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Yahoo
18 hours ago
- Business
- Yahoo
Rackspace Technology Second Quarter 2025 Earnings: Beats Expectations
Explore Rackspace Technology's Fair Values from the Community and select yours Rackspace Technology (NASDAQ:RXT) Second Quarter 2025 Results Key Financial Results Revenue: US$666.3m (down 2.7% from 2Q 2024). Net loss: US$54.5m (down by 318% from US$25.0m profit in 2Q 2024). US$0.23 loss per share (down from US$0.11 profit in 2Q 2024). We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free. All figures shown in the chart above are for the trailing 12 month (TTM) period Rackspace Technology Revenues and Earnings Beat Expectations Revenue exceeded analyst estimates by 1.1%. Earnings per share (EPS) also surpassed analyst estimates by 33%. Looking ahead, revenue is forecast to grow 1.4% p.a. on average during the next 3 years, compared to a 12% growth forecast for the IT industry in the US. Performance of the American IT industry. The company's shares are up 2.5% from a week ago. Risk Analysis It is worth noting though that we have found 3 warning signs for Rackspace Technology (1 is significant!) that you need to take into consideration. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
2 days ago
- Business
- Yahoo
Rackspace Technology Reports Second Quarter 2025 Results
Revenue of $666 million in the Second Quarter, down 3% Year-over-Year Private Cloud Revenue was $250 million, down 4% Year-over-Year Public Cloud Revenue was $417 million, down 2% Year-over-Year Second Quarter 2025 Cash Flow From Operating Activities was $8 million; Cash Flow From Operating Activities was $127 million on a Trailing-Twelve-Month Basis SAN ANTONIO, Aug. 07, 2025 (GLOBE NEWSWIRE) -- Rackspace Technology, Inc. (Nasdaq: RXT), a leading end-to-end, hybrid cloud and AI solutions company, today announced results for its second quarter ended June 30, 2025. Amar Maletira, Chief Executive Officer, stated, 'I am pleased with our second quarter results. Revenue and operating profit exceeded the midpoint of guidance and EPS was within our guided range.' Mr. Maletira added, 'Go‑to‑market execution across both business units remains strong, reflecting continued progress in our turnaround. Bookings grew 16% while operating profit increased 34% year‑over‑year, and we delivered positive operating cash flow.' Second Quarter 2025 Results Revenue was $666 million in the second quarter of 2025, a decrease of 3% on a reported and constant currency (1) basis as compared to revenue of $685 million in the second quarter of 2024. Private Cloud revenue was $250 million in the second quarter of 2025, a decrease of 4% on a reported basis and 5% on a constant currency basis as compared to revenue of $260 million in the second quarter of 2024. Public Cloud revenue was $417 million in the second quarter of 2025, a decrease of 2% on a reported and constant currency basis compared to revenue of $425 million in the second quarter of 2024. Loss from operations was $(25) million in the second quarter of 2025, compared to loss from operations of $(54) million in the second quarter of 2024. Net loss was $(55) million in the second quarter of 2025, compared to net income of $25 million in the second quarter of 2024. Net loss per diluted share was $(0.23) in the second quarter of 2025, compared to net earnings per diluted share of $0.11 in the second quarter of 2024. Non-GAAP Operating Profit was $27 million in the second quarter of 2025, an increase of 34% compared to $20 million in the second quarter of 2024. Non-GAAP Loss Per Share was $(0.06) in the second quarter of 2025, an increase of 33% compared to Non-GAAP Loss Per Share of $(0.09) in the second quarter of 2024. Capital expenditures were $31 million in the second quarter of 2025, compared to $33 million in the second quarter of 2024. As of June 30, 2025, we had cash and cash equivalents of $104 million and total liquidity of $414 million, including our New Revolving Credit Facility. (1) Constant currency revenue and certain other measures in this release are non-GAAP financial measures. See 'Non-GAAP Financial Measures' and the tables that accompany this release for definitions and reconciliations of these non-GAAP measures to the most comparable GAAP measures. Financial Outlook Rackspace Technology is providing guidance as follows: Q3 2025 Guidance Total Revenue $660 - $674 million Private Cloud Revenue $246 - $254 million Public Cloud Revenue $414 - $420 million Non-GAAP Operating Profit $30 - $32 million Non-GAAP Loss Per Share $(0.04) - $(0.06 ) Non-GAAP Other Income (Expense) $(47) – $(51) million Non-GAAP Tax Expense Rate 26 % Non-GAAP Weighted Average Shares 239 - 241 million Information about Rackspace Technology's use of non-GAAP financial measures is provided below under 'Non-GAAP Financial Measures'. Definitions of non-GAAP financial measures and the reconciliations to the most directly comparable measures in accordance with generally accepted accounting principles in the United States ('GAAP') are provided in subsequent sections of this press release narrative and supplemental schedules. Rackspace Technology has not reconciled Non-GAAP Operating Profit, Non-GAAP Loss Per Share, Non-GAAP Other Income (Expense) or Non-GAAP Tax Expense Rate guidance to the most directly comparable GAAP measure because it does not provide guidance on GAAP net income (loss) or the reconciling items between these Non-GAAP measures and GAAP net income (loss) as a result of the uncertainty regarding, and the potential variability of, certain of these items, such as share-based compensation expense. Accordingly, a reconciliation of the non-GAAP financial measure guidance to the corresponding GAAP measure is not available without unreasonable effort. With respect to Non-GAAP Operating Profit, Non-GAAP Loss Per Share, Non-GAAP Other Income (Expense) and Non-GAAP Tax Expense Rate guidance, adjustments in future periods are generally expected to be similar to the kinds of charges and costs excluded from these Non-GAAP measures in prior periods, but the impact of such adjustments could be significant. Conference Call and Webcast Rackspace Technology will hold a conference call today, August 7, 2025, at 4:00pm CT / 5:00pm ET to discuss its second quarter 2025 results. Interested parties may access the conference call as follows: To listen to the live webcast or access the replay following the webcast, please visit our IR website at the following link: To obtain a dial-in number, please pre-register at the following link: Registrants will receive dial-in information and a PIN allowing them to access the live call. About Rackspace Technology Rackspace Technology is a leading end-to-end, hybrid cloud and AI solutions company. We can design, build, and operate our customers' cloud environments across all major technology platforms, irrespective of technology stack or deployment model. We partner with our customers at every stage of their cloud journey, enabling them to modernize applications, build new products, and adopt innovative technologies. Forward-looking Statements Rackspace Technology has made statements in this press release and other reports, filings, and other public written and verbal announcements that are forward-looking and therefore subject to risks and uncertainties. All statements, other than statements of historical fact, included in this press release are, or could be, 'forward-looking statements' within the meaning of the Private Securities Litigation Reform Act of 1995 and are made in reliance on the safe harbor protections provided thereunder. These forward-looking statements relate to anticipated financial performance, management's plans and objectives for future operations, business prospects, outcome of regulatory proceedings, market conditions, and other matters. Any forward-looking statement made in this press release speaks only as of the date on which it is made. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise. Forward-looking statements can be identified by various words such as 'expects,' 'intends,' 'will,' 'anticipates,' 'believes,' 'confident,' 'continue,' 'propose,' 'seeks,' 'could,' 'may,' 'should,' 'estimates,' 'forecasts,' 'might,' 'goals,' 'objectives,' 'targets,' 'planned,' 'projects,' and similar expressions. These forward-looking statements are based on management's current beliefs and assumptions and on information currently available to management. Rackspace Technology cautions that these statements are subject to risks and uncertainties, many of which are outside of our control, and could cause future events or results to be materially different from those stated or implied in this press release, including among others, risk factors that are described in Rackspace Technology, Inc.'s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and other filings with the Securities and Exchange Commission, including the sections entitled 'Risk Factors' and 'Management's Discussion and Analysis of Financial Condition and Results of Operations' contained therein. Non-GAAP Financial Measures This press release includes several non-GAAP financial measures such as constant currency revenue, Non-GAAP Gross Profit, Non-GAAP Net Income (Loss), Non-GAAP Operating Profit, Adjusted EBITDA and Non-GAAP Earnings (Loss) Per Share. These non-GAAP financial measures exclude the impact of certain costs, losses and gains that are required to be included in our profit and loss measures under GAAP. Although we believe these measures are useful to investors and analysts for the same reasons they are useful to management, as described in the accompanying pages, these measures are not a substitute for, or superior to, GAAP financial measures or disclosures. Other companies may calculate similarly-titled non-GAAP measures differently, limiting their usefulness as comparative measures. We have reconciled each of these non-GAAP measures to the applicable most comparable GAAP measure in the accompanying pages. Beginning in the fourth quarter of 2024, we updated the presentation of our non-GAAP financial measures to no longer exclude certain cash compensation paid to employees who remain employed with Rackspace which were previously included in the 'special bonuses and other compensation expenses' and 'restructuring and transformation expenses' line items of our reconciliations. Additionally, we removed the 'special bonuses and other compensation expenses' line item and the remaining adjustments are now presented within the 'restructuring and transformation expenses' line item. All prior period Non-GAAP Gross Profit, Non-GAAP Net Income (Loss), Non-GAAP Operating Profit, Adjusted EBITDA and Non-GAAP Earnings (Loss) Per Share financial measures have been recast to reflect current period presentation in the accompanying pages. IR ContactSagar HebbarRackspace Technology Investor Relationsir@ Media Contact:Cheryl AmerineRackspace Technology Media Relationspublicrelations@ RACKSPACE TECHNOLOGY, RESULTS OF OPERATIONS(Unaudited) Three Months Ended June 30, Year-Over-Year Comparison 2024 2025 (In millions, except % and per share data) Amount % Revenue Amount % Revenue Amount % Change Revenue $ 684.9 100.0 % $ 666.3 100.0 % $ (18.6 ) (2.7 )% Cost of revenue (553.5 ) (80.8 )% (537.1 ) (80.6 )% 16.4 (3.0 )% Gross profit 131.4 19.2 % 129.2 19.4 % (2.2 ) (1.7 )% Selling, general and administrative expenses (185.2 ) (27.0 )% (154.3 ) (23.2 )% 30.9 (16.7 )% Loss from operations (53.8 ) (7.9 )% (25.1 ) (3.8 )% 28.7 (53.3 )% Other income (expense): Interest expense (18.4 ) (2.7 )% (21.3 ) (3.2 )% (2.9 ) 15.8 % Gain on investments, net — — % 0.3 0.0 % 0.3 100.0 % Gain on debt extinguishment, net of debt modification costs 72.5 10.6 % — — % (72.5 ) (100.0 )% Other expense, net (5.2 ) (0.8 )% (3.8 ) (0.6 )% 1.4 (26.9 )% Total other income (expense) 48.9 7.2 % (24.8 ) (3.7 )% (73.7 ) NM Loss before income taxes (4.9 ) (0.7 )% (49.9 ) (7.5 )% (45.0 ) NM Benefit (provision) for income taxes 29.9 4.4 % (4.6 ) (0.7 )% (34.5 ) NM Net income (loss) $ 25.0 3.7 % $ (54.5 ) (8.2 )% $ (79.5 ) NM Net earnings (loss) per share: Basic $ 0.11 $ (0.23 ) Diluted $ 0.11 $ (0.23 ) Weighted average number of shares outstanding: Basic 224.5 238.0 Diluted 229.6 238.0 NM = not meaningful. RACKSPACE TECHNOLOGY, RESULTS OF OPERATIONS(Unaudited) Six Months Ended June 30, Year-Over-Year Comparison 2024 2025 (In millions, except % and per share data) Amount % Revenue Amount % Revenue Amount % Change Revenue $ 1,375.7 100.0 % $ 1,331.7 100.0 % $ (44.0 ) (3.2 )% Cost of revenue (1,111.5 ) (80.8 )% (1,075.6 ) (80.8 )% 35.9 (3.2 )% Gross profit 264.2 19.2 % 256.1 19.2 % (8.1 ) (3.1 )% Selling, general and administrative expenses (377.6 ) (27.5 )% (319.6 ) (24.0 )% 58.0 (15.4 )% Impairment of goodwill (573.2 ) (41.7 )% — — % 573.2 (100.0 )% Impairment of assets, net (20.0 ) (1.5 )% — — % 20.0 (100.0 )% Loss from operations (706.6 ) (51.4 )% (63.5 ) (4.8 )% 643.1 (91.0 )% Other income (expense): Interest expense (62.1 ) (4.5 )% (40.7 ) (3.1 )% 21.4 (34.5 )% Gain on investments, net 0.1 0.0 % 0.2 0.0 % 0.1 100.0 % Gain on debt extinguishment, net of debt modification costs 129.2 9.4 % — — % (129.2 ) (100.0 )% Other expense, net (10.8 ) (0.8 )% (9.2 ) (0.7 )% 1.6 (14.8 )% Total other income (expense) 56.4 4.1 % (49.7 ) (3.7 )% (106.1 ) NM Loss before income taxes (650.2 ) (47.3 )% (113.2 ) (8.5 )% 537.0 (82.6 )% Benefit (provision) for income taxes 34.6 2.5 % (12.8 ) (1.0 )% (47.4 ) NM Net loss $ (615.6 ) (44.7 )% $ (126.0 ) (9.5 )% $ 489.6 (79.5 )% Net loss per share: Basic and diluted $ (2.77 ) $ (0.54 ) Weighted average number of shares outstanding: Basic and diluted 222.2 235.0 NM = not meaningful. RACKSPACE TECHNOLOGY, BALANCE SHEETS(Unaudited) (In millions, except per share data) December 31, 2024 June 30, 2025 ASSETS Current assets: Cash and cash equivalents $ 144.0 $ 103.9 Accounts receivable, net of allowance for credit losses and accrued customer credits of $27.0 and $24.6, respectively 298.8 253.9 Prepaid expenses 84.9 111.4 Other current assets 91.1 79.2 Total current assets 618.8 548.4 Property, equipment and software, net 601.0 594.8 Goodwill, net 735.7 741.1 Intangible assets, net 844.7 770.2 Operating right-of-use assets 134.6 130.0 Other non-current assets 119.3 110.4 Total assets $ 3,054.1 $ 2,894.9 LIABILITIES AND STOCKHOLDERS' DEFICIT Current liabilities: Accounts payable and accrued expenses $ 389.6 $ 389.8 Accrued compensation and benefits 96.7 70.0 Deferred revenue 84.2 68.4 Debt 29.2 33.4 Accrued interest 7.4 6.2 Operating lease liabilities 55.9 47.2 Finance lease liabilities 53.1 48.7 Financing obligations 16.4 14.1 Other current liabilities 34.1 37.6 Total current liabilities 766.6 715.4 Non-current liabilities: Debt 2,756.4 2,766.8 Operating lease liabilities 77.8 79.4 Finance lease liabilities 293.1 301.1 Financing obligations 39.2 30.2 Deferred income taxes 30.2 23.8 Other non-current liabilities 95.0 97.2 Total liabilities 4,058.3 4,013.9 Commitments and Contingencies Stockholders' deficit: Preferred stock, $0.01 par value per share: 5.0 shares authorized; no shares issued or outstanding — — Common stock, $0.01 par value per share: 1,495.0 shares authorized; 232.2 and 242.1 shares issued; 229.1 and 239.0 shares outstanding, respectively 2.3 2.4 Additional paid-in capital 2,682.8 2,696.7 Accumulated other comprehensive income 24.1 21.3 Accumulated deficit (3,682.4 ) (3,808.4 ) Treasury stock, at cost; 3.1 shares held (31.0 ) (31.0 ) Total stockholders' deficit (1,004.2 ) (1,119.0 ) Total liabilities and stockholders' deficit $ 3,054.1 $ 2,894.9 RACKSPACE TECHNOLOGY, STATEMENTS OF CASH FLOWS(Unaudited) Six Months Ended June 30, (In millions) 2024 2025 Cash Flows From Operating Activities Net loss $ (615.6 ) $ (126.0 ) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation and amortization 149.0 148.9 Reduction in carrying amount of operating right-of-use assets 34.2 32.5 Deferred income taxes (51.2 ) (9.1 ) Share-based compensation expense 32.3 22.0 Impairment of goodwill 573.2 — Impairment of assets, net 20.0 — Gain on debt extinguishment, net of debt modification costs (129.2 ) — Gain on investments, net (0.1 ) (0.2 ) Provision for bad debts and accrued customer credits 10.8 2.6 Amortization of debt issuance costs and debt discount and premium (3.5 ) 3.0 Third party fees paid in connection with the March 2024 Refinancing Transactions (31.7 ) — Other operating activities (2.9 ) 1.8 Changes in operating assets and liabilities: Accounts receivable 10.4 43.5 Prepaid expenses and other current assets 4.2 (27.1 ) Accounts payable, accrued expenses, and other current liabilities (35.5 ) (39.4 ) Deferred revenue (7.7 ) (15.8 ) Operating lease liabilities (43.8 ) (34.8 ) Other non-current assets and liabilities 20.9 19.1 Net cash provided by (used in) operating activities (66.2 ) 21.0 Cash Flows From Investing Activities Purchases of property, equipment and software (66.7 ) (29.1 ) Proceeds from sale of headquarters 16.9 — Other investing activities 0.3 (0.8 ) Net cash used in investing activities (49.5 ) (29.9 ) Cash Flows From Financing Activities Proceeds from employee stock plans 0.4 0.3 Shares of common stock withheld for employee taxes (3.4 ) (0.8 ) Proceeds from borrowings under long-term debt arrangements 275.0 80.0 Payments on long-term debt (91.9 ) (67.3 ) Debt extinguishment costs (22.1 ) — Payments on financing component of interest rate swap (8.6 ) (8.7 ) Principal payments of finance lease liabilities (30.8 ) (27.9 ) Principal payments of financing obligations (8.2 ) (11.3 ) Net cash provided by (used in) financing activities 110.4 (35.7 ) Effect of exchange rate changes on cash, cash equivalents, and restricted cash (1.3 ) 3.3 Decrease in cash, cash equivalents, and restricted cash (6.6 ) (41.3 ) Cash, cash equivalents, and restricted cash at beginning of period 199.7 147.0 Cash, cash equivalents, and restricted cash at end of period $ 193.1 $ 105.7 Supplemental Cash Flow Information Cash payments for interest, net of amount capitalized $ 70.1 $ 41.0 Cash payments for income taxes, net of refunds $ 6.8 $ 1.3 Non-cash Investing and Financing Activities Acquisition of property, equipment and software by finance leases $ 13.7 $ 25.3 Increase (decrease) in property, equipment and software accrued in liabilities (1.3 ) 3.2 Other non-cash activity (0.5 ) — Non-cash purchases of property, equipment and software $ 11.9 $ 28.5 Non-cash gain on sale of property and equipment $ (5.1 ) $ — SEGMENT DATA (In millions, except %) Three Months Ended June 30, % Change Revenue by segment: 2024 2025 Actual Constant Currency (a) Public Cloud $ 424.9 $ 416.6 (2.0 )% (2.2 )% Private Cloud 260.0 249.7 (4.0 )% (4.8 )% Total consolidated revenue $ 684.9 $ 666.3 (2.7 )% (3.2 )% (In millions, except %) Six Months Ended June 30, % Change Revenue by segment: 2024 2025 Actual Constant Currency (a) Public Cloud $ 847.3 $ 832.2 (1.8 )% (1.7 )% Private Cloud 528.4 499.5 (5.5 )% (5.7 )% Total consolidated revenue $ 1,375.7 $ 1,331.7 (3.2 )% (3.3 )% (a) Refer to "Non-GAAP Financial Measures" in this section for further explanation and reconciliation. Three Months Ended June 30, Year-Over-Year Comparison (In millions, except %) 2024 2025 Segment operating profit (a): Amount % of Segment Revenue Amount % of Segment Revenue Amount % Change Public Cloud $ 10.7 2.5 % $ 16.2 3.9 % $ 5.5 51.4 % Private Cloud 68.8 26.5 % 61.5 24.6 % (7.3 ) (10.6 )% Corporate functions (b) (59.2 ) (50.4 ) 8.8 (14.9 )% Non-GAAP Operating Profit (c) $ 20.3 $ 27.3 $ 7.0 34.5 % Six Months Ended June 30, Year-Over-Year Comparison (In millions, except %) 2024 2025 Segment operating profit (a): Amount % of Segment Revenue Amount % of Segment Revenue Amount % Change Public Cloud $ 18.9 2.2 % $ 33.5 4.0 % $ 14.6 77.2 % Private Cloud 139.9 26.5 % 122.5 24.5 % (17.4 ) (12.4 )% Corporate functions (b) (124.5 ) (103.1 ) 21.4 (17.2 )% Non-GAAP Operating Profit (c) $ 34.3 $ 52.9 $ 18.6 54.2 % (a) Segment revenue less expenses directly attributable to running the respective segments' business. These expenses exclude centralized corporate function costs. (b) Costs that are not allocated to segments. These costs are related to centralized corporate functions that provide services to the segments in areas such as accounting, information technology, marketing, legal and human resources. (c) Refer to "Non-GAAP Financial Measures" in this section for further explanation and reconciliation. NON-GAAP FINANCIAL MEASURES We use constant currency revenue as an additional metric for understanding and assessing our growth excluding the effect of foreign currency rate fluctuations on our international business operations. Constant currency information compares results between periods as if exchange rates had remained constant period over period and is calculated by translating the non-U.S. dollar income statement balances for the most current period to U.S. dollars using the average exchange rate from the comparative period rather than the actual exchange rates in effect during the respective period. We also believe this is an important metric to help investors evaluate our performance in comparison to prior periods. Three MonthsEnded June 30,2024 Three Months Ended June 30, 2025 % Change (In millions, except %) Revenue Revenue Foreign Currency Translation (a) Revenue in Constant Currency Actual Constant Currency Public Cloud $ 424.9 $ 416.6 $ (0.8 ) $ 415.8 (2.0 )% (2.2 )% Private Cloud 260.0 249.7 (2.2 ) 247.5 (4.0 )% (4.8 )% Total $ 684.9 $ 666.3 $ (3.0 ) $ 663.3 (2.7 )% (3.2 )% Six MonthsEnded June 30,2024 Six Months Ended June 30, 2025 % Change (In millions, except %) Revenue Revenue Foreign Currency Translation (a) Revenue in Constant Currency Actual Constant Currency Public Cloud $ 847.3 $ 832.2 $ 0.3 $ 832.5 (1.8 )% (1.7 )% Private Cloud 528.4 499.5 (1.4 ) 498.1 (5.5 )% (5.7 )% Total $ 1,375.7 $ 1,331.7 $ (1.1 ) $ 1,330.6 (3.2 )% (3.3 )% (a) The effect of foreign currency is calculated by translating current period results using the average exchange rate from the prior comparative present Non-GAAP Gross Profit because we believe the measure is useful in analyzing trends in our underlying, recurring gross margins. We define Non-GAAP Gross Profit as gross profit, adjusted to exclude the impact of share-based compensation expense, purchase accounting-related effects, and certain business transformation-related costs. Three Months Ended June 30, Six Months Ended June 30, (In millions) 2024 2025 2024 2025 Gross profit $ 131.4 $ 129.2 $ 264.2 $ 256.1 Share-based compensation expense 2.0 1.3 3.9 3.1 Purchase accounting impact on expense (a) 0.6 0.2 1.2 0.4 Restructuring and transformation expenses (b) 4.6 1.2 9.6 4.4 Non-GAAP Gross Profit $ 138.6 $ 131.9 $ 278.9 $ 264.0 (a) Adjustment for the impact of purchase accounting from the November 2016 merger on expenses. (b) Adjustment for the impact of business transformation and optimization activities, as well as associated severance, certain facility closure costs and lease termination expenses. Also includes payroll taxes associated with the exercise of stock options and vesting of restricted stock. We present Non-GAAP Net Income (Loss), Non-GAAP Operating Profit and Adjusted EBITDA because they are a basis upon which management assesses our performance and we believe they are useful to evaluating our financial performance. We believe that excluding items from net income that may not be indicative of, or are unrelated to, our core operating results, and that may vary in frequency or magnitude, enhances the comparability of our results and provides a better baseline for analyzing trends in our business. We define Non-GAAP Net Income (Loss) as net income (loss) adjusted to exclude the impact of non-cash charges for share-based compensation, transaction-related costs and adjustments, restructuring and transformation charges, costs related to the Hosted Exchange incident, the amortization of acquired intangible assets, goodwill and asset impairment charges, the interest expense impact from the refinancing transactions announced in March 2024 (the 'March 2024 Refinancing Transactions'), and certain other non-operating, non-recurring or non-core gains and losses, as well as the tax effects of these non-GAAP adjustments. We define Non-GAAP Operating Profit as income (loss) from operations adjusted to exclude the impact of non-cash charges for share-based compensation, transaction-related costs and adjustments, restructuring and transformation charges, costs related to the Hosted Exchange incident, the amortization of acquired intangible assets, goodwill and asset impairment charges, and certain other non-operating, non-recurring or non-core gains and losses. We define Adjusted EBITDA as net income (loss) adjusted to exclude the impact of non-cash charges for share-based compensation, transaction-related costs and adjustments, restructuring and transformation charges, costs related to the Hosted Exchange incident, certain other non-operating, non-recurring or non-core gains and losses, interest expense, expenses for our accounts receivable purchase agreement, income taxes, depreciation and amortization, and goodwill and asset impairment charges. Non-GAAP Operating Profit and Adjusted EBITDA are management's principal metrics for measuring our underlying financial performance. Non-GAAP Operating Profit and Adjusted EBITDA, along with other quantitative and qualitative information, are also the principal financial measures used by management and our Board of Directors in determining performance-based compensation for our management and key employees. These non-GAAP measures are not intended to imply that we would have generated higher income or avoided net losses if the November 2016 merger and the subsequent transactions and initiatives had not occurred. In the future we may incur expenses or charges such as those added back to calculate Non-GAAP Net Income (Loss), Non-GAAP Operating Profit or Adjusted EBITDA. Our presentation of Non-GAAP Net Income (Loss), Non-GAAP Operating Profit and Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by these items. Other companies, including our peer companies, may calculate similarly-titled measures in a different manner from us, and therefore, our non-GAAP measures may not be comparable to similarly-titled measures of other companies. Investors are cautioned against using these measures to the exclusion of our results in accordance with GAAP. Net income (loss) reconciliation to Non-GAAP Net Loss Three Months Ended June 30, Six Months Ended June 30, (In millions) 2024 2025 2024 2025 Net income (loss) $ 25.0 $ (54.5 ) $ (615.6 ) $ (126.0 ) Share-based compensation expense 19.5 10.0 32.3 22.0 Transaction-related adjustments, net (a) 1.6 0.4 2.6 1.9 Restructuring and transformation expenses (b) 14.5 4.4 35.4 17.5 Hosted Exchange incident expenses, net of proceeds received or expected to be received under our insurance coverage (0.1 ) — 0.1 — Impairment of goodwill — — 573.2 — Impairment of assets, net — — 20.0 — Net gain on divestiture and investments (c) — (0.3 ) (0.1 ) (0.2 ) Gain on debt extinguishment, net of debt modification costs (72.5 ) — (129.2 ) — Interest expense impact from the March 2024 Refinancing Transactions (d) (25.6 ) (21.1 ) (25.6 ) (42.1 ) Other adjustments (e) 0.1 (1.5 ) 0.5 (1.1 ) Amortization of intangible assets (f) 38.6 37.6 77.3 75.0 Tax effect of non-GAAP adjustments (g) (22.4 ) 10.0 (18.0 ) 23.3 Non-GAAP Net Loss $ (21.3 ) $ (15.0 ) $ (47.1 ) $ (29.7 ) Loss from operations reconciliation to Non-GAAP Operating Profit Three Months Ended June 30, Six Months Ended June 30, (In millions) 2024 2025 2024 2025 Loss from operations $ (53.8 ) $ (25.1 ) $ (706.6 ) $ (63.5 ) Share-based compensation expense 19.5 10.0 32.3 22.0 Transaction-related adjustments, net (a) 1.6 0.4 2.6 1.9 Restructuring and transformation expenses (b) 14.5 4.4 35.4 17.5 Hosted Exchange incident expenses, net of proceeds received or expected to be received under our insurance coverage (0.1 ) — 0.1 — Impairment of goodwill — — 573.2 — Impairment of assets, net — — 20.0 — Amortization of intangible assets (f) 38.6 37.6 77.3 75.0 Non-GAAP Operating Profit $ 20.3 $ 27.3 $ 34.3 $ 52.9 Net income (loss) reconciliation to Adjusted EBITDA Three Months Ended June 30, Six Months Ended June 30, (In millions) 2024 2025 2024 2025 Net income (loss) $ 25.0 $ (54.5 ) $ (615.6 ) $ (126.0 ) Share-based compensation expense 19.5 10.0 32.3 22.0 Transaction-related adjustments, net (a) 1.6 0.4 2.6 1.9 Restructuring and transformation expenses (b) 14.5 4.4 35.4 17.5 Hosted Exchange incident expenses, net of proceeds received or expected to be received under our insurance coverage (0.1 ) — 0.1 — Impairment of goodwill — — 573.2 — Impairment of assets, net — — 20.0 — Net gain on divestiture and investments (c) — (0.3 ) (0.1 ) (0.2 ) Gain on debt extinguishment, net of debt modification costs (72.5 ) — (129.2 ) — Other expense, net (h) 5.2 3.8 10.8 9.2 Interest expense 18.4 21.3 62.1 40.7 Provision (benefit) for income taxes (29.9 ) 4.6 (34.6 ) 12.8 Depreciation and amortization (i) 73.4 74.7 148.3 147.8 Adjusted EBITDA $ 55.1 $ 64.4 $ 105.3 $ 125.7 (a) Includes purchase accounting adjustments, exploratory acquisition and divestiture costs, and expenses related to financing activities. (b) Includes consulting and advisory fees related to business transformation and optimization activities, as well as associated severance, certain facility closure costs, and lease termination expenses. Also includes payroll taxes associated with the exercise of stock options and vesting of restricted stock. The six months ended June 30, 2024 also includes a $9.0 million Master Economic Incentives Agreement early termination fee associated with the sale of our corporate headquarters in March 2024. (c) Includes gains and losses on investment and from dispositions. (d) Interest expense impact due to the accounting for contractual interest payments on debt instruments entered into as part of the March 2024 Refinancing Transactions, which reduced interest expense relative to contractual interest cost. (e) Primarily consists of foreign currency gains and losses. (f) All of our intangible assets are attributable to acquisitions, including the November 2016 merger. (g) We utilize an estimated structural long-term non-GAAP tax rate in order to provide consistency across reporting periods, removing the effect of non-recurring tax adjustments, which include but are not limited to tax rate changes, U.S. tax reform, share-based compensation, audit conclusions and changes to valuation allowances. When computing this long-term rate for the 2024 and 2025 interim periods, we based it on an average of the 2023 and estimated 2024 tax rates and 2024 and estimated 2025 tax rates, respectively, recomputed to remove the tax effect of non-GAAP pre-tax adjustments and non-recurring tax adjustments, resulting in a structural non-GAAP tax rate of 26% for all periods. The non-GAAP tax rate could be subject to change for a variety of reasons, including the rapidly evolving global tax environment, significant changes in our geographic earnings mix including due to acquisition activity, or other changes to our strategy or business operations. We will re-evaluate our long-term non-GAAP tax rate as appropriate. We believe that making these adjustments facilitates a better evaluation of our current operating performance and comparisons to prior periods. (h) Primarily consists of foreign currency gains and losses and expense related to our accounts receivable purchase agreement. (i) Excludes accelerated depreciation expense related to facility closures. We define Non-GAAP Earnings (Loss) Per Share as Non-GAAP Net Income (Loss) divided by our GAAP weighted average number of shares outstanding for the period on a diluted basis and further adjusted for the weighted average number of shares associated with securities which are anti-dilutive to GAAP loss per share. Management uses Non-GAAP Earnings (Loss) Per Share to evaluate the performance of our business on a comparable basis from period to period, including by adjusting for the impact of the issuance of shares. Three Months Ended June 30, Six Months Ended June 30, (In millions, except per share amounts) 2024 2025 2024 2025 Net income (loss) attributable to common stockholders $ 25.0 $ (54.5 ) $ (615.6 ) $ (126.0 ) Non-GAAP Net Loss $ (21.3 ) $ (15.0 ) $ (47.1 ) $ (29.7 ) Weighted average number of shares - Diluted 229.6 238.0 222.2 235.0 Effect of dilutive securities (a) — 1.3 7.3 7.1 Non-GAAP weighted average number of shares - Diluted 229.6 239.3 229.5 242.1 Net earnings (loss) per share - Diluted $ 0.11 $ (0.23 ) $ (2.77 ) $ (0.54 ) Per share impacts of adjustments to net income (loss) (b) (0.20 ) 0.17 2.56 0.41 Per share impacts of shares after adjustments to net income (loss) (a) 0.00 0.00 0.00 0.01 Non-GAAP Loss Per Share $ (0.09 ) $ (0.06 ) $ (0.21 ) $ (0.12 )(a) Potential common share equivalents consist of shares issuable upon the exercise of stock options, vesting of restricted stock units (including performance-based restricted stock units) or purchases under the Employee Stock Purchase Plan as well as contingent shares associated with our acquisition of Datapipe Parent, Inc. Certain of our potential common share equivalents are contingent on certain investment funds managed by affiliates of Apollo Global Management, Inc. achieving pre-established performance targets based on a multiple of their invested capital, which are included in the denominator for the entire period if such shares would be issuable as of the end of the reporting period assuming the end of the reporting period was the end of the contingency period. (b) Reflects the aggregate adjustments made to reconcile Non-GAAP Net Loss to our net income (loss), as noted in the above table, divided by the GAAP diluted number of shares outstanding for the relevant period. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Channel Post MEA
14-07-2025
- Business
- Channel Post MEA
Rackspace Introduces OpenStack Business For Organizations Running Mission-Critical Workloads
Rackspace Technology has announced the launch of Rackspace OpenStack Business, a new, open source, dedicated private cloud for organizations running mission-critical or regulated workloads. This fully-managed solution delivers improved performance, enhanced security, and full operational support without the burden of managing infrastructure. Built for scalability, Rackspace OpenStack Business offers a cost-effective cloud solution centered around privacy, security and control. This launch expands Rackspace's leadership in open-source private cloud by delivering dedicated, secure OpenStack infrastructure while meeting the growing demand from enterprises seeking control without compromise or vendor lock-in. Rackspace OpenStack Business supports a broad range of use cases for organizations focused on application development and cloud modernization. It is especially well-suited for performance-sensitive applications that require guaranteed system resources, as well as regulated industries that demand single-tenant environments to meet strict compliance requirements. 'Rackspace OpenStack Business is the next evolution in private cloud infrastructure,' said Lance Weaver, Chief Product and Technology Officer, Rackspace Private Cloud. 'This platform is built for customers requiring performance, security, privacy and control. Delivered as a fully-managed open source platform, it provides businesses the freedom to modernize on their terms.' The launch of Rackspace OpenStack Business builds on the success of Rackspace OpenStack Flex which was introduced in 2024 as a cost-effective, flexible private cloud alternative to hyperscalers and proprietary platforms. Designed to work seamlessly together, Rackspace OpenStack Business provides a stable foundation for steady-state workloads, while OpenStack Flex enables rapid scaling during peak demand, delivering the elasticity of the public cloud without sacrificing the benefits of a secure, dedicated private environment. 'With this latest offering, Rackspace expands its leadership in open-source private cloud by delivering open source dedicated and secure OpenStack infrastructure to meet the growing demand for greater control without compromise,' said Josh Villarreal, General Manager, OpenStack, Rackspace Technology. 'Together, Rackspace OpenStack Flex and OpenStack Business provide a powerful foundation for building scalable hybrid cloud environments. This combination helps organizations address key IT challenges, including cost control, data privacy, performance consistency, and avoiding vendor lock-in.' Key Benefits Built on a proven OpenStack foundation, the solution includes full API access, 24x7x365 support and proactive monitoring and management. Other key benefits include: Rapid deployment : Accelerate time to production with private cloud infrastructure available in hours instead of days, weeks or months. : Accelerate time to production with private cloud infrastructure available in hours instead of days, weeks or months. Dedicated performance : Leverage predictable performance to run applications and avoid the congestion of multi-tenant resources. : Leverage predictable performance to run applications and avoid the congestion of multi-tenant resources. Cost efficiency : Achieve strong TCO with an open source platform while maintaining enterprise-level performance. : Achieve strong TCO with an open source platform while maintaining enterprise-level performance. Enterprise-level support : Benefit from always-on expert support along with proactive monitoring and management to help clouds run smoothly and efficiently. : Benefit from always-on expert support along with proactive monitoring and management to help clouds run smoothly and efficiently. Freedom from vendor lock-in: Gain flexibility, portability, and ecosystem integration with open-source and full API access.
Techday NZ
16-06-2025
- Business
- Techday NZ
APAC leads with USD $11.3m average AI spend as global gap widens
New research from Rackspace Technology indicates global corporate investment in artificial intelligence (AI) has risen by 250% year-on-year, reaching USD $8.7 million on average, with Asia Pacific (APAC) spending highest at USD $11.3 million. The study, which surveyed over 1,400 IT decision-makers including 269 in APAC, highlights a growing gap between early AI adopters - termed "AI Leaders" - and organisations still developing their approach. Only 13% of respondents were classified as AI Leaders, but these organisations are already experiencing notable outcomes from their AI initiatives. Study findings Of the AI Leaders, 64% reported substantial benefits from AI deployment, compared to 32% of other organisations. The report found that these Leaders are three times more likely to have AI agents in production and to be effectively scaling their deployments compared to their peers. AI Leaders are described as organisations that have embedded artificial intelligence into their core business strategies. They scored highly across several criteria including customer experience, new product development, and employee productivity. The research shows that 95% of AI Leaders have secured strategic alignment on AI within their company, and about 75% have undertaken comprehensive workforce training for the use of AI tools and solutions. "While nearly every organisation is exploring how to implement AI, these forward-thinking companies are not waiting for the technology to mature—they have acted early, starting with achievable use cases to build momentum," said Srini Koushik, President of AI, Technology and Sustainability at Rackspace Technology. "By doing so, they have been able to test and refine their strategies, train their teams, and establish the governance and infrastructure needed for long-term success. Now, as others remain in the experimentation phase, these leaders are confidently scaling their initiatives and securing a lasting competitive advantage." The report notes that overall AI investment is accelerating, with respondents anticipating further increases over the coming years. Specifically, 90% of APAC participants expect their organisations to boost AI spending in the next five years. Investment is currently split evenly between developing in-house AI solutions and integrating third-party products. The average number of AI projects in production is also forecasted to rise by 33% in 2025. Additionally, 65% of APAC respondents anticipate a positive return on their AI investments within the next two years, with another 26% projecting returns within three to five years. Adhil Badat, Managing Director for Asia Pacific and Japan at Rackspace Technology, commented: "Across APAC, we're seeing a surge in AI adoption as businesses shift from experimentation to execution." "Organisations are no longer treating AI as a future bet, it's becoming a core part of their strategy today. From automating customer interactions to optimising supply chains, companies in the region are investing in AI to drive efficiency, unlock innovation, and stay competitive in a rapidly evolving market." Shifting perceptions of AI Survey results suggest companies are viewing AI as more than a simple automation tool. A substantial 90% of respondents identified customer experience as a priority use case, with a parallel emphasis on boosting employee productivity. In APAC, customer experience was the most tracked key performance indicator (KPI) for AI initiatives at 51%, while revenue and profitability followed at 48%. The findings also reveal that 24% of businesses are applying AI to enhance or develop new products. Cybersecurity and AI Cybersecurity remains a key consideration; it is identified as a top-three risk factor for AI but, in a shift from previous years, is increasingly seen as an area where AI can be used to strengthen defences. According to respondents, cybersecurity is the most transformative AI application projected for the next three to five years, closely followed by process optimisation. AI Leaders address security challenges by embedding protocols and procedures into AI applications at the design stage. Scaling challenges Despite the surge in deployment, 72% of APAC organisations report ongoing challenges in scaling AI effectively. Infrastructure investment is cited as critical, with 79% agreeing that bolstering infrastructure is necessary to enable scalable and flexible AI initiatives. The report also notes that meeting stricter data privacy and regulatory standards will be a substantial challenge over the next few years for the majority of respondents. AI Leaders are more likely than others to favour hybrid cloud strategies for scaling their AI solutions, while other organisations utilise a mix of cloud deployment approaches. Competitive advantage The survey suggests that organisations in the AI Leaders category see artificial intelligence as more than an automation enabler - 87% consider it a fundamental competitive driver. The report highlights the wider gap developing between these leading organisations and others, with two-thirds of Leaders citing substantial benefits realised over the previous year. According to the research conducted by Coleman Parkes Research on behalf of Rackspace Technology, the findings represent feedback from decision-makers across multiple sectors, ranging from manufacturing to healthcare and financial services, with company sizes spanning from 1,000 to over 10,000 employees and annual revenues from USD $50 million to USD $15 billion.
Channel Post MEA
02-06-2025
- Business
- Channel Post MEA
Rubrik And Rackspace Partner For Enhance Cloud Cyber Resilience
Rubrik and Rackspace Technology have announced Rackspace Cyber Recovery Service – a new managed service for customers operating in public cloud. By combining Rubrik's orchestrated data protection and cyber recovery solutions with Rackspace's DevOps principles and managed services, enterprises can simplify and accelerate recovery from ransomware attacks. Automated workflows deliver clean data and workloads through immutable backups, zero-trust architecture and Infrastructure as Code. With Rackspace Cyber Recovery Service, critical business workloads running in public clouds can be restored in hours, helping enterprises significantly strengthen their cyber resilience. Why does this matter? Organizations running key workloads in public clouds face growing challenges when responding to cyber attacks – from limited visibility and inconsistent backup policies to slow recovery times and lack of automation to rebuild at scale. At the same time, IT leaders are grappling with increasingly complex and distributed cloud environments, making it difficult to maintain consistency, ensure visibility and execute reliable recovery. Recently, Rubrik Zero Labs revealed that 90% of global IT and security executives reported cyber attacks in the last year. In the event of major disruptions – such as ransomware attacks – many enterprises struggle to restore critical workloads quickly due to fragmented tooling, manual processes, untrusted data and inadequate automation. 'Enterprises can no longer rely on traditional recovery methods in a cloud-first, threat-intensified world,' said DK Sinha, President for Public Cloud at Rackspace Technology. 'To ensure recoverability in the public cloud, they must adopt a new approach that leverages cloud native tools, modern DevOps methodologies and trusted expertise. Through our partnership with Rubrik, Rackspace Cyber Recovery Service sets a new standard for cyber resilience of public cloud workloads.' Rackspace Cyber Recovery Service Extends Fast and Confident Cyber Resilience to Public Cloud Rackspace Cyber Recovery Service applies Infrastructure as Code and platform engineering principles to cyber recovery, enabling restoration of critical workloads across multi-cloud environments. The journey begins with a professional services-led transformation, where Rackspace experts modernize recovery architectures and codify resilient workflows tailored to each environment. These capabilities are then transitioned into a 'Day 2' fully managed service, ensuring continuous validation, optimization and operational readiness. By orchestrating Recovery as Code, the solution delivers rapid, repeatable and auditable workflows aligned with modern DevOps practices. Paired with Rubrik's immutable architecture and AI-driven threat detection and containment, it ensures clean data recovery into secure landing zones with minimal operational disruption. 'Amidst the evolving complexities of multiple cloud environments, proactive cyber resilience is not a luxury but a necessity. Together, Rackspace and Rubrik offer a differentiated, engineering-led approach to cyber resilience,' said Ghazal Asif, Vice President of Global Channels and Alliances at Rubrik. 'Specifically designed for complex, distributed cloud environments, our companies are at the forefront of safeguarding organizations against the rising tide of ransomware attacks in the realm of cloud and SaaS platforms.' Rackspace Cyber Recovery Service provides enterprises running public cloud workloads with: Proactive Protection : Continuous anomaly detection and threat monitoring to identify and resolve potential issues before they impact backups or recovery capabilities : Continuous anomaly detection and threat monitoring to identify and resolve potential issues before they impact backups or recovery capabilities Expert Management : Optimal backup configuration, policy and lifecycle management : Optimal backup configuration, policy and lifecycle management Cloud Management : Infrastructure management services to ensure your applications are managed efficiently in the cloud while infrastructure and data restoration procedures are tested for recovery during incidents or disasters : Infrastructure management services to ensure your applications are managed efficiently in the cloud while infrastructure and data restoration procedures are tested for recovery during incidents or disasters Improved Compliance : The ability to support data retention policies and regulatory requirements with consistent management and detailed reporting : The ability to support data retention policies and regulatory requirements with consistent management and detailed reporting Advisory & Professional Services: Strategic guidance and implementation of Rubrik-powered cyber recovery solutions – including RTO/RPO planning, regulatory alignment and deployment of automated Infrastructure as Code workflows into secure landing zones 0 0
