SAN ANTONIO, Texas - Rackspace Technology (NASDAQ: NASDAQ:RXT), a prominent provider of hybrid, multicloud, and AI technology solutions with a market capitalization of $544 million, today announced significant changes to its Board of Directors along with executive transitions. According to InvestingPro data, the company operates with a significant debt burden, with total debt reaching $3.4 billion as of the latest quarter. Jeffrey Benjamin, a current board member since 2016, will take over as the Independent (LON:IOG) Chairman of the Board, succeeding David Sambur, who has stepped down after nine years of service.
Benjamin, who has extensive experience in investment management, including stints on the boards of American Airlines Group (NASDAQ:AAL) and Caesars (NASDAQ:CZR) Entertainment, is expected to support Rackspace’s growth strategy with his expertise. Vikram Mahidhar, known for his leadership in artificial intelligence at Apollo Global Management (NYSE:APO), will also join the Rackspace Board. Mahidhar’s appointment follows Susan Arthur’s departure from the board to focus on other responsibilities.
In executive moves, Brian Lillie, President of Private Cloud at Rackspace, will leave his role to concentrate on personal commitments. Amar Maletira, Rackspace’s CEO, will temporarily lead the Private Cloud business while the company searches for Lillie’s successor. Lillie is set to stay on in an advisory capacity until April 5, 2025.
The company also highlighted its strong sales performance, noting record-breaking quarterly sales bookings in the fourth quarter of 2024, which showed significant year-over-year and sequential growth. This comes despite a challenging environment, with InvestingPro analysis showing an 8.4% revenue decline over the last twelve months. The stock has shown resilience, posting a 45.7% return over the past year despite recent volatility. This performance aligns with the financial guidance for the fourth quarter of 2024, which Rackspace reaffirmed today. This guidance was initially provided in a November 12, 2024, press release.
Rackspace Technology is recognized for designing, building, and operating cloud environments for its customers on major technology platforms. The company assists clients throughout their cloud journey, from modernizing applications to adopting new technologies.
This announcement is based on a press release statement and includes forward-looking statements subject to risks and uncertainties. Analysts maintain a hold consensus on the stock, with price targets ranging from $2.00 to $3.50 per share. For deeper insights into Rackspace’s financial health and growth prospects, investors can access comprehensive analysis and additional ProTips through InvestingPro’s detailed research reports. The company cautions that these statements are based on current beliefs and assumptions and are subject to change.
In other recent news, Rackspace Technology has showcased strong financial performance in its recent quarterly earnings. The company reported GAAP revenue of $676 million, with the Private Cloud and Public Cloud divisions generating $258 million and $418 million respectively. This success marks the ninth consecutive quarter that the company has surpassed its revenue, profit, and earnings per share guidance. BMO Capital Markets, while maintaining a Market Perform rating, has raised its price target for Rackspace to $3.50, reflecting a positive outlook on the company’s financial prospects.
Rackspace’s Private Cloud services have shown growth for the first time in several years, indicating potential for revenue improvements in fiscal year 2025. The company’s bookings, particularly in the Public Cloud division, have also shown consecutive growth over the past three quarters. In terms of future projections, Rackspace anticipates Q4 GAAP revenue to be between $668 million and $680 million, and non-GAAP operating profit to be between $34 million and $36 million. The company also expects significant growth in the healthcare sector, with possible high double-digit growth in fiscal 2025. These are recent developments that highlight the company’s ongoing success and future potential.
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