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Rackspace (RXT) investor relations material

Rackspace Q4 2025 earnings summary

Complete event summary combining all related documents: earnings call transcript, report, and slide presentation.
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Q4 2025 earnings summary26 Feb, 2026

Executive summary

  • Sharpened strategy to focus on enterprise AI and platform engineering, emphasizing regulated, data-sensitive workloads and structural changes to support this pivot.

  • Embedded engineers and curated partnerships, including Palantir, VMware, and Rubrik, are driving deeper customer engagement and incremental infrastructure demand.

  • Q4 2025 results exceeded guidance on most metrics due to disciplined cost management, improved execution, and stabilization in Private Cloud.

  • Strategic exit from low-margin government contracts and focus on higher-margin services improved revenue quality.

  • 2026 guidance targets durable revenue growth, margin expansion, and sustained free cash flow, with AI as a key growth vector.

Financial highlights

  • Q4 2025 GAAP revenue was $683 million, flat year-over-year; non-GAAP operating profit was $41 million, up 5% year-over-year and above guidance.

  • Non-GAAP gross profit margin for Q4 was 18.1%, down 180 bps sequentially; full-year margin was 19.4%, down 120 bps year-over-year.

  • Q4 2025 cash flow from operations was $60 million; free cash flow was $56 million.

  • Ended 2025 with $106 million in cash and $397 million in total liquidity.

  • FY 2025 non-GAAP operating profit was $126 million, up 19% year-over-year; adjusted EBITDA was $276 million, up 13%.

Outlook and guidance

  • FY 2026 revenue guidance: $2,600–$2,700 million, down 1% year-over-year at midpoint.

  • Private Cloud revenue expected to grow 6% to $1,025–$1,075 million; Public Cloud revenue to decline 6% to $1,575–$1,625 million.

  • Public Cloud services revenue (excluding contract) to grow mid to high teens year-over-year.

  • Non-GAAP operating profit expected at $160–$170 million (up 31% at midpoint); adjusted EBITDA at $305–$315 million (up 12%).

  • Free cash flow guidance: $90–$110 million, up 10% year-over-year.

Reconcile Public Cloud revenue guidance
Private Cloud growth: margin implications?
Capex increase: how supports strategic shift?
Palantir partnership scaling to 250 engineers
Drivers for 6% private cloud growth in 2026
Rationale for annual guidance framework shift
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Rackspace Technology Inc provides multi-cloud technology services, including cloud migration, application management, and IT security solutions. It serves businesses across industries globally with cloud optimization services. The company is headquartered in San Antonio, Texas, and its shares are listed on the NASDAQ.

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