What happened

Shares of Iron Mountain (IRM +1.36%), a real estate investment trust (REIT) specializing in document storage, gained nearly 20% in the first 30 minutes of trading on Thursday. There's little question about what got investors excited about the company, which has one of the most boring businesses in the world: It was earnings.

So what

The core of Iron Mountain's operation is taking boxes filled with physical documents and placing them in long-term storage. This is not a high-growth business, but it is a very sticky one since most customers don't really want to go through the effort of moving their boxes to another storage company to save a few bucks. This business, and related operations, saw first-quarter net operating income increase by 2.1%. Adjusted EBITDA margins in this segment increased 230 basis points.   

Image source: Getty Images.

That's good news, especially as other REITs struggle to deal with the impact of COVID-19. But it's not nearly exciting enough to justify a 20% pop in the stock price, considering that the document storage business is actually facing material long-term headwinds as the world shifts to digital records.

What was far more interesting was that this cash-cow business continues to support Iron Mountain's expansion into higher-growth data centers, which grew net operating income by 10% in the first quarter. All in, funds from operations (FFO) were up nearly 23% year over year.  

Now what

Iron Mountain is in the middle of a large and slow-moving transition from a world driven by physical documents to one that is digital. The first quarter shows that it is making solid progress on its plan to support the core (document storage) while expanding the new (data centers). In a turbulent time for the global economy, investors were clearly very pleased with the positive update.