Slides
Page 1
Rackspace Technology Q4 2025 Earnings Presentation February 26, 2026
Page 2
Disclaimer 2 Forward-Looking Statements Rackspace Technology has made statements in this presentation and other reports, filings, and other public written and verbal announcements that are forward-looking and therefore subject to risks and uncertainties. All statements, other than statements of historical fact, included in this presentation are, or could be, “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and are made in reliance on the safe harbor protections provided thereunder. These forward-looking statements relate to anticipated financial performance, including our financial outlook and expected future resu lts, management’s plans and objectives for future operations, business prospects, outcome of regulatory proceedings, market conditions, and other matters. Any forward-looking statement made in this presentation speaks only as of the date on which it is made. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise. Forward-looking statements can be identified by various words such as “expects,” “intends,” “will,” “anticipates,” “believes,” “confident,” “continue,” “propose,” “seeks,” “could,” “may,” “should,” “estimates,” “forecasts,” “might,” “goals,” “guidance,” “objectives,” “outlook,” “targets,” “planned,” “projects,” and similar expressions. These forward-looking statements are based on management’s current beliefs and assumptions and on information currently available to management. Rackspace Technology cautions that these statements are subject to risks and uncertainties, many of which are outside of our control, and could cause future events or results to be materially different from those stated or implied in this presentation, including among others, risk factors that are described in Rackspace Technology, Inc.’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and other filings with the Securities and Exchange Commission, including the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained therein. Non-GAAP Measures To provide investors with additional information in connection with our results as determined in accordance with generally accepted accounting principles in the United States (“GAAP”), we disclose Non-GAAP Gross Profit, Non-GAAP Operating Profit, Non-GAAP Net Income (Loss), Adjusted EBITDA, and Non-GAAP Earnings (Loss) Per Share as non-GAAP financial measures. These non-GAAP financial measures are not measures of financial performance in accordance with GAAP and may exclude items that are significant in understanding and assessing our financial results. Therefore, these measures should not be considered in isolation or as an alternative or superior to GAAP measures. You should be aware that our presentation of these measures may not be comparable to similarly-titled measures used by other companies. Reconciliations of each non-GAAP financial measure to the applicable most comparable GAAP measure can be found in the Appendix. We present these non-GAAP financial measures to provide investors with meaningful supplemental financial information, in addition to the financial information presented on a GAAP basis. Rackspace Technology management believes that excluding items such as the impacts from foreign currency rate fluctuations on our international business operations or certain costs, losses and gains that may not be indicative of, or are unrelated to, our core operating results, and that may vary in frequency or magnitude, enhances the comparability of our results and provides a better baseline for analyzing trends in our business. Rackspace Technology management believes the non-GAAP measures provided are also considered important measures by financial analysts covering Rackspace Technology as equity research analysts continue to publish estimates and research notes based on our non-GAAP commentary. Amounts on subsequent pages may not add due to rounding.
Page 3
Executive Summary 3 ▪ Q4 Outperformance — Exceeded guidance across most metrics, reflecting disciplined cost management and improved operating execution. ▪ Private Cloud Inflection — FY25 performance improved materially versus prior double-digit declines; business stabilizing with line-of-sight to return to growth in FY26. ▪ Public Cloud Mix Shift — Strategic exit of low-margin government contract and pivot toward higher-margin services, driving margin profile improvement and revenue quality. ▪ AI as Structural Growth Driver — Building a scalable platform engineering model and advancing strategic partnerships (e.g., Palantir) to position AI as a long-term growth vector. ▪ Forward Outlook — 2026 guidance centered on durable revenue growth, operating margin expansion, and sustained free cash flow generation to support balance sheet strength and equity value creation.
Page 4
Q4 2025 Financial Results 4 $'s in millions (except EPS) Q4 2025 Q/Q Y/Y Total Revenue $683 2% (0%) Non-GAAP Gross Profit $124 (7%) (12%) Non-GAAP Gross Margin 18.1% (1.8 pts) (2.5 pts) Non-GAAP Operating Profit $41 29% 5% Non-GAAP Operating Margin 6.0% 1.2 pts 0.3 pts Non-GAAP Loss per Share ($0.01) $0.04 $ 0.01 NOTES: 1. Refer to Appendix for reconciliation of Non -GAAP measures to most comparable GAAP measures, as well as detailed definition s of Non-GAAP metrics
Page 5
Q4 2025 Segment Financials 5 $'s in millions Q/Q % Y/Y % Total Rackspace Private Cloud Public Cloud Total Rackspace Private Cloud Public Cloud Total Rackspace Private Cloud Public Cloud Total Revenue $683 $241 $442 2% (4%) 5% (0%) (10%) 6% Non-GAAP Gross Profit $124 $86 $38 (7%) (10%) (2%) (12%) (20%) 11% Non-GAAP Gross Margin 18.1% 35.7% 8.5% (1.8 pts) (2.4 pts) (0.7 pts) (2.5 pts) (4.1 pts) 0.3 pts Segment Operating Profit $83 $63 $20 2% (7%) 44% (9%) (22%) 103% Segment Operating Margin 12.1% 26.1% 4.5% 0.0 pts (0.8 pts) 1.2 pts (1.1 pts) (3.9 pts) 2.1 pts Corporate Functions ($42) (15%) (19%) Non-GAAP Operating Profit $41 29% 5% Non-GAAP Operating Margin 6.0% 1.2 pts 0.3 pts NOTES: 1. Refer to Appendix for reconciliation of Non -GAAP measures to most comparable GAAP measures, as well as definitions for Seg ment Operating Profit and Corporate Functions
Page 6
Cash Flow & Capital Expenditures 6 NOTES: 1. Free cash flow is a Non-GAAP metric and is presented as cash flow from operations less cash paid for purchases of property , equipment and software. Refer to Appendix for a reconciliation of Free Cash Flow to the most comparable GAAP measure 2. LTM free cash flow yield calculated as LTM Free Cash Flow divided by Market Capitalization as of December 31 , 2025 3. Refer to Appendix for how we define capital intensity 4. Revolving Credit Facility balance reflects undrawn letters of credit ($24 million) which decreases our available commit ments $'s in millions Q4’25 2025 Cash Provided by Operating Activities $60 $151 Free Cash Flow $56 $91 LTM Free Cash Flow Yield 38% Total Capital Expenditures $48 $139 Total CAPEX Intensity 7% 5% Cash Capital Expenditures $4 $61 Cash CAPEX Intensity 1% 2% As of December 31, 2025 Cash & Cash Equivalents $106 Revolving Credit Facility $291 Total Liquidity $397
Page 7
FY26 Outlook 7 NOTES: 1. Refer to Appendix for more information on how we define Non -GAAP Tax Expense Rate and Non-GAAP Weighted Average Shares 2. Y/Y % growth is defined as guidance midpoint vs. 2025 full year results 3. Free cash flow is a Non-GAAP metric and is presented as cash flow from operations less cash paid for purchases of property, equi pment and software 4. We expect non-GAAP Other Income and Expense of $220M - $230M. This excludes the non-cash benefits from our March 2024 debt refin ancing transaction Full Year Guidance Y/Y % Total Revenue $2,600 - $2,700 million -1% Private Cloud Revenue $1,025 - $1,075 million 6% Public Cloud Revenue $1,575 - $1,625 million -6% Non-GAAP Operating Profit $160 - $170 million 31% Adjusted EBITDA $305 - $315 million 12% Non-GAAP Loss Per Share ($0.15) - ($0.20) Non-GAAP Other Income (Expense) ($220) - ($230) million Non-GAAP Tax Expense Rate 26% Non-GAAP Weighted Average Shares 250 - 260 million Free Cash Flow $90 - $110 million 10%
Page 8
Appendix
Page 9
FY 2025 Financial Results 9 NOTES: 1. Refer to Appendix for reconciliation of Non -GAAP measures to most comparable GAAP measures, as well as detailed definition s of Non-GAAP metrics FY 2025 Y/Y Total Revenue $2,686 (2%) Non-GAAP Gross Profit $521 (7%) Non-GAAP Gross Margin 19.4% (1.2 pts) Non-GAAP Operating Profit $126 19% Non-GAAP Operating Margin 4.7% 0.8 pts Non-GAAP Loss per Share ($0.18) $0.09 Adj. EBITDA $276 13% Adj. EBITDA Margin 10.3% 1.4 pts $'s in millions (except EPS)
Page 10
FY 2025 Segment Financials 10 $'s in millions Y/Y % FY’25 Total Rackspace Private Cloud Public Cloud Total Rackspace Private Cloud Public Cloud Total Revenue $2,686 $990 $1,696 (2%) (6%) 1% Non-GAAP Gross Profit $521 $365 $156 (7%) (10%) 1% Non-GAAP Gross Margin 19.4% 36.9% 9.2% (1.2 pts) (1.8 pts) 0.0 pts Segment Operating Profit $320 $252 $68 (5%) (14%) 53% Segment Operating Margin 11.9% 25.5% 4.0% (0.5 pts) (2.4 pts) 1.4 pts Corporate Functions ($194) (17%) Non-GAAP Operating Profit $126 19% Non-GAAP Operating Margin 4.7% 0.8 pts NOTES: 1. Refer to Appendix for reconciliation of Non-GAAP measures to most comparable GAAP measures, as well as definitions for Segment O perating Profit and Corporate Functions
Page 11
As of December 31st, Debt Maturity Overview 1 11 NOTES: 1. Quarterly principal payments of approximately $5.1 million on the Term Loans are not reflected in the maturity chart $'s in millions (1) Debt values are shown at principal value. (2) Under the terms of the security documents and intercreditor agreements dated March 12, 2024, any amounts received by the collateral agent or any other secured party in respect of the proceeds of collateral will be applied first to repay the holders of the FLFO New Money Term Loan and the Revolving Credit Facility (the “Super Priority Indebtedness”). The Super Priority Indebtedness will be repaid in full prior to any payment in respect of collateral to the holders of the FLSO Term Loan, the FLSO Secured Notes and any other indebtedness of the New Borrower and the Guarantors. (3) Following the debt refinancing transactions completed in March 2024, the Company subsidiaries that previously guaranteed the Legacy Term Loan and the Legacy Secured Notes no longer guarantee or pledge collateral to secure the Legacy Term Loan or the Legacy Secured Notes. FLSO Term Loan (2) FLSO Secured Notes (2) Senior Notes FLFO New Money Term Loan (2) Legacy Term Loan (3) Legacy Secured Notes (3) The Company has no corporate maturities prior to 2028. Facility Balance Maturity Rate Hedge FLFO New Money Term Loan $270 May-2028 1-mth SOFR + 625 bps + 0.114% Spread N/A FLSO/Legacy Term Loan $1,671 May-2028 (FLSO)/ Feb-2028 (L) 1-mth SOFR + 275 bps + 0.114% Spread $1,350M at 2.342% w/ 75 bps floor FLSO/Legacy Secured Notes $363 May-2028 (FLSO)/ Feb-2028 (L) 3.500% Fixed Rate N/A Senior Notes $125 Dec-2028 5.375% Fixed Rate N/A Revolving Credit Facility $60 May-2028 1-mth SOFR + 300 bps N/A Total Principal Balance $2,489 Unamortized debt issuance costs, debt premium, and debt discount $257 Total Debt $2,746 Revolving Credit Facility $44 M $319 M $60 M $61 M $2,489 $125 M $1,610 M $270 M
Page 12
Non-GAAP Gross Profit Reconciliation 12 (In millions) Q4 2024 Q1 2025 Q2 2025 Q3 2025 Q4 2025 2024 2025 GAAP Gross Profit $131.7 $126.9 $129.2 $129.9 $120.4 $533.4 $506.4 Share-based compensation expense 1.7 1.8 1.3 1.2 0.8 7.6 5.1 Purchase accounting impact on expense 0.3 0.2 0.2 0.2 0.2 1.8 0.8 Restructuring and transformation expenses 7.5 3.2 1.2 2.3 2.2 19.8 8.9 Total Adjustments $9.5 $5.2 $2.7 $3.7 $3.2 $29.2 $14.8 Non-GAAP Gross Profit $141.2 $132.1 $131.9 $133.6 $123.6 $562.6 $521.2
Page 13
Non-GAAP Net Loss Reconciliation 13 (In millions) Q4 2024 Q1 2025 Q2 2025 Q3 2025 Q4 2025 2024 2025 Net loss $(56.0) $(71.5) $(54.5) $(67.1) $(32.7) $(858.2) $(225.8) Share-based compensation expense 15.6 12.0 10.0 18.2 4.9 63.4 45.1 Transaction-related adjustments, net 0.8 1.5 0.4 0.2 0.4 5.2 2.5 Restructuring and transformation expenses 13.7 13.1 4.4 10.0 4.8 58.5 32.3 Hosted Exchange incident expenses, net of insurance proceeds (0.3) - - - - (1.4) - Impairment of goodwill - - - - - 714.9 - Impairment of assets, net - - - - - 20.0 - Net (gain) loss on divestiture and investments 0.1 0.1 (0.3) (0.1) - (0.1) (0.3) Gain on debt extinguishment, net of debt modification costs - - - - - (147.2) - Interest expense impact from the March 2024 Refinancing Transactions (22.3) (21.0) (21.1) (21.1) (19.8) (72.9) (83.0) Other adjustments 5.0 0.4 (1.5) (1.2) 0.2 1.2 (2.1) Amortization of intangible assets 38.1 37.4 37.6 37.5 34.4 154.1 146.9 Tax effect of non-GAAP adjustments 0.9 13.3 10.0 12.1 4.3 (1.0) 39.7 Non-GAAP Net Loss $(4.4) $(14.7) $(15.0) $(11.5) $(3.5) $(63.5) $(44.7)
Page 14
Non-GAAP Operating Profit Reconciliation 14 (In millions) Q4 2024 Q1 2025 Q2 2025 Q3 2025 Q4 2025 2024 2025 Loss from operations $(28.8) $(38.4) $(25.1) $(33.9) $(3.3) $(909.1) $(100.7) Share-based compensation expense 15.6 12.0 10.0 18.2 4.9 63.4 45.1 Transaction-related adjustments, net 0.8 1.5 0.4 0.2 0.4 5.2 2.5 Restructuring and transformation expenses 13.7 13.1 4.4 10.0 4.8 58.5 32.3 Hosted Exchange incident expenses, net of insurance proceeds (0.3) - - - - (1.4) - Impairment of goodwill - - - - - 714.9 - Impairment of assets, net - - - - - 20.0 - Amortization of intangible assets 38.1 37.4 37.6 37.5 34.4 154.1 146.9 Total Adjustments $67.9 $64.0 $52.4 $65.9 $44.5 $1,014.7 $226.8 Non-GAAP Operating Profit $39.1 $25.6 $27.3 $32.0 $41.2 $105.6 $126.1
Page 15
Adjusted EBITDA Reconciliation 15 (In millions) Q4 2024 Q1 2025 Q2 2025 Q3 2025 Q4 2025 2024 2025 Net loss $(56.0) $(71.5) $(54.5) $(67.1) $(32.7) $(858.2) $(225.8) Share-based compensation expense 15.6 12.0 10.0 18.2 4.9 63.4 45.1 Transaction-related adjustments, net 0.8 1.5 0.4 0.2 0.4 5.2 2.5 Restructuring and transformation expenses 13.7 13.1 4.4 10.0 4.8 58.5 32.3 Hosted Exchange incident expenses, net of insurance proceeds (0.3) - - - - (1.4) - Impairment of goodwill - - - - - 714.9 - Impairment of assets, net - - - - - 20.0 - Net (gain) loss on divestiture and investments 0.1 0.1 (0.3) (0.1) - (0.1) (0.3) Gain on debt extinguishment, net of debt modification costs - - - - - (147.2) - Other expense, net 9.9 5.4 3.8 4.0 5.5 21.7 18.7 Interest expense 17.9 19.4 21.3 21.2 20.8 98.0 82.7 Provision (benefit) for income taxes (0.7) 8.2 4.6 8.1 3.1 (23.3) 24.0 Depreciation and amortization 72.7 73.1 74.7 74.8 73.9 293.3 296.5 Adjusted EBITDA $73.7 $61.3 $64.4 $69.3 $80.7 $244.8 $275.7
Page 16
Non-GAAP Loss Per Share Reconciliation 16 (In millions) Q4 2024 Q1 2025 Q2 2025 Q3 2025 Q4 2025 2024 2025 Net loss attributable to common stockholders $(56.0) $(71.5) $(54.5) $(67.1) $(32.7) $(858.2) $(225.8) Non-GAAP Net Loss $(4.4) $(14.7) $(15.0) $(11.5) $(3.5) $(63.5) $(44.7) Weighted average number of shares – Diluted 228.1 231.9 238.0 240.4 244.2 224.8 238.7 Effect of dilutive securities 11.2 9.6 1.3 1.8 2.6 10.7 6.2 Non-GAAP weighted average number of shares – Diluted 239.3 241.5 239.3 242.2 246.8 235.5 244.9 Net loss per share – Diluted $(0.25) $(0.31) $(0.23) $(0.28) $(0.13) $(3.82) $(0.95) Per share impacts of adjustments to net loss 0.23 0.24 0.17 0.23 0.12 3.54 0.76 Per share impacts of shares after adjustments to net loss 0.00 0.01 0.00 0.00 0.00 0.01 0.01 Non-GAAP Loss per Share $(0.02) $(0.06) $(0.06) $(0.05) $(0.01) $(0.27) $(0.18)
Page 17
Free Cash Flow Reconciliation 17 (In millions) Q4 2024 Q1 2025 Q2 2025 Q3 2025 Q4 2025 2024 2025 Net cash provided by operating activities $54.3 $12.6 $8.4 $70.7 $59.7 $39.9 $151.4 Cash purchases of property, equipment and software (19.9) (8.3) (20.8) (28.0) (3.7) (111.1) (60.8) Free Cash Flow $34.4 $4.3 $(12.4) $42.7 $56.0 $(71.2) $90.6
Page 18
Definitions 18 Segment Operating Profit Segment revenue less expenses directly attributable to running the respective segments’ business. These expenses exclude centralized corporate function costs. Corporate Functions Costs that are not allocated to segments. These costs are related to centralized corporate functions that provide services to the segments in areas such as accounting, information technology, marketing, legal and human resources. Capital Intensity Capital intensity reflects capital expenditures divided by revenue for the same period. Non-GAAP Tax Expense Rate We utilize an estimated structural long-term non-GAAP tax rate in order to provide consistency across reporting periods, removing the effect of non-recurring tax adjustments, which include but are not limited to tax rate changes, U.S. tax reform, share-based compensation, audit conclusions and changes to valuation allowances. We used a structural non-GAAP tax rate of 26% for all periods which reflects the removal of the tax effect of non-GAAP pre-tax adjustments and non-recurring tax adjustments on a year-over-year basis. The non-GAAP tax rate could be subject to change for a variety of reasons, including the rapidly evolving global tax environment, significant changes in our geographic earnings mix including due to acquisition activity, or other changes to our strategy or business operations. We will re-evaluate our long-term non-GAAP tax rate as appropriate. We believe that making these adjustments facilitates a better evaluation of our current operating performance and comparisons to prior periods. Non-GAAP Weighted Average Shares Reflects impact of awards that would have been anti-dilutive to net loss per share, and therefore not included in the calculation, but would be dilutive to Non-GAAP EPS and are therefore included in the share count for purposes of this non-GAAP measure. Potential common share equivalents consist of shares issuable upon the exercise of stock options, vesting of restricted stock units (including performance-based restricted stock units) or purchases under the Employee Stock Purchase Plan (the "ESPP"), as well as contingent shares associated with our acquisition of Datapipe Parent, Inc. Certain of our potential common share equivalents are contingent on Apollo achieving pre-established performance targets based on a multiple of their invested capital ("MOIC"), which are included in the denominator for the entire period if such shares would be issuable as of the end of the reporting period assuming the end of the reporting period was the end of the contingency period.