Q1 2025 Rackspace Technology Inc Earnings Call Transcript
Key Points
- Rackspace Technology Inc (RXT) exceeded expectations across all key metrics for the first quarter of 2025, with revenue at the high end of guidance and profit and EPS surpassing guidance range.
- The company achieved an 11th consecutive quarter of meeting or exceeding guidance, indicating strong operational performance.
- Bookings measured by annual contract value grew 9% year-over-year, with a notable 13% increase in the Americas.
- Rackspace Technology Inc (RXT) announced a strategic partnership with Rubrik to launch the Cyber Recovery Cloud, enhancing cyber resiliency for customers.
- Public cloud bookings grew 16% year-over-year, driven by strong execution in the Americas, reflecting successful land and expand strategies.
- Total company GAAP revenue of $665 million was down 4% year-over-year, indicating a decline in overall revenue.
- Non-GAAP gross profit margin decreased by 1.5 percentage points year-over-year, primarily due to declines in private cloud.
- Private cloud revenue decreased by 7% year-over-year due to customers rolling off older generation offerings.
- The macroeconomic environment remains uncertain, potentially impacting onboarding timelines for recently closed deals and customer decision cycles.
- Infrastructure resale in public cloud is expected to continue declining by low-to-mid single digits, which could affect revenue growth.
Good day and welcome to the Rackspace first quarter 2025 earnings webcast. (Operator Instructions). As a reminder, this call may be recorded.
I would like to turn the call over to Sagar Hebbar, Head of Investor Relations. Please go ahead.
Thank you and welcome to Rackspace Technology's, first quarter 2025 earnings conference call. I'm Sagar Hebbar, Head of Investor Relations. Joining me on today's call are Amar Maletira, our Chief Executive Officer; and Mark Marino, our Chief Financial Officer.
As a reminder, certain comments we make on this call will be forward-looking. These statements involve risks and uncertainties which could cause actual results to differ. A discussion of these risks and uncertainties is included in our SEC filings. Rackspace Technology assumes no obligation to update the information presented on the call except as required by law.
Our presentation includes certain non-GAAP financial measures and adjustments to
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