Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark one) ☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2025. OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______ to ______. Commission File Number: 001-39420 RACKSPACE TECHNOLOGY, INC. (Exact name of registrant as specified in its charter) Delaware 8 ...

Core Insights - Rackspace Technology (RXT) reported Q4 revenue of $683 million, surpassing estimates, with losses narrowing to $0.01 per share compared to an expected loss of $0.04 [1] - The company guided a 31% increase in operating profit for 2026 and anticipates 6% growth in private cloud revenue for the first time in years [1] - Despite these positive developments, Rackspace's stock fell 10% after a previous surge of 69% following the earnings announcement, indicating profit-taking by investors [1] Financial Performance - Q4 revenue showed a slight decline of 0.4% year-over-year but was above the guidance and consensus estimates of around $675 million [1] - For the full year, total revenue was $2.69 billion, down 2% from 2024 [1] - The private cloud segment experienced a 10% decline, while the public cloud outperformed expectations [1] - Non-GAAP operating profit reached $41 million, exceeding guidance, with margins expanding by 120 basis points sequentially [1] - Cash flow from operations was $60 million, increasing year-end liquidity to $397 million [1] Future Outlook - Management projects 2026 revenue between $2.6 billion and $2.7 billion, indicating flat to slight decline at midpoint, with non-GAAP operating profit targeted at $160 million to $170 million [1] - The anticipated 6% growth in private cloud revenue is expected to be driven by AI-related enterprise deals [1] - Public cloud revenue may decline by 6% due to a large contract transition, but overall outlook suggests stabilization and selective growth in high-margin areas [1] Strategic Partnerships - The recent partnership with Palantir Technologies aims to enhance AI deployments, positioning Rackspace as a strategic partner for managing Palantir's Foundry and AI Platform [1] - Rackspace will provide managed services, including cloud hosting and compliance, particularly for regulated sectors [1] Market Dynamics - Rackspace's stock has experienced significant volatility, rising from lows of $0.42 to recent highs around $2.67, reflecting investor sentiment and market reactions to news [1] - Despite improvements in business metrics, the company still faces challenges such as substantial debt of $2.76 billion and ongoing net losses [1] - Competition from major players like AWS and Azure continues to pose risks in the hybrid cloud market [1]

Core Insights - Rackspace is transitioning from traditional services to a "platform engineering" model, focusing on embedding engineers in customer environments to operationalize AI use cases [1][2][4] - The company is positioned as a key player in the "private cloud renaissance," emphasizing the need for governed private and hybrid architectures for sensitive data and regulated workloads [2][4] - Rackspace's fourth quarter 2025 earnings exceeded guidance, with GAAP revenue of $683 million and a non-GAAP operating profit of $41 million, despite challenges in the private cloud segment [3][8] Strategic Focus - CEO Gajen Kandiah highlighted the shift from isolated AI experiments to integrating AI at scale within core enterprise systems, stressing the importance of performance, cost, and compliance [2][4] - The company aims to leverage partnerships with Palantir, VMware, and Rubrik to enhance its service delivery model and support a modern AI stack [5][6] Financial Performance - Fourth quarter results showed public cloud revenue of $442 million, driven by a 28% year-over-year growth in services revenue, while private cloud revenue was $241 million, impacted by a slower ramp in healthcare contracts [8][9][14] - For the full year 2025, private cloud revenue was reported at $990 million, down 6% year-over-year, while public cloud revenue totaled $1.7 billion [10][14] Future Outlook - Rackspace expects 2026 GAAP revenue to be between $2.6 billion and $2.7 billion, with private cloud growth anticipated and public cloud revenue affected by a planned government contract transition [16][21] - The company plans to scale its Palantir-trained platform engineers from 30 to over 250 in the next 12 months to support a growing pipeline of opportunities [4][5] Operational Insights - The company reported a non-GAAP gross profit margin of 18.1% for the fourth quarter, down 180 basis points sequentially, attributed to lower private cloud revenue [13] - Rackspace's approach is modular, allowing clients to utilize existing investments without needing to replace current systems [7]

Core Viewpoint - Rackspace Technologies held its Fourth Quarter 2025 Earnings Conference Call, indicating a focus on financial performance and future outlook [2]. Group 1: Financial Performance - The presentation included non-GAAP financial measures and adjustments, which the company believes provide useful information to investors [3]. - A reconciliation of these non-GAAP measures to the most directly comparable GAAP measures is available in the earnings press release and presentation on the Investor Relations website [3]. Group 2: Leadership and Management - The call featured key executives, including Gajen Kandiah, the Chief Executive Officer, and Mark Marino, the Chief Financial Officer, highlighting the leadership team involved in the financial update [2].

Financial Data and Key Metrics Changes - Total company GAAP revenue for Q4 2025 was $683 million, exceeding guidance, driven by public cloud outperformance [25] - Non-GAAP operating profit was $41 million, above the high end of the range, with margins up 120 basis points sequentially [25] - For the full year 2025, non-GAAP gross profit margin was 19.4%, down 120 basis points year-over-year due to a decline in private cloud revenue [27] - Cash flow from operations for Q4 was $60 million, with free cash flow at $56 million [28] Business Line Data and Key Metrics Changes - Private cloud revenue for Q4 was $241 million, below the guided range due to a healthcare contract ramping slowly [28] - Public cloud revenue for Q4 totaled $442 million, exceeding guidance, driven by strength in both services and infrastructure [29] - Services revenue in public cloud grew 28% year-over-year, reflecting momentum in higher value engagements [19] Market Data and Key Metrics Changes - Private cloud revenue for the full year totaled $990 million, down 6% year-over-year, marking an improvement from prior years' double-digit declines [15] - Public cloud revenue for the full year reached $1.7 billion, with services revenue growing 6% [19] Company Strategy and Development Direction - The company is focusing on becoming the infrastructure and operations backbone for enterprise AI, emphasizing a platform engineering model [4][5] - There is a deliberate shift towards larger, multi-year enterprise engagements and scaling AI services [12] - The company plans to move to an annual guidance framework starting in 2026 to better align with long-term growth and margin expansion [30] Management's Comments on Operating Environment and Future Outlook - Management sees AI as an important growth vector, not as a standalone product but integrated into core enterprise systems [9] - The company expects private cloud revenue to grow 6% year-over-year at the midpoint for 2026, marking the first sustained growth in many years [11] - Public cloud revenue is expected to decline approximately 6% year-over-year at the midpoint, primarily due to the transition of a large government contract [11] Other Important Information - The company has made changes to its executive team to enhance operational and delivery expertise [5] - The partnership with Palantir is central to the company's model, with plans to scale from 30 to over 250 Palantir-trained platform engineers in the next 12 months [8] Q&A Session Summary Question: What are the expectations for private cloud revenue growth? - The company expects private cloud revenue to grow 6% year-over-year at the midpoint for 2026, driven by large healthcare and other regulated deployments moving into production [30] Question: How is the company addressing the decline in public cloud revenue? - Public cloud revenue is expected to decline approximately 6% year-over-year at the midpoint, primarily due to the planned transition of a low-margin government contract, but excluding this, services revenue is expected to grow in the mid to high teens [11][31]

Rackspace Technology Q4 2025 Earnings Presentation February 26, 2026 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 ...

Revenue Performance - Fourth quarter 2025 revenue was $683 million, a decrease of 0.4% year-over-year, while full year 2025 revenue was $2,686 million, down 2% year-over-year[4][9] - Private Cloud revenue in Q4 2025 was $241 million, down 10% year-over-year, with full year 2025 revenue at $990 million, a decrease of 6% year-over-year[4][9] - Public Cloud revenue increased to $442 million in Q4 2025, up 6% year-over-year, with full year 2025 revenue at $1,696 million, an increase of 1% year-over-year[5][9] - Total revenue for 2024 was $2,737.1 million, a decrease of 1.9% compared to $2,685.7 million in 2025[28] - Public Cloud revenue for 2024 was $1,682.6 million, a slight increase of 0.8% from $1,696.0 million in 2025[35] - Private Cloud revenue decreased by 6.1% from $1,054.5 million in 2024 to $989.7 million in 2025[35] - The company experienced a total revenue decline of 1.9% year-over-year for the year ended December 31, 2025, totaling $2,685.7 million[40] Profit and Loss - Net loss for Q4 2025 was $(33) million, improving from a net loss of $(56) million in Q4 2024, while full year 2025 net loss was $(226) million, significantly reduced from $(858) million in 2024[5][11] - Net loss for 2024 was $858.2 million, significantly higher than the net loss of $225.8 million in 2025, marking a 73.7% increase[28] - The company reported a net loss of $32.7 million for Q4 2025, compared to a net loss of $56.0 million in Q4 2024[50] - Net loss for Q4 2024 was $56.0 million, compared to a net loss of $32.7 million in Q4 2025; for the year, net loss was $858.2 million in 2024 and $225.8 million in 2025[52] Operating Profit - Non-GAAP Operating Profit for Q4 2025 was $41 million, a 5% increase from $39 million in Q4 2024, with full year 2025 Non-GAAP Operating Profit at $126 million, up 19% from $106 million in 2024[8][13] - Non-GAAP Operating Profit for the year ended December 31, 2025, was $126.1 million, up from $105.6 million in 2024[51] - Non-GAAP Operating Profit for Q4 2024 was $39.1 million, reflecting a 5.4% increase compared to Q4 2025[36] Cash Flow and Expenditures - Cash flow from operating activities in Q4 2025 was $60 million, with full year 2025 cash flow at $151 million[7] - Capital expenditures for Q4 2025 were $48 million, compared to $27 million in Q4 2024, while full year 2025 capital expenditures were $139 million, slightly up from $136 million in 2024[8][14] - Net cash provided by operating activities increased from $39.9 million in 2024 to $151.4 million in 2025[32] Future Guidance - The company expects FY 2026 revenue guidance between $2,600 million and $2,700 million, with Private Cloud revenue projected at $1,025 million to $1,075 million and Public Cloud revenue at $1,575 million to $1,625 million[16] - Non-GAAP Loss Per Share for FY 2026 is expected to be between $(0.15) and $(0.20)[16] Strategic Focus - The company emphasizes a strategic shift towards higher-value enterprise engagements and AI as a growth vector for future performance[3] Asset and Liability Overview - Cash and cash equivalents decreased from $144.0 million in 2024 to $105.8 million in 2025[30] - Total assets increased from $3,054.1 million in 2024 to $2,799.8 million in 2025[30] - Total liabilities remained relatively stable, with a slight decrease from $4,058.3 million in 2024 to $4,019.3 million in 2025[30] Impairment and Expenses - The company reported an impairment of goodwill of $714.9 million in 2024, which was not present in 2025[28] - Share-based compensation expense was $15.6 million in Q4 2024 and $4.9 million in Q4 2025; for the year, it was $63.4 million in 2024 and $45.1 million in 2025[52] - Interest expense for the year was $98.0 million in 2024 and $82.7 million in 2025, reflecting a decrease in interest costs[52] - The company incurred $714.9 million in goodwill impairment for the year 2024, with no impairment recorded in 2025[52] Shareholder Metrics - The weighted average number of diluted shares increased from 224.8 million in 2024 to 238.7 million in 2025[58] - Diluted Net Loss per share for Q4 2024 was $(0.25), improving to $(0.13) in Q4 2025; for the year, it decreased from $(3.82) in 2024 to $(0.95) in 2025[58] Other Financial Metrics - Adjusted EBITDA for Q4 2024 was $73.7 million, increasing to $80.7 million in Q4 2025; for the year, Adjusted EBITDA rose from $244.8 million in 2024 to $275.7 million in 2025[52] - Non-GAAP Net Loss for the year ended December 31, 2025, was $44.7 million, an improvement from $63.5 million in 2024[50] - Non-GAAP Net Loss for Q4 2024 was $4.4 million, compared to $3.5 million in Q4 2025; for the year, Non-GAAP Net Loss decreased from $63.5 million in 2024 to $44.7 million in 2025[58] Corporate Transactions - The company recorded a $9.0 million early termination fee related to the sale of its corporate headquarters in March 2024[53]

Core Insights - Rackspace Technology, Inc. reported a decrease in revenue for Q4 2025, totaling $683 million, down 0.4% year-over-year, while full-year revenue for 2025 was $2,686 million, a decrease of 2% compared to 2024 [3][7][8]. Financial Performance - Q4 2025 Private Cloud revenue was $241 million, down 10% year-over-year, while Public Cloud revenue increased to $442 million, up 6% year-over-year [3][4][8]. - The company experienced a loss from operations of $(3) million in Q4 2025, significantly improved from a loss of $(29) million in Q4 2024 [4][8]. - Net loss for Q4 2025 was $(33) million, an improvement from $(56) million in Q4 2024, resulting in a net loss per diluted share of $(0.13) compared to $(0.25) in the prior year [4][5][8]. - For the full year 2025, net loss was $(226) million, a significant reduction from $(858) million in 2024, with net loss per diluted share improving to $(0.95) from $(3.82) [10][11]. Operational Metrics - Non-GAAP Operating Profit for Q4 2025 was $41 million, up 5% from $39 million in Q4 2024, while full-year Non-GAAP Operating Profit was $126 million, a 19% increase from $106 million in 2024 [5][10]. - Capital expenditures in Q4 2025 were $48 million, compared to $27 million in Q4 2024, indicating increased investment in infrastructure [6][10]. Future Outlook - The company anticipates growth in Private Cloud revenue for 2026, projecting between $1,025 million and $1,075 million, while Public Cloud revenue is expected to be between $1,575 million and $1,625 million [12]. - Non-GAAP Operating Profit guidance for 2026 is set between $160 million and $170 million, with an Adjusted EBITDA forecast of $305 million to $315 million [12].

Core Viewpoint - Rackspace Technology, Inc. is experiencing a decline in stock price and is set to report fourth-quarter earnings, with analysts predicting a loss and modest revenue growth [1][2]. Financial Performance - Analysts expect Rackspace to report a loss of 1 cent per share on revenue of $672.56 million for the fourth quarter [1]. - In the previous third quarter, the company reported a loss of 5 cents per share, which was in line with consensus estimates, while revenue was $671.20 million, slightly exceeding expectations of $666.83 million [1]. Earnings Surprises - Over the past four quarters, Rackspace has averaged an earnings per share surprise of 0.24% and a revenue surprise of 0.01% [2]. Stock Performance - Rackspace Technology's stock has declined by 43.41% over the past year, but it is currently trading significantly above its short-term moving averages: 103% above the 20-day SMA of 74 cents, 69.7% above the 50-day SMA of 89 cents, and 36.6% above the 100-day SMA of $1.11 [3]. - The current stock price of $1.51 is closer to its 52-week high of $2.89 than its 52-week low of 39 cents, indicating some recovery from previous lows [3]. Recent Price Action - As of the latest publication, Rackspace Technology shares were down 4.45% at $1.39 [4].

Core Viewpoint - Rackspace Technology (RXT) shares have experienced a remarkable 265% increase over the last five trading days due to a strategic partnership with Palantir (PLTR), integrating PLTR's AI platform into Rackspace's private cloud [1] Financial Performance - Despite the recent surge, Rackspace stock is still down approximately 50% from its 52-week high, raising questions about the sustainability of this rally [2] - The company's balance sheet reveals ongoing challenges, including revenue deceleration and persistent net losses, alongside a significant debt burden exceeding $2.8 billion [7] - Interest expenses are impacting Rackspace's narrow profit margins, indicating financial strain [7] Market Dynamics - The recent rally appears to be driven more by "meme" dynamics and a short squeeze, with short interest in RXT stock rising to over 27% prior to the Palantir announcement [6] - Historically, rallies based on short-covering and hype tend to fade quickly, leaving late investors at risk of sharp corrections [6] Workforce and Capital Needs - Rackspace has a limited number of PLTR-trained engineers, and scaling this workforce will require significant capital that the company currently cannot afford [8] Analyst Sentiment - Wall Street maintains a cautious stance on Rackspace Technology, with a consensus rating of "Hold" and a mean target price of $1.48, suggesting a potential downside of about 10% from current levels [9][10]