Rackspace (RXT) Q3 2026 earnings summary

Executive summary

• Q3 revenue was $609.1M, down 9.3% YoY; Private Cloud growth was offset by Public Cloud contraction.

• Non-GAAP Operating Profit rose 12.2% to $35.9M; Adjusted EBITDA increased to $75.2M from $69.3M.

• FY26 revenue outlook midpoint increased by $35M; Non-GAAP Operating Profit and Adjusted EBITDA guidance were maintained.

• Enterprise AI strategy advanced toward signed contracts and deployments, with near-term margin pressure expected before revenue ramps.

Financial highlights

• Q3 GAAP revenue was $609.1M vs. $671.2M; gross profit was $113.1M vs. $129.9M.

• GAAP operating loss narrowed to $12.5M from $33.9M; net loss narrowed to $53.5M from $67.1M.

• Non-GAAP Operating Profit was $35.9M vs. $32.0M; Non-GAAP loss per share was $0.06 vs. $0.05.

• Adjusted EBITDA was $75.2M vs. $69.3M; 9M Adjusted EBITDA was $212.3M vs. $195.0M.

• 9M revenue declined 2.3% to $1,957.3M; net loss was $112.7M vs. $193.1M, including a $62.5M debt-extinguishment gain in 2026.

Outlook and guidance

• FY26 revenue guidance is $2.510B–$2.560B, with midpoint implying a 6% YoY decline; Private Cloud is $995M–$1.015B and Public Cloud is $1.515B–$1.545B.

• FY26 Non-GAAP Operating Profit guidance is $125M–$135M; Adjusted EBITDA is $285M–$295M, with midpoint growth of 5% YoY.

• FY26 Non-GAAP loss per share is $0.25–$0.30; tax rate is 26%, other expense is $220M–$230M, and weighted average shares are 265M–275M, excluding potential ATM dilution.

• Planned AMD and NVIDIA capacity is 20–22 MW by end-2027, supporting $420M–$460M annualized revenue and 60%+ EBITDA margins at full deployment and anticipated utilization.

• Initial AMD GPU deployment targets nearly 2 MW by year-end 2026, with approximately $75M of associated capital expenditures.