Rackspace Technology (NASDAQ:RXT) Posts Earnings Results, Misses Estimates By $0.03 EPS

08 May 2026, 21:36 by Renee Jackson · The Cerbat Gem

Rackspace Technology (NASDAQ:RXT – Get Free Report) 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 firm had revenue of $678.10 million for 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 Stock Performance

Shares of RXT traded up $1.98 during mid-day trading on Friday, hitting $5.50. 151,627,549 shares of the company traded hands, compared to its average volume of 16,777,988. The stock has a 50-day moving average price of $1.61 and a two-hundred day moving average price of $1.24. Rackspace Technology has a 1 year low of $0.39 and a 1 year high of $6.00. The stock has a market cap of $1.37 billion, a price-to-earnings ratio of -9.02 and a beta of 2.23.

Insiders Place Their Bets

In related news, CFO Mark A. Marino sold 234,683 shares of the company’s stock in a transaction on Monday, February 23rd. The stock was sold at an average price of $1.63, for a total transaction of $382,533.29. Following the completion of the sale, the chief financial officer owned 2,193,115 shares in the company, valued at approximately $3,574,777.45. This represents a 9.67% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which can be accessed through the SEC website. Also, EVP Dharmendra Kumar Sinha sold 188,123 shares of the firm’s stock in a transaction dated Wednesday, March 18th. The stock was sold at an average price of $1.81, for a total value of $340,502.63. Following the completion of the transaction, the executive vice president directly owned 2,276,057 shares in the company, valued at $4,119,663.17. The trade was a 7.63% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Over the last 90 days, insiders sold 502,440 shares of company stock worth $867,173. Company insiders own 2.90% of the company’s stock.

Institutional Investors Weigh In On Rackspace Technology

Hedge funds have recently modified their holdings of the business. Creative Planning lifted its position in shares of Rackspace Technology by 114.2% during the 2nd quarter. Creative Planning now owns 25,715 shares of the company’s stock valued at $33,000 after buying an additional 13,708 shares in the last quarter. Jump Financial LLC bought a new stake in Rackspace Technology during the 4th quarter worth approximately $34,000. Engineers Gate Manager LP lifted its holdings in Rackspace Technology by 47.1% during the second quarter. Engineers Gate Manager LP now owns 34,777 shares of the company’s stock valued at $45,000 after purchasing an additional 11,141 shares in the last quarter. Steward Partners Investment Advisory LLC boosted its position in shares of Rackspace Technology by 3,385.4% in the fourth quarter. Steward Partners Investment Advisory LLC now owns 64,828 shares of the company’s stock worth $63,000 after purchasing an additional 62,968 shares during the period. Finally, XTX Topco Ltd increased its stake in shares of Rackspace Technology by 62.8% in the second quarter. XTX Topco Ltd now owns 57,682 shares of the company’s stock worth $74,000 after purchasing an additional 22,243 shares in the last quarter. Institutional investors own 82.48% of the company’s stock.

Key Headlines Impacting Rackspace Technology

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

Analyst Ratings Changes

RXT has been the topic of several research reports. Royal Bank Of Canada lifted their price target on shares of Rackspace Technology from $1.75 to $2.50 and gave the company a “sector perform” rating in a research report on Friday, February 27th. Weiss Ratings reaffirmed a “sell (d-)” rating on shares of Rackspace Technology in a research note on Thursday, January 22nd. Four analysts have rated the stock with a Hold rating and one has assigned a Sell rating to the company. According to data from MarketBeat.com, the company presently has a consensus rating of “Reduce” and an average price target of $1.93.

Check Out Our Latest Stock Analysis on Rackspace Technology

About Rackspace Technology

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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.