Slide 1: Rackspace Technology Q3 2024 Earnings Presentation
Rackspace Technology Q3 2024 Earnings Presentation November 12, 2024
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: Q3 2024 Financial Results
Q3 2024 Financial Results #039;s in millions Q3 2024 Q/Q Y/Y Total Revenue $676 (1%) (8%) Non-GAAP Gross Profit $143 3% (12%) Non-GAAP Gross Margin 21.2% 1 pt (1 pt) Non-GAAP Operating Profit $34 50% (25%) Non-GAAP Operating Margin 5.1% 2 pts (1 pt) Non-GAAP Loss per Share ($0.04) $0.04 $ - Note: Refer
Slide 4: Q3 2024 Segment Financials
Q3 2024 Segment Financials #039;s in millions Q/Q % Y/Y % Total Private Public Total Private Public Total Private Public Rackspace Cloud Cloud Rackspace Cloud Cloud Rackspace Cloud Cloud Total Revenue $676 $258 $418 (1%) (1%) (2%) (8%) (14%) (3%) Non-GAAP Gross Profit $143 $99 $44 3% 2% 4% (12%) (13%)
Slide 5: Cash Flow & Capital Expenditures
Cash Flow & Capital Expenditures #039;s in millions Q3'24 LTM Cash Provided by Operating Activities $52 $58 Free Cash Flow $27 ($67) LTM Free Cash Flow Yield (12%) Total Capital Expenditures $31 $147 Total CAPEX Intensity 5% 5% Cash Capital Expenditures $25 $125 Cash CAPEX Intensity 4% 5% As of Septemb
Slide 6: As of September 30th, Debt Maturity Overview
As of September 30th, Debt Maturity Overview 1 #039;s in millions $2,454 M 274 M FLFO New Money Term Loan (2) Facility Balance Maturity Rate Hedge 1-mth SOFR + 625 bps + FLFO New Money Term Loan $274 May-2028 0.114% Spread N/A May-2028 (FLSO)/ 1-mth SOFR + 275 bps + $1,350M at 2.342% w/ FLSO/Legacy Ter
Slide 7: Outlook
Outlook Q4 2024 Guidance Total Revenue $668 - $680 million Private Cloud Revenue $258 - $264 million Public Cloud Revenue $410 - $416 million Non-GAAP Operating Profit $34 - $36 million Non-GAAP Loss Per Share ($0.03) - ($0.05) Non-GAAP Other Income (Expense) ($47) - ($51) million Non-GAAP Tax Expen
Slide 8: Appendix
Appendix rackspace technology.
Slide 9: Non-GAAP Gross Profit Reconciliation
Non-GAAP Gross Profit Reconciliation (In millions) Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 GAAP Gross Profit $152.0 $154.1 $132.8 $131.4 $137.5 Share-based compensation expense 2.0 1.7 1.9 2.0 2.0 Special bonuses and other compensation expense 1.2 0.7 0.9 1.0 0.7 Purchase accounting impact on expens
Slide 10: Non-GAAP Net Loss Reconciliation
Non-GAAP Net Loss Reconciliation (In millions) Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 Net income (loss) $(226.6) $28.0 $(640.6) $25.0 $(186.6) Share-based compensation expense 17.2 13.5 12.8 19.5 15.5 Special bonuses and other compensation expense 3.3 2.4 3.1 3.3 2.7 Transaction-related adjustments
Slide 11: Non-GAAP Operating Profit Reconciliation
Non-GAAP Operating Profit Reconciliation (In millions) Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 Loss from operations $(239.4) $(15.2) $(652.8) $(53.8) $(173.7) Share-based compensation expense 17.2 13.5 12.8 19.5 15.5 Special bonuses and other compensation expense 3.3 2.4 3.1 3.3 2.7 Transaction-rela
Slide 12: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation (In millions) Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 Net income (loss) $(226.6) $28.0 $(640.6) $25.0 $(186.6) Share-based compensation expense 17.2 13.5 12.8 19.5 15.5 Special bonuses and other compensation expense 3.3 2.4 3.1 3.3 2.7 Transaction-related adjustments,
Slide 13: Non-GAAP Loss Per Share Reconciliation
Non-GAAP Loss Per Share Reconciliation (In millions) Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 Net income (loss) attributable to common stockholders $(226.6) $28.0 $(640.6) $25.0 $(186.6) Non-GAAP Net Loss $(8.1) $(6.4) $(24.3) $(19.4) $(10.3) Weighted average number of shares – Diluted 216.0 219.6 21
Slide 14: Free Cash Flow Reconciliation
Free Cash Flow Reconciliation (In millions) Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 Net cash provided by (used in) operating activities $266.8 $72.2 $(90.3) $24.1 $51.8 Cash purchases of property, equipment and software (27.5) (33.9) (28.1) (38.6) (24.5) Free Cash Flow $239.3 $38.3 $(118.4) $(14.5)
Slide 15: Definitions
Definitions Segment Segment revenue less expenses directly attributable to running the respective segments’ business. These expenses exclude centralized corporate function costs. Operating Profit Corporate Costs that are not allocated to segments. These costs are related to centralized corporate fun
Slide 16: Rackspace Technology
rackspace technology.