SA cloud company Rackspace boosted revenue, narrowed loss in 2021

San Antonio’s Rackspace Technology said Tuesday it increased revenue 11 percent in 2021 and narrowed its losses over the previous year as more companies moved their data to the cloud.

The cloud-computing firm reported a loss of $ 218 million on revenue of $ 3 billion for the last year, compared to a shortfall of $ 246 million on revenue of $ 2.7 billion in 2020.

In a conference call with stock analysts late Tuesday, Rackspace CEO Kevin Jones said the company is “well-positioned in this fast-growing cloud market.”

“Demand environment is strong,” he said. “The market is strong. Customers have a mandate to move to the cloud. And we’re there to service this unprecedented demand. ”

Rackspace reported about $ 1 billion in annual bookings in 2021, which refers to contracts signed in the year by new customers and upgrades by existing customers. That was an 8 percent decrease from the $ 1.1 billion in bookings in 2020.

Fourth-quarter earnings

The quarter ending Dec. 31 marked Rackspace’s ninth consecutive quarter of revenue growth.

The company reported revenue of $ 777 million in the quarter of fiscal year 2021, a 9 percent increase over revenue of $ 716 million the year before. President and CFO Amar Maletira said the figures “were on the high-end of expectations for the quarter.”

The company reported a net loss of $ 83 million in the fourth quarter, up from a loss of $ 64 million in the same period the year before.

“The fourth quarter was a strong conclusion to the year, and Rackspace Technology continued to execute on its mission to lead the cloud services market as a best-in-class, pure-play cloud solutions company,” Jones said in a statement Tuesday.

Rackspace said it strengthened cloud partnerships with midsize customers, including Snowflake, Datadog, Cloudfare and Platform9, and attracted larger companies.

In January, the company acquired Just Analytics, a Singapore-based computer software company specializing in cloud data and artificial intelligence. Rackspace also partnered with BT Group, a UK telecommunications and network provider serving customers in more than 180 countries.

Jones declined to disclose financial details of the two deals.

He said the BT partnership is the largest deal in company history, estimating that “it could be worth several hundred million dollars over multiple years.” Rackspace expects to take on hundreds of new international customers as a result of the deal.

Looking ahead, Maletira estimated a revenue of $ 768 million to $ 778 million for the first quarter, which ends March 31.

Last July, Rackspace announced it would lay off 700 workers, about 10 percent of its global workforce. At least half of the affected employees worked at the company’s Windcrest headquarters.

In a regulatory filing at the time, Rackspace said the layoffs were part of “an internal restructuring plan,” and that it would tap its offshore service centers to back-fill about 85 percent of the positions.

Since 2017, Rackspace has spent $ 1.7 billion to acquire four businesses – including Onica, a cloud services and management firm, and Datapipe, a managed services provider for private and public cloud customers.

New York private-equity powerhouse Apollo Global Management took Rackspace private in a $ 4.3 billion deal in 2016, and reintroduced it to the stock market in August 2020.

Since then, Rackspace’s stock price has fluctuated, ranging from a high of $ 26.43 per share in April 2021 to a low of $ 10.85 – which it hit Tuesday. The stock fell 8.9 percent in today’s trading.

Rackspace released its earnings report after the market closed Tuesday.

Leave a Comment