"Revenue came in at $683 million, a modest 0.4% drop year-over-year but above guidance and consensus estimates of around $675 million. For the full year, revenue totaled $2.69 billion, down 2% from 2024. Non-GAAP operating profit reached $41 million, exceeding the high end of guidance, with margins expanding 120 basis points sequentially."
"Net losses also narrowed meaningfully, with Q4 at approximately $33 million and adjusted losses at $0.01 per share, far better than the expected $0.04 loss. Cash flow from operations was $60 million, bolstering Rackspace's year-end liquidity to $397 million."
"Management guided 2026 revenue to $2.6 billion to $2.7 billion (flat to a slight decline at midpoint), with non-GAAP operating profit targeted at $160 million to $170 million (up 31%) and private cloud revenue growth of 6% - the first sustained increase in years - anchored by AI-driven enterprise deals."
Rackspace Technology demonstrated incremental progress in its turnaround with Q4 revenue of $683 million, slightly above guidance despite a modest 0.4% year-over-year decline. Non-GAAP operating profit reached $41 million with expanding margins, while net losses narrowed significantly to approximately $33 million. The private cloud segment, a strategic focus, declined 10% due to timing issues, though public cloud outperformed expectations. Operating cash flow strengthened at $60 million, bringing year-end liquidity to $397 million. Management projects 2026 revenue between $2.6-$2.7 billion with non-GAAP operating profit increasing 31% to $160-$170 million, anchored by AI-driven enterprise deals and anticipated private cloud growth of 6%.
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