Rackspace Technology Reports Second Quarter 2024 Financial Results
Intellectia.AI Updated: 2024-08-09
Rackspace Technology Reports Second Quarter 2024 Financial Results
SAN ANTONIO, Aug. 8, 2024 (GLOBE NEWSWIRE) -- Rackspace Technology, Inc. (NASDAQ: RXT), a leading end-to-end, hybrid, multicloud, and AI solutions company, today announced its financial results for the second quarter ended June 30, 2024.
Key Financial Metrics
| Metric | Q2 2024 | Q2 2023 | YoY Change | Consensus Estimates (Q2 2024) |
|---|---|---|---|---|
| Revenue | $685M | $746M | -8% | $673.57M |
| Net Income | $25M | $(27)M | n/a | n/a |
| Earnings Per Share (EPS) | $0.11 | $(0.13) | n/a | $-0.11 |
| Non-GAAP Operating Profit | $23M | $39M | -41% | n/a |
| Non-GAAP Loss Per Share | $(0.08) | $(0.06) | -33% | n/a |
Interpretation: Rackspace Technology reported a revenue of $685 million for Q2 2024, surpassing the consensus estimate of $673.57 million yet reflecting an 8% decline year-over-year. The company achieved a net income of $25 million, a stark improvement from a net loss of $27 million in Q2 2023. EPS stood at $0.11, in contrast to the consensus estimate of -$0.11, showcasing improved financial health.
Revenue Performance by Segment
| Segment | Q2 2024 | Q2 2023 | YoY Change |
|---|---|---|---|
| Private Cloud Revenue | $260M | $313M | -17% |
| Public Cloud Revenue | $425M | $434M | -2% |
Interpretation: Private Cloud revenue witnessed a 17% decline year-over-year to $260 million, while Public Cloud revenue slightly decreased by 2% year-over-year to $425 million. Both segments experienced revenue contractions, indicating potential challenges in maintaining client engagements or pricing strategies in a competitive market.
Operational Data
| Metric | Q2 2024 | Q2 2023 | Trailing-Twelve-Month Basis |
|---|---|---|---|
| Cash Flow From Operating Activities | $24M | n/a | $273M |
| Capital Expenditures | $33M | $45M | n/a |
| Cash and Cash Equivalents | $190M | n/a | n/a |
| New Revolving Credit Facility | $0M | n/a | $375M (undrawn commitments) |
Comments from Company Officers
Amar Maletira, Chief Executive Officer, stated, "Our second-quarter financial results once again exceeded guidance for revenue, operating profit, and EPS. We are focused on strengthening our pipeline in both Private and Public Cloud, stabilizing and growing revenue and profit while continuing to drive cost efficiencies. We are pleased with the steady progress on all fronts."
Dividends and Share Repurchase Program
No details on dividends or share repurchase program were mentioned in the earnings release.
Forward Guidance
Rackspace Technology is providing guidance for non-GAAP operating profit, non-GAAP loss per share, non-GAAP other income (expense), and non-GAAP tax expense rate but did not reconcile these to the corresponding GAAP measures due to the potential variability of certain items.
Stock Price Movement
Post the earnings release, Rackspace Technology's stock price saw an increase of approximately 5.66%.
In summary, despite year-over-year revenue declines across both Private and Public Cloud segments, Rackspace Technology demonstrated significant improvement in overall net income and EPS. The favorable EPS and surpassing revenue estimates have positively influenced market sentiments, as reflected in the stock price uptick.
