Rackspace Technology, Inc. (Nasdaq: RXT), a leading end-to-end,
hybrid multicloud technology solutions company, today announced
results for its third quarter ended September 30, 2023.
Amar Maletira, Chief Executive Officer, stated,
“Fiscal third quarter 2023 results exceeded the midpoint of our
revenue, operating profit, and EPS guidance. Our two-business unit
operating model is now fully implemented, and our leadership teams
are executing to their plans.”
Mr. Maletira added, “We continue to launch new
offerings across all lines of business including Public Cloud,
Private Cloud, and AI. We also see our industry vertical strategy
generating good traction in Private Cloud.”
Third Quarter
2023 Results
Revenue was $732 million in the third quarter of
2023, a decrease of 7% on a reported basis and 8% on a constant
currency basis as compared to revenue of $788 million in the third
quarter of 2022.
Private Cloud revenue was $300 million in the
third quarter of 2023, a decrease of 13% on a reported basis and
14% on a constant currency basis as compared to revenue of $343
million in the third quarter of 2022.
Public Cloud revenue was $433 million in the
third quarter of 2023, a decrease of 3% on both a reported and
constant currency basis as compared to revenue of $445 million in
the third quarter of 2022.
The third quarter of 2023 included a total of
$214 million of non-cash impairment charges compared to $464
million of non-cash impairment charges in the third quarter of
2022. These impairments were primarily a result of a sustained
decrease in our market capitalization.
Loss from operations was $(239) million in the
third quarter of 2023, compared to loss from operations of $(477)
million in the third quarter of 2022.
Net loss was $(227) million in the third quarter
of 2023, compared to net loss of $(512) million in the third
quarter of 2022.
Net loss per diluted share was $(1.05) in the
third quarter of 2023, compared to net loss per diluted share of
$(2.43) in the third quarter of 2022.
Non-GAAP Operating Profit was $46 million in the
third quarter of 2023, a decrease of 43% compared to $80 million in
the third quarter of 2022.
Non-GAAP Loss Per Share was $(0.04) in the third
quarter of 2023, a decrease of 140% as compared to Non-GAAP
Earnings Per Share of $0.10 in the third quarter of 2022.
Capital expenditures were $28 million in the
third quarter of 2023, compared to $31 million in the third quarter
of 2022.
As of September 30, 2023, we had cash and
cash equivalents of $278 million with no balance outstanding on our
Revolving Credit Facility ($375 million of undrawn
commitments).
Financial Outlook
Rackspace Technology is providing guidance as follows:
|
Q4 2023 Guidance |
Total Revenue |
$710 - $720 million |
Private Cloud Revenue |
$284 - $289 million |
Public Cloud Revenue |
$426 - $431 million |
Non-GAAP Operating Profit |
$46 - $48 million |
Non-GAAP Loss Per Share |
$(0.05) - $(0.03) |
Non-GAAP Other Income
(Expense)1 |
$(59) – $(57) million |
Non-GAAP Tax Expense Rate |
26% |
Non-GAAP Weighted Average Shares |
221 – 223 million |
1 Non-GAAP Other Income (Expense) is only expected to include
interest expense.
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
Loss 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 Loss 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, November 7, 2023, at 4:00pm CT / 5:00pm ET to discuss its
third quarter 2023 results. Interested parties may access the
conference call as follows:
To listen to the live webcast or access the
replay following the webcast, please visit our IR website at the
following link: https://edge.media-server.com/mmc/p/6amjdn8o
To obtain a dial-in number, please pre-register
at the following link:
https://register.vevent.com/register/BI74f3b750319d47e4888fd4104e44dc12.
Registrants will receive dial-in information and a PIN allowing
them to access the live call.
About Rackspace Technology
Rackspace Technology is a leading end-to-end
hybrid multicloud technology services company. We can design, build
and operate our customers’ cloud environments across all major
technology platforms, irrespective of technology stack or
deployment model. We partner with our customers at every stage of
their cloud journey, enabling them to modernize applications, build
new products and adopt innovative technologies.
Forward-looking Statements
Rackspace Technology has made statements in this
press release and other reports, filings, and other public written
and verbal announcements that are forward-looking and therefore
subject to risks and uncertainties. All statements, other than
statements of historical fact, included in this document are, or
could be, “forward-looking statements” within the meaning of the
Private Securities Litigation Reform Act of 1995 and are made in
reliance on the safe harbor protections provided thereunder. These
forward-looking statements relate to anticipated financial
performance, management’s plans and objectives for future
operations, business prospects, outcome of regulatory proceedings,
market conditions, and other matters. Any forward-looking statement
made in this presentation speaks only as of the date on which it is
made. We undertake no obligation to publicly update or revise any
forward-looking statement, whether as a result of new information,
future developments or otherwise. Forward-looking statements can be
identified by various words such as “expects,” “intends,” “will,”
“anticipates,” “believes,” “confident,” “continue,” “propose,”
“seeks,” “could,” “may,” “should,” “estimates,” “forecasts,”
“might,” “goals,” “objectives,” “targets,” “planned,” “projects,”
and similar expressions. These forward-looking statements are based
on management’s current beliefs and assumptions and on information
currently available to management. Rackspace Technology cautions
that these statements are subject to risks and uncertainties, many
of which are outside of our control, and could cause future events
or results to be materially different from those stated or implied
in this document, including among others, risk factors that are
described in Rackspace Technology, Inc.’s Annual Reports on Form
10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K,
and other filings with the Securities and Exchange Commission,
including the sections entitled “Risk Factors” and “Management’s
Discussion and Analysis of Financial Condition and Results of
Operations” contained therein.
Non-GAAP Financial Measures
This press release includes several non-GAAP
financial measures such as constant currency revenue, Non-GAAP
Gross Profit, Non-GAAP Net Income (Loss), Non-GAAP Operating
Profit, Adjusted EBITDA and Non-GAAP Earnings (Loss) Per Share.
These non-GAAP financial measures exclude the impact of certain
costs, losses and gains that are required to be included in our
profit and loss measures under GAAP. Although we believe these
measures are useful to investors and analysts for the same reasons
they are useful to management, as described in the accompanying
pages, these measures are not a substitute for, or superior to,
GAAP financial measures or disclosures. Other companies may
calculate similarly-titled non-GAAP measures differently, limiting
their usefulness as comparative measures. We have reconciled each
of these non-GAAP measures to the applicable most comparable GAAP
measure in the accompanying pages.
IR ContactSagar HebbarRackspace Technology
Investor Relationsir@rackspace.com
PR ContactNatalie SilvaRackspace Technology
Corporate Communicationspublicrelations@rackspace.com
RACKSPACE TECHNOLOGY,
INC.CONSOLIDATED RESULTS OF
OPERATIONS(Unaudited)
|
Three Months Ended September 30, |
Year-Over-Year Comparison |
|
|
2022 |
|
2023 |
(In millions, except % and per
share data) |
Amount |
|
% Revenue |
|
Amount |
|
% Revenue |
|
Amount |
|
% Change |
|
Revenue |
$ |
787.6 |
|
|
100.0 |
% |
|
$ |
732.4 |
|
|
100.0 |
% |
|
$ |
(55.2 |
) |
|
(7.0 |
)% |
|
Cost of revenue |
|
(580.5 |
) |
|
(73.7 |
)% |
|
|
(580.4 |
) |
|
(79.2 |
)% |
|
|
0.1 |
|
|
— |
% |
|
Gross profit |
|
207.1 |
|
|
26.3 |
% |
|
|
152.0 |
|
|
20.8 |
% |
|
|
(55.1 |
) |
|
(26.6 |
)% |
|
Selling, general and
administrative expenses |
|
(219.9 |
) |
|
(27.9 |
)% |
|
|
(177.3 |
) |
|
(24.2 |
)% |
|
|
42.6 |
|
|
(19.4 |
)% |
|
Impairment of goodwill |
|
(405.2 |
) |
|
(51.4 |
)% |
|
|
(165.7 |
) |
|
(22.6 |
)% |
|
|
239.5 |
|
|
(59.1 |
)% |
|
Impairment of assets, net |
|
(58.7 |
) |
|
(7.5 |
)% |
|
|
(48.4 |
) |
|
(6.6 |
)% |
|
|
10.3 |
|
|
(17.5 |
)% |
|
Loss from operations |
|
(476.7 |
) |
|
(60.5 |
)% |
|
|
(239.4 |
) |
|
(32.7 |
)% |
|
|
237.3 |
|
|
(49.8 |
)% |
|
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
(52.3 |
) |
|
(6.6 |
)% |
|
|
(56.5 |
) |
|
(7.7 |
)% |
|
|
(4.2 |
) |
|
8.0 |
% |
|
Loss on investments, net |
|
(0.1 |
) |
|
(0.0 |
)% |
|
|
— |
|
|
— |
% |
|
|
0.1 |
|
|
(100.0 |
)% |
|
Gain on debt extinguishment |
|
— |
|
|
— |
% |
|
|
55.4 |
|
|
7.6 |
% |
|
|
55.4 |
|
|
100.0 |
% |
|
Other expense, net |
|
(6.0 |
) |
|
(0.8 |
)% |
|
|
(2.6 |
) |
|
(0.4 |
)% |
|
|
3.4 |
|
|
(56.7 |
)% |
|
Total other income (expense) |
|
(58.4 |
) |
|
(7.4 |
)% |
|
|
(3.7 |
) |
|
(0.5 |
)% |
|
|
54.7 |
|
|
(93.7 |
)% |
|
Loss before income taxes |
|
(535.1 |
) |
|
(67.9 |
)% |
|
|
(243.1 |
) |
|
(33.2 |
)% |
|
|
292.0 |
|
|
(54.6 |
)% |
|
Benefit for income taxes |
|
23.4 |
|
|
3.0 |
% |
|
|
16.5 |
|
|
2.3 |
% |
|
|
(6.9 |
) |
|
(29.5 |
)% |
|
Net loss |
$ |
(511.7 |
) |
|
(65.0 |
)% |
|
$ |
(226.6 |
) |
|
(30.9 |
)% |
|
$ |
285.1 |
|
|
(55.7 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted |
$ |
(2.43 |
) |
|
|
|
$ |
(1.05 |
) |
|
|
|
|
|
|
|
Weighted average number of
shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted |
|
210.8 |
|
|
|
|
|
216.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RACKSPACE TECHNOLOGY,
INC.CONSOLIDATED RESULTS OF
OPERATIONS(Unaudited)
|
Nine Months Ended September 30, |
|
Year-Over-Year Comparison |
|
2022 |
|
2023 |
|
(In millions, except % and per
share data) |
Amount |
|
% Revenue |
|
Amount |
|
% Revenue |
|
Amount |
|
% Change |
Revenue |
$ |
2,335.3 |
|
|
100.0 |
% |
|
$ |
2,237.4 |
|
|
100.0 |
% |
|
$ |
(97.9 |
) |
|
(4.2 |
)% |
|
Cost of revenue |
|
(1,678.2 |
) |
|
(71.9 |
)% |
|
|
(1,762.7 |
) |
|
(78.8 |
)% |
|
|
(84.5 |
) |
|
5.0 |
% |
|
Gross profit |
|
657.1 |
|
|
28.1 |
% |
|
|
474.7 |
|
|
21.2 |
% |
|
|
(182.4 |
) |
|
(27.8 |
)% |
|
Selling, general and
administrative expenses |
|
(645.0 |
) |
|
(27.6 |
)% |
|
|
(601.7 |
) |
|
(26.9 |
)% |
|
|
43.3 |
|
|
(6.7 |
)% |
|
Impairment of goodwill |
|
(405.2 |
) |
|
(17.3 |
)% |
|
|
(708.8 |
) |
|
(31.7 |
)% |
|
|
(303.6 |
) |
|
74.9 |
% |
|
Impairment of assets, net |
|
(58.7 |
) |
|
(2.5 |
)% |
|
|
(48.4 |
) |
|
(2.2 |
)% |
|
|
10.3 |
|
|
(17.5 |
)% |
|
Loss from operations |
|
(451.8 |
) |
|
(19.3 |
)% |
|
|
(884.2 |
) |
|
(39.5 |
)% |
|
|
(432.4 |
) |
|
95.7 |
% |
|
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
(152.9 |
) |
|
(6.5 |
)% |
|
|
(170.7 |
) |
|
(7.6 |
)% |
|
|
(17.8 |
) |
|
11.6 |
% |
|
Gain (loss) on investments, net |
|
(0.4 |
) |
|
(0.0 |
)% |
|
|
0.2 |
|
|
0.0 |
% |
|
|
0.6 |
|
|
NM |
|
|
Gain on debt extinguishment |
|
— |
|
|
— |
% |
|
|
163.1 |
|
|
7.3 |
% |
|
|
163.1 |
|
|
100.0 |
% |
|
Other expense, net |
|
(15.5 |
) |
|
(0.7 |
)% |
|
|
(0.3 |
) |
|
(0.0 |
)% |
|
|
15.2 |
|
|
(98.1 |
)% |
|
Total other income (expense) |
|
(168.8 |
) |
|
(7.2 |
)% |
|
|
(7.7 |
) |
|
(0.3 |
)% |
|
|
161.1 |
|
|
(95.4 |
)% |
|
Loss before income taxes |
|
(620.6 |
) |
|
(26.6 |
)% |
|
|
(891.9 |
) |
|
(39.9 |
)% |
|
|
(271.3 |
) |
|
43.7 |
% |
|
Benefit for income taxes |
|
29.8 |
|
|
1.3 |
% |
|
|
26.1 |
|
|
1.2 |
% |
|
|
(3.7 |
) |
|
(12.4 |
)% |
|
Net loss |
$ |
(590.8 |
) |
|
(25.3 |
)% |
|
$ |
(865.8 |
) |
|
(38.7 |
)% |
|
$ |
(275.0 |
) |
|
46.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share: |
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted |
$ |
(2.80 |
) |
|
|
|
$ |
(4.03 |
) |
|
|
|
|
|
|
Weighted average number of
shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted |
|
210.7 |
|
|
|
|
|
214.8 |
|
|
|
|
|
|
|
NM = not meaningful.
RACKSPACE TECHNOLOGY,
INC.CONSOLIDATED BALANCE
SHEETS(Unaudited)
(In millions, except per share
data) |
|
December 31,2022 |
|
September 30,2023 |
ASSETS |
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash equivalents |
|
$ |
228.4 |
|
|
$ |
277.8 |
|
Accounts receivable, net allowance for credit losses and accrued
customer credits of $24.6 and $19.8, respectively |
|
|
622.2 |
|
|
|
348.7 |
|
Prepaid expenses |
|
|
97.3 |
|
|
|
93.3 |
|
Other current assets |
|
|
125.3 |
|
|
|
125.3 |
|
Total current assets |
|
|
1,073.2 |
|
|
|
845.1 |
|
|
|
|
|
|
Property, equipment and software, net |
|
|
628.3 |
|
|
|
614.4 |
|
Goodwill, net |
|
|
2,155.1 |
|
|
|
1,448.1 |
|
Intangible assets, net |
|
|
1,236.0 |
|
|
|
1,057.8 |
|
Operating right-of-use assets |
|
|
138.0 |
|
|
|
127.2 |
|
Other non-current assets |
|
|
226.1 |
|
|
|
187.7 |
|
Total assets |
|
$ |
5,456.7 |
|
|
$ |
4,280.3 |
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY (DEFICIT) |
|
|
|
|
Current liabilities: |
|
|
|
|
Accounts payable and accrued expenses |
|
$ |
447.3 |
|
|
$ |
416.8 |
|
Accrued compensation and benefits |
|
|
95.3 |
|
|
|
84.1 |
|
Deferred revenue |
|
|
80.9 |
|
|
|
81.6 |
|
Debt |
|
|
23.0 |
|
|
|
47.4 |
|
Accrued interest |
|
|
36.3 |
|
|
|
18.3 |
|
Operating lease liabilities |
|
|
60.0 |
|
|
|
65.5 |
|
Finance lease liabilities |
|
|
61.7 |
|
|
|
63.3 |
|
Financing obligations |
|
|
16.7 |
|
|
|
12.3 |
|
Other current liabilities |
|
|
35.3 |
|
|
|
35.5 |
|
Total current liabilities |
|
|
856.5 |
|
|
|
824.8 |
|
|
|
|
|
|
Non-current liabilities: |
|
|
|
|
Debt |
|
|
3,295.4 |
|
|
|
3,011.6 |
|
Operating lease liabilities |
|
|
84.8 |
|
|
|
77.5 |
|
Finance lease liabilities |
|
|
310.5 |
|
|
|
317.4 |
|
Financing obligations |
|
|
47.6 |
|
|
|
45.5 |
|
Deferred income taxes |
|
|
126.7 |
|
|
|
91.8 |
|
Other non-current liabilities |
|
|
105.7 |
|
|
|
94.5 |
|
Total liabilities |
|
|
4,827.2 |
|
|
|
4,463.1 |
|
|
|
|
|
|
Commitments and Contingencies |
|
|
|
|
|
|
|
|
|
Stockholders' equity (deficit): |
|
|
|
|
Preferred stock, $0.01 par value per share: 5.0 shares authorized;
no shares issued or outstanding |
|
|
— |
|
|
|
— |
|
Common stock, $0.01 par value per share: 1,495.0 shares authorized;
215.7 and 219.5 shares issued; 212.6 and 216.4 shares outstanding,
respectively |
|
|
2.2 |
|
|
|
2.2 |
|
Additional paid-in capital |
|
|
2,573.3 |
|
|
|
2,623.4 |
|
Accumulated other comprehensive income |
|
|
71.4 |
|
|
|
74.8 |
|
Accumulated deficit |
|
|
(1,986.4 |
) |
|
|
(2,852.2 |
) |
Treasury stock, at cost; 3.1 shares held |
|
|
(31.0 |
) |
|
|
(31.0 |
) |
Total stockholders' equity (deficit) |
|
|
629.5 |
|
|
|
(182.8 |
) |
Total liabilities and stockholders' equity (deficit) |
|
$ |
5,456.7 |
|
|
$ |
4,280.3 |
|
|
RACKSPACE TECHNOLOGY,
INC.CONSOLIDATED STATEMENTS OF CASH
FLOWS(Unaudited)
|
Nine Months Ended September 30, |
(In millions) |
2022 |
|
2023 |
Cash Flows From
Operating Activities |
|
|
|
Net loss |
$ |
(590.8 |
) |
|
$ |
(865.8 |
) |
Adjustments to reconcile net loss to net cash provided by operating
activities: |
|
|
|
Depreciation and amortization |
|
296.4 |
|
|
|
282.5 |
|
Amortization of operating right-of-use assets |
|
44.0 |
|
|
|
57.9 |
|
Deferred income taxes |
|
(46.7 |
) |
|
|
(38.9 |
) |
Share-based compensation expense |
|
59.5 |
|
|
|
51.9 |
|
Impairment of goodwill |
|
405.2 |
|
|
|
708.8 |
|
Impairment of assets, net |
|
58.7 |
|
|
|
48.4 |
|
Gain on debt extinguishment |
|
— |
|
|
|
(163.1 |
) |
Unrealized loss on derivative contracts |
|
13.9 |
|
|
|
13.7 |
|
(Gain) loss on investments, net |
|
0.4 |
|
|
|
(0.2 |
) |
Provision for bad debts and accrued customer credits |
|
6.7 |
|
|
|
5.1 |
|
Amortization of debt issuance costs and debt discount |
|
6.0 |
|
|
|
6.0 |
|
Non-cash fair value adjustments |
|
3.0 |
|
|
|
(1.0 |
) |
Other operating activities |
|
(0.3 |
) |
|
|
0.3 |
|
Changes in operating assets and liabilities: |
|
|
|
Accounts receivable |
|
(50.8 |
) |
|
|
268.8 |
|
Prepaid expenses and other current assets |
|
2.4 |
|
|
|
23.1 |
|
Accounts payable, accrued expenses, and other current
liabilities |
|
46.6 |
|
|
|
(65.6 |
) |
Deferred revenue |
|
(15.3 |
) |
|
|
(1.5 |
) |
Operating lease liabilities |
|
(50.3 |
) |
|
|
(48.6 |
) |
Other non-current assets and liabilities |
|
30.6 |
|
|
|
20.9 |
|
Net cash provided by operating activities |
|
219.2 |
|
|
|
302.7 |
|
Cash Flows From
Investing Activities |
|
|
|
Purchases of property, equipment and software |
|
(65.4 |
) |
|
|
(63.0 |
) |
Acquisitions, net of cash acquired |
|
(7.7 |
) |
|
|
— |
|
Purchase of convertible promissory note |
|
(15.0 |
) |
|
|
— |
|
Other investing activities |
|
4.6 |
|
|
|
0.7 |
|
Net cash used in investing activities |
|
(83.5 |
) |
|
|
(62.3 |
) |
Cash Flows From
Financing Activities |
|
|
|
Proceeds from employee stock plans |
|
2.7 |
|
|
|
0.8 |
|
Shares of common stock withheld for employee taxes |
|
— |
|
|
|
(1.0 |
) |
Shares of common stock repurchased |
|
(31.0 |
) |
|
|
— |
|
Proceeds from borrowings under long-term debt arrangements |
|
— |
|
|
|
50.0 |
|
Payments on long-term debt |
|
(17.3 |
) |
|
|
(151.8 |
) |
Payments on financing component of interest rate swap |
|
(12.9 |
) |
|
|
(14.3 |
) |
Principal payments of finance lease liabilities |
|
(49.6 |
) |
|
|
(60.3 |
) |
Principal payments of financing obligations |
|
(37.4 |
) |
|
|
(14.8 |
) |
Other financing activities |
|
(3.3 |
) |
|
|
— |
|
Net cash used in financing activities |
|
(148.8 |
) |
|
|
(191.4 |
) |
Effect of exchange rate changes on cash, cash equivalents, and
restricted cash |
|
(10.2 |
) |
|
|
0.3 |
|
Increase (decrease) in cash, cash equivalents, and restricted
cash |
|
(23.3 |
) |
|
|
49.3 |
|
Cash, cash equivalents, and restricted cash at beginning of
period |
|
275.4 |
|
|
|
231.4 |
|
Cash, cash equivalents, and restricted cash at end of period |
$ |
252.1 |
|
|
$ |
280.7 |
|
Supplemental Cash Flow
Information |
|
|
|
Cash payments for interest, net of amount capitalized |
$ |
127.1 |
|
$ |
166.2 |
Cash payments for income taxes, net of refunds |
$ |
9.0 |
|
$ |
9.9 |
|
|
|
|
Non-cash Investing and
Financing Activities |
|
|
|
Acquisition of property, equipment and software by finance
leases |
$ |
19.6 |
|
$ |
67.4 |
Acquisition of property, equipment and software by financing
obligations |
|
7.1 |
|
|
8.5 |
Increase in property, equipment and software accrued in
liabilities |
|
6.9 |
|
|
4.9 |
Non-cash purchases of property, equipment and software |
$ |
33.6 |
|
$ |
80.8 |
|
|
|
|
|
|
SEGMENT DATA
(In millions, except %) |
|
Three Months Ended September 30, |
|
% Change |
|
|
Revenue by
segment: |
|
2022 |
|
2023 |
|
Actual |
|
Constant Currency (a) |
Public Cloud |
|
$ |
445.0 |
|
$ |
432.8 |
|
(2.7 |
)% |
|
(3.1 |
)% |
Private Cloud |
|
|
342.6 |
|
|
299.6 |
|
(12.5 |
)% |
|
(13.8 |
)% |
Total consolidated revenue |
|
$ |
787.6 |
|
$ |
732.4 |
|
(7.0 |
)% |
|
(7.7 |
)% |
(In millions, except %) |
|
Nine Months Ended September 30, |
|
% Change |
Revenue by
segment: |
|
2022 |
|
2023 |
|
Actual |
|
Constant Currency (a) |
Public Cloud |
|
$ |
1,284.1 |
|
$ |
1,312.3 |
|
2.2 |
% |
|
2.3 |
% |
Private Cloud |
|
|
1,051.2 |
|
|
925.1 |
|
(12.0 |
)% |
|
(11.8 |
)% |
Total consolidated revenue |
|
$ |
2,335.3 |
|
$ |
2,237.4 |
|
(4.2 |
)% |
|
(4.0 |
)% |
(a) |
Refer to "Non-GAAP Financial Measures" in this section for further
explanation and reconciliation. |
|
Three Months Ended September 30, |
|
Year-Over-Year Comparison |
|
(In millions, except %) |
2022 |
|
2023 |
|
Segment operating
profit (a): |
Amount |
|
% of Segment Revenue |
|
Amount |
|
% of Segment Revenue |
|
Amount |
|
% Change |
|
Public Cloud |
$ |
28.1 |
|
|
6.3 |
% |
|
$ |
21.6 |
|
|
5.0 |
% |
|
$ |
(6.5 |
) |
|
(23.1 |
)% |
Private Cloud |
|
116.2 |
|
|
33.9 |
% |
|
|
84.9 |
|
|
28.3 |
% |
|
|
(31.3 |
) |
|
(26.9 |
)% |
Total consolidated segment operating profit |
|
144.3 |
|
|
|
|
|
106.5 |
|
|
|
|
|
(37.8 |
) |
|
(26.2 |
)% |
Corporate functions (b) |
|
(64.8 |
) |
|
|
|
|
(61.0 |
) |
|
|
|
|
3.8 |
|
|
(5.9 |
)% |
Non-GAAP Operating Profit (c) |
$ |
79.5 |
|
|
|
|
$ |
45.5 |
|
|
|
|
$ |
(34.0 |
) |
|
(42.8 |
)% |
|
Nine Months Ended September 30, |
|
Year-Over-Year Comparison |
(In millions, except %) |
2022 |
|
2023 |
|
Segment operating
profit (a): |
Amount |
|
% of Segment Revenue |
|
Amount |
|
% of Segment Revenue |
|
Amount |
|
% Change |
Public Cloud |
$ |
92.5 |
|
|
7.2 |
% |
|
$ |
63.1 |
|
|
4.8 |
% |
|
$ |
(29.4 |
) |
|
(31.8 |
)% |
Private Cloud |
|
385.7 |
|
|
36.7 |
% |
|
|
264.6 |
|
|
28.6 |
% |
|
|
(121.1 |
) |
|
(31.4 |
)% |
Total consolidated segment operating profit |
|
478.2 |
|
|
|
|
|
327.7 |
|
|
|
|
|
(150.5 |
) |
|
(31.5 |
)% |
Corporate functions (b) |
|
(188.1 |
) |
|
|
|
|
(192.7 |
) |
|
|
|
|
(4.6 |
) |
|
2.4 |
% |
Non-GAAP Operating Profit (c) |
$ |
290.1 |
|
|
|
|
$ |
135.0 |
|
|
|
|
$ |
(155.1 |
) |
|
(53.5 |
)% |
(a) |
Segment revenue less expenses
directly attributable to running the respective segments’ business.
These expenses exclude centralized corporate function costs. |
(b) |
Costs that are not allocated to
segments. These costs are related to centralized corporate
functions that provide services to the segments in areas such as
accounting, information technology, marketing, legal and human
resources. |
(c) |
Refer to "Non-GAAP Financial
Measures" in this section for further explanation and
reconciliation. |
NON-GAAP FINANCIAL MEASURES
Constant Currency Revenue
We use constant currency revenue as an
additional metric for understanding and assessing our growth
excluding the effect of foreign currency rate fluctuations on our
international business operations. Constant currency information
compares results between periods as if exchange rates had remained
constant period over period and is calculated by translating the
non-U.S. dollar income statement balances for the most current
period to U.S. dollars using the average exchange rate from the
comparative period rather than the actual exchange rates in effect
during the respective period. We also believe this is an important
metric to help investors evaluate our performance in comparison to
prior periods.
|
|
Three Months Ended September 30, 2022 |
|
Three Months Ended September 30, 2023 |
|
% Change |
(In millions, except %) |
|
Revenue |
|
Revenue |
|
Foreign Currency Translation
(a) |
|
Revenue in Constant Currency |
|
Actual |
|
Constant Currency |
Public Cloud |
|
$ |
445.0 |
|
$ |
432.8 |
|
$ |
(1.6 |
) |
|
$ |
431.2 |
|
(2.7 |
)% |
|
(3.1 |
)% |
Private Cloud |
|
|
342.6 |
|
|
299.6 |
|
|
(4.2 |
) |
|
|
295.4 |
|
(12.5 |
)% |
|
(13.8 |
)% |
Total |
|
$ |
787.6 |
|
$ |
732.4 |
|
$ |
(5.8 |
) |
|
$ |
726.6 |
|
(7.0 |
)% |
|
(7.7 |
)% |
|
|
Nine Months Ended September 30, 2022 |
|
Nine Months Ended September 30, 2023 |
|
% Change |
(In millions, except %) |
|
Revenue |
|
Revenue |
|
Foreign Currency Translation
(a) |
|
Revenue in Constant Currency |
|
Actual |
|
Constant Currency |
Public Cloud |
|
$ |
1,284.1 |
|
$ |
1,312.3 |
|
$ |
1.6 |
|
$ |
1,313.9 |
|
2.2 |
% |
|
2.3 |
% |
Private Cloud |
|
|
1,051.2 |
|
|
925.1 |
|
|
2.3 |
|
|
927.4 |
|
(12.0 |
)% |
|
(11.8 |
)% |
Total |
|
$ |
2,335.3 |
|
$ |
2,237.4 |
|
$ |
3.9 |
|
$ |
2,241.3 |
|
(4.2 |
)% |
|
(4.0 |
)% |
|
|
|
|
|
|
|
|
(a) |
The effect of foreign
currency is calculated by translating current period results using
the average exchange rate from the prior comparative period. |
Non-GAAP Gross Profit
We present Non-GAAP Gross Profit because we
believe the measure is useful in analyzing trends in our
underlying, recurring gross margins. We define Non-GAAP Gross
Profit as gross profit, adjusted to exclude the impact of
share-based compensation expense and other non-recurring or unusual
compensation items, purchase accounting-related effects, certain
business transformation-related costs, and costs related to the
Hosted Exchange incident.
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
(In millions) |
2022 |
|
2023 |
|
2022 |
|
2023 |
Gross profit |
$ |
207.1 |
|
$ |
152.0 |
|
$ |
657.1 |
|
$ |
474.7 |
Share-based compensation
expense |
|
2.8 |
|
|
2.0 |
|
|
9.0 |
|
|
7.4 |
Other compensation expense
(a) |
|
0.4 |
|
|
1.2 |
|
|
1.6 |
|
|
3.3 |
Purchase accounting impact on
expense (b) |
|
0.6 |
|
|
0.6 |
|
|
2.1 |
|
|
1.9 |
Restructuring and
transformation expenses (c) |
|
0.8 |
|
|
6.2 |
|
|
9.2 |
|
|
16.0 |
Hosted Exchange incident
expenses, net of proceeds received or expected to be received under
our insurance coverage |
|
— |
|
|
— |
|
|
— |
|
|
0.3 |
Non-GAAP Gross Profit |
$ |
211.7 |
|
$ |
162.0 |
|
$ |
679.0 |
|
$ |
503.6 |
(a) |
Adjustments for retention
bonuses, mainly in connection with restructuring and transformation
projects, and the related payroll tax, and payroll taxes associated
with the exercise of stock options and vesting of restricted stock.
Beginning in the second quarter of 2023, includes expense related
to the one-time grant of long-term incentive bonuses as a component
of our annual compensation award process. |
(b) |
Adjustment for the impact of
purchase accounting from the November 2016 merger on expenses. |
(c) |
Adjustment for the impact of
business transformation and optimization activities, as well as
associated severance, certain facility closure costs and lease
termination expenses. This amount also includes certain costs
associated with the July 2021 Restructuring Plan which are not
accounted for as exit and disposal costs under ASC 420, including
one-time offshore build out costs. |
Non-GAAP Net Income (Loss), Non-GAAP Operating Profit
and Adjusted EBITDA
We present Non-GAAP Net Income (Loss), Non-GAAP
Operating Profit and Adjusted EBITDA because they are a basis upon
which management assesses our performance and we believe they are
useful to evaluating our financial performance. We believe that
excluding items from net income that may not be indicative of, or
are unrelated to, our core operating results, and that may vary in
frequency or magnitude, enhances the comparability of our results
and provides a better baseline for analyzing trends in our
business.
We define Non-GAAP Net Income (Loss) as net
income (loss) adjusted to exclude the impact of non-cash charges
for share-based compensation, special bonuses and other
compensation expense, transaction-related costs and adjustments,
restructuring and transformation charges, costs related to the
Hosted Exchange incident, the amortization of acquired intangible
assets, goodwill and asset impairment charges, costs related to the
closure of a UK office, and certain other non-operating,
non-recurring or non-core gains and losses, as well as the tax
effects of these non-GAAP adjustments.
We define Non-GAAP Operating Profit as income
(loss) from operations adjusted to exclude the impact of non-cash
charges for share-based compensation, special bonuses and other
compensation expense, transaction-related costs and adjustments,
restructuring and transformation charges, costs related to the
Hosted Exchange incident, the amortization of acquired intangible
assets, goodwill and asset impairment charges, costs related to the
closure of a UK office, and certain other non-operating,
non-recurring or non-core gains and losses.
We define Adjusted EBITDA as net income (loss)
adjusted to exclude the impact of non-cash charges for share-based
compensation, special bonuses and other compensation expense,
transaction-related costs and adjustments, restructuring and
transformation charges, costs related to the Hosted Exchange
incident, costs related to the closure of a UK office, certain
other non-operating, non-recurring or non-core gains and losses,
interest expense, income taxes, depreciation and amortization, and
goodwill and asset impairment charges.
Non-GAAP Operating Profit and Adjusted EBITDA
are management's principal metrics for measuring our underlying
financial performance. Non-GAAP Operating Profit and Adjusted
EBITDA, along with other quantitative and qualitative information,
are also the principal financial measures used by management and
our board of directors in determining performance-based
compensation for our management and key employees.
These non-GAAP measures are not intended to
imply that we would have generated higher income or avoided net
losses if the November 2016 merger and the subsequent transactions
and initiatives had not occurred. In the future we may incur
expenses or charges such as those added back to calculate Non-GAAP
Net Income (Loss), Non-GAAP Operating Profit or Adjusted EBITDA.
Our presentation of Non-GAAP Net Income (Loss), Non-GAAP Operating
Profit and Adjusted EBITDA should not be construed as an inference
that our future results will be unaffected by these items. Other
companies, including our peer companies, may calculate
similarly-titled measures in a different manner from us, and
therefore, our non-GAAP measures may not be comparable to
similarly-titled measures of other companies. Investors are
cautioned against using these measures to the exclusion of our
results in accordance with GAAP.
Net loss reconciliation to Non-GAAP Net Income
(Loss)
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
(In millions) |
2022 |
|
2023 |
|
2022 |
|
2023 |
Net loss |
$ |
(511.7 |
) |
|
$ |
(226.6 |
) |
|
$ |
(590.8 |
) |
|
$ |
(865.8 |
) |
Share-based compensation
expense |
|
19.4 |
|
|
|
17.2 |
|
|
|
59.5 |
|
|
|
51.9 |
|
Special bonuses and other
compensation expense (a) |
|
2.4 |
|
|
|
3.3 |
|
|
|
8.2 |
|
|
|
9.7 |
|
Transaction-related
adjustments, net (b) |
|
2.4 |
|
|
|
1.6 |
|
|
|
9.6 |
|
|
|
4.1 |
|
Restructuring and
transformation expenses (c) |
|
26.1 |
|
|
|
14.3 |
|
|
|
74.3 |
|
|
|
63.0 |
|
Hosted Exchange incident
expenses, net of proceeds received or expected to be received under
our insurance coverage |
|
— |
|
|
|
(5.3 |
) |
|
|
— |
|
|
|
(0.4 |
) |
Impairment of goodwill |
|
405.2 |
|
|
|
165.7 |
|
|
|
405.2 |
|
|
|
708.8 |
|
UK office closure (d) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
12.1 |
|
Impairment of assets, net |
|
58.7 |
|
|
|
48.4 |
|
|
|
58.7 |
|
|
|
48.4 |
|
Net (gain) loss on divestiture
and investments (e) |
|
0.1 |
|
|
|
— |
|
|
|
0.4 |
|
|
|
(0.2 |
) |
Gain on debt extinguishment
(f) |
|
— |
|
|
|
(55.4 |
) |
|
|
— |
|
|
|
(163.1 |
) |
Other expense, net (g) |
|
6.0 |
|
|
|
2.6 |
|
|
|
15.5 |
|
|
|
0.3 |
|
Amortization of intangible
assets (h) |
|
42.0 |
|
|
|
39.7 |
|
|
|
126.4 |
|
|
|
121.6 |
|
Tax effect of non-GAAP
adjustments (i) |
|
(30.6 |
) |
|
|
(13.6 |
) |
|
|
(65.6 |
) |
|
|
(16.7 |
) |
Non-GAAP Net Income (Loss) |
$ |
20.0 |
|
|
$ |
(8.1 |
) |
|
$ |
101.4 |
|
|
$ |
(26.3 |
) |
Loss from operations reconciliation to Non-GAAP
Operating Profit
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
(In millions) |
2022 |
|
2023 |
|
2022 |
|
2023 |
Loss from operations |
$ |
(476.7 |
) |
|
$ |
(239.4 |
) |
|
$ |
(451.8 |
) |
|
$ |
(884.2 |
) |
Share-based compensation
expense |
|
19.4 |
|
|
|
17.2 |
|
|
|
59.5 |
|
|
|
51.9 |
|
Special bonuses and other
compensation expense (a) |
|
2.4 |
|
|
|
3.3 |
|
|
|
8.2 |
|
|
|
9.7 |
|
Transaction-related
adjustments, net (b) |
|
2.4 |
|
|
|
1.6 |
|
|
|
9.6 |
|
|
|
4.1 |
|
Restructuring and
transformation expenses (c) |
|
26.1 |
|
|
|
14.3 |
|
|
|
74.3 |
|
|
|
63.0 |
|
Hosted Exchange incident
expenses, net of proceeds received or expected to be received under
our insurance coverage |
|
— |
|
|
|
(5.3 |
) |
|
|
— |
|
|
|
(0.4 |
) |
Impairment of goodwill |
|
405.2 |
|
|
|
165.7 |
|
|
|
405.2 |
|
|
|
708.8 |
|
Impairment of assets, net |
|
58.7 |
|
|
|
48.4 |
|
|
|
58.7 |
|
|
|
48.4 |
|
Amortization of intangible
assets (h) |
|
42.0 |
|
|
|
39.7 |
|
|
|
126.4 |
|
|
|
121.6 |
|
UK office closure (d) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
12.1 |
|
Non-GAAP Operating Profit |
$ |
79.5 |
|
|
$ |
45.5 |
|
|
$ |
290.1 |
|
|
$ |
135.0 |
|
Net loss reconciliation to Adjusted EBITDA
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
(In millions) |
2022 |
|
2023 |
|
2022 |
|
2023 |
Net loss |
$ |
(511.7 |
) |
|
$ |
(226.6 |
) |
|
$ |
(590.8 |
) |
|
$ |
(865.8 |
) |
Share-based compensation
expense |
|
19.4 |
|
|
|
17.2 |
|
|
|
59.5 |
|
|
|
51.9 |
|
Special bonuses and other
compensation expense (a) |
|
2.4 |
|
|
|
3.3 |
|
|
|
8.2 |
|
|
|
9.7 |
|
Transaction-related
adjustments, net (b) |
|
2.4 |
|
|
|
1.6 |
|
|
|
9.6 |
|
|
|
4.1 |
|
Restructuring and
transformation expenses (c) |
|
26.1 |
|
|
|
14.3 |
|
|
|
74.3 |
|
|
|
63.0 |
|
Hosted Exchange incident
expenses, net of proceeds received or expected to be received under
our insurance coverage |
|
— |
|
|
|
(5.3 |
) |
|
|
— |
|
|
|
(0.4 |
) |
Impairment of goodwill |
|
405.2 |
|
|
|
165.7 |
|
|
|
405.2 |
|
|
|
708.8 |
|
UK office closure (d) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
12.1 |
|
Impairment of assets, net |
|
58.7 |
|
|
|
48.4 |
|
|
|
58.7 |
|
|
|
48.4 |
|
Net (gain) loss on divestiture
and investments (e) |
|
0.1 |
|
|
|
— |
|
|
|
0.4 |
|
|
|
(0.2 |
) |
Gain on debt extinguishment
(f) |
|
— |
|
|
|
(55.4 |
) |
|
|
— |
|
|
|
(163.1 |
) |
Other expense, net (g) |
|
6.0 |
|
|
|
2.6 |
|
|
|
15.5 |
|
|
|
0.3 |
|
Interest expense |
|
52.3 |
|
|
|
56.5 |
|
|
|
152.9 |
|
|
|
170.7 |
|
Benefit for income taxes |
|
(23.4 |
) |
|
|
(16.5 |
) |
|
|
(29.8 |
) |
|
|
(26.1 |
) |
Depreciation and amortization
(j) |
|
96.6 |
|
|
|
90.1 |
|
|
|
296.1 |
|
|
|
279.2 |
|
Adjusted EBITDA |
$ |
134.1 |
|
|
$ |
95.9 |
|
|
$ |
459.8 |
|
|
$ |
292.6 |
|
(a) |
Includes expense related to
retention bonuses, mainly relating to restructuring and integration
projects, and the related payroll tax, senior executive signing
bonuses and relocation costs, and payroll taxes associated with the
exercise of stock options and vesting of restricted stock.
Beginning in the second quarter of 2023, includes expense related
to the one-time grant of long-term incentive bonuses as a component
of our annual compensation award process. |
(b) |
Includes legal, professional,
accounting and other advisory fees related to acquisitions, certain
one-time compliance costs related to being a public company,
integration costs of acquired businesses, purchase accounting
adjustments, payroll costs for employees that dedicate significant
time to supporting these projects and exploratory acquisition and
divestiture costs and expenses related to financing
activities. |
(c) |
Includes consulting and advisory
fees related to business transformation and optimization
activities, payroll costs for employees that dedicate significant
time to these projects, as well as associated severance, certain
facility closure costs, and lease termination expenses. This amount
also includes total charges of $1.0 million and $5.2 million for
the three and nine months ended September 30, 2022, respectively,
related to the July 2021 Restructuring Plan which are not accounted
for as exit and disposal costs under ASC 420, including one-time
offshore build out costs. |
(d) |
Expense recognized related to the
closure of a UK office that we exited in the second quarter of 2023
prior to the lease end date. |
(e) |
Includes gains and losses on
investment and from dispositions. |
(f) |
Includes gains related to
repurchases of 5.375% Senior Notes. |
(g) |
Primarily consists of foreign
currency gains and losses. |
(h) |
All of our intangible assets are
attributable to acquisitions, including the November 2016
merger. |
(i) |
We utilize an estimated
structural long-term non-GAAP tax rate in order to provide
consistency across reporting periods, removing the effect of
non-recurring tax adjustments, which include but are not limited to
tax rate changes, U.S. tax reform, share-based compensation, audit
conclusions and changes to valuation allowances. When computing
this long-term rate for the 2022 and 2023 interim periods, we based
it on an average of the 2021 and estimated 2022 tax rates and 2022
and estimated 2023 tax rates, respectively, recomputed to remove
the tax effect of non-GAAP pre-tax adjustments and non-recurring
tax adjustments, resulting in a structural non-GAAP tax rate of 26%
for all periods. The non-GAAP tax rate could be subject to change
for a variety of reasons, including the rapidly evolving global tax
environment, significant changes in our geographic earnings mix
including due to acquisition activity, or other changes to our
strategy or business operations. We will re-evaluate our long-term
non-GAAP tax rate as appropriate. We believe that making these
adjustments facilitates a better evaluation of our current
operating performance and comparisons to prior periods. |
(j) |
Excludes accelerated depreciation
expense related to facility closures. |
Non-GAAP Earnings (Loss) Per Share
We define Non-GAAP Earnings (Loss) Per Share as
Non-GAAP Net Income (Loss) divided by our GAAP weighted average
number of shares outstanding for the period on a diluted basis and
further adjusted for the weighted average number of shares
associated with securities which are anti-dilutive to GAAP loss per
share but dilutive to Non-GAAP Earnings (Loss) Per Share.
Management uses Non-GAAP Earnings (Loss) Per Share to evaluate the
performance of our business on a comparable basis from period to
period, including by adjusting for the impact of the issuance of
shares that would be dilutive to Non-GAAP Earnings (Loss) Per
Share.
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
(In millions, except per share
amounts) |
2022 |
|
2023 |
|
2022 |
|
2023 |
Net loss attributable to common stockholders |
$ |
(511.7 |
) |
|
$ |
(226.6 |
) |
|
$ |
(590.8 |
) |
|
$ |
(865.8 |
) |
Non-GAAP Net Income
(Loss) |
$ |
20.0 |
|
|
$ |
(8.1 |
) |
|
$ |
101.4 |
|
|
$ |
(26.3 |
) |
|
|
|
|
|
|
|
|
Weighted average number of
shares - Diluted |
|
210.8 |
|
|
|
216.0 |
|
|
|
210.7 |
|
|
|
214.8 |
|
Effect of dilutive securities
(a) |
|
0.2 |
|
|
|
6.4 |
|
|
|
0.5 |
|
|
|
2.9 |
|
Non-GAAP weighted average number of shares - Diluted |
|
211.0 |
|
|
|
222.4 |
|
|
|
211.2 |
|
|
|
217.7 |
|
|
|
|
|
|
|
|
|
Net loss per share -
Diluted |
$ |
(2.43 |
) |
|
$ |
(1.05 |
) |
|
$ |
(2.80 |
) |
|
$ |
(4.03 |
) |
Per share impacts of
adjustments to net loss (b) |
|
2.52 |
|
|
|
1.01 |
|
|
|
3.29 |
|
|
|
3.91 |
|
Per share impacts of shares
dilutive after adjustments to net loss (a) |
|
0.01 |
|
|
|
0.00 |
|
|
|
(0.01 |
) |
|
|
0.00 |
|
Non-GAAP Earnings (Loss) Per Share |
$ |
0.10 |
|
|
$ |
(0.04 |
) |
|
$ |
0.48 |
|
|
$ |
(0.12 |
) |
(a) |
Reflects impact of awards that
would have been anti-dilutive to net loss per share, and therefore
not included in the calculation, but would be dilutive to Non-GAAP
Earnings (Loss) Per Share and are therefore included in the share
count for purposes of this non-GAAP measure. Potential common share
equivalents consist of shares issuable upon the exercise of stock
options, vesting of restricted stock units (including
performance-based restricted stock units) or purchases under the
Employee Stock Purchase Plan (the "ESPP"), as well as contingent
shares associated with our acquisition of Datapipe Parent, Inc.
Certain of our potential common share equivalents are contingent on
Apollo achieving pre-established performance targets based on a
multiple of their invested capital ("MOIC"), which are included in
the denominator for the entire period if such shares would be
issuable as of the end of the reporting period assuming the end of
the reporting period was the end of the contingency period. |
(b) |
Reflects the aggregate
adjustments made to reconcile Non-GAAP Net Income (Loss) to our net
loss, as noted in the above table, divided by the GAAP diluted
number of shares outstanding for the relevant period. |
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