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RXT (Rackspace Technology) ROIC % : -4.34% (As of Dec. 2024)


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What is Rackspace Technology ROIC %?

ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. Rackspace Technology's annualized return on invested capital (ROIC %) for the quarter that ended in Dec. 2024 was -4.34%.

As of today (2025-03-14), Rackspace Technology's WACC % is 4.95%. Rackspace Technology's ROIC % is -5.51% (calculated using TTM income statement data). Rackspace Technology earns returns that do not match up to its cost of capital. It will destroy value as it grows.


Rackspace Technology ROIC % Historical Data

The historical data trend for Rackspace Technology's ROIC % can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Rackspace Technology ROIC % Chart

Rackspace Technology Annual Data
Trend Dec17 Dec18 Dec19 Dec20 Dec21 Dec22 Dec23 Dec24
ROIC %
Get a 7-Day Free Trial 0.32 0.44 0.03 -3.21 -5.24

Rackspace Technology Quarterly Data
Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22 Dec22 Mar23 Jun23 Sep23 Dec23 Mar24 Jun24 Sep24 Dec24
ROIC % Get a 7-Day Free Trial Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only -0.90 -7.00 35.90 -4.63 -4.34

Competitive Comparison of Rackspace Technology's ROIC %

For the Software - Infrastructure subindustry, Rackspace Technology's ROIC %, along with its competitors' market caps and ROIC % data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.


Rackspace Technology's ROIC % Distribution in the Software Industry

For the Software industry and Technology sector, Rackspace Technology's ROIC % distribution charts can be found below:

* The bar in red indicates where Rackspace Technology's ROIC % falls into.



Rackspace Technology ROIC % Calculation

Rackspace Technology's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Dec. 2024 is calculated as:

ROIC % (A: Dec. 2024 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (A: Dec. 2023 ) + Invested Capital (A: Dec. 2024 ))/ count )
=-174.2 * ( 1 - 2.14% )/( (3704.4 + 2801.8)/ 2 )
=-170.47212/3253.1
=-5.24 %

where

Rackspace Technology's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Dec. 2024 is calculated as:

ROIC % (Q: Dec. 2024 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (Q: Sep. 2024 ) + Invested Capital (Q: Dec. 2024 ))/ count )
=-115.2 * ( 1 - -6.53% )/( (2850 + 2801.8)/ 2 )
=-122.72256/2825.9
=-4.34 %

where

Note: The Operating Income data used here is four times the quarterly (Dec. 2024) data.

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.


Rackspace Technology  (NAS:RXT) ROIC % Explanation

ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. The reason book values of debt and equity are used is because the book values are the capital the company received when issuing the debt or receiving the equity investments.

There are four key components to this definition. The first is the use of operating income or EBIT rather than net income in the numerator. The second is the tax adjustment to this operating income or EBIT, computed as a hypothetical tax based on an effective or marginal tax rate. The third is the use of book values for invested capital, rather than market values. The final is the timing difference; the capital invested is from the end of the prior year whereas the operating income or EBIT is the current year's number.

Why is ROIC % important?

Because it costs money to raise capital. A firm that generates higher returns on investment than it costs the company to raise the capital needed for that investment is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases, whereas a firm that earns returns that do not match up to its cost of capital will destroy value as it grows.

As of today, Rackspace Technology's WACC % is 4.95%. Rackspace Technology's ROIC % is -5.51% (calculated using TTM income statement data).


Be Aware

Like ROE % and ROA %, ROIC % is calculated with only 12 months of data. Fluctuations in the company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.


Rackspace Technology ROIC % Related Terms

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Rackspace Technology Business Description

Traded in Other Exchanges
N/A
Address
19122 US Highway 281 North, Suite 128, San Antonio, TX, USA, 78258
Rackspace Technology Inc is an end-to-end, hybrid, multi cloud technology services company. It designs, builds and operates its customers' cloud environments across all technology platforms, irrespective of technology stack or deployment model. The company's solutions include Application Services; Data; Colocation; Cloud; Managed Hosting; Professional Services; and Security & Compliance. It operates in segments namely, Private Cloud, and Public Cloud. It generates revenue through the sale of consumption-based contracts for its service offerings and from the sale of professional services related to designing and building custom solutions.
Executives
Mark A. Marino other: Vice President & CAO 1 FANATICAL PLACE, CITY OF WINDCREST, SAN ANTONIO TX 78218
Anthony C. Roberts director 1 FANATICAL PLACE, SAN ANTONIO TX 78218
Brian Lillie officer: EVP, President Private Cloud 1485 BROOKMILL ROAD, LOS ALTOS CA 94024
Kellie Teal-guess officer: Chief Human Resources Officer 1 FANATICAL PLACE, C/O RACKSPACE TECHNOLOGY, INC., SAN ANTONIO TX 78218
Amar Maletira officer: President & CFO C/O VIAVI SOLUTIONS INC., 430 NORTH MCCARTHY BOULEVARD, MILPITAS CA 95035
Srini Koushik officer: Chief Technology Officer 1 FANATICAL PLACE, CITY OF WINDCREST, SAN ANTONIO TX 78218
Dharmendra Kumar Sinha officer: EVP, President, Public Cloud C/O COGNIZANT TECHNOLOGY SOLUTIONS CORP, 300 FRANK W. BURR BLVD., STE. 36, 6 FL., TEANECK NJ 07666
Casey L. Shilling officer: SVP - Chief Marketing Officer 1 FANATICAL PLACE, CITY OF WINDCREST, SAN ANTONIO TX 78218
Rackspace Technology, Inc. director 1 FANATICAL PLACE, CITY OF WINDCREST, SAN ANTONIO TX 78218
Anthony Scott director 25501 WEST VALLEY PARKWAY, OLATHE KS 66061
Betsy S Atkins director
Naushaza Molu officer: EVP, Chief Financial Officer 1 FANATICAL PLACE, SAN ANTONIO TX 78218
Shashank Samant director 6600 NORTH MILITARY TRAIL, LEGAL DEPARTMENT, BOCA RATON FL 33496
Gregory S. Hrncir officer: SVP - Chief Operations Officer 1 FANATICAL PLACE, CITY OF WINDCREST, SAN ANTONIO TX 78218
Timothy Campos director C/O JDS UNIPHASE CORPORATION, 430 N MCCARTHY BOULEVARD, MILPITAS CA 95035