Iron Mountain Inc (IRM) — Q1 2025 Earnings Call Transcript

Thank you, Chuck. Good morning, and welcome to our first quarter 2025 earnings conference call. On today's call, we will refer to materials available on our Investor Relations website. We are joined here today by Bill Meaney, President and Chief Executive Officer; and Barry Hytinen, our Executive Vice President and Chief Financial Officer. After prepared remarks, we'll open the lines for Q&A. Today's earnings materials contain forward-looking statements, including statements regarding our expectations. All forward-looking statements are subject to certain risks and uncertainties. Please refer to today's earnings materials, the safe harbor language on Slide 2 and our annual and quarterly reports on Form 10-K and 10-Q for a discussion of the major risk factors that could cause our actual results to differ from those in our forward-looking statements. In addition, we use several non-GAAP measures when presenting our financial results. We've included the reconciliations to these measures in our supplemental financial information. With that, I'll turn the call over to Bill.

Thank you, Mark, and thank you all for joining us today to discuss our first quarter results. We are pleased with our strong start to 2025. Our team's focus on providing solutions that meet our customers' needs as part of our Matterhorn growth strategy continues to drive record results across the business and above our expectations. On a reported basis in the first quarter, we achieved all-time high quarterly revenue of $1.6 billion, representing 8% year-over-year growth and record first quarter adjusted EBITDA of $580 million, an increase of 12% as compared to last year. This performance was even better when excluding the effects of foreign exchange with revenue increasing 9% and adjusted EBITDA growing 13% to last year. Strong growth was achieved in each of our key business units. Our portfolio of growth businesses, which represents more than 25% of our total revenue and includes data center, digital solutions, and asset lifecycle management collectively grew more than 20% in the quarter. And our traditional records business achieved record results as well. This formula supports our ability to sustainably drive double-digit revenue and profit growth. Our commercial team continues to make marked progress in executing our strategy. I'm especially pleased with the breadth and scope of customer deals we are winning. For example, during the first quarter, our global scale and reputation were key factors in securing multiple records management and ALM deals where customers consolidated to single vendors, further testimony of the benefits from our number one ranking in customer satisfaction by the Wall Street Journal of the top US-listed companies. And we achieved broad cross-selling success through both traditional add-on solution sales and by partnering across the business to integrate multiple solutions for the customer. This approach met the customer need to get their job done seamlessly and truly differentiates our individual offerings by the whole suite being worth more than any single product. Our potential for growth remains significant, especially with the substantial expansion of our solutions offerings in recent years. To complement our cross-selling efforts and capitalize on this opportunity, we have marketing initiatives underway to increase awareness of our complete solutions offering. Let me now turn to an update of our key achievements and customer wins that showcase the success we are delivering against our strategic priorities, which are driving continued revenue growth in our physical storage records management business, delivering differentiated digital solutions, which give truly transformative results to our customers in terms of revenue, security, and cost, supplying differentiated data center offerings through our global scale and customer trust, and providing asset lifecycle management capabilities, which are secure, economic, and environmentally sustainable. Let's begin with our records and information management business. We are pleased with our consistent and strong performance. Storage volume continues to increase modestly each quarter and our revenue management is further accelerating growth by capturing the enhanced customer value we are providing through our global and integrated services. Additionally, we are driving record digital revenue and a growing percentage of this revenue is recurring. Let me highlight a few new projects we secured during the quarter, starting first with records management. A Greek bank, an existing customer for over 10 years, chose Iron Mountain to store records from 20 locations following a merger. The strength of our relationship, the security of our facility, and the speed and efficiency of our document retrieval services led to cost savings for the customer. Additionally, a global insurance company's operations in Thailand awarded Iron Mountain a three-year records management agreement with the first project utilizing our Smart Sort solution to manage over 3 million commingled files. I'm also excited to share recent accomplishments in our digital solutions business. Our InSight Digital Experience Platform, or DXP, continues to gain traction and acceptance in the market. Customers are realizing the value of this SaaS platform, which is reflected in larger deal values and shorter sales cycles. We are continuing to expand DXP's capabilities to manage and create structure from unstructured content, increase efficiency through process automation, enable visibility of dark data, increase compliance, and make information actionable. We are also tailoring DXP use cases to industry-specific requirements. I'll highlight a few of our recent wins in digital solutions. In the United Kingdom, we have secured a 10-year contract with an existing customer, expanding our relationship significantly. Under the agreement, we will intake an additional 350,000 cubic feet of documents, digitize close to 9 million images per year, and provide DXP access to 2,500 users. Our store, digitize, and access solutions will enable the customer to realize financial savings, operational efficiencies, and an overall improved stakeholder experience. In Europe, we strengthened our relationship with a long-standing healthcare client through a three-year deal to digitize patient documents. Moreover, the customer is using our InSight DXP Platform's AI capabilities to provide concise summaries of patient incidents and to facilitate efficient access to critical information. We will digitize 500,000 documents and 750,000 images a month whilst also providing physical records management. Our solution will provide enhanced scalability and accelerated processing time, resulting in substantial cost reductions for the customer. As we mentioned on our last earnings call, we believe our many years of experience in providing digital transformation services to the United States government positions us well to assist the broad DOGE effort. And now let me briefly highlight a significant order we received yesterday. We have been awarded a contract for the Department of the Treasury. We will be assisting with a broad digital transformation effort leveraging our DXP platform and its embedded AI capabilities. The contract value is approximately $140 million and will commence immediately with the majority of the revenue in 2026. I would like to thank the Treasury and the Department of Government Efficiency for their trust in Iron Mountain. Lastly, during the process of this award, more people involved in transforming the federal government have learned about our capabilities and experience in digital transformation. The result has been that we have seen a marked increase in our digital services pipeline serving a broad range of federal agencies across a number of improvement and efficiency initiatives. Let me now turn to our data center business. For the quarter, we continued to execute on our strong leasing backlog with revenue growth of over 20% year-over-year, driven by more than 24% organic storage growth. In the first quarter, our enterprise leasing activity was in line with expectations, leasing approximately 4 megawatts of new business. Whilst we did not sign new hyperscale contracts in the quarter, we are responding to strong interest across our US, European, and Indian sites. We expect this to convert over the course of the year, which aligns with our projection for 125 megawatts of total new leasing. We continue to see strong demand for data center development across our global portfolio and our pipeline remains strong. When fully developed, our current portfolio will reach 1.3 gigawatts, more than triple the size of our current operating portfolio. Finally, I would also like to welcome Gary Aitkenhead, our new EVP and General Manager of Data Centers. Gary joins us from Equinix and reports to Mark Kidd, who leads our data center and ALM businesses. His global experience, proven leadership in driving transformation and growth, and commitment to fostering high-performing inclusive teams will be a key asset to our customers and team as we further expand the business. Turning to our asset lifecycle management business, we continue to drive strong growth in this large and highly fragmented ALM market. In the first quarter, we achieved 44% reported revenue growth, including 22% organic growth with strength across both the enterprise and hyperscale channels. In the enterprise channel, our commercial team's success is evidenced by the size and scope of deals we are winning. We think over time, as large enterprises become more sensitive to the cyber risks with the disposal of their IT assets, Iron Mountain's brand will play an ever-increasing factor in their vendor selection. And in the hyperscale channel, given the robust growth in data center development in recent years, we anticipate strong tailwinds for decommissioning work for the foreseeable future. We will leverage our differentiation as a data center operator in this channel to capture additional share. We will also continue to selectively acquire ALM enterprise businesses to expand our capabilities and geographic footprint. In late March, we acquired Premier Surplus in the Southern US, expanding our customer base and capabilities. To illustrate our growing strength in this segment, let me now share some of the ALM wins achieved during the quarter, which continued to drive strong double-digit organic growth. A large global fintech company specializing in online payments and employing over 20,000 people globally has selected Iron Mountain as its exclusive ALM partner for the secured disposition of its assets following the customers' consolidation of providers. Our long-standing relationship with this customer, our flexibility, and our experience handling sensitive assets contributed to this win. We also secured a new customer win with a global technology infrastructure provider with over 35,000 employees. Iron Mountain was chosen to manage a large batch of materials the customer accumulated through a series of acquisitions. Our solution met all of this customer's requirements, including chain of custody, reconciliation, secured wiping, and remarketing. Our reputation and brand were also key to this win. In conclusion, I'm proud of the strong results that our dedicated Mountaineers continue to deliver. Our team's commitment to meeting the needs of our nearly 250,000 customers worldwide is integral to our success. As Barry will share in more detail, we are increasing our full-year guidance to reflect the strong Q1 performance and positive outlook. With that, I'll turn the call over to Barry.

Thanks, Bill, and thank you all for joining us to discuss our results. Our team is off to a strong start this year, delivering record first-quarter results across all of our key financial metrics. We achieved record revenue of $1.59 billion, up 8% on a reported basis and 9% on a constant currency basis. We delivered strong organic growth in the quarter of 8%. Total storage revenue was $948 million, up $64 million year-on-year and up 9% on an organic basis. Total service revenue was $644 million, up $52 million from last year. Organic service growth of 7.1% was ahead of our expectations and improved slightly from the fourth-quarter rate despite lapping a much more difficult comparison from the prior year. Adjusted EBITDA of $580 million was a record for the first quarter and expanded $61 million year-on-year. This was $5 million ahead of the projection we provided on our last call. The upside to our projection was driven by $4 million of operating performance and approximately $1 million from the US dollar's weakening in the first quarter. Adjusted EBITDA margin was 36.4%, up 130 basis points year-on-year, which reflects improved margins across all of our businesses. A key highlight for me in the quarter was that our team delivered significant operating leverage with an incremental flow-through margin of greater than 50%, which is the highest we've achieved in years. AFFO was $348 million, up $25 million, which represents growth as compared to last year of 8% on a reported basis and 10% excluding FX. AFFO on a per share basis was $1.17, up 6% to last year on a reported basis and up 9% excluding FX. Now, turning to segment performance. I'll start with our Global RIM business, which achieved first-quarter revenue of $1.26 billion, an increase of $46 million year-on-year, driven by revenue management and digital solutions, partially offset by the stronger US dollar, which negatively impacted revenue by approximately $20 million. Organic storage was up 6%, driven by revenue management and consistent volume. Organic service revenue was up 5% with contributions from digital and core services. Reported service revenue was down $4 million on a sequential basis due to a $3 million decline in terminations and permanent withdrawal revenue and another $3 million headwind from the stronger US dollar. Our digital business had another strong quarter, achieving record revenue. We are also pleased to report improvement in our records management retention rate and storage capacity utilization, both of which achieved the highest levels we've seen in some time. Global RIM adjusted EBITDA was $556 million, an increase of $30 million year-on-year. Global RIM adjusted EBITDA margin of 44.3% was up 80 basis points from last year, driven by operating leverage and revenue management. Let me provide a brief update on our consumer storage business following our commentary on our last call. While consumer storage remained a headwind to revenue growth in the first quarter, the team is driving solid operating improvement. Profitability is increasing and we are seeing very positive trends in storage reservations, which is a key forward indicator for revenue. Turning to our global data center business. Total data center revenue was $173 million in the first quarter, an increase of $29 million year-on-year. Organic storage rental growth increased 24% driven by lease commencements and continued strong pricing trends. In the first quarter, new commencements were 12 megawatts, including 8 megawatts in Northern Virginia. Pricing remains strong with the average price per kilowatt on new commencements up 15% as compared to last year. We renewed leases totaling 10 megawatts with strong renewal spreads of 19% and 27% on a cash and GAAP basis, respectively. First-quarter data center adjusted EBITDA was $91 million, up 48%. Adjusted EBITDA margin was up 960 basis points from the first quarter of last year and up 60 basis points sequentially to 52.4%. Improved pricing, recent commencements, and operating leverage were the key drivers of the strong margin expansion in the quarter. Turning to asset lifecycle management. Total ALM revenue was $121 million, an increase of $37 million or 44% year-over-year. On an organic basis, our ALM team delivered 22% growth. The strong performance was driven by volume increases in both our enterprise and hyperscale businesses. On an inorganic basis, Wisetek and APCD continued to perform well and contributed revenue of $18 million. We are pleased with the continued improvement in ALM profitability, which was up significantly as compared to last year, benefiting from acquisition synergies as well as improved operating performance across the business. As we discussed last quarter, our strong customer wins, both in enterprise and hyperscale give us high visibility to accelerating growth as we move through 2025. I will note that our organic growth increased over 1,000 basis points on a sequential basis, ahead of our expectations, despite pricing being broadly flat to slightly down. Regarding our acquisition of Premier Surplus, I should note, this was completed right at the end of the first quarter. So, its results were not included in our quarterly financials. For modeling purposes, we expect Premier will contribute revenue of approximately $10 million to our full year results. Turning to capital allocation, we remain committed to our strategy that is balanced between funding our growth initiatives, delivering meaningful shareholder returns, and maintaining our strong balance sheet. Capital expenditures in the first quarter were $657 million with $629 million of growth and $28 million of recurring. Our outlook for capital expenditures is unchanged from our prior call with approximately $1.8 billion of growth and approximately $150 million of recurring, both consistent with the levels from last year. We are planning for capital spending to be more first-half weighted. Turning to the balance sheet. With strong EBITDA performance, we ended the quarter with net lease adjusted leverage of 5.0 times, in line with our expectations for both the quarter and year-end. Turning to our dividend, our Board of Directors declared our quarterly dividend of $0.785 per share to be paid in early July. On a trailing four-quarter basis, our payout ratio is now 62%, in line with our long-term target range. And now, turning to our outlook. Based on our strong first-quarter performance and positive outlook and recent changes in currency exchange rates, we are pleased to increase our financial guidance. For the full year 2025, we now expect total revenue to be within the range of $6.74 billion to $6.89 billion, which represents year-on-year growth of 11% at the midpoint. Relative to our prior guidance, we are raising revenue by $90 million based on the weaker US dollar, continued strong revenue management, improved outlook for ALM performance and the Premier Surplus acquisition. We now expect adjusted EBITDA to be within the range of $2.505 billion to $2.555 billion, which represents year-on-year growth of 13% at the midpoint. Relative to our prior guidance, we are raising adjusted EBITDA by $30 million. And we now expect AFFO to be within the range of $1.48 billion to $1.51 billion in AFFO per share to be $4.95 to $5.05. At the midpoint, this represents 11% and 10% growth respectively. For the second quarter, we expect revenue of approximately $1.68 billion, an increase of 10% to last year. Adjusted EBITDA of approximately $620 million, up 14% year-on-year. AFFO of approximately $350 million, which is up 9%. And AFFO per share of approximately $1.18, up 9% to last year. Before closing, I would like to address two additional items. First, regarding the contract with the Department of the Treasury that Bill mentioned, as it was awarded just last night, we have not included it in our financial guidance. For modeling purposes, we expect the contract will generate revenue in both 2025 and 2026 with the majority of the benefit next year. We look forward to updating you on the progress of this deal and our technical difficulty on our next few calls. Second, knowing that tariffs are a key area of investor interest, I wanted to provide some perspective on our exposure. In our Global RIM business, our exposure to tariffs is essentially zero as our revenues and costs are matched based on each market in which we operate. In our ALM business, the vast majority of the revenue is generated from IT gear that we decommission and then resell in the same market. For example, we decommissioned gear in the US and then resell it to US-based customers. And as a result, there is no cross-border impact. While we do have some components which are sold into China, let me share a couple of important points. First, over the last few years, the team has done a terrific job significantly diversifying our downstream sales away from China. And for those components that are sold into China, I would highlight that tariffs tend to be based on the original manufacturing country of origin, and as such, we would not anticipate an impact on our component sales. Lastly, in our data center business, the vast majority of the cost of construction is not subject to tariffs. We estimate that we have less than 5% exposure within data center construction. With that said, let me conclude. Our year is off to a great start with record-breaking first quarter results across all key financial metrics. Our outlook is strong and we are pleased to increase our full year guidance. We are focused on driving double-digit revenue growth over many years, supported by our strong cross-selling opportunity into what are very large fragmented markets. I want to express my gratitude to all of our mountaineers for their continued dedication to serving our customers. And with that, Operator, would you please open the line for Q&A.

Hi. Thank you very much. Bill or Barry, if you can just talk a little bit about the market for leasing. The leasing activity has been uncharacteristically low for the last three quarters. Last quarter, you talked about a large deal that you walked away from due to some market conditions you didn't want to accept. If you could just talk about what's going on, your confidence in being able to achieve that 125 megawatts, because it does assume pretty good step-up and down the rest of the year? And then if you don't mind my just tagging on, Barry, at the end of your last comment, you talked about the data center expansion, less than 5% exposure. If you don't mind just elaborating on that a little bit more because it's very timely and your ability to potentially change terms of customers in terms of there's tariff impacted cost changes with imports? Thank you.

Good morning, Shlomo. Let me begin with leasing, after which Barry will provide more details on how we estimated the 5% impact on construction costs. We had a strong quarter in leasing, particularly with our enterprise colocation sales, and we were satisfied with the leasing activity and the ongoing pipeline on the enterprise colo side. Regarding hyperscale, we are confident in our 125 megawatt guidance for the year based on our pipeline and discussions with several of our largest hyperscale customers in various locations, including the US, Europe, and India.

And, Shlomo, it's Barry. When we examine the construction costs for data centers, a significant portion relates to labor involved in site development, along with design and various construction expenses. There's also some import impact from materials like steel and certain MEP components. Overall, we estimate the total exposure is below 5%. It's important to note that we operate a global data center portfolio, so the situation in the US is one aspect of that. Regarding pricing, I believe the data center market remains robust. Our renewal spreads indicate this, and I expect that if tariffs persist, the market will adapt, allowing returns to remain strong. We feel well-positioned and don't anticipate significant tariff impacts on our data center business in the near future, particularly since much of our supply is secured through long-term commitments with staggered delivery schedules. Thank you.

Hi. Thanks. Good morning. I want to stick on the topic of data centers. You mentioned you're very pleased with leasing activity. You feel good about hyperscalers. But I want to take a step back. And so if you look at broader data center demand at the industry level, certainly has been evolving. Has there been any place within your business where you've seen any changes in demand in data centers from any part of your customer set?

Good morning, George. Thanks for the question. Actually, no. In the discussions that Mark and now Gary have been having, which I’ve been part of, we haven't noticed any changes in the demand from our largest customer on the hyperscale side, and this is consistent across North America, Europe, and India. Moreover, their announcements have remained quite solid, with some even increasing their guidance for expected capital expenditures over the next 12 to 24 months. It's worth noting that about half of their capital expenditures is usually outsourced, though this can vary by hyperscale customer. Therefore, we haven't observed any significant changes in that macro environment, and the scarcity of power and locations continues to provide us with a strong pipeline.

Thanks. With respect to your sales strategy and initiatives across the businesses, I was wondering if you could talk to us about what your most important initiatives are and how you think you're tracking against them for this year and in the next.

Thank you, Tobey, for your question. You're highlighting a fundamental aspect of the Matterhorn strategy. The significant change we've made is the creation of a Chief Commercial Officer position, held by Greg McIntosh, who serves as a central contact point for our customer relationships. It's essential to understand that Matterhorn is not only about our expanded portfolio of products, which has grown our total addressable market from $10 billion to over $160 billion, but also about how we present a single point of contact for our customers. This approach has transformed us from a company with single-digit growth to one that consistently achieves double-digit growth, as customers appreciate the convenience of a one-stop shop for a wide range of products and services. Additionally, it's important to note that over 25% of these products and services benefit from macro trends that typically see growth exceeding 20%. You've accurately pointed out that a significant element of the Matterhorn transformation is providing that singular customer contact within Iron Mountain, enabling us to promote our entire range of offerings.

Great. Thanks so much. Hey. Hey, Barry, can you maybe disaggregate the $90 million of increase on the revenue and the EBITDA? How much of that was currency versus revenue management? It sounds like Premier was about $10 million. But how much of the additional $80 million or so was FX as opposed to other things?

Good morning, Kevin. Thanks for your question. The increase was $90 million, with approximately $75 million attributed to changes in exchange rates. We also saw a contribution of $10 million from Premier, leaving between $5 million and $10 million as pure operating performance, depending on how you analyze the FX impact. It's still early in the year, and we are feeling very positive about the business's trajectory. Additionally, I did not factor in our recent contract win with the US government, so I am optimistic about our guidance and will keep the market updated on our progress throughout the year. Thanks again for your question.

Thanks. One on data centers and then one on ALM. So, for data centers, just interested in kind of where you see the opportunity set by region. Where might be the deal volumes or the deal sizes be the most meaningful relative to your portfolio?

Thank you for the question. Starting with the US, we have a robust pipeline, particularly in Northern Virginia, which includes our Manassas campus, and we're also seeing growth in Richmond, which is becoming a significant area for us. Our Chicago locations, relatively new to our portfolio, are showing strong interest as well. Recently, we broke ground on our Miami facility, which is smaller and focused on edge deployment, but there is also considerable demand there. In Arizona, our pipeline is strong, but we are nearing full capacity. So right now, the key markets are Northern Virginia, Richmond, and Chicago, along with edge deployments in Miami. In Europe, we are expanding our Amsterdam campus, which continues to show strong pipeline potential. Amsterdam is crucial for many hyperscalers, and there is limited capacity not just in Europe, but specifically in Amsterdam. We are optimistic about our projects there, as well as in Madrid, which are among our top markets. Currently, we are sold out in Frankfurt and London. Moving to India, which is a newer market for us, we recently acquired the remaining stake in Web Werks, making it fully owned. We are witnessing a strong pipeline across their sites, particularly in Mumbai and Chennai, where we are expanding our presence. Barry, would you like to add anything regarding ALM?

Jon, did you have an ALM question there? I know you said you did.

I was interested just in the mix and how you see it evolving across cloud, hyperscale and enterprise, international versus US and then the lens with which you kind of evaluate potential for the M&A in that segment.

I will start by discussing the mix and then Barry can address the M&A question. Regarding the mix, as we mentioned in the last call, the ITRenew acquisition has led to a historical skew towards hyperscale and the decommissioning of data center assets. However, this is beginning to change due to acquisitions like Wisetek, Premier, and Regency, which have focused more on the enterprise sector, as has the market itself. Currently, the market is approximately 70% enterprise end-user devices and IT assets within enterprise customers, and 30% data center decommissioning, while our previous mix was closer to 60% data center decommissioning and 40% enterprise. We are pleased to see this shift as we continue with our acquisitions, which enhances our cross-selling opportunities with nearly 250,000 enterprise customers. Geographically, we are happy to have improved coverage in the southern United States thanks to our recent acquisition and feel adequately covered across the U.S. in terms of customer service. Wisetek, an Irish company, has also strengthened our presence in Europe and has a small footprint in Thailand, which aids our Asian operations. We are still exploring opportunities in India, where we have a minor presence, and we recognize that more work is required in both India and the Middle East. We have also announced an acquisition in Australia, which I visited recently and is off to a great start as it is a significant market. In summary, you will see our business increasingly reflect the broader industry trends, shifting towards a more balanced mix of about 60-70% enterprise and 30-40% data center decommissioning. Geographically, we are well established in North America and Europe, though we continue to explore opportunities in Eastern Europe, India, the Middle East, and also look for potential markets in Latin America.

Jon, it's Barry. I want to share a few additional thoughts. In the first quarter, our revenue split was approximately 59% from enterprise and 41% from hyperscale. If we factor in the Premier deal, that would shift to the low 60% range, as Bill mentioned, and it's on an upward trend. We value both sectors of our business, enterprise and hyperscale. In hyperscale, there is significant visibility into a large volume of growth due to the ongoing decommissioning of data centers, which are expanding rapidly. This results in considerable volume, although the margins are lower as it operates more on a revenue-share basis. On the enterprise side, we have a more stable flow business that resembles an annuity model and offers better margins since it is primarily a service offering. Furthermore, as Bill noted, the enterprise market is significantly larger than the hyperscale market, and we anticipate continued growth in this area, enhancing our margin mix. This shift also opens more opportunities for us to achieve operational leverage and efficiency across our network, allowing us to better serve our clients. We're observing some of these benefits as we scale up. As I mentioned in my prepared remarks, our ALM profitability continues to improve, and the team is performing exceptionally well, thanks to synergy from acquisitions and enhanced operating leverage. Regarding acquisitions in the ALM sector, we are actively pursuing smaller tuck-in opportunities. We generally see acquisition multiples in the mid to high single-digit range of EBITDA, which can quickly adjust to below five times when accounting for synergy. This approach not only fosters growth but also complements the organic growth our team is achieving. I'd like to highlight that the team delivered a robust 22% organic growth in the quarter within ALM, reflecting a strong increase compared to the fourth quarter. As we mentioned earlier, we have a strong trajectory for this organic growth to continue accelerating, Jon. Thank you for your question.

Brendan, if you're muted, we can't hear you.

Sorry, how about now?

Yeah, we got you, Brendan.

Okay. Sorry about that. Yeah, sticking with the ALM theme, the volume was up quite a bit in the quarter. Can you talk about what triggered that? Did downstream pricing or something else change in the market that allowed you or your customers to accelerate the pace of selling inventory?

I believe it's more about the fact that we've been consistently gaining more business, and our team is expanding our enterprise book of business through the wins we've achieved over the past year, which tend to build on each other. As I mentioned earlier, this business is flow-oriented; when we win an account, we generally start taking on increasing volumes from that account, especially since all the accounts we're acquiring have existing methods for recycling and reuse. Therefore, the enterprise volume continues to grow. Regarding data center decommissioning, as we noted last year, we are still winning additional accounts and gaining more share within the accounts we already service. As for pricing, I want to reiterate a point I made in my earlier comments: pricing in the market was mostly flat or slightly down. It didn’t create any significant opportunities. Additionally, in my future projections, we took a more conservative stance on pricing, keeping our assumptions at the levels they were at the end of the first quarter. While this may prove to be conservative, we felt it was the right approach given what we observed during the quarter. Overall, we feel very well positioned.