Rackspace launches up to $250M equity offering, cuts FY26 outlook by $150M on AI pivot

On July 9, 2026, Rackspace Technology, Inc. (the “Company”) entered into an Equity Distribution Agreement (the “Agreement”) with Goldman Sachs & Co. LLC, in its capacity as sales agent (the “Manager”), with respect to an at-the-market offering program under which the Company may offer and sell, from time to time at its sole discretion, shares of its common stock, par value $0.01 per share (“Common Stock”), having an aggregate offering price of up to $250,000,000 (the “Shares”) through the Manager, acting as sales agent, or directly to the Manager acting as principal for its own accounts at a price and on terms agreed upon in a separate written agreement.

On July 2, 2026, Rackspace Receivables II LLC (the "Seller"), Rackspace Receivables Canada Limited, certain subsidiaries of Rackspace Technology, Inc. serving as originators and servicers, PNC Bank, National Association, as administrative agent and purchaser, and PNC Capital Markets LLC, as structuring agent, entered into an Omnibus Amendment and Waiver (the "Amendment") to the Receivables Purchase Agreement, dated September 29, 2023, and certain related transaction documents governing the Company's receivables purchase facility.

Among other things, the Amendment (i) extends the Scheduled Termination Date from September 29, 2026 to July 2, 2029

the Amendment (i) extends the Scheduled Termination Date from September 29, 2026 to July 2, 2029 and revises the early termination provisions to reference the earliest scheduled maturity of the revolving facilities under the Company's first lien credit agreement (or any revolving credit facility that refinances or replaces such revolving facility), (ii) permits the Facility Limit to be increased by up to $50 million, from $300 million to a maximum of $350 million, subject to the terms and conditions of the Receivables Purchase Agreement

On July 9, 2026, the Company issued a press release announcing preliminary financial results for the fiscal quarter ended June 30, 2026 and updates to its fiscal year 2026 outlook.

Revenue is expected to be in the range of $641 to $649 million, including Private Cloud revenue between $242 to $246 million and Public Cloud revenue between $399 to $403 million.

Gain on debt extinguishment (7) (6)

The combination of our prioritization efforts, industry trends and current supply constraints results in a reduction of $150 million in our revenue expectations and $20 million in EBITDA.

In a separate release today, Palantir and Rackspace announced a definitive agreement establishing an operating framework to deploy Palantir Foundry and AIP in mid-market, regulated and sovereign environments, naming Rackspace a preferred partner.

Since the companies’ initial February 2026 announcement, the partnership has built measurable momentum. Rackspace has scaled to approximately 400 Palantir certifications across sales, engineering, delivery, and operations, including a large global cohort of Palantir-certified forward deployed engineers (FDEs) to serve demand across healthcare, financial services, energy, and mid-market. The first joint deployment closed in less than 2 months with Rackspace FDEs deploying AI-enabled workflows on Palantir Foundry inside a U.S.-based solar tracking manufacturer to deliver a 94% reduction in their quote cycle time.

As we look beyond 2026, our current plan is to ramp the Enterprise AI business up to cumulative capacity of 15 MW by the end of 2027 and a total of 30 MW of capacity by the end of 2028. We expect to average $15-20 million of annual revenue per MW deployed as GPU and customer mix evolves. This translates to $450-$600 million of annual revenue at the full 30 MW of AMD deployments and we expect Adjusted EBITDA margins for Enterprise AI to be in the 50%+ range

The best-of-breed partnerships we have signed during 2026 – with AMD, Palantir, Rubrik, Uniphore and VMware by Broadcom – combined with the data center capacity and 25+ years of expertise that Rackspace brings to the table, represent a unique positional advantage for Rackspace. Today’s capital raise announcement is meaningful because it will enable us to expedite our AI Enterprise strategy and unlock a meaningful revenue and EBITDA growth vector for Rackspace, starting in 2027.