Q2 2025 Rackspace Technology Inc Earnings Call Transcript
Key Points
- Rackspace Technology Inc (RXT) exceeded the midpoint of its revenue and operating profit guidance, marking the 12th consecutive quarter of meeting or exceeding guidance.
- Private Cloud bookings grew 24% sequentially and 42% year over year, driven by large, long-term deals across key industries.
- The company reported a 34% year-over-year growth in non-GAAP operating profit and delivered positive cash from operations of $8 million.
- Rackspace Technology Inc (RXT) expanded its relationship with a large UK bank to modernize its Edge infrastructure, showcasing its ability to secure strategic engagements.
- The company launched Rackspace OpenStack business, a new open-source dedicated solution, enhancing its product offerings and catering to organizations with mission-critical workloads.
- Total company GAAP revenue was down 3% year over year, indicating challenges in maintaining growth momentum.
- Private Cloud revenue decreased 4% year over year due to customers rolling off older generation offerings.
- Non-GAAP gross profit margin was slightly down year over year, driven by lower cost absorption in Private Cloud.
- Free cash flow was negative $12 million for the quarter, highlighting cash flow management challenges.
- Public Cloud revenue declined 2% year over year due to expected declines in lower margin infrastructure resale.
Good day and thank you for standing by. Welcome to the Rackspace second-quarter 2025 earnings conference call. (Operator Instructions) Please be advised of today's conference is being recorded.
I'd now like to hear the conference over to Sagar Hebbar, Head of Investor Relations. Please go ahead.
Thank you and welcome to Rackspace Technologies second-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 certainties is included in our SEC filings. Rackspace Technology assumes no obligation to update the information presented on the call, except as required by law.
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