Slide 1: Rackspace Technology 1st Quarter 2021 Earnings Presentation
Rackspace Technology 1st Quarter 2021 Earnings Presentation May 10, 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 Concluding remarks Kevin Jones 4
Slide 5: Q1 2021 key messages
Q1 2021 key messages Exceeded Q1 • First quarter revenue, Non-GAAP Operating Profit and Non-GAAP EPS expectations exceeded guidance set in February 2021 Revenue • Tectonic shift to multicloud expected to continue to drive double-digit growth revenue growth in Q2 and FY 2021 New product • Recent prod
Slide 6: Q1 2021 results at-a-glance
Q1 2021 results at-a-glance Revenue ($M) Core Revenue ($M) $726 $664 $677 $716 $626 $682 $599 $589 $653 $657 +11% +15% YoY YoY Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Non-GAAP Operating Profit ($M) Non-GAAP EPS $0.26 $132 $0.23 $115 $117 $119 $0.21 $109 $0.19
Slide 7: Rackspace Technology: the un-GSI
Rackspace Technology: the un-GSI Global Systems NON-GSI un-GSI Integrators (GSIs) Cloud focus Breadth & depth Disruptive technology Size & scale Flexible delivery model Agility & speed 7
Slide 8: Launched Innovative New Service Offerings for the Multicloud Market
Launched Innovative New Service Offerings for the Multicloud Market Rackspace Elastic Engineering “(Rackspace Elastic Engineering) definitely fits with the trend that + customers are seeking to engage for more rapid results and with Rackspace Services for greater flexibility than afforded by traditi
Slide 9: Elastic Engineering
R A C K S PA C E ELASTIC ENGINEERING Reinventing managed services for cloud AU T O M AT I O N O P T I M I Z AT I O N AR C H I T E C T U R E R E L I AB I L I T Y Cloud Lead Cloud Engagement Manager Architect Architect Rackspace M I G R AT I O N S Cloud Engineers Elastic Engineering Pod Sr. Cloud Engi
Slide 10: Rackspace Services for VMware Cloud: The best place to run
Rackspace Services for VMware Cloud Multi-Tenancy Consumption Self Service Rapid Automation Pricing Deployment Application Optimize C o n t r o l Yo u r Resources Out of the Box Driven Choices Costs Environment On Demand Automation The best place to run 10
Slide 11: Porsche fuels its Multicloud strategy with Rackspace Technology
Porsche fuels its Multicloud strategy with Rackspace Technology. Challenge Digitization and automation in the automotive industry has led to many innovative new technologies. As a result, navigating the various cloud environments and governing the iconic sports car brand’s IT infrastructure was a hi
Slide 12: Autodesk revolutionizes water treatment operations with SaaS transformation
Autodesk revolutionizes water treatment operations with SaaS transformation Challenge Primarily existing as a desktop product business with on- premises client servers for most of its history, Autodesk’s Innovyze subsidiary wanted to address the real-time operational needs of utilities by unifying t
Slide 13: Agenda
Agenda Summary results and RXT overview Kevin Jones Financial results Amar Maletira Concluding remarks Kevin Jones 13
Slide 14: Q1 2021 Financial Highlights
Q1 2021 Financial Highlights ($M, except per share data) Total Revenue $726 Core Revenue $677 $653 $589 1Q20 1Q21 1Q20 1Q21 Non-GAAP Operating Profit Non-GAAP EPS $0.23 $119 $109 $0.16 Non-GAAP Operating 16.6% 16.4% Margin Q1 2020 Q1 2021 1Q20 1Q21 Note: Refer to Appendix for more information on how
Slide 15: Q1 2021 Revenue Detail
Q1 2021 Revenue Detail Revenue by Segment Revenue by Geography Multicloud +14% YoY 80% Apps and 75% 21% Americas EMEA Cross Platform 13% +8% YoY +19% YoY +11% YoY 7% 4% APJ OpenStack +28% YoY -23% YoY Significant growth in Multicloud, applications and data services Broad based growth across all geog
Slide 16: Multicloud Segment Trend
Multicloud Segment Trend Low Growth / Mature Markets* High Growth Markets* Multicloud Revenue Multicloud Segment Revenue Rolling Trailing Twelve Months ($M) $2,213 $2,142 $2,049 $1,957 $1,833 $1,888 $1,803 $1,803 $1,796 $1,799 High Growth Markets ~ 65% to 70% of Multicloud Revenue Growth 30% to
Slide 17: Land and Expand in Action
Land and Expand in Action Cumulative Bookings and Sold Gross Margin % Cumulative Bookings and Sold Gross Margin % Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 1Q20 2Q20 3Q20 4Q20 1Q21 Public Cloud Infrastructure Services Sold Gross Margin % Public Cloud Infrastructure Services Sold Gr
Slide 18: Q1 2020 Managed Public Cloud Cohort
Q1 2020 Managed Public Cloud Cohort Cumulative Bookings Sold Gross Margin % Q1 ’21 vs. Q1 ’20 +230 basis points of sold gross margin improvement +21% cumulative bookings growth 1Q20 2Q20 3Q20 4Q20 1Q21 * Managed public cloud includes of solutions that include services, infrastructure, and software s
Slide 19: Cash Flow and Balance Sheet Metrics
Cash Flow and Balance Sheet Metrics Strong first quarter Cash Provided To t a l Cash Cash operating and free by Operating Capital Capital & Cash Activities Expenditures Expenditures Equivalents cash flow driven by improved working $103M $59M $37M $198M capital management. CAPEX intensity in line wit
Slide 20: Outlook
Outlook 2Q21 FY 2021 Revenue $735 - $745 million $2.9 - $3.1 billion Core Revenue $690 - $698 million $2.7 - $2.9 billion Non-GAAP Operating Profit $113 - $117 million $500 - $530 million Non-GAAP EPS $0.21 - $0.23 $0.95 - $1.05 Non-GAAP Other Income (Expense) ($52) – ($53) million ($212) – ($222) m
Slide 21: Agenda
Agenda Summary results and RXT overview Kevin Jones Financial results Amar Maletira Concluding remarks Kevin Jones 21
Slide 22: Rackspace Technology investment thesis
Rackspace Well positioned in the large, attractive and growing Technology multicloud services market investment Winning differentiators, including proprietary automation thesis technology, deep multicloud expertise, comprehensive partnership ecosystem and fanatical customer experience Demonstrated t
Slide 23: Appendix
Appendix rackspace technology.
Slide 24: Non-GAAP reconciliations
Non-GAAP reconciliations GROSS (in millions) Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 PROFIT Non-GAAP Gross Profit $256.2 $251.4 $255.5 $262.9 $249.9 Share-based compensation expense (1.8) (2.3) (4.5) (5.9) (4.9) Other compensation expense (1.9) (1.5) (1.5) (1.0) (1.3) Purchase accounting impact on expense (1.
Slide 25: Non-GAAP reconciliations
Non-GAAP reconciliations (In millions) Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Net loss $(48.2) $(32.6) $(101.2) $(63.8) $(64.0) Share-based compensation expense 7.5 9.1 40.2 17.7 17.2 Special bonuses and other compensation expense 8.3 5.8 5.0 18.4 4.0 Transaction-related adjustments, net 8.4 8.1 18
Slide 26: Non-GAAP Earnings Per Share reconciliation
Non-GAAP Earnings Per Share reconciliation (In millions, except per share amounts) Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Net loss attributable to common stockholders $ (48.2) $ (32.6) $ (101.2) $ (63.8) $ (64.0) Non-GAAP Net Income $ 27.0 $ 34.3 $ 36.4 $ 53.6 $ 49.1 Weighted average number of shar
Slide 27: 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 28: Rackspace Technology
rackspace technology.