Financial Data and Key Metrics Changes - Revenue for the first quarter of 2025 was $665 million, down 4% year over year, but met the high end of guidance [19] - Non-GAAP operating profit grew 83% year over year to $26 million, exceeding guidance [19] - Non-GAAP loss per share improved to $0.06 compared to a guided range of $0.07 to $0.09 [19] - Cash flow from operations was $13 million, and free cash flow was $4 million, showing significant improvement from the previous year [19] Business Line Data and Key Metrics Changes Private Cloud - Private cloud revenue for Q1 was $250 million, in line with guidance, but down 7% year over year [20] - Bookings in private cloud remained flat year over year, but would have grown 20% if not for the slippage of large deals into Q2 [8][20] - Non-GAAP gross margin for private cloud was 37.1%, down 1.8 points year over year [21] Public Cloud - Public cloud revenue reached $416 million, exceeding guidance, but down 2% year over year [21] - Public cloud bookings grew 16% year over year, driven by a 26% increase in The Americas [13] - Non-GAAP gross margin for public cloud was 9.5%, up 1 point year over year [21] Market Data and Key Metrics Changes - Strong performance in The Americas contributed to overall growth, with bookings in this region increasing by 13% [6] - Federal contracts accounted for only 1% of 2024 revenue, indicating minimal exposure to federal cost-cutting measures [7] Company Strategy and Development Direction - The company is focused on digital transformation, cloud, and AI, with a strategic partnership with Rubrik to enhance cyber resiliency [6][7] - Emphasis on expanding into regulated industries such as healthcare and energy, with notable wins in these sectors [10][55] - The company aims to build a sustainable business model that consistently delivers revenue, profit, and cash flow growth [18] Management's Comments on Operating Environment and Future Outlook - Management expressed caution regarding the macroeconomic environment, which may impact onboarding timelines and customer decision cycles [7][30] - Despite macro uncertainties, the company remains confident in its strong sales pipeline and execution [29] - The focus is on transitioning from low-margin infrastructure resale to high-margin services, with expectations for operating profit growth in public cloud [44] Other Important Information - The company launched several new products, including Rackspace AI Business and modern operations for data and AI, to enhance service offerings [17] - The company is actively working on CapEx efficiency and inventory reutilization to optimize capital structure [52] Q&A Session Summary Question: What are the macro perspectives affecting customer behavior? - Management noted that while there are some delays in onboarding, overall bookings remain strong and customers are not delaying transformational projects [28][30] Question: How has the sales pipeline evolved? - The sales pipeline has remained strong, with improved win rates and a focus on higher value, long-term contracts [34][35] Question: What is the outlook for public cloud services? - The company is seeing good wins in the services business, with a focus on managed services and data services [42][44] Question: Are larger customers still interested in upfront CapEx payments? - Yes, there is continued interest from larger customers in paying upfront CapEx for lower OpEx over the life of the deal [51] Question: How is the company performing in regulated industries? - The company is seeing good traction in regulated industries, particularly in healthcare and energy, with significant deals being closed [55][57]

Financial Data and Key Metrics Changes - Total company GAAP revenue for Q1 2025 was $665 million, down 4% year over year, but met the high end of guidance [18] - Non-GAAP operating profit was $26 million, exceeding guidance and up 83% year over year, largely due to operational efficiencies [18] - Non-GAAP loss per share improved to $0.06 compared to the guided range of $0.07 to $0.09 [18] - Cash flow from operations was $13 million, and free cash flow was $4 million, showing significant improvement from the previous year [18] Business Line Data and Key Metrics Changes - Private Cloud revenue for Q1 was $250 million, in line with guidance, but down 7% year over year due to customers transitioning from older offerings [19] - Public Cloud revenue reached $416 million, surpassing guidance, but was down 2% year over year due to declines in infrastructure volumes and services [20] - Private Cloud bookings remained flat year over year, but would have grown 20% if not for the slippage of large deals into Q2 [7] - Public Cloud bookings grew 16% year over year, driven by strong performance in The Americas, which saw a 26% increase [12] Market Data and Key Metrics Changes - Federal contracts comprised only 1% of 2024 revenue, indicating minimal exposure to federal agency cost-cutting measures [6] - The company is seeing strong demand in regulated industries, particularly healthcare and energy, with significant new contracts secured [9][56] Company Strategy and Development Direction - The company is focused on driving digital transformation for customers through cloud and AI solutions, while also enhancing cyber resiliency [5] - A strategic partnership with Rubrik was announced to launch the Cyber Recovery Cloud, aimed at improving customer recovery capabilities post-cybersecurity breaches [6] - The company is expanding its offerings in private cloud, including new products like OpenStack Flex and UK Sovereign Secure, to meet compliance and security needs [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed caution regarding the macroeconomic environment, which may impact onboarding timelines and customer decision cycles [6] - Despite macro uncertainties, the company remains well-positioned to capitalize on long-term trends in public cloud, private cloud, and AI [6] - The company aims to maintain a sustainable business model that consistently delivers revenue, profit, and cash flow growth in 2025 [17] Other Important Information - The company has made significant progress in stabilizing private cloud revenue, with a focus on higher value, long-term contracts [8] - The company is pivoting towards managed services and high-margin offerings, moving away from low-margin infrastructure resale [44] Q&A Session Summary Question: Changes in customer behavior due to macroeconomic factors - Management noted that while there are some delays in onboarding contracts, overall bookings remain strong and customers are not delaying decisions on transformational projects [25][28] Question: Evolution of the sales pipeline and win rates - The sales pipeline has remained strong, with improved win rates and a focus on higher value, long-term contracts in both public and private cloud segments [30][34] Question: Trends in public cloud services and infrastructure resale - The company is seeing good wins in services, particularly in data services driven by AI, while infrastructure resale is expected to decline purposefully to maintain profitability [42][44] Question: Upfront CapEx payments from larger customers and regulated industries - There is continued interest from large customers in upfront CapEx payments for lower OpEx, and traction in regulated industries is strong, particularly in healthcare and energy [52][56]

Financial Performance - Total revenue for Q1 2025 was $665 million, a decrease of 3% quarter-over-quarter and 4% year-over-year[7] - Non-GAAP gross profit was $132 million, down 6% both quarter-over-quarter and year-over-year[7] - Non-GAAP operating profit was $26 million, a decrease of 35% quarter-over-quarter but an increase of 83% year-over-year[7] - Non-GAAP loss per share was $(006), compared to $(002) in Q4 2024 and $005 in Q1 2024[7, 25] - Cash provided by operating activities was $13 million in Q1 2025[9] - Free cash flow was $4 million in Q1 2025[9] Segment Performance - Total Rackspace revenue was $665 million, with Private Cloud contributing $250 million and Public Cloud $416 million[8] - Private Cloud revenue decreased by 7% year-over-year, while Public Cloud revenue decreased by 2% year-over-year[8] - Private Cloud Non-GAAP gross margin was 371%, while Public Cloud Non-GAAP gross margin was 95%[8] Debt and Liquidity - Total principal balance of debt as of March 31, 2025, was $2474 billion[10] - Total debt, including unamortized debt issuance costs, debt premium, and debt discount, was $2787 billion[10] - Total liquidity, including cash and cash equivalents and the revolving credit facility, was $473 million[9] Outlook - Q2 2025 revenue is expected to be between $653 million and $665 million[16] - Q2 2025 Non-GAAP operating profit is expected to be between $25 million and $27 million[16] - Q2 2025 Non-GAAP loss per share is expected to be between $(004) and $(006)[16]

Exhibit 99.1 Rackspace Technology Reports First Quarter 2025 Results SAN ANTONIO, May 8, 2025 – Rackspace Technology, Inc. (Nasdaq: RXT), a leading end-to-end, hybrid cloud and AI solutions company, today announced results for its first quarter ended March 31, 2025. Amar Maletira, Chief Executive Officer, stated, "Results in the first quarter of 2025 exceeded our expectations across all key metrics. Revenue was at the high end of our guidance while profit and EPS exceeded our guidance range. This marks the ...

Core Insights - Rackspace Technology, Inc. reported first quarter 2025 results that exceeded expectations across key metrics, with revenue at the high end of guidance and profit and EPS surpassing guidance ranges [2][3][5] Financial Performance - Total revenue for Q1 2025 was $665 million, a decrease of 4% year-over-year from $691 million in Q1 2024 [3][7] - Private Cloud revenue was $250 million, down 7% year-over-year from $268 million in Q1 2024 [3][4] - Public Cloud revenue was $416 million, a decrease of 2% year-over-year from $422 million in Q1 2024 [4][28] - Non-GAAP operating profit increased by 83% year-over-year to $26 million from $14 million in Q1 2024 [5][46] - Net loss for Q1 2025 was $(72) million, significantly improved from a net loss of $(641) million in Q1 2024 [5][50] Operational Metrics - Sales bookings grew by 9% in Q1 2025, indicating a strengthening sales pipeline across business units [2] - Cash flow from operating activities was $13 million for Q1 2025, compared to $143 million on a trailing twelve-month basis [7] Guidance - For Q2 2025, the company provided revenue guidance of $653 - $665 million, with Private Cloud revenue expected between $247 - $253 million and Public Cloud revenue between $406 - $412 million [8]

Rackspace Cyber Recovery Cloud powered by Rubrik Enables Organizations to Restore Critical Operations Faster and More Securely than Traditional Offerings in the Event of a Cyber AttackSAN FRANCISCO, April 30, 2025 (GLOBE NEWSWIRE) -- LIVE! from RSAC, Rubrik (NYSE: RBRK), a leading cybersecurity company, and Rackspace Technology® (NASDAQ: RXT), a leading end-to-end hybrid cloud and AI solutions company, today announced a strategic partnership. The two companies will collaborate to deliver a fully managed iso ...

SAN ANTONIO, April 15, 2025 (GLOBE NEWSWIRE) -- Rackspace Technology® (NASDAQ: RXT), a leading end-to-end hybrid cloud and AI solutions company, today announced that it will release its first quarter 2025 financial results after the market closes on Thursday, May 8, 2025. Amar Maletira, Chief Executive Officer, and Mark Marino, Chief Financial Officer, will host a conference call on the day of the release (May 8, 2025) at 5:00 PM ET to discuss the Company’s financial results. Interested parties may access t ...

Core Insights - Rackspace Technology has launched Rackspace OpenStack Flex, a high-performance, license-free cloud service designed to modernize organizations' infrastructure while alleviating vendor lock-in concerns [1][2] Company Overview - Rackspace Technology is recognized as a leading end-to-end hybrid and AI solutions provider, capable of designing, building, and operating cloud environments across various technology platforms [4] Product Features - Rackspace OpenStack Flex offers a unified OpenStack-powered cloud platform that enhances agility, compliance, and adaptability in a rapidly changing environment [2] - The service includes 24x7 expert support and fully monitored infrastructure, facilitating the adoption and operation of applications [1][2] - It is built on proven OpenStack software, ensuring innovation, efficiency, and guaranteed service levels for mission-critical applications [2] Market Context - According to IDC, over 80% of cloud buyers plan to modernize their cloud infrastructure, with nearly 90% already deploying or operating a hybrid cloud [2] Key Benefits - The solution provides industry-leading security, scalability, flexibility, cost efficiency, and enterprise-level support [3][5] - It allows organizations to avoid vendor lock-in, embrace an open-source ecosystem, and manage costs effectively while maintaining high performance [5]

Core Insights - Rackspace Technology has launched Rackspace AI Business, a private cloud platform designed specifically for AI workloads, combining advanced AI capabilities with enterprise-grade security and privacy protections [1][5][6] - The platform addresses the challenges enterprises face in deploying and scaling AI initiatives, providing a flexible and high-performance solution that operates seamlessly across hybrid environments [2][3][4] Company Overview - Rackspace Technology is recognized as a leading end-to-end hybrid cloud and AI solutions provider, capable of designing, building, and operating cloud environments across various technology platforms [10] - The company emphasizes its commitment to innovation and security in AI implementations, aiming to empower organizations to leverage AI for decision-making and operational efficiency [4][5] Product Features - Rackspace AI Business is built on a robust private cloud infrastructure powered by Dell Servers and NVIDIA GPUs, optimized for diverse AI workloads, including complex training and high-demand inferencing [5][6] - The platform offers features such as distributed training, scalable inferencing, and easy fine-tuning of pre-trained models, enabling organizations to maximize the value of their AI investments [6][7][8] Market Position - The Foundry for AI by Rackspace (FAIR) has successfully implemented over 70 Enterprise AI projects across various industries, showcasing the company's expertise in driving strategic AI adoption [9] - Rackspace AI Business aims to remove technical barriers to AI adoption, allowing organizations to focus on extracting business value rather than managing complex infrastructure [6][8]

Customer Base and Market Presence - Rackspace Technology served over 81,000 customers across 120 countries as of December 31, 2024[41]. - The company operates in more than 60 cities globally, enhancing its ability to serve multinational clients[40]. - As of December 31, 2024, Rackspace Technology served over 81,000 customers across more than 120 countries, with no single customer representing 5% or more of total revenue[62][63]. - The company has a global direct sales team of over 170 representatives and over 570 service delivery managers as of December 31, 2024[66]. Financial Performance and Efficiency - Revenue per employee for the years ended December 31, 2023 and 2024 exceeded $500,000, indicating a strong operational efficiency[38]. - The company incurred net losses of $804.8 million, $837.8 million, and $858.2 million for the fiscal years ended December 31, 2022, 2023, and 2024, respectively[98]. - The company has $375.0 million available for additional borrowing under the New Revolving Credit Facility, with $23.5 million of letters of credit issued[184]. - The company’s substantial indebtedness could limit its ability to borrow for working capital, capital expenditures, and strategic initiatives, potentially resulting in an event of default under its debt agreements[180]. Product and Service Offerings - The company has invested over $1 billion and 12 million hours in developing Rackspace Fabric, its proprietary cloud software[35]. - Rackspace Technology differentiates itself by focusing solely on hybrid cloud solutions, unlike many competitors who charge based on labor costs[31]. - Rackspace Technology launched Foundry for Artificial Intelligence (FAIR) in June 2023, offering services to accelerate AI adoption across industries[52]. - The company focuses on expanding its private cloud business with new solutions, including Rackspace Software Defined Datacenter and Private AI Cloud[56]. Partnerships and Collaborations - The company partners with major cloud providers, including AWS, Google Cloud, and Microsoft Azure, to deliver a full suite of cloud services[38]. - The company has established partnerships with major cloud vendors like AWS, Microsoft Azure, and Google Cloud, enhancing its competitive advantage[65]. - The company has established non-exclusive managed service provider relationships with major cloud providers such as AWS, Microsoft, and Google, which are crucial for maintaining customer relationships and driving revenue[108]. Operational Challenges and Risks - The company faces risks related to customer retention and acquisition, which could adversely affect revenue and results of operations[87]. - The company operates in a highly competitive market with significant challenges from existing and new competitors[102]. - Cybersecurity threats are a significant concern, with past incidents causing service disruptions, which could harm the company's reputation and financial condition[115]. - The company faces significant risks related to service interruptions, which could lead to substantial customer dissatisfaction and loss of revenue[123]. Compliance and Regulatory Issues - Compliance with various data privacy laws, including the E.U. GDPR and U.K. GDPR, could result in fines up to €20 million or £17 million, and 4% of total annual revenue for non-compliance[143]. - The regulatory framework for privacy and security is complex and evolving, leading to potential increased costs and liability for the company[144]. - The company must maintain FISMA and FedRAMP certifications to meet federal government security compliance requirements, with failure potentially breaching contracts[152]. Corporate Governance and Ownership - Apollo beneficially owned approximately 57% of the voting power of the company's outstanding common stock as of December 31, 2024, allowing it to control significant corporate decisions[206]. - The company is classified as a "controlled company" under Nasdaq rules, allowing it to rely on exemptions from certain corporate governance requirements[207]. Environmental and Social Responsibility - The company logged over 22,000 volunteer hours for community service in the year ended December 31, 2024[74]. - Concerns about greenhouse gas emissions may lead to increased electricity prices, impacting the company's operational costs[164]. Debt and Financial Obligations - The company had $2,449.4 million in outstanding indebtedness, with total debt service payments of approximately $200.7 million and $162.1 million for the years ended December 31, 2023 and 2024, representing 53.5% and 406.2% of cash flow from operations respectively[179]. - The company’s ability to generate sufficient cash flow to service its indebtedness is uncertain, and failure to do so could lead to substantial liquidity problems[187]. - The company’s debt agreements contain restrictive covenants that limit its operational flexibility and ability to engage in favorable business activities[189].