=====Rackspace Technology (RXT) reported earnings on Thur 26 Feb 26 (b/o)

 

Rackspace beats Q4 estimates and guidance with revenue $683M, guides 2026 revenue $2.6-$2.7B and non-GAAP operating profit up ~31% YoY

• Q4 2025 revenue $683M beat guidance, driven by stronger-than-expected public cloud performance.
• Non-GAAP EPS improved 50% YoY to -$0.01, while revenue was flat YoY at $682.8M (-0% YoY).
• Private cloud revenue $241M missed guidance as major health care contract ramped slower.
• Public cloud services revenue grew 28% YoY in Q4, with full-year services up 6%.
• 2026 revenue guided to $2.6–$2.7B, about 1% YoY decline at midpoint.
• Private cloud 2026 revenue outlook implies ~6% YoY growth, reversing years of declines.
• Public cloud 2026 revenue expected down ~6% YoY, mainly from exiting low-margin government contract.
• 2026 non-GAAP operating profit guided at $160–$170M, roughly 31% YoY growth.
• Company shifting from quarterly to annual guidance as large deals increase revenue timing volatility.
• AI platform-engineering model and Palantir partnership building pipeline, with 30 engineers scaling to 250.
• Balance sheet solid with $397M liquidity and $91M full-year free cash flow.
• Main concern: Execution risk ramping large regulated deals and managing public cloud contraction from major government-contract exit.
• Mixed quarter driven by strong public-cloud services and AI momentum, offset by private-cloud ramp delays and modest 2026 revenue-decline.