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On-Demand tech is on the rise, but spiraling costs, complexity, and governance gaps are putting returns at risk
Globenewswire· 2025-09-10 06:30
Core Insights - The rise of On-Demand technologies is reshaping business operations, but increasing costs, complexity, and governance gaps are jeopardizing returns [2][4][5] - Organizations are transitioning from capital-intensive IT investments to flexible, consumption-based models, with On-Demand tech expected to grow from 29% to 41% of IT budgets in the next year [3][4] - Despite the benefits of On-Demand technologies, many organizations struggle with cost management and achieving expected returns on investment [5][6] Cost and Complexity Challenges - 82% of executives report significant increases in costs associated with cloud, SaaS, and Gen AI, driven by inflation and digital infrastructure demands [6] - 76% of organizations exceeded their public cloud budgets by an average of 10%, with 68% overspending on Gen AI and 52% on SaaS [6] - Underutilized resources and decentralized procurement are major contributors to budget overruns [6] Governance and Management Issues - 60% of organizations utilize cloud cost management tools, but only 37% assess their effectiveness [7] - 76% of organizations have or plan to establish FinOps teams, yet most remain narrowly focused and operational [7] - Only 2% of organizations with a dedicated FinOps function cover cloud, SaaS, and Gen AI holistically [7] Sustainability Considerations - 53% of organizations acknowledge that suboptimal usage of On-Demand tech leads to excessive energy consumption and increased carbon emissions [8] - Only 36% have a strategy for integrating sustainability into FinOps, despite the potential for cost reduction and carbon footprint minimization [8] Research Methodology - The Capgemini Research Institute conducted a survey of 1,000 executives from global organizations with annual revenues of at least $1 billion, focusing on On-Demand technologies across 12 sectors and 14 countries [9]
Unlocking Q1 Potential of NetApp (NTAP): Exploring Wall Street Estimates for Key Metrics
ZACKS· 2025-08-22 14:15
Core Viewpoint - Analysts forecast that NetApp (NTAP) will report quarterly earnings of $1.54 per share, reflecting a year-over-year decline of 1.3%, with anticipated revenues of $1.54 billion, a decrease of 0.1% compared to the previous year [1]. Earnings Projections - The consensus EPS estimate for the quarter has not changed over the past 30 days, indicating stability in analysts' projections [2]. - Revisions to earnings projections are crucial for predicting investor behavior, as empirical studies show a strong correlation between earnings estimate trends and short-term stock performance [3]. Revenue Estimates - Analysts predict 'Net revenues- Services' at $884.44 million, a year-over-year increase of 1.4% [5]. - 'Net revenues- Product' is expected to be $654.94 million, indicating a decline of 2.1% year over year [5]. - 'Net revenues- Public Cloud' is projected to reach $170.45 million, reflecting a growth of 7.2% year over year [5]. - 'Net revenues- Hybrid Cloud' is forecasted at $1.37 billion, a decrease of 0.5% from the previous year [6]. Geographic Revenue Insights - The consensus for 'Geographic Revenue- United States, Canada and Latin America' is $782.49 million, suggesting a year-over-year increase of 2.6% [6]. - 'Geographic Revenue- Asia Pacific' is expected to be $235.61 million, indicating a significant decline of 11.1% year over year [6]. - 'Geographic Revenue- Europe, Middle East and Africa' is projected at $517.03 million, reflecting a modest increase of 0.8% year over year [7]. Margin and Change Estimates - Analysts estimate 'Gross margin - Product - Non-GAAP' to be 56.0%, down from 59.9% year over year [7]. - 'Gross margin - Services - Non-GAAP' is expected to reach 82.8%, slightly up from 81.7% year over year [7]. - The estimated 'Product - % Change' is -1.8%, contrasting with the previous year's figure of 13.0% [8]. - 'Total Revenue - % Change' is projected at 0.3%, compared to 8.0% year over year [8]. Stock Performance - NetApp shares have increased by 3% in the past month, outperforming the Zacks S&P 500 composite, which moved up by 1.1% [8].
Rackspace Technology(RXT) - 2025 Q2 - Earnings Call Transcript
2025-08-07 22:00
Financial Data and Key Metrics Changes - Total company GAAP revenue for Q2 2025 was $666 million, down 3% year over year but slightly up sequentially, exceeding guidance due to solid performance across both business units [18] - Non-GAAP operating profit was $27 million, up 34% year over year, driven by operational efficiencies [18] - Non-GAAP loss per share was $0.06, at the lower end of the guided range, primarily due to higher expenses related to data center leases [19] Business Line Data and Key Metrics Changes - Private Cloud bookings grew 24% sequentially and 42% year over year, with revenue at $250 million, down 4% year over year [6][20] - Public Cloud bookings grew 1% year over year, with revenue totaling $417 million, down 2% year over year [11][21] - Non-GAAP gross margin for Private Cloud was 36.8%, down 50 basis points year over year, while Public Cloud's was 9.6%, down 20 basis points year over year [20][21] Market Data and Key Metrics Changes - Private Cloud saw double-digit year-over-year bookings growth in The Americas and EMEA, indicating broad-based strength [6] - Public Cloud services revenue grew 3% sequentially, remaining flat year over year, with a focus on higher-margin services [12][21] Company Strategy and Development Direction - The company is focused on building a sustainable business model that consistently delivers revenue, profit, and cash flow growth [17] - Strategic expansion into mid-market and enterprise segments is underway, with a strong emphasis on private cloud solutions [7][10] - The company is also investing in AI capabilities, with initiatives aimed at becoming a private AI infrastructure provider [50] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the stability of the private cloud business and the positive trajectory of bookings performance [31] - The company anticipates a flat revenue outlook for private cloud in Q3, while expecting growth in public cloud services [28][34] - Management highlighted the importance of operational discipline and working capital performance in driving free cash flow improvements [29] Other Important Information - The company launched several new products and enhancements, including Rackspace OpenStack and Rackspace CloudOps, aimed at improving service offerings [10][12] - A strategic alliance with Semaphore.ai was announced to enhance AI capabilities across business functions [15][54] Q&A Session Summary Question: Discussion on guidance and free cash flow - Management indicated that Q3 guidance is expected to be flat sequentially for private cloud, with an uptick anticipated in public cloud services [28][29] Question: Insights on private cloud services and public cloud performance - Management noted a favorable mix in private cloud bookings, with a shift towards larger deals and longer contract lengths [32][33] - Public cloud services are expected to grow in the second half of 2025, with a projected year-over-year growth of 10% to 20% in Q4 [34][35] Question: Investments in market traction and AI partnerships - Management stated that investments in mid-market and enterprise segments have already been made, with a focus on success-based CapEx [49] - The company is seeing traction in AI across both private and public cloud, with successful implementations in healthcare and retail sectors [51][54]
Rackspace Technology(RXT) - 2025 Q2 - Earnings Call Presentation
2025-08-07 21:00
Financial Performance - Q2 2025 - Total revenue was $666 million, flat quarter-over-quarter (Q/Q) and down 3% year-over-year (Y/Y) [7] - Non-GAAP gross profit was $132 million, essentially flat Q/Q and down 5% Y/Y [7] - Non-GAAP gross margin was 198%, down 01 percentage points Q/Q and 04 percentage points Y/Y [7] - Non-GAAP operating profit was $27 million, up 7% Q/Q and 34% Y/Y [7] - Non-GAAP operating margin was 41%, up 03 percentage points Q/Q and 11 percentage points Y/Y [7] - Non-GAAP loss per share was ($006), an increase of $003 Y/Y [7] Segment Performance - Q2 2025 - Total Rackspace revenue was $666 million, with Private Cloud at $250 million and Public Cloud at $417 million [8] - Private Cloud revenue decreased by 4% Y/Y, while Public Cloud revenue decreased by 2% Y/Y [8] - Segment operating profit was $78 million, with Private Cloud contributing $62 million and Public Cloud $16 million [8] - Corporate functions resulted in a loss of $50 million [8] Cash Flow and Capital Expenditures - Cash provided by operating activities was $8 million for Q2 2025 [9] - Free cash flow was ($12) million for Q2 2025 [9] - Total capital expenditures were $31 million, with cash capital expenditures at $21 million [9] - As of June 30, 2025, cash and cash equivalents were $104 million, with $310 million available under the revolving credit facility, resulting in total liquidity of $414 million [9] Q3 2025 Guidance - Total revenue is expected to be between $660 million and $674 million [12] - Private Cloud revenue is projected to be between $246 million and $254 million [12] - Public Cloud revenue is expected to be between $414 million and $420 million [12] - Non-GAAP operating profit is guided to be between $30 million and $32 million [12] - Non-GAAP loss per share is expected to be between ($004) and ($006) [12]
Rackspace Technology Reports Second Quarter 2025 Results
Globenewswire· 2025-08-07 20:05
Core Insights - Rackspace Technology reported second quarter 2025 results with revenue of $666 million, a decrease of 3% year-over-year from $685 million in Q2 2024 [2][6] - Private Cloud revenue was $250 million, down 4% from $260 million in Q2 2024, while Public Cloud revenue was $417 million, down 2% from $425 million in Q2 2024 [2][3] - The company achieved a 34% increase in Non-GAAP Operating Profit, reaching $27 million compared to $20 million in Q2 2024 [4][41] - Net loss for Q2 2025 was $(55) million, a significant decline from net income of $25 million in Q2 2024, resulting in a net loss per diluted share of $(0.23) compared to earnings of $0.11 in the prior year [3][4] Financial Performance - Total revenue for the first half of 2025 was $1.3317 billion, down 3.2% from $1.3757 billion in the same period of 2024 [20][30] - Operating cash flow for Q2 2025 was $8 million, with a trailing twelve-month cash flow from operating activities of $127 million [6][5] - Capital expenditures were $31 million in Q2 2025, slightly down from $33 million in Q2 2024 [5] Segment Analysis - Public Cloud segment revenue decreased by 2% year-over-year, while Private Cloud segment revenue saw a 4% decline [2][30] - Non-GAAP Operating Profit for the Public Cloud segment increased by 51.4%, while the Private Cloud segment experienced a 10.6% decrease [32][41] Guidance and Outlook - The company provided guidance for total revenue in Q3 2025 to be between $660 million and $674 million, with Private Cloud revenue expected between $246 million and $254 million, and Public Cloud revenue between $414 million and $420 million [7][6] - Non-GAAP Loss Per Share is projected to be between $(0.04) and $(0.06) for the upcoming quarter [7]
NetApp: Needs To Prove Its Capabilities Before Achieving Revenue Expansion
Seeking Alpha· 2025-06-04 13:48
Core Insights - NetApp Inc. operates in the hardware and data infrastructure market, focusing on two key segments: Hybrid Cloud and Public Cloud [1] - Approximately 51% of the company's revenues come from the U.S., with the remainder generated from international markets [1] Segment Analysis - The Hybrid Cloud segment provides data storage solutions, which are essential for businesses transitioning to cloud-based infrastructures [1] - The Public Cloud segment complements the Hybrid offerings, allowing for scalable and flexible data management solutions [1]
Rising AI, Analytics Budgets Could Lift Microsoft, Snowflake, Datadog
Benzinga· 2025-06-03 18:02
Core Insights - BofA Securities analyst Brad Sills reported a decline in software spending growth intentions for the second half of 2025 and 2026, with expected growth rates of +9.9% for 2025 and +10.8% for 2026, down from previous estimates [2] Software Spending Trends - The survey indicates a healthy pipeline for new software projects in 2026, with Data Analytics regaining the top spending priority, followed by Cloud Communications and Videoconferencing, and Security in third place [3] - Categories with higher spending expectations include observability and financials/ERP, while front-office applications like CRM Sales, Marketing, and Support scored lower due to firms reassessing AI priorities [4] AI Investment Insights - Infrastructure and Back Office are identified as the top software categories for AI investment, with Back Office seeing the largest increase since the last survey [5] - After LLMs, Workday Inc was the most selected for Back Office investments, while Salesforce Inc led in front-office AI offerings [5][6] Vendor Preferences - Amazon, Microsoft, and Alphabet's Google were the most frequently selected vendors for AI in infrastructure, while Adobe Inc remains the market leader in AI investments for desktop applications [6][7] - Hiring expectations for 2025 are down, with recession fears impacting spending plans more than tariffs [7]
Broadcom’s Private Cloud Outlook 2025 Report Reveals Definitive Cloud Reset
Globenewswire· 2025-05-29 13:00
Core Insights - The "cloud reset" indicates a shift in organizational cloud strategies, with private cloud becoming a top priority for deploying new workloads [1][6] - 53% of IT leaders prioritize private cloud for new workloads over the next three years, while 69% are considering repatriating workloads from public to private cloud [1][6] - Private cloud is now viewed as strategically equal to public cloud, particularly for AI and cloud-native applications [1][6] Security and Compliance - 92% of respondents trust private cloud for security and compliance needs, with security being the leading driver for workload repatriation from public cloud [7] - Data privacy and security concerns are significant challenges for generative AI adoption, with 49% of respondents citing these issues [7] Cost Predictability and Efficiency - 90% of organizations value private cloud for its financial visibility and predictability, while 94% report some level of waste in public cloud spending [7] - 49% believe that over 25% of their public cloud spending is wasted, highlighting optimization opportunities [7] Organizational Challenges - Siloed IT teams (33%) and lack of in-house skills (30%) are identified as the greatest challenges to private cloud adoption [4] - 81% of organizations are restructuring their technical teams around platform teams to address these challenges and close the skills gap [4]
Rackspace Technology(RXT) - 2025 Q1 - Earnings Call Presentation
2025-05-08 21:01
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]
Compared to Estimates, Teradata (TDC) Q1 Earnings: A Look at Key Metrics
ZACKS· 2025-05-07 01:00
Financial Performance - For the quarter ended March 2025, Teradata reported revenue of $418 million, down 10.1% year-over-year, and EPS of $0.66, compared to $0.57 in the same quarter last year [1] - The reported revenue was below the Zacks Consensus Estimate of $425.28 million, resulting in a surprise of -1.71%, while the EPS exceeded the consensus estimate of $0.57 by +15.79% [1] Key Metrics - Annual recurring revenue (ARR) totaled $1.44 billion, matching the average estimate from two analysts [4] - Public Cloud ARR was reported at $606 million, surpassing the average estimate of $590.05 million [4] - Revenue from perpetual software licenses and hardware was $10 million, significantly above the estimated $4.85 million, reflecting a +25% change year-over-year [4] - Recurring revenue was $358 million, below the average estimate of $368.40 million, indicating a -7.7% change year-over-year [4] - Consulting services revenue was $50 million, slightly below the average estimate of $52.03 million, with a gross profit of -$3 million compared to an estimated $4.64 million [4] - Gross profit from recurring revenue was $250 million, slightly below the estimated $256.11 million [4] Stock Performance - Teradata shares have returned +15.1% over the past month, outperforming the Zacks S&P 500 composite's +11.5% change [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]