Cover Page
Cover Page - shares | 6 Months Ended | |
Jun. 30, 2021 | Aug. 06, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2021 | |
Document Transition Report | false | |
Entity File Number | 001-39420 | |
Entity Registrant Name | RACKSPACE TECHNOLOGY, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 81-3369925 | |
Entity Address, Address Line One | 1 Fanatical Place | |
Entity Address, Address Line Two | City of Windcrest | |
Entity Address, City or Town | San Antonio | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 78218 | |
City Area Code | 210 | |
Local Phone Number | 312-4000 | |
Title of 12(b) Security | Common stock, par value $0.01 per share | |
Trading Symbol | RXT | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 209,134,764 | |
Entity Central Index Key | 0001810019 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Millions | Jun. 30, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 214.8 | $ 104.7 |
Accounts receivable, net of allowance for doubtful accounts and accrued customer credits of $28.3 and $16.0, respectively | 501.1 | 483 |
Prepaid expenses | 94 | 123.8 |
Other current assets | 75.3 | 47 |
Total current assets | 885.2 | 758.5 |
Property, equipment and software, net | 892 | 884.6 |
Goodwill, net | 2,765.8 | 2,761.1 |
Intangible assets, net | 1,553.8 | 1,646.3 |
Operating right-of-use assets | 151.3 | 171.1 |
Other non-current assets | 164.2 | 156.2 |
Total assets | 6,412.3 | 6,377.8 |
Current liabilities: | ||
Accounts payable and accrued expenses | 324.4 | 285.4 |
Accrued compensation and benefits | 91.5 | 110.6 |
Deferred revenue | 93 | 76.7 |
Debt | 23 | 43.4 |
Accrued interest | 26.6 | 26.5 |
Operating lease liabilities | 60.7 | 62.2 |
Finance lease liabilities | 57.3 | 40.7 |
Financing obligations | 59.8 | 48.8 |
Other current liabilities | 53 | 47.9 |
Total current liabilities | 789.3 | 742.2 |
Non-current liabilities: | ||
Debt | 3,318.7 | 3,319.3 |
Operating lease liabilities | 103.8 | 118.2 |
Finance lease liabilities | 361.8 | 358.1 |
Financing obligations | 80.2 | 74.1 |
Deferred income taxes | 219.1 | 236.7 |
Other non-current liabilities | 156.9 | 145.5 |
Total liabilities | 5,029.8 | 4,994.1 |
Commitments and Contingencies (Note 7) | ||
Stockholders' equity: | ||
Preferred stock, $0.01 par value per share: 5.0 shares authorized; no shares issued or outstanding | 0 | 0 |
Common stock, $0.01 par value per share: 1,495.0 shares authorized; 201.8 and 209.0 shares issued and outstanding, respectively | 2.1 | 2 |
Additional paid-in capital | 2,445.3 | 2,363.6 |
Accumulated other comprehensive loss | (1) | (18.6) |
Accumulated deficit | (1,063.9) | (963.3) |
Total stockholders' equity | 1,382.5 | 1,383.7 |
Total liabilities and stockholders' equity | $ 6,412.3 | $ 6,377.8 |
Consolidated Balance Sheets (_2
Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Millions | Jun. 30, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts and accrued customer credits | $ 16 | $ 28.3 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 1,495,000,000 | 1,495,000,000 |
Common stock, shares issued (in shares) | 209,000,000 | 201,800,000 |
Common stock, shares outstanding (in shares) | 209,000,000 | 201,800,000 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Statement of Comprehensive Income [Abstract] | ||||
Revenue | $ 743.8 | $ 656.5 | $ 1,469.7 | $ 1,309.2 |
Cost of revenue | (508.3) | (414.6) | (998.9) | (818) |
Gross profit | 235.5 | 241.9 | 470.8 | 491.2 |
Selling, general and administrative expenses | (232.6) | (219.2) | (463.6) | (447) |
Gain on sale of land | 0 | 0 | 19.9 | 0 |
Income from operations | 2.9 | 22.7 | 27.1 | 44.2 |
Other income (expense): | ||||
Interest expense | (50.5) | (68.9) | (103.1) | (140.9) |
Gain (loss) on investments, net | 0.1 | 1 | (3.6) | 0.9 |
Debt modification and extinguishment costs | (0.5) | 0 | (37.5) | 0 |
Other income (expense), net | 0.6 | 0.3 | (1.2) | (0.3) |
Total other income (expense) | (50.3) | (67.6) | (145.4) | (140.3) |
Loss before income taxes | (47.4) | (44.9) | (118.3) | (96.1) |
Benefit for income taxes | 10.8 | 12.3 | 17.7 | 15.3 |
Net loss | (36.6) | (32.6) | (100.6) | (80.8) |
Other comprehensive income (loss), net of tax | ||||
Foreign currency translation adjustments | 2.7 | 0.9 | 5.7 | (19.5) |
Unrealized gain (loss) on derivative contracts | (6) | (6.8) | 3.4 | (47.5) |
Amount reclassified from accumulated other comprehensive income (loss) to earnings | 4.5 | 1.7 | 8.5 | 1.3 |
Other comprehensive income (loss) | 1.2 | (4.2) | 17.6 | (65.7) |
Comprehensive loss | $ (35.4) | $ (36.8) | $ (83) | $ (146.5) |
Net loss per share: | ||||
Basic (in dollars per share) | $ (0.18) | $ (0.20) | $ (0.49) | $ (0.49) |
Diluted (in dollars per share) | $ (0.18) | $ (0.20) | $ (0.49) | $ (0.49) |
Weighted average number of shares outstanding: | ||||
Basic (in shares) | 207.9 | 165.5 | 206.2 | 165.4 |
Diluted (in shares) | 207.9 | 165.5 | 206.2 | 165.4 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Cash Flows From Operating Activities | ||
Net loss | $ (100.6) | $ (80.8) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 216.3 | 237.6 |
Amortization of operating right-of-use assets | 36 | 36.3 |
Deferred income taxes | (23.1) | (19.2) |
Share-based compensation expense | 37.6 | 16.6 |
Gain on sale of land | (19.9) | 0 |
Debt modification and extinguishment costs | 37.5 | 0 |
Unrealized (gain) loss on derivative contracts | 10.8 | (2.7) |
(Gain) loss on investments, net | 3.6 | (0.9) |
Provision for bad debts and accrued customer credits | (8) | 10.1 |
Amortization of debt issuance costs and debt discount | 4.8 | 9.4 |
Other operating activities | (0.6) | (1.8) |
Changes in operating assets and liabilities: | ||
Accounts receivable | (8.9) | (47.1) |
Prepaid expenses and other current assets | 11.5 | 2.9 |
Accounts payable, accrued expenses, and other current liabilities | 19.1 | (31.8) |
Deferred revenue | 16.5 | (9) |
Operating lease liabilities | (31.9) | (33.7) |
Other non-current assets and liabilities | 8.2 | 12.9 |
Net cash provided by operating activities | 208.9 | 98.8 |
Cash Flows From Investing Activities | ||
Purchases of property, equipment and software | (66) | (66.4) |
Proceeds from sale of land | 31.3 | 0 |
Other investing activities | 3 | 3.6 |
Net cash used in investing activities | (31.7) | (62.8) |
Cash Flows From Financing Activities | ||
Proceeds from issuance of common stock, net | 0 | 0.5 |
Proceeds from employee stock plans | 43.9 | 0 |
Shares of common stock withheld for employee taxes | 0 | (0.6) |
Proceeds from borrowings under long-term debt arrangements | 2,838.5 | 310 |
Payments on long-term debt | (2,866.4) | (259.5) |
Payments for debt issuance costs | (34.5) | (1) |
Payments on financing component of interest rate swap | (4.3) | 0 |
Principal payments of finance lease liabilities | (21.4) | (7.1) |
Proceeds from financing obligations | 0 | 20.9 |
Principal payments of financing obligations | (22.6) | (19.9) |
Net cash provided by (used in) financing activities | (66.8) | 43.3 |
Effect of exchange rate changes on cash, cash equivalents, and restricted cash | (0.4) | (1.7) |
Increase in cash, cash equivalents, and restricted cash | 110 | 77.6 |
Cash, cash equivalents, and restricted cash at beginning of period | 108.1 | 87.1 |
Cash, cash equivalents, and restricted cash at end of period | 218.1 | 164.7 |
Supplemental Cash Flow Information | ||
Cash payments for interest, net of amount capitalized | 90.6 | 131.4 |
Cash payments for income taxes, net of refunds | 6.5 | 8.1 |
Non-cash Investing and Financing Activities | ||
Acquisition of property, equipment and software by finance leases | 38.4 | 42.5 |
Acquisition of property, equipment and software by financing obligations | 40.1 | 19.9 |
Decrease in property, equipment and software accrued in liabilities | (3.7) | (2.6) |
Non-cash purchases of property, equipment and software | 74.8 | 59.8 |
Non-cash increase in buildings within property, equipment and software, net due to lease modification | 0 | 220.3 |
Other non-cash investing and financing activities | 0.3 | 2.3 |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents [Abstract] | ||
Cash and cash equivalents | 214.8 | 161.4 |
Restricted cash included in other non-current assets | 3.3 | 3.3 |
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows | $ 218.1 | $ 164.7 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) shares in Millions, $ in Millions | Total | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit |
Beginning balance (in shares) at Dec. 31, 2019 | 165.4 | ||||
Beginning balance at Dec. 31, 2019 | $ 898.8 | $ 1.6 | $ 1,602.7 | $ 12 | $ (717.5) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Exercise of stock options and release of stock awards (in shares) | 0.2 | ||||
Exercise of stock options and release of stock awards | (0.1) | (0.1) | |||
Share-based compensation expense | 16.6 | 16.6 | |||
Net loss | (80.8) | (80.8) | |||
Other comprehensive income (loss) | (65.7) | (65.7) | |||
Ending balance (in shares) at Jun. 30, 2020 | 165.6 | ||||
Ending balance at Jun. 30, 2020 | 768.8 | $ 1.6 | 1,619.2 | (53.7) | (798.3) |
Beginning balance (in shares) at Mar. 31, 2020 | 165.4 | ||||
Beginning balance at Mar. 31, 2020 | 796.6 | $ 1.6 | 1,610.2 | (49.5) | (765.7) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Exercise of stock options and release of stock awards (in shares) | 0.2 | ||||
Exercise of stock options and release of stock awards | (0.1) | (0.1) | |||
Share-based compensation expense | 9.1 | 9.1 | |||
Net loss | (32.6) | (32.6) | |||
Other comprehensive income (loss) | (4.2) | (4.2) | |||
Ending balance (in shares) at Jun. 30, 2020 | 165.6 | ||||
Ending balance at Jun. 30, 2020 | 768.8 | $ 1.6 | 1,619.2 | (53.7) | (798.3) |
Beginning balance (in shares) at Dec. 31, 2020 | 201.8 | ||||
Beginning balance at Dec. 31, 2020 | 1,383.7 | $ 2 | 2,363.6 | (18.6) | (963.3) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of common stock (in shares) | 2.7 | ||||
Exercise of stock options and release of stock awards (in shares) | 4.1 | ||||
Exercise of stock options and release of stock awards | 37.9 | $ 0.1 | 37.8 | ||
Issuance of shares from Employee Stock Purchase Plans (in shares) | 0.4 | ||||
Issuance of shares from Employee Stock Purchase Plan | 6.3 | 6.3 | |||
Share-based compensation expense | 37.6 | 37.6 | |||
Net loss | (100.6) | (100.6) | |||
Other comprehensive income (loss) | 17.6 | 17.6 | |||
Ending balance (in shares) at Jun. 30, 2021 | 209 | ||||
Ending balance at Jun. 30, 2021 | 1,382.5 | $ 2.1 | 2,445.3 | (1) | (1,063.9) |
Beginning balance (in shares) at Mar. 31, 2021 | 207 | ||||
Beginning balance at Mar. 31, 2021 | 1,375.2 | $ 2.1 | 2,402.6 | (2.2) | (1,027.3) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Exercise of stock options and release of stock awards (in shares) | 1.6 | ||||
Exercise of stock options and release of stock awards | 16 | 16 | |||
Issuance of shares from Employee Stock Purchase Plans (in shares) | 0.4 | ||||
Issuance of shares from Employee Stock Purchase Plan | 6.3 | 6.3 | |||
Share-based compensation expense | 20.4 | 20.4 | |||
Net loss | (36.6) | (36.6) | |||
Other comprehensive income (loss) | 1.2 | 1.2 | |||
Ending balance (in shares) at Jun. 30, 2021 | 209 | ||||
Ending balance at Jun. 30, 2021 | $ 1,382.5 | $ 2.1 | $ 2,445.3 | $ (1) | $ (1,063.9) |
Company Overview, Basis of Pres
Company Overview, Basis of Presentation, and Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2021 | |
Accounting Policies [Abstract] | |
Company Overview, Basis of Presentation, and Summary of Significant Accounting Policies | Company Overview, Basis of Presentation, and Summary of Significant Accounting Policies Nature of Operations and Basis of Presentation Rackspace Technology, Inc. ("Rackspace Technology") is a Delaware corporation controlled by investment funds affiliated with Apollo Global Management, Inc. and its subsidiaries (“Apollo”). Rackspace Technology was formed on July 21, 2016 but had no assets, liabilities or operating results until November 3, 2016 when Rackspace Hosting, Inc. (now named Rackspace Technology Global, Inc., or “Rackspace Technology Global”), a global provider of modern information technology-as-a-service, was acquired by Inception Parent, Inc., a wholly-owned entity indirectly owned by Rackspace Technology (the “Rackspace Acquisition”). Rackspace Technology Global commenced operations in 1998 as a limited partnership, and was incorporated in Delaware in March 2000. Rackspace Technology serves as the holding company for Rackspace Technology Global and does not engage in any material business or operations other than those related to its indirect ownership of the capital stock of Rackspace Technology Global and its subsidiaries or business or operations otherwise customarily undertaken by a holding company. For ease of reference, the terms “we,” “our company,” “the company,” “us,” or “our” as used in this report refer to Rackspace Technology and its consolidated subsidiaries. The unaudited consolidated financial statements include the accounts of Rackspace Technology, Inc. and our wholly-owned subsidiaries. Intercompany transactions and balances have been eliminated in consolidation. Unaudited Interim Financial Information The unaudited consolidated financial statements as of June 30, 2021, and for the three and six months ended June 30, 2020 and 2021, have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information. Accordingly, certain financial information and disclosures required for financial statements prepared under GAAP have been omitted in accordance with the SEC disclosure rules and regulations that permit reduced disclosure for interim periods. These unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the related notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2020 ("Annual Report on Form 10-K"). The unaudited interim consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements included in our Annual Report on Form 10-K and, in the opinion of management, reflect all adjustments, which include normal recurring adjustments, necessary for a fair statement of our financial position as of June 30, 2021, our results of operations and stockholders' equity for the three and six months ended June 30, 2020 and 2021, and our cash flows for the six months ended June 30, 2020 and 2021. The results of operations for the three and six months ended June 30, 2021 are not necessarily indicative of the results of operations to be expected for the year ending December 31, 2021, or for any other interim period, or for any other future year. Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenue and expenses, and related disclosures of contingent assets and liabilities in the consolidated financial statements and accompanying notes. On an ongoing basis, we evaluate our estimates, including those related to the allowance for doubtful accounts, useful lives of property, equipment and software, software capitalization, incremental borrowing rates for lease liability measurement, fair values of intangible assets and reporting units, useful lives of intangible assets, share-based compensation, contingencies, and income taxes, among others. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results could differ from our estimates. Impact of COVID-19 In March 2020, the World Health Organization declared COVID-19 a global pandemic. The effects of COVID-19 (and any variations thereof) continue to evolve, and the full impact and duration of the virus are unknown. Currently, COVID-19 has not had a significant impact on our operations or financial performance; however, the ultimate extent of the impact of COVID-19 on our operational and financial performance will depend on certain developments, including the duration and severity of the outbreak, the pace of economic recovery, the possible resurgence in the spread of the virus or any variant strain(s) of the virus, advances in testing, treatment, and prevention, including the efficacy and availability of vaccines, its impact on our customers, vendors and employees, and its impact on our sales cycles as well as industry events, all of which are uncertain and cannot be predicted. We continue to face a greater degree of uncertainty in making estimates and assumptions needed to prepare our consolidated financial statements and footnotes as a result of COVID-19. Subsequent Events On July 21, 2021, we committed to an internal restructuring plan, which will drive a change in the types of and location of certain positions and is expected to result in the termination of approximately 10% of our workforce. We anticipate that approximately 85% of these roles will be backfilled in our offshore service centers. As part of the plan, we are also expanding our internal training program to further develop expertise in cloud services. The rebalance in workforce is a component of a broader strategic review of our operations that is intended to more effectively align our resources with our business priorities in high growth areas. Substantially all of the employees impacted by the reduction in force were notified of the reduction on July 22, 2021 and will exit the company over the next 12 months. We estimate that we will incur expenses of approximately $70 million to $80 million related to the restructuring plan over the next 12-24 months with the majority of expenses incurred in the next 12 months. These expenses will consist primarily of termination benefits to the affected employees, including, but not limited to, severance payments, healthcare benefits and other exit costs. The remainder of these expenses will consist of various costs associated with the restructuring plan, including one time offshore build-out costs, asset write-offs, professional fees, and expected investments in automation and technology. During the second quarter of 2021, we incurred costs of $6.4 million related to the restructuring plan which are included within "Selling, general and administrative expenses" in the Consolidated Statements of Comprehensive Loss and consist mainly of certain contractual termination benefits and professional fees. Significant Accounting Policies and Estimates Our Annual Report on Form 10-K includes an additional discussion of the significant accounting policies and estimates used in the preparation of our consolidated financial statements. There were no material changes to our significant accounting policies and estimates during the six months ended June 30, 2021. Change in Accounting Estimate In March 2021, we completed an assessment of the useful lives of certain assets within the Computers and equipment asset class. The timing of this review was based on a combination of factors accumulating over time that provided the company with updated information to make a better estimate on the economic lives of certain property and equipment. These factors included changes in customer purchasing patterns, technological advancements and the availability of extended equipment warranties. The assessment resulted in a revision within our policy ranges for certain useful lives in this asset class. This change in accounting estimate was effective in the first quarter of 2021. The effect of this change was a reduction in depreciation expense of $7.5 million and $14.1 million for the three and six months ended June 30, 2021, respectively. Reclassifications Certain reclassifications have been made to the prior period consolidated financial statements to conform to the current period presentation. Specifically, the current portion of "Finance lease liabilities" is now presented separately from "Other current liabilities" in the Consolidated Balance Sheets. Recently Adopted Accounting Pronouncements Simplifying the Accounting for Income Taxes In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740) - Simplifying the Accounting for Income Taxes , which removes certain exceptions to the general principles in Topic 740 and improves consistent application of and simplifies GAAP for other areas of Topic 740 by clarifying and amending existing guidance. We adopted this guidance on January 1, 2021. The adoption of this guidance did not have a mate rial impact on our consolidated financial statements. |
Customer Contracts
Customer Contracts | 6 Months Ended |
Jun. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Customer Contracts | Customer Contracts The following table presents the balances related to customer contracts: (In millions) Consolidated Balance Sheets Account December 31, 2020 June 30, 2021 Accounts receivable, net Accounts receivable, net (1) $ 483.0 $ 501.1 Current portion of contract assets Other current assets 12.2 15.3 Non-current portion of contract assets Other non-current assets 13.9 10.5 Current portion of deferred revenue Deferred revenue 76.7 93.0 Non-current portion of deferred revenue Other non-current liabilities 14.2 14.6 (1) Allowance for doubtful accounts and accrued customer credits was $28.3 million and $16.0 million as of December 31, 2020 and June 30, 2021, respectively. Amounts recognized in revenue for the three months ended June 30, 2020 and 2021, which were included in deferred revenue as of the beginning of each period, totaled $29.1 million and $25.2 million, respectively. Amounts recognized in revenue for the six months ended June 30, 2020 and 2021, which were included in deferred revenue as of the beginning of each period, totaled $46.9 million and $46.1 million, respectively. Cost Incurred to Obtain and Fulfill a Contract As of December 31, 2020 and June 30, 2021, the balances of capitalized costs to obtain a contract were $59.3 million and $57.8 million, respectively, and the balances of capitalized costs to fulfill a contract were $25.0 million and $25.6 million, respectively. These capitalized costs are included in “Other non-current assets” on the Consolidated Balance Sheets. Amortization of capitalized sales commissions and implementation costs was as follows: Three Months Ended June 30, Six Months Ended June 30, (In millions) 2020 2021 2020 2021 Amortization of capitalized sales commissions $ 11.4 $ 10.7 $ 22.3 $ 21.5 Amortization of capitalized implementation costs 4.4 4.4 8.6 8.9 Remaining Performance Obligations As of June 30, 2021, the aggregate amount of transaction price allocated to remaining performance obligations was $801.3 million, of which 38% is expected to be recognized as revenue during 2021 and the remainder thereafter. These remaining performance obligations primarily relate to our fixed-term arrangements. Our other revenue arrangements are usage-based, and as such, we recognize revenue based on the right to invoice for the services performed. |
Net Loss Per Share
Net Loss Per Share | 6 Months Ended |
Jun. 30, 2021 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | Net Loss Per Share Basic net loss per share is calculated by dividing net loss attributable to common stockholders by the weighted average shares outstanding during the period. The following table sets forth the computation of basic and diluted net loss per share: Three Months Ended June 30, Six Months Ended June 30, (In millions, except per share data) 2020 2021 2020 2021 Basic and diluted net loss per share: Net loss attributable to common stockholders $ (32.6) $ (36.6) $ (80.8) $ (100.6) Weighted average shares outstanding: Common stock 165.5 207.9 165.4 206.2 Number of shares used in per share computations 165.5 207.9 165.4 206.2 Net loss per share $ (0.20) $ (0.18) $ (0.49) $ (0.49) Potential common share equivalents consist of shares issuable upon the exercise of stock options, vesting of restricted stock or purchase under the Employee Stock Purchase Plan (the "ESPP"), as well as contingent shares associated with our acquisition of Datapipe Parent, Inc. Since we were in a net loss position for all periods presented, basic net loss per share is the same as diluted net loss per share for all periods as the inclusion of all potential common shares outstanding would have been anti-dilutive. We excluded 25.4 million and 19.4 million potential common shares from the computation of dilutive loss per share for the three months ended June 30, 2020 and 2021, respectively, and 25.4 million and 19.4 million potential shares for the six months ended June 30, 2020 and 2021, respectively, because the effect would have been anti-dilutive. |
Property, Equipment and Softwar
Property, Equipment and Software, net | 6 Months Ended |
Jun. 30, 2021 | |
Property, Plant and Equipment [Abstract] | |
Property, Equipment and Software, net | Property, Equipment and Software, net Property, equipment and software, net, consisted of the following: (In millions) December 31, June 30, Computers and equipment $ 1,191.8 $ 1,220.9 Software 472.4 503.3 Furniture and fixtures 22.4 21.5 Buildings and leasehold improvements 513.1 513.9 Land 32.6 21.2 Property, equipment and software, at cost 2,232.3 2,280.8 Less: Accumulated depreciation (1,366.8) (1,408.9) Work in process 19.1 20.1 Property, equipment and software, net $ 884.6 $ 892.0 On January 15, 2021, we completed the sale of a parcel of undeveloped land in the United Kingdom adjacent to one of our existing data centers. The net book value of the land prior to the sale was $11.4 million and we received cash proceeds of $32.2 million, less brokerage and professional fees of $0.9 million, resulting in net cash proceeds of $31.3 million. Therefore, we recorded a gain on sale of land of $19.9 million to "Gain on sale of land" in the Consolidated Statements of Comprehensive Loss for the six months ended June 30, 2021. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 6 Months Ended |
Jun. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets The following table sets forth the changes in the carrying amounts of goodwill by reportable segment: (In millions) Multicloud Services Apps & Cross Platform OpenStack Public Cloud Total Consolidated Balance as of December 31, 2020 (1) $ 2,386.0 $ 322.6 $ 52.5 $ 2,761.1 Foreign currency translation 4.3 0.2 0.2 4.7 Balance as of June 30, 2021 $ 2,390.3 $ 322.8 $ 52.7 $ 2,765.8 (1) Multicloud Services had accumulated impairment charges of $295.0 million as of December 31, 2020. The following table provides information regarding our intangible assets other than goodwill: December 31, 2020 June 30, 2021 (In millions) Gross carrying amount Accumulated amortization Net carrying amount Gross carrying amount Accumulated amortization Net carrying amount Customer relationships $ 1,986.2 $ (624.0) $ 1,362.2 $ 1,987.8 $ (706.7) $ 1,281.1 Property tax abatement 16.0 (7.4) 8.6 16.0 (8.3) 7.7 Other 47.7 (22.2) 25.5 47.6 (32.6) 15.0 Total definite-lived intangible assets 2,049.9 (653.6) 1,396.3 2,051.4 (747.6) 1,303.8 Trade name (indefinite-lived) 250.0 — 250.0 250.0 — 250.0 Total intangible assets other than goodwill $ 2,299.9 $ (653.6) $ 1,646.3 $ 2,301.4 $ (747.6) $ 1,553.8 |
Debt
Debt | 6 Months Ended |
Jun. 30, 2021 | |
Debt Disclosure [Abstract] | |
Debt | Debt Debt consisted of the following: (In millions, except %) December 31, 2020 June 30, 2021 Debt Instrument Maturity Date Interest Rate (1) Amount Interest Rate (1) Amount Prior Term Loan Facility November 3, 2023 4.00% $ 2,795.6 —% $ — Term Loan Facility February 15, 2028 —% — 3.50% 2,294.3 Revolving Credit Facility August 7, 2025 —% — —% — 3.50% Senior Secured Notes February 15, 2028 —% — 3.50% 550.0 5.375% Senior Notes December 1, 2028 5.375% 550.0 5.375% 550.0 Receivables Financing Facility July 19, 2022 2.37% 65.0 —% — Less: unamortized debt issuance costs (44.2) (39.1) Less: unamortized debt discount (3.7) (13.5) Total debt 3,362.7 3,341.7 Less: current portion of debt (43.4) (23.0) Debt, excluding current portion $ 3,319.3 $ 3,318.7 (1) Interest rates are as of each respective balance sheet date. Senior Facilities Our senior secured credit facilities include a first lien term loan facility (the "Term Loan Facility") and a revolving credit facility (the "Revolving Credit Facility" and, together with the Term Loan Facility, the "Senior Facilities"). On February 9, 2021, we amended and restated the credit agreement governing our Senior Facilities (the "First Lien Credit Agreement"), which included a new seven-year $2,300.0 million senior secured first lien term loan facility due on February 15, 2028 and our existing $375.0 million Revolving Credit Facility. We used the borrowings under the Term Loan Facility, together with the proceeds from the issuance of the 3.50% Senior Secured Notes described below (together, the "February 2021 Refinancing Transaction"), to repay all borrowings under our prior term loan facility (the "Prior Term Loan Facility"), to pay related fees and expenses and for general corporate purposes. Borrowings under the Senior Facilities bear interest at an annual rate equal to an applicable margin plus, at our option, either (a) a LIBOR rate determined by reference to the costs of funds for Eurodollar deposits for the interest period relevant to such borrowing, adjusted for certain additional costs, subject to a 0.75% floor, in the case of the Term Loan Facility, and a 1.00% floor, in the case of the Revolving Credit Facility, or (b) a base rate determined by reference to the highest of (i) the federal funds rate plus 0.50%, (ii) the prime rate of Citibank, N.A. and (iii) the one-month adjusted LIBOR plus 1.00%. The applicable margin for the Term Loan Facility is 2.75% for LIBOR loans and 1.75% for base rate loans and the applicable margin for the Revolving Credit Facility is 3.00% for LIBOR loans and 2.00% for base rate loans. Interest is due at the end of each interest period elected, not exceeding 90 days, for LIBOR loans and at the end of every calendar quarter for base rate loans. In addition to paying interest on the outstanding principal under the Senior Facilities, the Revolving Credit Facility also includes a commitment fee equal to 0.50% per annum in respect of the unused commitments that is due quarterly. This commitment fee is subject to one step-down based on the net first lien leverage ratio. As of June 30, 2021, the interest rate on the Term Loan Facility was 3.50%. Beginning June 30, 2021, we are required to make quarterly principal payments of $5.8 million. See Note 10, "Derivatives" for information on interest rate swap agreements we utilize to manage the interest rate risk on the Term Loan Facility. In addition to the quarterly amortization payments discussed above, the Senior Facilities require us to make certain mandatory prepayments, including using (i) a portion of annual excess cash flow, as defined in the First Lien Credit Agreement, to prepay the Term Loan Facility, (ii) net cash proceeds of certain non-ordinary assets sales or dispositions of property to prepay the Term Loan Facility and (iii) net cash proceeds of any issuance or incurrence of debt not permitted under the Senior Facilities to prepay the Term Loan Facility. We may make voluntary prepayments at any time without penalty, except in connection with a repricing event, as defined in the First Lien Credit Agreement. The fair value of the Term Loan Facility as of June 30, 2021 was $2,282.8 million, based on quoted market prices for identical assets that are traded in over-the-counter secondary markets that are not considered active. The fair value of the Term Loan Facility is classified as Level 2 within the fair value hierarchy. Rackspace Technology Global is the borrower under the Senior Facilities, and all obligations under the Senior Facilities are (i) guaranteed by Inception Parent, Inc., Rackspace Technology Global’s immediate parent company, on a limited recourse basis and secured by the equity interests of Rackspace Technology Global held by Inception Parent, Inc. and (ii) guaranteed by Rackspace Technology Global’s wholly-owned domestic restricted subsidiaries and secured by substantially all material owned assets of Rackspace Technology Global and the subsidiary guarantors, including the equity interests held by each, in each case subject to certain exceptions. The only financial covenant is with respect to the Revolving Credit Facility which limits the net first lien leverage ratio to a maximum of 5.00 to 1.00; however, this covenant is only applicable and tested if the aggregate amount of outstanding borrowings under the Revolving Credit Facility and letters of credit issued thereunder (excluding $25.0 million of undrawn letters of credit and cash collateralized letters of credit) is equal to or greater than 35% of the Revolving Credit Facility commitments at the end of a fiscal quarter. Other covenants include limitations on restricted payments, indebtedness, investments, liens, asset sales and transactions with affiliates. As of June 30, 2021, we were in compliance with all covenants under the Senior Facilities. The Revolving Credit Facility matures on August 7, 2025. As of June 30, 2021, we had total commitments of $375.0 million and no outstanding borrowings under the Revolving Credit Facility. 3.50% Senior Secured Notes due 2028 On February 9, 2021, Rackspace Technology Global issued $550.0 million aggregate principal amount of 3.50% Senior Secured Notes due 2028 (the “3.50% Senior Secured Notes”). The 3.50% Senior Secured Notes will mature on February 15, 2028 and bear interest at an annual fixed rate of 3.50%. Interest is payable semiannually on each February 15 and August 15, commencing on August 15, 2021. The 3.50% Senior Secured Notes are not subject to registration rights. As noted above, we used the net proceeds from the issuance of the 3.50% Senior Secured Notes, together with borrowings under the Term Loan Facility described above, to repay all borrowings outstanding under the Prior Term Loan Facility, to pay related fees and expenses and for general corporate purposes. Rackspace Technology Global is the issuer of the 3.50% Senior Secured Notes, and obligations under the 3.50% Senior Secured Notes are fully and unconditionally guaranteed, jointly and severally, by all of Rackspace Technology Global’s wholly-owned domestic restricted subsidiaries (as subsidiary guarantors) that guarantee the Senior Facilities. The 3.50% Senior Secured Notes and the related guarantees are secured by first-priority security interests in substantially all material owned assets of Rackspace Technology Global and the subsidiary guarantors, including the equity interest held by each, subject to certain exceptions, which assets also secure the Senior Facilities. Rackspace Technology Global may redeem the 3.50% Senior Secured Notes at its option, in whole at any time or in part from time to time, at the following redemption prices: prior to February 15, 2024, at a redemption price equal to 100.000% of the principal amount, plus the applicable premium described in the indenture governing the 3.50% Senior Secured Notes (the "3.50% Notes Indenture") and accrued and unpaid interest, if any, to but excluding the redemption date; from February 15, 2024 to February 14, 2025, at a redemption price equal to 101.750% of the principal amount, plus accrued and unpaid interest, if any, to but excluding the redemption date; from February 15, 2025 to February 14, 2026, at a redemption price equal to 100.875% of the principal amount, plus accrued and unpaid interest, if any, to but excluding the redemption date; and from February 15, 2026 and thereafter, at a redemption price equal to 100.000% of the principal amount, plus accrued and unpaid interest, if any, to but excluding the redemption date. Rackspace Technology Global may also redeem prior to February 15, 2024 up to 40.0% of the aggregate principal amount of the 3.50% Senior Secured Notes with funds in an aggregate amount not to exceed the net cash proceeds from certain equity offerings at a redemption price equal to 103.500% of the principal amount of the 3.50% Senior Secured Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. Notwithstanding the foregoing, Rackspace Technology Global m ay redeem during each twelve-month period, commencing with February 9, 2021, up to 10.0% of the original aggregate principal amount of the 3.50% Senior Secured Notes at a redemption price of 103.00%, plus accrued and unpaid interest, if any, to, but excluding, the applicable redemption date. The 3.50% Notes Indenture contains covenants that, among other things, limit our ability to incur certain additional debt, incur certain liens securing debt, pay certain dividends or make other restricted payments, make certain investments, make certain asset sales and enter into certain transactions with affiliates. These covenants are subject to a number of exceptions, limitations, and qualifications as set forth in the 3.50% Notes Indenture. Additionally, upon the occurrence of a change of control (as defined in the 3.50% Notes Indenture), we will be required to make an offer to repurchase all of the outstanding 3.50% Senior Secured Notes at a price in cash equal to 101% of the aggregate principal amount, plus accrued and unpaid interest, if any, to, but not including the purchase date. As of June 30, 2021, Rackspace Technology Global was in compliance with all covenants under the 3.50% Notes Indenture. The fair value of the 3.50% Senior Secured Notes as of June 30, 2021 was $532.1 million, based on quoted market prices for identical assets that are traded in over-the-counter secondary markets that are not considered active. The fair value of the 3.50% Senior Secured Notes are classified as Level 2 within the fair value hierarchy. 5.375% Senior Notes due 2028 On December 1, 2020, Rackspace Technology Global issued $550.0 million aggregate principal amount of 5.375% Senior Notes due 2028 (the "5.375% Senior Notes"). The 5.375% Senior Notes will mature on December 1, 2028 and bear interest at an annual fixed rate of 5.375%. Interest is payable semiannually on each June 1 and December 1, commencing on June 1, 2021. The 5.375% Senior Notes are not subject to registration rights. Rackspace Technology Global is the issuer of the 5.375% Senior Notes, and obligations under the 5.375% Senior Notes are guaranteed on a senior unsecured basis by all of Rackspace Technology Global’s wholly-owned domestic restricted subsidiaries (as subsidiary guarantors) that guarantee the Senior Facilities. The 5.375% Senior Notes are effectively junior to the indebtedness under the Senior Facilities and the 3.50% Senior Secured Notes, to the extent of the collateral securing the Senior Facilities and the 3.50% Senior Secured Notes. Rackspace Technology Global may redeem the 5.375% Senior Notes at its option, in whole at any time or in part from time to time, at the following redemption prices: prior to December 1, 2023, at a redemption price equal to 100.000% of the principal amount, plus the applicable premium described in the indenture governing the 5.375% Senior Notes (the "5.375% Notes Indenture") and accrued and unpaid interest, if any, to but excluding the redemption date; from December 1, 2023 to December 1, 2024, at a redemption price equal to 102.688% of the principal amount, plus accrued and unpaid interest, if any, to but excluding the redemption date; from December 1, 2024 to December 1, 2025, at a redemption price equal to 101.344% of the principal amount, plus accrued and unpaid interest, if any, to but excluding the redemption date; and from December 1, 2025 and thereafter, at a redemption price equal to 100.000% of the principal amount, plus accrued and unpaid interest, if any, to but excluding the redemption date. Rackspace Technology Global may also redeem prior to December 1, 2023 up to 40.0% of the aggregate principal amount of the 5.375% Senior Notes with funds in an aggregate amount not to exceed the net cash proceeds from certain equity offerings at a redemption price equal to 105.375% of the principal amount of the 5.375% Senior Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. The 5.375% Notes Indenture contains covenants that, among other things, limit our ability to incur certain additional debt, incur certain liens securing debt, pay certain dividends or make other restricted payments, make certain investments, make certain asset sales and enter into certain transactions with affiliates. These covenants are subject to a number of exceptions, limitations, and qualifications as set forth in the 5.375% Notes Indenture. Additionally, upon the occurrence of a change of control (as defined in the 5.375% Notes Indenture), we will be required to make an offer to repurchase all of the outstanding 5.375% Senior Notes at a price in cash equal to 101.0% of the aggregate principal amount, plus accrued and unpaid interest, if any, to, but not including the purchase date. As of June 30, 2021, Rackspace Technology Global was in compliance with all covenants under the 5.375% Notes Indenture. The fair value of the 5.375% Senior Notes as of June 30, 2021 was $563.8 million, based on quoted market prices for identical assets that are traded in over-the-counter secondary markets that are not considered active. The fair value of the 5.375% Senior Notes are classified as Level 2 within the fair value hierarchy. Accounts Receivable Financing Agreement Under the accounts receivable financing agreement (the "Receivables Financing Facility") entered into in 2020, a bankruptcy-remote special purpose vehicle ("SPV") indirectly wholly owned by Rackspace Technology Global granted a security interest in all of its current and future receivables and related assets in exchange for a credit facility permitting borrowings of up to a maximum aggregate amount of $100.0 million from time to time. Rackspace Technology Global was the primary beneficiary of the SPV. During the three months ended June 30, 2021, the SPV repaid the outstanding balance of $50.0 million and terminated the Receivables Financing Facility. The termination resulted in expense of $0.5 million recorded within "Debt modification and extinguishment costs" in our Consolidated Statements of Comprehensive Loss for the three and six months ended June 30, 2021. The expense was comprised of the write-off of the unamortized debt issuance costs, as well as third party fees associated with the termination. February 2021 Refinancing Transaction The February 2021 Refinancing Transaction represented an extinguishment and modification of debt. We derecognized $2,795.6 million of the Prior Term Loan Facility and wrote off $9.4 million in unamortized debt issuance costs and debt discount associated with the portion of the Prior Term Loan Facility that was deemed extinguished. We recognized $2,300.0 million borrowed under the Term Loan Facility and $41.0 million of associated debt issuance costs and debt discount, including amounts allocated from the Prior Term Loan Facility, both classified as a direct deduction from the carrying value of non-current debt on our Consolidated Balance Sheets. We recognized $550.0 million aggregate principal amount of the 3.50% Senior Secured Notes due 2028 and $6.8 million of associated debt issuance costs, including amounts allocated from the Prior Term Loan Facility. The February 2021 Refinancing Transaction resulted in expense of $37.0 million recorded within "Debt modification and extinguishment costs" in our Consolidated Statements of Comprehensive Loss for the six months ended June 30, 2021. The expense was comprised of the write-off of unamortized debt issuance costs and debt discount associated with the portion of the Prior Term Loan Facility that was deemed extinguished, as well as $27.6 million in third party fees associated with the modification. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies We have contingencies that arise from various litigation, claims and commitments, none of which we consider to be material. From time to time, we are a party to various claims asserting that certain of our services and technologies infringe the intellectual property rights of others. Adverse results in these lawsuits may include awards of substantial monetary damages, costly royalty or licensing agreements, or orders preventing us from offering certain features, products, or services, and may also cause us to change our business practices and require development of non-infringing products or technologies, which could result in a loss of revenue for us or otherwise harm our business. We record an accrual for a loss contingency when a loss is considered probable and reasonably estimable. As additional facts concerning a loss contingency become known, we reassess our position and make appropriate adjustments to a recorded accrual. The amount that will ultimately be paid related to a matter may differ from the recorded accrual, and the timing of such payments, if any, may be uncertain. We are not a party to any litigation, the outcome of which, if determined adversely to us, would individually or in the aggregate be reasonably expected to have a material and adverse effect on our business, financial position or results of operations. |
Share-Based Compensation
Share-Based Compensation | 6 Months Ended |
Jun. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Share-Based Compensation | Share-Based Compensation During the six months ended June 30, 2021, we granted 4.0 million restricted stock units ("RSUs") under the Rackspace Technology, Inc. 2020 Equity Incentive Plan with a weighted-average grant date fair value of $22.55. The majority of the RSUs were granted as part of our annual compensation award process and vest ratably over a three-year period, subject to continued service. Share-based compensation expense recogniz ed was as follows: Three Months Ended June 30, Six Months Ended June 30, (In millions) 2020 2021 2020 2021 Cost of revenue $ 2.3 $ 4.3 $ 4.1 $ 9.2 Selling, general and administrative expenses 6.8 16.1 12.5 28.4 Pre-tax share-based compensation expense 9.1 20.4 16.6 37.6 Less: Income tax benefit (1.9) (4.3) (3.5) (7.9) Total share-based compensation expense, net of tax $ 7.2 $ 16.1 $ 13.1 $ 29.7 As of June 30, 2021, there was $128.6 million of total unrecognized compensation cost related to stock options, RSUs and the ESPP, which will be recognized using the straight-line method over a weighted average period of 2.0 years. |
Taxes
Taxes | 6 Months Ended |
Jun. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
Taxes | Taxes We are subject to U.S. federal income tax and various state, local, and international income taxes in numerous jurisdictions. The differences between our effective tax rate and the U.S. federal statutory rate of 21% generally result from various factors, including the geographical distribution of taxable income, tax credits, contingency reserves for uncertain tax positions, and permanent differences between the book and tax treatment of certain items. Additionally, the amount of income taxes paid is subject to our interpretation of applicable tax laws in the jurisdictions in which we file. For the three months ended June 30, 2021, our effective tax rate is higher than the U.S. federal statutory rate of 21% due to the net impact of the geographic distribution of our earnings and application of the global intangible low-taxed income (“GILTI”) provisions that were implemented with the Tax Cuts and Jobs Act (the “Act”) that was passed on December 22, 2017. For the six months ended June 30, 2021, our effective tax rate is lower than the U.S. federal statutory rate due to the net impact of the geographical distribution of our earnings, the application of the GILTI provisions, as well as executive compensation that is nondeductible under Internal Revenue Code ("IRC") Section 162(m). In the next 12 months, we are likely to have a release of historic tax reserves that will result in a tax benefit of $10 million to $15 million due to the lapse of statute of limitations. |
Derivatives
Derivatives | 6 Months Ended |
Jun. 30, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives | Derivatives We utilize derivative instruments, including interest rate swap agreements and foreign currency hedging contracts, to manage our exposure to interest rate risk and foreign currency fluctuations. We only hold such instruments for economic hedging purposes, not for speculative or trading purposes. Our derivative instruments are transacted only with highly-rated institutions, which reduces our exposure to credit risk in the event of nonperformance. Interest Rate Swaps We are exposed to interest rate risk associated with fluctuations in interest rates on the floating-rate Term Loan Facility. The objective in using interest rate derivatives is to manage our exposure to interest rate movements. To accomplish this objective, we have entered into interest rate swap agreements as part of our interest rate risk management strategy. Interest rate swaps involve the receipt of variable amounts from a counterparty in exchange for the company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. On a quarterly basis, we net settle with the counterparty for the difference between the fixed rate specified in each swap agreement and the variable rate based upon the three-month LIBOR as applied to the notional amount of the swap. On January 9, 2020, we designated certain of our swaps as cash flow hedges. On the designation date, the cash flow hedges were in a $39.9 million liability position. The cash flow hedges were expected to be highly effective on the designation date and, on a quarterly basis, we performed retrospective and prospective regression assessments to determine whether the cash flow hedges continue to be highly effective. As long as the cash flow hedges are highly effective, changes in fair value are recorded to "Accumulated other comprehensive income (loss)" in the Consolidated Balance Sheets and reclassified to "Interest expense" in the period when the underlying transaction affects earnings. The income tax effects of cash flow hedges are released from "Accumulated other comprehensive income (loss)" in the period when the underlying transaction affects earnings. Any stranded income tax effects are released from “Accumulated other comprehensive income (loss)” into “Benefit (provision) for income taxes” under the portfolio a pproach. As of December 31, 2020, all of our cash flow hedges were highly effective. During the six months ended June 30, 2021, we completed a series of transactions to modify our interest rate swap positions as follows: (i) All the interest rate swaps outstanding as of December 31, 2020, as shown in the table below, with the exception of the agreement that matured on February 3, 2021, were de-designated as cash flow hedges on January 31, 2021, (ii) on February 12, 2021, we entered into a $900.0 million receive-fixed interest rate swap which was designed to offset the terms of the remaining two December 2016 swaps, and (iii) on February 12, 2021, we terminated all December 2018 swaps and entered into a $1.35 billion pay-fixed interest rate swap, effectively blending the liability position of our existing interest rate swap agreements into the new swap and extending the term of our hedged position to February 2026. The amount remaining in “Accumulated other comprehensive income (loss)" for the de-designated December 2016 and December 2018 swaps at the de-designation date was app roximately $51.6 million, and will be amortized as an increase to "Interest expense" over the effective period of the original swap agreements. The new receive-fixed interest rate swap qualifies as a hybrid instrument in accordance with ASC 815, Derivatives and Hedging , consisting of a loan and an embedded derivative for which the fair value option has been elected. This $900.0 million swap will remain undesignated to economically offset the now undesignated December 2016 swaps. This new swap and the December 2016 swaps mature on February 3, 2022. Cash settlements related to this receive-fixed interest rate swap will offset and are classified as operating activities in the Consolidated Statements of Cash Flows. The new pay-fixed interest rate swap also qualifies as a hybrid instrument in accordance with ASC 815, Derivatives and Hedging , consisting of a loan and an embedded at-market derivative that was designated as a cash flow hedge. The loan is accounted for at amortized cost over the life of the swap while the embedded at-market derivative is accounted for at fair value. This new $1.35 billion swap is indexed to three-month LIBOR and will be net settled on a quarterly basis with the counterparty for the difference between the fixed rate of 2.3820% and the variable rate based upon three-month LIBOR (subject to a floor of 0.75%) as applied to the notional amount of the swap. In connection with the transactions discussed above, no cash was exchanged between us and the counterparty. The liability of the terminated interest rate swaps as well as the inception value of the receive-fixed interest rate swap was blended into the new pay-fixed interest rate swap. The cash flows related to the portion treated as debt will be classified as financing activities in the Consolidated Statements of Cash Flows while the portion treated as an at-market derivative will be classified as operating activities. As of June 30, 2021, the cash flow hedge was highly effective. The key terms of interest rate swaps outstanding are presented below: Effective Date Fixed Rate Paid (Received) December 31, 2020 June 30, 2021 Notional Amount (in millions) Status Notional Amount (in millions) Status Maturity Date Entered into December 2016: February 3, 2017 1.7625% $ 150.0 Active $ — Matured February 3, 2021 February 3, 2017 1.9040% 450.0 Active 450.0 Active February 3, 2022 February 3, 2017 1.9040% 450.0 Active 450.0 Active February 3, 2022 Entered into December 2018: February 3, 2019 2.7490% 150.0 Active — Terminated November 3, 2023 February 3, 2020 2.7350% 150.0 Active — Terminated November 3, 2023 February 3, 2021 2.7360% 150.0 Active — Terminated November 3, 2023 February 3, 2022 2.7800% 900.0 Active — Terminated November 3, 2023 Entered into February 2021: February 3, 2021 (1.9040)% — N/A (900.0) Active February 3, 2022 February 9, 2021 2.3820% — N/A 1,350.0 Active February 9, 2026 Total $ 2,400.0 $ 1,350.0 Our interest rate swap agreements, excluding the portion treated as debt, are recognized at fair value in the Consolidated Balance Sheets and are valued using pricing models that rely on market observable inputs such as yield curve data, which are classified as Level 2 inputs within the fair value hierarchy. Foreign Currency Hedging Contracts The majority of our customers are invoiced, and the majority of our expenses are paid, by us or our subsidiaries in the functional currency of our company or our subsidiaries, respectively. We also have exposure to foreign currency transaction gains and losses as the result of certain receivables due from our foreign subsidiaries. As such, the results of operations and cash flows of our foreign subsidiaries are subject to fluctuations in foreign currency exchange rates. The objective of our foreign currency hedging contracts is to manage our exposure to foreign currency movements. To accomplish this objective, we may enter into foreign currency forward contracts and collars. A forward contract is an agreement to buy or sell a quantity of a currency at a predetermined future date and at a predetermined exchange rate. A collar is a strategy that uses a combination of a purchased put option and a sold call option with equal premiums to hedge a portion of anticipated cash flows, or to limit possible gains or losses on an underlying asset or liability to a specific range. The put and call options have identical notional amounts and settlement dates. In November 2019, we entered into two foreign currency net-zero cost collar contracts with an aggregate notional amount of £100 million and a maturity date of November 30, 2020. Under the terms of the contracts, the British pound sterling to U.S. dollar exchange rate floats between 1.2375 and 1.3475. On March 26, 2020, we settled one of these contracts, with an aggregate notional amount of £50 million, and we received a final net payment of $1.9 million and on November 19, 2020, we settled the remaining contract, with an aggregate notional amount of £50 million, and we made a final net payment of $0.2 million. During 2020, we entered into a series of foreign currency contracts to manage our exposure to movements in the British pound sterling, Euro, and Mexican peso. These contracts had three-month terms and settlement dates throughout the year. The June 30, 2020 settlement date resulted in us making a final net payment of $1.7 million. As of December 31, 2020, there was no notional amount outstanding related to these contracts. During the fourth quarter of 2020, we entered into two foreign currency forward contracts. Under the terms of these contracts, on November 30, 2021, we will sell a total of £80 million at an average rate of 1.3388 British pound sterling to U.S. dollar and receive $107.1 million. These contracts are recognized at fair value in the Consolidated Balance Sheets and are valued using pricing models that rely on market observable inputs such as current exchange rates, which are classified as Level 2 inputs within the fair value hierarchy. We have not designated these contracts as cash flow hedges for accounting purposes, therefore, all changes in fair value are recorded in "Other income (expense), net." Fair Values of Derivatives on the Consolidated Balance Sheets The fair values of our derivatives and their location on the Consolidated Balance Sheets as of December 31, 2020 and June 30, 2021 were as follows: December 31, 2020 June 30, 2021 (In millions) Assets Liabilities Assets Liabilities Derivatives not designated as hedging instruments Location Interest rate swaps Other current assets (1) $ — $ — $ 9.4 $ — Interest rate swaps Other current liabilities — — — 9.4 Foreign currency contracts Other current liabilities — 1.7 — 3.7 Total $ — $ 1.7 $ 9.4 $ 13.1 Derivatives designated as hedging instruments Location Interest rate swaps Other non-current assets $ — $ — $ 11.0 $ — Interest rate swaps Other current liabilities (2) — 22.6 — 21.3 Interest rate swaps Other non-current liabilities (3) — 64.4 — 65.1 Total $ — $ 87.0 $ 11.0 $ 86.4 (1) The entire balance as of June 30, 2021 is comprised of the receive-fixed interest rate swap for which the fair value option has been elected. (2) The balance as of June 30, 2021 includes $17.2 million related to the financing component of the pay-fixed interest rate swap. (3) The entire balance as of June 30, 2021 is comprised of the financing component of the pay-fixed interest rate swap. For financial statement presentation purposes, we do not offset assets and liabilities under master netting arrangements and all amounts above are presented on a gross basis. The following table, however, is presented on a net asset and net liability basis: December 31, 2020 June 30, 2021 (In millions) Gross Amounts on Balance Sheet Effect of Counter-Party Netting Net Amounts Gross Amounts on Balance Sheet Effect of Counter-Party Netting Net Amounts Assets Interest rate swaps $ — $ — $ — $ 20.4 $ (20.4) $ — Total $ — $ — $ — $ 20.4 $ (20.4) $ — Liabilities Interest rate swaps $ 87.0 $ — $ 87.0 $ 95.8 $ (20.4) $ 75.4 Foreign currency contracts 1.7 — 1.7 3.7 — 3.7 Total $ 88.7 $ — $ 88.7 $ 99.5 $ (20.4) $ 79.1 Effect of Derivatives on the Consolidated Statements of Comprehensive Loss The effect of our derivatives and their location on the Consolidated Statements of Comprehensive Loss for the three and six months ended June 30, 2020 and 2021 was as follows: Three Months Ended June 30, Six Months Ended June 30, (In millions) 2020 2021 2020 2021 Derivatives not designated as hedging instruments Location Interest rate swaps Interest expense $ — $ (4.8) $ (3.2) $ (9.4) Foreign currency contracts Other income (expense), net 0.3 (0.7) 3.6 (2.0) Derivatives designated as hedging instruments Location Interest rate swaps Interest expense $ (2.2) $ (1.3) $ (1.7) $ (3.6) Interest expense was $68.9 million and $50.5 million for the three months ended June 30, 2020 and 2021, respectively, and $140.9 million and $103.1 million for the six months ended June 30, 2020 and 2021, respectively. As of June 30, 2021, the amount of cash flow hedge losses included within "Accumulated other comprehensive income (loss)" that is expected to be reclassified as an increase to "Interest expense" over the next 12 months is approximately $23.8 million. See Note 11, "Accumulated Other Comprehensive Income (Loss)," for information regarding changes in fair value of our derivatives designated as hedging instruments. Credit-risk-related Contingent Features We have agreements with interest rate swap counterparties that contain a provision whereby if we default on any of our material indebtedness, then we could also be declared in default of our interest rate swap agreements. As of June 30, 2021, our interest rate swap agreements with an aggregate fair value of $95.8 million were in a net liability position. However, if we were in default, our master netting arrangements with certain of our interest rate swap counterparties contain provisions which could result in net settlement of all outstanding agreements. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 6 Months Ended |
Jun. 30, 2021 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) Accumulated other comprehensive income (loss) consisted of the following: (In millions) Accumulated Foreign Currency Translation Adjustments Accumulated Loss on Derivative Contracts Accumulated Other Comprehensive Loss Balance at March 31, 2020 $ (8.4) $ (41.1) $ (49.5) Foreign currency translation adjustments, net of tax benefit of $0.2 0.9 — 0.9 Unrealized loss on derivative contracts, net of tax benefit of $2.3 — (6.8) (6.8) Amount reclassified from Accumulated comprehensive income (loss) into earnings, net of tax benefit of $0.5 (1) — 1.7 1.7 Balance at June 30, 2020 $ (7.5) $ (46.2) $ (53.7) (1) Includes interest expense recognized of $3.7 million, partially offset by amortization of off-market swap value of $1.5 million for the three months ended June 30, 2020. (In millions) Accumulated Foreign Currency Translation Adjustments Accumulated Loss on Derivative Contracts Accumulated Other Comprehensive Income (Loss) Balance at December 31, 2019 $ 12.0 $ — $ 12.0 Foreign currency translation adjustments, net of tax benefit of $1.4 (19.5) — (19.5) Unrealized loss on derivative contracts, net of tax benefit of $16.3 — (47.5) (47.5) Amount reclassified from Accumulated comprehensive income (loss) into earnings, net of tax benefit of $0.4 (1) — 1.3 1.3 Balance at June 30, 2020 $ (7.5) $ (46.2) $ (53.7) (1) Includes interest expense recognized of $4.4 million, partially offset by amortization of off-market swap value of $2.7 million for the six months ended June 30, 2020. (In millions) Accumulated Foreign Currency Translation Adjustments Accumulated Loss on Derivative Contracts Accumulated Other Comprehensive Loss Balance at March 31, 2021 $ 23.8 $ (26.0) $ (2.2) Foreign currency translation adjustments, net of tax expense of $0.2 2.7 — 2.7 Unrealized loss on derivative contracts, net of tax benefit of $2.0 — (6.0) (6.0) Amount reclassified from Accumulated comprehensive income (loss) into earnings, net of tax benefit of $1.5 (1) — 4.5 4.5 Balance at June 30, 2021 $ 26.5 $ (27.5) $ (1.0) (1) Includes interest expense recognized of $1.2 million and amortization of off-market swap value and accumulated loss at hedge de-designation of $4.8 million for the three months ended June 30, 2021. (In millions) Accumulated Foreign Currency Translation Adjustments Accumulated Loss on Derivative Contracts Accumulated Other Comprehensive Loss Balance at December 31, 2020 $ 20.8 $ (39.4) $ (18.6) Foreign currency translation adjustments, net of tax expense of $0.3 5.7 — 5.7 Unrealized gain on derivative contracts, net of tax expense of $1.2 — 3.4 3.4 Amount reclassified from Accumulated comprehensive income (loss) into earnings, net of tax benefit of $2.9 (1) — 8.5 8.5 Balance at June 30, 2021 $ 26.5 $ (27.5) $ (1.0) (1) Includes interest expense recognized of $4.0 million and amortization of off-market swap value and accumulated loss at hedge de-designation of $7.4 million for the six months ended June 30, 2021. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions In connection with the Rackspace Acquisition, we entered into a management consulting agreement with affiliates of Apollo and Searchlight Capital Partners L.P (“Searchlight”), (the “Apollo/Searchlight Management Consulting Agreement”) and a transaction fee agreement with an affiliate of Apollo (the “Transaction Fee Agreement”). In addition, on November 15, 2017, we entered into a management consulting agreement with ABRY Partners, LLC and ABRY Partners II, LLC (collectively, “ABRY”) (the “ABRY Management Consulting Agreement”). For the three and six months ended June 30, 2020, we recorded $3.5 million and $7.1 million, respectively, of management consulting fees within "Selling, general and administrative expenses" in the Consolidated Statements of Comprehensive Loss. On July 24, 2020, we executed termination letters with each of the parties to the Apollo/Searchlight Management Consulting Agreement, the Transaction Fee Agreement and the ABRY Management Consulting Agreement, whereby all such agreements terminated effective as of the pricing of our initial public offering on August 4, 2020. Therefore no management consulting or transaction fees were accrued or were payable under any of these agreements for periods subsequent to August 4, 2020. Affiliates of ABRY are also Term Loan Facility lenders under the First Lien Credit Agreement. As of June 30, 2021, the outstanding principal amount of the Term Loan Facility was $2,294.3 million, of which $47.9 million, or 2.1%, is due to ABRY affiliates. On February 2, 2021, we issued 2,665,935 shares of common stock to DPH 123, LLC, an ABRY affiliate, for no additional consideration pursuant to the Agreement and Plan of Merger, dated as of September 6, 2017, in connection with our November 15, 2017 acquisition of Datapipe Parent, Inc. Apollo Global Securities, LLC ("Apollo Global Securities"), an affiliate of Apollo, received approximately $0.6 million in connection with their role as an initial purchaser of the 3.50% Senior Secured Notes issued on February 9, 2021. Apollo Global Securities also received $2.3 million in arranger fees in connection with the entry into the Term Loan Facility on February 9, 2021. |
Segment Reporting
Segment Reporting | 6 Months Ended |
Jun. 30, 2021 | |
Segment Reporting [Abstract] | |
Segment Reporting | Segment Reporting We have organized our operations into the following three operating segments, which correspond directly to our reportable segments: Multicloud Services, Apps & Cross Platform, and OpenStack Public Cloud. Our segments are based upon a number of factors, including, the basis for our budgets and forecasts, organizational and management structure and the financial information regularly used by our Chief Operating Decision Maker to make key decisions and to assess performance. We assess financial performance of our segments on the basis of revenue and non-GAAP gross profit, which is a non-GAAP measure of profitability. For the calculation of non-GAAP gross profit, we allocate certain costs, such as data center operating costs, customer support costs, license expense, and depreciation, to our segments generally based on segment revenue. The table below presents a reconciliation of revenue by reportable segment to consolidated revenue and a reconciliation of segment non-GAAP gross profit to total consolidated gross profit for the three and six months ended June 30, 2020 and 2021. Three Months Ended June 30, Six Months Ended June 30, (In millions) 2020 2021 2020 2021 Revenue by segment: Multicloud Services $ 519.0 $ 605.1 $ 1,026.9 $ 1,184.7 Apps & Cross Platform 79.9 92.7 161.4 190.0 OpenStack Public Cloud 57.6 46.0 120.9 95.0 Total consolidated revenue $ 656.5 $ 743.8 $ 1,309.2 $ 1,469.7 Non-GAAP gross profit by segment: Multicloud Services $ 200.7 $ 202.0 $ 397.5 $ 398.4 Apps & Cross Platform 27.0 32.0 57.1 66.9 OpenStack Public Cloud 23.7 16.1 53.0 34.7 Less: Share-based compensation expense (2.3) (4.3) (4.1) (9.2) Other compensation expense (1) (1.5) (0.4) (3.4) (1.7) Purchase accounting impact on expense (2) (1.6) (1.2) (3.5) (2.4) Restructuring and transformation expenses (3) (4.1) (8.7) (5.4) (15.9) Total consolidated gross profit $ 241.9 $ 235.5 $ 491.2 $ 470.8 (1) Adjustments for retention bonuses, mainly in connection with restructuring and transformation projects, and the related payroll tax, and payroll taxes associated with the exercise of stock options and vesting of restricted stock. (2) Adjustment for the impact of purchase accounting from the Rackspace Acquisition on expenses. (3) Adjustment for the impact of business transformation and optimization activities, as well as associated severance, facility closure costs and lease termination expenses. |
Company Overview, Basis of Pr_2
Company Overview, Basis of Presentation, and Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2021 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | The unaudited consolidated financial statements include the accounts of Rackspace Technology, Inc. and our wholly-owned subsidiaries. Intercompany transactions and balances have been eliminated in consolidation. |
Unaudited Interim Financial Information | Unaudited Interim Financial Information The unaudited consolidated financial statements as of June 30, 2021, and for the three and six months ended June 30, 2020 and 2021, have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information. Accordingly, certain financial information and disclosures required for financial statements prepared under GAAP have been omitted in accordance with the SEC disclosure rules and regulations that permit reduced disclosure for interim periods. These unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the related notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2020 ("Annual Report on Form 10-K"). The unaudited interim consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements included in our Annual Report on Form 10-K and, in the opinion of management, reflect all adjustments, which include normal recurring adjustments, necessary for a fair statement of our financial position as of June 30, 2021, our results of operations and stockholders' equity for the three and six months ended June 30, 2020 and 2021, and our cash flows for the six months ended June 30, 2020 and 2021. The results of operations for the three and six months ended June 30, 2021 are not necessarily indicative of the results of operations to be expected for the year ending December 31, 2021, or for any other interim period, or for any other future year. |
Use of Estimates And Change in Accounting Estimate | Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenue and expenses, and related disclosures of contingent assets and liabilities in the consolidated financial statements and accompanying notes. On an ongoing basis, we evaluate our estimates, including those related to the allowance for doubtful accounts, useful lives of property, equipment and software, software capitalization, incremental borrowing rates for lease liability measurement, fair values of intangible assets and reporting units, useful lives of intangible assets, share-based compensation, contingencies, and income taxes, among others. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results could differ from our estimates. |
Reclassifications | Reclassifications Certain reclassifications have been made to the prior period consolidated financial statements to conform to the current period presentation. Specifically, the current portion of "Finance lease liabilities" is now presented separately from "Other current liabilities" in the Consolidated Balance Sheets. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements Simplifying the Accounting for Income Taxes In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740) - Simplifying the Accounting for Income Taxes , which removes certain exceptions to the general principles in Topic 740 and improves consistent application of and simplifies GAAP for other areas of Topic 740 by clarifying and amending existing guidance. We adopted this guidance on January 1, 2021. The adoption of this guidance did not have a mate rial impact on our consolidated financial statements. |
Net Loss Per Share | Net Loss Per ShareBasic net loss per share is calculated by dividing net loss attributable to common stockholders by the weighted average shares outstanding during the period. |
Derivatives | Derivatives We utilize derivative instruments, including interest rate swap agreements and foreign currency hedging contracts, to manage our exposure to interest rate risk and foreign currency fluctuations. We only hold such instruments for economic hedging purposes, not for speculative or trading purposes. Our derivative instruments are transacted only with highly-rated institutions, which reduces our exposure to credit risk in the event of nonperformance. We are exposed to interest rate risk associated with fluctuations in interest rates on the floating-rate Term Loan Facility. The objective in using interest rate derivatives is to manage our exposure to interest rate movements. To accomplish this objective, we have entered into interest rate swap agreements as part of our interest rate risk management strategy. Interest rate swaps involve the receipt of variable amounts from a counterparty in exchange for the company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. On January 9, 2020, we designated certain of our swaps as cash flow hedges. On the designation date, the cash flow hedges were in a $39.9 million liability position. The cash flow hedges were expected to be highly effective on the designation date and, on a quarterly basis, we performed retrospective and prospective regression assessments to determine whether the cash flow hedges continue to be highly effective. As long as the cash flow hedges are highly effective, changes in fair value are recorded to "Accumulated other comprehensive income (loss)" in the Consolidated Balance Sheets and reclassified to "Interest expense" in the period when the underlying transaction affects earnings. The income tax effects of cash flow hedges are released from "Accumulated other comprehensive income (loss)" in the period when the underlying transaction affects earnings. Any stranded income tax effects are released from “Accumulated other comprehensive income (loss)” into “Benefit (provision) for income taxes” under the portfolio a pproach. As of December 31, 2020, all of our cash flow hedges were highly effective. |
Customer Contracts (Tables)
Customer Contracts (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Balances Related to Customer Contracts | The following table presents the balances related to customer contracts: (In millions) Consolidated Balance Sheets Account December 31, 2020 June 30, 2021 Accounts receivable, net Accounts receivable, net (1) $ 483.0 $ 501.1 Current portion of contract assets Other current assets 12.2 15.3 Non-current portion of contract assets Other non-current assets 13.9 10.5 Current portion of deferred revenue Deferred revenue 76.7 93.0 Non-current portion of deferred revenue Other non-current liabilities 14.2 14.6 |
Schedule of Capitalized Contract Cost | Amortization of capitalized sales commissions and implementation costs was as follows: Three Months Ended June 30, Six Months Ended June 30, (In millions) 2020 2021 2020 2021 Amortization of capitalized sales commissions $ 11.4 $ 10.7 $ 22.3 $ 21.5 Amortization of capitalized implementation costs 4.4 4.4 8.6 8.9 |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Net Income (Loss) Per Share | The following table sets forth the computation of basic and diluted net loss per share: Three Months Ended June 30, Six Months Ended June 30, (In millions, except per share data) 2020 2021 2020 2021 Basic and diluted net loss per share: Net loss attributable to common stockholders $ (32.6) $ (36.6) $ (80.8) $ (100.6) Weighted average shares outstanding: Common stock 165.5 207.9 165.4 206.2 Number of shares used in per share computations 165.5 207.9 165.4 206.2 Net loss per share $ (0.20) $ (0.18) $ (0.49) $ (0.49) |
Property, Equipment and Softw_2
Property, Equipment and Software, net (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Equipment, and Software, net | Property, equipment and software, net, consisted of the following: (In millions) December 31, June 30, Computers and equipment $ 1,191.8 $ 1,220.9 Software 472.4 503.3 Furniture and fixtures 22.4 21.5 Buildings and leasehold improvements 513.1 513.9 Land 32.6 21.2 Property, equipment and software, at cost 2,232.3 2,280.8 Less: Accumulated depreciation (1,366.8) (1,408.9) Work in process 19.1 20.1 Property, equipment and software, net $ 884.6 $ 892.0 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Changes in Carrying Amounts of Goodwill by Reportable Segment | The following table sets forth the changes in the carrying amounts of goodwill by reportable segment: (In millions) Multicloud Services Apps & Cross Platform OpenStack Public Cloud Total Consolidated Balance as of December 31, 2020 (1) $ 2,386.0 $ 322.6 $ 52.5 $ 2,761.1 Foreign currency translation 4.3 0.2 0.2 4.7 Balance as of June 30, 2021 $ 2,390.3 $ 322.8 $ 52.7 $ 2,765.8 (1) Multicloud Services had accumulated impairment charges of $295.0 million as of December 31, 2020. |
Schedule of Finite-Lived Intangible Assets Other Than Goodwill | The following table provides information regarding our intangible assets other than goodwill: December 31, 2020 June 30, 2021 (In millions) Gross carrying amount Accumulated amortization Net carrying amount Gross carrying amount Accumulated amortization Net carrying amount Customer relationships $ 1,986.2 $ (624.0) $ 1,362.2 $ 1,987.8 $ (706.7) $ 1,281.1 Property tax abatement 16.0 (7.4) 8.6 16.0 (8.3) 7.7 Other 47.7 (22.2) 25.5 47.6 (32.6) 15.0 Total definite-lived intangible assets 2,049.9 (653.6) 1,396.3 2,051.4 (747.6) 1,303.8 Trade name (indefinite-lived) 250.0 — 250.0 250.0 — 250.0 Total intangible assets other than goodwill $ 2,299.9 $ (653.6) $ 1,646.3 $ 2,301.4 $ (747.6) $ 1,553.8 |
Schedule of Indefinite-Lived Intangible Assets Other Than Goodwill | The following table provides information regarding our intangible assets other than goodwill: December 31, 2020 June 30, 2021 (In millions) Gross carrying amount Accumulated amortization Net carrying amount Gross carrying amount Accumulated amortization Net carrying amount Customer relationships $ 1,986.2 $ (624.0) $ 1,362.2 $ 1,987.8 $ (706.7) $ 1,281.1 Property tax abatement 16.0 (7.4) 8.6 16.0 (8.3) 7.7 Other 47.7 (22.2) 25.5 47.6 (32.6) 15.0 Total definite-lived intangible assets 2,049.9 (653.6) 1,396.3 2,051.4 (747.6) 1,303.8 Trade name (indefinite-lived) 250.0 — 250.0 250.0 — 250.0 Total intangible assets other than goodwill $ 2,299.9 $ (653.6) $ 1,646.3 $ 2,301.4 $ (747.6) $ 1,553.8 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | Debt consisted of the following: (In millions, except %) December 31, 2020 June 30, 2021 Debt Instrument Maturity Date Interest Rate (1) Amount Interest Rate (1) Amount Prior Term Loan Facility November 3, 2023 4.00% $ 2,795.6 —% $ — Term Loan Facility February 15, 2028 —% — 3.50% 2,294.3 Revolving Credit Facility August 7, 2025 —% — —% — 3.50% Senior Secured Notes February 15, 2028 —% — 3.50% 550.0 5.375% Senior Notes December 1, 2028 5.375% 550.0 5.375% 550.0 Receivables Financing Facility July 19, 2022 2.37% 65.0 —% — Less: unamortized debt issuance costs (44.2) (39.1) Less: unamortized debt discount (3.7) (13.5) Total debt 3,362.7 3,341.7 Less: current portion of debt (43.4) (23.0) Debt, excluding current portion $ 3,319.3 $ 3,318.7 (1) Interest rates are as of each respective balance sheet date. |
Share-Based Compensation and Se
Share-Based Compensation and Settlement of Share-Based Awards (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Share-based Compensation Expense Recognized Under the Incentive Plan | Share-based compensation expense recogniz ed was as follows: Three Months Ended June 30, Six Months Ended June 30, (In millions) 2020 2021 2020 2021 Cost of revenue $ 2.3 $ 4.3 $ 4.1 $ 9.2 Selling, general and administrative expenses 6.8 16.1 12.5 28.4 Pre-tax share-based compensation expense 9.1 20.4 16.6 37.6 Less: Income tax benefit (1.9) (4.3) (3.5) (7.9) Total share-based compensation expense, net of tax $ 7.2 $ 16.1 $ 13.1 $ 29.7 |
Derivatives (Tables)
Derivatives (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments | The key terms of interest rate swaps outstanding are presented below: Effective Date Fixed Rate Paid (Received) December 31, 2020 June 30, 2021 Notional Amount (in millions) Status Notional Amount (in millions) Status Maturity Date Entered into December 2016: February 3, 2017 1.7625% $ 150.0 Active $ — Matured February 3, 2021 February 3, 2017 1.9040% 450.0 Active 450.0 Active February 3, 2022 February 3, 2017 1.9040% 450.0 Active 450.0 Active February 3, 2022 Entered into December 2018: February 3, 2019 2.7490% 150.0 Active — Terminated November 3, 2023 February 3, 2020 2.7350% 150.0 Active — Terminated November 3, 2023 February 3, 2021 2.7360% 150.0 Active — Terminated November 3, 2023 February 3, 2022 2.7800% 900.0 Active — Terminated November 3, 2023 Entered into February 2021: February 3, 2021 (1.9040)% — N/A (900.0) Active February 3, 2022 February 9, 2021 2.3820% — N/A 1,350.0 Active February 9, 2026 Total $ 2,400.0 $ 1,350.0 |
Schedule of Fair Values of Derivative Assets and Liabilities on the Consolidated Balance Sheets | The fair values of our derivatives and their location on the Consolidated Balance Sheets as of December 31, 2020 and June 30, 2021 were as follows: December 31, 2020 June 30, 2021 (In millions) Assets Liabilities Assets Liabilities Derivatives not designated as hedging instruments Location Interest rate swaps Other current assets (1) $ — $ — $ 9.4 $ — Interest rate swaps Other current liabilities — — — 9.4 Foreign currency contracts Other current liabilities — 1.7 — 3.7 Total $ — $ 1.7 $ 9.4 $ 13.1 Derivatives designated as hedging instruments Location Interest rate swaps Other non-current assets $ — $ — $ 11.0 $ — Interest rate swaps Other current liabilities (2) — 22.6 — 21.3 Interest rate swaps Other non-current liabilities (3) — 64.4 — 65.1 Total $ — $ 87.0 $ 11.0 $ 86.4 (1) The entire balance as of June 30, 2021 is comprised of the receive-fixed interest rate swap for which the fair value option has been elected. (2) The balance as of June 30, 2021 includes $17.2 million related to the financing component of the pay-fixed interest rate swap. (3) The entire balance as of June 30, 2021 is comprised of the financing component of the pay-fixed interest rate swap. |
Schedule Offsetting Assets Under Master Netting Arrangements | For financial statement presentation purposes, we do not offset assets and liabilities under master netting arrangements and all amounts above are presented on a gross basis. The following table, however, is presented on a net asset and net liability basis: December 31, 2020 June 30, 2021 (In millions) Gross Amounts on Balance Sheet Effect of Counter-Party Netting Net Amounts Gross Amounts on Balance Sheet Effect of Counter-Party Netting Net Amounts Assets Interest rate swaps $ — $ — $ — $ 20.4 $ (20.4) $ — Total $ — $ — $ — $ 20.4 $ (20.4) $ — Liabilities Interest rate swaps $ 87.0 $ — $ 87.0 $ 95.8 $ (20.4) $ 75.4 Foreign currency contracts 1.7 — 1.7 3.7 — 3.7 Total $ 88.7 $ — $ 88.7 $ 99.5 $ (20.4) $ 79.1 |
Schedule Offsetting Liabilities Under Master Netting Arrangements | For financial statement presentation purposes, we do not offset assets and liabilities under master netting arrangements and all amounts above are presented on a gross basis. The following table, however, is presented on a net asset and net liability basis: December 31, 2020 June 30, 2021 (In millions) Gross Amounts on Balance Sheet Effect of Counter-Party Netting Net Amounts Gross Amounts on Balance Sheet Effect of Counter-Party Netting Net Amounts Assets Interest rate swaps $ — $ — $ — $ 20.4 $ (20.4) $ — Total $ — $ — $ — $ 20.4 $ (20.4) $ — Liabilities Interest rate swaps $ 87.0 $ — $ 87.0 $ 95.8 $ (20.4) $ 75.4 Foreign currency contracts 1.7 — 1.7 3.7 — 3.7 Total $ 88.7 $ — $ 88.7 $ 99.5 $ (20.4) $ 79.1 |
Schedule of Derivative Instruments, Effect on Comprehensive Income (Loss) | The effect of our derivatives and their location on the Consolidated Statements of Comprehensive Loss for the three and six months ended June 30, 2020 and 2021 was as follows: Three Months Ended June 30, Six Months Ended June 30, (In millions) 2020 2021 2020 2021 Derivatives not designated as hedging instruments Location Interest rate swaps Interest expense $ — $ (4.8) $ (3.2) $ (9.4) Foreign currency contracts Other income (expense), net 0.3 (0.7) 3.6 (2.0) Derivatives designated as hedging instruments Location Interest rate swaps Interest expense $ (2.2) $ (1.3) $ (1.7) $ (3.6) |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | Accumulated other comprehensive income (loss) consisted of the following: (In millions) Accumulated Foreign Currency Translation Adjustments Accumulated Loss on Derivative Contracts Accumulated Other Comprehensive Loss Balance at March 31, 2020 $ (8.4) $ (41.1) $ (49.5) Foreign currency translation adjustments, net of tax benefit of $0.2 0.9 — 0.9 Unrealized loss on derivative contracts, net of tax benefit of $2.3 — (6.8) (6.8) Amount reclassified from Accumulated comprehensive income (loss) into earnings, net of tax benefit of $0.5 (1) — 1.7 1.7 Balance at June 30, 2020 $ (7.5) $ (46.2) $ (53.7) (1) Includes interest expense recognized of $3.7 million, partially offset by amortization of off-market swap value of $1.5 million for the three months ended June 30, 2020. (In millions) Accumulated Foreign Currency Translation Adjustments Accumulated Loss on Derivative Contracts Accumulated Other Comprehensive Income (Loss) Balance at December 31, 2019 $ 12.0 $ — $ 12.0 Foreign currency translation adjustments, net of tax benefit of $1.4 (19.5) — (19.5) Unrealized loss on derivative contracts, net of tax benefit of $16.3 — (47.5) (47.5) Amount reclassified from Accumulated comprehensive income (loss) into earnings, net of tax benefit of $0.4 (1) — 1.3 1.3 Balance at June 30, 2020 $ (7.5) $ (46.2) $ (53.7) (1) Includes interest expense recognized of $4.4 million, partially offset by amortization of off-market swap value of $2.7 million for the six months ended June 30, 2020. (In millions) Accumulated Foreign Currency Translation Adjustments Accumulated Loss on Derivative Contracts Accumulated Other Comprehensive Loss Balance at March 31, 2021 $ 23.8 $ (26.0) $ (2.2) Foreign currency translation adjustments, net of tax expense of $0.2 2.7 — 2.7 Unrealized loss on derivative contracts, net of tax benefit of $2.0 — (6.0) (6.0) Amount reclassified from Accumulated comprehensive income (loss) into earnings, net of tax benefit of $1.5 (1) — 4.5 4.5 Balance at June 30, 2021 $ 26.5 $ (27.5) $ (1.0) (1) Includes interest expense recognized of $1.2 million and amortization of off-market swap value and accumulated loss at hedge de-designation of $4.8 million for the three months ended June 30, 2021. (In millions) Accumulated Foreign Currency Translation Adjustments Accumulated Loss on Derivative Contracts Accumulated Other Comprehensive Loss Balance at December 31, 2020 $ 20.8 $ (39.4) $ (18.6) Foreign currency translation adjustments, net of tax expense of $0.3 5.7 — 5.7 Unrealized gain on derivative contracts, net of tax expense of $1.2 — 3.4 3.4 Amount reclassified from Accumulated comprehensive income (loss) into earnings, net of tax benefit of $2.9 (1) — 8.5 8.5 Balance at June 30, 2021 $ 26.5 $ (27.5) $ (1.0) (1) Includes interest expense recognized of $4.0 million and amortization of off-market swap value and accumulated loss at hedge de-designation of $7.4 million for the six months ended June 30, 2021. |
Segment Reporting (Tables)
Segment Reporting (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Segment Reporting [Abstract] | |
Reconciliation of Revenue from Segments to Consolidated | The table below presents a reconciliation of revenue by reportable segment to consolidated revenue and a reconciliation of segment non-GAAP gross profit to total consolidated gross profit for the three and six months ended June 30, 2020 and 2021. Three Months Ended June 30, Six Months Ended June 30, (In millions) 2020 2021 2020 2021 Revenue by segment: Multicloud Services $ 519.0 $ 605.1 $ 1,026.9 $ 1,184.7 Apps & Cross Platform 79.9 92.7 161.4 190.0 OpenStack Public Cloud 57.6 46.0 120.9 95.0 Total consolidated revenue $ 656.5 $ 743.8 $ 1,309.2 $ 1,469.7 Non-GAAP gross profit by segment: Multicloud Services $ 200.7 $ 202.0 $ 397.5 $ 398.4 Apps & Cross Platform 27.0 32.0 57.1 66.9 OpenStack Public Cloud 23.7 16.1 53.0 34.7 Less: Share-based compensation expense (2.3) (4.3) (4.1) (9.2) Other compensation expense (1) (1.5) (0.4) (3.4) (1.7) Purchase accounting impact on expense (2) (1.6) (1.2) (3.5) (2.4) Restructuring and transformation expenses (3) (4.1) (8.7) (5.4) (15.9) Total consolidated gross profit $ 241.9 $ 235.5 $ 491.2 $ 470.8 (1) Adjustments for retention bonuses, mainly in connection with restructuring and transformation projects, and the related payroll tax, and payroll taxes associated with the exercise of stock options and vesting of restricted stock. (2) Adjustment for the impact of purchase accounting from the Rackspace Acquisition on expenses. (3) Adjustment for the impact of business transformation and optimization activities, as well as associated severance, facility closure costs and lease termination expenses. |
Reconciliation of Gross Profit from Segments to Consolidated | The table below presents a reconciliation of revenue by reportable segment to consolidated revenue and a reconciliation of segment non-GAAP gross profit to total consolidated gross profit for the three and six months ended June 30, 2020 and 2021. Three Months Ended June 30, Six Months Ended June 30, (In millions) 2020 2021 2020 2021 Revenue by segment: Multicloud Services $ 519.0 $ 605.1 $ 1,026.9 $ 1,184.7 Apps & Cross Platform 79.9 92.7 161.4 190.0 OpenStack Public Cloud 57.6 46.0 120.9 95.0 Total consolidated revenue $ 656.5 $ 743.8 $ 1,309.2 $ 1,469.7 Non-GAAP gross profit by segment: Multicloud Services $ 200.7 $ 202.0 $ 397.5 $ 398.4 Apps & Cross Platform 27.0 32.0 57.1 66.9 OpenStack Public Cloud 23.7 16.1 53.0 34.7 Less: Share-based compensation expense (2.3) (4.3) (4.1) (9.2) Other compensation expense (1) (1.5) (0.4) (3.4) (1.7) Purchase accounting impact on expense (2) (1.6) (1.2) (3.5) (2.4) Restructuring and transformation expenses (3) (4.1) (8.7) (5.4) (15.9) Total consolidated gross profit $ 241.9 $ 235.5 $ 491.2 $ 470.8 (1) Adjustments for retention bonuses, mainly in connection with restructuring and transformation projects, and the related payroll tax, and payroll taxes associated with the exercise of stock options and vesting of restricted stock. (2) Adjustment for the impact of purchase accounting from the Rackspace Acquisition on expenses. (3) Adjustment for the impact of business transformation and optimization activities, as well as associated severance, facility closure costs and lease termination expenses. |
Company Overview, Basis of Pr_3
Company Overview, Basis of Presentation, and Summary of Significant Accounting Policies - Narrative (Details) - USD ($) $ in Millions | Jul. 21, 2021 | Jun. 30, 2021 | Jun. 30, 2021 |
Internal restructuring plan | Subsequent Event | |||
Subsequent Event [Line Items] | |||
Percent of workforce to be terminated | 10.00% | ||
Percent of workforce expected to be backfilled | 85.00% | ||
Employee force reduction period | 12 months | ||
Maximum restructuring plan expected period | 12 months | ||
Internal restructuring plan | Selling, general and administrative expenses | |||
Subsequent Event [Line Items] | |||
Restructuring costs | $ 6.4 | ||
Internal restructuring plan | Minimum | Subsequent Event | |||
Subsequent Event [Line Items] | |||
Restructuring plan expected cost | $ 70 | ||
Restructuring plan expected period | 12 months | ||
Internal restructuring plan | Maximum | Subsequent Event | |||
Subsequent Event [Line Items] | |||
Restructuring plan expected cost | $ 80 | ||
Restructuring plan expected period | 24 months | ||
Service Life | |||
Subsequent Event [Line Items] | |||
Decrease in depreciation expense | $ 7.5 | $ 14.1 |
Customer Contracts - Schedule o
Customer Contracts - Schedule of Balances Related to Customer Contracts (Details) - USD ($) $ in Millions | Jun. 30, 2021 | Dec. 31, 2020 |
Revenue from Contract with Customer [Abstract] | ||
Accounts receivable, net | $ 501.1 | $ 483 |
Current portion of contract assets | 15.3 | 12.2 |
Non-current portion of contract assets | 10.5 | 13.9 |
Current portion of deferred revenue | 93 | 76.7 |
Non-current portion of deferred revenue | 14.6 | 14.2 |
Allowance for doubtful accounts and accrued customer credits | $ 16 | $ 28.3 |
Customer Contracts - Narrative
Customer Contracts - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | |
Capitalized Contract Cost [Line Items] | |||||
Revenue recognized included in deferred revenue | $ 25.2 | $ 29.1 | $ 46.1 | $ 46.9 | |
Cost To Obtain A Contract | |||||
Capitalized Contract Cost [Line Items] | |||||
Capitalized contract cost, net | 57.8 | 57.8 | $ 59.3 | ||
Cost To Fulfill A Contract | |||||
Capitalized Contract Cost [Line Items] | |||||
Capitalized contract cost, net | $ 25.6 | $ 25.6 | $ 25 |
Customer Contracts - Schedule_2
Customer Contracts - Schedule of Amortization of Capitalized Contract Costs (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Amortization of capitalized sales commissions | ||||
Capitalized Contract Cost [Line Items] | ||||
Capitalized contract cost, amortization | $ 10.7 | $ 11.4 | $ 21.5 | $ 22.3 |
Amortization of capitalized implementation costs | ||||
Capitalized Contract Cost [Line Items] | ||||
Capitalized contract cost, amortization | $ 4.4 | $ 4.4 | $ 8.9 | $ 8.6 |
Customer Contracts - Remaining
Customer Contracts - Remaining Performance Obligations (Details) $ in Millions | Jun. 30, 2021USD ($) |
Revenue from Contract with Customer [Abstract] | |
Remaining performance obligation | $ 801.3 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-07-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation expected to be recognized, percentage | 38.00% |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 6 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, expected timing of satisfaction, period |
Net Loss Per Share - Computatio
Net Loss Per Share - Computation of Basic and Diluted Net Income (Loss) per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Net loss per share: | ||||
Net loss attributable to common stockholders | $ (36.6) | $ (32.6) | $ (100.6) | $ (80.8) |
Net loss attributable to common stockholders | $ (36.6) | $ (32.6) | $ (100.6) | $ (80.8) |
Common stock (in shares) | 207.9 | 165.5 | 206.2 | 165.4 |
Number of shares used in per share computations (in shares) | 207.9 | 165.5 | 206.2 | 165.4 |
Net loss per share (in dollars per share) | $ (0.18) | $ (0.20) | $ (0.49) | $ (0.49) |
Net loss per share (in dollars per share) | $ (0.18) | $ (0.20) | $ (0.49) | $ (0.49) |
Net Loss Per Share - Narrative
Net Loss Per Share - Narrative (Details) - shares shares in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Earnings Per Share [Abstract] | ||||
Anti-dilutive potential common shares excluded from computation of dilutive net income (loss) per share (in shares) | 19.4 | 25.4 | 19.4 | 25.4 |
Property, Equipment and Softw_3
Property, Equipment and Software, net - Schedule of Property, Equipment and Software, net (Details) - USD ($) $ in Millions | Jun. 30, 2021 | Dec. 31, 2020 |
Property, Plant and Equipment [Line Items] | ||
Property, equipment and software, at cost | $ 2,280.8 | $ 2,232.3 |
Less: Accumulated depreciation | (1,408.9) | (1,366.8) |
Property, equipment and software, net | 892 | 884.6 |
Computers and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, equipment and software, at cost | 1,220.9 | 1,191.8 |
Software | ||
Property, Plant and Equipment [Line Items] | ||
Property, equipment and software, at cost | 503.3 | 472.4 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property, equipment and software, at cost | 21.5 | 22.4 |
Buildings and leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, equipment and software, at cost | 513.9 | 513.1 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Property, equipment and software, at cost | 21.2 | 32.6 |
Work in process | ||
Property, Plant and Equipment [Line Items] | ||
Work in process | $ 20.1 | $ 19.1 |
Property, Equipment and Softw_4
Property, Equipment and Software, net - Narrative (Details) - USD ($) $ in Millions | Jan. 15, 2021 | Jan. 14, 2021 |
Property, Plant and Equipment [Abstract] | ||
Land available-for-sale | $ 11.4 | |
Proceeds from sale of land held-for-use | $ 32.2 | |
Payments for brokerage fees and professional fees | 0.9 | |
Proceeds from sale of land held-for-use, net of brokerage and professional fees | 31.3 | |
Gain on sale of land | $ 19.9 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Changes in Carrying Amounts of Goodwill by Reportable Segment (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2021 | Dec. 31, 2020 | |
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | $ 2,761.1 | |
Foreign currency translation | 4.7 | |
Goodwill, ending balance | 2,765.8 | |
Multicloud Services | ||
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | 2,386 | |
Foreign currency translation | 4.3 | |
Goodwill, ending balance | 2,390.3 | |
Accumulated impairment charges | $ 295 | |
Apps & Cross Platform | ||
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | 322.6 | |
Foreign currency translation | 0.2 | |
Goodwill, ending balance | 322.8 | |
OpenStack Public Cloud | ||
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | 52.5 | |
Foreign currency translation | 0.2 | |
Goodwill, ending balance | $ 52.7 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Intangible Assets Other Than Goodwill (Details) - USD ($) $ in Millions | Jun. 30, 2021 | Dec. 31, 2020 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | $ 2,051.4 | $ 2,049.9 |
Accumulated amortization | (747.6) | (653.6) |
Net carrying amount | 1,303.8 | 1,396.3 |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Gross carrying amount | 2,301.4 | 2,299.9 |
Accumulated amortization | (747.6) | (653.6) |
Net carrying amount | 1,553.8 | 1,646.3 |
Trade name (indefinite-lived) | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Trade name (indefinite-lived) | 250 | 250 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 1,987.8 | 1,986.2 |
Accumulated amortization | (706.7) | (624) |
Net carrying amount | 1,281.1 | 1,362.2 |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Accumulated amortization | (706.7) | (624) |
Property tax abatement | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 16 | 16 |
Accumulated amortization | (8.3) | (7.4) |
Net carrying amount | 7.7 | 8.6 |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Accumulated amortization | (8.3) | (7.4) |
Other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 47.6 | 47.7 |
Accumulated amortization | (32.6) | (22.2) |
Net carrying amount | 15 | 25.5 |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Accumulated amortization | $ (32.6) | $ (22.2) |
Debt - Schedule of Debt (Detail
Debt - Schedule of Debt (Details) - USD ($) $ in Millions | Jun. 30, 2021 | Feb. 28, 2021 | Dec. 31, 2020 |
Debt Instrument [Line Items] | |||
Less: unamortized debt issuance costs | $ (39.1) | $ (44.2) | |
Less: unamortized debt discount | (13.5) | (3.7) | |
Total debt | 3,341.7 | 3,362.7 | |
Less: current portion of debt | (23) | (43.4) | |
Debt, excluding current portion | $ 3,318.7 | $ 3,319.3 | |
3.50% Senior Secured Notes | |||
Debt Instrument [Line Items] | |||
Less: unamortized debt issuance costs | $ (6.8) |
Debt - Narrative (Details)
Debt - Narrative (Details) - USD ($) | Feb. 09, 2021 | Feb. 28, 2021 | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Feb. 15, 2028 | Dec. 31, 2020 | Dec. 01, 2020 | Mar. 19, 2020 |
Debt Instrument [Line Items] | ||||||||||
Debt modification and extinguishment costs | $ 500,000 | $ 0 | $ 37,500,000 | $ 0 | ||||||
Unamortized debt issuance cost | $ 39,100,000 | $ 39,100,000 | $ 44,200,000 | |||||||
Loan modification fee | $ 27,600,000 | |||||||||
3.50% Senior Secured Notes | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt modification and extinguishment costs | 37,000,000 | |||||||||
Unamortized debt issuance cost | 6,800,000 | |||||||||
Term Loan Facility | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt Instrument, unamortized discount and debt issuance costs | 9,400,000 | |||||||||
Term Loan Facility | Term Loan Facility | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument, term | 7 years | |||||||||
Aggregate principal amount | $ 2,300,000,000 | |||||||||
Debt instrument, basis spread on variable rate floor | 0.75% | |||||||||
Interest payment period (not exceed) | 90 days | |||||||||
Effective interest rate | 3.50% | 3.50% | 0.00% | |||||||
Fair value of debt | $ 2,282,800,000 | $ 2,282,800,000 | ||||||||
Principal balance | 2,294,300,000 | 2,294,300,000 | $ 0 | |||||||
Debt Instrument, unamortized discount and debt issuance costs | $ 41,000,000 | |||||||||
Term Loan Facility | Term Loan Facility | Forecast | Subsequent Event | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Quarterly principal payment | $ 5,800,000 | |||||||||
Term Loan Facility | Term Loan Facility | LIBOR | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument, basis spread on variable rate | 2.75% | |||||||||
Term Loan Facility | Term Loan Facility | Base rate | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument, basis spread on variable rate | 1.75% | |||||||||
Term Loan Facility | Senior Facilities | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Principal balance | $ 2,294,300,000 | $ 2,294,300,000 | ||||||||
Term Loan Facility | Senior Facilities | Federal Funds Rate | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument, basis spread on variable rate | 0.50% | |||||||||
Term Loan Facility | Senior Facilities | One-month Adjusted LIBOR | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument, basis spread on variable rate | 1.00% | |||||||||
Term Loan Facility | Prior Term Loan Facility | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Effective interest rate | 0.00% | 0.00% | 4.00% | |||||||
Principal balance | $ 0 | $ 0 | $ 2,795,600,000 | |||||||
Line of Credit | Receivables Financing Facility | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Effective interest rate | 0.00% | 0.00% | 2.37% | |||||||
Principal balance | $ 0 | $ 0 | $ 65,000,000 | |||||||
Senior notes | 3.50% Senior Secured Notes | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Aggregate principal amount | $ 550,000,000 | |||||||||
Interest rate | 3.50% | 3.50% | 3.50% | 0.00% | ||||||
Fair value of debt | $ 532,100,000 | $ 532,100,000 | ||||||||
Principal balance | $ 550,000,000 | $ 550,000,000 | $ 0 | |||||||
Redemption price, percentage | 101.00% | |||||||||
Senior notes | 3.50% Senior Secured Notes | Prior to February 15, 2024 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Redemption price, percentage | 100.00% | |||||||||
Percent of redeemable debt | 40.00% | |||||||||
Senior notes | 3.50% Senior Secured Notes | From February 15, 2024 to February 14, 2025 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Redemption price, percentage | 101.75% | |||||||||
Senior notes | 3.50% Senior Secured Notes | From February 15, 2025 to February 14, 2026 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Redemption price, percentage | 100.875% | |||||||||
Senior notes | 3.50% Senior Secured Notes | from February 15, 2026 and thereafter | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Redemption price, percentage | 100.00% | |||||||||
Senior notes | 3.50% Senior Secured Notes | Commencing with February 9 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Redemption price, percentage | 103.00% | |||||||||
Percent of redeemable debt | 10.00% | |||||||||
Senior notes | 5.375% Senior Notes | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Aggregate principal amount | $ 550,000,000 | |||||||||
Interest rate | 5.375% | 5.375% | 5.375% | |||||||
Principal balance | $ 550,000,000 | $ 550,000,000 | $ 550,000,000 | |||||||
Percent of redeemable debt | 40.00% | |||||||||
Fair value | 563,800,000 | $ 563,800,000 | ||||||||
Senior notes | 5.375% Senior Notes | Prior to December 1, 2023 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Redemption price, percentage | 100.00% | |||||||||
Senior notes | 5.375% Senior Notes | December 1, 2023 to December 1, 2024 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Redemption price, percentage | 102.688% | |||||||||
Senior notes | 5.375% Senior Notes | December 1, 2024 to December 1, 202 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Redemption price, percentage | 101.344% | |||||||||
Senior notes | 5.375% Senior Notes | December 1, 2025 and thereafter | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Redemption price, percentage | 100.00% | |||||||||
Senior notes | 5.375% Senior Notes | Upon change of control | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Redemption price, percentage | 101.00% | |||||||||
Senior notes | Forty Percent Of Senior Notes, 5.375%, Due 2028 | Prior to December 1, 2023 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Redemption price, percentage | 105.375% | |||||||||
Senior notes | Forty Percent Of 3.50% Senior Secured Notes Due 2028 | Prior to February 15, 2024 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Redemption price, percentage | 103.50% | |||||||||
Revolving Credit Facility | Receivables Financing Facility | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Repayments of lines of credit | 50,000,000 | |||||||||
Revolving Credit Facility | Line of Credit | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Total commitments | $ 375,000,000 | $ 375,000,000 | ||||||||
Debt instrument, basis spread on variable rate floor | 1.00% | |||||||||
Unused commitment fee percentage | 0.50% | |||||||||
Effective interest rate | 0.00% | 0.00% | 0.00% | |||||||
Principal balance | $ 0 | $ 0 | $ 0 | |||||||
Revolving Credit Facility | Line of Credit | Senior Facilities | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument, leverage ratio, maximum | 5 | |||||||||
Debt instrument, covenant, undrawn letters of credit and cash collateralized letters of credit excluded from threshold trigger | $ 25,000,000 | |||||||||
Debt instrument, covenant, percentage of outstanding borrowings trigger, minimum | 35.00% | |||||||||
Revolving Credit Facility | Line of Credit | Senior Facilities | LIBOR | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument, basis spread on variable rate | 3.00% | |||||||||
Revolving Credit Facility | Line of Credit | Senior Facilities | Base rate | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument, basis spread on variable rate | 2.00% | |||||||||
Revolving Credit Facility | Line of Credit | Receivables Financing Facility | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Total commitments | $ 100,000,000 | |||||||||
Debt modification and extinguishment costs | $ 500,000 | $ 500,000 |
Share-Based Compensation and _2
Share-Based Compensation and Settlement of Share-Based Awards - Narrative (Details) $ / shares in Units, shares in Millions, $ in Millions | 6 Months Ended |
Jun. 30, 2021USD ($)$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized compensation cost | $ | $ 128.6 |
Unrecognized compensation cost, period for recognition | 2 years |
Restricted Stock Units (RSUs) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
RSUs granted (in shares) | shares | 4 |
Weighted average grant date fair value, RSUs granted during period (in usd per share) | $ / shares | $ 22.55 |
Vesting period | 3 years |
Share-Based Compensation and _3
Share-Based Compensation and Settlement of Share-Based Awards - Schedule of Share-Based Compensation Expense Recognized Under the Incentive Plan (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Pre-tax share-based compensation expense | $ 20.4 | $ 9.1 | $ 37.6 | $ 16.6 |
Less: Income tax benefit | (4.3) | (1.9) | (7.9) | (3.5) |
Total share-based compensation expense, net of tax | 16.1 | 7.2 | 29.7 | 13.1 |
Cost of revenue | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Pre-tax share-based compensation expense | 4.3 | 2.3 | 9.2 | 4.1 |
Selling, general and administrative expenses | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Pre-tax share-based compensation expense | $ 16.1 | $ 6.8 | $ 28.4 | $ 12.5 |
Taxes - Narrative (Details)
Taxes - Narrative (Details) - Forecast $ in Millions | 12 Months Ended |
Jun. 30, 2022USD ($) | |
Minimum | |
Income Tax Examination [Line Items] | |
Reduction resulting from lapse of applicable statute of limitations | $ 10 |
Maximum | |
Income Tax Examination [Line Items] | |
Reduction resulting from lapse of applicable statute of limitations | $ 15 |
Derivatives - Narrative (Detail
Derivatives - Narrative (Details) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||||||||
Jun. 30, 2021USD ($)instrument | Jun. 30, 2020USD ($) | Jun. 30, 2021USD ($)instrument | Jun. 30, 2020USD ($) | Dec. 31, 2020USD ($)instrument | Feb. 12, 2021USD ($) | Jan. 31, 2021USD ($) | Dec. 31, 2020GBP (£)instrument | Nov. 19, 2020USD ($) | Nov. 19, 2020GBP (£) | Mar. 26, 2020USD ($)instrument | Mar. 26, 2020GBP (£)instrument | Jan. 09, 2020USD ($) | Nov. 30, 2019GBP (£)instrument£ / $ | |
Derivative [Line Items] | ||||||||||||||
Liabilities | $ 99,500,000 | $ 99,500,000 | $ 88,700,000 | |||||||||||
Accumulated other comprehensive loss | 1,000,000 | 1,000,000 | 18,600,000 | |||||||||||
Interest expense | 50,500,000 | $ 68,900,000 | 103,100,000 | $ 140,900,000 | ||||||||||
Cash flow hedge losses expected to be reclassified as an increase to interest expense over the next twelve months | 23,800,000 | |||||||||||||
Derivatives designated as hedging instruments | ||||||||||||||
Derivative [Line Items] | ||||||||||||||
Liabilities | 86,400,000 | 86,400,000 | 87,000,000 | |||||||||||
Interest rate swaps | ||||||||||||||
Derivative [Line Items] | ||||||||||||||
Liabilities | 95,800,000 | 95,800,000 | 87,000,000 | |||||||||||
Derivative, notional amount | $ 1,350,000,000 | $ 1,350,000,000 | 2,400,000,000 | $ 900,000,000 | ||||||||||
Accumulated other comprehensive loss | $ 51,600,000 | |||||||||||||
Derivative, fixed interest rate | 2.382% | |||||||||||||
Interest rate swaps | LIBOR | ||||||||||||||
Derivative [Line Items] | ||||||||||||||
Variable interest rate | 0.75% | |||||||||||||
Interest rate swaps | Cash Flow Hedging | Derivatives designated as hedging instruments | ||||||||||||||
Derivative [Line Items] | ||||||||||||||
Liabilities | $ 39,900,000 | |||||||||||||
Receive fixed interest rate swap | ||||||||||||||
Derivative [Line Items] | ||||||||||||||
Derivative, notional amount | $ 900,000,000 | |||||||||||||
Number of derivative instruments | instrument | 2 | 2 | ||||||||||||
Pay-fixed interest rate swap | ||||||||||||||
Derivative [Line Items] | ||||||||||||||
Derivative, notional amount | $ 1,350,000,000 | |||||||||||||
Foreign Currency Net Zero Cost Collar Contract - Entered In November 2019 | ||||||||||||||
Derivative [Line Items] | ||||||||||||||
Derivative, notional amount | £ | £ 100,000,000 | |||||||||||||
Number of derivative instruments | instrument | 2 | |||||||||||||
Number of derivative instruments settled | instrument | 1 | 1 | ||||||||||||
Notional amount settled | £ | £ 50,000,000 | £ 50,000,000 | ||||||||||||
Net payment (receipt) after settlement | $ 200,000 | $ (1,900,000) | ||||||||||||
Foreign Currency Net Zero Cost Collar Contract - Entered In November 2019 | Minimum | ||||||||||||||
Derivative [Line Items] | ||||||||||||||
Forward exchange rate | £ / $ | 1.2375 | |||||||||||||
Foreign Currency Net Zero Cost Collar Contract - Entered In November 2019 | Maximum | ||||||||||||||
Derivative [Line Items] | ||||||||||||||
Forward exchange rate | £ / $ | 1.3475 | |||||||||||||
Foreign Currency Forward Contract - Entered in during 2020 | ||||||||||||||
Derivative [Line Items] | ||||||||||||||
Derivative, notional amount | $ 0 | |||||||||||||
Net payment (receipt) after settlement | $ 1,700,000 | $ 1,700,000 | ||||||||||||
Derivative term of contract | 3 months | |||||||||||||
Foreign Currency Forward Contract - Entered in fourth quarter 2020 | ||||||||||||||
Derivative [Line Items] | ||||||||||||||
Derivative, notional amount | $ 107,100,000 | £ 80,000,000 | ||||||||||||
Number of derivative instruments | instrument | 2 | 2 | ||||||||||||
Forward exchange rate | 1.3388 | 1.3388 |
Derivatives - Interest Rate Swa
Derivatives - Interest Rate Swaps Outstanding (Details) - USD ($) | Jun. 30, 2021 | Feb. 12, 2021 | Dec. 31, 2020 |
Interest rate swaps | |||
Derivative [Line Items] | |||
Fixed Rate Paid (Received) | 2.382% | ||
Notional Amount (in millions) | $ 1,350,000,000 | $ 900,000,000 | $ 2,400,000,000 |
Interest Rate Swap - Entered in December 2016 | |||
Derivative [Line Items] | |||
Fixed Rate Paid (Received) | 1.7625% | ||
Notional Amount (in millions) | $ 150,000,000 | ||
Interest Rate Swap - Entered in December 2016 | |||
Derivative [Line Items] | |||
Fixed Rate Paid (Received) | 1.904% | ||
Notional Amount (in millions) | $ 450,000,000 | 450,000,000 | |
Interest Rate Swap - Entered in December 2016 | |||
Derivative [Line Items] | |||
Fixed Rate Paid (Received) | 1.904% | ||
Notional Amount (in millions) | $ 450,000,000 | $ 450,000,000 | |
Interest Rate Swap - Entered in December 2018 | |||
Derivative [Line Items] | |||
Fixed Rate Paid (Received) | 2.749% | ||
Notional Amount (in millions) | $ 150,000,000 | ||
Interest Rate Swap - Entered in December 2018 | |||
Derivative [Line Items] | |||
Fixed Rate Paid (Received) | 2.735% | ||
Notional Amount (in millions) | $ 150,000,000 | ||
Interest Rate Swap - Entered in December 2018 | |||
Derivative [Line Items] | |||
Fixed Rate Paid (Received) | 2.736% | ||
Notional Amount (in millions) | $ 150,000,000 | ||
Interest Rate Swap - Entered in December 2018 | |||
Derivative [Line Items] | |||
Fixed Rate Paid (Received) | 2.78% | ||
Notional Amount (in millions) | $ 900,000,000 | ||
Interest Rate Swap - Entered in February 2021 | |||
Derivative [Line Items] | |||
Fixed Rate Paid (Received) | (1.904%) | ||
Notional Amount (in millions) | $ (900,000,000) | ||
Interest Rate Swap - Entered in February 2021 | |||
Derivative [Line Items] | |||
Fixed Rate Paid (Received) | 2.382% | ||
Notional Amount (in millions) | $ 1,350,000,000 |
Derivatives - Schedule of Fair
Derivatives - Schedule of Fair Values of Derivatives on the Consolidated Balance Sheets (Details) - USD ($) $ in Millions | Jun. 30, 2021 | Dec. 31, 2020 |
Derivatives, Fair Value [Line Items] | ||
Assets | $ 20.4 | $ 0 |
Liabilities | 99.5 | 88.7 |
Interest rate swaps | ||
Derivatives, Fair Value [Line Items] | ||
Assets | 20.4 | 0 |
Liabilities | 95.8 | 87 |
Foreign currency contracts | ||
Derivatives, Fair Value [Line Items] | ||
Liabilities | 3.7 | 1.7 |
Derivatives not designated as hedging instruments | ||
Derivatives, Fair Value [Line Items] | ||
Assets | 9.4 | 0 |
Liabilities | 13.1 | 1.7 |
Derivatives not designated as hedging instruments | Other current assets | Interest rate swaps | ||
Derivatives, Fair Value [Line Items] | ||
Assets | 9.4 | 0 |
Liabilities | 0 | 0 |
Derivatives not designated as hedging instruments | Other current liabilities | Interest rate swaps | ||
Derivatives, Fair Value [Line Items] | ||
Assets | 0 | 0 |
Liabilities | 9.4 | 0 |
Derivatives not designated as hedging instruments | Other current liabilities | Foreign currency contracts | ||
Derivatives, Fair Value [Line Items] | ||
Assets | 0 | 0 |
Liabilities | 3.7 | 1.7 |
Derivatives designated as hedging instruments | ||
Derivatives, Fair Value [Line Items] | ||
Assets | 11 | 0 |
Liabilities | 86.4 | 87 |
Derivatives designated as hedging instruments | Other non-current assets | Interest rate swaps | ||
Derivatives, Fair Value [Line Items] | ||
Assets | 11 | 0 |
Liabilities | 0 | 0 |
Derivatives designated as hedging instruments | Other current liabilities | Interest rate swaps | ||
Derivatives, Fair Value [Line Items] | ||
Assets | 0 | 0 |
Liabilities | 21.3 | 22.6 |
Derivatives designated as hedging instruments | Other current liabilities | Pay-fixed interest rate swap | ||
Derivatives, Fair Value [Line Items] | ||
Liabilities | 17.2 | |
Derivatives designated as hedging instruments | Other non-current liabilities | Interest rate swaps | ||
Derivatives, Fair Value [Line Items] | ||
Assets | 0 | 0 |
Liabilities | $ 65.1 | $ 64.4 |
Derivatives - Derivatives Prese
Derivatives - Derivatives Presented on a Net Asset and Net Liability basis (Details) - USD ($) $ in Millions | Jun. 30, 2021 | Dec. 31, 2020 |
Assets | ||
Gross Amounts on Balance Sheet | $ 20.4 | $ 0 |
Effect of Counter-Party Netting | (20.4) | 0 |
Net Amounts | 0 | 0 |
Liabilities | ||
Gross Amounts on Balance Sheet | 99.5 | 88.7 |
Effect of Counter-Party Netting | (20.4) | 0 |
Net Amounts | 79.1 | 88.7 |
Interest rate swaps | ||
Assets | ||
Gross Amounts on Balance Sheet | 20.4 | 0 |
Effect of Counter-Party Netting | (20.4) | 0 |
Net Amounts | 0 | 0 |
Liabilities | ||
Gross Amounts on Balance Sheet | 95.8 | 87 |
Effect of Counter-Party Netting | (20.4) | 0 |
Net Amounts | 75.4 | 87 |
Foreign currency contracts | ||
Liabilities | ||
Gross Amounts on Balance Sheet | 3.7 | 1.7 |
Effect of Counter-Party Netting | 0 | 0 |
Net Amounts | $ 3.7 | $ 1.7 |
Derivatives - Effect of Derivat
Derivatives - Effect of Derivatives on the Consolidated Statements of Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Interest expense | Interest rate swaps | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Derivatives not designated as hedging instruments | $ (4.8) | $ 0 | $ (9.4) | $ (3.2) |
Derivatives designated as hedging instruments | (1.3) | (2.2) | (3.6) | (1.7) |
Other income (expense), net | Foreign currency contracts | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Derivatives not designated as hedging instruments | $ (0.7) | $ 0.3 | $ (2) | $ 3.6 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) - Schedule of Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | $ 1,375.2 | $ 796.6 | $ 1,383.7 | $ 898.8 |
Foreign currency translation adjustments, net of tax benefit | 2.7 | 0.9 | 5.7 | (19.5) |
Unrealized gain (loss) on derivative contracts, net of tax benefit | (6) | (6.8) | 3.4 | (47.5) |
Amount reclassified from Accumulated comprehensive income (loss) into earnings, net of tax benefit | 4.5 | 1.7 | 8.5 | 1.3 |
Ending balance | 1,382.5 | 768.8 | 1,382.5 | 768.8 |
Foreign currency translation adjustment, tax benefit | 0.2 | 0.2 | 0.3 | 1.4 |
Unrealized losses on derivative contracts, before reclassification, tax expense (benefit) | 2 | 2.3 | 1.2 | 16.3 |
Tax benefit, reclassification from AOCI | 1.5 | 0.5 | (2.9) | (0.4) |
Interest expense | 50.5 | 68.9 | 103.1 | 140.9 |
Reclassification out of Accumulated Other Comprehensive Income | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Interest expense | 1.2 | 3.7 | 4 | 4.4 |
Amortization of off-market swap | 4.8 | 1.5 | 7.4 | 2.7 |
Accumulated Foreign Currency Translation Adjustments | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | 23.8 | (8.4) | 20.8 | 12 |
Foreign currency translation adjustments, net of tax benefit | 2.7 | 0.9 | 5.7 | (19.5) |
Unrealized gain (loss) on derivative contracts, net of tax benefit | 0 | 0 | 0 | 0 |
Amount reclassified from Accumulated comprehensive income (loss) into earnings, net of tax benefit | 0 | 0 | 0 | 0 |
Ending balance | 26.5 | (7.5) | 26.5 | (7.5) |
Accumulated Loss on Derivative Contracts | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | (26) | (41.1) | (39.4) | 0 |
Foreign currency translation adjustments, net of tax benefit | 0 | 0 | 0 | 0 |
Unrealized gain (loss) on derivative contracts, net of tax benefit | (6) | (6.8) | 3.4 | (47.5) |
Amount reclassified from Accumulated comprehensive income (loss) into earnings, net of tax benefit | 4.5 | 1.7 | 8.5 | 1.3 |
Ending balance | (27.5) | (46.2) | (27.5) | (46.2) |
Accumulated Other Comprehensive Income (Loss) | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | (2.2) | (49.5) | (18.6) | 12 |
Ending balance | $ (1) | $ (53.7) | $ (1) | $ (53.7) |
Related Party Transactions - Na
Related Party Transactions - Narrative (Details) - USD ($) $ in Millions | Feb. 09, 2021 | Feb. 02, 2021 | Jun. 30, 2020 | Jun. 30, 2020 | Jun. 30, 2021 | Dec. 31, 2020 |
Datapipe Parent Inc | ||||||
Related Party Transaction [Line Items] | ||||||
Equity issued in acquisition (in shares) | 2,665,935 | |||||
Term Loan Facility | Senior Facilities | ||||||
Related Party Transaction [Line Items] | ||||||
Principal balance | $ 2,294.3 | |||||
Senior notes | 3.50% Senior Secured Notes | ||||||
Related Party Transaction [Line Items] | ||||||
Principal balance | $ 550 | $ 0 | ||||
Interest Rate | 3.50% | 3.50% | 0.00% | |||
Apollo Global Securities, LLC | Senior notes | ||||||
Related Party Transaction [Line Items] | ||||||
Underwriting fees | $ 0.6 | |||||
Arranger Fees | Apollo Global Securities, LLC | ||||||
Related Party Transaction [Line Items] | ||||||
Underwriting fees | $ 2.3 | |||||
Affiliated Entity | Affiliates of ABRY | Term Loan Facility | Senior Facilities | ||||||
Related Party Transaction [Line Items] | ||||||
Principal balance | $ 47.9 | |||||
Percentage of debt due to related party | 2.10% | |||||
Affiliated Entity | Consulting Fees | ABRY | ||||||
Related Party Transaction [Line Items] | ||||||
Related party consulting fees | $ 3.5 | $ 7.1 |
Segment Reporting - Narrative (
Segment Reporting - Narrative (Details) | 6 Months Ended |
Jun. 30, 2021segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 3 |
Number of reportable segments | 3 |
Segment Reporting - Reconciliat
Segment Reporting - Reconciliation of Revenue and Gross Profits from Segments to Consolidated (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenue | $ 743.8 | $ 656.5 | $ 1,469.7 | $ 1,309.2 |
Non-GAAP gross profit | 235.5 | 241.9 | 470.8 | 491.2 |
Share-based compensation expense | (20.4) | (9.1) | (37.6) | (16.6) |
Other compensation expense | (0.4) | (1.5) | (1.7) | (3.4) |
Purchase accounting impact on expense | (1.2) | (1.6) | (2.4) | (3.5) |
Restructuring and transformation expenses | (8.7) | (4.1) | (15.9) | (5.4) |
Cost of revenue | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Share-based compensation expense | (4.3) | (2.3) | (9.2) | (4.1) |
Multicloud Services | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenue | 605.1 | 519 | 1,184.7 | 1,026.9 |
Non-GAAP gross profit | 202 | 200.7 | 398.4 | 397.5 |
Apps & Cross Platform | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenue | 92.7 | 79.9 | 190 | 161.4 |
Non-GAAP gross profit | 32 | 27 | 66.9 | 57.1 |
OpenStack Public Cloud | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Revenue | 46 | 57.6 | 95 | 120.9 |
Non-GAAP gross profit | $ 16.1 | $ 23.7 | $ 34.7 | $ 53 |