Rackspace Q4 revenue beats, public cloud up 6%

Overview

• Hybrid cloud solutions firm's Q4 revenue beat analyst expectations despite a slight decline

• Adjusted EPS for Q4 beat analyst expectations

• Public Cloud revenue grew 6% yr/yr in Q4

Outlook

• Rackspace expects FY 2026 revenue between $2,600 mln and $2,700 mln

• Company anticipates FY 2026 private cloud revenue of $1,025 mln to $1,075 mln

• Rackspace forecasts FY 2026 public cloud revenue of $1,575 mln to $1,625 mln

Result Drivers

• PUBLIC CLOUD GROWTH - Public Cloud revenue increased by 6% yr/yr, driven by a shift towards higher-value enterprise engagements

• PRIVATE CLOUD DECLINE - Private Cloud revenue decreased by 10% yr/yr, reflecting ongoing challenges in this segment

• STRATEGIC SHIFT - CEO highlighted a strategic focus on enterprise AI and partnerships as a foundation for future growth

Company press release: ID:nGNX1KmXRr

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is no "strong buy" or "buy", 3 "hold" and no "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 is $1.40, about 3.7% above its February 25 closing price of $1.35

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