Rackspace Technology Q1 revenue rises 2%, beats estimates

Rackspace Technology

07/05/2026 13:18

Overview

US hybrid cloud and AI provider's Q1 revenue rose 2% yr/yr, beating analyst expectations

Net income turned positive at $8 mln after a loss in prior year

Company signed MOU with AMD to develop governed enterprise AI infrastructure

Outlook

Rackspace Technology sees FY 2026 revenue between $2.6 bln and $2.7 bln

Company expects FY 2026 public cloud revenue of $1.575 bln to $1.625 bln

Rackspace Technology expects FY 2026 non-GAAP loss per share of ($0.15) to ($0.20)

Result Drivers

PUBLIC CLOUD GROWTH - Public Cloud revenue rose 7% yr/yr, offsetting Private Cloud declines

REGULATED ENTERPRISE AI FOCUS - Co said results reflect its strategy to serve regulated enterprises seeking governed AI infrastructure, per CEO Gajen Kandiah

PRIVATE CLOUD WEAKNESS - Private Cloud revenue fell 6% yr/yr, weighing on overall growth

Company press release: ID:nGNX30SmTt

Key Details

Metric
Beat/Miss
Actual
Consensus Estimate
Q1 Revenue
Beat
$678.10 mln
$660.83 mln (3 Analysts)
Q1 Adjusted EPS
Miss
-$0.06
-$0.04 (2 Analysts)
Q1 Net Income
$8.30 mln
Q1 Adjusted Operating Income
$31 mln
Q1 Capex
$35 mln
Q1 Gross Profit
$119.10 mln


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"

Wall Street's median 12-month price target for Rackspace Technology Inc is $2.00, about 11.9% below its May 6 closing price of $2.27

For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.

(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.)