Core Insights - Total Wine & More has partnered with Rackspace Technology to implement a strategic multicloud approach, utilizing Microsoft Azure and Google Cloud for its digital transformation [1][2] - The partnership aims to enhance flexibility, cost efficiency, and speed in operations, showcasing the benefits of a tailored cloud strategy for different workloads [2] - Total Wine & More operates 284 superstores across 29 states, emphasizing its growth and commitment to exceptional customer experiences [3] Company Overview - Total Wine & More is the largest independent retailer of fine wine in the U.S., offering over 8,000 wines, 3,000 spirits, and 2,500 beers, founded in 1991 [4] - The company focuses on providing low prices, exceptional service, and a superior shopping experience [4] Partnership Benefits - The collaboration with Rackspace Technology has enabled Total Wine to transform cost optimization into a catalyst for innovation, utilizing the FinOps program and Optimizer+ for actionable insights [3][8] - Rackspace's ongoing support includes modernizing Total Wine's inventory system and migrating backend operations to Azure, ensuring optimal performance and reliability [8] Strategic Approach - Total Wine & More's multicloud strategy is increasingly common among innovative retailers, aiming to modernize operations and enhance customer experience [2] - The partnership is characterized by a relationship built on trust and shared success, with Rackspace providing not just tools but also valuable expertise [4]

Core Points - Rackspace Technology has been awarded the UK Armed Forces Covenant's Defence Employer Recognition Scheme (ERS) Silver Award for its exceptional support to the armed forces community, including reservists, veterans, and military families [1][5][8] Group 1: Company Commitment - The company has implemented supportive employee policies that go beyond the UK Armed Forces Covenant commitments, promoting defense values and advocating for service personnel in the civilian workforce [2][7] - Rackspace Technology expresses pride in supporting those who serve or have served in the Armed Forces and their families, emphasizing a commitment to ensuring employee policies support active reservists, veterans, and their families [2][7] Group 2: Recognition Details - The Silver Award was received in a ceremony held in September, highlighting the company's dedication to military support [8] - The award recognizes various policies, including paid leave for reservist training and mobilization, active veteran recruitment and retention policies, and flexible support for military families [7][8] Group 3: Company Overview - Rackspace Technology is a leading provider of end-to-end hybrid cloud and AI solutions, capable of designing, building, and operating cloud environments across major technology platforms [3] - The company partners with customers at every stage of their cloud journey, enabling modernization of applications and adoption of innovative technologies [3]

Core Insights - Rackspace Technology Inc. has experienced a significant decline in stock performance, with a drop of over 45% in the last year and continued challenges in 2025 [1] - The company is focusing on stabilizing its private cloud revenue and expanding its market presence, particularly in mid-market and enterprise segments [2] - The appointment of Gajen Kandiah as the new CEO is seen as a potential turning point for the company, as he is expected to lead an AI-first multi-cloud strategy [3] - Rackspace has achieved the AWS Automotive Competency, indicating its capability in supporting digital transformation for automotive companies [4] Company Challenges - The company is facing slowing growth, mounting losses, and a lack of transformational deals, alongside significant leverage [1] - Despite some improvements in cash flow generation, strong execution of its strategy is necessary to regain investor confidence [2] Strategic Developments - The new CEO, Gajen Kandiah, brings expertise in services, infrastructure, software, and AI, which may help in reversing the company's current performance slide [3] - The AWS Automotive Competency achievement highlights Rackspace's commitment to enhancing its service offerings in the automotive sector [4]

Core Insights - Rackspace Technology has achieved the Amazon Web Services (AWS) Automotive Competency, showcasing its expertise in supporting automotive companies and their suppliers in digital transformation on AWS [1][2][4] Company Achievements - The AWS Automotive Services Competency recognizes AWS Partner Network (APN) members with deep technical expertise and proven customer success in the automotive industry [2] - Achieving the AWS Automotive Competency reflects over five years of collaboration with Original Equipment Manufacturers (OEMs) and Tier 1 suppliers globally [3] - Rackspace Technology has modernized a major German automotive OEM's legacy shopfloor IT on AWS, implementing an event-driven data pipeline for real-time visibility into shopfloor machinery data [3] Industry Impact - The implementation of new technologies enables faster operator response and prepares the company for predictive maintenance, aligning with Industry 4.0 standards [3] - This achievement reinforces Rackspace Technology's position as a trusted partner for leading automotive companies and highlights its ongoing investment in industry-specific solutions [4]

Core Insights - Rackspace Technology announced the appointment of Gajen Kandiah as the new CEO and granted him inducement equity awards [1][2] Equity Awards - Mr. Kandiah received 4,000,000 restricted stock units (RSUs) and non-qualified stock options to purchase 6,000,000 shares of common stock [2] - The stock options have an exercise price of $1.30 per share, equal to the closing price on the grant date, with a maximum term of ten years [2] - The RSUs and stock options will vest in equal annual installments on September 3 for the years 2026, 2027, 2028, and 2029, contingent on Mr. Kandiah's continued employment [2] Compliance and Approval - The equity awards were granted as an inducement material to Mr. Kandiah's employment, in accordance with Nasdaq Listing Rule 5635(c)(4) [3] - The awards were approved by a majority of the independent members of the board of directors, outside of the shareholder-approved equity incentive plan [3] Company Overview - Rackspace Technology is a leading provider of hybrid multicloud technology services and AI solutions, focusing on designing, building, and operating cloud environments across major technology platforms [4] - The company partners with customers at every stage of their cloud journey, enabling modernization of applications, product development, and adoption of innovative technologies [4]

Core Viewpoint - Rackspace Technology has appointed Gajen Kandiah as the new CEO, effective September 3, 2025, to lead the company's AI-first multicloud strategy and enhance customer outcomes across various cloud environments [1][11]. Company Leadership - Gajen Kandiah succeeds Amar Maletira, who has been CEO since September 2022 and will transition to Vice Chairman of the Board [3][11]. - Kandiah has extensive experience in services, infrastructure, software, and AI, previously serving as President and COO of Hitachi Digital and CEO of Hitachi Vantara [4][6]. Strategic Focus - Under Kandiah's leadership, Rackspace will prioritize measurable customer outcomes in highly-regulated sectors and accelerate innovation in cloud management and private AI [5][6]. - The company aims to deepen partnerships with major cloud providers and enhance execution across sales, delivery, and operations [5][6]. Company Background - Rackspace Technology is recognized as a leading provider of end-to-end hybrid multicloud technology services and AI solutions, partnering with customers throughout their cloud journey [7].

Core Insights - Rackspace Technology and SMPL-C have formed a strategic partnership aimed at enhancing compliance automation for organizations working with federal agencies, particularly in relation to Cybersecurity Maturity Model Certification (CMMC) requirements [1][2][3] Group 1: Partnership Overview - The partnership will be facilitated through Rackspace Technology Government Solutions, focusing on secure, CMMC-authorized cloud infrastructure and compliance services [1] - The collaboration aims to simplify the compliance process by integrating SMPL-C's intelligent documentation and workflow engine with Rackspace's secure cloud infrastructure [2] Group 2: Benefits of the Partnership - The partnership seeks to create a unified ecosystem that simplifies and accelerates the CMMC compliance journey, addressing challenges faced by organizations that currently navigate compliance in silos [3] - By automating the documentation process, the collaboration aims to reduce costs associated with CMMC compliance for the defense sector [4] Group 3: Services Offered - Enterprises will benefit from automated gap assessments, documentation, and evidence tracking for CMMC certification [8] - Rackspace's CMMC-aligned environments and multicloud expertise will provide secure cloud hosting solutions [8] - The partnership offers ongoing advisory and support, ensuring continuous guidance and remediation from both Rackspace and SMPL-C [8]

Core Insights - Rackspace Technology announced enhancements to its Rackspace Cyber Defense Center (RCDC) that leverage AI for improved threat detection and remediation across various cloud environments [1][4] - The Rackspace AI Security Engine (RAISE) integrates human expertise with machine learning to enhance cybersecurity operations, enabling faster and more precise responses to threats [2][5] - RAISE employs a closed-loop model of adaptive intelligence that continuously learns from incidents, improving detection and response capabilities over time [3] Company Developments - The RCDC combines operational expertise with advanced telemetry insights and proprietary technology to provide continuous real-time protection against evolving threats [4] - Rackspace has been recognized as a leader in cybersecurity by the Information Services Group (ISG) in its 2025 Provider Lens™ report, excelling in Strategic Security Services, Next-Gen SOC MDR Services, and Technical Security Services [4] - ISG highlighted RAISE's capabilities in accelerating threat detection and response while minimizing manual overhead, thus enhancing incident triage and reducing response times [5]

Core Insights - Rackspace Technology has partnered with Dell Medical School at The University of Texas at Austin to provide fully managed cloud-native services for healthcare IT infrastructure, marking a significant transformation in the sector [1][2][3] Partnership Details - The partnership aims to establish Dell Med as a leading academic medical center by managing its Epic Electronic Health Record (EHR) and related workloads, which will serve as the comprehensive EHR platform for future clinics and hospitals [2][3] - Rackspace will deliver a fully managed service model, ensuring operational excellence and a seamless transition for Dell Med's digital transformation [3][4] Future Plans - Dell Med plans to develop a new academic medical center without a traditional physical data center, relying on Rackspace to host and manage critical digital infrastructure components, including Epic and other clinical workloads [5] - The cloud services provided will be designed with redundancy to support patient safety, regulatory standards, and system resilience [5]

General Information [Filing Details](index=1&type=section&id=Filing%20Details) This section provides the administrative details of the Form 10-Q filing for Rackspace Technology, Inc., including its identification as an accelerated filer and smaller reporting company, and the number of outstanding common shares as of August 5, 2025 - Rackspace Technology, Inc. is a Delaware corporation with Commission File Number 001-39420. Its common stock trades on The Nasdaq Stock Market LLC under the symbol RXT[3](index=3&type=chunk) - The registrant is classified as an **Accelerated filer** and a **Smaller reporting company**[4](index=4&type=chunk) - As of August 5, 2025, there were **239,360,677 shares of common stock outstanding**[4](index=4&type=chunk) [Special Note Regarding Forward-Looking Statements](index=4&type=section&id=SPECIAL%20NOTE%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) This section highlights that the report contains forward-looking statements, particularly in 'Risk Factors' and 'Management's Discussion and Analysis,' which involve risks and uncertainties that could cause actual results to differ materially from projections. The company disclaims any obligation to update these statements - The report contains forward-looking statements, primarily in 'Risk Factors' and 'Management's Discussion and Analysis of Financial Condition and Results of Operations,' which are subject to risks and uncertainties[8](index=8&type=chunk) - Actual future operations and financial results could differ materially and substantially from those discussed in forward-looking statements due to various factors and assumptions about future events[9](index=9&type=chunk) - The company disclaims any obligation to publicly update or revise any forward-looking statements, except as required by law[9](index=9&type=chunk) [Trademarks, Trade Names and Service Marks](index=4&type=section&id=TRADEMARKS%2C%20TRADE%20NAMES%20AND%20SERVICE%20MARKS) This section lists the company's registered and unregistered trademarks, such as 'Rackspace Technology' and 'Fanatical Experience,' and clarifies that the absence of symbols does not waive rights to these marks. It also acknowledges that other trademarks belong to their respective holders - Key trademarks include 'Rackspace,' 'Rackspace Technology,' 'Fanatical,' 'Fanatical Experience,' 'Rackspace Fabric,' 'Rackspace Data Freedom,' 'Rackspace Services for VMware Cloud,' and 'My Rackspace'[11](index=11&type=chunk) - The absence of ® or ™ symbols does not indicate a waiver of the company's or licensor's rights to these trademarks, trade names, and service marks[11](index=11&type=chunk) Part I - Financial Information [Item 1. Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements, including balance sheets, statements of comprehensive income (loss), cash flows, and stockholders' deficit, along with detailed notes explaining significant accounting policies, customer contracts, debt, share-based compensation, and segment reporting. The company reported a net loss of **$54.5 million** for the three months ended June 30, 2025, and a total stockholders' deficit of **$1,119.0 million** [Unaudited Condensed Consolidated Balance Sheets](index=5&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) | Metric | December 31, 2024 (Millions) | June 30, 2025 (Millions) | Change (Millions) | % Change | | :-------------------------------- | :--------------------------- | :------------------------- | :---------------- | :------- | | Cash and cash equivalents | $144.0 | $103.9 | $(40.1) | -27.8% | | Total current assets | $618.8 | $548.4 | $(70.4) | -11.4% | | Total assets | $3,054.1 | $2,894.9 | $(159.2) | -5.2% | | Total current liabilities | $766.6 | $715.4 | $(51.2) | -6.7% | | Total liabilities | $4,058.3 | $4,013.9 | $(44.4) | -1.1% | | Total stockholders' deficit | $(1,004.2) | $(1,119.0) | $(114.8) | 11.4% | [Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss)](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) | Metric | Three Months Ended June 30, 2024 (Millions) | Three Months Ended June 30, 2025 (Millions) | Change (Millions) | % Change | | :----------------------------------- | :---------------------------------------- | :---------------------------------------- | :---------------- | :------- | | Revenue | $684.9 | $666.3 | $(18.6) | -2.7% | | Gross profit | $131.4 | $129.2 | $(2.2) | -1.7% | | Loss from operations | $(53.8) | $(25.1) | $28.7 | -53.3% | | Net income (loss) | $25.0 | $(54.5) | $(79.5) | NM | | Basic EPS | $0.11 | $(0.23) | $(0.34) | NM | | Diluted EPS | $0.11 | $(0.23) | $(0.34) | NM | | Metric | Six Months Ended June 30, 2024 (Millions) | Six Months Ended June 30, 2025 (Millions) | Change (Millions) | % Change | | :----------------------------------- | :---------------------------------------- | :---------------------------------------- | :---------------- | :------- | | Revenue | $1,375.7 | $1,331.7 | $(44.0) | -3.2% | | Gross profit | $264.2 | $256.1 | $(8.1) | -3.1% | | Loss from operations | $(706.6) | $(63.5) | $643.1 | -91.0% | | Net income (loss) | $(615.6) | $(126.0) | $489.6 | -79.5% | | Basic EPS | $(2.77) | $(0.54) | $2.23 | -80.5% | | Diluted EPS | $(2.77) | $(0.54) | $2.23 | -80.5% | [Unaudited Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) | Metric | Six Months Ended June 30, 2024 (Millions) | Six Months Ended June 30, 2025 (Millions) | Change (Millions) | | :-------------------------------------- | :---------------------------------------- | :---------------------------------------- | :---------------- | | Net cash provided by (used in) operating activities | $(66.2) | $21.0 | $87.2 | | Net cash used in investing activities | $(49.5) | $(29.9) | $19.6 | | Net cash provided by (used in) financing activities | $110.4 | $(35.7) | $(146.1) | | Cash, cash equivalents, and restricted cash at end of period | $193.1 | $105.7 | $(87.4) | [Unaudited Condensed Consolidated Statements of Stockholders' Deficit](index=10&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Deficit) | Metric | December 31, 2024 (Millions) | June 30, 2025 (Millions) | Change (Millions) | | :-------------------------- | :--------------------------- | :------------------------- | :---------------- | | Total stockholders' deficit | $(1,004.2) | $(1,119.0) | $(114.8) | - The accumulated deficit increased from **$(3,682.4) million** at December 31, 2024, to **$(3,808.4) million** at June 30, 2025, primarily due to net losses[13](index=13&type=chunk)[22](index=22&type=chunk) [Notes to the Unaudited Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20the%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) [1. Company Overview, Basis of Presentation, and Summary of Significant Accounting Policies](index=12&type=section&id=1.%20Company%20Overview%2C%20Basis%20of%20Presentation%2C%20and%20Summary%20of%20Significant%20Accounting%20Policies) - Rackspace Technology, Inc. is a holding company for Rackspace Technology Global, Inc., a global provider of modern information technology-as-a-service, controlled by investment funds affiliated with Apollo Global Management, Inc[24](index=24&type=chunk)[25](index=25&type=chunk) - The company is highly leveraged, with **$2,439.3 million** aggregate principal amount outstanding under its debt instruments as of June 30, 2025. It relies on internally-generated cash and borrowings under the New Revolving Credit Facility for liquidity[30](index=30&type=chunk) - An interim quantitative goodwill impairment analysis as of February 29, 2024, resulted in impairment charges of **$385.4 million** for Public Cloud and **$187.8 million** for Private Cloud, totaling **$573.2 million**. A **$20.0 million** impairment charge was also recorded for the Rackspace trade name[36](index=36&type=chunk)[38](index=38&type=chunk) [2. Customer Contracts](index=16&type=section&id=2.%20Customer%20Contracts) | Metric | December 31, 2024 (Millions) | June 30, 2025 (Millions) | | :-------------------------------- | :--------------------------- | :------------------------- | | Accounts receivable, net | $298.8 | $253.9 | | Current portion of contract assets | $6.2 | $3.9 | | Non-current portion of contract assets | $6.4 | $2.5 | | Current portion of deferred revenue | $84.2 | $68.4 | | Non-current portion of deferred revenue | $2.0 | $2.7 | - Amounts recognized in revenue from deferred revenue at the beginning of the period were **$48.9 million** for the three months ended June 30, 2025 (vs. **$43.9 million** in 2024) and **$68.0 million** for the six months ended June 30, 2025 (vs. **$61.3 million** in 2024)[46](index=46&type=chunk) - As of June 30, 2025, the aggregate amount of transaction price allocated to remaining performance obligations was **$515.0 million**, with approximately **35%** expected to be recognized as revenue during the remainder of 2025[49](index=49&type=chunk) [3. Sale of Receivables](index=17&type=section&id=3.%20Sale%20of%20Receivables) - The company recorded **$5.3 million** and **$10.3 million** in yield charges and fees for accounts receivable sold during the three and six months ended June 30, 2025, respectively, within 'Other expense, net'[53](index=53&type=chunk) - The outstanding portfolio of sold accounts receivable derecognized from the balance sheet was **$246.8 million** as of June 30, 2025, up from **$218.7 million** at December 31, 2024[54](index=54&type=chunk) [4. Net Earnings (Loss) Per Share](index=18&type=section&id=4.%20Net%20Earnings%20(Loss)%20Per%20Share) | Metric | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | | :----------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Net income (loss) attributable to common stockholders (Millions) | $25.0 | $(54.5) | $(615.6) | $(126.0) | | Basic EPS | $0.11 | $(0.23) | $(2.77) | $(0.54) | | Diluted EPS | $0.11 | $(0.23) | $(2.77) | $(0.54) | | Weighted average shares outstanding (Basic, Millions) | 224.5 | 238.0 | 222.2 | 235.0 | | Weighted average shares outstanding (Diluted, Millions) | 229.6 | 238.0 | 222.2 | 235.0 | - Potential common shares of **24.3 million** were excluded from diluted loss per share computations for the three and six months ended June 30, 2025, as their effect would have been anti-dilutive[57](index=57&type=chunk) [5. Property, Equipment and Software, net](index=19&type=section&id=5.%20Property%2C%20Equipment%20and%20Software%2C%20net) | Category | December 31, 2024 (Millions) | June 30, 2025 (Millions) | | :-------------------------------- | :--------------------------- | :------------------------- | | Computers and equipment | $1,142.9 | $1,129.1 | | Software | $448.1 | $430.7 | | Buildings and leasehold improvements | $409.7 | $422.0 | | Property, equipment and software, net | $601.0 | $594.8 | - In March 2024, the company sold its corporate headquarters for net cash proceeds of **$16.9 million** and paid a **$9.0 million** early termination fee related to economic incentives[59](index=59&type=chunk) [6. Goodwill and Intangible Assets](index=20&type=section&id=6.%20Goodwill%20and%20Intangible%20Assets) | Metric | December 31, 2024 (Millions) | June 30, 2025 (Millions) | | :-------------------------------- | :--------------------------- | :------------------------- | | Goodwill, net | $735.7 | $741.1 | | Total definite-lived intangible assets, net | $704.7 | $630.2 | | Trade name (indefinite-lived), net | $140.0 | $140.0 | | Total intangible assets other than goodwill, net | $844.7 | $770.2 | - Goodwill impairment charges of **$573.2 million** were recorded in the first quarter of 2024 for Public Cloud (**$385.4 million**) and Private Cloud (**$187.8 million**)[36](index=36&type=chunk)[63](index=63&type=chunk) - An impairment charge of **$20.0 million** was recognized for the trade name indefinite-lived intangible asset during the six months ended June 30, 2024[38](index=38&type=chunk)[64](index=64&type=chunk) [7. Debt](index=21&type=section&id=7.%20Debt) | Debt Instrument | Maturity Date | Interest Rate (June 30, 2025) | Amount (December 31, 2024, Millions) | Amount (June 30, 2025, Millions) | | :-------------------------------- | :------------ | :------------------------------ | :----------------------------------- | :------------------------------- | | FLSO Term Loan Facility | May 15, 2028 | 7.18% | $1,626.8 | $1,618.4 | | FLFO Term Loan Facility | May 15, 2028 | 10.68% | $272.9 | $271.6 | | Term Loan Facility | Feb 15, 2028 | 7.18% | $61.8 | $61.4 | | New Revolving Credit Facility | May 15, 2028 | 7.49% | $0.0 | $65.0 | | 3.50% FLSO Senior Secured Notes | May 15, 2028 | 3.50% | $318.6 | $318.6 | | 3.50% Senior Secured Notes | Feb 15, 2028 | 3.50% | $43.9 | $43.9 | | 5.375% Senior Notes | Dec 1, 2028 | 5.375% | $125.4 | $125.4 | | Total principal amount outstanding | | | $2,449.4 | $2,504.3 | | Total debt | | | $2,785.6 | $2,800.2 | - The company completed March 2024 Refinancing Transactions, including private and public debt exchanges, and established a New Revolving Credit Facility, resulting in a **$56.7 million** gain in Q1 2024 and a **$23.3 million** gain in Q2 2024[73](index=73&type=chunk)[75](index=75&type=chunk)[76](index=76&type=chunk) - As of June 30, 2025, the company had **$310.0 million** of available commitments remaining under the New Revolving Credit Facility and was in compliance with all debt covenants[95](index=95&type=chunk)[96](index=96&type=chunk) [8. Commitments and Contingencies](index=28&type=section&id=8.%20Commitments%20and%20Contingencies) - The company has contingencies from various litigation, claims, and commitments, none of which are considered material[125](index=125&type=chunk)[128](index=128&type=chunk) - Accruals for loss contingencies are recorded when a loss is probable and reasonably estimable[127](index=127&type=chunk) [9. Share-Based Compensation](index=29&type=section&id=9.%20Share-Based%20Compensation) - During the six months ended June 30, 2025, the company granted **9.3 million** restricted stock units (RSUs) with a weighted-average fair value of **$1.46** and **30.2 million** long-term incentive cash units (LTIC units) with a weighted average fair value of **$0.71**[130](index=130&type=chunk)[131](index=131&type=chunk) | Metric | Three Months Ended June 30, 2024 (Millions) | Three Months Ended June 30, 2025 (Millions) | Six Months Ended June 30, 2024 (Millions) | Six Months Ended June 30, 2025 (Millions) | | :----------------------------------- | :---------------------------------------- | :---------------------------------------- | :---------------------------------------- | :---------------------------------------- | | Equity classified awards | $13.0 | $6.9 | $26.0 | $14.5 | | Liability classified awards | $6.5 | $3.1 | $6.3 | $7.5 | | Total share-based compensation expense | $19.5 | $10.0 | $32.3 | $22.0 | - As of June 30, 2025, there was **$29.9 million** of total unrecognized compensation cost related to RSUs and performance stock units[132](index=132&type=chunk) [10. Taxes](index=29&type=section&id=10.%20Taxes) - For the three and six months ended June 30, 2025, the effective tax rate was lower than the U.S. federal statutory rate of **21%** primarily due to changes in valuation allowance, non-deductible executive compensation, and the geographic distribution of earnings[133](index=133&type=chunk) - The U.S. government enacted the One Big Beautiful Bill Act (OBBBA) on July 4, 2025, and the company is assessing its effect on consolidated financial statements, expected to be reflected starting Q3 2025[134](index=134&type=chunk) [11. Derivatives](index=30&type=section&id=11.%20Derivatives) - The company uses interest rate swap agreements to manage exposure to interest rate risk on floating-rate debt, designating certain swaps as cash flow hedges[135](index=135&type=chunk)[136](index=136&type=chunk)[137](index=137&type=chunk) | Metric | December 31, 2024 (Millions) | June 30, 2025 (Millions) | | :-------------------------------- | :--------------------------- | :------------------------- | | Total derivatives designated as hedging instruments (Assets) | $46.2 | $25.3 | | Total derivatives designated as hedging instruments (Liabilities) | $20.3 | $11.7 | - As of June 30, 2025, **$25.3 million** of cash flow hedge gain included in 'Accumulated other comprehensive income' is expected to be reclassified as a reduction to 'Interest expense' over the next 12 months[151](index=151&type=chunk) [12. Accumulated Other Comprehensive Income](index=33&type=section&id=12.%20Accumulated%20Other%20Comprehensive%20Income) | Metric | December 31, 2024 (Millions) | June 30, 2025 (Millions) | | :-------------------------------- | :--------------------------- | :------------------------- | | Accumulated Foreign Currency Translation Adjustments | $(10.2) | $2.8 | | Accumulated Gain on Derivative Contracts | $34.3 | $18.5 | | Accumulated Other Comprehensive Income | $24.1 | $21.3 | - For the six months ended June 30, 2025, foreign currency translation adjustments resulted in a **$13.0 million** gain, and unrealized gain on derivative contracts was **$1.4 million**[156](index=156&type=chunk) [13. Segment Reporting](index=34&type=section&id=13.%20Segment%20Reporting) - The company operates in two reportable segments: Public Cloud (services-centric, capital-light) and Private Cloud (technology-forward, capital-intensive)[157](index=157&type=chunk) | Segment | Three Months Ended June 30, 2024 (Millions) | Three Months Ended June 30, 2025 (Millions) | Six Months Ended June 30, 2024 (Millions) | Six Months Ended June 30, 2025 (Millions) | | :---------------- | :---------------------------------------- | :---------------------------------------- | :---------------------------------------- | :---------------------------------------- | | Public Cloud Revenue | $424.9 | $416.6 | $847.3 | $832.2 | | Public Cloud Operating Profit | $10.7 | $16.2 | $18.9 | $33.5 | | Private Cloud Revenue | $260.0 | $249.7 | $528.4 | $499.5 | | Private Cloud Operating Profit | $68.8 | $61.5 | $139.9 | $122.5 | | Total Consolidated Revenue | $684.9 | $666.3 | $1,375.7 | $1,331.7 | | Total Segment Operating Profit | $79.5 | $77.7 | $158.8 | $156.0 | - Public Cloud operating profit increased by **51.4%** for the three months and **77.2%** for the six months ended June 30, 2025, driven by operational improvements and cost optimization, despite revenue declines[201](index=201&type=chunk)[221](index=221&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=37&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides an in-depth analysis of Rackspace Technology's financial performance, condition, and cash flows, highlighting a net loss of **$126.0 million** for the six months ended June 30, 2025, an improvement from the prior year's **$615.6 million** loss. It details revenue declines in both Public and Private Cloud segments, discusses key factors affecting performance, and reconciles GAAP to non-GAAP financial measures, emphasizing the company's liquidity and debt management strategies [Overview](index=37&type=section&id=Overview) - Rackspace Technology is a leading end-to-end, hybrid cloud and AI solutions company, designing, building, and operating customer cloud environments across major technology platforms[172](index=172&type=chunk) - The company operates through two reportable segments: Public Cloud (services-centric, capital-light) and Private Cloud (technology-forward, capital-intensive)[173](index=173&type=chunk) [Key Factors Affecting Our Performance](index=38&type=section&id=Key%20Factors%20Affecting%20Our%20Performance) - Success depends on differentiating service offerings, expanding and upgrading services, deepening relationships with public cloud providers, and establishing new partnerships in a competitive market[177](index=177&type=chunk) - Customer retention and attraction are crucial, driven by an integrated cloud service portfolio, differentiated customer experience, and technology like Rackspace Fabric and Elastic Engineering[178](index=178&type=chunk) - The business mix has shifted from Private Cloud to Public Cloud infrastructure resale and services, with a focus on defending Private Cloud revenue and expanding Public Cloud operating margins through cost efficiencies and higher-margin services[179](index=179&type=chunk) [Key Components of Statement of Operations](index=39&type=section&id=Key%20Components%20of%20Statement%20of%20Operations) - Revenue is primarily generated from fixed-term contracts (12-36 months) in Private Cloud and usage-based arrangements in Public Cloud, with revenue recognized daily as services are provided[181](index=181&type=chunk) - Cost of revenue includes third-party infrastructure usage charges, personnel costs, depreciation, data center rent, and other infrastructure maintenance, driven by service demand, mix, and labor costs[182](index=182&type=chunk) - Selling, general and administrative expenses (SG&A) cover personnel costs for sales, executive, and corporate functions, R&D, facilities, advisory fees, marketing, and amortization of intangible assets[183](index=183&type=chunk) [Results of Operations](index=40&type=section&id=Results%20of%20Operations) The company experienced a decrease in revenue across both Public and Private Cloud segments for the three and six months ended June 30, 2025, compared to the prior year. Despite revenue declines, gross margin remained relatively stable, and operating loss significantly improved due to reduced selling, general and administrative expenses and the absence of large impairment charges seen in the prior year [Three Months Ended June 30, 2024 Compared to Three Months Ended June 30, 2025](index=40&type=section&id=Three%20Months%20Ended%20June%2030%2C%202024%20Compared%20to%20Three%20Months%20Ended%20June%2030%2C%202025) | Metric | 2024 (Millions) | 2025 (Millions) | Change (Millions) | % Change | | :----------------------------------- | :-------------- | :-------------- | :---------------- | :------- | | Revenue | $684.9 | $666.3 | $(18.6) | -2.7% | | Cost of revenue | $(553.5) | $(537.1) | $16.4 | -3.0% | | Gross profit | $131.4 | $129.2 | $(2.2) | -1.7% | | Selling, general and administrative expenses | $(185.2) | $(154.3) | $30.9 | -16.7% | | Loss from operations | $(53.8) | $(25.1) | $28.7 | -53.3% | | Interest expense | $(18.4) | $(21.3) | $(2.9) | 15.8% | | Gain on debt extinguishment, net of debt modification costs | $72.5 | $0.0 | $(72.5) | -100.0% | | Net income (loss) | $25.0 | $(54.5) | $(79.5) | NM | | Segment | 2024 (Millions) | 2025 (Millions) | Actual % Change | Constant Currency % Change | | :---------------- | :-------------- | :-------------- | :-------------- | :------------------------- | | Public Cloud Revenue | $424.9 | $416.6 | -2.0% | -2.2% | | Private Cloud Revenue | $260.0 | $249.7 | -4.0% | -4.8% | - Public Cloud operating profit increased **51.4%** to **$16.2 million**, and Private Cloud operating profit decreased **10.6%** to **$61.5 million**, for the three months ended June 30, 2025, compared to the prior year[201](index=201&type=chunk)[202](index=202&type=chunk) [Six Months Ended June 30, 2024 Compared to Six Months Ended June 30, 2025](index=44&type=section&id=Six%20Months%20Ended%20June%2030%2C%202024%20Compared%20to%20Six%20Months%20Ended%20June%2030%2C%202025) | Metric | 2024 (Millions) | 2025 (Millions) | Change (Millions) | % Change | | :----------------------------------- | :-------------- | :-------------- | :---------------- | :------- | | Revenue | $1,375.7 | $1,331.7 | $(44.0) | -3.2% | | Cost of revenue | $(1,111.5) | $(1,075.6) | $35.9 | -3.2% | | Gross profit | $264.2 | $256.1 | $(8.1) | -3.1% | | Selling, general and administrative expenses | $(377.6) | $(319.6) | $58.0 | -15.4% | | Impairment of goodwill | $(573.2) | $0.0 | $573.2 | -100.0% | | Impairment of assets, net | $(20.0) | $0.0 | $20.0 | -100.0% | | Loss from operations | $(706.6) | $(63.5) | $643.1 | -91.0% | | Interest expense | $(62.1) | $(40.7) | $21.4 | -34.5% | | Gain on debt extinguishment, net of debt modification costs | $129.2 | $0.0 | $(129.2) | -100.0% | | Net loss | $(615.6) | $(126.0) | $489.6 | -79.5% | | Segment | 2024 (Millions) | 2025 (Millions) | Actual % Change | Constant Currency % Change | | :---------------- | :-------------- | :-------------- | :-------------- | :------------------------- | | Public Cloud Revenue | $847.3 | $832.2 | -1.8% | -1.7% | | Private Cloud Revenue | $528.4 | $499.5 | -5.5% | -5.7% | - Public Cloud operating profit increased **77.2%** to **$33.5 million**, and Private Cloud operating profit decreased **12.4%** to **$122.5 million**, for the six months ended June 30, 2025, compared to the prior year[221](index=221&type=chunk)[222](index=222&type=chunk) [Non-GAAP Financial Measures](index=49&type=section&id=Non-GAAP%20Financial%20Measures) This section presents non-GAAP financial measures, including constant currency revenue, Non-GAAP Gross Profit, Non-GAAP Net Income (Loss), Non-GAAP Operating Profit, and Adjusted EBITDA, which are used by management to assess underlying financial performance by excluding certain non-recurring or non-core items. These measures are provided to enhance comparability and analyze business trends, with all prior period non-GAAP figures recast to reflect current presentation [Update to Non-GAAP Financial Measures](index=49&type=section&id=Update%20to%20Non-GAAP%20Financial%20Measures) - Beginning in Q4 2024, the company updated its non-GAAP financial measures presentation to exclude certain cash compensation previously included in 'special bonuses and other compensation expenses' and 'restructuring and transformation expenses'[236](index=236&type=chunk) - The 'special bonuses and other compensation expenses' line item was removed, and remaining adjustments are now presented within 'restructuring and transformation expenses.' All prior period non-GAAP figures have been recast[236](index=236&type=chunk) [Constant Currency Revenue](index=49&type=section&id=Constant%20Currency%20Revenue) | Segment | Three Months Ended June 30, 2025 (Millions) | Constant Currency % Change | | :---------------- | :---------------------------------------- | :------------------------- | | Public Cloud | $415.8 | -2.2% | | Private Cloud | $247.5 | -4.8% | | Total | $663.3 | -3.2% | | Segment | Six Months Ended June 30, 2025 (Millions) | Constant Currency % Change | | :---------------- | :---------------------------------------- | :------------------------- | | Public Cloud | $832.5 | -1.7% | | Private Cloud | $498.1 | -5.7% | | Total | $1,330.6 | -3.3% | [Non-GAAP Gross Profit](index=51&type=section&id=Non-GAAP%20Gross%20Profit) | Metric | Three Months Ended June 30, 2024 (Millions) | Three Months Ended June 30, 2025 (Millions) | Six Months Ended June 30, 2024 (Millions) | Six Months Ended June 30, 2025 (Millions) | | :----------------------------------- | :---------------------------------------- | :---------------------------------------- | :---------------------------------------- | :---------------------------------------- | | 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 | $0.6 | $0.2 | $1.2 | $0.4 | | Restructuring and transformation expenses | $4.6 | $1.2 | $9.6 | $4.4 | | Non-GAAP Gross Profit | $138.6 | $131.9 | $278.9 | $264.0 | [Non-GAAP Net Income (Loss), Non-GAAP Operating Profit and Adjusted EBITDA](index=51&type=section&id=Non-GAAP%20Net%20Income%20(Loss)%2C%20Non-GAAP%20Operating%20Profit%20and%20Adjusted%20EBITDA) | Metric | Three Months Ended June 30, 2024 (Millions) | Three Months Ended June 30, 2025 (Millions) | Six Months Ended June 30, 2024 (Millions) | Six Months Ended June 30, 2025 (Millions) | | :----------------------------------- | :---------------------------------------- | :---------------------------------------- | :---------------------------------------- | :---------------------------------------- | | Net income (loss) | $25.0 | $(54.5) | $(615.6) | $(126.0) | | Non-GAAP Net Loss | $(21.3) | $(15.0) | $(47.1) | $(29.7) | | Adjusted EBITDA | $55.1 | $64.4 | $105.3 | $125.7 | | Metric | Three Months Ended June 30, 2024 (Millions) | Three Months Ended June 30, 2025 (Millions) | | :----------------------------------- | :---------------------------------------- | :---------------------------------------- | | Loss from operations | $(53.8) | $(25.1) | | Non-GAAP Operating Profit | $20.3 | $27.3 | | Metric | Six Months Ended June 30, 2024 (Millions) | Six Months Ended June 30, 2025 (Millions) | | :----------------------------------- | :---------------------------------------- | :---------------------------------------- | | Loss from operations | $(706.6) | $(63.5) | | Non-GAAP Operating Profit | $34.3 | $52.9 | [Non-GAAP Earnings (Loss) Per Share](index=54&type=section&id=Non-GAAP%20Earnings%20(Loss)%20Per%20Share) | Metric | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | | :----------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Net income (loss) attributable to common stockholders (Millions) | $25.0 | $(54.5) | $(615.6) | $(126.0) | | Non-GAAP Net Loss (Millions) | $(21.3) | $(15.0) | $(47.1) | $(29.7) | | Net earnings (loss) per share - Diluted | $0.11 | $(0.23) | $(2.77) | $(0.54) | | Non-GAAP Loss Per Share | $(0.09) | $(0.06) | $(0.21) | $(0.12) | | Non-GAAP weighted average number of shares - Diluted (Millions) | 229.6 | 239.3 | 229.5 | 242.1 | - The company uses non-GAAP measures like constant currency revenue, Non-GAAP Gross Profit, Non-GAAP Net Income (Loss), Non-GAAP Operating Profit, and Adjusted EBITDA to monitor and manage underlying financial performance, excluding certain costs, losses, and gains[235](index=235&type=chunk) - Beginning in Q4 2024, the presentation of non-GAAP financial measures was updated to no longer exclude certain cash compensation, and all prior period figures have been recast for comparability[236](index=236&type=chunk) - Non-GAAP Operating Profit and Adjusted EBITDA are management's principal metrics for measuring underlying financial performance and are used in determining performance-based compensation[248](index=248&type=chunk) [Liquidity and Capital Resources](index=55&type=section&id=Liquidity%20and%20Capital%20Resources) The company primarily funds operations and capital expenditures through internally-generated cash and the New Revolving Credit Facility, which had **$310 million** in available commitments as of June 30, 2025. Total debt outstanding was **$2,439 million**. Operating cash flow improved significantly, moving from a net cash outflow of **$66 million** in the prior year to a net cash inflow of **$21 million**, driven by reduced operating expenses and increased accounts receivable proceeds [Overview (Liquidity)](index=55&type=section&id=Overview%20(Liquidity)) - As of June 30, 2025, the company had **$104 million** in cash and cash equivalents, with **$74 million** held by foreign entities[263](index=263&type=chunk) - The company had **$44 million** outstanding in financing obligations and **$476 million** in operating and finance lease agreements as of June 30, 2025[264](index=264&type=chunk)[265](index=265&type=chunk) [Debt (Liquidity)](index=56&type=section&id=Debt%20(Liquidity)) [New Debt Instruments](index=56&type=section&id=New%20Debt%20Instruments) - The New Senior Facilities include the FLSO Term Loan Facility (**$1,618 million** outstanding), FLFO Term Loan Facility (**$272 million** outstanding), and New Revolving Credit Facility (**$65 million** outstanding), all maturing on May 15, 2028[271](index=271&type=chunk)[274](index=274&type=chunk)[277](index=277&type=chunk) - The **3.50%** FLSO Senior Secured Notes, with **$319 million** outstanding, also mature on May 15, 2028, and bear a fixed annual interest rate of **3.50%**[281](index=281&type=chunk)[284](index=284&type=chunk) - All new debt obligations are guaranteed on a senior secured basis by Rackspace Finance Holdings and certain subsidiaries, secured by a pledge of capital stock and substantially all assets[272](index=272&type=chunk)[275](index=275&type=chunk)[279](index=279&type=chunk)[283](index=283&type=chunk) [Existing Debt Instruments](index=58&type=section&id=Existing%20Debt%20Instruments) - As of June 30, 2025, **$61 million** aggregate principal amount of the Term Loan Facility remained outstanding, maturing on February 15, 2028, with a contractual interest rate of **7.18%**[286](index=286&type=chunk)[287](index=287&type=chunk) - The **3.50%** Senior Secured Notes have **$44 million** outstanding, maturing on February 15, 2028, with a fixed annual interest rate of **3.50%**[289](index=289&type=chunk)[290](index=290&type=chunk) - The **5.375%** Senior Notes have **$125 million** outstanding, maturing on December 1, 2028, with a fixed annual interest rate of **5.375%**[291](index=291&type=chunk)[292](index=292&type=chunk) [Debt covenants](index=59&type=section&id=Debt%20covenants) - The FLSO Term Loan Facility, FLFO Term Loan Facility, and Term Loan Facility are not subject to a financial maintenance covenant[293](index=293&type=chunk) - The New Revolving Credit Facility includes a financial maintenance covenant limiting the super-priority net senior secured leverage ratio to a maximum of **5.00 to 1.00**, applicable if outstanding borrowings and letters of credit exceed **35%** of commitments[293](index=293&type=chunk) - As of June 30, 2025, the company was in compliance with all covenants under the New Senior Facilities, Senior Facilities, and Indentures[296](index=296&type=chunk) [Supplemental Financial Information](index=59&type=section&id=Supplemental%20Financial%20Information) - As of June 30, 2025, the New Credit Group (obligors under the 3.50% FLSO Senior Secured Notes) had total assets of **$2,870 million** and total liabilities of **$3,773 million**, including **$2,571 million** in total debt[298](index=298&type=chunk) [Capital Expenditures](index=60&type=section&id=Capital%20Expenditures) | Category | Six Months Ended June 30, 2024 (Millions) | Six Months Ended June 30, 2025 (Millions) | | :-------------------------------- | :---------------------------------------- | :---------------------------------------- | | Customer gear | $55.0 | $31.0 | | Data center build outs | $1.8 | $4.0 | | Capitalized software and other projects | $21.5 | $22.6 | | Total capital expenditures | $78.6 | $57.6 | - Capital expenditures decreased by **$21 million**, or **26.7%**, to **$57.6 million** in the six months ended June 30, 2025, driven by optimizing current inventory, prior year large healthcare deals, and lower capital requirements on recent deals[299](index=299&type=chunk) [Cash Flows](index=60&type=section&id=Cash%20Flows) [Cash Provided by (Used in) Operating Activities](index=60&type=section&id=Cash%20Provided%20by%20(Used%20in)%20Operating%20Activities) - Net cash provided by operating activities was **$21 million** in the six months ended June 30, 2025, a significant increase from **$66 million** of net cash used in the prior year[300](index=300&type=chunk)[302](index=302&type=chunk) - This improvement was driven by a **$22 million** decrease in cash paid for operating expenses, a **$28 million** increase in cash proceeds from accounts receivable sold, and the absence of **$32 million** in refinancing fees and a **$9 million** headquarters sale termination fee incurred in 2024[302](index=302&type=chunk) [Cash Used in Investing Activities](index=60&type=section&id=Cash%20Used%20in%20Investing%20Activities) - Net cash used in investing activities decreased by **$20 million**, or **40%**, to **$29.9 million** in the six months ended June 30, 2025[300](index=300&type=chunk)[304](index=304&type=chunk) - The decrease was primarily due to a **$38 million** reduction in cash purchases of property, equipment, and software, partially offset by **$17 million** in net proceeds from the sale of the corporate headquarters in 2024[304](index=304&type=chunk) [Cash Provided by (Used in) Financing Activities](index=61&type=section&id=Cash%20Provided%20by%20(Used%20in)%20Financing%20Activities) - Net cash used in financing activities was **$36 million** in the six months ended June 30, 2025, a shift from **$110 million** provided in the prior year[300](index=300&type=chunk)[306](index=306&type=chunk) - This change was driven by **$275 million** in proceeds from the FLFO Term Loan Facility in 2024, compared to **$80 million** from the New Revolving Credit Facility in 2025, partially offset by reduced debt repayments and the absence of **$22 million** in debt extinguishment costs from 2024[306](index=306&type=chunk) [Critical Accounting Policies and Estimates](index=61&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) - The company's critical accounting policies and estimates have not changed from those described in its Annual Report[308](index=308&type=chunk) - The company primarily finances operations and capital expenditures with internally-generated cash from operations and hardware leases, and borrowings under the New Revolving Credit Facility[261](index=261&type=chunk) - As of June 30, 2025, the New Revolving Credit Facility provided for up to **$375 million** of borrowings, with **$65 million** drawn and **$310 million** of available commitments remaining[261](index=261&type=chunk)[280](index=280&type=chunk) - Total aggregate principal amount outstanding under debt instruments was **$2,439 million** as of June 30, 2025[266](index=266&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=62&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section outlines the company's exposure to market risks, primarily from interest rate fluctuations on its floating-rate debt, foreign currency translation and transaction risks, and volatility in power prices for its data centers. The company uses interest rate swaps to manage interest rate risk and may use foreign currency hedging instruments in the future [Interest Rates](index=62&type=section&id=Interest%20Rates) - The company is exposed to interest rate risk from floating-rate debt under its Senior Facilities and New Senior Facilities, totaling **$1,951 million** outstanding (Term Loan, FLSO Term Loan, FLFO Term Loan) and **$65 million** under the New Revolving Credit Facility as of June 30, 2025[309](index=309&type=chunk) - A **0.125%** change in assumed blended interest rates would result in a **$3 million** change in annual interest expense on indebtedness under the Senior Facilities and New Senior Facilities, assuming the New Revolving Credit Facility was fully drawn[309](index=309&type=chunk) - The company uses an interest rate swap agreement with a notional amount of **$1,350 million** (fixed rate **2.34150%**, maturing Feb 9, 2026) to manage risk from fluctuations in one-month Term SOFR above the **0.75%** floor[310](index=310&type=chunk)[311](index=311&type=chunk) [Foreign Currencies](index=62&type=section&id=Foreign%20Currencies) - The company is subject to foreign currency translation risk due to the translation of foreign subsidiaries' results to the U.S. dollar[312](index=312&type=chunk) - In the six months ended June 30, 2025, the company recognized foreign currency transaction gains of **$0.1 million** within 'Other expense, net'[312](index=312&type=chunk) - As international operations grow, exposure to foreign currency translation and transaction risk could become more significant, and the company may use hedging instruments in the future[312](index=312&type=chunk)[313](index=313&type=chunk) [Power Prices](index=62&type=section&id=Power%20Prices) - The company is a large consumer of power, expensing approximately **$18 million** for utility costs in the six months ended June 30, 2025, representing about **1%** of revenue[314](index=314&type=chunk) - Power costs vary by geography, generation source, and seasonal fluctuations, and are subject to potential increases from proposed legislation[314](index=314&type=chunk) - The company has power contracts for data centers in key regions (Dallas-Fort Worth, San Jose, Somerset, London) that allow for fixed or variable pricing[314](index=314&type=chunk) [Item 4. Controls and Procedures](index=63&type=section&id=Item%204.%20Controls%20and%20Procedures) The company's management, including the CEO and CFO, concluded that its disclosure controls and procedures were effective as of June 30, 2025. No material changes in internal controls over financial reporting were identified during the fiscal quarter, though the company acknowledges the inherent limitations of all control systems [Evaluation of Disclosure Controls and Procedures](index=63&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) - As of June 30, 2025, the Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective[316](index=316&type=chunk) [Changes in Internal Control](index=63&type=section&id=Changes%20in%20Internal%20Control) - There were no changes in internal controls over financial reporting during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, internal control over financial reporting[317](index=317&type=chunk) [Inherent Limitations of Internal Controls](index=63&type=section&id=Inherent%20Limitations%20of%20Internal%20Controls) - Management acknowledges that no control system can prevent all error and fraud, providing only reasonable, not absolute, assurance due to inherent limitations such as faulty judgments, simple errors, collusion, or management override[318](index=318&type=chunk) Part II - Other Information [Item 1. Legal Proceedings](index=64&type=section&id=Item%201.%20Legal%20Proceedings) The company is subject to various legal proceedings and claims arising in the ordinary course of business, including potential intellectual property claims. However, no current litigation is expected to have a material adverse effect on the company's business, financial position, or results of operations - The company has contingencies from various litigation, claims, and commitments, recording accruals when losses are probable and reasonably estimable[320](index=320&type=chunk) - No current litigation is expected to have a material and adverse effect on the company's business, financial position, or results of operations[322](index=322&type=chunk) [Item 1A. Risk Factors](index=64&type=section&id=Item%201A.%20Risk%20Factors) This section states that there have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K. Investors are advised to consider those risks, along with other information in this Quarterly Report - There have been no material changes from the risk factors previously disclosed in the Annual Report on Form 10-K for the year ended December 31, 2024[324](index=324&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=64&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section indicates that there were no unregistered sales of equity securities and no use of proceeds to report for the period - Unregistered Sales of Equity Securities: Not Applicable[325](index=325&type=chunk) - Use of Proceeds: None[326](index=326&type=chunk) [Item 3. Defaults Upon Senior Securities](index=64&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section confirms that there were no defaults upon senior securities to report for the period - No defaults upon senior securities were reported[328](index=328&type=chunk) [Item 4. Mine Safety Disclosures](index=64&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section states that mine safety disclosures are not applicable to the company - Mine Safety Disclosures: Not Applicable[330](index=330&type=chunk) [Item 5. Other Information](index=64&type=section&id=Item%205.%20Other%20Information) This section reports that no Rule 10b5-1 or non-Rule 10b5-1 trading arrangements were adopted, modified, or terminated by the company's directors or officers during the fiscal quarter ended June 30, 2025 - During the fiscal quarter ended June 30, 2025, none of the company's directors or officers adopted, modified, or terminated a 'Rule 10b5-1 trading arrangement' or a 'non-Rule 10b5-1 trading arrangement'[332](index=332&type=chunk) [Item 6. Exhibits](index=65&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed or furnished with the Quarterly Report, including certifications from the CEO and CFO, and Inline XBRL documents - Exhibits include certifications from the Chief Executive Officer and Chief Financial Officer pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002[334](index=334&type=chunk) - The report also includes various Inline XBRL Taxonomy Extension Documents and a Cover Page Interactive Data File[334](index=334&type=chunk) [Signatures](index=66&type=section&id=Signatures) This section contains the signature confirming the due authorization and filing of the report on behalf of Rackspace Technology, Inc. by its Chief Financial Officer - The report was signed on August 11, 2025, by Mark Marino, Chief Financial Officer, on behalf of Rackspace Technology, Inc[339](index=339&type=chunk)