Private Cloud Revenue was $235 million, down 6% Year-over-Year
Public Cloud Revenue was $443 million, up 7% Year-over-Year
First Quarter 2026 Cash Flow From Operating Activities was $5 million; Cash Flow From Operating Activities was $144 million on a Trailing-Twelve-Month Basis
Rackspace Technology and AMD sign Memorandum of Understanding to establish a new category of governed Enterprise AI Infrastructure
SAN ANTONIO, May 07, 2026 (GLOBE NEWSWIRE) -- 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, 2026.
Gajen Kandiah, Chief Executive Officer, stated, "The market is moving in the direction we anticipated, with regulated enterprises making deliberate choices about where their AI runs, who operates it, and who is accountable for outcomes."
Mr. Kandiah added, "Our first quarter results reflect a strategy that is delivering, and today I am pleased to announce a Memorandum of Understanding with AMD to establish governed enterprise AI infrastructure as a new market category. It is a category Rackspace is built to lead."
First Quarter 2026 Results
Revenue was $678 million in the first quarter of 2026, an increase of 2% on a reported basis and 1% on a constant currency (1) basis compared to revenue of $665 million in the first quarter of 2025.
Private Cloud revenue was $235 million in the first quarter of 2026, a decrease of 6% on a reported basis and 8% on a constant currency basis compared to revenue of $250 million in the first quarter of 2025.
Public Cloud revenue was $443 million in the first quarter of 2026, an increase of 7% on a reported basis and 6% on a constant currency basis compared to revenue of $416 million in the first quarter of 2025.
Loss from operations was $(18) million in the first quarter of 2026, compared to loss from operations of $(38) million in the first quarter of 2025.
Net income was $8 million in the first quarter of 2026, compared to net loss of $(72) million in the first quarter of 2025.
Net earnings per diluted share was $0.03 in the first quarter of 2026, compared to net loss per diluted share of $(0.31) in the first quarter of 2025.
Non-GAAP Operating Profit was $31 million in the first quarter of 2026, an increase of 20% compared to $26 million in the first quarter of 2025.
Non-GAAP Loss Per Share was $(0.06) in both the first quarter of 2026 and 2025.
Capital expenditures were $35 million in the first quarter of 2026, compared to $27 million in the first quarter of 2025.
As of March 31, 2026, we had cash and cash equivalents of $94 million and total liquidity of $295 million, including our Revolving Credit Facility.
(1)
Constant currency revenue and certain other measures in this release are non-GAAP financial measures. See "Non-GAAP Financial Measures" and the tables that accompany this release for definitions and reconciliations of these non-GAAP measures to the most comparable GAAP measures.
Financial Outlook
Rackspace Technology is providing guidance as follows:
FY 2026 Guidance
Total Revenue
$2,600 - $2,700 million
Private Cloud Revenue
$1,025 - $1,075 million
Public Cloud Revenue
$1,575 - $1,625 million
Non-GAAP Operating Profit
$160 - $170 million
Adjusted EBITDA
$305 - $315 million
Non-GAAP Loss Per Share
($0.15) - ($0.20)
Non-GAAP Other Income (Expense)
($220), ($230) million
Non-GAAP Tax Expense Rate
26%
Non-GAAP Weighted Average Shares
250 - 260 million
Information about Rackspace Technology's use of non-GAAP financial measures is provided below under "Non-GAAP Financial Measures".
Definitions of non-GAAP financial measures and the reconciliations to the most directly comparable measures in accordance with generally accepted accounting principles in the United States ("GAAP") are provided in subsequent sections of this press release narrative and supplemental schedules. Rackspace Technology has not reconciled Non-GAAP Operating Profit, Adjusted EBITDA, Non-GAAP Loss Per Share, Non-GAAP Other Income (Expense) or Non-GAAP Tax Expense Rate guidance to the most directly comparable GAAP measure because it does not provide guidance on GAAP net income (loss) or the reconciling items between these Non-GAAP measures and GAAP net income (loss) as a result of the uncertainty regarding, and the potential variability of, certain of these items, such as share-based compensation expense. Accordingly, a reconciliation of the non-GAAP financial measure guidance to the corresponding GAAP measure is not available without unreasonable effort. With respect to Non-GAAP Operating Profit, Adjusted EBITDA, Non-GAAP Loss Per Share, Non-GAAP Other Income (Expense) and Non-GAAP Tax Expense Rate guidance, adjustments in future periods are generally expected to be similar to the kinds of charges and costs excluded from these Non-GAAP measures in prior periods, but the impact of such adjustments could be significant.
Conference Call and Webcast
Rackspace Technology will hold a conference call today, May 7, 2026, at 7:30am CT / 8:30am ET to discuss its first quarter 2026 results.
To listen to the live webcast or access the replay following the webcast, please visit our IR website at the following link: https://ir.rackspace.com/news-and-events/events-and-presentations.
To obtain a dial-in number, please pre-register at the following link: https://register-conf.media-server.com/register/BI0dd982209e5e4e0c8ecd0399b3f24aee
Registrants will receive dial-in information and a PIN allowing them to access the live call.
About Rackspace Technology
Rackspace Technology is a leading end-to-end hybrid cloud and AI solutions company. We can design, build, and operate our customers' cloud environments across all major technology platforms, irrespective of technology stack or deployment model. We partner with our customers at every stage of their cloud journey, enabling them to modernize applications, build new products, and adopt innovative technologies.
Forward-looking Statements
Rackspace Technology has made statements in this press release 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 press release 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 safe harbor protections provided thereunder. These forward-looking statements relate to anticipated financial performance, management's plans and objectives for future operations, business prospects, outcome of regulatory proceedings, market conditions, and other matters. In addition, the anticipated collaboration with AMD is forward-looking and has been memorialized in a non-binding memorandum of understanding, which is a framework for potential collaboration and does not constitute a binding commitment by either party to complete any specific transaction, financing or other commercial arrangement or transaction. No definitive agreements have been reached, discussions remain preliminary, and there can be no assurance that any such arrangements will be entered into or that the parties will reach definitive agreement on terms, or that the anticipated benefits of the collaboration will ultimately be realized. Any third-party financing required to implement the transactions contemplated by the MOU is subject to the availability of financing on acceptable terms. Any forward-looking statement made in this press release speaks only as of the date on which it is made. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise. Forward-looking statements can be identified by various words such as "expects," "intends," "to establish," "will," "anticipates," "believes," "confident," "continue," "propose," "seeks," "could," "may," "should," "estimates," "forecasts," "might," "goals," "objectives," "targets," "planned," "projects," and similar expressions. These forward-looking statements are based on management's current beliefs and assumptions and on information currently available to management. Rackspace Technology cautions that these statements are subject to risks and uncertainties, many of which are outside of our control, and could cause future events or results to be materially different from those stated or implied in this press release, including among others, risk factors that are described in Rackspace Technology, Inc.'s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and other filings with the Securities and Exchange Commission, including the sections entitled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" contained therein.
Non-GAAP Financial Measures
This press release includes several non-GAAP financial measures such as constant currency revenue, Non-GAAP Gross Profit, Non-GAAP Net Income (Loss), Non-GAAP Operating Profit, Adjusted EBITDA and Non-GAAP Earnings (Loss) Per Share. These non-GAAP financial measures exclude the impact of certain costs, losses and gains that are required to be included in our profit and loss measures under GAAP. Although we believe these measures are useful to investors and analysts for the same reasons they are useful to management, as described in the accompanying pages, these measures are not a substitute for, or superior to, GAAP financial measures or disclosures. Other companies may calculate similarly-titled non-GAAP measures differently, limiting their usefulness as comparative measures. We have reconciled each of these non-GAAP measures to the applicable most comparable GAAP measure in the accompanying pages.
IR ContactSagar HebbarRackspace Technology Investor Relations[email protected]
Media ContactCheryl AmerineRackspace Technology Media Relations [email protected]
RACKSPACE TECHNOLOGY, INC.CONSOLIDATED RESULTS OF OPERATIONS(Unaudited)
Three Months Ended March 31,
Year-Over-YearComparison
2025
2026
(In millions, except % and per share data)
Amount
% Revenue
Amount
% Revenue
Amount
% Change
Revenue
$
665.4
100.0
%
$
678.1
100.0
%
$
12.7
1.9
%
Cost of revenue
(538.5
)
(80.9
)%
(559.0
)
(82.4
)%
(20.5
)
3.8
%
Gross profit
126.9
19.1
%
119.1
17.6
%
(7.8
)
(6.1
)%
Selling, general and administrative expenses
(165.3
)
(24.8
)%
(136.9
)
(20.2
)%
28.4
(17.2
)%
Loss from operations
(38.4
)
(5.8
)%
(17.8
)
(2.6
)%
20.6
(53.6
)%
Other income (expense):
Interest expense
(19.4
)
(2.9
)%
(26.2
)
(3.9
)%
(6.8
)
35.1
%
Loss on investments, net
(0.1
)
(0.0
)%
(0.1
)
(0.0
)%
—
—
%
Gain on debt extinguishment
—
—
%
55.8
8.2
%
55.8
100.0
%
Other expense, net
(5.4
)
(0.8
)%
(3.5
)
(0.5
)%
1.9
(35.2
)%
Total other income (expense)
(24.9
)
(3.7
)%
26.0
3.8
%
50.9
NM
Income (loss) before income taxes
(63.3
)
(9.5
)%
8.2
1.2
%
71.5
NM
Benefit (provision) for income taxes
(8.2
)
(1.2
)%
0.1
0.0
%
8.3
NM
Net income (loss)
$
(71.5
)
(10.8
)%
$
8.3
1.2
%
$
79.8
NM
Net earnings (loss) per share:
Basic
$
(0.31
)
$
0.03
Diluted
$
(0.31
)
$
0.03
Weighted average number of shares outstanding:
Basic
231.9
246.3
Diluted
231.9
249.7
NM = not meaningful.
RACKSPACE TECHNOLOGY, INC.CONSOLIDATED BALANCE SHEETS(Unaudited)
(In millions, except per share data)
December 31,2025
March 31,2026
ASSETS
Current assets:
Cash and cash equivalents
$
105.8
