Brief: Rackspace Technology Q2 Adjusted EPS USD -0.06 Vs. IBES Estimate USD -0.05

Rackspace Technology

07/08/2025 21:05

Overview

Rackspace 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/Miss
Actual
Consensus Estimate
Q2 Revenue
Beat
$666.30 mln
$659.40 mln (4 Analysts)
Q2 Adjusted EPS
Miss
-$0.06
-$0.05 (4 Analysts)
Q2 Net Income
-$54.50 mln
Q2 Adjusted Operating Income
Miss
$27 mln
$27.20 mln (3 Analysts)
Q2 Capex
$31 mln
Q2 Gross Profit
$129.20 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 is $1.68, about 27.2% above its August 6 closing price of $1.22

Press Release: ID:nGNXnjmD2

(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.)