Iron Mountain Incorporated IRM is set to release second-quarter 2021 results on Aug 5, before the bell. The company’s quarterly results will likely display growth in both revenues and funds from operations (FFO) per share.

In the last reported quarter, the real estate investment trust (REIT) delivered a surprise of 26.56% in terms of adjusted FFO per share. Results reflected better-than-expected revenues in the quarter.

Over the trailing four quarters, the company surpassed the Zacks Consensus Estimate on each occasion, the average beat being 18.42%. The graph below depicts this surprise history:

Iron Mountain Incorporated Price and EPS Surprise

Iron Mountain Incorporated price-eps-surprise | Iron Mountain Incorporated Quote

Let’s see how things have shaped up prior to this announcement.

Factors to Note

Rising growth of data, rapid accelerations in cloud adoption and the boom in IT outsourcing demand have been spurring demand for data-center spaces. Moreover, new technologies like 5G and augmented reality have been creating opportunities for edge deployments and data-center operators. The strong demand for connectivity, interconnection and colocation spaces is anticipated to have driven data-center leasing activity for Iron Mountain. Amid the favorable backdrop, the company continued its portfolio expansion and data-center enhancement efforts in the quarter under review, thereby, driving revenues from the global data-center business.

Accordingly, the Zacks Consensus Estimate for second-quarter revenues from the global data-center business is pegged at $76 million, indicating an improvement from the $67 million seen in the prior year and the year-ago quarter.

Also, a steady stream of recurring revenues from its core storage and record management businesses is expected to have aided Iron Mountain in the second quarter. This, along with high box retention rate, is anticipated to have rendered storage rental revenue stability.

The consensus estimate for the same is pegged at $719 million for the second quarter, suggesting an improvement from the prior quarter’s $708 million and the year-ago period’s $677 million.

Moreover, the company’s quarterly results will likely display modest improvements in core service revenues. The consensus estimate for second-quarter service revenues is pegged at $378 million, which indicates an increase from the prior quarter’s $374 million and the year-ago quarter’s $305 million.

For the second quarter, management projects an increase in both revenues and adjusted EBITDA compared to the first quarter, while in terms of margin, it expects the figure to be down two to three points sequentially. This is because of pandemic-related construction delays and one-time build-out services for a specific customer. Particularly, management projects revenues to reach $1.1 billion and adjusted EBITDA to approach $400 million.

Overall, total revenues for the second quarter are pegged at $1.10 billion and the figure suggests a year-over-year increase of 11.7%.

Iron Mountain’s activities in the second quarter were inadequate to gain analyst confidence. The Zacks Consensus Estimate of 64 cents for the quarterly FFO per share has been unrevised over the past month. Nonetheless, the figure suggests year-over-year growth of 20.75%.