Rackspace Technology, Inc. is a global provider specializing in multi-cloud technology services. The company organizes its business into two primary divisions: Multicloud ...
Rackspace Technology is a technology services company focused on helping enterprises manage increasingly complex cloud, data, application, security, and artificial intelligence environments. Its roots extend to the managed hosting industry: the company was founded by Richard Yoo, Dirk Elmendorf, and Patrick Condon in the 1990s and operated under the Rackspace ...Rackspace Technology is a technology services company focused on helping enterprises manage increasingly complex cloud, data, application, security, and artificial intelligence environments. Its roots extend to the managed hosting industry: the company was founded by Richard Yoo, Dirk Elmendorf, and Patrick Condon in the 1990s and operated under the Rackspace name from 1998. It is headquartered in San Antonio, Texas, and became publicly traded on Nasdaq under the symbol RXT in August 2020. Gajen Kandiah serves as chief executive officer and is leading the company’s strategic evolution from traditional cloud services toward an end-to-end enterprise AI and hybrid-cloud platform.
The business is broadly organized around Multicloud Services and Apps & Cross Platform capabilities. Multicloud Services includes managed services for public and private clouds, cloud architecture, migration, infrastructure operations, optimization, governance, and deployment of cloud-native applications. Rackspace supports major cloud environments and helps customers coordinate workloads across providers rather than relying on a single infrastructure platform. Apps & Cross Platform services include managed applications, professional services, database and data services, application modernization, and managed security. Security offerings cover threat detection, prevention, incident response, compliance, governance, risk management, privacy, data protection, access controls, and reporting.
Rackspace’s newer strategic emphasis is enterprise AI. The company positions itself as an operator of the enterprise AI stack, spanning governed private infrastructure, cloud platforms, data services, model deployment, AI inference, and production applications or agents. Its collaboration with AMD is intended to support an integrated enterprise AI offering. The company’s value proposition is to reduce the operational burden and specialized labor required to run complex technology environments, while improving reliability, security, scalability, and time to deployment.
Because Rackspace primarily delivers services rather than manufactured hardware, a conventional bill of materials is not a central reporting concept. Its practical cost structure is instead driven by cloud and data-center capacity, third-party infrastructure and software, personnel, technical support, security operations, sales, facilities, and subcontracted or partner services. Customers may pay through recurring managed-service arrangements, cloud consumption-related programs, professional-services projects, application management contracts, and security services. Pricing varies with workload size, service-level requirements, architecture complexity, compliance needs, and the degree of operational responsibility transferred to Rackspace.
The supplied trailing information indicates approximately $2.96 billion of 2023 revenue, an enterprise value of roughly $4.38 billion in the referenced data set, and about 5,800-plus employees. The company reports positive EBITDA-related performance but also carries significant debt and has negative trailing net income and shareholders’ equity in the supplied metrics. Its financial profile therefore reflects both the recurring nature of managed technology services and the challenges of leverage, restructuring, competitive pricing, and ongoing investment. Rackspace’s principal strategic objectives are to deepen customer relationships, expand higher-value security, data, and AI services, improve operating efficiency, manage debt, and establish a differentiated position as enterprises move from cloud adoption toward governed, production-scale AI.
YoYYoY means Year-over-Year. It compares the latest annual value with the previous annual value to show long-term trend strength.
QoQQoQ means Quarter-over-Quarter. It compares the latest quarter with the immediately previous quarter to show short-term momentum changes.
RevenueThe total money that came through the front door from selling things, before paying a single bill. Think of it as the grand total of every credit card swipe from customers. (YoY compares this year to last year's performance, while QoQ compares the current three months to the previous three).
$2.7B
-1.9%
-1.7%
Net IncomeThe absolute bottom line. If the company paid every single supplier, employee, banker, and tax collector, this is the actual money left in their pocket at the end of the day.
$-225.8M
+73.7%
-913.3%
Gross MarginThe basic markup. If they sell a $100 pair of sneakers, this percentage tells you how much of that price tag is profit right after paying for the rubber and shoelaces, but before paying for things like store rent or TV commercials.
+13.4%
-31.3%
+49.8%
Operating MarginThe 'day job' efficiency score. Out of every dollar a customer spends, this shows how many cents the company keeps after making the product AND paying for all the everyday corporate overhead (like salaries, marketing, and keeping the lights on).
-2.5%
+92.3%
-190.3%
Net MarginThe final take-home percentage. When you strip away every conceivable cost, tax, and interest payment, this is the exact number of cents the company truly gets to keep from every dollar in sales.
-8.4%
+73.2%
-927.7%
Free Cash FlowThe holy grail of corporate cash. It's the spendable, physical money left over after the business pays for its daily operations AND buys the big, expensive upgrades (like new factories or servers) it needs to survive. This is the 'free' money they can use to pay dividends or buy back stock.
$90.6M
+227.2%
-413.8%
FCF MarginThe ultimate cash conversion rate. It shows how good the company is at turning regular sales directly into cold, hard, spendable cash. A high percentage means the business is an absolute cash-printing machine.
+3.4%
+229.7%
-422.9%
Debt / EquityThe financial risk gauge. It compares how much of the company's empire was built using borrowed money (loans) versus the owners' own money (shareholders). A high number means they are heavily leveraged and playing a riskier game; a low number means they are playing it safe.
-269.3%
+17.6%
+2.9%
Current RatioThe 12-month survival check. It simply compares the cash they have right now (plus things they can quickly turn into cash) against the immediate bills they absolutely must pay this year. A score above 1 means they have enough in the wallet to cover the upcoming bills without panicking.
0.68x
-16.3%
+11.0%
Total AssetsThe absolute size of the company's empire. It bundles together absolutely everything of value they own—from the cash in the register and the inventory in the warehouse, to the software patents in the vault and the factories on the ground.
Thank you for standing by, and welcome to Rackspace's Second Quarter 2026 Earnings Conference Call. I would now like to hand the call over to Sagar Hebbar, Investor Relations. Please go ahead.
Sagar HebbarHead of Investor RelationsSentiment 0.0
Thank you, and welcome to Rackspace Technology's Second Quarter 2026 Earnings Conference Call. I'm Sagar Hebbar, Head of Investor Relations. Joining me today are Gajan Kandiah, our Chief Executive Officer; and Mark Marino, our Chief Financial Officer. As a reminder, certain comments we make on this call will be forward-looking, including, without limitation, statements regarding our financial guidance and outlook, our enterprise AI deployment plans, capacity targets and timelines, expected capital expenditures, revenue per megawatt and margin assumptions, our financing plans, cash flow expectations, our business strategy and product roadmap as well as shifts in our business mix. These statements involve risks and uncertainties, which could cause actual results to differ materially. A discussion of these risks and uncertainties is included in the Risk Factors and Forward-Looking Statements sections of our most recent annual report on Form 10-K and subsequent quarterly reports on Form 10-Q filed with the SEC. Rackspace Technology assumes no obligation to update the information presented on the call, except as required by law. Our presentation includes certain non-GAAP financial measures and adjustments to these measures, which we believe provide useful information to our investors. In accordance with SEC rules, we have provided a reconciliation of these measures to their most directly comparable GAAP measures in the earnings press release and presentation, both of which are available on our Investor Relations website. I will now turn the call over to Gajan for an update on the business.
Gajan KandiahChief Executive OfficerSentiment 0.8
Thank you, Sagar. Good morning, everyone, and thank you for joining us. I want to start by reviewing our progress toward a clear strategic goal, becoming the accountable provider and operator of the full enterprise AI stack from core to cloud to edge. For more than 25 years, enterprises have trusted Rackspace to operate complex mission-critical infrastructure across private cloud, public cloud and data centers worldwide. As enterprise AI becomes operational infrastructure, the things that have always mattered most to our customers — governance, security, sovereignty, resilience and accountability — matter even more. McKinsey & Company estimates that global inferencing workloads will surpass training by the end of 2026 and represent two-thirds of all AI workloads by 2030. Rackspace has tens of thousands of customers across its installed base and many are starting to harness inference to run their businesses more effectively. The questions they are asking are sharpening around sovereign AI estates that run through a model-agnostic, vendor-neutral ecosystem, and we have listened carefully. Every AI interaction — an employee query, an agent evaluating a transaction, a hospital …
