The following is a summary of the Rackspace Technology, Inc. (RXT) Q1 2024 Earnings Call Transcript:
Financial Performance:
Rackspace reported Q1 GAAP revenue of $691 million, exceeding the highest guidance.
Total non-GAAP net revenue was at $384 million, which was 7% down sequentially.
Non-GAAP operating profit stood at $16 million, and non-GAAP loss per share was $0.11.
Public Cloud revenue amounted to $422 million, while Private Cloud revenues were $268 million.
The company has reduced its principal debt by over $300 million, lowering annual interest costs by more than $11 million.
Business Progress:
Consistent progress on turnaround strategy with success credited to operational turnaround and repositioning as a hybrid multi-cloud and AI solutions company.
Strong double-digit YoY growth in Q1 bookings for Private Cloud, with emphasis on healthcare verticals.
Stable growth in Public Cloud, guided by effective execution strategies.
There are over 30 AI-related opportunities currently in various stages of implementation after June 2023's launch.
Intent to establish a sustainable business model that consistently generates revenue and profit growth is the main goal for 2024.
A significant growth in data services bookings is reported in Q1, forecasting revenue stabilization in Q3 with a slight uptick in sequential revenue going into Q4.
Enhanced operating profit in the second half due to higher revenue and organizational efficiencies is expected.
Despite challenges in a macro environment, professional services consulting saw growth in Public Cloud, Security, Applications, and Data sectors.
The company's vertical strategy on the Private Cloud had positive outcomes, and an increase in AI-related projects was also noted.
Maintenance of labor and non-labor efficiencies, initiated in the second half of 2023 and continuing through 2024, is ongoing.
More details: Rackspace Technology IR
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