- Record Revenue of $726 million in the First Quarter, up 11% Year-over-Year
- Core Revenue Grew 15% to $677 million
- Net loss of $(64) million, or $(0.31) per diluted share
- First quarter revenue, Non-GAAP Operating Profit and Non-GAAP EPS exceeded guidance set in February 2021
- Non-GAAP Earnings Per Share Grew 44% Year-over-Year to $0.23
- Quarterly Cash Flow From Operating Activities Improved Dramatically to $103 million, a Four-Fold Year-over-Year Increase
Rackspace Technology, Inc. (Nasdaq: RXT), a leading end-to-end multicloud technology solutions company, today announced results for its first quarter ended March 31, 2021.
Kevin Jones, Chief Executive Officer, commented, “Our first quarter results represent a strong start to the year. We continued to grow both total and Core revenue by double digits. The earnings leverage inherent in our business model and our cost transformation programs are driving significant improvements in year-over-year profitability. And our working capital discipline resulted in a dramatic increase in both operating and free cash flow.”
Mr. Jones continued, “Most importantly we are continuing to position the company for consistent ongoing growth and earnings leverage. The new customers we landed in 2019 and 2020 provide a strong growth foundation, and the continued tectonic shift of workloads to the cloud will provide secular tailwinds for years to come. Our new market positioning as the un-GSI, as well as the new service offerings we’ve introduced in 2021, position Rackspace Technology as the clear partner of choice for companies that want to migrate their business to the cloud. We are already seeing significant traction in the market for these initiatives.”
First Quarter 2021 Results
Revenue was $726 million in the first quarter of 2021, an increase of 11% as compared to revenue of $653 million in the first quarter of 2020. Revenue for the first quarter of 2021 was positively impacted by new customer acquisitions and growing customer spend in our Multicloud Services and Apps & Cross Platform segments. On a constant currency basis, revenue increased by 10% in the first quarter of 2021 as compared to the first quarter of 2020.
Revenue from our Core Segments (“Core Revenue”), comprised of Multicloud Services and Apps & Cross Platform, increased 15% in the first quarter of 2021 as compared to the first quarter of 2020. On a constant currency basis, Core Revenue increased 14% in the first quarter of 2021 as compared to the first quarter of 2020.
Bookings were $244 million in the first quarter of 2021, an increase of 6% as compared to Bookings of $231 million in the first quarter of 2020.
Net loss was $(64) million in the first quarter of 2021, compared to net loss of $(48) million in the first quarter of 2020.
Net loss per diluted share was $(0.31) in the first quarter of 2021, compared to net loss per diluted share of $(0.29) in the first quarter of 2020.
Non-GAAP Operating Profit was $119 million in the first quarter of 2021, an increase of 10% compared to $109 million in the first quarter of 2020.
Non-GAAP Earnings Per Share was $0.23 in the first quarter of 2021, an increase of 44% as compared to Non-GAAP Earnings Per Share of $0.16 in the first quarter of 2020.
Capital expenditures were $59 million in the first quarter of 2021, compared to $75 million in the first quarter of 2020.
As of March 31, 2021, we had cash and cash equivalents of $198 million with no balance outstanding on our Revolving Credit Facility.
Definitions of non-GAAP financial measures and the reconciliations to the most directly comparable measures in accordance with generally accepted accounting principles in the United States (“GAAP”) are provided in subsequent sections of this press release narrative and supplemental schedules. Rackspace Technology has not reconciled Non-GAAP Operating Profit, Non-GAAP Earnings Per Share, Non-GAAP Other Income (Expense) or Non-GAAP Tax Expense Rate guidance to the most directly comparable GAAP measure because it does not provide guidance on GAAP net income (loss) or the reconciling items between these Non-GAAP measures and GAAP net income (loss) as a result of the uncertainty regarding, and the potential variability of, certain of these items, such as share-based compensation expense. Accordingly, a reconciliation of the non-GAAP financial measure guidance to the corresponding GAAP measure is not available without unreasonable effort. With respect to Non-GAAP Operating Profit, Non-GAAP Earnings Per Share, Non-GAAP Other Income (Expense) and Non-GAAP Tax Expense Rate guidance, adjustments in future periods are generally expected to be similar to the kinds of charges and costs excluded from these Non-GAAP measures in prior periods, but the impact of such adjustments could be significant.
Conference Call and Webcast
Rackspace Technology will hold a conference call today, May 10, 2021, at 4:00pm CT / 5:00pm ET to discuss its first quarter 2021 results. Interested parties may access the conference call live over the phone by dialing 1-877-300-8521 (domestic) or 1-412-317-6026 (international) and requesting the Rackspace Technology First Quarter 2021 Earnings Conference Call. A live webcast of the call will be available on Rackspace Technology’s website at https://ir.rackspace.com/news-and-events/events-and-presentations. An audio replay of the conference call will be available approximately three hours after the conference call until 11:59 pm ET on May 24, 2021, and can be accessed by dialing 1-844-512-2921 (domestic) or 1-412-317-6671 (international) and providing the passcode 10155750.