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Jun 30, 2023
Rackspace Q2 2023 Earnings Report
Rackspace Technology's financial performance declined slightly in Q2 2023, with revenue decreasing year-over-year but exceeding guidance. The company focused on generative AI solutions and saw growth in public cloud revenue, offset by a decline in private cloud revenue. Operating loss was reported, but non-GAAP measures showed some profitability challenges.
Key Takeaways
Rackspace Technology reported a 3% year-over-year decrease in revenue to $746 million for Q2 2023. Public Cloud revenue increased by 3% to $435 million, while Private Cloud revenue decreased by 11% to $311 million. The company experienced a loss from operations of $(64) million and a net loss of $(27) million. Non-GAAP operating profit was $39 million, and non-GAAP loss per share was $(0.06).
Total revenue decreased by 3% year-over-year to $746 million.
Public Cloud revenue increased by 3% year-over-year to $435 million.
Private Cloud revenue decreased by 11% year-over-year to $311 million.
The company launched Foundry for AI by Rackspace (FAIR™) to focus on generative AI solutions.
Rackspace
Rackspace
Forward Guidance
Rackspace Technology provided guidance for Q3 2023, including revenue, public and private cloud revenue, non-GAAP operating profit, and non-GAAP loss per share.
Positive Outlook
- Total Revenue: $722 - $732 million
- Public Cloud Revenue: $428 - $433 million
- Private Cloud Revenue: $294 - $299 million
- Non-GAAP Operating Profit: $43 - $47 million
- Non-GAAP Tax Expense Rate: 26%
Challenges Ahead
- Non-GAAP Loss Per Share: $(0.06) - $(0.04)
- Non-GAAP Other Income (Expense): $(58) – $(60) million
- Non-GAAP Weighted Average Shares: 215 – 217 million
- Uncertainty regarding GAAP net income (loss)
- Potential variability of share-based compensation expense