Earnings

Iron Mountain CEO Says It Isn't Building Data Centers In Texas, Ohio Or Georgia, Where Rules Are Tightening

Bill Meaney also projected another 20%-plus year for data centers in 2027, and shares fell 10.37% in Thursday trading.

Matteo Parrino Jonathan Ponciano

Matteo Parrino, Jonathan Ponciano

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Iron Mountain CEO Says It Isn't Building Data Centers In Texas, Ohio Or Georgia, Where Rules Are Tightening

Iron Mountain, which stores records and runs data centers, is not developing sites in the three states CEO Bill Meaney named as probably the most restrictive on data centers, he told analysts on the company's third-quarter earnings call Thursday. Shares fell 10.37% to $106.36 in Thursday trading, and a Yahoo Finance report said fourth-quarter and full-year revenue guidance came in below consensus.

Pushback questions, state by state

A Wells Fargo analyst asked whether the broad political pushback on data centers, after the elections, is affecting the development pipeline or changing how the company underwrites powered land. A Jefferies analyst asked whether permitting could push projects further out.

Meaney said the states probably most restrictive now, and looking at more rules, are "Texas, Ohio, and Georgia." "We're not developing any sites in those three markets," he said.

He said about 325 megawatts due to energize within the next 24 months is fully permitted, with energy committed to those sites. About two-thirds of it is the Richmond campus, with the rest in Northern Virginia, India and Europe. Land-bank sites beyond that window already have energy commitments and are in permitting, and Meaney said the company sees no issues getting them approved.

Meaney added that Iron Mountain's records business gives it good local contacts in most places it operates, and that it has long been seen as a good local partner.

Another 20% year for data centers

Meaney said next year "will be another 20% plus year for data center," and that he sees no slowdown from the land bank. Over 90% of the company's leasing now goes to hyperscalers, he said, after it added two new hyperscale customers this quarter.

CFO Barry Hytinen said that once the signed backlog is fully energized and developed, it would deliver 1.7, "nearly 1.8 billion" of annual revenue, before any additional leasing or pricing.

Data center revenue rose 34% to $274 million in the quarter, and the company leased a record 102 megawatts. Overall revenue was $1.99 billion, up 13%. Hytinen said the company raised its full-year revenue outlook to $7.95 billion to $8.02 billion, and expects fourth-quarter revenue of about $2.03 billion.

March investor meeting

Iron Mountain will hold an investor meeting in early March to lay out longer-term plans. Meaney said it will include tours of a records center and an asset lifecycle management facility, the business that handles retired IT equipment.

Meaney said the growth businesses, now closer to 35% of the company, could reach 50% within a few years.

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