Rackspace Technology Reports Q3 2025 Revenue Decline and Reduced Net Loss

Rackspace Technology, Inc. reported its financial results for the third quarter of 2025, revealing a slight decline in revenue and a significant reduction in net loss compared to the same period in the previous year. The company generated revenue of $671.2 million for the three months ended September 30, 2025, a decrease of 0.7% from $675.8 million in the prior year. For the nine months ended September 30, 2025, total revenue was $2.0029 billion, down 2.4% from $2.0515 billion in the same period of 2024. The net loss for the quarter was $67.1 million, a notable improvement from a loss of $186.6 million in the third quarter of 2024, while the nine-month net loss decreased to $193.1 million from $802.2 million.

The company's financial performance was impacted by a decline in revenue from its Private Cloud segment, which fell by 3.1% year-over-year, attributed to customer transitions off legacy platforms. Conversely, the Public Cloud segment saw a slight increase in revenue of 0.8%, driven by higher services revenue and increased infrastructure volumes. The overall gross profit for the third quarter was $129.9 million, down from $137.5 million a year earlier, resulting in a gross margin of 19.4%, compared to 20.4% in the prior year.

In terms of operational developments, Rackspace Technology has focused on optimizing its cost structure, leading to a reduction in selling, general, and administrative expenses by 3% to $163.8 million in the third quarter. The company also recorded no goodwill impairment charges in the third quarter of 2025, a significant change from the previous year when it incurred a $141.7 million impairment. This reflects a strategic shift in managing its assets and improving operational efficiency.

As of September 30, 2025, Rackspace reported total assets of $2.845 billion and total liabilities of $4.032 billion, resulting in a stockholders' deficit of $1.187 billion. The company had $99.5 million in cash and cash equivalents, down from $144 million at the end of 2024. Rackspace's debt obligations included $2.434 billion in aggregate principal amount outstanding under various debt instruments, with a focus on managing its leverage and liquidity through refinancing efforts initiated in March 2024.

Looking ahead, Rackspace Technology expressed cautious optimism regarding its operational outlook, emphasizing the importance of maintaining liquidity and managing debt service requirements. The company believes its current cash position and operational strategies will provide sufficient liquidity over the next twelve months, although it acknowledged the inherent risks and uncertainties in achieving its financial objectives.