Rackspace Technology (NASDAQ:RXT) Announces Quarterly Earnings Results, Misses Expectations By $0.03 EPS

Rackspace Technology (NASDAQ:RXT) posted its earnings results on Thursday. The company reported ($0.06) EPS for the quarter, missing the consensus estimate of ($0.03) by ($0.03), Zacks reports. The company had revenue of $678.10 million during the quarter, compared to analysts’ expectations of $660.83 million. Rackspace Technology updated its FY 2026 guidance to -0.200–0.150 EPS.

Here are the key takeaways from Rackspace Technology’s conference call:

• AMD MoU announced to integrate Instinct GPUs, EPYC CPUs and ROCm into a fully managed, governed enterprise AI stack (definitive agreement expected near term), creating a managed alternative to commodity GPU rental.
• Palantir partnership and FDE model is accelerating sales and deployment — first joint deal closed in 41 days and a customer case reduced quoting time by 94%, with the model expanding into EMEA and being used internally.
• Public Cloud momentum — Q1 public cloud revenue was $443M, up 7% YoY, with services revenue up 10%, and Rackspace positioning to operate production inference and governed AI workloads.
• Private Cloud revenue timing — Q1 Private Cloud revenue was $235M, down 6% YoY due to timing of a large healthcare onboarding, though segment operating margin improved and management reaffirmed full‑year guidance.
• Capital and cash flow — company repurchased ~$96M of debt and emphasizes deleveraging ahead of 2028 maturities, but ended Q1 with $94M cash, $295M total liquidity and free cash flow of -$9M.

Rackspace Technology Trading Up 56.4%

NASDAQ:RXT traded up $1.98 during trading hours on Friday, reaching $5.50. 151,627,549 shares of the company were exchanged, compared to its average volume of 16,777,988. The stock’s 50-day moving average is $1.61 and its 200-day moving average is $1.24. The firm has a market cap of $1.37 billion, a PE ratio of -9.02 and a beta of 2.23. Rackspace Technology has a twelve month low of $0.39 and a twelve month high of $6.00.

Analyst Upgrades and Downgrades

Several research firms recently commented on RXT. Royal Bank Of Canada raised their target price on Rackspace Technology from $1.75 to $2.50 and gave the stock a “sector perform” rating in a report on Friday, February 27th. Weiss Ratings reaffirmed a “sell (d-)” rating on shares of Rackspace Technology in a report on Thursday, January 22nd. Three investment analysts have rated the stock with a Hold rating and one has assigned a Sell rating to the stock. Based on data from MarketBeat, Rackspace Technology presently has a consensus rating of “Reduce” and a consensus target price of $1.95.

Insider Activity

In other news, CFO Mark A. Marino sold 14,058 shares of Rackspace Technology stock in a transaction dated Wednesday, March 18th. The shares were sold at an average price of $1.81, for a total value of $25,444.98. Following the sale, the chief financial officer owned 2,158,874 shares in the company, valued at $3,907,561.94. This trade represents a 0.65% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available through this link. Also, EVP Dharmendra Kumar Sinha sold 188,123 shares of the stock in a transaction that occurred on Wednesday, March 18th. The shares were sold at an average price of $1.81, for a total value of $340,502.63. Following the transaction, the executive vice president directly owned 2,276,057 shares of the company’s stock, valued at $4,119,663.17. The trade was a 7.63% decrease in their position. The SEC filing for this sale provides additional information. In the last quarter, insiders sold 502,440 shares of company stock worth $867,173. Company insiders own 2.90% of the company’s stock.

Institutional Inflows and Outflows

A number of hedge funds and other institutional investors have recently added to or reduced their stakes in RXT. AQR Capital Management LLC lifted its holdings in Rackspace Technology by 228.6% in the 1st quarter. AQR Capital Management LLC now owns 264,565 shares of the company’s stock valued at $447,000 after purchasing an additional 184,058 shares in the last quarter. Dynamic Technology Lab Private Ltd purchased a new position in Rackspace Technology in the 1st quarter valued at $113,000. Geode Capital Management LLC lifted its position in Rackspace Technology by 17.9% during the second quarter. Geode Capital Management LLC now owns 2,064,549 shares of the company’s stock worth $2,643,000 after buying an additional 313,636 shares in the last quarter. Creative Planning lifted its position in Rackspace Technology by 114.2% during the second quarter. Creative Planning now owns 25,715 shares of the company’s stock worth $33,000 after buying an additional 13,708 shares in the last quarter. Finally, JPMorgan Chase & Co. lifted its position in Rackspace Technology by 25.5% during the second quarter. JPMorgan Chase & Co. now owns 1,437,879 shares of the company’s stock worth $1,840,000 after buying an additional 292,249 shares in the last quarter. Hedge funds and other institutional investors own 82.48% of the company’s stock.

Rackspace Technology News Roundup

Here are the key news stories impacting Rackspace Technology this week:

• Positive Sentiment: Rackspace announced a memorandum of understanding with AMD to build an Enterprise AI Cloud for regulated and sovereign workloads, a partnership that could strengthen its position in enterprise AI infrastructure and drive future revenue growth. Rackspace Technology and AMD Sign Memorandum of Understanding to Establish New Category of Governed Enterprise AI Infrastructure
• Positive Sentiment: The company reported first-quarter revenue of $678 million, which topped expectations and was up 2% year over year, suggesting demand remains stable despite ongoing profitability challenges. Rackspace Technology Reports First Quarter 2026 Results
• Positive Sentiment: Trading interest surged, with unusually large call option activity indicating that some investors are betting on further upside in RXT shares.
• Neutral Sentiment: Rackspace’s earnings per share came in at a loss of $0.06, worse than the consensus loss of $0.03, which tempers enthusiasm around the quarter. Rackspace Technology earnings report and conference call
• Neutral Sentiment: Management’s FY2026 guidance calls for adjusted EPS of -$0.20 to -$0.15 and revenue of $2.6 billion to $2.7 billion, which was roughly in line on sales but still points to continued losses. Rackspace Technology Reports First Quarter 2026 Results
• Negative Sentiment: Private cloud revenue declined 6% year over year, showing that some parts of the business remain under pressure even as public cloud improved. Rackspace Technology Reports First Quarter 2026 Results

Rackspace Technology Company Profile

Rackspace Technology (NASDAQ: RXT) is a leading provider of managed multi-cloud solutions and services, specializing in the deployment, management and optimization of public and private cloud environments. The company helps organizations design and operate applications across platforms such as Amazon Web Services (AWS), Microsoft Azure, Google Cloud and its own private cloud infrastructure. Rackspace’s core offerings include cloud migration, application modernization, data protection, security services and 24x7x365 operational support.

Beyond cloud hosting, Rackspace offers a range of professional services designed to accelerate digital transformation initiatives.