I vestme ts a d Pa t e ships to Fuel AI G owth i 2027 a d Beyo d
Pala ti ames Rackspace Tech ology as a P efe ed Pa t e i Regulated a d Sove eig Ma kets
SAN ANTONIO, July 09, 2026 (GLOBE NEWSWIRE) — Rackspace Tech ology® (NASDAQ: RXT), a global e te p ise AI i f ast uctu e a d solutio s p ovide , today a ou ced a st ategic a d fi a cial update o its t a sitio to becomi g the ope ato of the full e te p ise AI stack.
Rackspace is becomi g the ope ato of the full e te p ise AI stack, se vi g a dema d ow visible ac oss the ma ket. E te p ises, pa ticula ly i egulated i dust ies, a e seeki g co t ol ove thei compute, thei models, a d thei data, a d assu a ce that the p op ieta y k owledge embedded i that data is ot t a sfe ed outside thei e vi o me ts. Rackspace is model-ag ostic by desig a d ope ates the gove ed laye that allows e te p ises to use the best available models, whethe ope , closed, o thei ow , o p ivate cloud whe e co t ol matte s a d public cloud whe e elasticity matte s, while policy, ide tity, a d data bou da ies emai u de the e te p ise’s co t ol.
“The best-of-b eed pa t e ships we have sig ed du i g 2026 – with AMD, Pala ti , Rub ik, U ipho e a d VMwa e by B oadcom – combi ed with the data ce te capacity a d 25+ yea s of expe tise that Rackspace b i gs to the table, ep ese t a u ique positio al adva tage fo Rackspace. Today’s capital aise a ou ceme t is mea i gful because it will e able us to expedite ou AI E te p ise st ategy a d u lock a mea i gful eve ue a d EBITDA g owth vecto fo Rackspace, sta ti g i 2027,” said Gaje Ka diah, Chief Executive Office of Rackspace Tech ology.
“Apollo emai s highly suppo tive of Rackspace’s st ategy a d believes the Compa y is taki g the ight steps to fu d its ext phase of g owth. We a e excited about the oppo tu ity ahead a d emai alig ed with Rackspace as it builds a diffe e tiated platfo m fo E te p ise AI,” said Aa o Sobel, Pa t e at Apollo Global Ma ageme t a d a membe of Rackspace Tech ology’s Boa d of Di ecto s.
I a sepa ate elease today, Pala ti a d Rackspace a ou ced a defi itive ag eeme t establishi g a ope ati g f amewo k to deploy Pala ti Fou d y a d AIP i mid-ma ket, egulated a d sove eig e vi o me ts, ami g Rackspace a p efe ed pa t e .
Si ce the compa ies’ i itial Feb ua y 2026 a ou ceme t, the pa t e ship has built measu able mome tum. Rackspace has scaled to app oximately 400 Pala ti ce tificatio s ac oss sales, e gi ee i g, delive y, a d ope atio s, i cludi g a la ge global coho t of Pala ti -ce tified fo wa d deployed e gi ee s (FDEs) to se ve dema d ac oss healthca e, fi a cial se vices, e e gy, a d mid-ma ket. The fi st joi t deployme t closed i less tha 2 mo ths with Rackspace FDEs deployi g AI-e abled wo kflows o Pala ti Fou d y i side a U.S.-based sola t acki g ma ufactu e to delive a 94% eductio i thei quote cycle time.
Both pa ties have co side able t actio o this pa t e ship a d Rackspace views today’s a ou ceme t as a ma ke of the pa t e ship’s ea ly success.
The e te p ise AI deployme t e d ma ket has att active dema d cha acte istics. Howeve , e te p ise AI g owth a d deployme ts equi e discipli e because of the esou ce-co st ai ed atu e of the capacity- a d supply-side. Rackspace believes the co ect st ategic a d tactical espo se i this e vi o me t is to p io itize ou esou ces a d focus o the activities that we believe p ovide the best etu s to Rackspace’s stakeholde s.
The combi atio of ou p io itizatio effo ts, i dust y t e ds a d cu e t supply co st ai ts esults i a eductio of $150 millio i ou eve ue expectatio s a d $20 millio i EBITDA. The details a e illust ated i the table below.
| P ivate Cloud | 1,025 | 1,050 | 1,075 | 1,000 | 1,025 | 1,050 |
| Rev yea /yea % | 4% | 6% | 9% | 1% | 4% | 6% | Public Cloud | 1,575 | 1,600 | 1,625 | 1,450 | 1,475 | 1,500 |
| Rev yea /yea % | (7)% | (6)% | (4)% | (15)% | (13)% | (12)% | Rev yea /yea % | (3)% | (1)% | 1% | (9)% | (7)% | (5)% |
| Adj. EBITDA ma gi % | 12% | 12% | 12% | 12% | 12% | 12% |
Rackspace Tech ology a ticipates the followi g p elimi a y fi a cial esults fo the seco d qua te of 2026:
- Reve ue is expected to be i the a ge of $641 to $649 millio , i cludi g P ivate Cloud eve ue betwee $242 to $246 millio a d Public Cloud eve ue betwee $399 to $403 millio .
- GAAP Net Loss is expected to be i the a ge of $(91) to $(62) millio , a d GAAP et loss pe diluted sha e is expected to be i the a ge of $(0.36) to $(0.25)
- GAAP Loss f om Ope atio s is expected to be i the a ge of $(53) to $(33) millio .
- No -GAAP Ope ati g P ofit is expected to be i the a ge of $19 to $23 millio .
- No -GAAP Loss Pe Sha e is expected to be $(0.11) to $(0.08).
- No -GAAP Adjusted EBITDA is expected to be betwee $58 to $62 millio .
As we look beyo d 2026, ou cu e t pla is to amp the E te p ise AI busi ess up to cumulative capacity of 15 MW by the e d of 2027 a d a total of 30 MW of capacity by the e d of 2028. We expect to ave age $15-20 millio of a ual eve ue pe MW deployed as GPU a d custome mix evolves. This t a slates to $450-$600 millio of a ual eve ue at the full 30 MW of AMD deployme ts a d we expect Adjusted EBITDA ma gi s fo E te p ise AI to be i the 50%+ a ge, as summa ized i the followi g table:
| Estimated A ual Reve ue pe MW deployed | $15M | $20M | Estimated A ual Reve ue at full 30MW deployme t | $450M | $600M | A ticipated Adj. EBITDA Ma gi | 50%+ | 50%+ | *Estimated eve ue a d a ticipated ma gi figu es a e illust ative a d subject to va iability based o GPU model, deployme t mix, a d custome co t act te ms. | Cumulative MW Deployed | 2MW | 15MW | 30MW | Note: Deployme t timeli es a e subject to custome dema d, OEM lead times fo GPUs a d elated ha dwa e, a d othe facto s. |
The st ategic i te t of ou ece t pa t e ships a d today’s a ou ced capital aise is to add a ew g owth vecto – E te p ise AI capacity, which is i c eme tal to ou co e busi ess, ot a ca ibalizatio of existi g eve ues. Although Public Cloud i f ast uctu e esale will co ti ue to decli e, we look fo co e P ivate Cloud to g ow low si gle digits, d ive by the mix shift out of lowe -g owth, lowe -ma gi eve ue a d i to highe -g owth, highe -ma gi eve ue. E te p ise AI capacity is a ew g owth vecto that sits o top of ou established P ivate Cloud base, which we expect to e able sustai able g owth i P ivate Cloud.
A i vesto call has bee scheduled fo July 9, 2026 at 8:30 am ET to p ovide fu the ema ks by Rackspace Tech ology’s CEO a d CFO a d to take questio s.
Date: 07/09/2026Sta t time: 8:30 am EDT
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Rackspace Tech ology® (NASDAQ: RXT) is the ope ato of the full e te p ise AI stack f om gove ed p ivate cloud to AI i fe e ce a d age ts i p oductio . With a Outcomes-as-a-Se vice model built o secu e i f ast uctu e, data fou datio s, a d fo wa d deployed e gi ee i g, Rackspace delive s busi ess esults fo egulated a d missio -c itical i dust ies whe e gove a ce, sove eig ty, a d uptime a e o – egotiable. Lea mo e at www. ackspace.com.
Rackspace Tech ology has made stateme ts i this p ess elease a d othe epo ts, fili gs, a d othe public w itte a d ve bal a ou ceme ts that a e fo wa d-looki g a d the efo e subject to isks a d u ce tai ties. All stateme ts, othe tha stateme ts of histo ical fact, i cluded i this p ess elease a e, o could be, “fo wa d-looki g stateme ts” withi the mea i g of the P ivate Secu ities Litigatio Refo m Act of 1995 a d a e made i elia ce o the safe ha bo p otectio s p ovided the eu de . These fo wa d-looki g stateme ts elate to a ticipated fi a cial pe fo ma ce, ma ageme t’s pla s a d objectives fo futu e ope atio s, busi ess p ospects, outcome of egulato y p oceedi gs, ma ket co ditio s, ou expectatio s ega di g ou AI st ategy a d st ategic cha ges we a e maki g at Rackspace, st ategic pa t e ships, GPU i f ast uctu e deployme t costs, timi g a d eco omics, fi a ci g a a geme ts a d capital expe ditu es, the at-the-ma ket equity offe i g a d expected use of p oceeds, a ticipated custome dema d, ou ece t wo kfo ce ealig me t a d expected cost savi gs, po tfolio optimizatio i itiatives, expected Public Cloud a d P ivate Cloud pe fo ma ce, a d ou expectatio s ega di g futu e ope ati g a d fi a cial pe fo ma ce, a d othe matte s. These fo wa d-looki g stateme ts may ot be achieved i full o at all, o may be achieved o a mate ially diffe e t timeli e. A y fo wa d-looki g stateme t made i this p ess elease speaks o ly as of the date o which it is made. We u de take o obligatio to publicly update o evise a y fo wa d-looki g stateme t, whethe as a esult of ew i fo matio , futu e developme ts o othe wise, except as may be equi ed by law. Fo wa d-looki g stateme ts ca be ide tified by va ious wo ds such as “expects,” “i te ds,” “will,” “a ticipates,” “believes,” “co fide t,” “co ti ue,” “p opose,” “seeks,” “could,” “may,” “should,” “estimates,” “fo ecasts,” “might,” “goals,” “objectives,” “ta gets,” “pla ed,” “p ojects,” a d simila exp essio s. I additio , this p ess elease i cludes p elimi a y fi a cial esults fo the seco d qua te e ded Ju e 30, 2026. These p elimi a y esults a e based o i fo matio available to ma ageme t as of the date of this p ess elease a d a e subject to the completio of the Compa y’s fi a cial closi g p ocedu es, qua te -e d eview p ocesses a d othe developme ts that may a ise betwee ow a d the time ou fi a cial esults fo the qua te a e fi alized. These p elimi a y esults a e ot a comp ehe sive stateme t of the Compa y’s fi a cial esults fo the seco d qua te a d should ot be viewed as a substitute fo full fi a cial stateme ts p epa ed i acco da ce with GAAP. These p elimi a y esults a e i he e tly u ce tai , have ot bee audited o eviewed by ou i depe de t egiste ed public accou ti g fi m, a d may diffe , i cludi g mate ially, f om the fi a cial esults that will be epo ted i ou Qua te ly Repo t o Fo m 10-Q fo the qua te e ded Ju e 30, 2026.
All fo wa d-looki g stateme ts a e based o ma ageme t’s cu e t beliefs a d assumptio s a d o i fo matio cu e tly available. Rackspace Tech ology cautio s that these stateme ts a e subject to isks a d u ce tai ties, ma y of which a e outside of ou co t ol, a d could cause futu e eve ts o esults to be mate ially diffe e t f om those stated o implied i this p ess elease, i cludi g amo g othe s, isk facto s that a e desc ibed i Rackspace Tech ology, I c.’s A ual Repo ts o Fo m 10-K, Qua te ly Repo ts o Fo m 10-Q, Cu e t Repo ts o Fo m 8-K, egist atio stateme ts a d othe fili gs with the Secu ities a d Excha ge Commissio , i cludi g the sectio s e titled “Risk Facto s” a d “Ma ageme t’s Discussio a d A alysis of Fi a cial Co ditio a d Results of Ope atio s” co tai ed the ei .
I vesto Relatio s Co tact: Saga Hebba , i @ ackspace.com
Media Co tact: Will Li k, ackspace@sta to p .com
This p ess elease i cludes seve al o -GAAP fi a cial measu es such as No -GAAP Net I come (Loss), No -GAAP Ope ati g P ofit, Adjusted EBITDA a d No -GAAP Ea i gs (Loss) Pe Sha e. These o -GAAP fi a cial measu es exclude the impact of ce tai costs, losses a d gai s that a e equi ed to be i cluded i ou p ofit a d loss measu es u de GAAP. Although we believe these measu es a e useful to i vesto s a d a alysts fo the same easo s they a e useful to ma ageme t, as desc ibed i the accompa yi g pages, these measu es a e ot a substitute fo , o supe io to, GAAP fi a cial measu es o disclosu es. Othe compa ies may calculate simila ly-titled o -GAAP measu es diffe e tly, limiti g thei useful ess as compa ative measu es. We have eco ciled each of these o -GAAP measu es to the applicable most compa able GAAP measu e i the accompa yi g pages.
We p ese t No -GAAP Net I come (Loss), No -GAAP Ope ati g P ofit a d Adjusted EBITDA because they a e a basis upo which ma ageme t assesses ou pe fo ma ce a d we believe they a e useful to evaluati g ou fi a cial pe fo ma ce. We believe that excludi g items f om et i come that may ot be i dicative of, o a e u elated to, ou co e ope ati g esults, a d that may va y i f eque cy o mag itude, e ha ces the compa ability of ou esults a d p ovides a bette baseli e fo a alyzi g t e ds i ou busi ess.
No -GAAP Ope ati g P ofit a d Adjusted EBITDA a e ma ageme t’s p i cipal met ics fo measu i g ou u de lyi g fi a cial pe fo ma ce.
I the futu e we may i cu expe ses o cha ges such as those added back to calculate No -GAAP Net I come (Loss), No -GAAP Ope ati g P ofit o Adjusted EBITDA. Ou p ese tatio of No -GAAP Net I come (Loss), No -GAAP Ope ati g P ofit a d Adjusted EBITDA should ot be co st ued as a i fe e ce that ou futu e esults will be u affected by these items. Othe compa ies, i cludi g ou pee compa ies, may calculate simila ly-titled measu es i a diffe e t ma e f om us, a d the efo e, ou o -GAAP measu es may ot be compa able to simila ly-titled measu es of othe compa ies. I vesto s a e cautio ed agai st usi g these measu es to the exclusio of ou esults i acco da ce with GAAP.
| (I millio s) | Net loss | $ | (91 | ) | $ | (62 | ) | Sha e-based compe satio expe se | 12 | 9 | T a sactio – elated adjustme ts, et (a) | 2 | — | Rest uctu i g a d t a sfo matio expe ses (b) | 25 | 17 | Net (gai ) loss o divestitu e a d i vestme ts (c) | (1 | ) | 1 | Gai o debt exti guishme t | (7 | ) | (6 | ) | I te est expe se impact f om the Ma ch 2024 Refi a ci g T a sactio s (d) | (19 | ) | (17 | ) | Othe adjustme ts (e) | 2 | (2 | ) | Amo tizatio of i ta gible assets (f) | 33 | 30 | Tax effect of o -GAAP adjustme ts (g) | 15 | 9 | No -GAAP Net Loss | $ | (29 | ) | $ | (21 | ) |
| (I millio s) | Loss f om ope atio s | $ | (53 | ) | $ | (33 | ) | Sha e-based compe satio expe se | 12 | 9 | T a sactio – elated adjustme ts, et (a) | 2 | — | Rest uctu i g a d t a sfo matio expe ses (b) | 25 | 17 | Amo tizatio of i ta gible assets (f) | 33 | 30 | No -GAAP Ope ati g P ofit | $ | 19 | $ | 23 |
| (I millio s) | Net loss | $ | (91 | ) | $ | (62 | ) | Sha e-based compe satio expe se | 12 | 9 | T a sactio – elated adjustme ts, et (a) | 2 | — | Rest uctu i g a d t a sfo matio expe ses (b) | 25 | 17 | Net (gai ) loss o divestitu e a d i vestme ts (c) | (1 | ) | 1 | Gai o debt exti guishme t | (7 | ) | (6 | ) | Othe expe se, et (h) | 8 | 2 | I te est expe se | 33 | 30 | P ovisio fo i come taxes | 5 | 2 | Dep eciatio a d amo tizatio (i) | 72 | 69 | Adjusted EBITDA | $ | 58 | $ | 62 |
| (a) | I cludes pu chase accou ti g adjustme ts, explo ato y acquisitio a d divestitu e costs, a d expe ses elated to fi a ci g | (b) | I cludes co sulti g a d adviso y fees elated to busi ess t a sfo matio a d optimizatio activities, as well as associated seve a ce, ce tai facility closu e costs, a d lease te mi atio expe ses. Also i cludes pay oll taxes associated with the exe cise of stock optio s a d vesti g of est icted stock. | (c) | I cludes gai s a d losses o i vestme t a d f om dispositio s. | (d) | I te est expe se impact due to the accou ti g fo co t actual i te est payme ts o debt i st ume ts e te ed i to as pa t of the Ma ch 2024 Refi a ci g T a sactio s, which educed i te est expe se elative to co t actual i te est cost. | (e) | P ima ily co sists of fo eig cu e cy gai s a d losses. | (f) | All of ou i ta gible assets a e att ibutable to acquisitio s, i cludi g the Novembe 2016 me ge . | (g) | We utilize a estimated st uctu al lo g-te m o -GAAP tax ate i o de to p ovide co siste cy ac oss epo ti g pe iods, emovi g the effect of o – ecu i g tax adjustme ts, which i clude but a e ot limited to tax ate cha ges, U.S. tax efo m, sha e-based compe satio , audit co clusio s a d cha ges to valuatio allowa ces. Whe computi g this lo g-te m ate fo the 2026 i te im pe iods, we based it o a ave age of the 2025 a d estimated 2026 tax ates, ecomputed to emove the tax effect of o -GAAP p e-tax adjustme ts a d o – ecu i g tax adjustme ts, esulti g i a st uctu al o -GAAP tax ate of 26%. The o -GAAP tax ate could be subject to cha ge fo a va iety of easo s, i cludi g the apidly evolvi g global tax e vi o me t, sig ifica t cha ges i ou geog aphic ea i gs mix i cludi g due to acquisitio activity, o othe cha ges to ou st ategy o busi ess ope atio s. We will e-evaluate ou lo g-te m o -GAAP tax ate as app op iate. We believe that maki g these adjustme ts facilitates a bette evaluatio of ou cu e t ope ati g pe fo ma ce a d compa iso s to p io pe iods. | (h) | P ima ily co sists of fo eig cu e cy gai s a d losses a d expe se elated to ou accou ts eceivable pu chase ag eeme t. | (i) | Excludes accele ated dep eciatio expe se elated to facility closu es. |
We defi e No -GAAP Ea i gs (Loss) Pe Sha e as No -GAAP Net I come (Loss) divided by ou GAAP weighted ave age umbe of sha es outsta di g fo the pe iod o a diluted basis a d fu the adjusted fo the weighted ave age umbe of sha es associated with secu ities which a e a ti-dilutive to GAAP loss pe sha e. Ma ageme t uses No -GAAP Ea i gs (Loss) Pe Sha e to evaluate the pe fo ma ce of ou busi ess o a compa able basis f om pe iod to pe iod, i cludi g by adjusti g fo the impact of the issua ce of sha es.
| (I millio s, except pe sha e amou ts) | Net loss att ibutable to commo stockholde s | $ | (91 | ) | $ | (62 | ) | No -GAAP Net Loss | $ | (29 | ) | $ | (21 | ) | Weighted ave age umbe of sha es – Diluted | 251 | 249 | Effect of dilutive secu ities (a) | 17 | 15 | No -GAAP weighted ave age umbe of sha es – Diluted | 268 | 264 | Net loss pe sha e – Diluted | $ | (0.36 | ) | $ | (0.25 | ) | Pe sha e impacts of adjustme ts to et loss (b) | 0.25 | 0.16 | Pe sha e impacts of sha es afte adjustme ts to et loss (a) | 0.00 | 0.01 | No -GAAP Loss Pe Sha e | $ | (0.11 | ) | $ | (0.08 | ) |
| (a) | Pote tial commo sha e equivale ts co sist of sha es issuable upo the exe cise of stock optio s, vesti g of est icted stock u its (i cludi g pe fo ma ce-based est icted stock u its) o pu chases u de the Employee Stock Pu chase Pla as well as co ti ge t sha es associated with ou acquisitio of Datapipe Pa e t, I c. Ce tai of ou pote tial commo sha e equivale ts a e co ti ge t o ce tai i vestme t fu ds ma aged by affiliates of Apollo Global Ma ageme t, I c. achievi g p e-established pe fo ma ce ta gets based o a multiple of thei i vested capital, which a e i cluded i the de omi ato fo the e ti e pe iod if such sha es would be issuable as of the e d of the epo ti g pe iod assumi g the e d of the epo ti g pe iod was the e d of the co ti ge cy pe iod. | (b) | Reflects the agg egate adjustme ts made to eco cile No -GAAP Net Loss to ou et loss, as oted i the above table, divided by the GAAP diluted umbe of sha es outsta di g fo the eleva t pe iod. |
