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Jun 30, 2025
Rackspace Q2 2025 Earnings Report
Rackspace Technology reported its second quarter 2025 results, with revenue and operating profit exceeding guidance midpoints and EPS within the guided range.
Key Takeaways
Rackspace Technology reported a revenue of $666 million in Q2 2025, a 3% decrease year-over-year. The company experienced a net loss of $55 million and a diluted EPS of $(0.23). Despite the revenue decline, Non-GAAP Operating Profit increased by 34% to $27 million, and bookings grew by 16%, indicating strong go-to-market execution and progress in their turnaround strategy.
Revenue for Q2 2025 was $666 million, a 3% decrease year-over-year, but exceeded the midpoint of guidance.
The company reported a net loss of $55 million and a diluted EPS of $(0.23) for the quarter.
Non-GAAP Operating Profit increased by 34% year-over-year to $27 million, demonstrating improved operational efficiency.
Bookings grew by 16%, reflecting strong go-to-market execution and continued progress in the company's turnaround efforts.
Revenue by Segment
Forward Guidance
Rackspace Technology provided guidance for Q3 2025, expecting total revenue between $660 million and $674 million, Non-GAAP Operating Profit between $30 million and $32 million, and Non-GAAP Loss Per Share between $(0.04) and $(0.06).
Positive Outlook
- Expected increase in Non-GAAP Operating Profit to $30 - $32 million for Q3 2025, up from $27 million in Q2 2025.
- Anticipated improvement in Non-GAAP Loss Per Share to $(0.04) - $(0.06) for Q3 2025, compared to $(0.06) in Q2 2025.
- Continued focus on go-to-market execution across both business units.
- Management's confidence in exceeding guidance midpoints for revenue and operating profit.
- Positive operating cash flow delivered in the current quarter, expected to continue.
Challenges Ahead
- Projected total revenue for Q3 2025 ($660 - $674 million) indicates continued year-over-year decline compared to Q2 2025 revenue of $666 million.
- Private Cloud Revenue is expected to be $246 - $254 million, suggesting a continued decline from Q2 2025's $250 million.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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