May 2 (Reuters) - Iron Mountain beat market

expectations for first-quarter revenue on Thursday, as clients

of the real estate investment trust spent more to develop data

centers to cater to the growing need of handling large

artificial intelligence workloads.

With more businesses upgrading their cloud infrastructure,

bigger investments are made in data centers despite elevated

borrowing costs and sticky inflation.

"Our consistent strong performance is evidence that our

strategy, through Project Matterhorn, is working," Chief

Executive Officer William Meaney said.

Iron Mountain unveiled Project Matterhorn in 2022 to

increase its annual revenue to more than $7 billion by 2026 by

attracting more business for its data centers and IT management

services.

Iron Mountain reported first-quarter revenue of $1.48

billion, above the average analyst estimate of $1.45 billion,

according to LSEG data.

But its funds from operations, a key measure of cash flow,

came in at 74 cents per share, below analysts' estimate of 92

cents.

The company kept its annual revenue forecast unchanged at $6

billion to $6.15 billion.

(Reporting by Zaheer Kachwala in Bengaluru; Editing by Shinjini

Ganguli)