Rackspace empowers midmarket businesses with AI-driven cloud transformation, secure multicloud operations, and FinOps excellence ISG Multi Public Cloud Services - Managed Services - Midmarket Rackspace Technology Named a Leader in Managed Services - Midmarket in 2025 ISG Provider Lens™ Multi Public Cloud Services Report SAN ANTONIO, Dec. 15, 2025 (GLOBE NEWSWIRE) -- Rackspace Technology® (NASDAQ: RXT), a leading end-to-end hybrid cloud and AI solutions company, today announced it has been positioned as a ...

A Major Automotive Supplier Modernizes IT Infrastructure to Drive Innovation and GrowthSAN ANTONIO, Dec. 10, 2025 (GLOBE NEWSWIRE) -- Rackspace Technology®, a leading end-to-end hybrid cloud and AI solutions company, today announced that Niterra EMEA GmbH (hereafter Niterra), a technical ceramics and major automotive supplier, partnered with Rackspace to advance its digital transformation through a rapid migration to Google Cloud. Niterra selected Rackspace based on its deep expertise in business-critical w ...

Core Insights - Rackspace Technology has been recognized as a Leader in four quadrants of the 2025 ISG Provider Lens AWS Ecosystem Partners Report for the U.S., including AWS Professional Services, AWS Managed Services, AWS Enterprise Data Modernization and AI Services, and AWS SAP Workloads [1][4][9] - In Germany, Rackspace has also been identified as a Leader in two quadrants: AWS Professional Services and AWS Managed Services [1][4] Company Performance - The 2025 ISG Provider Lens AWS Ecosystem Partners Report evaluates AWS-focused service providers on their capabilities in delivering end-to-end AWS services, including migration, modernization, AI-driven innovation, and SAP workload management [2] - Rackspace Technology utilizes its proprietary Foundry for AI by Rackspace (FAIR™), RITA, and ICE assets to drive business outcomes across clients' cloud lifecycle through workload-aware migration, application modernization, cloud-native data services, and AI industrialization [3] Industry Recognition - The recognition as a Leader across multiple quadrants highlights Rackspace Technology's expertise in delivering comprehensive AWS professional and managed services that facilitate AI-led transformation at scale [4] - Rackspace Technology boasts over 2,700 AWS certifications globally and holds 19 AWS competencies, including Generative AI [4]

Core Insights - Rackspace Technology has been awarded the 2025 Geography and Global AWS Partner Award, highlighting its role in driving innovation and building solutions on Amazon Web Services (AWS) [1] - The company was recognized as the Collaboration Partner of the Year for its partnership with MontyCloud, achieving significant improvements in deployment cycles and operational efficiencies [2][4] Company Achievements - Rackspace Technology and MontyCloud's joint solution resulted in 60% faster deployment cycles and a 45% improvement in operational efficiencies [2][8] - The company was also a finalist in two additional AWS award categories: Data and Analytics Consulting Partner of the Year and Public Sector Solution Provider Program Partner of the Year [6] Customer Success - A San Francisco-based digital marketing company partnered with Rackspace and MontyCloud to address scaling and security challenges, leveraging MontyCloud's DAY2 platform and AWS Landing Zone Accelerator [5] - The collaboration provided a secure and scalable foundation for the customer, positioning them for long-term growth and innovation [5] Industry Context - The AWS Partner Network (APN) is a global program that supports partners in innovating and accelerating their cloud journey, emphasizing the importance of collaboration and specialization among AWS partners [3][6] - Rackspace Technology's focus on customer success through partnerships and innovative cloud solutions is underscored by its recognition from AWS [4]

Core Insights - Rackspace Technology has appointed Lata Varghese as Senior Vice President of Business Transformation and Phani Kishore Burre as Senior Vice President of Services and Delivery for the Public Cloud business unit, aiming to enhance growth and customer success [1] Leadership Experience - Lata Varghese has extensive leadership experience in technology services, having managed global P&L responsibilities at Cognizant and led the growth of emerging technology consulting practices, with expertise in financial services, digital banking, payments, blockchain, and digital assets [2] - Phani Kishore Burre brings over two decades of experience in IT transformation for Fortune 100 clients, having served as Managing Director and Global Practice Head for Digital Infrastructure at Brillio, where he facilitated significant growth and cloud adoption [3] Strategic Focus - The new leadership is expected to strengthen Rackspace's operating model, improve execution, and turn AI and hybrid cloud into practical outcomes for clients, aligning with the company's goal to deliver speed, innovation, and certainty [4] - Rackspace Technology aims to advance its transformation and deliver value across core, cloud, and edge services [4] Company Overview - Rackspace Technology is recognized as a leading end-to-end hybrid and AI solutions company, capable of designing, building, and operating cloud environments across all major technology platforms [5]

Core Insights - Rackspace Technology has launched the Rackspace AI launchpad, a secure managed service aimed at facilitating the evaluation, piloting, and deployment of AI workloads across various industries, including healthcare and finance [1][8] - The service offers a phased, guided approach to AI adoption, addressing the complexities of infrastructure, tooling selection, and performance benchmarking [2][8] - The Rackspace AI launchpad is designed to eliminate the paralysis many enterprises face regarding AI implementation, providing a fast track from AI ambition to production with necessary security and governance [3][8] Company Offerings - Rackspace AI launchpad leverages Rackspace's AI Anywhere, a private cloud solution that integrates advanced AI/ML capabilities with a focus on data security and privacy [3][4] - The service includes managed infrastructure for AI workloads, featuring secure, fully managed GPU infrastructure powered by NVIDIA GPUs [6] - It provides onboarding and operational support, including technical documentation and assistance from AI infrastructure experts [6] Case Study - Compass, a U.S.-based healthcare provider, utilized Rackspace's AI launchpad to enhance care delivery by implementing a private cloud-hosted AI solution [4][5] - The AI solution enabled natural language querying and automated documentation analysis, resulting in an 80% reduction in manual review time and improved documentation quality [5] Importance of AI Adoption - AI adoption is framed as a competitive imperative, with Rackspace AI launchpad transforming AI from a strategic ambition into a tangible business advantage [8]

Revenue and Profitability - Revenue for the three months ended September 30, 2025, was $671.2 million, a slight decrease of 0.9% compared to $675.8 million in the same period of 2024[14] - Gross profit for the three months ended September 30, 2025, was $129.9 million, down from $137.5 million in the prior year, reflecting a gross margin of approximately 19.3%[14] - Net loss for the three months ended September 30, 2025, was $67.1 million, compared to a net loss of $186.6 million in the same period of 2024, indicating a significant improvement[14] - Total consolidated revenue for the three months ended September 30, 2024, was $675.8 million, slightly higher than $671.2 million in 2025, with nine-month revenue at $2,051.5 million compared to $2,002.9 million[168] - The company reported a total consolidated loss before income taxes of $174.6 million for the three months ended September 30, 2024, compared to a loss of $59.0 million in 2025, with a nine-month loss of $824.8 million versus $172.2 million[168] Assets and Liabilities - Total assets as of September 30, 2025, were $2,845.0 million, a decrease from $3,054.1 million as of December 31, 2024[13] - Total liabilities as of September 30, 2025, were $4,032.2 million, slightly down from $4,058.3 million at the end of 2024[13] - Cash and cash equivalents at the end of September 30, 2025, were $99.5 million, down from $144.0 million at the end of 2024[13] - As of September 30, 2025, the company had $2,434.3 million in outstanding debt, including various senior secured notes and term loan facilities[30] - Total debt as of September 30, 2025, was $2,772.5 million, down from $2,785.6 million as of December 31, 2024[70] Cash Flow and Liquidity - Operating cash flow for the nine months ended September 30, 2025, was $91.7 million, a significant increase compared to a cash outflow of $14.4 million in the same period of 2024[17] - The company reported cash and cash equivalents of $99.5 million as of September 30, 2025, indicating sufficient liquidity for at least the next twelve months[30] - Total cash, cash equivalents, and restricted cash amounted to $160.1 million, up from $101.3 million, reflecting a 58.0% increase[19] Shareholder Equity and Stock Performance - The weighted average number of shares outstanding for the three months ended September 30, 2025, was 240.4 million, compared to 226.4 million in the same period of 2024[14] - The company’s total stockholders' deficit reached $949.7 million as of September 30, 2024, compared to $756.2 million at June 30, 2024, marking an increase of 25.6%[21] - Basic net loss per share improved to $(0.28) for the three months ended September 30, 2025, compared to $(0.82) for the same period in 2024[61] Impairment and Goodwill - The company incurred impairment of goodwill of $141.7 million in the three months ended September 30, 2024, with no such impairment reported in 2025[14] - Goodwill, net as of September 30, 2025, was $739.7 million, with accumulated impairment charges totaling $2,305.6 million[66] - The company recognized impairment charges of $20.0 million related to its trade name indefinite-lived intangible asset during the nine months ended September 30, 2024[68] Segment Performance - The company has organized its operations into two segments: Public Cloud and Private Cloud, focusing on different service offerings and operational strategies[162] - Public Cloud revenue for the three months ended September 30, 2024, was $418.3 million, a slight increase from $421.6 million in 2025, while the nine-month revenue was $1,265.6 million compared to $1,253.8 million[168] - Private Cloud revenue for the three months ended September 30, 2024, was $257.5 million, up from $249.6 million in 2025, with nine-month revenue at $785.9 million compared to $749.1 million[168] Debt and Financing - The New Revolving Credit Facility allows for borrowings up to $375.0 million, with $65.0 million drawn as of September 30, 2025[30] - The New Borrower issued $1,687.2 million in the FLSO Term Loan Facility, which matures on May 15, 2028, with a contractual interest rate of 7.04% as of September 30, 2025[82][83] - The company completed a private debt exchange on March 12, 2024, involving $331.4 million of Existing Secured Notes and $1,588.8 million of Existing Term Loans[72] Tax and Regulatory Matters - The effective tax rate for the three months ended September 30, 2025, was lower than the U.S. federal statutory rate of 21% due to various factors including changes in valuation allowance and nondeductible executive compensation[138] - The company is currently evaluating the impact of ASU No. 2023-09 on income tax disclosures, effective for the 2025 Form 10-K[45] Compensation and Employee Costs - Total share-based compensation expense for the three months ended September 30, 2025, was $18.2 million, compared to $15.5 million for the same period in 2024[137] - The company recorded an increase in expense of $10.0 million due to the accelerated vesting of awards related to the former CEO's departure[135] - As of September 30, 2025, there was $28.7 million of total unrecognized compensation cost related to RSUs, PSUs, stock options, and the ESPP[137]

Core Viewpoint - Rackspace Technology held its Q3 2025 Earnings Conference Call, indicating a focus on financial performance and business updates [2]. Group 1: Business Updates - Gajen Kandiah, the Chief Executive Officer, provided an update on the business during the earnings call [4]. Group 2: Financial Reporting - The company emphasized that certain comments made during the call would be forward-looking, involving risks and uncertainties that could lead to actual results differing from expectations [2]. - Rackspace Technology stated that it assumes no obligation to update the information presented on the call, except as required by law [3]. - The presentation included non-GAAP financial measures and adjustments, which the company believes provide useful information to investors, with reconciliations to GAAP measures available on their Investor Relations website [3].

Financial Data and Key Metrics Changes - Total company GAAP revenue for Q3 2025 was $671 million, up 1% sequentially but down 1% year over year, exceeding the midpoint of guidance [12] - Non-GAAP gross profit margin was 19.9% of GAAP revenue, slightly up sequentially but down 120 basis points year over year [12] - Non-GAAP operating profit was $32 million, up 17% sequentially, meeting the high end of guidance [12] - Non-GAAP loss per share was $0.05, at the midpoint of the guided range of $0.04-$0.06 [12] - Cash flow from operations was $71 million, and free cash flow was $43 million [12] - The company ended the quarter with $100 million in cash and $386 million of total liquidity [13] Business Line Data and Key Metrics Changes - **Private Cloud**: Revenue was $250 million, meeting guidance but down 3% year over year; non-GAAP gross margin was 38.1%, down 50 basis points year over year [13][14] - **Public Cloud**: Revenue totaled $422 million, up 1% year over year and sequentially, driven by a 3% rise in services revenue [9][15] Market Data and Key Metrics Changes - Bookings measured by annual contract value grew 5% year over year, primarily driven by private cloud [6] - Public cloud bookings grew 2% sequentially, led by the Americas [8] Company Strategy and Development Direction - The company aims to be a leading hybrid multi-cloud partner for regulated, sovereign, and mission-critical workloads [17] - Focus on leveraging AI advancements to capture external opportunities and improve internal efficiencies [4] - Emphasis on building trust with customers and partners, and executing with precision to enhance reliability and security [5][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in meeting or exceeding expectations across all key metrics for Q3 2025 [5] - The enterprise market is shifting towards production in AI, with increasing complexity due to data sovereignty and security requirements [5] - Future growth is anticipated in healthcare, sovereign markets, and AI, with a focus on expanding relationships with enterprise customers [6][10] Other Important Information - The company introduced several new solutions, including Rackspace Electronic Health Record Cloud Enterprise and AI Launchpad, aimed at enhancing customer capabilities in healthcare and AI [8][10] - The company will participate in the UBS Global Technology and AI Conference on December 3 [18] Q&A Session Summary - No questions were asked during the Q&A session, and the call concluded without any inquiries from participants [19][20]

November 6, 2025 Disclaimer Forward-Looking Statements Rackspace Technology has made statements in this presentation 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 presentation 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 ...