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Rackspace (RXT) investor relations material
Rackspace Q3 2025 earnings summary
Complete event summary combining all related documents: earnings call transcript, report, and slide presentation.Executive summary
Q3 2025 revenue was $671 million, up 1% sequentially but down up to 1% year-over-year, meeting or exceeding expectations.
Non-GAAP operating profit was $32 million, up 17% sequentially and stable year-over-year; non-GAAP loss per share was $(0.05).
Net loss improved to $67 million from $187 million year-over-year, with net loss per share at $(0.28) versus $(0.82) last year.
Strong sales momentum driven by private cloud wins and new AI solutions, with continued focus on healthcare, sovereign, and regulated markets.
No goodwill or asset impairment charges in 2025, compared to significant charges in 2024.
Financial highlights
Public Cloud revenue was $422 million, up 1% year-over-year; Private Cloud revenue was $250 million, down 3% year-over-year.
Gross profit margin for Q3 2025 was 19.4%, down from 20.4% in Q3 2024; non-GAAP gross margin was 19.9%.
Adjusted EBITDA for Q3 2025 was $69.3 million, up from $65.8 million in Q3 2024.
Free cash flow for Q3 2025 was $43 million; cash flow from operations was $71 million.
Cash and cash equivalents at September 30, 2025, were $100 million; total liquidity was $386 million.
Outlook and guidance
Q4 2025 revenue guidance: $664–$678 million; Private Cloud: $244–$252 million; Public Cloud: $420–$426 million.
Non-GAAP operating profit expected at $32–$34 million; non-GAAP loss per share between $(0.03) and $(0.05).
Non-GAAP tax rate expected at 26%; share count between 242–244 million.
Management expects continued focus on cost optimization and margin improvement, especially in Public Cloud.
Liquidity and cash flow from operations are expected to be sufficient for at least the next twelve months, though market uncertainty remains.
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