Rackspace Lowers FY26 Outlook, Posts Q2 Loss; Launches $250M ATM and AI Growth Plan

summarizeSummary

Rackspace reported preliminary Q2 results with a GAAP net loss of up to $91M, slashed its full-year revenue and EBITDA outlook, and launched a $250M at-the-market equity program to fund an enterprise AI pivot.

check_boxKey Events · Earnings and Guidance · RXT

• Q2 Preliminary Results Miss

  Revenue of $641–$649M, GAAP net loss of $(91)–$(62)M, and Non-GAAP Operating Profit of only $19–$23M. The loss reflects restructuring charges and ongoing revenue mix shift.

• FY26 Guidance Slashed

  Full-year revenue outlook cut by $150M at the midpoint to $2,450–$2,550M (a 7% decline), and Adjusted EBITDA lowered by $20M to $285–$295M, driven by exits from low-margin resale and colocation.

• $250M At-the-Market Equity Program

  Entered into an Equity Distribution Agreement with Goldman Sachs to sell up to $250M of common stock from time to time, creating potential dilution for existing shareholders.

• Enterprise AI Growth Vector

  Announced a strategic pivot to enterprise AI, including a Palantir partnership and a 30 MW AMD GPU deployment plan targeting $450–$600M in annual revenue at 50%+ Adjusted EBITDA margins by 2028.

auto_awesomeAnalysis · RXT · Technology

Rackspace Technology delivered a double-barreled update: preliminary Q2 results showing a GAAP net loss of up to $91 million and a sharp cut to full-year guidance — revenue now expected to decline 7% at the midpoint, with Adjusted EBITDA trimmed by $20 million. The company is exiting low-margin resale and colocation revenue to reserve capacity for enterprise AI, a pivot it aims to fund partly through a newly established $250 million at-the-market equity program. While the AI narrative — anchored by a Palantir partnership and a 30 MW AMD deployment targeting $450–$600 million in annual revenue at 50%+ margins — offers a long-term growth vector, the near-term dilution from the ATM and the guidance reset create immediate headwinds for shareholders.