cents per share from 61.85 cents paid out earlier for the third quarter of 2023. The dividend will be paid out on Oct 5 to its shareholders on record as of Sep 15, 2023.
2023 Guidance
Iron Mountain reaffirmed its guidance for 2023.
The company projects an AFFO per share of $3.91-$4.00 for the full year. The Zacks Consensus Estimate for the same is currently pegged at $3.96, which lies within the company’s guided range.
Revenues are estimated to be $5,500 -$5,600 million, while adjusted EBITDA is anticipated to be $1,940-$1,975 million.
Iron Mountain currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Iron Mountain Incorporated Price, Consensus and EPS Surprise
Iron Mountain Incorporated price-consensus-eps-surprise-chart | Iron Mountain Incorporated Quote
Performance of Other REITs
Healthpeak Properties, Inc. reported second-quarter 2023 FFO as adjusted per share of 45 cents, beating the Zacks Consensus Estimate by a whisker. The reported figure improved 2.3% from the year-ago quarter.
Results reflected better-than-anticipated revenues. Moreover, year-over-year improvement in same-store portfolio cash (adjusted) net operating income (NOI) was witnessed across the portfolio. PEAK revised its 2023 outlook.
Welltower Inc.’s (WELL - Free Report) second-quarter 2023 normalized FFO per share of 90 cents surpassed the Zacks Consensus Estimate of 86 cents. The reported figure improved 4.7% from the prior-year quarter’s actual.
Results reflected better-than-anticipated revenues. The total same-store net operating income (SSNOI) increased year over year, driven by SSNOI growth in the seniors housing operating (SHO) portfolio. Welltower also raised its guidance for 2023 normalized FFO per share.
Equinix Inc.’s (EQIX - Free Report) second-quarter 2023 AFFO per share of $8.04 surpassed the Zacks Consensus Estimate of $7.51. The figure improved 6.1% from the prior-year quarter.
EQIX’s results reflect steady growth in colocation and inter-connection revenues on the back of strong demand for digital infrastructure. The company also raised its AFFO per share guidance for 2023.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.