Slide 1: Rackspace Technology Investor Presentation May 2021
Rackspace Technology Investor Presentation May 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 RXT Overview Kevin Jones Financial Overview Amar Maletira Concluding Remarks Kevin Jones 4
Slide 5: Rackspace Technology overview
Rackspace Technology Well positioned in the large, attractive and growing A leading end-to-end multicloud multicloud services market technology services company Winning differentiators, including proprietary automation technology, deep multicloud expertise, comprehensive partnership ecosystem and fa
Slide 6: Rackspace Technology transformed
Rackspace Technology transformed At LBO Today Competitor Partner Market positioning to public cloud to cloud ecosystem Managed hosting, A leader in end-to-end Core offerings and services expertise OpenStack public cloud multicloud solutions Revenue from segments with <10% 93% attractive growth dynam
Slide 7: The multicloud ecosystem is a large and growing market
The multicloud ecosystem is a large and growing market Businesses recognize the Leading to complexity and driving Creating a large benefits of multicloud strategies demand for multicloud services market opportunity % of enterprise customers seeking Managed services and cloud % of cloud users working
Slide 8: Our robust portfolio powers the future of innovation
Our robust portfolio powers the future of innovation Multicloud Applications Data Security Cloud strategy Cloud-optimized COTS apps Data engineering and strategy Data governance and security Cloud adoption and migration SaaS products Relational and next-gen DBs Security design and strategy Managed s
Slide 9: Our proprietary technology is at the center of our multicloud capabilities
Our proprietary technology is at the center of our multicloud capabilities Rackspace Fabric™ Automation 9 years Solution automation Reduced manual onboarding, of development provisioning, and admin tasks $1B+ Intelligent automation More than 75% of Multicloud workloads invested in Rackspace Technolo
Slide 10: Technology driven economics
Technology driven economics 2020 revenue per employee, $k per employee Rackspace Technology Software IT services $375 $367 $349 $345 $326 $315 $297 $289 $278 $213 $208 High $158 $142 $131 IT services median : $88k Recurring $88 $72 revenue $58 $53 $46 $46 Rackspace Adjusted EBITDA per employee: ~$10
Slide 11: Our people bring deep technical expertise across multicloud journeys
Our people bring the deep technical expertise necessary to deliver solutions across customers' multicloud journeys CERTIFICATIONS* Cloud certified • One of the leading AWS consulting 2,800+ professionals 2,300+ partners with 15 competencies Top tech talent • Expert partner Cloud-native application 1
Slide 12: Strategy to accelerate long-term growth
Strategy to accelerate long-term growth Strategic M&A Geographic expansion Sales execution Leveraging of Canada Technology partner network footprint Japan Increased sales force expansion investment and Middle East productivity LATAM Stronger enterprise Cloud-native app focus development and Europe m
Slide 13: 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 13
Slide 14: 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 15: Agenda
Agenda RXT Overview Kevin Jones Financial Overview Amar Maletira Concluding Remarks Kevin Jones 15
Slide 16: Financial model highlights
Scale Growth in Core segments Revenue visibility $2.7B 15% High Revenue Core revenue growth Recurring revenue Q1 2021 YoY Financial model highlights Strong Non-GAAP Robust bookings growth Margin profile Operating Profit 44% 17% $483M bookings growth Non-GAAP operating Non-GAAP operating profit profi
Slide 17: Financial Highlights
Financial Highlights ($M, except per share data) Total Revenue Core Revenue $2,707 $2,438 $2,478 $2,152 $653 $726 $589 $677 1 2019 2 2020 1Q20 1Q21 2019 1 2020 2 1Q20 1Q21 Non-GAAP Operating Profit Non-GAAP EPS $0.83 $473 $414 $0.38 $0.23 $109 $119 $0.16 1 2019 2 2020 1Q20 Q1 2020 1Q21 Q1 2021 1 201
Slide 18: Revenue Details
Revenue Details #039;s in millions RACKSPACE REVENUE MULTICLOUD SEGMENT REVENUE Q1’21 Revenue mix and Y/Y growth Rolling trailing twelve months ($M) Low Growth / Mature Markets* High Growth Markets* $2,213 $2,142 $2,049 $1,957 $1,888 OpenStack $1,803 $1,803 $1,796 $1,799 $1,833 Apps & (23%) Y/Y Cross P
Slide 19: Land and Expand in Action
Land and Expand in Action Q1 2020 Managed Public Cloud Cohort Cumulative Bookings Sold Margin % Q1 ’21 vs. Q1 ’20 +230 basis points of margin improvement +21% cumulative bookings growth 1Q20 2Q20 3Q20 4Q20 1Q21 * Cohort represents 80% of the bookings value for managed public cloud in 1Q 2020 19
Slide 20: Q1 2021 Cash Flow And Balance Sheet Metrics
Q1 2021 Cash Flow And Balance Sheet Metrics Strong first quarter operating and free Cash Provided To t a l Cash Cash cash flow driven by by Operating Capital Capital & Cash Activities Expenditures Expenditures Equivalents improved working capital management $103M $59M $37M $198M CAPEX intensity in l
Slide 21: Agenda
Agenda RXT Overview Kevin Jones Financial Overview 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: Question and Answer Session
Question and Answer Session 23
Slide 24: Appendix
Appendix rackspace technology.
Slide 25: Non-GAAP reconciliations
Non-GAAP reconciliations LTM Q1 GROSS (in millions) Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 2019 2020 2021 PROFIT Non-GAAP Gross Profit $256.2 $251.4 $255.5 $262.9 $249.9 $1,019.7 $1,039.4 $1,026.0 Share-based compensation expense (1.8) (2.3) (4.5) (5.9) (4.9) (17.6) (5.7) (14.5) Other compensation expense (1
Slide 26: Non-GAAP reconciliations
Non-GAAP reconciliations LTM Q1 (In millions) Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 2019 2020 2021 Net loss $(48.2) $(32.6) $(101.2) $(63.8) $(64.0) $(261.6) $(102.3) $(245.8) Share-based compensation expense 7.5 9.1 40.2 17.7 17.2 84.2 30.2 74.5 Cash settled equity, special bonuses and other 8.3
Slide 27: 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 2019 2020 Net loss attributable to common stockholders $ (48.2) $ (32.6) $ (101.2) $ (63.8) $ (64.0) $ (102.3) $ (245.8) Non-GAAP Net Income $ 27.0 $ 34.3 $ 36.4 $ 53.6 $ 49.1 $
Slide 28: 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 29: rackspace technology
rackspace technology.