Good morning, and welcome to the Iron Mountain 2Q 2023 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the Star 0. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press Star 1 on your telephone keypad. To withdraw your question, please press Star 2. We will limit analysts to 1 question, and you can rejoin the queue. Please note this event is being recorded. I would now like to turn the conference over to Jillian Tilton, Senior Vice President and Head of Investor Relations. Please go ahead. Thank you, Andrea. Good morning, and welcome to our second quarter 2023 earnings conference call. On today's call, we will refer to materials available on our investor relations website. We're 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 risks and uncertainties. Please refer to today's earnings materials, the Safe Harbor language on slide 2, and our quarterly report on Form 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. We use several non-GAAP measures when presenting our financial results. We have included the reconciliations to these measures in our supplemental financial information. With that, I'll turn the call over to Bill. Thank you, Jillian, and thank you all for taking time to join us today for our discussion of our record second quarter results. Our team has once again exceeded expectations with performance reflective of our strong legacy of customer service, our laser focus on execution, and our dedication to finding innovative solutions to serve our customers as they evolve their businesses. I'm excited to share that in the second quarter, we achieved our highest-ever quarterly revenue of $1.36 billion and record EBITDA of $476 million. This performance is ahead of the expectations we provided last quarter. The enhanced operating model we created through Project Matterhorn has continued to prove successful, as our commercial team is empowered to sell the entire mountain range of products and solutions across our portfolio. We are pleased with the high quality and wide range of our offerings today, which positions us to be a nimble partner to serve our customers' needs. To highlight some of our results in the second quarter, we delivered organic storage rental revenue growth of 11% and drove high teens organic growth in both our data center and digital services businesses. We are also pleased to announce that our board of directors has increased our quarterly dividend per share to $0.65, or $2.60 per share annualized, commencing with our third quarter dividend to be paid in October. As we have said before, when our AFFO payout ratio reached the mid to low 60s as a percentage, we would increase the dividend. Our payout ratio at the end of the second quarter was just under 64%. I would like to begin our broader discussion of some of the customer wins, which led to our record second quarter results. Let me start with records management, where our success was derived from both new and existing customers. One significant win we would like to highlight this quarter was with a large not-for-profit hospital system. Faced with rising lease costs despite a shrinking, shrinking storage footprint, the customer turned to us for an alternative to storing in their own space. Our Smart Sort solution will address their needs over the next three years. It will deliver cost efficiency and optimize storage space for the customer before they transfer their records to an Iron Mountain facility for secure future management. This win exemplifies our commitment to solving our customers' problems and providing them with tailored solutions. The COVID-19 pandemic has led organizations around the world to reassess their current real estate portfolios in order to accommodate remote and hybrid work. Our customers are optimizing their real estate to accommodate changing working practices. We are able to offer solutions that demonstrate the breadth of our portfolio and the value of partnering with Iron Mountain across our products and services. One example is a customer who chose our Clean Start solution to remove and relocate records, office equipment, and IT assets from more than 60 offices across North America that are being closed or decommissioned over the next two years. Thanks to our asset lifecycle management solutions, we are also helping this customer to decommission IT assets from these offices securely and sustainably. We continue to see growing momentum for our digital business, with customers turning to us for solutions in areas such as public sector, industry-focused solutions, and end-to-end business process management. For example, we are proud to be supporting the digitization of real estate and mortgage records held by the Hellenic Land Registry in Greece under a two-year contract worth $35 million. We demonstrated our understanding of the public sector in Greece and of the European Commission's Recovery and Resilience Facility, which is funding this project through the Greek government to support European economies as they transform the way they support their citizens. This is a breakthrough deal that will provide further opportunities to support similar digitization projects elsewhere in Europe. Another example of how our digital business is enabling us to develop and deliver transformational solutions for our largest customers is with one of the biggest financial service companies in the United States. This customer is outsourcing its non-core services and has selected Iron Mountain to manage all of its records. Our end-to-end solution ensures a secure chain of custody, regardless of media format, for this customer, leveraging our Image on Demand service and InSight platform to integrate seamlessly with their customer success management system. This game-changing deal demonstrates the power of partnering with Iron Mountain to accelerate our customers' digital transformation. Staying with our digital solutions business, our 25-year relationship with a Fortune 500 gas and electric utility company continues to be a powerful example of how our customers turn to Iron Mountain because of the range of solutions we can provide. To ensure our customer is compliant with all legal and regulatory requirements, we are digitizing around 20 million images from 8,000 boxes stored with Iron Mountain over the next 3 years. Having provided records management and data management services since 1998, our customer was confident in our digital solutions, secure chain of custody, information governance expertise, and ability to scale up quickly to deliver this project. To conclude with records management, on the 29th of June, we acquired the controlling interest in Clutter, a tech-enabled, on-demand consumer storage company. We were previously a minority investor in Clutter and provided storage and operational services through a commercial partnership. This acquisition makes us the industry leader in valet self-storage services in North America. Turning to asset lifecycle management, we continue to see muted pricing for the largest part of this business, which relies on reselling used memory, hard drives, and CPUs we receive from hyperscalers. Pricing has stabilized, and we do expect to see an improvement as we head into next year. You will recall that our ALM business has three components: hyperscale decommissioning, which is highly dependent on component pricing; enterprise ITAD, or IT asset disposition; and original equipment manufacturers, or OEMs. In these latter two categories, we are seeing marked growth and traction. In the enterprise segment, our focus on cross-selling the Mountain range of products has driven bookings up 175% versus second quarter last year. For the OEM segment, you will recall that we signed our first MSA, or Master Services Agreement, in this area last quarter, and we have added another MSA with a second OEM this quarter. Turning to specific wins in the ALM area, a good example of our cross-selling appeal comes from the healthcare industry. A customer which has benefited from Iron Mountain's records management solutions for many years, has asked us to manage the recovery, decommissioning, disposal, and/or recycling of IT assets at over 2,000 locations in the United States. The strength of our relationship and our customer's inherent trust in Iron Mountain has resulted in an ALM contract and renewal of our existing services for the next 5 years. Also in ALM, our team secured a contract with a leading software and technology company to help them decommission racks of servers and non-essential IT equipment from their data center. Opportunities like this, where we are able to extend the value we provide to customers, have been significantly enhanced, thanks to the industry knowledge and expertise we have gained through our acquisition and integration of ITRenew. We remain very excited about ALM. Whilst component pricing remains a drag for part of the business, the growth we are achieving in the services side of the business shows how Iron Mountain's brand strength around security and reliability are a differentiator in this fast-growing area. Moving to our data center business, through the first half of the year, we leased 55 megawatts, which includes 2.7 megawatts this quarter. As we said in May, the first quarter was particularly strong as we signed some deals earlier than expected. Due to our strong pipeline, we now feel confident we will exceed our original projection of 80 MW in 2023. This confidence is thanks to our teams delivering record new sales in the first half, as well as the size of our late-stage pipeline from some of our largest customers as they add new capacity with the growth of AI. For example, we are well positioned with nearly 120 MW of unleased capacity on our NoVA campus, with power fully secured. In this very important market, we are pleased to note that pricing is moving up appreciably. Staying with our data center business, I would like to highlight a win that demonstrates the exciting opportunities to expand our solutions and services for customers with a footprint in India and the value of our joint venture with Web Werks in the country. As we have discussed before, India is a key focus for our company's growth, and our progress there is a major win for our business. In the second quarter, we closed a deal with a multinational media processing company to provide almost 1 MW of storage capacity at our Mumbai data center, with the potential to add a further 5 MW at this facility and extra capacity at other locations in India. Our data centers team's experience of handling high-density racks, Iron Mountain's wider understanding of the media industry, and our expansion plans in Mumbai, helped us to convince our customer that we are their best long-term partner as their capacity needs grow. Finally, I would like to mention an example of the success we are enjoying in our Crozier Fine Arts business as we build out one of the few globally integrated logistics, storage, and top-quality services businesses in the art world. Recently, we partnered with a major art gallery in the United Kingdom to support an exhibition by a well-known artist. This involved detailed planning and preparations to pack and transport 61 fragile sculptures from the U.S., Mexico, and Continental Europe. We are proud of the unique expertise that our Crozier teams provide for our customers and to be associated with important exhibitions like this one. To conclude, we are proud of the record results we delivered this quarter, as this is evidence that our strategy is working. As we continue to leverage the potential of our entire mountain range, expand our footprint of storage and services, and deliver tailored, innovative solutions for each of our customers, I could not be more grateful for the hard work of our Mountaineers. Our Matterhorn program is showing the way in delivering consistently strong sales growth while fueling AFFO growth and our dividend. We are more energized than ever to continue reaching new peaks, and I am excited for the bright future ahead. With that, I'll turn the call over to Barry. Thanks, Bill, and thank you all for joining us to discuss our results. In the second quarter, our team achieved solid performance across all metrics, exceeding the projections we shared in May. Revenue grew to a record $1.36 billion, up 5% year-on-year on a reported basis and 6% on an organic and constant currency basis. Revenue was above the expectations we provided on our last call, driven by outperformance in both our Global RIM and data center businesses. For me, a key highlight in the quarter is our organic storage rental revenue, which grew 11%. I'll note this performance was on top of a stronger year-on-year comp and represents an acceleration in rate of growth. This reflects strong contributions from revenue management, data center commencements, and positive volume trends. Total service revenue was $527 million, down 1% on a constant currency basis. This was consistent with our projections, which factored in the previously discussed year-on-year component price declines. Importantly, component pricing was consistent in the second quarter on a sequential basis. While this represents a significant headwind year on year, we are pleased that pricing has stabilized. As a reminder, that affects our ITRenew business most prominently. Excluding our ALM business, service revenue was up 8% on a constant currency basis. This would have resulted in total company revenue growth of 9%. Adjusted EBITDA was $476 million, a new record, up 5% year on year, with revenue management and strong data center commencements being the key drivers. Adjusted EBITDA margin was 35%, in line with our expectations, driven by revenue management and mix. AFFO was $277 million, or $0.94 on a per-share basis, up $6 million and $0.01, respectively, from the second quarter of last year. This was well ahead of the expectations we shared on our last call. Turning to segment performance. In the second quarter, our Global RIM business achieved revenue of $1.16 billion, an increase of $89 million year-on-year, reflecting organic revenue growth of 9%. Revenue management and positive volume trends contributed to strong organic storage rental revenue growth of 9.2%. We delivered organic service revenue growth of 9.3%, driven by digital solutions, which were up 20% year-on-year, and continued strength in core offerings. Global RIM Adjusted EBITDA was $499 million, an increase of $30 million year-on-year. Turning to our global data center business, From a total revenue perspective, we achieved 17% growth on an organic basis. Organic storage rental revenue growth was particularly strong at 22%, driven by commencements and improved pricing. As we projected, data center services were down year-on-year, given the fit out work we were performing in the first half of last year. As a reminder, the second quarter of 2022 represented the last quarter of these specific fit out services. We will have a more normalized comp on this line going forward. Data center Adjusted EBITDA was $54 million, representing 27% growth. Turning to new and expansion leasing, we signed 2.7 megawatts in the quarter, bringing total bookings year-to-date to 55 megawatts. As Bill mentioned, we are well on track to achieve our leasing projection for the full year of 80 megawatts. In fact, with the strength of our building pipeline, we have line of sight to exceed this projection. Turning to asset lifecycle management. In the second quarter, revenue grew 4% on a sequential basis, slightly ahead of the projections we gave on our last call. We are seeing positive momentum across all three verticals of our ALM business, which include hyperscale decommissioning, enterprise ITAD, and OEM. You will recall that China was mostly free of restrictions in the first half of last year. It returned to tight lockdowns in the second half. As a result, as we anniversary the second quarter, comparisons going forward will be much more favorable. While we are diversifying away from China, it is the largest market into which we sell components today. At the beginning of this year, as lockdowns eased, while component volumes increased, pricing declined to record low levels. Industry analysts project marked improvement in pricing by the fourth quarter and even more significantly in 2024. To be prudent, we have not factored any pricing improvement into our outlook for 2023. Turning to capital, in the second quarter, we invested $320 million, of which $287 million was growth and $33 million was recurring. In 2023, we now expect total capital expenditures to be approximately $1.2 billion, up $200 million from our prior expectations. This reflects an increase to our data center development plans, given our strong leasing year to date and building pipeline that I mentioned. Turning to the balance sheet, with strong EBITDA performance, we ended the quarter with net lease adjusted leverage of 5.1x, reflecting a meaningful improvement from last year. We have remained at this leverage level for the past 3 quarters, and it marks our lowest leverage level since 2017. Importantly, we expect to exit 2023 at this level, even with our increased investment in data center. Turning to our dividend, on a trailing four-quarter basis, our payout ratio is now 63.9%, an approximate 400 basis point improvement from this time last year. As you saw earlier today, we are pleased to announce that our board of directors has authorized an increase to our quarterly dividend of 5%, bringing it to $0.65 per share, to be paid in early October. This is consistent with our long-term commentary that as our payout ratio settles into the mid to low 60s as a percentage of AFFO, you should expect the dividend to rise. We remain dedicated to our disciplined approach to capital allocation as we are funding our growth objectives while continuing to drive meaningful shareholder returns. Now turning to our projections. For the full year, reflecting our performance in the first half and strong outlook, we are pleased to reiterate our full year guidance. For the third quarter, we expect revenue in excess of $1.4 billion, Adjusted EBITDA of approaching $500 million, AFFO of approximately $290 million, and AFFO per share of approximately $0.99. I would like to provide a bit more context for our guidance. In terms of revenue, our third quarter projection equates to growth of 9% as compared to the prior year. To frame that, I would recommend investors consider the following points: First, the prior year comparable in our ALM business is much easier in the third and fourth quarters of this year as compared to the first half. Second, we have incremental revenue management actions, which will go into effect in the third and fourth quarters and will provide a nice tailwind. Lastly, if you consider the underlying trends in the rest of the business, growth has been accelerating for several quarters now as our Matterhorn efforts are driving performance. For example, excluding our ALM business, the rest of the business's growth rate was 8% in the first quarter, 9% in the second quarter, and our projection is for 10% in the third quarter. Just as a reminder, the fourth quarter of 2022 is our easiest growth comparable this year. To conclude, our team continues to execute well and remains focused on driving our growth agenda. We have a growing and well-diversified pipeline, and we are positioned to achieve our objectives. I would like to take this opportunity to thank our entire team for their efforts and contributions. With that, operator, would you please open the line for Q&A? We will now begin the question and answer session. To ask a question, you may press star, then 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then 2. We will limit analysts to 1 question, and you can rejoin the queue. At this time, we will pause momentarily to assemble our roster. Our 1st question will come from George Tong of Goldman Sachs. Please go ahead. Hi, thanks. Good morning. In the ALM business, performance was impacted by component price declines, and you noted that you saw signs of stabilization in component prices. Can you elaborate a little bit more on that? What trends specifically did you see on component prices, and how would you deconstruct ALM growth between pricing and volumes? Okay. Hi, George, this is Barry. Thank you for the question. Yeah, let me help you with that. From a standpoint of the way the decommissioning and component pricing business has been unfolding this year, as you know, early this year, late last year, and to early this year, component pricing was dropping quite appreciably, and by about the February time frame, it had reached or essentially all-time record lows. That's really across the gamut of component pricing, from memory to CPUs, all the various components that we're selling. That has obviously been a significant impact for both for Iron Mountain, but also for many other players in the technology industry. I think importantly, what you've seen, and I'm sure you would have been following this, is many of the OEMs have significantly reduced their production of new components, which is now limiting supply in the marketplace. Of course, used component pricing tends to directly correlate and follow with new. What we've seen here since the component pricing hit the lows in the kind of February timeframe is, importantly, pricing has been very consistent. In fact, some components have been ticking up. We've seen that in certain elements of memory, among other component pricing. What we've worked into our outlook, though, George, is that we are keeping component pricing in our outlook for this year at this record level, low levels. Our thought process is that's a prudent way to plan. When you look at industry analysts, there's, this is publicly available data, there are many estimates that project for component pricing to begin to lift as we move through the remainder of 2023, in fact, have very, very sharp increases in most component pricing next year, in light of supply and demand expectations. As I said, we're not baking that into our 2023 outlook for prudent reasons. We are anticipating that our total ALM business will be up just a few million dollars on a sequential basis in the third quarter, then will be up again in the fourth quarter. That speaks to the points that Bill made in his prepared remarks, that, for example, in our enterprise ITAD business, bookings are up a tremendous amount in the second quarter, year-over-year. We are winning more decommissioning business across that decommissioning vertical. Of course, our OEM teams have been winning very important wins for us, which I think set us up very well for the intermediate and longer term in the broader asset lifecycle management space. Volume on a sequential basis was essentially equivalent, George, which we felt good about. I would say the forward pipeline, as it relates to volume, in light of what I've just mentioned, is favorable for us. We feel that we are now getting through the hardest comps of the year. You know, as you know, last year, we were $71 million-$72 million of revenue in the first quarter with ALM. We were $83 million in the second quarter. That dropped quite appreciably to $60 million in the third and $55 million or so in the fourth. That goes to my point about the comps get easier. With pricing being flat to up, we feel well positioned. Thanks, George. The next question comes from Nate Crossett of BNP Paribas. Please go ahead. Thank you. Is it fair to say, I guess, that the service revenue growth year-over-year, this is the low quarter in 2Q, and that we should expect maybe it to trend up from here? Then maybe just comment on storage rental growth that still remains very strong. Can you maybe just speak to recent customer conversations and, you know, your ability to push price? Okay. Thanks, Nate. This is Barry. A couple things there. On services, yes, you are thinking about that right, because really, when you look at the total company's service revenue growth, it was, you know, completely impacted by the fact that the ALM business was essentially half that which it was in the prior year. At that $40 some million of revenue, that's a big drag on the, on the service in total, because as you know, all of the ALM revenue essentially is on the service line. I'll give you a, a point that if you look at Global RIM, for example, our service revenue there was up over 9%. The total company's service revenue will be improving. It should be positive in the third quarter, of course, and furthermore in the fourth quarter, because frankly, by then, ALM no longer is a drag on our service revenue. In fact, I think it may even, there's a chance it may be accretive to growth rate in service by the fourth quarter. In terms of storage rental revenue growth, you know, we have had, as your question alludes to, strong performance there, and our revenue management actions have been very well received. We are, of course, very focused on driving value for our customers and making sure that they understand the significant value that Iron Mountain provides, both in terms of our core offerings of records and, but also all the other offerings that we can cross-sell around things such as enterprise IT Asset Disposition, data center services, among other. In terms of where you should expect storage rental revenue growth, volume has been trending very consistent with our expectations. It's been modestly positive, and we continue to expect that positive outlook. From a revenue standpoint, total revenue standpoint, you should expect it to continue to be comping quite well. As I mentioned in the prepared remarks, we do have some incremental revenue management actions in the third quarter and the fourth quarter, and that helps the growth rate, particularly in the fourth quarter, Nate, because as you may remember, last year, more of our revenue at management actions were shifted into the third quarter just from a timing of what we were doing last year, and this year is a little bit more spread out. These new revenue management actions that I alluded to today on the call, that's incremental to our prior plans and will be, as I said, a nice tailwind to growth rate. Thank you for the question, Nate. Just one thing I would add for Nate on the, on the storage trend from a volume you probably picked up from some of the wins we highlighted, is that as companies are shifting their use of, of space, as the workforce is more remote or hybrid, that's yielding both increased volume for our storage facilities as they clean out or decide that they want to have it depoted, rather than in an office that people don't, you know, visit as much or at all anymore. As well as, as Barry pointed out, that's part of behind this 175% year-over-year increase in ITAD bookings, both because as companies are kind of cleaning out, it's a tailwind both on the storage and in the ITAD business. The next question comes from Andrew Steinerman of J.P. Morgan. Please go ahead. Yes, hi, this is Alex Hasson for Andrew Steinerman. Maybe just to dig in on Global RIM for a second. Can you remind us what% of storage revenues are in some manner CPI linked with, you know, maybe what the price floor and lease terms look like nowadays? Then just quickly on Clutter, how does that factor into your outlook? You know, maybe some thoughts around that business, which we understand had some cash flow issues as a standalone company on its own. Thanks, guys. Okay. Hi, Alex, it's Barry. Thanks for those questions. You know, for proprietary and confidential reasons, we don't generally characterize our contracts too specifically. What I'll say is, you know, and certainly, as you know, you've followed the company for such a long time, we have a, a, a very large number of customers, you know, two hundred and, call it, 200+ thousand client relationships. The vast majority of those are on our standard, if you will, paper, that allows us to affect revenue management actions. You know, and, and as I said before, we are very aligned with driving value at times of, essentially our choosing, and is not, if you will, linked to any sort of indices. There are some, what I would describe as more bespoke contracts with some of our largest clients, which may have, you know, specific agreements around escalators and the like, but that is the, that is a small number of total contracts. With respect to Clutter, appreciate that question. As just to help others who may not be as familiar with Clutter. Clutter is a business that we have had a minority stake in for a while now. It, and it was a form of a joint venture. We owned about 25% of the company prior to the transaction that we mentioned this morning, and that's on the valet self-storage. It is a business that we have been providing, if you will, back-end services to for some time, and storing a fair bit of the volume that Clutter had been bringing in from consumers. What Clutter's focus had been on is, is building a brand and aggregating consumer demand, principally in, as Bill mentioned, tech-enabled manner. On a net basis, when all is said and done, we'll pay a little over $20+ million to buy the business. We'll also contribute various of our assets, so you'll see that through our other expense and income line on the P&L. From a standpoint of, for your modeling purposes, you know, revenue on a quarterly basis, this being the incremental revenue that Iron Mountain will recognize now, because, of course, we were recognizing revenue from what we were doing for services to Clutter previously, we'll recognize, you know, maybe a bit over $10 million. It'll be in excess of $10 million on a quarterly basis, likely to be growing as we move into the new year. From an EBITDA standpoint, and you would have seen this from our prior filings, because, of course, we were absorbing our minority interest in Clutter through our P&L. As I said, they've been building their brand for some time, so it is, Clutter has been absorbing a modest EBITDA loss on a quarterly basis. Think something in the vicinity of $2 million a quarter. Over time, and perhaps, you know, by, let's say, 2024, we expect to be able to drive that to break even and ultimately to generating positive EBITDA out of the Clutter enterprise itself, as we drive operating synergies by combining the two businesses together. I'll just note, of course, Iron Mountain had been generating a positive EBITDA on the relationship previously, so the incremental negative drag that I just referenced, is purely off of the brand building elements of the Clutter enterprise itself. The last thing I'll note is, Alex, is, of course, we reiterated our guidance and feel very good about it, despite absorbing that little drag there from Clutter that we'll absorb here in the second half. Appreciate the questions. The next question comes from Shlomo Rosenbaum of Stifel. Please go ahead. Hi, thank you very much. Could you talk a little bit about the gross margin trends? They were, looked like they were down, particularly in the services, down, like, 200 basis points year-over-year. Does that have to do with something from ALM or something else? I saw the labor costs were up almost 10% year-over-year. Also, I thought maybe you could just comment, you know, Bill, I always ask you about talking about the underlying trends in the volumes in the RIM business. If you could just comment on that, are you getting more positive trends in the, you know, the historical mature markets than what we've seen before? You mentioned, like, that hospital contract. Is that something that's, you know, is gonna lead to more positive, you know, volume trends in an area that historically had been a little bit more of a weaker trends? Okay. Let me start with the labor costs and the trends in terms of the volume. I think, first starting off on the volume trends as I was saying to Nate, on to Nate's question, is that, you know, overall, the volume, as you can see, is flat, slightly up, so it's trending in the right direction. I wouldn't say this is a, you know, gonna be a, you know, massive change. What we see if, you know, if you think about 730 million cubic feet, so it's a very large base that we're operating on, is the trends that we see both in some of the new storage areas, but as well as what we see in people going into a hybrid or remote working aspect, it really is getting a lot more traction for our Smart Sort and, and Clean Start type solutions, which, which uncover more storage. Also, the services that we can provid e being depot. In other words, we can serve their- their employees anywhere they are. You know, they don't have to come to the office to actually get information back, whether we give it back to them physically or Image on Demand. It's also uncovering, as we say, it's driving a lot of the increased bookings that we see in the enterprise ALM side of the business, and fueling that 175% growth that we see. Overall, we feel really good about where the trends are, but you can imagine on 730 million cubic feet around the world, is that, you know, even what I call quite macro trends that I described are, you know, don't change the overall trajectory, like, massively. It is definitely a tailwind for that, that business. On labor costs, before I hand it back to Barry, you're right, labor cost is up. Some of it is as we go into new areas in terms as we ramp, or some of the, the projects that we ramp on, then obviously we're bringing labor in ahead of time. The other part is making sure that our Mountaineers around the world are well looked after, because we really do see, you know, it's the, it's the core to our existence. We're a business services company, and the first impression that our customers have is our Mountaineers, and we want to make sure that they and their families are well looked after in the inflation environment. Shlomo, this is Barry. Maybe I'll just pick up there on Bill's point. You, you're right, it was up that level of year-over-year. You would have seen a similar increase in the first quarter when we made the actions, as it relates to improved wages that Bill was just referring to. I would point out, on a sequential basis, labor was up about 2%, while service revenue was up 5% on a sequential basis, reflecting the operating leverage that the team is driving. The other thing you mentioned more broadly about service gross margins, first up, they were up 110 basis points sequential basis. Yes, they were down year-over-year. As your question alluded to, that has all to do with our component pricing, ITRenew, because when you think about it, we are still processing a considerable amount of volume, yet we are recognizing a much lower price. If you excluded the impact of component pricing, actually, service gross margins were up quite nicely, which speaks to the ongoing trend in the rest of the core, and frankly, to the productivity that the team is driving in asset lifecycle management. When you think about what could happen with our gross margins as pricing recovers, we've got a lot of operating leverage in that business. I feel good about the forward look. If the industry projections are anywhere close to accurate for where pricing will be next year, I think we're gonna see a really nice lift there. Thanks, Shlomo. The next question comes from John Atkin of RBC. Please go ahead. Thank you. Couple questions. First, just interested in how to kind of frame the exposure in your data center business to Cyxtera, where there's a lease in Phoenix. Then, interested in just the data center development pipeline and kind of the opportunities ahead, and your thoughts about bringing in third-party capital to maybe co-invest. There was obviously a recent transaction in India and in other countries where third-party capital, you know, is, is, is being folded into the development projects of some of the established players, and your thoughts on pursuing that route from a capital standpoint. Thanks. Okay. Thanks, John. I'll start with the what we see on the data center, you know, horizon. Our data center business continues to grow. Also, as you know, I know you cover the industry extremely closely, is that, you know, pricing is up markedly. Like, if we look in, you know, markets like Northern Virginia on a triple-net basis, as we see around the hyperscale segment, you know, pricing up some 40%. We, we, the returns continue to grow and keep pace. I think in terms of you know, looking at, you know, looking at the size of our pipeline, you know, Barry mentioned that we've increased our capital allocation to about another $200 million on top of the $1 billion that we already had for investment capital in 2023, based on the strength of that pipeline and the success that we're having pretty much across the globe, is that, you know, I mean, you're right that we're always kind of conscious of in terms of how we fund our projects. That being said, we're actually fortunate that we have the records management business and our other service business, which is like a financial beast. I mean, it just generates a tremendous amount of cash that not only fuels the dividend, but it also fuels a lot of the development capital into our data center. I wouldn't say that we're in a situation where kind of a company that is, you know, solely in the data center space that, you know, has only to itself to look for in terms of how it funds itself going forward to drive a lot of the development. You know, we actually have a growing, but, you know, some people would consider a mature business in terms of the amount of capital we have to put into that because it's a very scaled, high operating leverage business, and we're able to use funds and profitability from that to fund a big part of our development. That being said, as you know, that we've done, we have taken third-party capital a couple times already, and we typically do that on stabilized or near stabilized assets and tap into funds that where people are looking for, you know, relatively low yielding, but long, maturity or duration type assets. We'll continue to do that as some of our portfolio stabilizes. You know, I can imagine that we would recycle capital when the opportunity presents itself. Overall, if you look at the plan that we laid out last September in terms of our Investor Day, we're probably a little bit ahead of that in data center, just because of the growth that we've been seeing in the first half of this year and what we see in the pipeline. We feel pretty good about, you know, that we're, we have a fully funded plan in terms of the way we're doing it now. You know, if there's opportunities, as I say, to, to take third-party capital, especially around stabilized assets, you know, generally, that, that boosts our returns long term, and, and, you know, we'll do that. Yeah. Hey, John, it's Barry. Thanks for the question. You know, for natural, and perhaps obvious reasons, we don't tend to comment on individual clients. As you noted, there's some things out there in the public domain as well as in their filings, that would confirm that they're a client of ours in Arizona. That's obviously a very long-standing relationship that goes back to prior to our ownership of one of the data centers that we purchased there. I mention that intently, because, of course, it's a long-standing contract with pricing that goes back quite a ways, and frankly, is sort of almost a built-to-suit type of situation for them, where, you know, it would not be... Well, let me put it this way. In Arizona, we are essentially 100% leased in everything we have, whether it be in our AZP-I facility, AZP-II, we're 100% leased. We're 100% leased now in Scottsdale. On what we're under construction for in our second facility, phase five and six, five and eight, we're 100% leased as well in terms of pre-lease. You know, it's a not a particularly large revenue client, John, and beyond that, I wouldn't want to comment, but you would see in the filings the relative amount of, let's see, credit that we have between the two entities. I feel very confident that in light of the, where we see pricing, on general hyperscale pricing today, we're seeing on a triple-net basis, pricing up about 40%. You know, we feel very good about where data center is trending on a macro basis and where we are. One last point, just build on something, Bill was mentioning. When we look at, I think there's a unique part of our data center story is, we're operating about 220 megawatts, you know, we're nearly fully leased on that, and we're under construction on about another 200 megawatts. The thing to think about that is, we're not building to spec or anything, and we're 91% pre-leased on everything we have under construction at this time. When we talk about expanding our development, capital for growth, it's merely to build out the facilities we've already sold. Our team is doing a phenomenal job, and we're working, quick, hard to figure out which other facilities to start construction on, as, the pipeline continues to build quite appreciably. We feel really good about where our data center business is trending, John. Thank you. The next question comes from Kevin McVeigh of Credit Suisse. Please go ahead. Great, thanks so much, and thanks for the disclosures. Hey, Barry, can we unpack the guidance a little bit? I just want to make sure I understand, because it seems like you reiterated the full year, but if I think about the puts and takes, you know, it sounds like the pricing's a lot better. The CapEx is going up a lot, and again, that may not be revenue that comes in. Looks like the Q2 is a little better. It looks like the Clutter is gonna have some incremental revenue, modestly. Is the offset the ALM business, or is it just a little bit of conservatism? You know, just as you put that all together, how should we think about cash flow for the full year? Not operating, but just what the use of cash should be, particularly given the step up in, in the CapEx. Okay. Thanks, Kevin. Appreciate that. You're right that our revenue management program is doing very, very well, and obviously, our storage rental revenue growth is, has been growing, and as I mentioned, some of our growth rates are actually accelerating, that being one of those, and that's thanks to both our Global RIM teams as well as our data center teams, because commencements have been very strong. You referenced that CapEx is up, and that, as I mentioned, that's going to build out our data center portfolio that's already pre-leased. We are endeavoring to meet all customer demand, which continues to ramp. In terms of, you are, you're right, Clutter adds a relatively small amount of revenue. We probably are a touch more conservative with ALM in the back half, Kevin, than where we were at the beginning of the year, because, of course, at the beginning of the year, component pricing was still was still coming down, and now it's stabilized, and we've recognized that, those stable levels of pricing. As I said, you know, that may prove to be conservative as we move through the year, but we're only halfway through, so we tend to try to not get ahead of ourselves, Kevin. In terms of cash generation and, and the compilation of the incremental CapEx, here, here's what I'd underscore. We have reiterated our leverage expectations, that we will be at 5.1 times at year-end, which is consistent with where we are today and at, you know, a multi-year level low. We feel really good about the cash generation of the business. We're generating incrementally higher returns in data center on that CapEx investment. Returns on hyperscale have moved from kind of the 7, 8 level to more like 8, 9. Retail, cash on cash on levered returns are also quite firm. We're blending into that low double-digit vicinity on a combined basis. We feel really good about where things are trending, Kevin, appreciate your questions. The next question comes from Eric Luebchow of Wells Fargo. Please go ahead. Hi, thanks for the questions. 2, if I could. Just wanted to touch again on the data center pipeline. Any requirements you see that you think are tied to this wave of generative AI demand we're hearing about in the industry? Does that change at all how you design your data centers for some of the higher densities that are required for these types of deployments? Secondly, on the hyperscale ALM business, I know you've talked about China COVID shutdowns impacting that business. Has there been any move to kind of diversify your end markets to, for resale beyond China to help reduce the concentration there? Thank you. Thanks, Eric. Yeah, on the trends, that we're seeing, I mean, and you've been following this industry for, for eons. I think you see the same thing I did, or do, we have, right? I mean, maybe a year ago, we saw. Still very high growth in hyperscale, but they're probably a little bit more conservative. Now there's, there's another wave of really accelerated growth because they're trying to, to keep pace with the amount of compute power is required to really run a lot of these large language models associated with, you know, the AI programs. We have seen, You know, it's not just hype, but we actually see virtually all of our largest, hyperscale customers coming to us, looking for more capacity. That's, you know, why, you know, we were speaking with such confidence that, you know, we'll exceed our original full year guidance in terms of the amount of leasing activity we expect. It's, it's just, is very, very strong. Now, in terms of the type of deployment, you're also right, that the density that they're looking for is much higher. You know, I think, I think I'm right to say probably a year, year and a half ago, we didn't have any customers coming to us and asking us to water cool the in rack to actually support some of these higher densities. Now we are seeing a number of deployments that are requiring that kind of design. Luckily, I mean, we've built our designs to be flexible. Of course, for these large deployments, we're actually, you know, doing the design to, to be, to meet the customer, a very specific customer requirements. We're able to accommodate the higher density, quite easily. But you're right. I mean, with the density that some folks are looking at and the amount of power they wanna put in a rack, we are cooling using different methods and, specifically, some water cooling in rack to support the requirements. Eric, it's Barry. As it relates to diversifying away from China, as we've talked about before, that certainly is a focus of the team. We have added to our organization in ALM and specifically around diversifying the downstream channels. We are making steady progress, but it is, it is slow, because, of course, as we've said before, China is the main market for us in that regard. We are looking at and branching into throughout Southeast Asia. There are opportunities, we think, over the intermediate term in India. We certainly have been selling more components into the U.S. and Europe as well, and that's a key focus, as well as the Mid East. There are opportunities there, and we are building that, those, those, those channels. The other thing I'll just build on and link the two questions is, when you think about hyperscale decommissioning, we generally are decommissioning data centers that were put into service, let's say, five years prior, and so on average. The thing about AI and this very significant ramp in terms of hyperscale data center development right now, is it will provide even another leg to our hyperscale decommissioning growth five years on. You know, historically, I've had some questions about like, well, how does the decommissioning business continue to ramp over time? Of course, the things that we'll be decommissioning this year are components that were put in place about five years ago. Next year, we'll be decommissioning things that were put in place four years ago. As those data center platforms have grown, it provides that much larger of a platform for us to decommission in the future. I think it shouldn't be lost on us that this AI growth is gonna drive another substantial leg up in the opportunity for hyperscale decommissioning in the future. As the leader in that space, we feel quite good about the future. Again, if you would like to ask a question, please press star then one. Our next question will come from Brendan Lynch of Barclays. Please go ahead. Hi, good morning. Thanks for taking my question. I wanted to ask on the storage, or, excuse me, the retention rate in the Global RIM business, looks like it contracted about 100 basis points year-over-year, and it's at, probably the lowest level in the past two years. I understand that the storage business has generated really, really strong growth, driven by price, but maybe you could kind of square some of those dynamics there as well. Okay. Hi, Brendan. Thanks for the question. When you look at that metric, I'll just remind you that it is on a trailing 4-quarter basis. What you've got going on there is... What you've got going on there is an element of Covid still, because we were naturally seeing clients do a little bit less activity of, of, switching and/or destruction, what have you, during the Covid period and even in the period after we all felt like Covid was over, if you will. So that's a little bit of catching up. If you look back and on that metric over, let's say, the last 15 years, and that data is available in our historic disclosure, you find that we're in a very tight band and not outside our normal levels from a pre-Covid standpoint. I appreciate the question. I will, I will tell you that we feel, you know, we our customer relationships are very good. We can, you, you linked it to revenue management. I would say our focus on revenue management is continuing to educate our customers on the very significant value we drive for them day in and day out. The fact that our volume continues to trend positively, I think, should give you a very good indicator there of, of how we're doing with our customers. This concludes our question and answer session and the Iron Mountain second quarter 2023 earnings conference call. Thank you for attending today's presentation, and you may now disconnect.