Good morning and welcome to the Iron Mountain third quarter 2020 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today’s presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to Greer Aviv, Senior Vice President of Investor Relations. Please go ahead.

Thank you, Rocco. Good morning and welcome to our third quarter 2020 earnings conference call. We have provided the user-controlled slides on our Investor Relations website. We will also be providing the links to today’s webcast and our materials. We are joined here today by Bill Meaney, President and CEO, and Barry Hytinen, our EVP and CFO. Today we plan to share a number of key messages to help you better understand our performance, including how we are continuing to respond and adapt to the COVID-19 pandemic, continuing to demonstrate top-line resilience in our physical storage business, continuing to see strength in our data center business, progressing on our transformation program with Project Summit, and how we are remaining committed to funding innovation and new product development. After our prepared remarks, we’ll open up the lines for Q&A. Today’s earnings materials will contain forward-looking statements. We have noted the impacts from COVID-19 and our expectations of how that may impact our operations and financial performance in 2020. We have also noted our expectations for Project Summit as well as certain other comments on our expectations for the remainder of the year. As you all know, forward-looking statements are subject to risks and uncertainties. Please refer to today’s earnings materials, the Safe Harbor language on Slide 2, and our annual report on Form 10-K and other periodic SEC filings for a discussion of the major risk factors that could cause our actual results to differ from those in our forward-looking statements. In addition, we use several non-GAAP measures when presenting our financial results. We have included a reconciliation to these measures as required by Reg G in our supplemental financial information. With that, Bill, would you please begin?

Thank you Greer, and thank you all for taking the time to join us. Let me start by saying I hope you and your families are safe and well. The third quarter provided us with a great opportunity to demonstrate the significance of the measures we have taken over the last few months in response to the pandemic and set a marker for outperformance through top-line resilience in our physical storage and growing data center businesses, adjusted EBITDA margin expansion, and by maintaining our strong cash generation track record all while continuing our investment in innovation and new product development. I would like to thank all of our Mountaineers for this remarkable performance and for their steadfast focus on safety and execution. Despite lingering uncertainty related to the global COVID-19 pandemic, we have seen improvements, albeit gradual, in key U.S. and international markets as it relates to our service activity levels while showing continued strong performance in both our physical storage business and our global data center business. I continue to be inspired by the tireless efforts of our teams as they support and care for our customers, each other, and our communities whilst accelerating progress on our strategic priorities. From the start, we set our priorities to deal with the situation clearly and take care of the health and safety of our people and work hard to honor the commitments we have made to our customers. In April, we had up to one-third of our workforce out on furlough or other temporary leave. I’m happy to report that we have brought a significant number of these Mountaineers back to work to serve our customers and we now have over 90% of our employees working regularly. Whilst this has been a very difficult time, we have proven to be very resilient. We are financially healthy with strong and reliable cash flow driven in part by our brand and customer loyalty. This was evident in how we’ve managed the heightened uncertainty of the past eight months. We quickly aligned on the right mix of priorities to maintain strong near-term momentum whilst continuing our investments in innovation and new products as we execute our plan for long-term value creation. This combined with the benefits from Project Summit has allowed us to continue to invest in transforming and modernizing our company. As demonstrated by our year-on-year constant currency year-to-date adjusted EBITDA in storage revenue growth, we can already see the evidence supporting our belief that we will emerge from this pandemic as a stronger company on all dimensions. Clearly, there are still many uncertainties around COVID in terms of the development of the pandemic and how the governments worldwide will continue to respond with varying degrees of restrictions as infections rise. However, in the third quarter we saw signs of improvement in customer trends and as a result, the decline of our service revenue moderated. In addition, there is clear evidence that as and when the restrictions lift, customers do come back to us with needs from both a physical and digital document storage perspective, and while some elements of our business may have changed forever, our positioning with the communities we serve remains strong. Throughout the pandemic, we have continued to adapt and transform our business model and solutions to changing customer needs due to challenges created by COVID-19. Our customers are evaluating their real estate needs, business processes, and ways to increase digitization in a remote workplace setting. We have been focused on helping them navigate these challenges and have tasked ourselves with accelerating our response to our customers’ needs. One thing is certain - the pandemic has created opportunities for us to help our customers in new and innovative ways. The fact is we’re a different company than the one most people know. The strategic journey we have been on has driven this change, and to remind folks, our focus remains on three pillars: first, continue growing physical storage revenue through pricing as well as new volume growth achieved from records growth in emerging markets and art and consumer storage in developed markets; second, utilizing our global scale as well as 70 years of customer trust to deliver a differentiated data center offering; and third, new products and services that allow our customers to achieve reliable and secure information management in a more complex regulatory environment and one in which hybrid, physical and digital solutions are the norm. Further expanding on the product and services pillar, most know us for protecting highly regulated records, but over the years our relationships have evolved to help customers manage a broader set of assets and to help them solve a broader range of problems. As customers’ needs evolve, their expectations with us evolve. For this reason, it is important we continue to invest in creating solutions that unlock value for our customers. A great example of this is a solution we just provided for a U.S. credit union who needed a faster, more efficient method for processing their members’ mortgage loans after closing. Their old process was too manual and it could no longer support the volume of work, much less scale to meet the credit union’s 30% year-over-year growth projection, and it didn’t satisfy increased regulations the organization must now meet when selling their loans. We rebuilt the customer’s workflow to better integrate their mix of paper and digital loan materials. This included mailroom services, document scanning, and private vault with fire-resistant safeguards in defensible, secure disposition. We also applied machine learning to automate how the credit union accessed data, verified its accuracy, and resolved missing or incorrect items. With these changes, the credit union can now process post-close mortgage loans much faster, more than doubling their capacity whilst reducing their costs by 25%. This example speaks to what we see as our differentiation and why customers ultimately call us when they need help. For some time, we have talked about our opportunity to enable our customers’ digital transformation journeys. Initially, much of this work was going on behind the scenes, especially as Project Summit got underway, putting in place the systems and structures to support this transformation. The benefits of this work are now becoming more evident with notable improvements to our customer experience at a time when demand for our solution has never been greater. This materialized in the third quarter and high single growth in our digital solutions business. If you look at our physical storage business, this remains a key foundation for Iron Mountain. Customers have long trusted us to secure their information and their assets that matter most to them. They needed us to serve as their lock, if you will. But over time whilst their needs expanded beyond security and compliance, their jobs grew more complex as they now had to store, use and extract value from growing amounts of information that was in both physical and digital form. The hybrid nature of their data was preventing them from achieving speed, compliance, efficiency, and ultimately growth. A lock was no longer enough. They now needed a key to solve for this hybrid environment. Uniquely, Iron Mountain offers both the lock and the key that organizations need in order to realize competitive advantage from their paper and digital information. Plenty of companies offer a secure home for valued assets; plenty offer technology services so customers can better use those assets. But this over-specialization falls short of the needs of most customers. We hear from our customers that they want partners who can help them build singular solutions capable of solving for multiple demands of speed, cost savings, revenue opportunities, and security. This is Iron Mountain’s distinctive position. We serve as the lock and the key. Now let’s take a closer look at business trends during the third quarter. At a high level, we are pleased with the stabilization and early recovery we’re beginning to see across our service business. Service activity levels have shown a gradual improvement from the second quarter; however, similar to what we discussed last quarter, the shape of the recovery will be dependent on macro factors. The recent increases in COVID-19 cases in many parts of the world has focused states and countries to implement new restrictions to mitigate the spread of COVID-19. Whilst these factors will make the recovery uneven, our experienced management team is prepared to competently manage the volatility. Turning now to our physical storage business, total organic storage rental revenue growth accelerated modestly from last quarter, up 2.5%. This once again was driven by strong revenue management results as well as growth in our emerging markets and consumer. We continue to be very encouraged with the levels of organic storage revenue growth underscoring the durability of the physical storage business in supporting strong cash generation. Total global organic volume increased 2 million cubic feet sequentially. Contributing to this was a 3 million cubic foot increase in consumer and other and fine art storage, partly offset by a decrease in records management volume. Looking more specifically at records management organic volume, this was down 1.1 million cubic feet compared to the second quarter. Whilst still in decline, this is a significant improvement from the 3.9 million cubic foot decline last quarter, again reflecting the early signs of recovery. We continue to expect the full year organic volume to be down 1% to 1.5% and up 2.5% in terms of organic revenue based on current visibility. Turning now to our global data center segment, we are very encouraged by another strong quarter of bookings. In Q3, we leased 12.3 megawatts, bringing the year-to-date total to just over 51 megawatts. The strong leasing this year, particularly among smaller deployments, has resulted in an increase in our utilization by more than seven points to nearly 92%. Given the need for additional capacity, we have increased our development pipeline to approximately 50 megawatts, consisting of both greenfield development and further build-out of existing facilities. Moreover, in excess of 50% of our development is preleased, resulting in a strong backlog. Let me now provide a brief update on Project Summit. Our transformation program is progressing well and we are on track to realize our permanent structural cost savings of $375 million per year exiting next year. As you saw in our press release this morning, we now expect to be able to generate greater adjusted EBITDA benefits in 2020 as we have accelerated some initiatives. Most notably, these ongoing initiatives should not only significantly reduce our cost base but also make it easier for our Mountaineers to get work done, enabling them to focus on a more customer-centric approach. Some examples include driving global standardization in IT, replacing cumbersome manual processes with reliable automation, and improving the user experience whilst reducing process cycle time. We are as excited about the systems and process improvements that are Project Summit as we are about the bottom line improvement and believe the end result will be an enhanced value proposition for our customers and communities. As we shared with you last quarter, we are strongly committed to all of our stakeholders. We are focused on our culture, especially our purpose to inspire and build better lives and communities. I would also point out that we are committed at the executive level to continue on our path and accelerate improving our diversity and inclusion. In order to be a sustainable and successful company, we need to attract the best talent to drive maximum creativity through diverse and innovative thinking. I am proud to say we achieved a perfect score of 100 on the Human Rights Campaign Foundation’s 2020 Corporate Equality Index. This recognition reinforces the important work we are doing and supports our goal of building and promoting an inclusive culture that encourages our employees to bring their whole authentic selves into the workplace. As we look at our business going forward, we see opportunities as well as risks, and we are making every effort to ensure we are well placed to maximize the opportunities. We are cautious about our expectation of the pace of market recovery as we progress through 2021. In our own business, as we have shared with you on previous calls, we expect the gradual recovery in our service business to continue as economic activity recovers, leading 2021 to look similar to 2020, just in reverse in terms of quarterly progression. The work we are doing and have done to address the challenges posed by COVID-19 gives us confidence that we will come out of this positioned to consistently deliver long-term, sustainable growth. In summary, we are leveraging the opportunity in this rapidly changing environment to reaffirm our commitment to our strategy of growth through increased product offerings in the physical storage area as well as continued rapid growth in our data center and digitization areas. At the same time, we continue to exercise prudent cost control and drive further efficiency across the organizations through our transformation activities. We are proud of the progress we have made towards our transformative shift during this crisis. We are now even more enthusiastic about the speed of our future transformation given the lessons we have learned during the pandemic. I hope you all remain well, and with that I’ll turn the call over to Barry.

Thanks Bill, and thank you for joining us to discuss our third-quarter results. We are pleased with our third-quarter and year-to-date performance. In a challenging macro environment, our team delivered solid performance across each of our key financial metrics. Revenue of $1.04 billion declined 2.4% on a reported basis year-on-year, which includes a 30 basis point impact from foreign exchange. Total organic revenue declined 3.4%. Organic service revenue declined 13.5%, reflecting the continued COVID impact on our activity levels. While the pace of recovery continues to be dependent on many factors, overall we continue to see service declines moderate, reflecting an improving trajectory since the April-May time frame. For the full quarter, service trends were generally consistent with the July levels we discussed on our last call. Despite the macro headwinds, total organic storage rental revenue grew 2.5% driven by three points of revenue management and data center growth, partially offset by a 30 basis point decline in global organic volume on a trailing 12-month basis. This is a 30 basis point improvement as compared to the second quarter on a trailing 12-month basis. Adjusted EBITDA was $370 million. Adjusted EBITDA margin expanded 30 basis points year-on-year to 35.7%. The improvement reflects progress on our Summit transformation, revenue management, and favorable mix while partially offset by fixed cost deleverage on lower service revenue and higher bonus compensation accrual. In addition, in the third quarter we incurred incremental cost to keep our team safe, for example specialized cleaning of our facilities as well as purchases of personal protective equipment. We included these expenses in our adjusted EBITDA. Adjusted EPS was $0.31, down a penny from last year. AFFO declined 5.4% to $213 million. As compared to adjusted EBITDA, the decline in AFFO was primarily driven by timing of cash taxes consistent with our outlook. Turning to segment performance and starting with the global RIM organization, in the third quarter our global RIM business experienced declines in service revenue, albeit at moderating levels compared to earlier in the year. This was partially offset by storage volume growth in our faster growing markets and revenue management, which led to a total organic revenue decline of 3.9%. That together with better than planned Project Summit benefits resulted in adjusted EBITDA margin expansion of 110 basis points. In the service business, we experienced year-on-year declines of approximately 31% for new boxes inbounded and 39% for retrievals and re-files. We also continued to see a slowdown on the outgoing side as permanent withdrawals declined 28% and destructions were down 22%. In our shred business, activity declined approximately 17%. For the third quarter, our average realized paper price was 20% higher than the prior year, which was more than offset by a decline in paper tonnage, leading to a net $3 million reduction in adjusted EBITDA. As we projected on our last call, after the temporary spike in recycled paper prices in April and May, prices have taken a step down and by October, paper prices have now returned to the low levels experienced at the end of 2019. Our consumer storage business has maintained momentum and continues to be a more meaningful contributor to our overall physical storage volume growth. In the third quarter, we continued cost reduction actions, including furloughs and reduced work hours, albeit at much lower levels than earlier in the year. As service revenue expectations improve, we want to ensure we are staffed to the appropriate level so we can always support our customers. As we have discussed before, this does tend to cause incremental cost de-leverage as we bring back employees ahead of demand. We think this is the right investment to service our customers. Turning to the global data center, the business delivered organic revenue growth of 12.1% driven by prior period leasing and strong service revenue growth. This was partially offset by moderate churn of 160 basis points, in line with our target of 1% to 2% per quarter. In the fourth quarter, we are expecting slightly elevated levels of churn compared to our normal target range. In the quarter, we booked a non-recurring revenue adjustment of $1.8 million. Adjusted EBITDA margin of 45.8% was consistent with our first half trend. As Bill noted, our data center team continued to deliver strong bookings momentum, signing over 12 megawatts of new and expansion leases, bringing year-to-date bookings of 51 megawatts. This commercial success resulted in us exceeding our previous full-year target through the first nine months. For the full year, we expect to deliver more than 55 megawatts of new and expansion leasing, representing bookings growth of 45%. Of course, that includes the significant hyperscale lease in Frankfurt, and excluding that we would expect bookings growth of about 23%. This compares to our original guidance of 15 to 20 megawatts, or mid-teens booking growth. We believe we are growing considerably faster than the broader market. Going into next year, we feel good about the state of our pipeline both from a hyperscale perspective as well as our core retail co-location business supporting rich ecosystems across our platform. We believe we can lease in excess of 20 megawatts next year, which would result in mid-teens annual bookings growth. In October, we announced the formation of our joint venture with AGC Equity Partners, a greater than €300 million partnership for our fully preleased data center in Frankfurt. This venture represents an important strategic step towards our goal of identifying alternative sources of capital to fund accelerating growth as we expect proceeds will be redeployed into higher return development opportunities. As we have previously disclosed, the venture will be reflected as an unconsolidated joint venture and therefore will not flow through to revenue and EBITDA. Turning to Project Summit, in the third quarter we recognized $48 million of restructuring charges as well as an adjusted EBITDA benefit of $48 million. Through the first nine months, we have delivered $113 million of benefit. This is ahead of our prior expectations as we accelerated certain initiatives in 2020 with a particular focus on the highest return activities in response to COVID-19. As Bill referred to, we now expect the program to deliver adjusted EBITDA benefits of $165 million in 2020, approximately $150 million more in 2021, with the full program generating $375 million exiting 2021. In terms of costs related to Project Summit, we now expect to spend closer to $200 million in 2020. We continue to expect the cost to implement the full program to be approximately $450 million. Turning to cash flow and the balance sheet, we are operating from a position of significant balance sheet strength. In the third quarter, our team did a nice job delivering further cash cycle improvement with solid performance in both payables days and days sales outstanding. On a sequential basis, cash cycle improved by a full day as a result of continued DSO improvement. In August, the team executed another successful bond refinancing, issuing $1.1 billion to redeem our most restrictive outstanding debt and pay down a portion of the outstanding balance under our revolving credit facility. The continued strong support received from the fixed income community provided us the opportunity to upsize our transaction while printing the lowest coupon for 10-year notes in the company’s history. Taken together with our bond offerings in June, we issued $3.5 billion of new debt on a leverage-neutral basis, increased our weighted average maturity by over two years to nearly eight years, while only modestly increasing our weighted average cost of debt. Additionally, these new bonds are more in line with our REIT peers as they include a fixed charge coverage ratio as opposed to a debt to EBITDA covenant. Also, I think it is worth noting that we have eliminated all of our 6.5 times leverage covenant bonds, meaning our most restrictive bond covenant is now 7 times debt to EBITDA. At quarter end, we had $1.7 billion of liquidity. As a reminder, at the end of the second quarter, we had elevated levels of cash on our balance sheet due to the timing of the payoff of one of our notes from the June bond offering. We paid off the notes in early July, leaving us with a cash balance at September 30 of $152 million. We ended the quarter with net lease adjusted leverage of 5.3 times, which takes into account adjustments as described in our credit facility. Looking ahead, we expect to end the year with leverage of approximately 5.5 times, which would represent an improvement year-on-year as we make progress towards our long-term leverage range. With our strong financial position, our board of directors declared our quarterly dividend of $0.62 per share to be paid in early January. Turning to capital expenditures, our full-year expectation is now approximately $450 million, or a decrease of $75 million, reflecting development capital for our Frankfurt data center that will now be a part of our venture with AGC. Now let me share a few thoughts as to our capital allocation strategy. First, we are committed to our dividend at this sustainable level and over time, we expect to glide into our targeted AFFO payout ratio of mid-60%. Second, we are committed to our target long-term leverage range of 4.5 to 5.5 times on a net lease adjusted basis. This year, the team has made good progress toward our target. As investors know, we have been allocating significant capital to our data center business for several years, and as our pipeline continues to build with high return investment opportunities, our strategic intent is to increase the amount of capital we dedicate to the business. With that, we have considered options to generate incremental funds for investment. We view capital recycling as a good means to monetize certain assets, particularly industrial real estate to increasingly invest in our development pipeline. Industrial cap rates are at historically low levels, and we have the opportunity to structure long-term leases on favorable terms that effectively allow us to have control of the facilities, whether we lease or own. With that, in the third quarter our team accessed the market and monetized two facilities for proceeds of approximately $110 million. This brings our year-to-date proceeds to nearly $120 million, ahead of our full-year target of $100 million. With the highly favorable market backdrop together with our development pipeline, we are planning to recycle relatively more going forward, albeit what will amount to a small portion of our total industrial assets. Similarly, we view selling stabilized data center assets into a joint venture as analogous to monetizing industrial real estate assets - it represents another source of capital to redeploy into development projects. The joint venture we just announced in Frankfurt is a good example of this strategy. The JV provides us with an opportunity to boost returns on stabilized assets and provides incremental capital to allocate to projects in the development phase. Turning to our outlook for the remainder of the year, while we are not issuing official guidance today, I would like to provide an update as to our expectations excluding any material and unforeseen changes. With the continued impact of COVID, we are planning for the fourth quarter to be generally in line with the third quarter for revenue and adjusted EBITDA on a dollar basis, therefore for the full year 2020, this would lead to a low single digit revenue decline and flat to slightly positive adjusted EBITDA growth as compared to last year. This outlook includes a full-year headwind from foreign exchange rates approaching $60 million for revenue and $20 million for adjusted EBITDA. This outlook reflects our solid year-to-date performance, benefits from revenue management, accelerated Project Summit savings, and incorporates a cautious view for the fourth quarter. Given our favorable results, we now expect AFFO growth to be up low single digits for the full year. Our full-year expectations for tax rate and shares outstanding remain unchanged from our prior commentary.

Today’s first question comes from Shlomo Rosenbaum with Stifel. Please go ahead.

Hi, thank you very much. I wanted to ask about the Frankfurt joint venture. Can you provide details on the cash investment and the debt the entity will take on? I'm trying to understand the structure and how successful it has been, and if this is the type of structure we can anticipate in the future for building and potentially selling through a joint venture.

Sure, good morning and thank you for the question. We feel very positive about the Frankfurt joint venture and the team's work with the fully leased facility. We invested about $100 million at the time of closing the deal. Over time, we expect to recover nearly all of that investment, and most of it at the close. We maintain over 20% equity interest in the venture. Additionally, we will earn fees for services such as property management, development, and construction, and we plan to reinvest those proceeds into our development pipeline, which offers attractive high-return opportunities. Essentially, we view this as an opportunity to capitalize on a stabilized asset, enhance returns, and reinvest. Regarding debt, the entity will indeed have debt, which will likely cover the additional development costs, potentially amounting to a couple hundred million euros over time. We secured a very favorable rate on that debt and are confident about the development's progress. Bill, do you have anything to add?

Yes, I think we’ve talked about it, Shlomo, a few times that we see that as a path that we would like to continue to follow. If you think about you have a fully stabilized data center asset, there is a lot of pension money or funds that manage pension money that are looking for mid-digit returns on an investment basis because it’s a fully stabilized asset with a very long contract, and we were able to find that both on the debt and the equity side, so it just makes sense to take that money and then plow it back into higher return projects.

Thank you. Our next question today comes from Nate Crossett at Berenberg. Please go ahead.

Hey, good morning guys. Just following up on the JV, I was wondering if this is something that could be opened up to future projects with them, specifically what’s their appetite for further deals and why did you go with them? My second question is on the organic storage revenue line, growth of 2.5%. How much of that growth can be attributed to data center growth, and then just on price increases, I was wondering if you’re getting any pushback from customers.

In terms of AGC, they are indeed interested in these matters and actually have a similar setup with a different client in the United States. We went through a process, so I anticipate they would be keen on any future processes we undertake. I would not be surprised to see us engage further with AGC; however, this will depend on the specific location and the opportunities available. Regarding your question on storage revenue growth, it was about 1.7% when focusing solely on physical storage and excluding the data center segment, down from 2.5%. Nonetheless, it still reflects strong positive growth due to our successes driven by consumer demand. I'm very pleased that record management performed better this quarter, and consumer demand is really beginning to gain momentum. That said, we do expect some fluctuations in quarters ahead since the consumer segment is seasonal, but we believe the overall direction for both businesses is positive. On the pricing front, we are still seeing approximately three points of price increase as noted, with no signs of slowing down. There's even more potential in emerging markets that are relatively new to our revenue management practices, and we've had a good response from our customers. We are still viewed as an essential business or service by our customers, which puts us in a favorable position.

Thank you. Our next question today comes from Kevin McVeigh with Credit Suisse. Please go ahead.

Thank you. I have another question about the data center. From an accounting standpoint, will that revenue be recognized, or will it be reflected in the revenue and EBITDA, or will it be accounted for separately based on the equity joint venture?

Good morning, this is Barry. Thanks for the question. Yes, the JV will be an unconsolidated joint venture, and so the revenue and EBITDA will not be benefited from it, and you’d see it below the line, to your question. You will see a smaller amount for the management type fees that I mentioned that would flow through revenue and therefore EBITDA - that’s for things like property management, construction development. I think that answers your question, thanks.

The next question today comes from Sheila McGrath at Evercore. Please go ahead.

Yes, good morning. You mentioned capital recycling as a source of capital. I was wondering if you could give us more detail - do you mean selling industrial facilities outright and relocating your boxes or are you doing sale-leaseback, and what are your capital allocation priorities for that capital besides data centers?

Hi Sheila, this is Barry. Thanks for the question. For the most part, you’d be thinking about sales-leasebacks in terms of what we’re talking about. The couple of opportunities we monetized in the most recent quarter were also sale-leasebacks. Frankly, we’re seeing very, very strong performance from the team as it relates to cap rates in light of where the market is - think something like sub-5, even 4. Then with relatively long-term leases together with options to further renew, we have the ability to effectively control those facilities, we feel like whether we lease or own them. We feel good about that monetization strategy, and then in terms of priorities, it really is into higher return IRR projects that are in the development pipeline. As you know, and you know the business really well, that’s focused principally on data center but not exclusively there, and so you should expect us to continue to recycle and likely step up that activity some going forward.

Thank you.

You’re welcome.

Our next question today comes from Michael Funk with Bank of America. Please go ahead.

Yes, thanks and good morning, and thank you for the questions. A couple, if I could. Going back to the digital transformation that you were talking about, working with customers there, can you help us think about comparing the revenue contribution from a customer transitioning to more of a digital solution versus a physical solution, and then where you see the growth opportunity there as well?

Thank you, Michael. First, I'd like to say that the shift to digital is incremental and adds to our existing services. We don't see many customers completely abandoning physical solutions; rather, they often choose to maintain physical records for verification purposes. Digital transformation is primarily evident in how customers use the services and in the downstream processing. For example, the mortgage processing I mentioned relates to how we handle downstream processes. We have also seen success in our image on demand service. In one case, a customer in the U.K. has fully adopted this, now retrieving everything through image on demand. Whenever they need a document, we digitize it and upload it for their access. This model is more profitable for us than traditional delivery methods and is better for the environment as well. Essentially, we are engaging in more processes where we previously had less involvement, and customers are benefiting from our image on demand service, which provides a more efficient way to receive information.

Thank you, and our next question today comes from George Tong with Goldman Sachs. Please go ahead.

Hi, thanks. Good morning. I wanted to dive deeper into service activity trends during and exiting the quarter. Can you provide the rate of year-over-year decline in service activity by month during 3Q and how the declines looked in October?

Sure George, this is Barry. Thanks for the question. In July, we mentioned that total service activities decreased by mid to high 20s for the quarter. When looking at new boxes received, they averaged about 31%. October is slightly below that level, and September was the best performance of the quarter, in line with the trajectory we've been observing, which applies to other service activities as well. Moving forward, we will consider the September-October levels as indicative of our expectations, and this is reflected in our forward outlook for the third and fourth quarters, which we anticipate will be similar in terms of revenue and EBITDA.

Thank you. Our next question comes from Eric Luebchow with Wells Fargo. Please go ahead.

Great, I have two questions. The first one is about the data center business. Can you provide details on the leasing this quarter, specifically how it was divided between hyperscale and enterprise customers? Usually, hyperscale has lower returns, so has your strategy changed? Are you actively seeking more hyperscale business, or is this just a reflection of the market conditions this year? Additionally, what targeted deals are you focusing on in the data center sector, and how do they break down between those two customer segments? Then, Barry, regarding the guidance, I know you mentioned flat revenue and EBITDA for Q4. I'm curious about how that breaks down between service and storage. Should we anticipate service being flat or slightly down while storage increases, or is there anything specific to highlight for Q4? Thank you.

Thanks Eric for the question. I wouldn’t say that we’re going more for hyperscale than we’ve always espoused. I think we’ve always said for large campuses, we’d expect somewhere between 40% and 60% of the campus to be hyperscale and the rest to be co-lo or retail, but this year it may be a little bit more noticeable because the gestation period in terms of that marketing takes a while. Our relationship as we went into data centers for sure was stronger on the enterprise side, setting up project cloud for large enterprise customers than it was on the hyperscale, so this year we’re actually really pleased with the progress we’ve made in terms of building our reputation and exposure with the hyperscale. If you look at year to date, we’re about 50/50, so about 50% of that 51 megawatts that we’ve signed up here to date is hyperscale, including obviously the Frankfurt site, and about 50% is retail, so we’re really happy with the mix. But for sure you’re right, is that the cash and cash returns on hyperscale deployments are lower, but they’re longer-term contracts and it allows you to build out the facilities or the campuses faster, so it still is the right mix, we think in terms of maximizing returns.

Thanks for the question, Barry. Regarding the fourth quarter, we anticipate that the decline in service revenue will be similar in nature between the third and fourth quarters compared to the previous year, and that expectation is reflected in our outlook. You should be able to analyze the storage number accordingly. This aligns with my earlier comments to George about our activity levels being relatively stable to slightly improved. Thank you for your inquiry.

Ladies and gentlemen, as a reminder, if you’d like to ask a question, please press star then one. Today’s next question is a follow-up from Shlomo Rosenbaum with Stifel. Please go ahead.

Hi, thank you very much. Can you just comment a little bit about the step-up in fine arts volume? It’s something that we really haven’t seen for a while, and I’m wondering what’s driving that.

Thanks Shlomo. It’s actually in our entertainment services, and the real improvement in physical I think, beyond a sustainable basis, is on the consumer side, so that was more of a true-up in terms of some private vaults that we had with our entertainment services. If you look overall, if you think about the overall record management down about 1.1 million cubic feet, consumer was up 2.5, and then I would say it was kind of a one-off true-up of a little over half a million cubes with entertainment services.

Thank you. This concludes our question and answer session and today’s conference call. A digital replay of the conference will be available approximately one hour after the conclusion of this call. You may access the digital replay by dialing 877-344-7529 in the U.S. and +1-412-317-0088 internationally. You will be prompted to enter the replay access code, which will be 10147841. Please record your name and company when joining. Thank you for attending today’s presentation. You may now disconnect.