Core Insights - Rackspace Technology reported second quarter 2025 results with revenue of $666 million, a decrease of 3% year-over-year from $685 million in Q2 2024 [2][6] - Private Cloud revenue was $250 million, down 4% from $260 million in Q2 2024, while Public Cloud revenue was $417 million, down 2% from $425 million in Q2 2024 [2][3] - The company achieved a 34% increase in Non-GAAP Operating Profit, reaching $27 million compared to $20 million in Q2 2024 [4][41] - Net loss for Q2 2025 was $(55) million, a significant decline from net income of $25 million in Q2 2024, resulting in a net loss per diluted share of $(0.23) compared to earnings of $0.11 in the prior year [3][4] Financial Performance - Total revenue for the first half of 2025 was $1.3317 billion, down 3.2% from $1.3757 billion in the same period of 2024 [20][30] - Operating cash flow for Q2 2025 was $8 million, with a trailing twelve-month cash flow from operating activities of $127 million [6][5] - Capital expenditures were $31 million in Q2 2025, slightly down from $33 million in Q2 2024 [5] Segment Analysis - Public Cloud segment revenue decreased by 2% year-over-year, while Private Cloud segment revenue saw a 4% decline [2][30] - Non-GAAP Operating Profit for the Public Cloud segment increased by 51.4%, while the Private Cloud segment experienced a 10.6% decrease [32][41] Guidance and Outlook - The company provided guidance for total revenue in Q3 2025 to be between $660 million and $674 million, with Private Cloud revenue expected between $246 million and $254 million, and Public Cloud revenue between $414 million and $420 million [7][6] - Non-GAAP Loss Per Share is projected to be between $(0.04) and $(0.06) for the upcoming quarter [7]

Core Insights - Rackspace Technology has launched the Rackspace Cloud Management Platform, enhancing its Managed Cloud offering with next-gen upgrades that streamline workload operations and optimize cloud infrastructure through AI-enabled tools [1][3] Group 1: Platform Features - The new platform provides full-stack observability, intelligent application optimization, and compliance with stringent Service Level Agreements (SLAs) [2] - It offers a flexible consumption-based model, lowering the barrier to entry for customers [2] - The platform integrates agile and DevOps methodologies to enhance operational efficiency, scalability, and resilience in hybrid cloud environments [2] Group 2: Customer Benefits - The upgrades provide customers with greater insight into their cloud environments, improved efficiency, and the ability to innovate without fear [3] - Customers can choose to use their own IT tooling solutions or leverage the new platform for operations, dashboards, and tracking [3] - The Rackspace Managed Cloud delivers enterprise-grade SLAs and fully outsourced cloud operations, helping customers maximize their cloud investments [3] Group 3: Company Expertise - Rackspace Technology has over 25 years of experience in integrating emerging technologies and managing cloud operations, which is central to its business model [4] - The company emphasizes the importance of providing clients with tools, flexibility, and power to leverage cloud technology for competitive advantage [4] Group 4: Operational Efficiency - The platform ensures proactive management of all aspects of the cloud environment, allowing businesses to scale seamlessly [5] - It offers a structured approach to service integration and management, ensuring efficient IT service delivery across various cloud environments [5] - Cost efficiency is achieved through optimized resource usage and automated controls to minimize unnecessary spending [5]

Core Insights - Rackspace Technology has received approval from the Science Based Targets Initiative (SBTi) for its emissions reduction goals, which include a commitment to reduce emissions by 50% by 2032 and 90% by 2045, aligning with the goal of limiting global warming to 1.5°C [1][2][3] Group 1: Sustainability Goals - The company aims to achieve net-zero carbon emissions by 2045, positioning itself ahead of many peers in the cloud services sector [1] - Rackspace currently powers approximately 80% of its global data centers with renewable energy and is working towards 100% through strategic partnerships [2] Group 2: Impact on Customers - Rackspace's Workload Aware Modernization program helps customers reduce their cloud carbon footprint by identifying wasted resources and transitioning to more sustainable cloud architectures [3] - The company emphasizes that its commitment to aggressive sustainability goals not only minimizes its own environmental impact but also aids customers in achieving their sustainability objectives [3] Group 3: Industry Context - Global energy consumption from data centers is expected to more than double by 2030, driven largely by AI, leading to increased regulatory pressure for companies to disclose and reduce carbon emissions [2]

Core Viewpoint - Rackspace Technology will release its second quarter 2025 financial results on August 7, 2025, after market close, with a conference call scheduled for the same day to discuss the results [1]. Group 1: Financial Results Announcement - The financial results for the second quarter of 2025 will be announced after market close on August 7, 2025 [1]. - Amar Maletira, the CEO, and Mark Marino, the CFO, will host a conference call at 5:00 PM ET on the release day to discuss the financial results [1]. Group 2: Accessing the Conference Call - Interested parties can access the live webcast or replay through the company's Investor Relations website [2]. - Pre-registration is required to obtain a dial-in number, and registrants will receive a PIN for accessing the live call [2]. Group 3: Company Overview - Rackspace Technology is recognized as a leading end-to-end hybrid cloud and AI solutions provider [3]. - The company offers services to design, build, and operate cloud environments across all major technology platforms, regardless of the technology stack or deployment model [3]. - Rackspace Technology partners with customers throughout their cloud journey, assisting in application modernization, new product development, and the adoption of innovative technologies [3].

Core Insights - Rackspace Technology has launched the Foundry for AI by Rackspace (FAIR) Model Context Protocol (MCP) Enterprise Accelerator on the AWS Marketplace, enhancing access to AI-driven solutions for customers [1][3] - The FAIR MCP Enterprise Accelerator on Amazon Bedrock enables organizations to scale deployments with enterprise-grade infrastructure, achieving over 70% reduction in legacy application integration for AI agents [2][3] Company Overview - Rackspace Technology is recognized as a leading end-to-end hybrid cloud and AI solutions provider, capable of designing, building, and operating cloud environments across various technology platforms [5] - The FAIR initiative focuses on advancing business transformation and improving customer experience through the responsible use of AI technologies, identifying over 500 use cases across multiple industries [6] Product Features - The MCP Enterprise Accelerator offers pre-configured server templates, zero-trust architecture, end-to-end encryption, and seamless integration with Amazon Bedrock agents, facilitating rapid deployment and scaling of AI agents [3] - Advanced observability, monitoring, and compliance tools are included to ensure consistent performance and improved decision-making, leading to faster returns on AI investments [3] Market Impact - The availability of AI agents and tools in the AWS Marketplace streamlines the procurement process, reducing the time for vendor evaluations and negotiations, while maintaining visibility and control over licensing and payments [4]

Core Insights - Rackspace Technology has launched Rackspace OpenStack Business, a dedicated private cloud solution designed for mission-critical and regulated workloads, emphasizing improved performance, enhanced security, and operational support without infrastructure management burdens [1][2][4] Group 1: Product Features - Rackspace OpenStack Business is built for scalability, offering a cost-effective cloud solution focused on privacy, security, and control, addressing the demand for dedicated, secure OpenStack infrastructure [2][5] - The solution supports a wide range of use cases, particularly for performance-sensitive applications and regulated industries requiring single-tenant environments for compliance [3][4] - Key benefits include rapid deployment, dedicated performance, cost efficiency, enterprise-level support, and freedom from vendor lock-in through open-source and full API access [6][7] Group 2: Strategic Positioning - The launch builds on the success of Rackspace OpenStack Flex, introduced in 2024, which serves as a flexible private cloud alternative to hyperscalers, providing a stable foundation for steady-state workloads while enabling rapid scaling during peak demand [4][5] - The combination of Rackspace OpenStack Flex and OpenStack Business creates a powerful foundation for scalable hybrid cloud environments, addressing IT challenges such as cost control, data privacy, and performance consistency [5][6]

Core Insights - Rackspace Technology has formed a strategic alliance with Sema4.ai to enhance enterprise AI solutions, integrating Rackspace's Foundry for AI (FAIR™) services with Sema4.ai's SAFE AI Agent Platform [1][5] - The collaboration aims to bridge the gap between AI experimentation and full-scale enterprise adoption, addressing the current statistic that only 24% of enterprises have AI agents in production [2][3] Company Overview - Rackspace Technology is a leading provider of hybrid cloud and AI solutions, focusing on the secure and responsible use of AI technologies to drive business transformation and improve customer experience [6][7] - Sema4.ai positions itself as an innovator in enterprise AI agents, emphasizing the importance of these agents in revolutionizing knowledge work and operational efficiency [9][10] Partnership Benefits - The partnership allows businesses to design and deploy custom AI agents tailored to specific use cases, with seamless integration across various functions such as HR, finance, and customer support [3][4] - The SAFE platform from Sema4 enables the integration of advanced AI capabilities into existing enterprise environments, promoting resilience and interconnectivity among AI agents [5][9] Market Context - Rackspace's AI research report highlights a critical gap in AI adoption, indicating a strong market opportunity for solutions that facilitate the transition from experimentation to enterprise-wide deployment [2] - The collaboration is expected to empower businesses to operationalize AI at scale, moving beyond testing to effective deployment of AI agents [4][5]

Core Insights - The report highlights a significant gap between organizations that have adopted AI strategies and those that have not, with "AI Leaders" achieving better productivity and innovation outcomes [1][2][10] - AI investments are surging, with an average increase of nearly 250% from 2024 to 2025, indicating a strong commitment to AI across various sectors [4][5] AI Leadership and Adoption - Only 13% of surveyed organizations are classified as "AI Leaders," who have integrated AI into their business strategies, leading to substantial benefits [1][2] - AI Leaders report a 64% realization of benefits from AI, compared to 32% of other organizations, and are three times more likely to scale AI deployments [1][2] Investment Trends - The average business investment in AI rose from $2.5 million to $8.7 million, with 83% of respondents expecting further increases in AI investments over the next five years [4] - Organizations anticipate a 33% increase in the average number of AI projects in production by the end of 2025 [4] Strategic Value of AI - AI is increasingly viewed as a strategic asset rather than just a tool for optimization, with 90% of respondents identifying customer experience and productivity as primary use cases [6] - Customer experience is the most commonly tracked KPI for AI initiatives, surpassing revenue and profitability [6] Cybersecurity and AI - Cybersecurity is recognized as a top risk factor for AI adoption, but organizations are beginning to see AI as a means to enhance cybersecurity measures [7] - AI Leaders are more likely to embed security protocols into their AI applications to address cybersecurity challenges [7] Challenges in Scaling AI - Despite increased AI deployments, 68% of respondents find it challenging to scale AI technology effectively [8] - 71% agree that investing in infrastructure is essential for enabling the scalability and flexibility needed for AI initiatives [9] Competitive Advantage through AI - AI Leaders view AI as a fundamental competitive driver, with 87% recognizing its importance beyond automation [10] - Two-thirds of AI Leaders reported substantial benefits from AI in the past year, compared to one-third of other companies, indicating a widening competitive gap [10]

Core Insights - Rackspace Technology has been awarded two Global Alliances Partner of the Year Awards by Dell Technologies, recognizing its innovation leadership in EMEA and marketing excellence in the Americas [1][2] - The awards highlight the strong collaboration between Rackspace and Dell Technologies, focusing on solutions for private cloud, data modernization, and AI adoption [2][3] Company Overview - Rackspace Technology is a leading provider of end-to-end hybrid and AI solutions, capable of designing, building, and operating cloud environments across various technology platforms [4] - The company emphasizes a customer-first approach, partnering with clients throughout their cloud journey to modernize applications and adopt innovative technologies [4]

Core Insights - Rubrik and Rackspace Technology have launched the Rackspace Cyber Recovery Service, a managed service aimed at enhancing cyber resilience for enterprises operating in public cloud environments [1][2][3] - The service combines Rubrik's data protection and cyber recovery solutions with Rackspace's DevOps principles, enabling faster recovery from ransomware attacks through automated workflows and secure data restoration [1][4] Company Overview - Rubrik is a leading cyber resilience company focused on securing data across enterprise, cloud, and SaaS applications, utilizing Zero Trust Data Security to help organizations maintain business resilience against cyber threats [7] - Rackspace Technology specializes in end-to-end hybrid cloud and AI solutions, assisting customers in modernizing applications and managing cloud environments effectively [6] Service Features - The Rackspace Cyber Recovery Service employs Infrastructure as Code and platform engineering principles to facilitate the restoration of critical workloads across multi-cloud environments [4] - Key features include proactive protection through continuous anomaly detection, expert management of backup configurations, cloud management services, improved compliance with data retention policies, and advisory services for strategic implementation [5] Industry Context - The increasing complexity of cloud environments and the rise in cyber attacks necessitate a shift from traditional recovery methods to modern approaches that leverage cloud-native tools and automation [2][3] - A report from Rubrik Zero Labs indicates that 90% of global IT and security executives experienced cyber attacks in the past year, highlighting the urgent need for effective cyber resilience strategies [2]