Overview

* Rackspace ( RXT ) Q2 revenue down 3% yr/yr, beats analyst expectations, per LSEG data

* Adjusted EPS for Q2 misses analyst estimates

* Non-GAAP operating profit up 34% yr/yr

Outlook

* Rackspace expects Q3 2025 revenue of $660 mln to $674 mln

* Company anticipates Q3 2025 private cloud revenue of $246 mln to $254 mln

* Rackspace forecasts Q3 2025 public cloud revenue at $414 mln to $420 mln

* Non-GAAP operating profit for Q3 2025 seen at $30 mln to $32 mln

Result Drivers

* REVENUE DECLINE - Q2 revenue fell 3% year-over-year to $666 mln, with private cloud revenue down 4% and public cloud revenue down 2%, as per the company

* BOOKINGS GROWTH - Bookings increased by 16% year-over-year, reflecting strong go-to-market execution across business units, according to CEO Amar Maletira

* OPERATING PROFIT INCREASE - Non-GAAP operating profit rose 34% year-over-year to $27 mln, attributed to improved go-to-market execution, per CEO Amar Maletira

Key Details

Metric Beat/Mis Actual Consensu

s s

Estimate

Q2 Beat $666.30 $659.40

Revenue mln mln (4

Analysts

)

Q2 Miss -$0.06 -$0.05

Adjusted (4

EPS Analysts

)

Q2 Net -$54.50

Income mln

Q2 Miss $27 mln $27.20

Adjusted mln (3

Operatin Analysts

g Income )

Q2 Capex $31 mln

Q2 Gross $129.20

Profit mln

Analyst Coverage

* The current average analyst rating on the shares is "hold" and the breakdown of recommendations is no "strong buy" or "buy", 4 "hold" and 1 "sell" or "strong sell"

* The average consensus recommendation for the it services & consulting peer group is "buy."

* Wall Street's median 12-month price target for Rackspace Technology Inc ( RXT ) is $1.68, about 27.2% above its August 6 closing price of $1.22

Press Release:

(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)