Good morning and welcome to the Iron Mountain third quarter 2022 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 on your telephone keypad. After today’s presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. We will limit analysts to one question, and you can re-join the queue. Please note this event is being recorded. I would now like to turn the conference over to Gillian Tiltman, Senior Vice President and Head of Investor Relations. Please go ahead.

Thanks Sarah. Good morning and welcome to our third quarter 2022 earnings conference call. On today’s call, we will refer to materials available on our Investor Relations website. We’re joined here today by Bill Meany, President and Chief Executive Officer, and Barry Hytinen, our Executive Vice President and Chief Financial Officer. After prepared remarks, we’ll open up the lines for Q&A. Today’s earnings materials contain forward-looking statements, including statements regarding our expectations. All 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 quarterly report on Form 10-Q 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 the reconciliations to these measures in our supplemental financial information. With that, I’ll turn the call over to Bill.

Thank you Gillian, and we appreciate everyone taking the time to join us for our third quarter results. We are pleased to share with you another outstanding quarter, representing the durability and growth of our business model as we continue to navigate successfully through significant headwinds, including the strength of the U.S. dollar, COVID shutdowns in China, and ongoing global tensions. Our team of 25,000 dedicated Mountaineers continues to empower our customers with solutions to enable them to transform their businesses. In the third quarter on a reported basis, we delivered revenue of $1.29 billion, representing 14% total organic revenue growth. We are pleased to have achieved all-time record adjusted EBITDA of $469 million. Since last year, the U.S. dollar has strengthened significantly, and excluding its impact on a like-for-like basis, this quarter our revenue was approximately $1.33 billion and EBITDA was $484 million, representing growth of 18% and 16% respectively. These results demonstrate the inherent growth and strength of our business and are further proof of why we continue to be so encouraged by the increased demand for our services across the markets in which we operate. Positive volume and revenue management trends continued to benefit us this quarter, as reflected in our organic storage rental revenue growth of 9.7%. As we shared with you in September at our investor event, we are executing well on our new Project Matterhorn operating model, the next transformational phase of Iron Mountain’s growth journey. Building off an already solid foundation, we believe Matterhorn is a cornerstone initiative that will allow us to maintain and capitalize on the positive momentum we have seen over the last several quarters. Through our fully funded plan’s ability to invest 16% of revenue over the next four years, we believe we will further strengthen Iron Mountain as a market leader across our expanded total addressable market, our diversified global footprint, and our enhanced suite of innovative solutions. Our strong double-digit organic growth is evidence of the early progress we are making on our initiatives, which gives us the momentum and confidence in our ability to deliver higher levels of profitable growth over the next several years. Now I’d like to share a few highlights of some recent customer wins that lie beneath the top and bottom line growth. Turning to our digital solutions business, we helped a global European bank evolve to a paperless branch experience to drive enhanced customer service with 360-degree customer data, traceable and audible digital records, and reduced manual efforts for their tellers. The customer has a footprint of more than 400 branches in the U.S. with each branch storing decades’ worth of customer records on premises. We are partnering with the bank to digitize all customer records across their U.S. branches in under a year. The files will be securely transferred and imaged at Iron Mountain digital supercenters indexing and tagged with critical metadata using machine learning and then placed into Insight, Iron Mountain’s digital repository. Insight will be provided to over 3,500 tellers across the bank to access these digitized customer records quickly and securely. This win is just one example of how we are helping our customers evolve their businesses through digitization, resulting in quicker, easier and more secure access to their most important information for years to come. Also in digital solutions, we won a contract with a state court in Brazil from an incumbent provider. To comply with the Brazilian National Council of Justice’s 100% Digital initiative, all state courts are required to convert active lawsuit documents from physical to digital by 2023. As such, they turned to Iron Mountain for help to implement and complete the conversion process within the mandated time frame whilst adhering to specific quality requirements. While this is in and of itself a terrific win, we are currently exploring further opportunities with this customer. Moving to our asset life cycle management segment, I’d like to share an innovative win this quarter. Our strong existing relationships and coordinated efforts led to a large asset life cycle management win to serve 700 locations in the United States and Canada for a large healthcare company. Prior to the deal, the customer had primarily engaged with us through our records business. The first phase of the partnership included retrieval of IT equipment and plans for a forthcoming data center refresh. We expect to process more than 13,000 assets in the first year. Moving onto the impact of COVID shutdowns in China on the ITRenew business, we see continued constraints in the downstream demand for recycled IT components. As a result, we expect to see similar levels of ITRenew sell-through in Q4 as in Q3. With the continued increase of the backlog of components, we remain bullish on the prospects for the business once the situation normalizes. In our fine arts business, we are pleased to highlight a win with an internationally renowned art museum. The customer turned to our team to assist them with multiple onsite projects related to renovations the museum will undergo throughout a three-year period. Lacking the internal resources to staff these projects, they were seeking a trusted partner to support them in providing additional art handling services. By leveraging our experience and successful track record of prior engagements with the customer, we were able to offer a compelling proposal that secured this very exciting initiative. In the quarter, this business grew by 17% year-over-year, which is a reflection of the strong underlying business. Shifting to the data center business, we are pleased to have booked 7 megawatts of leasing in this quarter, bringing total bookings year-to-date to 125 megawatts. As a result, we expect to exceed our previous projection of 130 megawatts for new leases for the year. One of the wins this quarter included a cross-sell deal with a large non-profit community health provider that needed to close down their internal data center and establish a disaster recovery site. As a long-term taped backup and records management customer of Iron Mountain, they reached out to their account team, who engaged with our data center team. As a result, the customer signed a co-location contract which included internet services and multiple cross-connects within 45 days. The convenience of having a single provider for all their physical and digital storage needs was a critical selling point in addition to Iron Mountain’s rigorous data center compliance program, which is essential for the customer given the highly regulated market in which they operate. Our team’s flexibility and willingness to collaborate across divisions to customize solutions for our customers provides a superior experience and ultimately is what made us stand out as their partner of choice. From a development perspective, as discussed in September at our investor event, we have continued to build our land bank in key strategic markets to support future growth with several notable expansion deals. As previously announced, we have added buildable capacity in the Phoenix, Arizona market with the purchase of adjacent land to our existing campus. Based on current design plans, the parcel can support 36 megawatts and includes a 56 MVA substation on site. This is an important expansion in this dynamic market as our current campus at 89 megawatts is nearly fully leased and/or committed. We also expanded our footprint in India with the securing of land and power for 20 megawatts of additional capacity in Mumbai. We remain excited about the growth potential in this strategic emerging market both for our data center business, as well for the enterprise as a whole. In total, we currently have 52 megawatts of buildable capacity across five markets in India. Subsequent to the end of the third quarter, we acquired a data center campus in Madrid, Spain, marking our entry into the Iberian market. The asset is a uniquely scaled data center campus with an existing 3 megawatt building and fully permitted expansion potential of 79 megawatts. We view Madrid as a very important European market as it is poised to capture significant growth from supply-constrained markets. With these additions to our portfolio, our total capacity is now nearly 670 megawatts. The wins I’ve shared with you today demonstrate the breadth and depth of our business, our focus on customer centricity and providing innovative, transformative solutions, and the strength of our global commercial platform driven by our Matterhorn initiative. I am very proud of our outstanding team who are the bedrock of our company and the way in which we come together to drive and deliver our growth journey. Our business model is highly profitable, our pipeline is strong, our vision is clear, and we continue to climb on. With that, I’ll turn the call over to Barry.

Thanks Bill, and thank you all for joining us today to discuss our results. In the third quarter, our team delivered solid performance, meeting top line projections while exceeding expectations for both EBITDA and AFFO. On a reported basis, revenue of $1.29 billion grew 14% year-on-year, or 18% excluding the effects of the stronger U.S. dollar. A key highlight in the quarter is our organic storage revenue, which grew 9.7% and represents a sequential improvement of 150 basis points. Total service revenue increased 28% to $527 million, driven by organic growth of 22%. These results reflect the strong performance of our commercial team and their laser focus on selling the full suite of products and solutions across our portfolio. Adjusted EBITDA was $469 million, up 12% on a reported basis and up over 16% year-on-year on a constant currency basis. As the dollar strengthened significantly since the time of our last call, I think it will be helpful to provide a bit more context. As compared to the rates we were using in August, the stronger dollar resulted in an incremental headwind in the third quarter of approximately $10 million to revenue and $3 million to EBITDA. Under the same FX rates we were using in our August projection, third quarter revenue and adjusted EBITDA would have been approximately $1.3 billion and $472 million respectively. Adjusted EBITDA margin was better than we projected and improved 120 basis points sequentially, driven by revenue management and mix. AFFO was $288 million or $0.98 on a per-share basis, up $25 million and $0.08 respectively from the third quarter of last year. Due to the strengthening dollar, there was an approximate $3 million impact to AFFO versus the rates we used in our August projection. Now turning to segment performance, in the third quarter our global RIM business delivered revenue of $1.1 billion, an increase of $93 million from last year or 9% on a reported basis. On an organic constant currency basis, revenue increased 14%. In the third quarter, our team continued to drive accelerating organic growth both in storage and services. Global RIM adjusted EBITDA was $484 million, an increase of $48 million year-on-year. Turning to our global data center business, we are pleased to report another successful quarter. Our data center storage revenue grew 33% year-on-year. On a total revenue basis, we delivered 13% year-on-year growth. Now as a reminder, in the second half of 2021, we provided unique fit-out services for our Frankfurt joint venture. In the third quarter of 2021, those services resulted in approximately $14 million of revenue. Excluding those fit-out services, on a like-for-like basis our total data center revenue grew in excess of 30%. We completed 7 megawatts of new and expansion leasing, and with the strength of our expanding pipeline, we now expect to exceed our leasing projection of 130 megawatts for the full year. As Bill detailed earlier, we are continuing to expand our data center platform into new markets. We closed the Madrid data center transaction early in the fourth quarter for an initial purchase price of $78 million, which is subject to an additional $10 million earn-out. Turning to corporate and other, revenue increased 22% on an organic basis and nearly 120% in total, driven by our ALM business and continued strength in fine arts. Within ALM, our organic IT asset disposition business continued on its strong trajectory, growing in excess of 20% year-on-year. Turning to ITRenew, revenue was down sequentially, as we projected on our last call. The business was $5 million below that projection as the lockdowns in China persisted throughout the quarter. We are projecting revenue levels for our total ALM business in the fourth quarter to be consistent with the third quarter. Turning to capital, total expenditures were $309 million in the third quarter. We deployed $270 million of growth capex and $39 million of recurring. Turning to the balance sheet, with strong EBITDA performance we ended the quarter with net lease adjusted leverage of 5.2 times, an improvement versus last quarter, and I think it is worth noting this marked our lowest leverage level since 2017. As we have said before, we are committed to our long-term range of 4.5 to 5.5 times, and we now expect to exit the year at 5.2 times. Our board of directors declared our quarterly dividend of $0.62 per share to be paid in early January. On a trailing four-quarter basis, our payout ratio is now 66%, approaching our long-term target range of low to mid-60s percent. Now let me share our projections for the fourth quarter, which incorporate recent FX rates. We expect total revenue to be approximately $1.3 billion, which represents 12% growth year-on-year. This would be a high teens growth rate on a constant currency basis. We expect adjusted EBITDA to be approximately $470 million in the fourth quarter, which represents 9% year-on-year growth, including the negative impact of FX. We expect AFFO to be approximately $280 million, which is $0.94 on a per-share basis. As FX rates have moved significantly both this year and in the most recent quarter, we feel it would be helpful to provide a bit more context. With the FX rates that we used at the time of our August earnings release, our projections for the fourth quarter would be revenue in excess of $1.32 billion, EBITDA of approximately $480 million, AFFO of approximately $290 million, and AFFO per share of approximately $0.97. As compared to our full year guidance ranges, with our year-to-date performance and our fourth quarter projection, revenue is at the low end and adjusted EBITDA is at the midpoint. I would like to highlight that on the same FX rates we were using at the start of the year, we estimate our full-year revenue would be in excess of the midpoint of our range and adjusted EBITDA would be beyond the high end of our range. To conclude, our results reflect the strength of our business model and our teams’ collective execution and focus on growth and operating leverage. I’d like to take this opportunity to thank our entire team for their strong performance and our drive to achieve our ambitions. With that, Operator, please open the line for Q&A.

Our first question comes from Shlomo Rosenbaum with Stifel. Please go ahead.

Hi, thank you for taking my question. You mentioned last quarter that you were talking about doing a third quarter pricing increase, and it’s usually something that happens, I think, more at the end of the year. Could you give us a little bit more color around the success of your ability to put through some more pricing and its implications for 2023?

Okay, thanks, Shlomo. This is Barry. I appreciate the question. We implemented the revenue management actions we discussed in the last call in September, and you can see the effects starting to show in the quarterly results. As you may have noticed, the growth from revenue management has accelerated this quarter and has been improving throughout the year. For our global RIM business, it was likely around 6.5, which is an increase from about 5 earlier in the year, indicating steady progress. Given the macro environment and the positive response we've had regarding our revenue management strategies, I expect we will maintain this level as we move into 2023. We are preparing similar revenue management actions going forward, and the reception has remained consistent with what we've experienced over the years. This reflects the value we are providing to our customers. Thanks for the question.

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

Great, thanks so much. Barry, can you clarify the numbers for ITRenew? How does the full year guidance compare to your initial guidance, and was the offset related to the data center deal? It seems like you're maintaining your guidance despite some decline in IT and foreign exchange. What is the offset in the guidance?

Okay, thanks Kevin, good morning. Thanks for the questions. On ITRenew, we certainly, as we’ve said throughout the year, have been experiencing challenges, like so many other companies that sell into China. With the COVID lockdowns that have persisted and then at one level or another throughout the second half and really throughout the year, that has been a challenge as it relates to our revenue, as Bill and I mentioned in the prepared remarks, we’ve assumed that ITRenew will be and total ALM business will be pretty consistent third quarter and fourth quarter at this level. In total, ITRenew was of the order of about $45 million of revenue in the third quarter, and that was, as I said in the prepared remarks, down about $5 million or $6 million from the projection we were using at that time. Thanks for the call-out as it relates to the total business continuing to perform well. You mentioned the data center deal - just to be clear, that business is only 3 megawatts today, so that is not a driver of revenue performance in the fourth quarter at all, although we are really bullish on that opportunity because Madrid is a market that we’ve wanted to play in for some time and it’s a unique market, as I’m sure you know, from the standpoint of where it is with the energy grid. It’s not constrained like so many other markets in Europe, and we think it is, as a market, one that has considerable opportunity. Our pipeline there is quite good, so we’ll be developing that site and we feel really good about the asset. In terms of the fourth quarter and our ability to continue to deliver strong growth, that’s a testament to our team’s strong performance across our operations, so in our global records business we’ll continue to see the benefits from revenue management, as I mentioned. We’ve had very strong services performance, and we continue to see a ramping business in our data center. Thanks so much for the question, Kevin.

Our next question comes from George Tong with Goldman Sachs. Please go ahead.

Hi, thanks. Good morning. Wanted to drill into the services revenue performance. The growth was very strong in the quarter, up 22% organically. I wanted to see what the sustainability of the drivers are, if you could talk a little bit about contributions from the growth portfolio, particularly digital services, overall services revenue growth, and any other factors such as paper prices or traditional service trends that might impact the outlook for services revenue performance. Thank you.

Thanks George for the question. We feel really good, as you would have noted, that over the last number of quarters, we’ve been consistently showing north of 20% growth both on our IT disposal business - you know, the traditional part or the organic portion of our asset life cycle management business has consistently been 20% or better, and our digital service business continues to go from strength to strength again, north of 20%. Those are really two of the key drivers driving that overall level of service growth. If anything, we see in both of those areas, the interest in customers, whether it’s helping them at the end-of-life in some of their assets, make sure that it is destroyed in a way that’s secure, or in the digital service business, we see more and more customer interest and actually customer contracting on us helping them with their digital transformation. I think the current environment, we see more rather than less of both of those things, so we feel really good about being able to maintain that kind of level of growth, which is all part of the Matterhorn project that we outlined at our investor event a few weeks ago, that when you put it all together, it drives what we see over the next coming years - you know, consistent growth rates that turn into a CAGR of 10% or better.

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

Hi, thanks for taking the questions. Two, if I could, and probably both for Barry. Just wanted to return to your investor day from September. Maybe you could give us a little color - the $450 million of cash costs you expect to incur over three years as part of Matterhorn, a little more insight into what those costs are, where they’ll be spent to help drive some of the growth rates you laid out longer term. Then secondly, just as you think about capital allocation, if you could talk about your funding plans to achieve the longer-term capex guide. I know your long-term debt yields are above 7% today, and obviously the forward curve on short-term rates continues to march higher, so just wondering how you’re thinking about managing fixed to floating mix as you fund your elevated data center capex pipeline. Thank you.

Okay, thank you Eric for the questions. A couple of ones in there. On Matterhorn, the costs that we spoke about, as you know, we’re moving to a new operating model that Bill just touched on briefly, that being with a global commercial organization, also a global operations function. In those cases, that is a pretty substantial change for us in terms of the way we go to market. On the commercial side, it’s really putting together an organization that is singularly focused on serving our customers on a solution basis and really developing a tremendous amount of excellence around all things commercial. Then, we are also constructing a global operations function which is meant to serve our customers effectively and drive significant customer satisfaction and high quality service, while also creating and furthering the shared services backbone that we have to support the entire organization. As well, we are moving to a business unit function, that being, as we discussed at the investor day event, storage and asset life cycle management and data center, as you know, so those are pretty substantial changes. We think of it, as Bill mentioned, as a transformation, and with that, probably about one-third of those costs, Eric, will be maybe slightly less, will be specific to enablement to align and transform into that commercial operating function. Then the bulk of the cost will be around in fact transforming the broader operating model, which would include costs that you would expect with respect to that kind of transformation, including activities such as restructuring and furthering our transformation. Thanks for that question. I guess I’ll just note, as I said at the investor event, we would expect to be approaching the run rate of that level in the fourth quarter as we continue to move into the Matterhorn model, as Bill mentioned in his prepared remarks. In terms of the funding plan, I appreciate that question as well. Just as a highlight for those that weren’t able to join the investor meeting, we noted that we expect a five-year revenue CAGR of 10% and a five-year EBITDA CAGR of 10%, AFFO of 8%, and that equates to AFFO per share of, let’s say, 7%, as we said in our slides this morning. With that, it’s a fully funded capital plan through EBITDA expansion and leverage within our target range. You note that rates have moved up recently, and I’ll just note that we consider ourselves in a very good position. We have $1.5 billion of liquidity and we’re about 80% fixed, as you know, Eric, and so from time to time, we will continue to term out debt but in light of the very good position we’re in with respect to availability on our revolver and the lowest levels of leverage we’ve experienced since 2017, we can really pick our timing as it relates to that over time, so we will be funding through expansion of EBITDA and leverage within our target range. I appreciate the questions, Eric.

Our next question comes from Wendy Ma with Evercore. Please go ahead.

Good morning everyone. Thank you for taking my questions. For Q3, the leasing of data centers seemed a little bit softer compared to historical levels. Could you please talk about the demand trends in your key markets given the current slowing down economic environment, and also, how should we think about the leasing activity maybe heading into 2023? Thanks.

Good morning, Wendy, thank you for your question. We are very excited and optimistic about our data center businesses. We expect to surpass the 130 megawatts we previously forecasted in our last call, and we are experiencing similar momentum as we move into next year. Our pipeline is not showing any signs of slowing down as we approach 2023. While there might be some variability in leasing activity from quarter to quarter due to the size of these contracts, we are seeing ongoing strength and momentum as we head into next year. Additionally, we are expanding in key markets such as Phoenix, where our current campus is almost fully leased. As Barry mentioned, there is an additional 3 megawatts associated with the over 70 megawatts of capacity we acquired in Madrid, which aligns with our customer discussions and anticipated activity. We continue to strengthen our business and build significant momentum as we move into 2023.

Our next question comes from Andrew Steinerman with JP Morgan. Please go ahead.

Hi. Barry, when talking about the fourth quarter revenue guide of $1.3 billion, could you tell us how that shakes out in terms of organic constant currency revenue growth, and if you could make a comment between storage and service?

Sure. Hi Andrew, good morning, and thanks for the questions. When we look at the fourth quarter revenue rate, that being of the order of high teens growth on a constant currency basis, and something of the order of 17%, 18%, so very strong continuation of trend. I’ll note that that’s basically the rate we’ve been running at through the year, so it’s a very good continuation of trend. From the standpoint of storage and services, as Bill mentioned in response to one of the earlier questions, our services business continues to go from strength to strength. That’s thanks to things like our digital solutions and our historic IT asset disposition business, which is growing in excess of 20% - I think 25% in the most recent quarter, very strong performance. We view many of our businesses as playing in markets that are quite large, growing secularly at double-digit rates, and that we expect to continue to take market share in, so for the fourth quarter, you should expect continued strong performance from both storage and services throughout the business. The only thing I would further underline is that for ITRenew and ALM in general, we’ve assumed it would be consistent on a sequential basis, so you can work into the organic if you’d like from that. Thank you for the question.

Again, if you’d like to ask a question, please press star then one. Our next question comes from Brendan Lynch with Barclays. Please go ahead.

Good morning, thanks for taking my question. I wanted to just dig in a little bit on your power cost exposure for the DC business. I believe you’re largely hedged, but maybe you could just give us a bit of color on how you hedged for this exposure and what the order of magnitude is that you expect for costs to go up for your customers specifically. Thank you.

Okay, maybe I’ll take the first part of that, and if Bill wants to add, he can. Thank you Brendan for the question, and appreciate those points that you’re asking about. I think our team has done quite an effective job with respect to hedging and getting us into a place where we’re in a very good position as we work into 2023 as it relates to power. To give you a sense, Brendan, obviously this is a little bit based on forecast of next year, but we estimate that we were in excess of 95% locked in terms of pricing at this point for power; in fact, it’s probably closer to 99%. I would say the other important point is when you look at our customer base, we have the ability to directly pass power pricing onto roughly 90% of the customers, and that’s either through pass-through or surcharge, for example to retail customers, and in many cases that’s month to month as we’ve highlighted before. For those that we don’t have that direct ability, of course we have the ability to adjust pricing on renewals, and that’s principally in the retail portion of our business. As you know, those are relatively shorter contracts, so we have the ability to price quite frequently or consistently with power, so it’s not a huge headwind. I think the fact that the team has continued to drive gross margins to being consistent, in fact in the most recent quarter up several hundred basis points in our data center business, is a very good testament to the fact that we’re managing the impact of power, which as you know is a margin drag as its increasing, so we feel very good about where we are going into next year as it relates to power. As it relates to pricing more broadly, the thing I would point you to is if you look at our mark-to-market, it has continued to improve throughout the year, and as you know, that’s a lagging indicator in light of when the contracts for renewals were signed, so we continue to see a very healthy environment for pricing within data center, at least within the markets that we operate in there, generally speaking. I would say there’s more demand than supply. We feel very well positioned as it relates to the assets we have and our ability to continue to price. I’ll also note, of course, that construction costs are up and so when you look across the platform of our data center business, we feel very good about how the team is performing.

I would like to emphasize that managing customer relationships has been a challenge, as highlighted by Barry. We are seeing improvements in our margins, which reflects our operational efficiency. We have successfully aligned our price increases with energy costs, so this has not negatively impacted us. However, it has been a significant concern for our customers. Recently, I spoke with a large ecommerce company based in Asia, which we serve globally, and a major financial institution. Even though we pass the power costs onto them, the uncertainty regarding budgets has been tough for them. To address this, we have been collaborating with several customers to pre-purchase power or secure contracts that provide them with predictability in their energy expenses over the next year. We are actively working to reduce the volatility and difficulties they face, and so far, we are seeing positive results.

This concludes our question and answer session and our Iron Mountain third quarter 2022 earnings conference call. Thank you for attending today’s presentation. You may now disconnect.