Rackspace Technology, Inc. Q1 FY2026 earnings call

Enterprise AI evolving towards agentic workflows; private cloud growth outlook on track with signed engagements; public cloud services revenue grew 10%; new partnerships expand ability to deploy context-aware inference, etc.; engineers embedded in customer environments; technology stack extended with partnerships like VMware, Palantir, etc.

Private cloud: First quarter GAAP revenue was $235 million, down 6% year-over-year. Non-GAAP gross margin was 36%, down 110 basis points year-over-year. Non-GAAP segment operating margin was 24.7%, an improvement at 30 basis points year-over-year. Public cloud: GAAP revenue was $443 million, up 7% year-over-year, with services revenue growing 10% year-over-year. Non-GAAP gross margin was 8.9%, down 60 basis points year-over-year. Non-GAAP segment operating margin was 4.7%, up 50 basis points year-over-year

Reaffirming full-year 2026 guidance in its entirety. Revenue, EBITDA, and cash flow outlook all remain unchanged. Q1 private cloud timing reflected in annual plan, confidence in full-year outlook unchanged

Q: Kevin McVey with UBS asked about how AMD dovetails into Palantir and progress on MOU, and capacity in private vs public cloud and margin and capital needs.

A: AMD gives CPU and GPU for efficient inference, partnership well along but need financing lockdown; customer workloads run across private and public; margin from govern private cloud on AMD Silicon is most profitable, then context-aware inference, etc.; intent is deleveraging with focus on 2028 debt maturity.

Q: David page with RBC capital markets asked about competitive environment and pipeline.

A: No one has put all elements together like Rackspace, giving edge in regulated/sovereign environments; pipeline strong with more deals expected as guide customers on AI workloads