# Rackspace Technology (RXT.US)

Canonical: https://gigainvestors.com/s/RXT

Analysis as of: 2026-10-16T07:31:43.845Z. Financial observations: FY2018–FY2026.

Listing currency: USD. Reporting currency: USD.

## Verdict

Not a wonderful business

Quality tests for Buy: not passed (profit record: fail; earnings resilience is evidence only). Published buy qualification: no.

Share price: $3.19 per share; close as of 2026-10-15.

## Checklist

### understandable: fail

- 4 revenue declines in the last 10 years (informational)

- more than 2 net loss years

- negative average operating margin

- operating margin variation exceeds 0.35

- Financial history: 9 years

- Years with declining revenue: 4

- Years with a net loss: 9

- Operating margin variation: 1.54×

Chart: Operating margin; fiscal year observations.

- FY2018: 0.03×

- FY2019: 0.04×

- FY2020: 0.01×

- FY2021: -0.00×

- FY2022: -0.22×

- FY2023: -0.30×

- FY2024: -0.33×

- FY2025: -0.03×

- LTM to Jun 2026: -0.02×

### moat: fail

- ROIC median below threshold

- ROIC worst years below threshold (more than 1 bad year allowed)

- Recent gross margin fell 15.9pp below the typical margin (limit 4pp)

- ROIC, median of available years: -2.3%

- ROIC, second-lowest year: -45.0%

- Typical minus recent gross margin: 15.9 pp

- Typical gross margin (annual median): 29.3%

- Recent gross margin (lower of latest and 3-year median): 13.4%

- Years with nonpositive capital: 0

- Capital spending / revenue: 3.8%

- ROIC including acquisitions, ten-year median: 0.1%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2018: 2.2%

- FY2019: 3.4%

- FY2020: 0.8%

- FY2021: -0.1%

- FY2022: -25.6%

- FY2023: -45.0%

- FY2024: -51.4%

- FY2025: -4.4%

### economics: fail

- owner earnings cash conversion below threshold

- incremental invested capital return below threshold

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: -$1.3B

- Net income, five-year total: -$2.9B

- Return on incremental invested capital: 0.0%

- Working capital / revenue, annual change: -1.9 pp

Chart: Owner earnings · five years; fiscal year observations.

- FY2021: $164M

- FY2022: -$438M

- FY2023: -$492M

- FY2024: -$606M

- FY2025: $76M

### management: fail

- ROIC first 3 years vs last 3 years: 2.2% vs -45.0%

- Per-share earnings: -1.37 to -3.82 (three-year endpoint medians)

- per-share value declined or ends nonpositive

- material buybacks concentrated at lower earnings yields (Spearman rho below threshold)

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 5-year annual growth: 5.9%

- Diluted shares, 5-year annual growth: 5.9%

- Per-share value change: -$2.45

- Per-share value, starting three-year median: -$1.37

- Per-share value, ending three-year median: -$3.82

- Buybacks concentrated in cheaper years (correlation): -0.60

- Average buyback yield: 1.1%

- Buyback history: 6 years

- Debt-funded buybacks: No

- ROIC, first three-year median: 2.2%

- ROIC, last three-year median: -45.0%

Chart: Earnings per share; fiscal year observations.

- FY2018: -$2.85

- FY2019: -$0.62

- FY2020: -$1.37

- FY2021: -$1.05

- FY2022: -$3.81

- FY2023: -$3.89

- FY2024: -$3.82

- FY2025: -$0.95

### accounting: pass

- stock compensation exceeds 15% of operating cash flow

- Sloan accruals: -13.5%

- Receivables to sales index (DSRI): 0.91×

- Restructuring years, last five: 2

- Stock compensation / operating cash flow: 29.8%

- Earnings backed by cash: Yes

- Accounting red flags: 1

Chart: Sloan accruals; fiscal year observations.

- FY2018: -14.7%

- FY2019: -6.3%

- FY2020: -5.7%

- FY2021: -9.3%

- FY2022: -19.5%

- FY2023: -29.6%

- FY2024: -29.4%

- FY2025: -13.5%

## Holders

- [Dan Davidowitz](https://gigainvestors.com/pcm): tracked 13F investor; follow the investor page for holding quarter and amounts.

## Price story

Down 78% since Nov 2021 · "Rackspace’s Nvidia Partnership Sparks Early Rally, But a $2.8 Billion Debt Load Remains" (finance.yahoo.com, Sep 2026) · sales +0.5%

Story as of 2026-10-16T09:59:32.433Z; price observation 2026-10-15.

- 2026-06-16: Rackspace surges after 30 MW AI compute deal with AMD; cuts 15% jobs ([seekingalpha.com](https://seekingalpha.com/news/4603912-rackspace-surges-after-30-mw-ai-compute-deal-with-amd-cuts-15-jobs?utm_source=feed_news_all&utm_medium=referral&feed_item_type=news))

- 2026-07-10: Rackspace Plunges 25% After Cutting 2026 Outlook, Unveils $250M Share Offering ([finance.yahoo.com](https://finance.yahoo.com/technology/ai/articles/rackspace-plunges-25-cutting-2026-172727482.html))

- 2026-09-22: Why Rackspace Technology (RXT) Is Up 15.8% After Joining NVIDIA’s Cloud Partner Program ([finance.yahoo.com](https://finance.yahoo.com/technology/ai/articles/why-rackspace-technology-rxt-15-011428011.html))

### Sales · FY2025–2026

sales +0.5%; source https://www.sec.gov/Archives/edgar/data/1810019/000181001926000015/rxt-20251231.htm; observed 2026-03-06.

- FY2018: $2.5B 

- FY2019: $2.4B 

- FY2020: $2.7B 

- FY2021: $3.0B 

- FY2022: $3.1B 

- FY2023: $3.0B 

- FY2024: $2.7B 

- FY2025: $2.7B 

- FY2026: $2.7B 

### Gross margin · FY2025

gross margin 13.4%; source https://www.sec.gov/Archives/edgar/data/1810019/000181001926000015/rxt-20251231.htm; observed 2026-03-06.

- FY2018: 41.1% 

- FY2019: 41.5% 

- FY2020: 36.4% 

- FY2021: 31.1% 

- FY2022: 27.4% 

- FY2023: 21.9% 

- FY2024: 19.5% 

- FY2025: 13.4% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in software infrastructure; annual sales are USD 2.7 billion.

- Source: https://www.sec.gov/Archives/edgar/data/1810019/000181001926000015/rxt-20251231.htm (filed 2026-03-06); FY2025: revenue 2685700000; grossProfit 359500000; margin = grossProfit / revenue.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-15); RXT.US: Rackspace Technology, Inc. operates as a hybrid cloud and artificial intelligence solutions company in the United States, the United Kingdom, and internationally. It operates through two segments, Public Cloud and Private Cloud. The company offers programmatic infrastructure, including hardware and services for datacenter compute, network, storage, and data protection; cloud operating systems; platform-as-a-service; private cloud solutions; and private cloud services, such as managed, professional, elastic engineering, and security services, as well as an email platform for customers and carriers. It also provides a cloud platform that offers platform-related services, including cloud strategy and architecture, platform and infrastructure migrations, and modern cloud infrastructure; cloud apps that build and manage applications within a cloud technology stack; and cloud data, which helps accelerate the adoption of modern data solutions enabling business transformation. In addition, the company offers cloud security that provides security solutions in security threat assessment and prevention; proactive threat detection and response; rapid remediation; governance, risk, and compliance assistance across multiple cloud platforms; and privacy and data protection services, including detailed access restrictions and reporting. Further, it provides Rackspace AI, a portfolio of AI services and solutions to help organizations scale AI, as well as multi-cloud strategy, data and application modernization, cloud adoption, cloud-native enablement, SaaS lifecycle management, and data management services. The company serves the financial services, government, healthcare, manufacturing, non-profit, education, SaaS and ISV, consumer goods, oil and gas, and other industries. The company was formerly known as Rackspace Corp. and changed its name to Rackspace Technology, Inc. in June 2020. Rackspace Technology, Inc. was founded in 1998 and is headquartered in San Antonio, Texas.

### Why customers stay

Margins ranged from 13.4% to 21.9% during 2023–25; it lost 2.3% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-06); FY2023: grossProfit / revenue = 21.9%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-06); FY2024: grossProfit / revenue = 19.5%.

- Source: https://www.sec.gov/Archives/edgar/data/1810019/000181001926000015/rxt-20251231.htm (filed 2026-03-06); FY2025: grossProfit / revenue = 13.4%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-06); 8-year return on capital observations [[2018,0.022478508293982322],[2019,0.03360294733316587],[2020,0.007778442158973132],[2021,-0.0008532791843083038],[2022,-0.255664648968114],[2023,-0.45046979014772076],[2024,-0.5137260371959943],[2025,-0.04434632745178498]]; median -0.022599803318046643. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Where the cash goes

Paid dividends in 3 of 8 years; bought back USD 1.2 million of shares.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-06); FY2019: growth capex 0; upkeep 198000000; cash acquisitions 316100000; owner earnings 266200000. Growth capex plus acquisitions / owner earnings = 1.1874530428249437.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-06); FY2020: growth capex 0; upkeep 116500000; cash acquisitions 9500000; owner earnings 174600000. Growth capex plus acquisitions / owner earnings = 0.05441008018327606.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-06); FY2021: growth capex 0; upkeep 108400000; cash acquisitions 0; owner earnings 164000000. Growth capex plus acquisitions / owner earnings = 0.

- Source: https://www.sec.gov/Archives/edgar/data/1810019/000181001926000015/rxt-20251231.htm (filed 2026-03-06); FY2025: growth capex 0; upkeep 60799999; owner earnings 76000001. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-06); Dividend observations: [[2018,0],[2019,0],[2020,912000000],[2021,0],[2022,3700000],[2023,1000000],[2024,0],[2025,0]]. Zero only counted when supported by a complete cash-flow statement.

- Source: https://www.sec.gov/Archives/edgar/data/1810019/000181001926000015/rxt-20251231.htm (filed 2026-03-06); FY2025: cash repurchases 1200000 USD.

### Are managers owners

Insiders own 2.9% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-15); RXT.US SharesStats.PercentInsiders = 2.91 percentage points; cache date 2026-10-15.

### What the price says

The price is 0.3 times annual sales.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-06); Closing price 3.185 USD; reporting-to-trading FX 1; FY2025 annual sales per share 11.251361541684123; price multiple 0.2830768514726142. FY2025 cash earnings/share 0.3183912903225806. Closing-price date 2026-10-15.

## Monthly share-price history (USD per share)

- 2020-08: $21.35 per share

- 2020-09: $19.29 per share

- 2020-10: $15.75 per share

- 2020-11: $17.96 per share

- 2020-12: $19.06 per share

- 2021-01: $23.11 per share

- 2021-02: $21.02 per share

- 2021-03: $23.78 per share

- 2021-04: $24.87 per share

- 2021-05: $20.18 per share

- 2021-06: $19.61 per share

- 2021-07: $17.75 per share

- 2021-08: $13.97 per share

- 2021-09: $14.22 per share

- 2021-10: $13.29 per share

- 2021-11: $14.26 per share

- 2021-12: $13.47 per share

- 2022-01: $12.51 per share

- 2022-02: $11.13 per share

- 2022-03: $11.16 per share

- 2022-04: $9.89 per share

- 2022-05: $9.23 per share

- 2022-06: $7.17 per share

- 2022-07: $6.74 per share

- 2022-08: $4.46 per share

- 2022-09: $4.08 per share

- 2022-10: $5.15 per share

- 2022-11: $4.88 per share

- 2022-12: $2.95 per share

- 2023-01: $3.00 per share

- 2023-02: $2.35 per share

- 2023-03: $1.88 per share

- 2023-04: $1.46 per share

- 2023-05: $1.56 per share

- 2023-06: $2.72 per share

- 2023-07: $2.32 per share

- 2023-08: $2.50 per share

- 2023-09: $2.35 per share

- 2023-10: $1.22 per share

- 2023-11: $1.26 per share

- 2023-12: $2.00 per share

- 2024-01: $1.68 per share

- 2024-02: $2.11 per share

- 2024-03: $1.58 per share

- 2024-04: $1.72 per share

- 2024-05: $1.96 per share

- 2024-06: $2.98 per share

- 2024-07: $2.34 per share

- 2024-08: $2.30 per share

- 2024-09: $2.45 per share

- 2024-10: $2.39 per share

- 2024-11: $2.68 per share

- 2024-12: $2.21 per share

- 2025-01: $2.63 per share

- 2025-02: $2.37 per share

- 2025-03: $1.69 per share

- 2025-04: $1.36 per share

- 2025-05: $1.14 per share

- 2025-06: $1.28 per share

- 2025-07: $1.21 per share

- 2025-08: $1.26 per share

- 2025-09: $1.41 per share

- 2025-10: $1.60 per share

- 2025-11: $1.06 per share

- 2025-12: $0.97 per share

- 2026-01: $0.61 per share

- 2026-02: $1.95 per share

- 2026-03: $0.98 per share

- 2026-04: $1.46 per share

- 2026-05: $5.17 per share

- 2026-06: $6.53 per share

- 2026-07: $4.13 per share

- 2026-08: $3.13 per share

- 2026-09: $3.73 per share

- 2026-10: $3.19 per share

## Annual estimated value (USD per share)

- FY2022: low $9.59 per share, central $10.81 per share, high $12.42 per share

- FY2023: low $8.82 per share, central $9.95 per share, high $11.45 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

## Sources

[Original 10-K filing](https://www.sec.gov/Archives/edgar/data/1810019/000181001926000015/rxt-20251231.htm); period 2025-12-31, filed 2026-03-06.

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.