Rackspace Technology (NASDAQ:RXT) Lifts Annual Revenue Outlook as Private Cloud Sales Expand

Aditi Sarkar

12 November 2026 04:53 PM AEDT

Rackspace Technology (NASDAQ:RXT) Lifts Annual Revenue Outlook as Private Cloud Sales Expand

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Highlights

Rackspace generated USD 609 mn of third-quarter revenue, a 9.3% decline from a year earlier.
Private Cloud Revenue increased 4% year over year to USD 260 mn.
The company reported USD 36 mn of Operating Cash Flow for the September quarter.
Rackspace raised the midpoint of its 2026 revenue guidance by USD 35 mn.

An improving private-cloud contribution stood out in Rackspace Technology, Inc. (NASDAQ:RXT) third-quarter update, even as total sales remained below year-earlier levels. The enterprise cloud and AI infrastructure provider reported USD 609 mn in revenue, positive operating cash flow and a higher midpoint for its full-year sales outlook.

Private Cloud Provides a Different Trend

Rackspace recorded USD 609 mn of revenue for the three months ended September 30, 2026, down 9.3% on a reported basis compared with USD 671 mn in the year-earlier quarter. Within that total, Private Cloud revenue rose 4% to USD 260 mn. Public Cloud revenue amounted to USD 349 mn, down 17% year over year. The divergent segment movements show that the two businesses are not advancing at the same pace.

Cash Generation and Investment

Operating activities generated USD 36 mn of cash during the September quarter, and operating cash flow reached USD 69 mn over the trailing twelve months. Capital Expenditure totalled USD 104 mn in the quarter, compared with USD 34 mn in the corresponding quarter of 2025. As of September 30, the company held USD 108 mn in cash and cash equivalents and reported total Liquidity of USD 170 mn including its revolving Credit facility.

The AI Infrastructure Strategy

Rackspace presents its enterprise offering around secure infrastructure, data foundations and engineering services, including governed private-cloud solutions and AI-related workloads. Its strategy targets businesses with governance, sovereignty and reliability requirements. The Private Cloud revenue increase therefore adds a specific Business signal within a period when aggregate revenue declined.

Guidance Moves Higher at the Midpoint

For 2026, Rackspace issued total revenue guidance of USD 2.51 bn to USD 2.56 bn, raising the midpoint by USD 35 mn. The company maintained adjusted EBITDA guidance of USD 285 mn to USD 295 mn and non-GAAP operating profit guidance of USD 125 mn to USD 135 mn. These remain management expectations rather than realised full-year figures; subsequent results will determine how closely reported performance aligns with the ranges.

Stock Price Information: Rackspace Technology shares traded at USD 3.13, up 16.79%, in the November 11, 2026 market figures.

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