Rackspace Technology, Inc. (Nasdaq: RXT), a leading end-to-end,
hybrid, multicloud, and AI solutions company, today announced
results for its first quarter ended March 31, 2024.
Amar Maletira, Chief Executive Officer, stated,
“I’m pleased to announce that first quarter 2024 results exceeded
the high-end of guidance for revenue, operating profit, and EPS. We
continue to make steady progress on our turnaround, and I’m
encouraged by the continued success from implementing our
healthcare vertical strategy in Private Cloud and go-to-market
execution in our Public Cloud business.”
Mr. Maletira added, “We successfully completed
our debt refinancing which provides ample liquidity and runway for
our turnaround. Our goal for 2024 is to position the business to
generate consistent revenue and profit growth.”
First Quarter
2024 Results
Revenue was $691 million in the first quarter of
2024, a decrease of 9% on a reported and constant currency basis as
compared to revenue of $759 million in the first quarter of
2023.
Private Cloud revenue was $268 million in the
first quarter of 2024, a decrease of 15% on a reported basis and
16% on a constant currency basis as compared to revenue of $315
million in the first quarter of 2023.
Public Cloud revenue was $422 million in the
first quarter of 2024, a decrease of 5% on a reported and constant
currency basis compared to revenue of $444 million in the first
quarter of 2023.
The first quarter of 2024 included a total of
$593 million of non-cash impairment charges compared to $543
million of non-cash impairment charges in the first quarter of
2023.
Loss from operations was $(653) million in the
first quarter of 2024, compared to loss from operations of $(581)
million in the first quarter of 2023.
Net loss per diluted share is expected to be
between $(2.48) and $(2.94) in the first quarter of 2024, compared
to net loss per diluted share of $(2.87) in the first quarter of
2023.
Non-GAAP Operating Profit was $16 million in the
first quarter of 2024, a decrease of 68% compared to $51 million in
the first quarter of 2023.
Non-GAAP Loss Per Share was $(0.11) in the first
quarter of 2024, a decrease of 450% as compared to Non-GAAP Loss
Per Share of $(0.02) in the first quarter of 2023.
Capital expenditures were $46 million in the
first quarter of 2024, compared to $72 million in the first quarter
of 2023.
As of March 31, 2024, we had cash and cash
equivalents of $283 million with no balance outstanding on our New
Revolving Credit Facility ($375 million of undrawn
commitments).
Financial Outlook
Rackspace Technology is providing guidance as
follows:
|
Q2 2024 Guidance |
Total Revenue |
$668 - $678 million |
Private Cloud Revenue |
$260 - $265 million |
Public Cloud Revenue |
$408 - $413 million |
Non-GAAP Operating Profit |
$20 - $22 million |
Non-GAAP Loss Per Share |
$(0.09) - $(0.11) |
Non-GAAP Other Income (Expense) |
$(52) – $(54) million |
Non-GAAP Tax Expense Rate |
26% |
Non-GAAP Weighted Average Shares |
227 – 229 million |
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|
Information about Rackspace Technology’s use of
non-GAAP financial measures is provided below under “Non-GAAP
Financial Measures”.
Definitions of non-GAAP financial measures and
the reconciliations to the most directly comparable measures in
accordance with generally accepted accounting principles in the
United States (“GAAP”) are provided in subsequent sections of this
press release narrative and supplemental schedules. Rackspace
Technology has not reconciled Non-GAAP Operating Profit, Non-GAAP
Loss Per Share, Non-GAAP Other Income (Expense) or Non-GAAP Tax
Expense Rate guidance to the most directly comparable GAAP measure
because it does not provide guidance on GAAP net income (loss) or
the reconciling items between these Non-GAAP measures and GAAP net
income (loss) as a result of the uncertainty regarding, and the
potential variability of, certain of these items, such as
share-based compensation expense. Accordingly, a reconciliation of
the non-GAAP financial measure guidance to the corresponding GAAP
measure is not available without unreasonable effort. With respect
to Non-GAAP Operating Profit, Non-GAAP Loss Per Share, Non-GAAP
Other Income (Expense) and Non-GAAP Tax Expense Rate guidance,
adjustments in future periods are generally expected to be similar
to the kinds of charges and costs excluded from these Non-GAAP
measures in prior periods, but the impact of such adjustments could
be significant.
Conference Call and Webcast
Rackspace Technology will hold a conference call
today, May 9, 2024, at 4:00pm CT / 5:00pm ET to discuss its first
quarter 2024 results. Interested parties may access the conference
call as follows:
To listen to the live webcast or access the
replay following the webcast, please visit our IR website at the
following link:
https://ir.rackspace.com/news-and-events/events-and-presentations
To obtain a dial-in number, please pre-register
at the following link:
https://register.vevent.com/register/BI948ffa0430e74a9d85c144912294218d.
Registrants will receive dial-in information and a PIN allowing
them to access the live call.
About Rackspace Technology
Rackspace Technology is a leading end-to-end,
hybrid, multicloud, and AI solutions company. We design, build, and
operate our customers’ cloud environments across all major
technology platforms, irrespective of technology stack or
deployment model. We partner with our customers at every stage of
their cloud journey, enabling them to modernize applications, build
new products, and adopt innovative technologies.
Forward-looking Statements
Rackspace Technology has made statements in this
press release and other reports, filings, and other public written
and verbal announcements that are forward-looking and therefore
subject to risks and uncertainties. All statements, other than
statements of historical fact, included in this press release are,
or could be, “forward-looking statements” within the meaning of the
Private Securities Litigation Reform Act of 1995 and are made in
reliance on the safe harbor protections provided thereunder. These
forward-looking statements relate to anticipated financial
performance, including our expected results for our first quarter
2024 results and our financial outlook, management’s plans and
objectives for future operations, business prospects, outcome of
regulatory proceedings, market conditions, and other matters. Any
forward-looking statement made in this press release speaks only as
of the date on which it is made. We undertake no obligation to
publicly update or revise any forward-looking statement, whether as
a result of new information, future developments or otherwise.
Forward-looking statements can be identified by various words such
as “expects,” “intends,” “will,” “anticipates,” “believes,”
“confident,” “continue,” “propose,” “seeks,” “could,” “may,”
“should,” “estimates,” “forecasts,” “might,” “goals,” “objectives,”
“targets,” “planned,” “projects,” and similar expressions. These
forward-looking statements are based on management’s current
beliefs and assumptions and on information currently available to
management. Rackspace Technology cautions that these statements are
subject to risks and uncertainties, many of which are outside of
our control, and could cause future events or results to be
materially different from those stated or implied in this press
release, including among others, risk factors that are described in
Rackspace Technology, Inc.’s Annual Reports on Form 10-K, Quarterly
Reports on Form 10-Q, Current Reports on Form 8-K, and other
filings with the Securities and Exchange Commission, including the
sections entitled “Risk Factors” and “Management’s Discussion and
Analysis of Financial Condition and Results of Operations”
contained therein.
Preliminary Financial
Results
The financial results included in this press
release are preliminary and pending final review by the company and
its external auditors. These preliminary financial results
represent estimates and expectations based on the most current
information available. Financial results will not be final until
Rackspace Technology files its quarterly report on Form 10-Q for
the period. Rackspace Technology does not undertake any obligation
to update these preliminary results, except as required by law.
Non-GAAP Financial Measures
This press release includes several non-GAAP
financial measures such as constant currency revenue, Non-GAAP
Gross Profit, Non-GAAP Net Income (Loss), Non-GAAP Operating
Profit, and Non-GAAP Earnings (Loss) Per Share. These non-GAAP
financial measures exclude the impact of certain costs, losses and
gains that are required to be included in our profit and loss
measures under GAAP. Although we believe these measures are useful
to investors and analysts for the same reasons they are useful to
management, as described in the accompanying pages, these measures
are not a substitute for, or superior to, GAAP financial measures
or disclosures. Other companies may calculate similarly-titled
non-GAAP measures differently, limiting their usefulness as
comparative measures. We have reconciled each of these non-GAAP
measures to the applicable most comparable GAAP measure in the
accompanying pages.
IR Contact Sagar Hebbar Rackspace
Technology Investor Relations ir@rackspace.com
PR Contact Natalie Silva
Rackspace Technology Corporate Communications
publicrelations@rackspace.com
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RACKSPACE TECHNOLOGY, INC.SELECTED
FINANCIAL DATA(Unaudited) |
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Results
of Operations Data(In millions, except
%) |
|
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|
|
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|
|
|
|
|
|
|
|
Three Months Ended March 31, |
|
Year-Over-Year Comparison |
|
2023 |
|
2024 |
|
|
Amount |
|
% Revenue |
|
Amount |
|
% Revenue |
|
Amount |
|
% Change |
Revenue |
$ |
758.7 |
|
|
100.0 |
% |
|
$ |
690.8 |
|
|
100.0 |
% |
|
$ |
(67.9 |
) |
|
(8.9 |
)% |
Cost of revenue |
(589.1 |
) |
|
(77.6 |
)% |
|
(558.0 |
) |
|
(80.8 |
)% |
|
31.1 |
|
|
(5.3 |
)% |
Gross profit |
169.6 |
|
|
22.4 |
% |
|
132.8 |
|
|
19.2 |
% |
|
(36.8 |
) |
|
(21.7 |
)% |
Selling, general and
administrative expenses |
(207.5 |
) |
|
(27.4 |
)% |
|
(192.4 |
) |
|
(27.9 |
)% |
|
15.1 |
|
|
(7.3 |
)% |
Impairment of goodwill |
(543.1 |
) |
|
(71.6 |
)% |
|
(573.2 |
) |
|
(83.0 |
)% |
|
(30.1 |
) |
|
5.5 |
% |
Impairment of assets, net |
— |
|
|
— |
% |
|
(20.0 |
) |
|
(2.9 |
)% |
|
(20.0 |
) |
|
100.0 |
% |
Loss from operations |
(581.0 |
) |
|
(76.6 |
)% |
|
(652.8 |
) |
|
(94.5 |
)% |
|
(71.8 |
) |
|
12.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance Sheet Data (In
millions) |
|
|
|
|
|
|
|
|
December 31, 2023 |
|
March 31, 2024 |
Cash and cash equivalents |
$ |
196.8 |
|
|
$ |
282.6 |
|
|
|
|
|
Principal balance of debt |
$ |
2,892.5 |
|
|
$ |
2,598.2 |
|
Unamortized debt issuance costs, debt premium, and debt
discount |
|
(29.9 |
) |
|
|
396.5 |
|
Balance sheet carrying value of debt |
$ |
2,862.6 |
|
|
$ |
2,994.7 |
|
|
|
|
|
|
|
|
|
Statement of Cash Flows Data (In
millions) |
|
|
Three Months Ended March 31, |
|
2023 |
|
2024 |
Net cash used in operating activities |
$ |
(1.9 |
) |
|
$ |
(90.3 |
) |
Net cash used in investing activities |
$ |
(11.7 |
) |
|
$ |
(11.1 |
) |
Net cash provided by (used in) financing activities |
$ |
(41.3 |
) |
|
$ |
188.2 |
|
|
|
|
|
Cash purchases of property, equipment and software |
$ |
(12.1 |
) |
|
$ |
(28.1 |
) |
|
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SEGMENT DATA |
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|
|
|
(In millions, except %) |
Three Months Ended March 31, |
|
% Change |
Revenue by segment: |
2023 |
|
2024 |
|
Actual |
|
Constant Currency (a) |
Public Cloud |
$ |
443.5 |
|
|
$ |
422.4 |
|
|
(4.7 |
)% |
|
(4.9 |
)% |
Private Cloud |
|
315.2 |
|
|
|
268.4 |
|
|
(14.9 |
)% |
|
(15.5 |
)% |
Total consolidated revenue |
$ |
758.7 |
|
|
$ |
690.8 |
|
|
(8.9 |
)% |
|
(9.3 |
)% |
(a) |
Refer to "Non-GAAP Financial Measures" in this section for further
explanation and reconciliation. |
|
|
|
Three Months Ended March 31, |
|
Year-Over-Year Comparison |
(In millions, except %) |
2023 |
|
2024 |
|
Segment operating
profit (a): |
Amount |
|
% of SegmentRevenue |
|
Amount |
|
% of SegmentRevenue |
|
Amount |
|
% Change |
Public Cloud |
$ |
23.4 |
|
|
5.3 |
% |
|
$ |
9.3 |
|
|
2.2 |
% |
|
$ |
(14.1 |
) |
|
(60.3 |
)% |
Private Cloud |
94.0 |
|
|
29.8 |
% |
|
71.7 |
|
|
26.7 |
% |
|
(22.3 |
) |
|
(23.7 |
)% |
Total consolidated segment operating profit |
117.4 |
|
|
|
|
|
81.0 |
|
|
|
|
|
(36.4 |
) |
|
(31.0 |
)% |
Corporate functions (b) |
(66.9 |
) |
|
|
|
|
(64.8 |
) |
|
|
|
|
2.1 |
|
|
(3.1 |
)% |
Non-GAAP Operating Profit (c) |
$ |
50.5 |
|
|
|
|
|
$ |
16.2 |
|
|
|
|
|
$ |
(34.3 |
) |
|
(67.9 |
)% |
(a) |
Segment revenue less expenses directly attributable to running the
respective segments’ business. These expenses exclude centralized
corporate function costs. |
(b) |
Costs that are not allocated to segments. These costs are related
to centralized corporate functions that provide services to the
segments in areas such as accounting, information technology,
marketing, legal and human resources. |
(c) |
Refer to "Non-GAAP Financial Measures" in this section for further
explanation and reconciliation. |
|
|
NON-GAAP FINANCIAL MEASURES |
|
Constant Currency Revenue
We use constant currency revenue as an
additional metric for understanding and assessing our growth
excluding the effect of foreign currency rate fluctuations on our
international business operations. Constant currency information
compares results between periods as if exchange rates had remained
constant period over period and is calculated by translating the
non-U.S. dollar income statement balances for the most current
period to U.S. dollars using the average exchange rate from the
comparative period rather than the actual exchange rates in effect
during the respective period. We also believe this is an important
metric to help investors evaluate our performance in comparison to
prior periods.
|
Three Months Ended March 31, 2023 |
|
Three Months Ended March 31, 2024 |
|
% Change |
(In millions, except %) |
Revenue |
|
Revenue |
|
Foreign Currency Translation
(a) |
|
Revenue in Constant Currency |
|
Actual |
|
Constant Currency |
Public Cloud |
$ |
443.5 |
|
|
$ |
422.4 |
|
|
$ |
(0.7 |
) |
|
$ |
421.7 |
|
|
(4.7 |
)% |
|
(4.9 |
)% |
Private Cloud |
|
315.2 |
|
|
|
268.4 |
|
|
|
(2.1 |
) |
|
|
266.3 |
|
|
(14.9 |
)% |
|
(15.5 |
)% |
Total |
$ |
758.7 |
|
|
$ |
690.8 |
|
|
$ |
(2.8 |
) |
|
$ |
688.0 |
|
|
(8.9 |
)% |
|
(9.3 |
)% |
(a) |
The effect of foreign currency is calculated by translating current
period results using the average exchange rate from the prior
comparative period. |
|
|
Non-GAAP Gross Profit
We present Non-GAAP Gross Profit because we
believe the measure is useful in analyzing trends in our
underlying, recurring gross margins. We define Non-GAAP Gross
Profit as gross profit, adjusted to exclude the impact of
share-based compensation expense and other non-recurring or unusual
compensation items, purchase accounting-related effects, certain
business transformation-related costs, and costs related to the
Hosted Exchange incident.
|
Three Months Ended March 31, |
(In millions) |
2023 |
|
2024 |
Gross profit |
$ |
169.6 |
|
|
$ |
132.8 |
|
Share-based compensation expense |
|
2.8 |
|
|
|
1.9 |
|
Special bonuses and other compensation expense (a) |
|
0.7 |
|
|
|
0.9 |
|
Purchase accounting impact on expense (b) |
|
0.6 |
|
|
|
0.6 |
|
Restructuring and transformation expenses (c) |
|
4.7 |
|
|
|
4.9 |
|
Hosted Exchange incident expenses, net of proceeds received or
expected to be received under our insurance coverage |
|
0.3 |
|
|
|
— |
|
Non-GAAP Gross Profit |
$ |
178.7 |
|
|
$ |
141.1 |
|
(a) |
Adjustments for retention bonuses, mainly in connection with
restructuring and transformation projects, and the related payroll
tax, and payroll taxes associated with the exercise of stock
options and vesting of restricted stock. Beginning in the second
quarter of 2023, includes expense related to the one-time grant of
long-term incentive bonuses as a component of our annual
compensation award process. |
(b) |
Adjustment for the impact of purchase accounting from the November
2016 merger on expenses. |
(c) |
Adjustment for the impact of business transformation and
optimization activities, as well as associated severance, certain
facility closure costs and lease termination expenses. |
|
|
Non-GAAP Net Income (Loss) and Non-GAAP
Operating Profit
We present Non-GAAP Net Income (Loss) and
Non-GAAP Operating Profit because they are a basis upon which
management assesses our performance and we believe they are useful
to evaluating our financial performance. We believe that excluding
items from net income that may not be indicative of, or are
unrelated to, our core operating results, and that may vary in
frequency or magnitude, enhances the comparability of our results
and provides a better baseline for analyzing trends in our
business.
We define Non-GAAP Net Income (Loss) as net
income (loss) adjusted to exclude the impact of non-cash charges
for share-based compensation, special bonuses and other
compensation expense, transaction-related costs and adjustments,
restructuring and transformation charges, costs related to the
Hosted Exchange incident, the amortization of acquired intangible
assets, goodwill and asset impairment charges, and certain other
non-operating, non-recurring or non-core gains and losses, as well
as the tax effects of these non-GAAP adjustments.
We define Non-GAAP Operating Profit as income
(loss) from operations adjusted to exclude the impact of non-cash
charges for share-based compensation, special bonuses and other
compensation expense, transaction-related costs and adjustments,
restructuring and transformation charges, costs related to the
Hosted Exchange incident, the amortization of acquired intangible
assets, goodwill and asset impairment charges, and certain other
non-operating, non-recurring or non-core gains and losses.
Non-GAAP Operating Profit is one of management's
principal metrics for measuring our underlying financial
performance. Non-GAAP Operating Profit, along with other
quantitative and qualitative information, is also one of the
principal financial measures used by management and our board of
directors in determining performance-based compensation for our
management and key employees.
These non-GAAP measures are not intended to
imply that we would have generated higher income or avoided net
losses if the November 2016 merger and the subsequent transactions
and initiatives had not occurred. In the future we may incur
expenses or charges such as those added back to calculate Non-GAAP
Net Income (Loss) or Non-GAAP Operating Profit. Our presentation of
Non-GAAP Net Income (Loss) and Non-GAAP Operating Profit should not
be construed as an inference that our future results will be
unaffected by these items. Other companies, including our peer
companies, may calculate similarly-titled measures in a different
manner from us, and therefore, our non-GAAP measures may not be
comparable to similarly-titled measures of other companies.
Investors are cautioned against using these measures to the
exclusion of our results in accordance with GAAP.
Net loss reconciliation to Non-GAAP Net
Loss
|
|
|
|
|
|
|
Three Months Ended March 31, |
(In millions) |
2023 |
|
2024 |
|
|
|
High |
|
Low |
Net loss |
$ |
(612.0 |
) |
|
$ |
(545.3 |
) |
|
$ |
(645.3 |
) |
Share-based compensation expense |
|
15.2 |
|
|
|
12.8 |
|
|
|
12.8 |
|
Special bonuses and other compensation expense (a) |
|
2.2 |
|
|
|
3.1 |
|
|
|
3.1 |
|
Transaction-related adjustments, net (b) |
|
1.3 |
|
|
|
1.0 |
|
|
|
1.0 |
|
Restructuring and transformation expenses (c) |
|
25.6 |
|
|
|
20.0 |
|
|
|
20.0 |
|
Hosted Exchange incident expenses, net of proceeds received or
expected to be received under our insurance coverage |
|
3.2 |
|
|
|
0.2 |
|
|
|
0.2 |
|
Impairment of goodwill |
|
543.1 |
|
|
|
573.2 |
|
|
|
573.2 |
|
Impairment of assets, net |
|
— |
|
|
|
20.0 |
|
|
|
20.0 |
|
Net gain on divestiture and investments (d) |
|
(0.1 |
) |
|
|
(0.1 |
) |
|
|
(0.1 |
) |
Debt modification costs and gain on debt extinguishment |
|
(12.8 |
) |
|
|
(56.7 |
) |
|
|
(56.7 |
) |
Other adjustments (e) |
|
(2.1 |
) |
|
|
0.4 |
|
|
|
0.4 |
|
Amortization of intangible assets (f) |
|
40.9 |
|
|
|
38.7 |
|
|
|
38.7 |
|
Tax effect of non-GAAP adjustments (g) |
|
(9.2 |
) |
|
|
(91.6 |
) |
|
|
8.4 |
|
Non-GAAP Net Loss |
$ |
(4.7 |
) |
|
$ |
(24.3 |
) |
|
$ |
(24.3 |
) |
|
|
|
|
|
|
|
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|
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|
|
Loss from operations reconciliation to
Non-GAAP Operating Profit
|
Three Months Ended March 31, |
(In millions) |
2023 |
|
2024 |
Loss from operations |
$ |
(581.0 |
) |
|
$ |
(652.8 |
) |
Share-based compensation expense |
|
15.2 |
|
|
|
12.8 |
|
Special bonuses and other compensation expense (a) |
|
2.2 |
|
|
|
3.1 |
|
Transaction-related adjustments, net (b) |
|
1.3 |
|
|
|
1.0 |
|
Restructuring and transformation expenses (c) |
|
25.6 |
|
|
|
20.0 |
|
Hosted Exchange incident expenses, net of proceeds received or
expected to be received under our insurance coverage |
|
3.2 |
|
|
|
0.2 |
|
Impairment of goodwill |
|
543.1 |
|
|
|
573.2 |
|
Impairment of assets, net |
|
— |
|
|
|
20.0 |
|
Amortization of intangible assets (f) |
|
40.9 |
|
|
|
38.7 |
|
Non-GAAP Operating Profit |
$ |
50.5 |
|
|
$ |
16.2 |
|
(a) |
Includes expense related to retention bonuses, mainly relating to
restructuring and integration projects, and the related payroll
tax, senior executive signing bonuses and relocation costs, and
payroll taxes associated with the exercise of stock options and
vesting of restricted stock. Beginning in the second quarter of
2023, includes expense related to the one-time grant of long-term
incentive bonuses as a component of our annual compensation award
process. |
(b) |
Includes legal, professional, accounting and other advisory fees
related to acquisitions, certain one-time compliance costs related
to being a public company, integration costs of acquired
businesses, purchase accounting adjustments, payroll costs for
employees that dedicate significant time to supporting these
projects and exploratory acquisition and divestiture costs and
expenses related to financing activities. |
(c) |
Includes consulting and advisory fees related to business
transformation and optimization activities, payroll costs for
employees that dedicate significant time to these projects, as well
as associated severance, certain facility closure costs, and lease
termination expenses. The first quarter of 2024 also includes a
$9.0 million MEIA early termination fee associated with the sale of
our corporate headquarters. |
(d) |
Includes gains and losses on investment and from dispositions. |
(e) |
Primarily consists of foreign currency gains and losses. |
(f) |
All of our intangible assets are attributable to acquisitions,
including the November 2016 merger. |
(g) |
We utilize an estimated structural long-term non-GAAP tax rate in
order to provide consistency across reporting periods, removing the
effect of non-recurring tax adjustments, which include but are not
limited to tax rate changes, U.S. tax reform, share-based
compensation, audit conclusions and changes to valuation
allowances. When computing this long-term rate for the 2023 and
2024 interim periods, we based it on an average of the 2022 and
estimated 2023 tax rates and 2023 and estimated 2024 tax rates,
respectively, recomputed to remove the tax effect of non-GAAP
pre-tax adjustments and non-recurring tax adjustments, resulting in
a structural non-GAAP tax rate of 26% for both periods. The
non-GAAP tax rate could be subject to change for a variety of
reasons, including the rapidly evolving global tax environment,
significant changes in our geographic earnings mix including due to
acquisition activity, or other changes to our strategy or business
operations. We will re-evaluate our long-term non-GAAP tax rate as
appropriate. We believe that making these adjustments facilitates a
better evaluation of our current operating performance and
comparisons to prior periods. We are providing preliminary
estimates of Net loss and the Tax effect of non-GAAP adjustments.
Ranges have been provided, rather than specific amounts as the
company is finalizing the income tax accounting for the series of
debt refinancing transactions completed close to the March 31, 2024
quarter-end date. Due to the compressed timeframe, size and
complexity of these transactions, the company requires additional
time to complete the income tax assessment. Such preliminary
estimated ranges reflect management’s current views and the
company’s unaudited financial results of Net loss and tax effects
of these transactions for the three months ended March 31, 2024 may
differ from the preliminary estimates presented as a result of
completion of our income tax procedures and management’s review of
results. The preliminary estimates of unaudited results for the
three months ended March 31, 2024 are subject to the completion of
financial and accounting review procedures and should not be viewed
as a substitute for consolidated financial statements prepared in
accordance with GAAP for any period, including the period
presented. |
|
|
Non-GAAP Earnings (Loss) Per
Share
We define Non-GAAP Earnings (Loss) Per Share as
Non-GAAP Net Income (Loss) divided by our GAAP weighted average
number of shares outstanding for the period on a diluted basis and
further adjusted for the weighted average number of shares
associated with securities which are anti-dilutive to GAAP loss per
share but dilutive to Non-GAAP Earnings (Loss) Per Share.
Management uses Non-GAAP Earnings (Loss) Per Share to evaluate the
performance of our business on a comparable basis from period to
period, including by adjusting for the impact of the issuance of
shares that would be dilutive to Non-GAAP Earnings (Loss) Per
Share.
|
Three Months Ended March 31, |
(In millions, except per share amounts) |
2023 |
|
2024 |
|
|
|
High |
|
Low |
Net loss attributable to common stockholders |
$ |
(612.0 |
) |
|
$ |
(545.3 |
) |
|
$ |
(645.3 |
) |
Non-GAAP Net Loss |
$ |
(4.7 |
) |
|
$ |
(24.3 |
) |
|
$ |
(24.3 |
) |
|
|
|
|
|
|
Weighted average number of shares - Diluted |
|
213.2 |
|
|
|
219.8 |
|
|
|
219.8 |
|
Effect of dilutive securities (a) |
|
1.1 |
|
|
|
5.7 |
|
|
|
5.7 |
|
Non-GAAP weighted average number of shares - Diluted |
|
214.3 |
|
|
|
225.5 |
|
|
|
225.5 |
|
|
|
|
|
|
|
Net loss per share - Diluted |
$ |
(2.87 |
) |
|
$ |
(2.48 |
) |
|
$ |
(2.94 |
) |
Per share impacts of adjustments to net loss (b) |
|
2.85 |
|
|
|
2.37 |
|
|
|
2.83 |
|
Per share impacts of shares dilutive after adjustments to net loss
(a) |
|
0.00 |
|
|
|
0.00 |
|
|
|
0.00 |
|
Non-GAAP Loss Per Share |
$ |
(0.02 |
) |
|
$ |
(0.11 |
) |
|
$ |
(0.11 |
) |
(a) |
Reflects impact of awards that would have been anti-dilutive to net
loss per share, and therefore not included in the calculation, but
would be dilutive to Non-GAAP Loss Per Share and are therefore
included in the share count for purposes of this non-GAAP measure.
Potential common share equivalents consist of shares issuable upon
the exercise of stock options, vesting of restricted stock units
(including performance-based restricted stock units) or purchases
under the Employee Stock Purchase Plan (the "ESPP"), as well as
contingent shares associated with our acquisition of Datapipe
Parent, Inc. Certain of our potential common share equivalents are
contingent on Apollo achieving pre-established performance targets
based on a multiple of their invested capital ("MOIC"), which are
included in the denominator for the entire period if such shares
would be issuable as of the end of the reporting period assuming
the end of the reporting period was the end of the contingency
period. |
(b) |
Reflects the aggregate adjustments made to reconcile Non-GAAP Net
Loss to our net loss, as noted in the above table, divided by the
GAAP diluted number of shares outstanding for the relevant
period. |
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