Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2025

Summary Of Significant Accounting Policies

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A. CASH AND CASH EQUIVALENTS

Cash and cash equivalents include cash on hand and cash invested in highly liquid short-term securities, which have remaining maturities at the date of purchase of less than 90 days. Cash and cash equivalents are carried at cost, which approximates fair value.

B. ACCOUNTS RECEIVABLE

We maintain an allowance for doubtful accounts and a credit memo reserve for estimated losses resulting from the potential inability of our customers to make required payments and potential disputes regarding billing and service issues. The rollforward of the allowance for doubtful accounts and credit memo reserves for the six months ended June 30, 2025 is as follows:



Balance as of December 31, 2024	$	86,712
Credit memos charged to revenue	47,315
Allowance for bad debts charged to expense	29,610
Deductions and other(1)	(61,740)
Balance as of June 30, 2025	$	101,897

(1)Primarily consists of the issuance of credit memos, the write-off of accounts receivable and the impact associated with currency translation adjustments.

C. LEASES

We lease facilities for certain warehouses, data centers and office space. We also have land leases, including those on which certain facilities are located.

Operating and financing lease right-of-use assets and lease liabilities as of June 30, 2025 and December 31, 2024 are as follows:


DESCRIPTION	JUNE 30, 2025		DECEMBER 31, 2024
Assets:
Operating lease right-of-use assets	$	2,414,510	$	2,489,893
Financing lease right-of-use assets, net of accumulated depreciation(1)	474,708		359,265
Liabilities:
Current
Operating lease liabilities	$	309,960	$	315,400
Financing lease liabilities(1)	134,619		128,397
Long-term
Operating lease liabilities	$	2,254,841	$	2,334,826
Financing lease liabilities(1)	371,509		278,444

(1)Financing lease right-of-use assets, current financing lease liabilities and long-term financing lease liabilities are included within Property, plant and equipment, net, Current portion of long-term debt and Long-term debt, net of current portion, respectively, within our Condensed Consolidated Balance Sheets.

The components of the lease expense for the three and six months ended June 30, 2025 and 2024 are as follows:


	THREE MONTHS ENDED JUNE 30,				SIX MONTHS ENDED JUNE 30,
DESCRIPTION	2025		2024		2025		2024
Operating lease cost(1)	$	179,831	$	172,735	$	353,139	$	344,481
Financing lease cost:
Depreciation of financing lease right-of-use assets	$	15,246	$	12,078	$	28,978	$	23,022
Interest expense for financing lease liabilities	7,325		5,217		13,454		10,438

(1)Operating lease cost, the majority of which is included in Cost of sales, includes variable lease costs of $47,261 and $93,666 for the three and six months ended June 30, 2025, respectively, and $39,594 and $77,688 for the three and six months ended June 30, 2024, respectively.

Other information: Supplemental cash flow information relating to our leases for the six months ended June 30, 2025 and 2024 is as follows:


	SIX MONTHS ENDED JUNE 30,
CASH PAID FOR AMOUNTS INCLUDED IN MEASUREMENT OF LEASE LIABILITIES:	2025		2024
Operating cash flows used in operating leases	$	244,840	$	235,030

Operating cash flows used in financing leases (interest)	13,454		10,438
Financing cash flows used in financing leases	27,242		21,536

NON-CASH ITEMS:
Operating lease modifications and reassessments	$	(21,629)	$	573
New operating leases (including acquisitions)	58,717		80,474

D. GOODWILL

Our reporting units as of December 31, 2024 are described in detail in Note 2.l. to Notes to Consolidated Financial Statements included in our Annual Report.

The changes in the carrying value of goodwill attributable to each reportable segment and Corporate and Other (as defined in Note 8) for the six months ended June 30, 2025 are as follows:


	GLOBAL RIM BUSINESS		GLOBAL DATA CENTER BUSINESS		CORPORATE AND OTHER		TOTAL CONSOLIDATED
Goodwill balance, net of accumulated amortization, as of December 31, 2024	$	3,816,874	$	469,461	$	797,482	$	5,083,817
Tax deductible goodwill acquired during the period	—		—		17,423		17,423



Fair value and other adjustments	—		—		(1,126)		(1,126)
Currency effects	110,136		16,013		3,680		129,829
Goodwill balance, net of accumulated amortization, as of June 30, 2025	$	3,927,010	$	485,474	$	817,459	$	5,229,943
Accumulated goodwill impairment balance as of June 30, 2025	$	132,409	$	—	$	26,011	$	158,420

E. FAIR VALUE MEASUREMENTS

The assets and liabilities carried at fair value and measured on a recurring basis as of June 30, 2025 and December 31, 2024 are as follows:


			FAIR VALUE MEASUREMENTS AS OF JUNE 30, 2025 USING
DESCRIPTION	TOTAL CARRYING VALUE AS OF JUNE 30, 2025		QUOTED PRICES IN ACTIVE MARKETS (LEVEL 1)		SIGNIFICANT OTHER OBSERVABLE INPUTS (LEVEL 2)		SIGNIFICANT UNOBSERVABLE INPUTS (LEVEL 3)(2)
Money Market Funds	$	3,335	$	—	$	3,335	$	—
Time Deposits	11,650		—		11,650		—
Trading Securities	8,696		6,911		1,785		—
Derivative Assets	993		—		993		—
Derivative Liabilities	77,324		—		77,324		—
Deferred Purchase Obligations(1)	99,548		—		—		99,548


			FAIR VALUE MEASUREMENTS AS OF DECEMBER 31, 2024 USING
DESCRIPTION	TOTAL CARRYING VALUE AS OF DECEMBER 31, 2024		QUOTED PRICES IN ACTIVE MARKETS (LEVEL 1)		SIGNIFICANT OTHER OBSERVABLE INPUTS (LEVEL 2)		SIGNIFICANT UNOBSERVABLE INPUTS (LEVEL 3)(2)
Money Market Funds	$	2,488	$	—	$	2,488	$	—
Time Deposits	9,612		—		9,612		—
Trading Securities	8,144		6,390		1,754		—
Derivative Assets	28,092		—		28,092		—
Derivative Liabilities	5,326		—		5,326		—
Deferred Purchase Obligations(1)	147,055		—		—		147,055

(1)The balance as of June 30, 2025 primarily relates to the fair value of the deferred purchase obligation associated with the Regency Transaction (as defined in Note 3 to Notes to Consolidated Financial Statements included in our Annual Report). The balance as of December 31, 2024 primarily relates to the fair values of the deferred purchase obligations associated with the Regency Transaction and ITRenew Transaction (as defined in Note 3 to Notes to Consolidated Financial Statements included in our Annual Report).

(2)The following is a rollforward of the Level 3 liabilities presented above for December 31, 2024 through June 30, 2025:



Balance as of December 31, 2024	$	147,055
Additions	2,880
Payments	(49,215)
Other changes, including accretion	(1,172)
Balance as of June 30, 2025	$	99,548

The level 3 valuation of the deferred purchase obligation was determined utilizing a Monte-Carlo model which takes into account our forecasted projections as they relate to the underlying performance of the business. The Monte-Carlo simulation model incorporates assumptions as to expected revenue over the achievement period, including adjustments for volatility and timing, as well as discount rates that account for the risk of the arrangement and overall market risks. Any material change to these assumptions may result in a significantly higher or lower fair value of the deferred purchase obligation.

There were no material items that were measured at fair value on a non-recurring basis as of June 30, 2025 and December 31, 2024 other than those disclosed in Note 2.p. to Notes to Consolidated Financial Statements included in our Annual Report

F. ACCUMULATED OTHER COMPREHENSIVE ITEMS, NET

The changes in Accumulated other comprehensive items, net for the three and six months ended June 30, 2025 and 2024 are as follows:


	THREE MONTHS ENDED JUNE 30, 2025						THREE MONTHS ENDED JUNE 30, 2024
	FOREIGN CURRENCY TRANSLATION AND OTHER ADJUSTMENTS		DERIVATIVE FINANCIAL INSTRUMENTS		TOTAL		FOREIGN CURRENCY TRANSLATION AND OTHER ADJUSTMENTS		DERIVATIVE FINANCIAL INSTRUMENTS		TOTAL
Beginning of Period	$	(493,553)	$	(8,816)	$	(502,369)	$	(440,129)	$	11,332	$	(428,797)
Other comprehensive income (loss):
Foreign currency translation and other adjustments	139,811		—		139,811		(31,806)		—		(31,806)
Change in fair value of interest rate swaps	—		(1,025)		(1,025)		—		(488)		(488)

Total other comprehensive income (loss)	139,811		(1,025)		138,786		(31,806)		(488)		(32,294)
End of Period	$	(353,742)	$	(9,841)	$	(363,583)	$	(471,935)	$	10,844	$	(461,091)


	SIX MONTHS ENDED JUNE 30, 2025						SIX MONTHS ENDED JUNE 30, 2024
	FOREIGN CURRENCY TRANSLATION AND OTHER ADJUSTMENTS		DERIVATIVE FINANCIAL INSTRUMENTS		TOTAL		FOREIGN CURRENCY TRANSLATION AND OTHER ADJUSTMENTS		DERIVATIVE FINANCIAL INSTRUMENTS		TOTAL
Beginning of Period	$	(568,129)	$	(1,823)	$	(569,952)	$	(373,628)	$	2,472	$	(371,156)
Other comprehensive income (loss):
Foreign currency translation and other adjustments	214,387		—		214,387		(98,307)		—		(98,307)
Change in fair value of interest rate swaps	—		(8,018)		(8,018)		—		10,900		10,900
Reclassifications from accumulated other comprehensive items, net	—		—		—		—		(2,528)		(2,528)
Total other comprehensive income (loss)	214,387		(8,018)		206,369		(98,307)		8,372		(89,935)
End of Period	$	(353,742)	$	(9,841)	$	(363,583)	$	(471,935)	$	10,844	$	(461,091)

G. REVENUES

Certain costs to fulfill or obtain customer contracts, including the costs associated with the initial movement of customer records into physical storage and certain commission expenses, and certain initial direct costs of obtaining data center leases are collectively referred to as "Contract Costs". Contract Costs are primarily made up of Intake Costs and Commissions (each as defined in Note 2.s. to Notes to Consolidated Financial Statements included in our Annual Report). Contract Costs as of June 30, 2025 and December 31, 2024 are as follows:


	JUNE 30, 2025						DECEMBER 31, 2024
DESCRIPTION	GROSS CARRYING AMOUNT		ACCUMULATED AMORTIZATION		NET CARRYING AMOUNT		GROSS CARRYING AMOUNT		ACCUMULATED AMORTIZATION		NET CARRYING AMOUNT
Intake Costs asset	$	100,986	$	(47,968)	$	53,018	$	89,057	$	(43,783)	$	45,274
Commissions asset	226,090		(96,793)		129,297		200,149		(78,955)		121,194

Deferred revenue liabilities are reflected in our Condensed Consolidated Balance Sheets as follows:


DESCRIPTION	LOCATION IN BALANCE SHEET	JUNE 30, 2025		DECEMBER 31, 2024(1)
Deferred revenue—Current(2)	Deferred revenue	$	342,225	$	326,882
Deferred revenue—Long-term(3)	Other Long-term Liabilities	142,293		110,601

(1) The beginning balance of current and long-term deferred revenue for the year ended December 31, 2024 was $325,665 and $100,770, respectively.

(2) The current deferred revenue accounted for under Accounting Standards Codification 842, Leases ("ASC 842") is approximately $30,700 and $25,500 as of June 30, 2025 and December 31, 2024, respectively.

(3) The long-term deferred revenue accounted for under ASC 842 is approximately $119,800 and $95,000 as of June 30, 2025 and December 31, 2024, respectively.

DATA CENTER LESSOR CONSIDERATIONS

Our Global Data Center Business features storage rental provided to customers at contractually specified rates over a fixed contractual period, which are accounted for in accordance with ASC 842. Storage rental revenue associated with our Global Data Center Business for the three and six months ended June 30, 2025 and 2024 is as follows:


	THREE MONTHS ENDED JUNE 30,				SIX MONTHS ENDED JUNE 30,
	2025		2024		2025		2024
Storage rental revenue	$	188,279	$	147,397	$	361,224	$	287,425

H. STOCK-BASED COMPENSATION

Our stock-based compensation expense includes the cost of stock options, restricted stock units ("RSUs") and performance units ("PUs") (together, the "Employee Stock-Based Awards").

STOCK-BASED COMPENSATION EXPENSE

Stock-based compensation expense for the Employee Stock-Based Awards for the three and six months ended June 30, 2025 and 2024 is as follows:


	THREE MONTHS ENDED JUNE 30,				SIX MONTHS ENDED JUNE 30,
	2025		2024		2025		2024
Stock-based compensation expense	$	60,354	$	29,889	$	86,448	$	43,928

On March 1, 2025, we granted approximately 83,400 stock options, 497,000 RSUs and 435,100 PUs under the 2014 Plan (as defined in Note 2.t. to Notes to Consolidated Financial Statements included in our Annual Report).

On May 29, 2025, our stockholders approved an amendment to the 2014 Plan, which (i) increases the number of shares of common stock authorized for issuance under the 2014 Plan by 4,600,000, from 20,750,000 to 25,350,000, and (ii) extends the termination date of the 2014 Plan from May 12, 2031 to May 29, 2035.

As of June 30, 2025, unrecognized compensation cost related to the unvested portion of our Employee Stock-Based Awards, inclusive of our estimated achievement of the performance metrics, is $135,386.

I. ACQUISITION AND INTEGRATION COSTS

Acquisition and integration costs represent operating expenditures directly associated with the closing and integration activities of our business acquisitions that have closed, or are highly probable of closing, and include (i) advisory, legal and professional fees to complete business acquisitions and (ii) costs to integrate acquired businesses into our existing operations, including move, severance and system integration costs (collectively, "Acquisition and Integration Costs").

Acquisition and Integration Costs for the three and six months ended June 30, 2025 and 2024 are as follows:


	THREE MONTHS ENDED JUNE 30,				SIX MONTHS ENDED JUNE 30,
	2025		2024		2025		2024
Acquisition and Integration Costs	$	4,815	$	9,502	$	10,638	$	17,311

J. (GAIN) LOSS ON DISPOSAL/WRITE-DOWN OF PROPERTY, PLANT AND EQUIPMENT, NET

(Gain) loss on disposal/write-down of property, plant and equipment, net for the three and six months ended June 30, 2025 and 2024 are as follows:


	THREE MONTHS ENDED JUNE 30,				SIX MONTHS ENDED JUNE 30,
	2025		2024		2025		2024
(Gain) loss on disposal/write-down of property, plant and equipment, net	$	(962)	$	2,790	$	4,609	$	3,179

K. OTHER EXPENSE (INCOME), NET

Other expense (income), net for the three and six months ended June 30, 2025 and 2024 consists of the following:


	THREE MONTHS ENDED JUNE 30,				SIX MONTHS ENDED JUNE 30,
DESCRIPTION	2025		2024		2025		2024
Foreign currency transaction losses (gains), net(1)	$	87,155	$	1,013	$	116,818	$	(15,366)

Other, net	(5,278)		4,820		(6,453)		8,669
Other Expense (Income), Net	$	81,877	$	5,833	$	110,365	$	(6,697)

(1)The losses for the three and six months ended June 30, 2025 primarily consist of the impact of changes in the exchange rate of the British pound sterling and the Euro against the United States dollar on our intercompany balances with and between certain of our subsidiaries.

L. INCOME TAXES

We provide for income taxes during interim periods based on our estimate of the effective tax rate for the year. Our effective tax rates for the three and six months ended June 30, 2025 and 2024 are as follows:


	THREE MONTHS ENDED JUNE 30,				SIX MONTHS ENDED JUNE 30,
	2025(1)		2024(2)		2025(1)		2024
Effective Tax Rate	60.3	%	27.8	%	773.6	%	21.1	%

(1)The primary reconciling items between the federal statutory tax rate of 21.0% and our overall effective tax rate for the three and six months ended June 30, 2025 were the lack of tax benefits recognized for the foreign exchange losses we recorded in Other expense (income), net, during the period, disallowed interest expenses of certain entities, as well as the differences in the tax rates to which our foreign earnings are subject, partially offset by the benefits derived from the dividends paid deduction.

(2)The primary reconciling items between the federal statutory tax rate of 21.0% and our overall effective tax rate for the three months ended June 30, 2024 were the lack of tax benefits recognized for the year to date ordinary losses of certain entities, the benefits derived from the dividends paid deduction and the differences in the tax rates to which our foreign earnings are subject.

M. (LOSS) INCOME PER SHARE—BASIC AND DILUTED

The calculations of basic and diluted (loss) income per share for the three and six months ended June 30, 2025 and 2024 are as follows:


	THREE MONTHS ENDED JUNE 30,				SIX MONTHS ENDED JUNE 30,
	2025		2024		2025		2024
Net (Loss) Income	$	(43,340)	$	34,621	$	(27,107)	$	111,646
Less: Net Income (Loss) Attributable to Noncontrolling Interests	1,581		(1,162)		1,862		1,802
Net (Loss) Income Attributable to Iron Mountain Incorporated (utilized in numerator of Earnings Per Share calculation)	$	(44,921)	$	35,783	$	(28,969)	$	109,844
Weighted-average shares—basic	295,364,000		293,340,000		294,935,000		293,043,000
Effect of dilutive potential stock options	—		2,068,000		—		1,977,000
Effect of dilutive potential RSUs and PUs	—		430,000		—		509,000
Weighted-average shares—diluted	295,364,000		295,838,000		294,935,000		295,529,000
Net (Loss) Income Per Share Attributable to Iron Mountain Incorporated:
Basic	$	(0.15)	$	0.12	$	(0.10)	$	0.37
Diluted	$	(0.15)	$	0.12	$	(0.10)	$	0.37
Antidilutive stock options, RSUs and PUs excluded from the calculation	2,413,370		506,149		2,632,028		435,957

IRON MOUNTAIN INC 10-Q