| Item 7.01. | Regulation FD Disclosure. |
On December 6, 2022, Rackspace Technology, Inc. (the “Company”) announced a ransomware incident affecting our Hosted Exchange environment, which is causing service disruptions for our Hosted Exchange customers. Alongside our internal security team, we have engaged a leading cyber defense firm to investigate. Immediately upon detecting the incident, we took proactive measures to isolate the Hosted Exchange environment to contain the incident.
Based on the investigation to date, the Company believes that this incident was isolated to our Hosted Exchange business. The Company’s other products and services are fully operational, and we have not experienced an impact to our Rackspace Email product line and platform. Out of an abundance of caution, we have put additional security measures in place and will continue to actively monitor for any suspicious activity.
The Company is in ongoing communication with Hosted Exchange customers to help them migrate to a new environment as quickly as possible. Rackspace has surged support staff and will be taking additional steps to help guide customers through this process in order to limit the impact to their own operations. Although we are in the early stages of assessing this incident, the incident has caused and may continue to cause an interruption in our Hosted Exchange business and may result in a loss of revenue for the Hosted Exchange business, which generates approximately $30 million of annual revenue in our Apps & Cross Platform segment. In addition, the Company may have incremental costs associated with its response to the incident.
The Company continues to investigate the incident. Beginning on December 2, 2022, the Company issued service announcements on its website with details relating to the foregoing incident, and will continue to post updates on its website as warranted.
The information in this Current Report on Form 8-K shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such a filing.
Forward-Looking Statements
This Current Report on Form 8-K includes statements which may constitute forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, the accuracy of which are necessarily subject to risks, uncertainties, and assumptions as to future events that may not prove to be accurate. These statements include, but are not limited to, express or implied forward-looking statements relating to our expectations regarding our ability to contain and assess the ransomware attack and the impact of the ransomware attack on our clients and financial results. These statements are neither promises nor guarantees, but are subject to a variety of risks and uncertainties, many of which are beyond our control, which could cause actual results to differ materially from those contemplated in these forward-looking statements. Existing and prospective investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Factors that could cause actual results to differ materially from those expressed or implied include the ongoing assessment of the ransomware attack, legal, reputational and financial risks resulting from cyberattacks, including the ransomware attack, the effectiveness of business continuity plans during the ransomware attack, and the other factors discussed in our most recent Annual Report on Form 10-K and other filings with the Securities and Exchange Commission. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as may be required under applicable securities law.
