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- Fourth Quarter Revenue of $686 million, down 5% Year-over-Year; 2024 Revenue of $2,737 million, down 7% Year-over-Year
- Fourth Quarter Private Cloud Revenue of $269 million, down 6% Year-over-Year; 2024 Private Cloud Revenue of $1,055 million, down 13% Year-over-Year
- Fourth Quarter Public Cloud Revenue of $417 million, down 4% Year-over-Year; 2024 Public Cloud Revenue of $1,683 million down 3% Year-over-Year
- Fourth Quarter Cash Flow From Operating Activities of $54 million
SAN ANTONIO, Feb. 20, 2025 (GLOBE NEWSWIRE) -- Rackspace Technology, Inc. (Nasdaq: RXT), a leading end-to-end, hybrid cloud and AI solutions company, today announced results for its fourth quarter and year ended December 31, 2024.
Amar Maletira, Chief Executive Officer, stated, "We closed the year on a high note, exceeding guidance for fourth-quarter revenue, operating profit, and EPS. Our company achieved record-breaking quarterly sales bookings-the highest since the inception of our two business units. Fiscal 2024 bookings grew 14% year-over-year, driven by strong sales execution across both units.”
Mr. Maletira added, "I am proud of our steady execution across our three strategic priorities: operational turnaround, innovation, and capital structure optimization. With a solid foundation in place, we are well-positioned to accelerate our progress in 2025.”
Fourth Quarter 2024 Results
Revenue was $686 million in the fourth quarter of 2024, a decrease of 5% on a reported and constant currency (1) basis as compared to revenue of $720 million in the fourth quarter of 2023.
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Private Cloud revenue was $269 million in the fourth quarter of 2024, a decrease of 6% on a reported basis and 7% on a constant currency basis as compared to revenue of $286 million in the fourth quarter of 2023.
Public Cloud revenue was $417 million in the fourth quarter of 2024, a decrease of 4% on a reported and constant currency basis as compared to revenue of $434 million in the fourth quarter of 2023.
Loss from operations was $(29) million in the fourth quarter of 2024, compared to loss from operations of $(15) million in the fourth quarter of 2023.
Net loss was $(60) million in the fourth quarter of 2024, compared to net income of $28 million in the fourth quarter of 2023.
Net loss per diluted share was $(0.26) in the fourth quarter of 2024, compared to net income per diluted share of $0.13 in the fourth quarter of 2023.
Non-GAAP Operating Profit was $39 million in the fourth quarter of 2024, a decrease of 13% compared to $45 million in the fourth quarter of 2023.
Non-GAAP Loss Per Share was $(0.02) in the fourth quarter of 2024, an increase of 50% as compared to Non-GAAP Loss Per Share of $(0.04) in the fourth quarter of 2023.
Capital expenditures were $27 million in the fourth quarter of 2024, compared to $38 million in the fourth quarter of 2023.
Full Year 2024 Results
Revenue was $2,737 million in 2024, a decrease of 7% on a reported basis and 8% on a constancy currency basis as compared to revenue of $2,957 million in 2023.
Private Cloud revenue was $1,055 million in 2024, a decrease of 13% on a reported basis and 14% on a constant currency basis as compared to revenue of $1,214 million in 2023.
Public Cloud revenue was $1,683 million in 2024, a decrease of 3% on a reported basis and 4% on a constancy currency basis as compared to revenue of $1,743 million in 2023.
Loss from operations was $(909) million in 2024, compared to loss from operations of $(899) million in 2023.
Net loss was $(863) million in 2024, compared to net loss of $(838) million in 2023.
Net loss per diluted share was $(3.84) in 2024, compared to net loss per diluted share of $(3.89) in 2023.
Non-GAAP Operating Profit was $106 million in 2024, a decrease of 33% compared to $157 million in 2023.
Non-GAAP Loss Per Share was $(0.27) in 2024, a decrease of 13% as compared to Non-GAAP Loss Per Share of $(0.24) in 2023.
Capital expenditures were $136 million in 2024, compared to $181 million in 2023.
As of December 31, 2024, we had cash and cash equivalents of $144 million with no balance outstanding on our New Revolving Credit Facility ($375 million of undrawn commitments).
| (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:
| Q1 2025 Guidance | |
| Revenue | $653 - $665 million |
| Private Cloud Revenue | $247 - $253 million |
| Public Cloud Revenue | $406 - $412 million |
| Non-GAAP Operating Profit | $19 - $21 million |
| Non-GAAP Loss Per Share | ($0.07) - ($0.09) |
| Non-GAAP Other Income (Expense) | ($46) - ($50) million |
| Non-GAAP Tax Expense Rate | 26% |
| Non-GAAP Weighted Average Shares | 245 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, 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, 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, February 20, 2025, at 4:00pm CT / 5:00pm ET to discuss its fourth quarter and full year 2024 results. Interested parties may access the conference call as follows:
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.vevent.com/register/BIad56d9097db646978aea4b4bd013e646
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. 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,” "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.
Beginning in the fourth quarter of 2024, we have updated the presentation of our non-GAAP financial measures to no longer exclude certain cash compensation paid to employees who remain employed with Rackspace which were previously included in "special bonuses and other compensation expenses” and "restructuring and transformation expenses” line items of our reconciliations. Additionally, we have removed "special bonuses and other compensation expenses” line item and the remaining adjustments are now presented within "restructuring and transformation expenses” line item. All prior period Non-GAAP Gross Profit, Non-GAAP Net Income (Loss), Non-GAAP Operating Profit, Adjusted EBITDA and Non-GAAP Earnings (Loss) Per Share financial measures have been recasted to reflect current period presentation in the accompanying pages.
IR Contact
Sagar Hebbar
Rackspace Technology Investor Relations
PR Contact
Natalie Silva
Rackspace Technology Corporate Communications
| RACKSPACE TECHNOLOGY, INC. CONSOLIDATED RESULTS OF OPERATIONS (Unaudited) | |||||||||||||||||||||||
| Three Months Ended December 31, | |||||||||||||||||||||||
| 2023 | 2024 | Year-Over-Year Comparison | |||||||||||||||||||||
| (In millions, except % and per share data) | Amount | % Revenue | Amount | % Revenue | Amount | % Change | |||||||||||||||||
| Revenue | $ | 719.7 | 100.0 | % | $ | 685.6 | 100.0 | % | $ | (34.1 | ) | (4.7 | )% | ||||||||||
| Cost of revenue | (565.6 | ) | (78.6 | )% | (553.9 | ) | (80.8 | )% | 11.7 | (2.1 | )% | ||||||||||||
| Gross profit | 154.1 | 21.4 | % | 131.7 | 19.2 | % | (22.4 | ) | (14.5 | )% | |||||||||||||
| Selling, general and administrative expenses | (165.5 | ) | (23.0 | )% | (160.5 | ) | (23.4 | )% | 5.0 | (3.0 | )% | ||||||||||||
| Impairment of assets, net | (3.8 | ) | (0.5 | )% | - | - | % | 3.8 | (100.0 | )% | |||||||||||||
| Loss from operations | (15.2 | ) | (2.1 | )% | (28.8 | ) | (4.2 | )% | (13.6 | ) | 89.5 | % | |||||||||||
| Other income (expense): | |||||||||||||||||||||||
| Interest expense | (50.9 | ) | (7.1 | )% | (17.9 | ) | (2.6 | )% | 33.0 | (64.8 | )% | ||||||||||||
| Gain (loss) on investments, net | 0.1 | 0.0 | % | (0.1 | ) | (0.0 | )% | (0.2 | ) | NM | |||||||||||||
| Gain on debt extinguishment | 108.2 | 15.0 | % | - | - | % | (108.2 | ) | (100.0 | )% | |||||||||||||
| Other expense, net | (4.7 | ) | (0.7 | )% | (9.9 | ) | (1.4 | )% | (5.2 | ) | 110.6 | % | |||||||||||
| Total other income (expense) | 52.7 | 7.3 | % | (27.9 | ) | (4.1 | )% | (80.6 | ) | NM | |||||||||||||
| Income (loss) before income taxes | 37.5 | 5.2 | % | (56.7 | ) | (8.3 | )% | (94.2 | ) | NM | |||||||||||||
| Provision for income taxes | (9.5 | ) | (1.3 | )% | (3.7 | ) | (0.6 | )% | 5.8 | (61.1 | )% | ||||||||||||
| Net income (loss) | $ | 28.0 | 3.9 | % | $ | (60.4 | ) | (8.8 | )% | $ | (88.4 | ) | NM | ||||||||||
| Net earnings (loss) per share: | |||||||||||||||||||||||
| Basic | $ | 0.13 | $ | (0.26 | ) | ||||||||||||||||||
| Diluted | $ | 0.13 | $ | (0.26 | ) | ||||||||||||||||||
| Weighted average number of shares outstanding: | |||||||||||||||||||||||
| Basic | 216.6 | ||||||||||||||||||||||
