Slide 1: Rackspace Technology 3rd Quarter 2021 Earnings Presentation
Rackspace Technology 3rd Quarter 2021 Earnings Presentation November 15, 2021 TM
Slide 2: Disclaimer
Disclaimer 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 histor
Slide 3: Kevin Jones and Amar Maletira
Kevin Jones Amar Maletira Chief Executive Officer President and Chief Financial Officer TM
Slide 4: Agenda
Agenda Summary results and RXT overview Kevin Jones Financial results Amar Maletira Q&A Session 4
Slide 5: Q3 2021 key messages
Q3 2021 key messages Continued Cloud • Rackspace Technology well-positioned as the pure play Cloud Solutions company. market growth Strong Q3 • Healthy growth across financial metrics Performance • Revenue, core revenue, Non-GAAP Operating profit and Non-GAAP EPS • Third straight quarter of strong c
Slide 6: Q3 2021 results at-a-glance
Q3 2021 results at-a-glance Revenue ($M) Core Revenue ($M) $763 $718 $744 $698 $716 $726 $664 $677 $682 +12% $626 +15% YoY YoY Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Non-GAAP EPS Non-GAAP Operating Profit ($M) $0.26 $0.24 $0.25 $132 $0.23 $117 $119 $119 $124
Slide 7: Accelerating cloud solutions with partnerships
Accelerating cloud solutions with partnerships • Rackspace Technology • Rackspace Technology • Rackspace Elastic • Rackspace Technology named Select Partner named Gold Tier Partner Engineering for Security made equity investment for Snowflake. for DataDog to customize, optimize, in Platform 9 in Apr
Slide 8: BFC Group Holdings migrates to multicloud
BFC Group Holdings migrates to multicloud Challenge BFC Group Holdings is a major fintech company based in the Kingdom of Bahrain, specializing in global money transfers, foreign currency exchange, wholesale currency and payment solutions. The company needed to enhance its on-premises application to
Slide 9: Arthrex reimagines patient experience post-surgery with Rackspace Technology on AWS
Arthrex reimagines patient experience post-surgery with Rackspace Technology on AWS Challenge Arthrex, a global medical device company, wanted to improve the post- surgery experience for patients by building a HIPAA-compliant digital communications portal. Surgeons would be able to upload reports, i
Slide 10: Rackspace ESG Report
Rackspace ESG Report Available on our website at www.rackspace.com/2021ESG Documents Rackspace Technology’s long- term commitment to its employees, customers, business partners, communities, and shareholders. 10
Slide 11: Agenda
Agenda Summary results and RXT overview Kevin Jones Financial results Amar Maletira Q&A Session 11
Slide 12: Q3 2021 Financial Highlights
Q3 2021 Financial Highlights ($M, except per share data) Total Revenue Core Revenue $763 $718 $682 $626 3Q20 3Q21 3Q20 3Q21 Non-GAAP Operating Profit Non-GAAP EPS $0.25 $124 $117 $0.19 Non-GAAP 17.2% 16.2% Operating Margin 3Q20 3Q21 3Q20 3Q21 Note: Refer to Appendix for more information on how we de
Slide 13: Land and Expand is Working
Land and Expand is Working Managed Public Cloud Cohorts Continue to Grow Double-digit cumulative bookings growth and 200-400 basis points of sold gross margin improvement for all 2020 Cohorts * Cohort represents 80% of the bookings value for managed public cloud in 1Q 2020 13
Slide 14: Multicloud Revenue Transition Continues in Q3 2021
Multicloud Revenue Transition Continues in Q3 2021 Growth Markets Exceed 70% of Multicloud Revenue MULTICLOUD SEGMENT REVENUE RACKSPACE REVENUE Rolling trailing twelve months ($M) Q3’21 Revenue mix and Y/Y growth High Growth Markets* Low Growth / Mature Markets* $2,382 OpenStack $2,299 Apps & (20%)
Slide 15: Cash Flow and Balance Sheet Metrics
Cash Flow and Balance Sheet Metrics Cash Provided To t a l Cash Cash by Operating Capital Capital & Cash Strong third quarter Activities Expenditures Expenditures Equivalents operating and free $102M $35M $21M $260M cash flow YTD operating cash flow $311 million CAPEX intensity in line with expec
Slide 16: Outlook
Outlook 4Q 2021 FY 2021 Revenue $766 - $776 million $2.998 - $3.008 million Core Revenue $724 - $732 million $2.815 - $2.823 million Non-GAAP Operating Profit $118 - $122 million $480 - $484 million Non-GAAP EPS $0.23 - $0.25 $0.95 - $0.97 Non-GAAP Other Income (Expense) ($51) – ($52) million ($205)
Slide 17: Agenda
Agenda Summary results and RXT overview Kevin Jones Financial results Amar Maletira Q&A Session 17
Slide 18: Appendix
Appendix rackspace technology.
Slide 19: Non-GAAP reconciliations
Non-GAAP reconciliations GROSS (In millions) Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 PROFIT Non-GAAP Gross Profit $255.5 $262.9 $249.9 $250.1 $250.3 Share-based compensation expense (4.5) (5.9) (4.9) (4.3) (4.0) Other compensation expense (1.5) (1.0) (1.3) (0.4) (0.4) Purchase accounting impact on e
Slide 20: Non-GAAP reconciliations
Non-GAAP reconciliations (In millions) Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Net loss $(101.2) $(63.8) $(64.0) $(36.6) $(34.8) Share-based compensation expense 40.2 17.7 17.2 20.4 19.1 Special bonuses and other compensation expense 5.0 18.4 4.0 3.0 2.1 Transaction-related adjustments, net 18.9 11.
Slide 21: Non-GAAP Earnings Per Share reconciliation
Non-GAAP Earnings Per Share reconciliation Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 (In millions, except per share amounts) $ (101.2) $ (63.8) $ (64.0) $ (36.6) $ (34.8) Net loss attributable to common stockholders $ 36.4 $ 53.6 $ 49.1 $ 50.9 $ 53.6 Non-GAAP Net Income 186.7 200.7 204.6 207.9 209.3 W
Slide 22: Definitions
Definitions We calculate Bookings for a given period as the annualized monthly value of our recurring customer contracts entered into during the period from (i) new customers and (ii) net upgrades by existing customers within the same workload, plus the actual (not annualized) estimated value of pro
Slide 23: rackspace technology
rackspace technology.