rackspace earnings 2020

First of all, our key profitability metrics are improving, right? We partnered with the hyperscalers, AWS, Google and Microsoft. In accordance with SEC rules, we have provided a reconciliation of these measures to their respective and most directly comparable GAAP measures. Yes. I love this example of how widespread applications for multi-cloud are and how we can grow with our clients bring cutting-edge solutions to the table and protect even the most sensitive data of patient's medical history. In the third quarter, we recorded the largest sales bookings in the history of the company, the highest revenue in the history of the company. We will address 2021 guidance during our fourth quarter earnings call. Our bookings are up. In Q3, we grew these revenues by 20% on a constant currency basis compared to last year's third quarter. And then second part of that really is when we think about the size, the absolute dollar size of new bookings relative to maybe what's embedded in the churn, like when should we start to hit this kind of inflection point where we start to get a little bit of a better connection between bookings and revenue growth? Yes. And then my follow-up is just about commentary in general from IT service providers that are talking about vendor consolidation. Got it. And both those things together is what's causing the revenue momentum. So the dynamic in the market, like we talked about, $400 billion market, growing fast, terrific opportunity. Rackspace Technology CEO Kevin Jones joins Yahoo Finance Live to discuss. The company’s stock price has collected -4.01% of loss in the last five trading OK. OK. Then my follow-up, go back to bookings for a second. You're able to improve upon that. Earnings, adjusted for non-recurring costs, came to 19 cents per share. Rackspace CEO Kevin Jones joins "Squawk Alley" to discuss the company's third-quarter results. The capital-light offerings, having capital-light offerings, while they do have lower gross margins, lower operating expenses, lower capital intensity, we really think that's a winning combination. I just want to make sure I understand that point. Yes. So that acceleration will be materially in there, almost 100% in Q4 going forward. We are very proud of the results, and we're even more excited to see our strategy play out against the huge market opportunity ahead of us. And that's 16 months in a row, right, that we've exceeded our sales targets as a company. Thanks so much. We're seeing it across all of our service offerings. Finally, turning to guidance on Slide 22. And so that acceleration you'll see pick up pretty materially, Keith, that will drive a pretty significant momentum exiting this year and a material step-up from Q3 to Q4. Even with this record sales quarter, pipeline is up, right, more than doubled since Q3 last year. You're getting to year-over-year growth in adjusted EBITDA. So again, just to hit it on the head right there. And it's virtually impossible for customers to do that at scale in a world-class way. We want to make sure that we're well positioned to capitalize on the momentum going into fiscal year '21. And as we indicated on the call, we're really quite excited about the momentum there, right? Earnings, adjusted for non-recurring costs, came to 19 cents per share. And as we add new logos to our installed base, really, what happens with our customers is their needs become more and more complex. The targets that Dustin and I set for the team certainly are increasing. The company needed to manage, optimize and innovate faster on Google Cloud to serve their major customers, including the global Fortune 100. So definitely an area of current investment, an area of significant sales momentum with the State of Texas deal that we talked about before and more to come here. For the full-year 2020, we now expect revenue growth of 10% to 11%, up from our previous range of 9% to 10%. Yes. We are also seizing the massive multi-cloud opportunity available to us and investing in growth. Gross margins, I think, are down on a year-over-year basis a fair bit. Returns as of 12/12/2020. This improvement was the desired end result of the shift I just mentioned to a capital-light sales mix and multi-cloud services that we expect to drive cash flow growth in the years to come. And then over time, as we add Service Blocks, those margins will go up. Press Release Rackspace Technology to Announce Second Quarter 2020 Earnings on Monday, August 31, 2020 Published: Aug. 13, 2020 at 4:15 p.m. Thanks, Amit, very much. In general, these complementary services tend to grow in tandem with our Multicloud Services. Secondly is depth. And if excluding those investments, it goes without saying that the adjusted EBITDA was already up quarter on quarter, year over year, but it would have been even higher, right? Multi-cloud again was already accelerating before COVID, and it was accelerating all around the world before COVID. The company posted revenue of $681.7 million in the period. So our M&A strategy has been very successful because it has gotten us into the enterprise part of the market where we're having great success. And how long of a period does that take before you see a client at maturity and really expanding the margin? The numbers show that once customers are on board, our mandates expand. All of those things together are really what has helped contribute to kind of about the consistency of our sales execution. I am incredibly excited to be back together with Amar and looking forward to working with him to lead Rackspace Technology to the next phase of growth. Consolidated revenues grew 13% over last year on a constant currency basis. Yes, we're excited about the quarter. So we really see the trends in the IT market as very, very favorable to Rackspace Technology. The result is that we have satisfied customers who see a clear return on investment while working with us and ultimately partner with us longer. We've got an entire sales education program called Race to Win. The reported $0.19 earnings per share (EPS) for the quarter, beating analysts' consensus estimates of $0.18 by $0.01. And really, that's where we see the next generation of economic value being created for our customers. I'm just wondering if that's a trend you see in your business. ET. We see movement from public cloud to private cloud. We deploy separate resources to not only land new logos but also expand relationships within our existing client base. Our offerings are truly modular and cover the life cycle of a customer's cloud journey. Thank you for taking my question and congrats on a nice sprint, guys. However, this margin also generally increases as customers grow with us and add Service Blocks. We want to hear from … As a result of the strength we are seeing across our business, we are raising our full-year 2020 guidance for revenue growth, core revenue growth, adjusted EBITDA and adjusted earnings per share. We also continue to evaluate acquisition opportunities to bolster growth. Dustin, anything else to add there? So it's underperforming your growth of the weighted average. And what we really see now is we see continued acceleration for the customers to go to multi-cloud because customers want to save money, that's kind of a timeless objective, and the cloud is great for that. Looking forward, I'm excited about the future for Rackspace Technology. And this is a great opportunity, particularly with multi-cloud, as it accelerates rapidly all over the world. Earnings, adjusted for non-recurring costs, came to 19 cents per share. From 2018, we have now grown our trailing 12-month bookings by approximately $500 million or over 80%. I don't know if there's the classic inverse correlation or not, but is that worth calling out in terms of implementation impact to gross margin? These statements are subject to known and unknown risks and uncertainties, which would cause actual results to differ materially from those expressed on the call. We are at the early stages of a significant secular trend, and we are well positioned to capture and capitalize on this market momentum. So yes, we're really quite excited about the sales bookings momentum that we've had. We also reported 36% year-over-year growth in adjusted earnings per share in the third quarter. These reconciliations can be found in the tables included in today's earnings release and our slide presentation, both of which are available on our website. And also customers, in a lot of cases, want to pivot to new business models. We're very well positioned to capture and capitalize on this tectonic shift in the industry to multi-cloud. We expect OpenStack to continue to decrease over time as we grow multi-cloud. Good luck in your next chapter. I wanted to actually just make sure I understood a prior comment from the question before mine regarding the Government of Texas win and when that sort of starts to feather in. The third quarter represented another quarter of record sales bookings, our highest revenue in the history of the company and the strongest quarterly free cash flow since 2017. And/or is there anything more broadly you can say about how you anticipate the pro forma revenue growth to start to mirror the bookings growth or get the benefit from that over time? We know we will benefit from that decision for years to come. Not only that, in addition to all of the sales success we've had, if you just look at our pipeline, our pipeline is double what it was at this time last year, and it's also up from last quarter. As we've discussed previously, we're right in the middle of a tectonic shift in the industry to multi-cloud. So that momentum did accelerate a bit, but we certainly do not see it as something that was temporary by any means. The company also provided guidance above the consensus estimates. Rackspace Technology continues to execute our strategy to capitalize on the incredible multi-cloud market opportunity. Let's conquer your financial goals together...faster. As we mentioned, fifth record sales quarter in a row. We are growing our key profitability metrics. The entire system is backed by Rackspace Technology. It's a great question. Those two coupled together did drive an impact to overall gross margin and adjusted EBITDA together. The company also provided guidance above the consensus estimates. With the strong revenue, profit and cash flow momentum we have in our business, we're off to a great start as a public company. As Kevin previously announced, full-year 2020 guidance is being raised to the following. His first day will be November 23. Please go ahead. SAN ANTONIO, Nov. 03, 2020 (GLOBE NEWSWIRE) -- Rackspace Technology, Inc. (RXT) (the “Company”) today announced that it will release its third quarter 2020 financial results after the market closes on November 10, 2020. So let's begin on Slide 5. Dustin, any other color to add there? And whether or not our customers are working from home or everyone is back in the office, we're in a great spot, really, Bryan, because there's this tectonic shift in the industry to multi-cloud. And where we see opportunity, Matt, going forward for a lot of the kind of what you would consider traditional, more traditional private cloud business is in the public sector, business which is growing for us, healthcare, of course, financial services and also technology companies. As a reminder, all participants are in listen only mode and the conference is being recorded after the presentation. SAN ANTONIO (AP) _ Rackspace Technology, Inc. (RXT) on Tuesday reported a loss of $101.2 million in its third quarter. Please go ahead. Rackspace Technology expects full-year earnings in the range of 79 cents to 81 cents per share. And with that, I will turn it over to Dustin to take you through our third-quarter results in more detail. So we anticipate very, very strong momentum picking up in Apps & Cross Platform services going forward. Interested parties may access the conference call live over the phone by dialing 1-877-407-4018 (domestic) or 1-201-689-8471 (international) and requesting the Rackspace Technology Second Quarter 2020 Earnings Conference Call. PRESS RELEASE GlobeNewswire . Thanks, Keith. So these niche providers that maybe provide services in one particular geography or one particular platform, maybe it's just Google or just AWS or etc., etc., those types of firms, in my view, are not as advantaged as Rackspace Technology. Using the Rackspace Technology solution, Zeotap is able to accelerate time to market, enhance their customers' experience, save money with streamlined processes and ultimately free their internal IT resources to focus on core business activities. And all that opportunity is there for us as a pure-play multi-cloud provider. Many thanks, gentlemen. Because of our strong execution in this attractive market, we have raised our guidance for full-year 2020. But I'm curious, just the impact of the sales bookings and the implementations, if that's also having an impact on gross margin here. And we had the strongest free cash flow since 2017. So we've broken our own record five quarters in a row. I want to ask the popular question about the impact from COVID. The San Antonio-based company said it had a loss of 54 cents per share. We have no meaningful debt maturities before 2023. And what we're doing here is we're creating an amazing installed base of customers where we're going to upsell and we're going to cross-sell higher margin offerings over time using our land and expand strategy. The Motley Fool - RXT earnings call for the period ending September 30, 2020. With that said, Tien-Tsin, as you look at the bottom line, keep in mind that with all of that investment and some of the hyper growth, you're still getting to quarter to quarter growth in adjusted EBITDA. And really, what we saw with the pandemic was customers really accelerating their journey to multi-cloud, but keep in mind that there's a lot of momentum with multi-cloud migrations before the pandemic, right? New logo bookings are up over 400% since 2018. Very good. Price to Earnings ratio is typically used for current valuation of Rackspace Hosting and is one of the most popular ratios that investors monitor daily. To that end, we are implementing our efficiency transformation programs to reduce costs through bestshoring and automation. The company posted revenue of $681.7 million in the period. Rackspace (Nasdaq: RXT) reported its highest ever quarterly revenue of $681.7 million for the three months ending Sept. 30, up 13% from revenue of $602 million in third quarter 2019. Thanks for the question. Sure. So that's the other dynamic here, is we've got 95% recurring revenue that drives strong visibility in the future, and that really allows us to play offense, which is exactly what we're doing in this fantastic market. We continue to see momentum in our sales bookings ramp driven by the strategy and initiatives we are implementing. Sure. We're using insights from customers and partners to develop new services and capabilities around tomorrow's technologies. Perfect. Second point is we are, as Dustin mentioned in his opening remarks, we are intentionally investing to grow, right? So on that, we're absolutely in growth mode. The report will be for the fiscal Quarter ending Sep 2020. Nov. 10, 2020Updated: Nov. 10, 2020 2:36 p.m. SAN ANTONIO (AP) _ Rackspace Technology, Inc. (RXT) on Tuesday reported a loss of $101.2 million in its third quarter. Thank you. We've done four acquisitions since the LBO, Tricore, Datapipe, RelationEdge and, most recently, Onica which is a fantastic acquisition. So if you go back to Q1, Q2, Q3, you're talking about net revenue retention on a quarterly basis, stepping up from 98, 99, 100. This comes after reporting adjusted earnings … [Operator Instructions] I would now like to turn the conference over to Joe Crivelli, vice president, investor relations. A lot of that is because of the M&A that we've done as a company, right? Well, thanks, Jennifer, and thanks, everyone, so much for joining us tonight and for the questions. Rackspace Technology (RXT) reported 3rd Quarter September 2020 earnings of $0.19 per share on revenue of $681.7 million. Thank you. Additionally, we continue to expand globally and had our first customer wins in South Africa, Indonesia and Vietnam. Congrats on these results. If you could just — you had 3% growth in the quarter and 3% growth year-to-date. That's why we've invested in growth, right? That increased in Q2 to 99%, and we're delighted that we've gotten to the 100% net revenue retention mark in the third quarter. Rackspace Technology, Inc. 2020 Q3 – Results – Earnings Call Presentation (NASDAQ:RXT) The following slide deck was published by Rackspace Technology, Inc. in conjunction with their 2020 Q3 earnings call. You've seen a more gradual step-up in Q3, and you'll see much more of a full ramp in Q4. So that consistency of sales execution and performance is fantastic. And I think what you're seeing is it is actually stepping up. Over time, we expect margins will increase as our new customer relationships mature. Good afternoon, everyone. Love to, Matt. We are proud that we hit double-digit pro forma core revenue growth well ahead of our previously discussed time frame. Video Transcript ZACK GUZMAN: Welcome back to Yahoo Finance Live. Slide 10 demonstrates how our strategic shift to multi-cloud solutions is working and has driven double-digit growth across all customer cohorts since 2016. And in particular, if there's any way to sort of dimensionalize or think about the contribution between growth in the public cloud versus private cloud or more traditional on-prem underneath there. The conference call will also be webcast live through the Company’s website at https://ir.rackspace.com/news-and-events/events-and-presentations. So a couple of things. Revenues in this segment declined 21% on a constant currency basis compared to Q3 of last year. Rackspace Technology to Announce Second Quarter 2020 Earnings on Monday, August 31, 2020. Look, I'll make a few points about your question. And now with our transformation, we've got roughly 71% of our new bookings from installed base and 29% from new logos. Absolutely. And so I'm just curious if you could just reiterate how much was — of that government of Texas win, how much was in this quarter? Yes. Before I turn the call to Dustin, I want to thank him again for his outstanding service to our company. And yes, I do believe our revenue momentum is sustainable. And we're having great luck partnering with the hyperscalers as we go to market. Rackspace Price to Earning is currently at 30.47 X. What I will say is you've seen that acceleration already step up as you think about Q3, excuse me, Q2 to Q3. Good afternoon, everyone. Thank you, Joe, and thank you all for joining us this afternoon. And finally, we have a robust cash flow profile with annual adjusted EBITDA of over $750 million and adjusted EBITDA margin of 29% in the 12 months ended September 30. Thanks for taking my question tonight. EBITDA growth is low single digits. So there's a couple of things. So that's kind of our current and future focus. Absolutely. And Dustin, best wishes to you, man. Really, how we think about our installed base of customers is through the net revenue retention metric. And our next question is from the line of Ramsey El-Assal with Barclays. We see — what customers want is they want a partner that can handle their multi-cloud environment. All growth comparisons we make on the call today relate to the corresponding period of last year unless otherwise noted. To close, I want to recap why we believe Rackspace Technology is such a compelling investment. This is a great visual of both the significant growth dynamic in multi-cloud as well as the success we have had implementing a number of initiatives to enable this growth. Great question, Ramsey. Likewise, our installed base bookings were up 40% in the 12 months ended September 30, 2020, compared to 2018. We leverage functions such as demand marketing and our strategic deal center to increase velocity with new and potential customers, whether that means using marketing to communicate our value proposition more widely or using pattern recognition to pursue large and complex opportunities more effectively. Analyst Opinion on Rackspace Technology (NASDAQ:RXT) 9 Wall Street analysts have issued ratings and price targets for Rackspace Technology in … Sales bookings were $315 million, an increase of 64% compared to $192 million in last year's third quarter. As we sign up new customers, the history shows that we can successfully grow our business with them, which leads to higher future revenue as well as expanding profitability for each customer account. Thanks and good evening, guys. Got it. Any insight around what's happening there? Thanks, Matt. We're in a $400 billion market, which is growing fast and has secular tailwinds. And our next question and our next question comes from the line of Tien-Tsin Huang with JP Morgan. Rackspace Technology does a good job of balancing the need for technology, internal expertise backed with customer references, and most importantly, a commitment to customer satisfaction. So when we — if you look back to my prepared remarks around gross margins in general and about some of the growth that we're experiencing, what we mentioned is that some of these deals, particularly as we're doing so many and so quickly, coming at initially a little bit lower margin, and some of that's associated with implementing them as well. We are also focused on continuing to optimize our earnings leverage. Yes. And all of that happening in such short period of time is pretty exciting. Thanks a lot for the question. After our prepared remarks this afternoon, we'll be happy to take your questions. You mentioned, Kevin, your pipeline is up two times. Bloomberg the Company & Its Products The Company & its Products Bloomberg Terminal Demo Request Bloomberg Anywhere Remote Login Bloomberg Anywhere Login Bloomberg Customer Support Customer Support As multi-cloud expands rapidly all over the world, Rackspace Technology will be there to capitalize on the opportunity. And our next question is from the line of Dan Perlin with RBC Capital Markets. After raising $658 million in net proceeds from our IPO, our leverage now stands at 4.3 times trailing 12-month adjusted EBITDA. And perhaps worthwhile, just to help us think through the free cash flow metrics and how do you think of the growth vectors there as well. Got it. Kevin Jones, Chief Executive Officer, and Dustin Semach, Chief Financial Officer, will also host a conference call on the day of the release (November 10, 2020) at 5:00 pm ET to discuss the Company’s financial results. And if you do see it, how does it impact you guys, is it a threat, an opportunity? I'm wondering if you can talk a little bit more about where you see the biggest pockets of opportunity to acquire and just how you guys are thinking about the trade-off between M&A versus maybe some accelerated debt repayment going forward. Yes. So we're really quite enthusiastic about that. We protect the assets that we acquire, and we integrate the business seamlessly into Rackspace Technology. The Earnings Whisper Score gives the statistical odds for the stock ahead of earnings. We're really, really excited about it. Yeah. And now that that's happened, we're on our way to becoming the leading pure-play multi-cloud provider in our industry. Rackspace Technology won the business by providing a means to stabilize and optimize a large, complex Google Cloud-supported application through Platform Essentials and Service Blocks, along with advisory guidance for critical areas of security and compliance best practices. The following slide deck was published by Rackspace Technology, Inc. in conjunction with their 2020 Q3 earnings call. And the last point I'll put to put a finer point on it, when you look at it from a cash flow perspective, if you knock out capital intensity, you look at overall free cash flow margin, it's still very, very strong at that level. Welcome to the Rackspace Technology, third quarter 2020 earnings call. We design, build and operate our customers’ cloud environments across all major technology platforms, irrespective of technology stack or deployment model. It's not — cloud is not a data center. And this is paying off extremely well in our top line. Our ecosystem is built on our proprietary software, IP and automation that allows us to differentiate our offerings and positions us well to win time and time again. So I'll start, and then, Dustin, you can jump in as well. That's the level of rigor and kind of execution orientation that we have in our sales organization. Secondly, our bookings growth has been broad-based across new logos and our installed base of customers. Slide 7 provides additional perspective on our bookings growth. The Ascent is The Motley Fool's new personal finance brand devoted to helping you live a richer life. I'm Joe Crivelli, and with me on the call today are Kevin Jones, our chief executive officer; and Dustin Semach, our chief financial officer. As we continue to stack Service Blocks with our customers, we recognize both improving customer retention and scale. This strategy has worked incredibly well for us and has enabled a strong new logo motion and our land and expand model that has driven the record bookings growth we just detailed. This makes our achievement in Q3 even more special, with broad-based growth across geographies, industries and market segments. The other thing just to say, just to finish off on this, just remember, Keith, our revenue model is 95% recurring. But even in the near term, each quarter, our pipeline continues to grow, and we will win in the marketplace due to our unique positioning as a leading pure-play multi-cloud provider. 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