Rackspace Technology, Inc. · NASDAQ:RXT

Rackspace Technology — Q3 2022 Earnings Presentation

17 slides from Rackspace Technology's earnings presentation, Nov 9, 2022

  1. Slide 1: Rackspace Technology Q3 2022 Earnings Presentation

    Rackspace Technology Q3 2022 Earnings Presentation November 9, 2022

  2. Slide 2: Disclaimer

    Disclaimer Forward-Looking Statements Rackspace Technology has made statements in this presentation and other reports, filings, and other public w ritten and verbal announcements that are forw ard-looking and therefore subject to risks and uncertainties. All statements, other than statements of hist

  3. Slide 3: Q3'22 financial results

    Q3’22 financial results #039;s in millions Q3 2022 Y/Y % Q/Q % Total Revenue $788 3% 2% Core Revenue $751 5% 2% • Revenue and Core Revenue exceeded high end of guidance provided on Q2 earnings call in August Non-GAAP Gross Profit $212 (15%) (9%) Non-GAAP Gross Margin 26.9% (6 pts) (3 pts) • Core Revenu

  4. Slide 4: Q3'22 segment financials

    Q3’22 segment financials #039;s in millions Apps & Cross OpenStack Total Multicloud Platform Public Cloud Rackspace Revenue $650 $102 $36 $788 • Decline in Rackspace Non-GAAP Gross Profit Y/Y % 4% 9% (18%) 3% and Non-GAAP Gross Margin driven primarily by Q/Q % 3% 1% (6%) 2% Multicloud segment and OpenS

  5. Slide 5: Q3'22 revenue breakdown

    Q3’22 revenue breakdown #039;s in millions Revenue by Segment Revenue by Geography Apps & Cross EMEA Platform (1%) Y/Y 13% +9% Y/Y Americas $788M 20% +8% Y/Y CC Multicloud 82% $788M +3% Y/Y 75% +3% Y/Y +4% Y/Y +3% Y/Y +4% Y/Y CC +5% Y/Y CC 5% OpenStack (18%) Y/Y 5% APJ +24% Y/Y +25% Y/Y CC • Public clo

  6. Slide 6: Q3'22 cash flow & capital expenditures

    Q3’22 cash flow & capital expenditures Quarter ended September 30, 2022 Cash Provided by Operating Activities $71 million • Cash Provided by Operating Activities and Free Free Cash Flow $52 million Cash Flow were positive for the 7th consecutive quarter driven by our focus on working capital and Tot

  7. Slide 7: Debt structure highlights

    Debt structure highlights Debt & Related Maturities $3.4B – Total debt $3.4B, Net Debt $3.1B Term loan: L+2.75% Libor Floor $2.3B – No material debt maturities until 2028 – No significant Senior secured notes: 3.50% $550M debt covenants Senior notes: 5.375% $550M 2022 2023 2024 2025 2026 2027 2028 N

  8. Slide 8: Outlook

    Outlook Q4 2022 Guidance Total Revenue $772 - $782 million Core Revenue $738 - $746 million Non-GAAP Operating Profit $65 - $69 million Non-GAAP Earnings Per Share $0.04 - $0.06 Non-GAAP Other Income (Expense) ($51) – ($53) million Non-GAAP Tax Expense Rate 26% Non-GAAP Weighted Average Shares 211 –

  9. Slide 9: Appendix

    Appendix

  10. Slide 10: Non-GAAP Gross Profit Reconciliation

    Non-GAAP Gross Profit Reconciliation (In millions) Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 GAAP Gross Profit $231.7 $234.3 $226.0 $224.0 $207.1 Share-based compensation expense 4.0 3.5 2.8 3.4 2.8 Other compensation expense 0.4 0.6 0.8 0.4 0.4 Purchase accounting impact on expense 1.2 1.1 0.7 0.8 0.

  11. Slide 11: Non-GAAP Net Income Reconciliation

    Non-GAAP Net Income Reconciliation (In millions) Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Net loss $(34.8) $(82.9) $(38.5) $(40.6) $(511.7) Share-based compensation expense 19.1 18.7 17.0 23.1 19.4 Special bonuses and other compensation expense 2.1 2.7 3.4 2.4 2.4 Transaction-related adjustments, net

  12. Slide 12: Non-GAAP Operating Profit Reconciliation

    Non-GAAP Operating Profit Reconciliation (In millions) Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Income (loss) from operations $(2.9) $(26.7) $20.9 $4.0 $(476.7) Share-based compensation expense 19.1 18.7 17.0 23.1 19.4 Special bonuses and other compensation expense 2.1 2.7 3.4 2.4 2.4 Transaction-rel

  13. Slide 13: Adjusted EBITDA Reconciliation

    Adjusted EBITDA Reconciliation (In millions) Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Net loss $(34.8) $(82.9) $(38.5) $(40.6) $(511.7) Share-based compensation expense 19.1 18.7 17.0 23.1 19.4 Special bonuses and other compensation expense 2.1 2.7 3.4 2.4 2.4 Transaction-related adjustments, net 6.5

  14. Slide 14: Non-GAAP EPS Reconciliation

    Non-GAAP EPS Reconciliation (In millions) Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Net loss attributable to common stockholders $(34.8) $(82.9) $(38.5) $(40.6) $(511.7) Non-GAAP Net Income $53.6 $52.9 $45.9 $35.5 $20.0 Weighted average number of shares – Diluted 209.3 210.3 211.4 209.5 210.8 Effect o

  15. Slide 15: Free Cash Flow Reconciliation

    Free Cash Flow Reconciliation (In millions) Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Net cash provided by operating activities $102.3 $59.6 $64.5 $84.0 $70.7 Cash purchases of property, equipment and software (21.2) (21.2) (19.2) (27.2) (19.0) Free Cash Flow $81.1 $38.4 $45.3 $56.8 $51.7 15

  16. Slide 16: Definitions

    Definitions We calculate Bookings for a given period as the annualized monthly value of our recurring customer contracts entered into dur ing the period from (i) new customers and (ii) net upgrades by existing customers w ithin the same w orkload, plus the actual (not annualized) estimated value of

  17. Slide 17: rackspace technology

    rackspace technology:

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