Iron Mountain Incorporated Q2 FY2020 Earnings Call

· Earnings call transcript and AI-powered summary

Key Highlights

  • Q2 revenue of $982 million decreased 7.9% year-over-year on a reported basis and 5.6% on a constant-currency basis, driven primarily by a 21% decline in service revenue due to COVID-19 disruptions.
  • Storage rental revenue grew 3.7% year-over-year on a constant-currency basis, demonstrating continued durability in the core business.
  • Adjusted EBITDA was $343 million, down 2.3% year-over-year; on a constant-currency basis, EBITDA was flat despite revenue declines, reflecting early Project Summit benefits and cost discipline.
  • Adjusted EBITDA margin expanded 200 basis points year-over-year to 34.9%.
  • AFFO grew 19% year-over-year to $249 million, driven by a sizable tax refund.
  • Global service activity declined 32% in Q2 versus the prior year, with monthly declines of 37% in April, 38% in May, and 21% in June.

COVID-19 Impact & Operational Response

  • 100% of records management facilities are open globally, though many customers continue to operate at reduced capacity.
  • Approximately 20% of the workforce remains impacted by furloughs or reduced hours, down from one-third earlier in the year.
  • Service volumes improved sequentially from April lows but remain materially below normal levels.
  • Cash collections improved year-over-year, with June collections exceeding June 2019 despite lower revenue.

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Operator: Good morning, and welcome to the Iron Mountain Second Quarter 2020 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please also 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. Greer Aviv: Thank you, Rocco. Good morning and welcome to our second quarter 2020 earnings conference call. We have provided the user-controlled slides on our Investor Relations website. We will also be providing a link to today’s webcast and earnings 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 successfully navigating the COVID-19 environment, how we have continued to see durability in our core Storage business, how we have continued to see strength in our Data Center business, how we are progressing on our Transformation Program with Project Summit, and how we as an organization are reflecting and acting on the recent events, highlighting continued social injustice with regards diversity broadly and of black population specifically. After our prepared remarks, we’ll open up the lines for Q&A. Today’s earnings materials will contain forward-looking statements. We hav

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