Third Bridge 专家访谈称 Iron Mountain 传统档案业务短期稳健但数字化转型仍有挑战

[[00:01:45]]
Iron Mountain's core global RIM [records and information management] business continues to show robust performance, reporting reported and organic revenue growth of 11.8% and 8.3%, respectively, in Q1 2026. What accounts for the strength of the company's core global RIM business? Is that growth range sustainable over the next 12 months?

[[00:02:19]]
The core global RIM business starting there, the reason why clients select Iron Mountain is because of trust and stability so that they understand that there is either regulatory or there's an operational risk that requires them to maintain that content. I think that their role within the market is going to remain. I think that they'll see lesser competition within that core RIM business, at least within the US and some of the other areas where they'll be challenged is the fact that quite often, a lot of that traditional retention will shift to digital, but that should hopefully help them build out their digital as well as their data centre business and really be able to still deliver that transition of trust and confidence for the client, but just with data rather than paper.

[[00:03:34]]
Iron Mountain's organic volumes increased 0.5% YoY in Q1 2026. Mature geographic markets, such as North America or western Europe, face the threat of ongoing paper reduction as the world becomes increasingly digital. This has prompted reliance on pricing actions and international emerging markets, where management has frequently highlighted expansions in LATAM or APAC as supporting long-term volume stability. How should investors think about this dynamic in terms of the volume reductions in the traditional record business?

[[00:04:37]]
From the traditional record business, I think that you're going to see and it's interesting because you've seen QoQ, QoQ, QoQ growth for Iron Mountain within that traditional RIM business. I think that's going to best case level out, worst case decline over the next five years within some of those sectors that you spoke to as far as western US, North America. There are still pockets that Iron Mountain can focus on for that RIM business. Those pockets would be, if I can just use an example, if I look at the Mexican marketplace as far as how they support the auto financing scenario, they are still largely physical, still largely paper driven. For you and I, most likely in most recent transactions, we've had to purchase cars, most likely have been a glass, so that Iron Mountain is uniquely positioned that the clients understand the need to preserve that data, at least in my example I just gave you for the auto loan.

If it's paper, what does that mean? That's a growth opportunity for RIM, if it's documents, I should say. If it's data, the client still has that retention responsibility for the data. The reason why that's important is that data not only represents pure data, but that represents the enforceability of that asset. It represents the marketability of that asset so that if they want to act upon that loan as an asset rather than a pure transaction, they need to be able to secure and identify that that is a single activity that can be acted upon.

[[00:06:49]]
In North America or western Europe, regulated enterprise accounts in financial services and healthcare sectors form the backbone of the global RIM business due to legal record-keeping mandates. Many institutions have accelerated their paperless initiatives to eliminate hard copy document creation at the source. Could you walk us through this dynamic? What proportion of some of the top enterprise accounts were executing the zero paper intake initiatives that were visibly reducing incoming box deposit rates?

[[00:07:39]]
I'm going to answer that really from a couple of different vantage points. From a strategy, whiteboard, 100% of customers. Actually I have that from a C-level initiative. How do we move to a paperless environment. There are some challenges as you cited and there are some limitations, especially as it relates to regulatory and compliance what needs to be held as an asset. If I can give another example there, if I speak at the mortgage industry itself, the mortgage industry created a cottage industry, probably around 30 years ago, might actually be 35 years ago now for the mortgage doc custody. Why is that relevant to our conversation today? The reason why it is, is because that cottage industry for doc custody now retains the physical assets. They're going to retain the physical mortgage recorded document. They're going to retain the live note as well as other supporting documents within that file. The document custodians hold today in the physical assets well over 50 million files.

That's a scenario where if I started with the whiteboard comment, all C-level have that strategy. Within the mortgage industry itself, the mortgage industry is still 85% paper transactions today, so that only 15% are e-signed. Bringing that back to this conversation. That means that the industry requirements, Fannie, Freddie and Ginnie really mandates those C-level conversations they say, "Even though you guys have that strategy in place and you want to attain that, you have the limitations if a loan is closed on paper to maintain those physical assets." Those are some of the challenges that will be in place. Having said that, if you look at, and again, moving forward with that example, e-signing within mortgage, it has moved forward very slowly from around 5% to 15% so that eventually, that's going to eliminate the need to retain those physical assets. The US is being in our marketplace is very slow to adopt, quick to create, slow to adopt and such, if I use the exact same example for the Australian marketplace, over five years' time, they moved over 95% in e-signing because they set out mandates as far as by X date will reach such level.

They did that over a very short period of time but because that environment still exists within the US that adoption is a challenge, that actually helps to sustain the RIM business. I know I got a little bit off target there, but I want to give an example as far as why the RIM business may be sustainable for slightly longer than one would think.

[[00:11:21]]
What percentage of the mortgage industry would operate under e-signing vs traditional paper transactions in 3-5 years?

[[00:11:52]]
In that scenario today, within 3-5 years from now, I think you're going to see an acceleration, a dramatic acceleration. I would be hopeful for the industry that you'd be looking for at least, I was going to say 80%, but I want to be more cautious in that comment, so let's say, over 70% of mortgage transactions would be e-signed. All of the capabilities are there from an enforceability regulatory, and it's been challenged through the courts as well. It's been challenged over, and this is the frightening part. It's been challenged over 20 years. It was actually 20 years ago that e-mortgages were regulatory enabled, and we still have only a 15% adoption rate. If I spoke to the primary market makers of Fannie, Freddie and Ginnie, I had the opportunity to do so probably around two years ago, I said, "Help me understand. How can we be at that adoption rate? Candidly, it's an embarrassment for our industry that we've been so slow to adopt." Their response was "We feel that the borrower will mandate a digital experience in the near future, and that will help dictate their buying decision."

[[00:13:29]]
Do you think the borrower is still looking for a paper transaction as opposed to the e-signing? Has that impeded the progress of e-signing within the mortgage industry in the instance where the borrower is used to the cultural norm of a traditional paper transaction?

[[00:13:59]]
No, I would take the contra view. I would say they don't want that experience. However, what is the borrower looking to do? Borrower is looking to purchase a home or refinance for a lower payment or refinance to reduce an interest rate. Those are the three key levers. If you look at the overall mortgage process and life cycle, the closing experience is such a minimal aspect of the overall process. They're like, "Well, we'll do whatever we need to do. Don't really care that much." Having said that, if it was a regular occurrence, keep in mind, a mortgage flips maybe 6.5-7 years, if it was regular occurrence, when you and I go to Home Depot, we're not handing over a charge card and signing a paper charge slip, it's been a long time because we have that ongoing experience that we can control that expectation, that experience that we want within the mortgage sector. Again, my view is different than what I told you, Fannie, Freddie and Ginnie said. My view is the customer really isn't… They're inconvenienced. They're slightly irritated, but it doesn't overwhelm their decision to buy that house, refinance for a lower payment or refinance for a lower interest rate.

[[00:15:27]]
Iron Mountain has exhibited strong public sector bookings, particularly in Q1 2026. Revenues from the company's contract with the Department of the Treasury come in at USD 9m, with an expectation for those to ramp to USD 45m for full-year 2026. What is your view regarding the near- and long-term outlook the federal opportunity represents for the records business, digital solutions business or both?

[[00:16:15]]
I think the near term is very, very healthy. Near term, let's define that for the next five years. I think the longer term is going to be dependent on how Iron Mountain can take that reputation of trust and convey that into a digital experience. What drives that comment? If we look at and there's nothing non-public here because it was all over the news. If we looked at the management of the treasury and how Iron Mountain stored those files, candidly, the industry shook their heads because the administration stated the files were left in caves and stored in caves, and it took folks 3-4 months, whatever the case might be, to actually get their retirement pension set up. That's not entirely true. What that did do is once again, it motivated and it accelerated because of embarrassment quite candidly, and that was Musk and others at that time. They said this process needs to change now. Iron Mountain was inherently involved with the process, and you're well aware of that, of course.

With that, so that created a short-term need that, "Hey, you know what, we are managing these files the same way we did 30 years ago. Not only is that inefficient, ineffective, non-compliant, it's also slightly embarrassment to the US public, so let's go ahead and digitise those immediately." That's why you see that short-term spike because once again, let me draw a parallel to the government and the adoption rate within the mortgage sector. When you have that backlog in the mortgage sector, it may be those 50 million files that are still on shelves today because they're managing those the same way they did 30 years ago. The pension files in the, quote unquote, cave those need to be digitised because they're managing the business the same way it was 30 years ago. There will be a wave of activity, and that will be presented by Iron Mountain, I'm certain as short-term revenue and digital revenue because they're scanning those and converting those from unstructured data to structured data and then acting upon that structured data. Short term, I think you're going to see a spike. Long term is going to be dependent upon their digital strategy.

[[00:19:08]]
You described one of the characteristics of the Global RIM business to be the trust that Iron Mountain has built with enterprises and clients. We see independent regional storage operators continuously targeting the company's account base through lower per box storage rates and/or targeting secondary and tertiary markets. Who do you identify as the most prominent competitive threats to its global RIM franchise? How durable do you view the competitive moat that we were talking about?

[[00:19:51]]
Some of the threats, a player such as maybe Access would be one that comes to mind as far as a pricing threat. The reason I give that example is because they are actively willing to undercut an Iron Mountain from a pricing point of view because they view the whole relationship. That beyond those physical documents, what can be done with those documents? How can we expand that relationship into a digital relationship with customers. That as such, I viewed scenarios in which they have been very, very aggressive and which… I'm just going to leave that there. I'll just leave that they've been very, very aggressive, because they say that "We see that more than paper. We see that as an opportunity to expand the client relationship." That, if you look at it, is also Iron Mountain's approach to the value of that content so that if… I know we're likely to touch upon this later, but InSight, the most valuable differentiator that Iron Mountain has today is possession of those records. Because we possess those records in unstructured data, we are best positioned to convert that to structured data, expose that and make it actionable for you.

[[00:21:36]]
Under Project Matterhorn, commercial strategy emphasised the cross-selling of high-margin digital solutions such as InSight DXP into legacy RIM accounts. Could you provide a brief overview of Iron Mountain's DXP offering and the value proposition it offers to traditional clients?

[[00:22:09]]
The value proposition is just that it's bringing the content to life so that from a historical perspective, Iron Mountain is viewed as the box company. Quite often, clients might not even know what's in those, quote unquote, boxes if you will. DXP actually says, "Let us take your legacy content, move that into a digital environment. Let's introduce AI capabilities to act upon that to fully understand what you have" and almost and I say this as a positive approach, cannibalising the short-term RIM opportunities for those longer-term digital opportunities with the customer so that the solution would really take that content, ingest the content, normalise the content and then allow Dean to query on the content and have a more robust view into what records Iron Mountain may have today beyond the inventory perspective. What does it really mean? That if Dean is holding 1,000 files, what percentage of those files have this feature, have this call feature, have this interest rate? How many of those are secured by different types of collateral. The reason that's important to Dean from a client point of view is that allows you to reach to those customers and say, "I may have a new product offering that can extend value to you." That's one aspect.

The other reason that's important to Dean is it allows him to, from a regulatory perspective, from a reporting perspective, better understand. To manage risk, you need to understand risk and understand where risk is, understand where it's not. DXP allows that capability. Then moving downstream, DXP also provides workflows so that those workflows can be set to reduce the amount of manual intervention in any given files and really leverage those workflow solutions. That's high level what DXP is as well as the value proposition to the customer.

[[00:25:02]]
Iron Mountain has touted that its DXP product is its AI-powered digital solutions platform. You talked about the nature of the documents, the unstructured data and how there is a real value proposition or opportunity, given that the company owns these records to structure that data. How effectively were AI capabilities embedded into the DXP offering? Was that resonating with clients?

[[00:25:52]]
In my perspective and purely nothing more than my opinion. DXP was largely a me-too offering and is largely a me-too, which means that it has those AI capabilities lagging behind the smaller players that are cost cutting because those smaller players tend to be more nimble. What we see coming out into the marketplace now is just so quick. Your life is completely different now than it was 36 months ago as far as how you research, how you analyse, how you create. Again, those capabilities of smaller providers may actually be more nimble than Iron Mountain. Once again, Iron Mountain does have possession of those physical assets. How can they leverage those and use that as foundational to create the relationship? Overall, clients understand that, and they're willing to at least incorporate Iron Mountain into a response. Once again, the larger players like to mitigate risk. Iron Mountain is not a risky bet. With that, you're more comfortable going with an Iron Mountain even if the AI capabilities are more of a me-too, which, by the way, me-too isn't necessarily a terrible comment because me-too today means that you're still only three to four to six months behind because it's just moving so quickly.

Again, it's not necessarily the cutting edge, but the cutting edge is often the bleeding edge. They have a window of opportunity to really leverage those legacy assets and allow that to be a key differentiator for them. If they aren't able to do that and they're selling a solution as just peer to peer for a DXP platform, they're likely going to lose from a capability. Again, I'll go back very briefly to the example I gave earlier because it was so well publicised, those pension files. Nobody's going to move those files to a different location and then digitise them in a different location but again, Iron Mountain was uniquely positioned to say "Ah, we can provide that solution." If that solution went into the open market and they were looking to build a forward-looking delivery channel, candidly, I think Iron Mountain would meet a lot more challenge. Again, they had the files, so they got to work.

[[00:29:09]]
How effectively did Iron Mountain's commercial sales teams pivot from selling physical box storage and records management to digital solutions, more of a SaaS and intelligent document processing platform sales pitch?

[[00:29:45]]
It was challenging. For the sake that Iron Mountain has overall historically had a very tenured sales team that has been selling the same product for a long period of time that has been built upon relationships. That as the sale shifts from relationship to product features, that's a transition that's sometimes too far for your traditional RIM salesperson. Having said that, the RIM salesperson also understands, "Hey, this is a commissionable event for me, so let me bring in a digital partner." Iron Mountain made great efforts to create a culture and alignment between traditional RIM that knew the customer and emerging digital that knew the product but they've struggled. If you go back, you're going to see significant strategic shifts and sales leadership changes at Iron Mountain within digital because they're still trying to find their way. They're trying to find that balance. I doubt that they're 100% comfortable with where they are today. Obviously, I'm not positioned to know that.

[[00:31:32]]
In Q1 2026, Iron Mountain's digital solutions business reported a record performance. Revenue growth was 20%-plus. When we consider the runway for the digital solutions business, is that the expectation you'd have going forwards, where we would see growth in that 20-20%-plus range? Do you view that as sustainable, given the trends and themes we've been talking about?

[[00:32:17]]
I think, first of all, it needs to be at that range for the next five years. Sustainability beyond that, Iron Mountain needs to reposition or reinvent themselves as a digital leader. I'm speaking beyond more from a marketing, but I'm speaking from a cultural aspect. What does it mean? What value are we looking to deliver to the customer? More importantly, where is the customer expecting to be 7-8 years down the road? Can we partner with them on that roadmap? Right now, those legacy files are a key asset for them. I think once when the dependency on those assets wanes, because even the mortgage industry, it's going to move away eventually from 85% paper. When those key assets wane and Iron Mountain isn't uniquely positioned to be holding those unstructured assets, I think in the open marketplace, they're going to hit some severe competition. Having said that, if you look at data centre, data centre is a natural flow because, again, Iron Mountain, you're trusted preserver of assets. That from a data centre, it's a logical correlation. It's a logical path forward. From a digital strategy perspective, again, nothing more than my opinion, not revealing anything internal. From my opinion, they're still trying to find their way.

[[00:34:12]]
The core records business has been funding the growth vectors or areas of Iron Mountain's business in areas such as data centre, ALM [asset lifecycle management] and digital solutions. It seems that there is some real strong synergy in the business model when you look at the different areas, whether data centres or ALM. Perhaps data centres is an outlier, but ALM, digital solutions and traditional record storage or management are synergistic components across the areas of the company's business. Was there a cultural friction between the traditional records business and the other burgeoning growth areas within the company's business, such as digital solutions, ALM or data centres?

[[00:35:18]]
First off, from the synergies, yes, I agree with that. From the friction question, I wouldn't call it friction. It was more this is my area of expertise. This is what I know. I know RIM, so I'm going to focus on RIM. The challenge is what's to your left and what's to your right that you're not as comfortable presenting and selling, so you're missing opportunities. That friction, I don't know if that's the proper word because I would see that as a lot of animosity between those three areas, and I don't think that's the case. I just think that you have a silo-based vision that doesn't necessarily allow you to talk strategically with where your customer is looking to be five years from now because if it's your RIM salesperson, "You know what, that's my RIM salesperson. We deal with Iron Mountain. We've dealt with them for 25 years and Mary or Joe manage that account." That's the relationship. That's when we're going to talk with Mary or Joe about. They aren't able to really expand those conversations deeper because of their allotted role in the client's mind.

[[00:36:53]]
Iron Mountain's management team has talked about breaking out the ALM [asset lifecycle management] business into its own segment at some point in 2026. The company has expressed similar sentiments with the digital solutions business. Do you have an expectation that, given the growth we're seeing on the digital solutions side at some point in the future, the company will break that segment or business into its own reporting segment?

[[00:37:38]]
Yes. From reporting, two different things. From reporting, that makes sense because even… I want to be very cautious here. How you represent an account as digital or RIM is very arbitrary, if you will. What one might see reported as a digital customer, you might walk in and say, "Really, there's not much digital about this." Just putting that out there theoretically. First of all, you need a cleaner definition of which would fall within each of those business lines. To do that deeper dive and really challenged revenue streams as far as that's concerned, obviously, that's going to lead to some uncomfortable conversations, let me say this, with any company, of course. With that, so you have that component. The other component, as I mentioned, that the key differentiator for those businesses would be the RIM business, that legacy RIM business that allows them to accelerate and move forward, especially within digital. With that, to break them into digital business units, that's fine. To separate them that they're not codependent, I think that would be problematic.

[[00:39:40]]
Iron Mountain's global RIM storage rental organic revenue grew 5.6% in Q1 2026, driven primarily by systematic pricing adjustments rather than fiscal volume expansion. Price increases roll out at the beginning of the year. We have seen repeated rounds of contractual pricing adjustments with enterprise clients. These come at a time where the same clients are facing higher-than-normal inflation expectations. On the flip side, market competitors, such as Access, are discounting to capture accounts on price. How would you characterise the pricing power that Iron Mountain's global RIM business exhibits? How sustainable is that pricing power over the next 12-24 months, given some of the dynamics we've talked about and some of the macro exogenous factors outside of the company's control?

[[00:41:07]]
I'm sure that the answer is going to be regionally driven, first of all, so you take that into account. Moving forward, it's probably pricing may not be tested as thoroughly as one might think only because quite candidly, dealing with financial customers at the C-level today, their storage cost is like a blip on the radar. They're focused on what is the AI cost? How we're going to leverage that? Who are we… What are those costs? How do we factor those costs? How do we define those costs? You have a great deal of focus on those costs. Where Iron Mountain may benefit is just it really doesn't dramatically move the needle for these customers. It's not strategic, so then they're not looking to make a strategic move to a different provider. The real question is from a vendor management perspective, do they have that vendor management internal department that is aggressively saying, "Hey, who's in the marketplace, what can we do to reduce this by 17%?" That's going to be client specific.

Again, their ability to increase prices is largely going to be dependent on a client's indifference, if you will, because they don't care that much because it's not part of their plan five years down the road. The other aspect is the exit cost of an Iron Mountain often offset the savings they'd realise over a period of time that ROI might be extended. If you have someone that comes in and says, "You know what, I'm going to undercut this so dramatically and because I'm just going to take it away because that unstructured content is meaningful to how I can grow my business, and the key differentiator that Iron Mountain has, if I can have that key differentiator in my back pocket, I may be willing to do that." In summary, they may be okay with it because of indifference, but that doesn't mean there won't be some players coming behind them in a very aggressive manner.

[[00:43:45]]
You talked about the aggressive manner of competitors nipping at the heels. How infrequent was it that you would come across a customer pushing back on contractual pricing adjustments? The current retention metrics are very strong in the global RIM business, in the range of 98%. What are the exit costs you were alluding to? How significant are they? Would you expect that retention rate of 98% to remain over the next 12-24 months?

[[00:44:39]]
I think that retention rate probably stays because, again, it's just not the focus. It's the question is, is someone really going to escalate the issue from a vendor management perspective. Then sure, they're going to challenge it. That's their job functions. Of the things that they have prioritised, it's number eight, nine or 10 on their list. Somewhere along the line, I've heard that you don't get to anything beyond your top five. The cost to move files as well as to pull files on the exit side, those would be some of the costs that would be associated with moving those. Those costs would have to be offset by the future savings from a retention point of view over a five-year period. Again, summary, the bigger point is it's just not strategic to these customers. Traditionally, why Iron Mountain has a business? Yes, yes, yes, that's the cost because I need to hold those files for CFPB, for Fannie, Freddie, Ginnie, whatever the case might be. I need to hold as part of my business, it's a cost structure and everybody puts them with Iron Mountain. That change in that requirement is going to shift as we move towards digital rather than physical.

[[00:46:12]]
Margins came in relatively high. What was the margin discrepancy between traditional records and the digital solutions business? I think the latter has higher margin than the former.

[[00:46:50]]
Yes. I don't know the specifics, but I do know that the digital was being pursued because it would always bring a wider margin.

[[00:47:11]]
Iron Mountain's ALM business grew 77% organically YoY, and total ALM revenue came in at USD 232m. A lot of this comes on the heels of some of the hyperscaler data centre decommissioning projects. Component pricing dynamics factor in as well. How effectively were the enterprise sales teams able to attach ALM ITAD [IT asset disposition] services into the traditional physical RIM contract renewal discussions, or was this a synergy more unique to the data centre business itself?

[[00:48:09]]
My response to that is going to be more anecdotal from dealing very closely day over day with the sales team. They were more comfortable with ALM because it was an easier story to tell and it was consistent with the RIM story that they've always told so that, again, the gap between those two presentations to the client was narrower. I felt they were more comfortable with ALM and successful than they were with digital. It's more of a natural fit, if you will.

[[00:48:52]]
Is there anything we haven't touched on related to Iron Mountain's digital solutions or traditional records business that you would like to bring into the fold here?

[[00:49:07]]
Again, Iron Mountain is a phenomenal company. Love Iron Mountain, love the people and love the culture. I think from Bill Meaney and down the intent is sincere, honest and deliberate to create a healthy environment. I think as you dig deeper into digital, I think they're just trying to find their way. I'll tell you, let me think, that's fine. I'm not divulging anything private. In my tenure there, which was very highly regarded by Iron Mountain, and I enjoyed my time there. I think I was there probably five years. I had seven different leaders over digital. What does that mean? You have a different strategy with each leadership that comes in. I'm hopeful they say, "Hey, this is where we need to be. This is our game plan. This is how we're going to execute, and this is how we're going to move forward." They're still trying to find their way. I'm hopeful they'll be able to get that done.

[[00:50:14]]
If the management team at Iron Mountain were to ask you to come back into the organisation to lead the strategic thinking for the digital solutions business, what would be your actionable steps for the near and long term to ensure that the business continues to grow at a 20%-plus profile and staves off any competitive threats within the space?

[[00:50:41]]
What I would do, first of all, in that regard, I would… You mentioned it earlier, I really need to have a single table that includes RIM, ALM and data centre so that because it's a single Iron Mountain. How do we position ourselves moving forward? From a digital perspective, in my mind, that is one component of the watch that actually drives the synergies, workflow conversion engines. You have data centres that actually focus more on the longer-term storage. You have RIM that supports the needs really outside of the, I shouldn't say supports, support all legacy needs, of course, but really the growth opportunities outside of North America and western Europe. How those come together ALM, what happens when they're done? How do we tell a single story together? Again, so that roadmap, if you will, would be critically important to me.

[[00:52:02]]
What are your overall impressions of Iron Mountain's CEO Bill Meaney and the broader management team there?

[[00:52:16]]
I actually love Iron Mountain. I truly do. Again, that's why I really want them to figure out this digital direction component because they've been great. I think they're sincere. I think that they've made some tough but right choices over the last handful of years with individuals that have been there for a long time. They recognise that the world is shifting and they need to reinvent themselves each and every day. It used to be you reinvent yourself each and every year. With AI and those capabilities coming so quickly that you and I shift our life on every day, Iron Mountain needs to do the same thing. How does they do it with all of the chairs at the table. Again, they're a great company. I love Iron Mountain.

[[00:53:11]]
I think that's a good note to end the Interview on. Let me just close by saying thank you for not only taking the time to speak with us today but also for the wonderful input and insights. Thank you, clients, as always, for choosing Third Bridge. We do hope you enjoy today's Interview. Lastly, a big thank you to all the team members who help put this Interview together today. Goodbye, everyone.

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