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August 15, 2025 • 4 min read
Iron Mountain (IRM), a global leader in information management and a growing force in the data center world, recently released its financial results for the second quarter of 2025. As a Real Estate Investment Trust (REIT), the company's filings offer a unique look into both its stable, long-term storage business and its high-growth data center operations. Let's dive into the numbers from its latest 10-Q filing to see how the company is performing.
At first glance, Iron Mountain's Q2 2025 presents a mixed picture. The company posted strong top-line growth, with total revenues climbing 11.6% year-over-year to $1.71 billion. This growth was consistent across both its major revenue streams: Storage Rental and Services.
However, despite this impressive revenue increase, the company swung from a net income of $35.8 million in Q2 2024 to a net loss of $44.9 million in the same quarter of 2025. How does a company earn more money but end up with a loss? The flow of revenue and expenses below helps visualize this journey.
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A key reason for this shift lies outside the company's core operations. A line item called "Other Expense (Income), Net" ballooned from a $5.8 million expense in Q2 2024 to an $81.9 million expense in Q2 2025. Digging deeper reveals the main driver was an $87.2 million loss from foreign currency transactions, a significant swing from a minor $1.0 million loss the prior year. Higher interest expenses, which grew by about $29 million, also contributed to the pressure on profitability.
This highlights why for a global REIT like Iron Mountain, looking beyond the standard net income figure is crucial. Non-cash charges and non-operational factors like currency fluctuations can obscure the underlying health of the business.
Iron Mountain's strategy rests on two pillars: its traditional Global Records & Information Management (RIM) business and its rapidly expanding Global Data Center business.
Global RIM Business: This segment, which includes services like physical document storage and digital solutions, remains the company's foundation. It saw revenues grow a healthy 5.9% to $1.32 billion in the second quarter. More importantly, its profitability remains robust, with its Adjusted EBITDA margin ticking up to 44.3%, demonstrating strong operational efficiency.
Global Data Center Business: This is where the company is placing its bets for future growth. The segment's revenue surged 24.0% to $189.4 million. The more impressive story is the dramatic improvement in profitability. The segment's Adjusted EBITDA margin expanded significantly, from 43.2% in Q2 2024 to 50.8% in Q2 2025. This shows powerful operating leverage—as the company leases more data center space, a much larger portion of that new revenue is converting into profit.
Because Iron Mountain is a REIT, one of the most insightful metrics for evaluating its performance is Funds From Operations (FFO). FFO is a standard measure for REITs that adjusts net income for things like depreciation on real estate, providing a clearer view of the company's cash-generating ability.
Here, the story is much more positive. FFO (Normalized) for the second quarter was $258.0 million, an increase from $231.0 million in the prior year. For the first six months of 2025, FFO (Normalized) reached $487.1 million, up from $450.8 million in 2024. This shows that the core cash-generating power of the business remains strong and is growing, despite the accounting net loss reported for the quarter.
Iron Mountain's Q2 2025 report reveals a company successfully executing its dual strategy. The legacy RIM business continues to be a stable and profitable cash generator, while the strategic investment in data centers is paying off with strong revenue growth and rapidly expanding margins.
While the headline net loss may cause initial concern, it is largely driven by non-operational factors like foreign exchange volatility. A closer look at operational metrics like Adjusted EBITDA and FFO reveals a fundamentally healthy and growing business. The primary challenge ahead will be for Iron Mountain to continue funding its capital-intensive data center expansion while managing its considerable debt load in a shifting economic environment.
Last updated: August 15, 2025