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

November 6, 2025 Disclaimer Forward-Looking Statements Rackspace Technology has made statements in this presentation and other reports, filings, and other public written and verbal announcements that are forward-looking and therefore subject to risks and uncertainties. All statements, other than statements of historical fact, included in this presentation are, or could be, "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and are made in reliance on the ...

Revenue Performance - Revenue for Q3 2025 was $671 million, a decrease of 1% year-over-year from $676 million in Q3 2024[3] - Private Cloud revenue was $250 million, down 3% year-over-year from $258 million in Q3 2024[3] - Public Cloud revenue increased to $422 million, up 1% year-over-year from $418 million in Q3 2024[4] - Total revenue for the nine months ended September 30, 2024, was $2,051.5 million, a decrease of 2.4% compared to $2,002.9 million in 2025[21] - Public Cloud revenue for the nine months ended September 30, 2024, was $1,265.6 million, a decrease of 0.9% from $1,253.8 million in 2025[28] - Private Cloud revenue decreased by 4.7% to $785.9 million compared to $749.1 million[28] Profit and Loss - Loss from operations improved to $(34) million in Q3 2025, compared to a loss of $(174) million in Q3 2024[4] - Net loss was $(67) million in Q3 2025, significantly reduced from a net loss of $(187) million in Q3 2024[4] - Net loss for the nine months ended September 30, 2024, was $802.2 million, compared to a net loss of $193.1 million in 2025, representing a 75.9% increase in losses[21] - Basic and diluted net loss per share was $3.59 for 2024, compared to $0.82 for 2025[21] - The company reported a net loss of $186.6 million for the three months ended September 30, 2024, compared to a net loss of $67.1 million in 2025[43] Cash Flow and Capital Expenditures - Cash flow from operating activities was $71 million in Q3 2025, with a trailing twelve-month cash flow of $146 million[6] - Capital expenditures were $34 million in Q3 2025, compared to $31 million in Q3 2024[7] - Net cash provided by operating activities was $(14.4) million for 2024, contrasting with $91.7 million for 2025[25] - Cash and cash equivalents at the end of the period were $160.1 million, down from $199.7 million at the beginning of the period[25] Guidance and Projections - Guidance for Q4 2025 projects total revenue between $664 million and $678 million[9] - Non-GAAP Operating Profit is expected to be between $32 million and $34 million for Q4 2025[9] - Non-GAAP Loss Per Share is projected to be between $(0.03) and $(0.05) for Q4 2025[9] Assets and Liabilities - Total assets increased to $3,054.1 million as of December 31, 2024, compared to $2,845.0 million as of September 30, 2025[23] - Total liabilities stood at $4,058.3 million, slightly up from $4,032.2 million[23] Operating Profit - Public Cloud segment operating profit decreased by 9.1% year-over-year to $15.4 million for the three months ended September 30, 2024[29] - Private Cloud segment operating profit also fell by 9.1% year-over-year to $73.9 million for the same period[29] - Non-GAAP Operating Profit for the three months ended September 30, 2024, was $32.2 million, a slight decrease of 0.6% compared to $32.0 million in 2025[29] - Non-GAAP Operating Profit for the nine months ended September 30, 2024, was $66.5 million, an increase of 27.7% compared to $84.9 million in 2025[29] Impairment and Expenses - The company experienced a significant impairment of goodwill amounting to $141.7 million for the three months ended September 30, 2024[43] - Impairment of goodwill for the nine months ended September 30, 2024, was $714.9 million, with no impairment recorded for the same period in 2025[45] - Interest expense for the nine months ended September 30, 2024, was $80.1 million, compared to $61.9 million in 2025[45] - Share-based compensation expense for the three months ended September 30, 2024, was $15.5 million, compared to $18.2 million in 2025[45] Tax and Fees - The structural non-GAAP tax rate is estimated at 26% for all periods, subject to change based on various factors[48] - The company incurred $9.0 million in early termination fees related to the Master Economic Incentives Agreement in March 2024[46]

Core Insights - Rackspace Technology reported third quarter 2025 results, achieving revenue of $671 million, a slight decrease of 1% year-over-year compared to $676 million in Q3 2024 [2][7] - The company emphasized its role as a trusted partner in navigating hybrid multicloud complexities, focusing on AI, data, and security services [1][12] Financial Performance - Private Cloud revenue was $250 million, down 3% year-over-year from $258 million in Q3 2024 [2][30] - Public Cloud revenue increased to $422 million, up 1% from $418 million in Q3 2024 [3][30] - Loss from operations improved to $(34) million in Q3 2025, significantly better than the $(174) million loss in Q3 2024 [3][19] - Net loss narrowed to $(67) million in Q3 2025, compared to $(187) million in Q3 2024 [3][19] - Net loss per diluted share was $(0.28), an improvement from $(0.82) in the same quarter last year [4][19] Cash Flow and Liquidity - Cash flow from operating activities was $71 million for Q3 2025, with a trailing twelve-month cash flow of $146 million [7][27] - As of September 30, 2025, the company had cash and cash equivalents of $100 million and total liquidity of $386 million [5][27] Guidance and Outlook - For Q4 2025, Rackspace provided revenue guidance of $664 to $678 million, with Private Cloud revenue expected between $244 to $252 million and Public Cloud revenue between $420 to $426 million [8][30] - Non-GAAP Operating Profit is projected to be between $32 to $34 million, with Non-GAAP Loss Per Share expected to range from $(0.03) to $(0.05) [8][30]

Core Insights - Rackspace Technology, Inc. (NASDAQ:RXT) is a prominent player in the cloud computing sector, focusing on managed services across various cloud platforms, helping businesses optimize their cloud environments [1] - RXT is currently trading at $1.7167 with a target price of $1.92, indicating a growth potential of approximately 11.96% [2][6] - In comparison to its competitors, RXT's growth potential is moderate, with Materialise N.V. (MTLS) showing the highest growth potential of 25.52% [5][6] Company Performance - RXT's current stock price is $1.71, with a target price of $1.92, reflecting a growth potential of about 11.96% [2][6] - Stem, Inc. (STEM) is trading at $21.01 but has a negative growth potential of -102.72%, indicating significant risk for investors [3][6] - Repay Holdings Corporation (RPAY) has a stock price of $4.45 and a slight negative growth potential of -6.22%, suggesting lower risk compared to STEM [4][6] Competitive Landscape - Among RXT's peers, Materialise N.V. (MTLS) stands out with a trading price of $5.93 and the highest growth potential of 25.52%, making it an attractive investment option [5][6] - The competitive landscape includes major players like Amazon Web Services, Microsoft Azure, and Google Cloud, which present stiff competition for Rackspace [1]

Core Insights - Rackspace Technology has made significant progress towards its net-zero carbon emissions targets, showcasing its commitment to sustainability and alignment with the United Nations Sustainable Development Goals (SDGs) [1][2][14] Sustainability Achievements - In 2025, Rackspace achieved a 10% reduction in total emissions from its 2023 baseline, with a notable 20% decrease in Scope 1 and Scope 2 emissions, and a 9% reduction in Scope 3 emissions [2][11] - The relocation of its headquarters in San Antonio, Texas, resulted in an 80% reduction in facility emissions, saving 6,007 tons of CO₂e from 2023 to 2024 [11] - Approximately 80% of Rackspace's global data centers are powered by renewable energy, with plans to reach 100% through initiatives like RE100 and strategic energy partnerships [11] Operational Efficiency - Upgrades at the Dallas/Fort Worth data center improved energy performance, reducing power consumption by approximately 1,700 MWh between 2023 and 2024 [11] - The company has implemented a circular IT lifecycle policy to promote recycling, upcycling, and waste reduction [11] Employee Engagement and Community Impact - Rackspace has empowered its workforce with over 13,000 technical certifications in cloud and sustainability skills since 2023, with 95% of employees AI-ready certified [11] - The company has raised over $8 million for education through the Rackspace Foundation, supporting more than 10,000 students with STEM and holistic programs [11]

Core Viewpoint - Rackspace Technology will release its third quarter 2025 financial results on November 6, 2025, after market close, with a conference call scheduled for the same day to discuss the results [1]. Group 1: Financial Results Announcement - The financial results for Q3 2025 will be announced after market close on November 6, 2025 [1]. - The conference call to discuss the financial results will be hosted by CEO Gajen Kandiah and CFO Mark Marino at 5:00 PM ET on November 6, 2025 [1]. Group 2: Accessing the Conference Call - Interested parties can access the live webcast or replay through the company's Investor Relations website [2]. - Pre-registration is required to obtain the dial-in number for the conference call, and registrants will receive a PIN for access [2]. Group 3: Company Overview - Rackspace Technology is recognized as a leading end-to-end hybrid cloud and AI solutions provider [3]. - The company specializes in designing, building, and operating cloud environments across various technology platforms, regardless of the technology stack or deployment model [3]. - Rackspace Technology partners with customers throughout their cloud journey, assisting in application modernization, new product development, and the adoption of innovative technologies [3].

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]