RXT - Earnings call transcript Q2 2022 | Rackspace Technology, Inc.

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Robert Watson

Good afternoon, and welcome to Rackspace Technologies Second Quarter 2022 Earnings Conference Call. My name is Robert Watson, Vice President of Corporate Finance.

As a reminder, today's call is being recorded. I am joined today by Kevin Jones, our Chief Executive Officer; and Amar Maletira, our President and Chief Financial Officer. The slide deck we will reference during the call can be found on our Investor Relations website. comments on certain be call two, forward-looking. Slide we this make will On subject uncertainties, risks actual statements to These are and differ. results which to cause could A included uncertainties risks discussion SEC our filings. is of these in and assumes call, as the Technology provided law. except no the required update Rackspace information to on by obligation

of Our provided the turn on the with queue provide use measures earnings further release call to useful in the these to presentation and up we our financial presentation, a prepared SEC measures, To directly these both investors. Kevin. please measures certain certain now of questions, Q&A and which over to non-GAAP function accordance rules, information our are After have we which reconciliation will includes In most available GAAP their for measures questions. adjustments we in website. to take Zoom. believe your remarks, will our comparable I

Kevin Jones

quarter. us. of and Azure grew billion will quarter, and In was estimate AWS thanks the for grew public cloud highlights cloud I'll XX%, additional of grew cloud growth for quarterly afternoon, last in detail into market Microsoft analysts Slide go business, Good our results. five, XX% on the second Google hyper to no the year-over-year impressive. that of joining year's and XX%. This Cloud $XX hyperscalers growth abating. the On discuss second signs financial represents direction then shows compared strategic the Amar revenue

and guidance. quarter, sixth well tech flow. non-GAAP Technology overall cash share, extremely non-GAAP the the Rackspace for the future. free In on operating flow quarter growth second expected the investors both and for our row. in cash are is the quarter, very were for market, both of strong end Technology And in executed earnings focused foreseeable benefits this with high current a from second the at to So cloud secular profit per and growth, Rackspace operating In continue we

XX-month was testament We on free a the a of the million operating the last solid On year's enhance partnerships, six, a Non-GAAP announced business. $XX core you expand cash-generating Slide also solid period, the we to these Revenue profit accomplishments EPS more underlying delivered that million strategic initiatives made over fact was with key compared of our proud X% and we've quarter, $XXX we snapshot to continue total revenue X% our and We of in on up progress growth of metrics quarter. are moment. this see cash flow revenue $X.XX. last quarter. was for up financial and non-GAAP second and to power

revenue Amar as global impacted As with will by in U.S.-based moment. most foreign quarter discuss companies, was currency a in the headwinds,

opportunity bookings. bookings on strong XXXX. Slide the months, we previewed And six of relatively market executing changes for into private noted capitalize aligning see we the repositioning first seven, in lines company our today. cloud very two flat a we quarter were separate quarter, cloud and on the had half compared the of to On and last This included to As business, business. the public we're slide, through immense first

we finalize to this number organization to We time of and facets, a this reporting over structure, across working pleased on the made with is go are The front progress people, transformation. team market.

very Most a DK fall. our was other we can Cognizant, long-term on revenue. of provide additional we game Microsoft growth from in spearheaded VMware. announced as in short of and strong eight, On he company including additional Unit. that to region We're digital stakeholders expertise President, positive details where point we particular, key these leader with three strategy Google our nearing met any and he go-forward we and the plan, structure and As decisions of this Public regarding of with where the received the later Slide approximately as well decades the hyperscaler and partners, transformation Amazon, is entrepreneurial feedback, America preview as Technology recently, growth changes, customers, Sinha joined that Business focus for North Cloud Rackspace Cognizant's represented in President business XX% DK global services. an execution technology per partners

on Tata built and key encompassing While go-to-market field industry we and previously partnerships alliances. as worked there, team I'm he global to DK On the team amazing Slide perfect to thrilled have marketing, already on for accelerate us new of engineering the product announced introduced public cloud elastic nine, DK exciting several sales, for also has and made leader led opportunity Consulting functions help an government. Services. we this also impact on a our offerings. second in strategy. the market He business. We capitalize is our quarter,

been innovative a XX Now delivery over Government leader engineering for where and the this offering years. sector, elastic service successful extends Technology Rackspace our model government has Solutions to

awards data expanded our Analytics sales the Databricks. service from this security access machine in target Azure. cloud and Rackspace complements Slide of operationalize zero to Technology to and to Solutions way This architect, recognition. named On data partner, corporate leader capabilities report in unique data Provider trust impact XXXX we've our design, cloud culture employee Just implement service a and portfolio public to with efforts of believe AI. acknowledgment that AWS U.S. proud Snowflake the this finally, also Government continues positively CloudFlare. on our And will sector. recent are our We was value incorporate proposition and XX, strong with receive the learning acquisition recognition in Analytics the We new the We Lens analytics, by services enhanced provided announced ISG set and a offerings Just important offerings a markets for vertical. We

quarter the awards. we Workplaces North of in second This and inspiring Workplace the form XXXX Inspiring Award the in EMEA received quarter, In two for both America.

proposition for develop workplace a loved culture our a for awards and careers and validation because their most their strong expertise. as to help valued and feel continue sharpen our market. of their will in certified our win skills, and grow can rackers our were the our These team we fostering company, a to members commitment addition, In value corporate are in of us culture where

members our progress one quarter. in the cloud second also XXX in We the made our certifications the Rackspace Cloud designation and Latin security we were validation provider And the as earned in Google services a We Cloud on across renewed AWS market. Security partners and Intelligent top invested managed second various managed in software who team completed Microsoft in capabilities Slide recognized a of vendors through Google the market. partners our Mexico disciplines we providers. XX, On hyperscaler received joined formal great as University. of deal the with We of independent ecosystem of our America quarter Association services and

expertise. Rackspace management transition sale as streaming Music case industry. One our platforms be The customers and has of artists for benefiting the in Apple songwriters times media cloud digital business BMG a roughly data-intensive physical to age. like stream Let's than look rights CD. few are at who such Slide strives to transformed the more and technology a from X,XXX of Spotify On digital XX, is the studies music the best partner

savings. months correct BMG all-time Rackspace receive portfolio. to at royalties consumption Within enhance its its six our cost business-critical management BMG music technology to of music ensure Google data Cloud, supply its had on and Google of expertise analytics. royalty most BMG XX% behind helped to high, an Ultimately, applications digital Cloud, chain applications engagement, migrate to calculation a significant the generating helped applications So including its migrate data management, we we the of

addition, for On also BMG's In targets were platform. Rackspace access edge we when as our Slide data for initially box VMware practices, data XX, we and strategic we're technology data best with and for strengthened additional planned knowledge XX solution relationship our VMware that potential modernization SASE SASE, supplements a environments, services. in centers their with networking, security be support. migration speed in our five another includes in-depth compute the on-premise another cloud due Rackspace phases. the launched will in the managed and solution in of deep partner centers application architecture a VMware services around-the-clock to center was broad which VMware of end-to-end of Cloud, services Cloud This point business. proof cloud cloud also portfolio SASE Google for Rackspace exceeding to private will deployed edge selected is our VMware or technology deploy XXXX. service This VMware such as secure for leverage

the Now financials. take through you Amar Amar? will

Amar Maletira

non-GAAP Apps our Non-GAAP perspective, & earnings s of and the year-over-year. a high end XXXX. a profit hosting. geography. million, in represent million, revenue to at compared currency Cross well Thank XX% revenue regional our the was Slide total you, continues vast was recaps our of the our revenue and XX for was foreign was our decline up as line XX% Core OpenStack below joining revenue to fluctuations, represent XX% was in segment was due was slightly and company's XX results the XX% mature year-over-year, operating Revenue and revenue. of today. to British expectations revenue Platform $XXX Non-GAAP Telecom the Kevin, X% shows second second the for was everyone, call mix, our profit revenue with as declined due a by down OpenStack ramp it the the today. and to second at of $XX per and margin X% X% quarter year-over-year impact grew and in quarter XX%, of operating XX% increase. quarter. second share X% financial the Multi-cloud Slide by total X% represents deal. up the primarily $XXX from million of From legacy slower for Americas year-over-year. guidance to gross you, Revenue quarter. for managed mix just This guidance majority of thank our $X.XX.

was cash $XX consecutive constant and would impacted is APG $XX $XX sixth can higher those XX% and cash six free free In and chart, quarter was flipped the quarter. first regional operating a flow million, materially million, see from growth, we $XX point operating of the have up Over free currency Americas cash tremendous respectively, X% of would X% intensity positive growth demonstrates CapEx million, second in Slide flow. drive and EMEA would On and the growth cumulative This have growth million cash point the at Total Technology $XXX in generation the was basis, and delivered CapEx with respectively. at continues been million to X% cash X%, was This strong ability CapEx second a business. you cash on quarter, a swing. rates flow. have X the points XX, X flow decline were to X%, quarter. at from been On by Rackspace the As higher foreign flow. currency have cash $XX of million fluctuations million a of quarters, $XX

X% year's end On X% We X% I at our was expect balance CapEx we to with investors XXXX. cash $XXX previous for the $XXX X% total want XX, with million of to the in to compared and sheet intensity XX, June intensity million last remind line of full a of strong At to year, no second cash until guidance. material that quarter. have Slide maturities debt CapEx

addition, XXXX covenants. refinanced net $X.X low $X.X was quarter was debt At XXXX was rates billion. financial minimal debt In of and debt historically and total in at our all end, billion, late with early

On with a profile. our Our third guidance XX, net quarter. growth we Slide and have very leverage company profit is the our for for manageable

the We of million, non-GAAP $XXX $XX operating profit the and million to revenue expect of $XXX range million $XXX of EPS in $X.XX $XXX to Core million. $XX to in of to $X.XX. revenue million, non-GAAP million total range

our Now provide additional outlook. some let me color

Third continued in for quarter as by margin revenue well headwinds. foreign impacted our of higher focus revenue from offering, away guidance currency the sales towards resale as shift is expectations

The impacted profit guidance primary operating third three quarter by is factors.

and decline the managed our OpenStack First, legacy and continued expected businesses. higher-margin of hosting

we although our resources seeing part hiring Second, services our is investments around drive center growth we intermediate in are are term. are additional And by impact cloud strategy. world, and record moderate support retaining, in driven This expect power to our the and temperatures and partially cost over the long-term retraining we business this increased hedged, to costs. third, data high the making includes in people,

and to few model our but on we better regard operating best spent in them. is address is focus higher-margin to the go-forward need cloud and quarters As it. sharpen Job last product development designing within two it. strategy the opportunities X key private our cloud realigning company establishing the this and opportunity and company the sales, markets, to The clear, execute you position we know, to public on operational

identified the few be which are end this near-term products believe we are We expect We our accelerating high-margin quarters. over result moderating have focused create transition, and on stronger the disruption Technology better markets. team some we will we our outlook. and leadership in executive Rackspace Hence, will a growing next

I for Instructions] Bank. up liquidity that flow the to question questions, please we cash the flow is come All six first go-forward we'll [Operator positive you market fall. from Our years comes ample at we are with take sheet Keane Deutsche queue enables open free excited flexibility. and fast-growing win to audience questions. share want quarters Robert that, this Bryan cloud that Before in balance the plan strong to told, your Q&A. reiterate to With and in strong for of have the and we well positioned a cash believe we with our

Kevin Jones

We Bryan later. to back come go Let's to the next. can

Robert Watson

right. All

So Ramsey El-Assal our from Capital. from question Barclays comes next

Kevin Jones

Ramsey. Hi

some We difficulties technical are having guys.

a minutes. call. be Just on Well, we Ron, give back us should few the

Robert Watson

We echo, Okay. an it have but Bryan, still line? are on you again. the try let's

Kevin Jones

Everyone promote Bryan speaker, as please. Keane, a keep

Bryan Keane

me? Good to you can go. guys, Hi, hear

Kevin Jones

you? How are Bryan. Hey,

Bryan Keane

out piece I'm doing away, well. tell much what the guys kind of And of Thanks the you well. my for trying of is of taking make components the revenues up? of resale business the of the figure that's There we business the kind focusing you're percentage is mixes that? business, bit margin just a higher us doing mix the that push and of Just how Can questions. business obviously, little towards the go. - resale, of the kind to is what which I'm business? then those like with kind

Amar Maletira

going and give be business So in I'll cloud Bryan, what two those and this able company doing private more give public to you business Realigning cloud That's the the all right to actually the fall. details public we are now. we details. across units, what's unit you cloud, on are

So the details. right that's to the than and give now, works happy all in be I'll you more

your answer as question previous public to call, on in Bryan, are segment. Now the we cloud our specifically, business we mentioned

emphasis compared there And it more even do business driving renewal, side, resale. services higher-margin the are on We putting we lower focus and sure when comes cloud to on that are business for margin, and thresholds accounts. meets are retail actually resale letting it assessment services to are in if whether public margin expand or not, understand can And objectives. thorough a those lower we our if business we our those And certain profit cloud churn. up

the we that's and is what are business overall That growing So public doing digits. segment. the double between cloud

little we I on we environment Kevin will the public think cloud about in are a public side. see environment cloud good a the and let seeing business, - I bit demand are talk demand on the we

Kevin Jones

That's great. Hey, Bryan.

private on side side see cloud say strong we're into and - public demand organization I about units. really business would public look, the also side on demand the things things. of So excited this We two cloud strong of

believe move cloud. look really the overall it's shift to the market their started workloads the We only If enormous, opportunity, right? to customers you at

growth So from and to us we've got driving potential many years ahead become desire them customers a to the default for demand to scale of very architecture causing modern multi-cloud workloads. of strong

need roll, the Rackspace and handle Technology. the progressing environment. help a at massive continue options These customers So businesses are, to businesses we migrations, services. And that complexity for to lots in they're for managed of And cloud. great hyperscalers both going of pace and multi-cloud right? of such of and result lots have to public integrations innovate, they're good see now or in this cloud private opportunities on a course, They margin for demand is customers

continuing need certainly and the to we public to it we're what down right margin, double do which on is at cloud Amar certainly before. So mentioned

of to thing Now apps wanting data help that beyond strategy mention the going trend in stack our right, layers IT the that seeing, and is towards infrastructure we're customers into there's other particular. I'll with help a the this is layer,

play in business look, factor Pacific, gaining perspective, to We're America. traction, geographic specialization a in So in And the then Europe, world, the high-value us. continues I'll the a in around demand And that's huge South America defined a multi-cloud a Latin technical market. then industry revolution what seeing Asia, North need for very strong is and right? from usually in call as the in

with we saw they're seeing So people in media like transitions. with The expertise They the talent. to Customers and from that engineering, our value elastic customers professional U.K. firm, action with hearing as resources we're to - struggling that's services.. company, providing other They augment in customers kind over trends to We customers leveraging expertise. a technology talent. particularly fascinating staff costs. of trying need Bryan. for service. lot there. mean have Rackspace talked environment, really the win are keep they and And Rackspace, services these I another And complex Rackspace I professional economic find And banking perspective, conversations, through big to offerings customer a a to skills agreement. supplement need market, some the from need cut recent this a to They're win from that had cloud customers, a seeing complete large over. with from need we we are a help short cloud in of

going it's tools DK and every from out we've just actually cost. your visited take So public I perspective, cloud, help of they revenue the that is Microsoft, need very see West to for hyperscaler revenue a demand second optimize continuing our to to AWS, you, new finally, advantage business massive in their of practices new for got lot cloud Google, had And on question to the $XX help financial of met Rackspace Coast. partnership from can our unit in customers the Sinha fast. quarter the multi-cloud and spend. another very there, then optimization a expertise And spend increases and we And our - reduce tell back We alone. partners leader, public I, demand we're billion sales quarter strong, products

is our into demand this cloud for to and and cloud with private for as big So and Dell customers private an growth side continue take VMware. the us from new Dell customers partnerships well. on VMware us multi-cloud and exciting

right, dialogue into early, get Rackspace continue the value So mode. to customers can then help and get conversations technical into customer partners execution we shape bringing we so tell there me, early, the

So very overall, the Bryan, opportunity. strong demand by environment, encouraged

Bryan Keane

Got In just public it. Day are into just maybe I Analyst to about. we still when cloud, for update sales think, there's a be you follow-up, October, going disruption? as talk the and the planned, of division is to And you about that talking private you be the near-term exactly on about on September Or what or that? Or going specifically segments? this for talking are was kind an disruption,

Kevin Jones

Brian. Yes. Thanks,

talked So organization you some long-term benefit, organization. shift disruptions our go-to-market look, near-term in a right? see know, of terms for the sales goals, Any are that structure to disruption restructuring, we shift the going to time you're about. you and we see realigning And with

the work it's is for prudent through changes. little the team think in of back half of of we disruption a year So bit the kind to going these to as plan

that we're towards company with confident team our model. said, we're the operating experienced leadership right that Now the driving is and

will our about, company with to embrace clear and forming. the expressed business and accountability Rackspace Technology teams ultimately, support They're these go-to-market then aligning for the great units partners we're business going into for the talked ownership strong end will about end. be the changes. very the as as transformation and two I've changes, stabilize, And to excited So accelerate

bit that's about little So transformation… the a

Amar Maletira

implementation Bryan. Day that the are listen, Analyst the in Kevin early deep in the the we'll forward model profile and of the sharing more this take alignment on begin financial our operating into stages businesses. detailed details and new planning to currently, look question, three we we of And cloud public the cloud about both I'll No, QX. fiscal of of private talked

our planning months. to accelerate we phase, speak, units. forecast we we each we'd can have where the can providing Once business committed communicate expectations profit think revenue of with more to that it I we are and in And as granularity we more like fully, transformation. completed So the performance of investors we'll on - and the the coming those accurately

Bryan Keane

the for question. Thanks taking

Amar Maletira

Bryan. Thanks,

Robert Watson

All right.

reminder, Just difficulties. the as a for technical sorry

ask on the to please in want Q&A click queue you question, the Zoom we'll see If questions button the portal, up way. a and our

comes go from then Bradley BMO, from question that. Irvin to Our after and Evercore from next Clark we'll

Bradley Clark

you Can hear Hi. me okay?

Kevin Jones

Hey, Bradley. Yeah.

Bradley Clark

than you has going deals talking that bit ask I more the you about of profile. the this you're are you know, went you being from? Thank strategic Are deal margin different think it deals my after if to can a understand, know, Rackspace I table, we're a wanted on the the better away cloud meet Thanks sort so, walking question about question. granular some going a pipeline? about typically, past And we mentioned you. a sort after? of pipe - a you're that what's if little in just being for want leaving, that public you're on you of more margin, being know, into you how to

Kevin Jones

sure can Microsoft, to first business be to the what hyperscaler different X thing is And we've several Rackspace. for scratch to go and make and we Look, continue is AWS. market And strategy. allowing time to to this selective, to good. allowed Google, is to scaled and with more cloud parts right, across sense us right make some that And with to should customer Thanks our last we've world pursuing in the we've lot the right? that it deals that for is that's we're this most We're of for of start are the shift then that that and mention with public hyperscalers. it I'll the I us all hyperscalers, do over seeing for Very with nearly the add - point success growing fast a Amar a from color. years, Bradley. now created XXX and all

a building and a expand customer had a three And landed we've couple last and an deal, and with in have we business and we've the don't and for it higher-margin offerings strategy. had opportunity years, is more scaled great For a than us been place infrastructure And three of particular of of or we've to if the land see still service makes account we for are places if - resale you sense? is all for it's into which prudent get comment. now look possible I'll to scaling other a grow, let because and with hyperscalers, this to lot that we to be. Amar, look,

Amar Maletira

I well. No, it said very I think think you

Kevin I think from more infrastructure within they data, modernize on. cloud the the we are move on more security applications on they even the offerings as moving journey modernized as focused the of see, have are is very, that's more customer the data, even unit. what their they as and we focused you changing services. as And public focused very business And mix business mentioned,

and installed about services cloud all capturing new higher-margin and base it's So selling a into solutions also stage. public revenue

So thoughtful we've on very very, mindful how do that. and we been

services attach sense. as now services that's So the attach. the leading infrastructure leading instead with actually average with makes with of an And infrastructure an

move up the focus believe we demand of stretch. as opportunity that’s environment going that’s is that forward and change there remains focus lot a I the stack. So of a do

Kevin Jones

of and We're our really layers stack. moving continuing with as to has benefit expand been Amar We Analytics, data a which type company leading business. professional for services mentioned, well acquired Just apps global security We're QX. quite in into, up business, performed which this our huge

little a sense of shift that it. of make that's So bit the

Amar Maletira

and So are the at We're go as cloud declining Bradley a and managed of the business a in Now business for, growth hosting OpenStack looking we market. it business bit the sales through have right? changing mix little and this question we take and business. take just this private we

As in demand see cloud. private mentioned, we Kevin good

capture demand course, secular in cloud, have market. growth We of to a the public and

make we balance and these as going are profitability. shifts, we growth So to all

of it expect well those But QX there that do is continuing. QX trend we you in next for our look headwind as So I see the some quarters, plus core look a if in if BT in plus growth saw QX, deal. basically slower FX revenue as forward you saw the we guidance at also we that few ramp reflects

core see revenue for So we the make single-digit we quarters, should low as growth shift next the few happen.

panicy, we growth, So that's are will on very good is generating is company. for senti focused the be reality. revenue profit us, focused ultimately and for profitable And growth reason cash and is cash revenue but we the good flow on

Robert Watson

Our then James from next question us. hear comes Irwin, from that. Evercore. Irvin Raymond Luton can after All here from you And Frank Liu right.

and Luton, circle Frank to we'll go Let's then back.

Frank Luton

All right. go. we There

kind Sorry positions about you need as add the that. clear to there what as organization? back? But you a are areas you to the you this. making can any have being of I've key you're the sales - lost transition, audio through may gone in be for minute, through are so go And transition trip restructured any change

Kevin Jones

Frank. positions some start we're can rating, the et making talk Thanks about for question, I'll and the of then investments Amar and cetera.

this, cloud. our about and reorganization we're So if we're track excited across private public cloud on with

good really feed our from our on analogies about, and feedback Amazon, As Google, Microsoft, stakeholders, there. see we've Delta VMware, we partners talked back

Sinha detailed blueprinting completed decades and So transformation. hiring the got be the are, up phase big begin DK milestone where scaling we and and we've experience businesses services leader, public design digital this quarter. and of of has we'll our wrapping was DK cloud technology the implementation A and three

and bit the overall, a we're transformation and company excellent But progress, our little So about this a is that would track. just made milestone. big why our then on we've so me on let just say, a for I And step transformation, talk take important stakeholders. was back and

just model private. price. they're when and positioned at in business, operating cloud end-to-end in we agile First they're and moving our to And right? that's be of end-to-end, cloud and uniquely twp are markets, Businesses look great and moving more of public an to what very public all, the will if right? win We're strong, model you And we're fundamentals to.

accelerate progress can having end-to-end, own quite across demands frankly you fast. scaled decision, we union business our when you So can cloud now. its so business It the you're board and have public faster

this on class public going being in is what So best for employee the means is in cloud the to every be the company best-in-class laser-focused private cloud. and

have higher thing means unit. leads across collaboration each this the wants, close with portfolios. and is accountability between going goal simple, and going the to we're sales really as dedicated go-to-market excited teams process our sales with clear service have So between team. business go-to-market market product our about our including, to A alignment And teams, another organizations, get which delivery then the those aligned going and both we're to the the expertise mentioned, are to model what you I'm product teams

So get progress making, talk excited the I overall, with about investments this pleased transformation want about you more the to day. or and every we're

Amar Maletira

the support initially the my remarks, noted that The that mention quarter, $XX just are Yes. well is here, in And Frank, from to BT investments investments we growth startup million as we $XX of we did in are cloud acceleration planning you the partner. million a last I to expected. slower PT as prepared ramping I in making as if quarter services recall, than

the some the retaining but So we are the [indiscernible] services includes, vessels, some to investments planned hiring resources of making well as of delayed, support as which execute Americas most cloud on also in and of region. as in sales our are mentioned, our QX slightly I public we investments did retraining delivery

profitability also QX you're as $X to that about a say, approximately market on to are manage -- million demand balance more guidance. the the in to of judiciously both million needless investments based and $X we that strong have we given continue we additional in plan my already growth made have And opportunity investments cloud. So strong the we'll seeing

Frank Luton

making investments you're those are And in personnel?

Amar Maletira

is mainly Yes, that in person

Frank Luton

Right very right. Thank Right, you much.

Robert Watson

you are still to Erin, question? not, move want we'll and on. there a If ask

Irvin Liu

am I here.

and business So X of businesses comp private another realignment public you both and question And if on then of are what cloud the cloud do more customers your see related I cloud to which overall tack could private to these prone of percentage disruption? customers? around -- public your

Kevin Jones

the see not very be did -- overlap actually. can X between but the tomorrow. question, a great a the today, to that's right? segments. analysis So And We overlap base through it is

designing way multi-cloud customer. opportunities for a in the the see So organization if is we are particular we a

will in this but we that that's with the be units our is, to other So one will public can customer beauty multi-cloud selling market. to very we'll will ultimately, the of the a cloud, solutions business be and unit, going we our big and of business units cloud clearly when we the be business bring doing private -- advantage the model a across focused solution both and

Amar Maletira

said. urban, getting add, I on well those right? worlds to with really would multi-cloud we're of I right. this offer customers. best mean, we're one solutions That's to the That's able reorganization, hand, the

salesperson to going have one customers. for So we're

be focus be But that cloud. make So our and will both sure their on cloud salespeople is incented primary private we where laser and sell going want grow to business unit grow profitably. to public their to we

for we got different us. the because X So types found had we've easier over careers, perfect done which as SIs, of to here. only I a model some in little lots XXX our of it's made of businesses and opposed service really it the offerings. think reorganizations these

perspective. very go-to-market from execution So straightforward a

We cloud public the going therefore, offerings, best-in-class will -- result be best-in-class offering face the the to cloud in in to a as to have multi-cloud focus, we're but going best-in-class have and multi-cloud. in of we're offerings the customer, offering one the private

Kevin Jones

Let me to just this. add

plan particular, to As for from some talked planning perspective, in we sales company, near-term realign Kevin the organization and it's prudent disruption. the that a about very

the has and strategy, model over to runway transformation. again, and our quarters moderately this long-term required the execute operating new to meet our next we changes the few hence, can growth. drive to grow profitable as we leadership our expect we And So make accelerate

Irvin Liu

wanted I you I how in ask bookings another to trended QX. question have can the about talk color on performance you the And your trended on just provide on remarks, may bookings And missed quarter? how this but overall well? learned as can prepared

Kevin Jones

bookings our I'll second little you on the of Sure. for color performance quarter. Absolutely, give Urban. a bit

and the company. of by regions, individual public the be sphere services Bookings strong in business We of in look, the So of performance are by we highest segment. the it business. over the deals closed tip saw our There first the good professional bookings continued history to the quarter. diversified traction EMEA in both quarter was in Americas in quarter in sector highly sales our by the all, market industry, second third had -- in with X,XXX geography,

We're Irvin, continue higher-margin balancing purchasing service larger deals, the managed And sizes They thing And that workloads cloud we're Our that offerings. services. tele on seeing received new and multiple the market, other our as increased profitability. bigger signing we've supported revenue we're -- deal right? to deals, focus be is are bringing customers in well seeing, by offerings. launched. and these

driving Our good there is focus results.

So very pleased of quality overall, the I'm the with bookings.

Okay. Kevin. Thanks,

Robert Watson

Campbell Ryan comes Our Barclays. next question from from

Ryan Campbell

color right to is Would able us be and contracts provide pricing additional how market seeing your inflation now? wage some in you're in how the structured on you

Kevin Jones

we So seeing demand the speak. our pricing to remains of are things any that -- one pricing, the I of think environment not pressure, kind because rich, so

a will when I comes we technology, about to that mainly mine talk on model. intensive market is don't on labor We labor model let model. last from operate the a -- our labor, we By good I the And operate with I We mean, basically Kevin think is it not embed labor. automation model. this don't that labor perspective. --

perspective, are any not our headed inflation that side cost actually from so And the inflation from labor pricing we such or seeing pressure

Ryan Campbell

well think that's I Yes, said.

Kevin Jones

because a there's interesting here. -- not business great model Yes, a is this an labor this heavy is

multi-canal market, that specifically XX% So right? you we to of Fabric, We're technology Rackspace makes how the market automation we have us about in our think which transactions, to our automated and platform. the go the is industry. IT If go software highest with

our of heavy And a a solutions terms have because we So we pricing, are labor in don't lot have pricing cost of don't our standardized, in solutions. lot complexity. of

sure margins So pricing pricing to win. organization and of of model. got pretty standardized right type the it. it's at We an excellent we're straightforward to We've that price straightforward a make CFO pretty type

decades base and we the of standardized X kind compared pricing industry to -- to certainly platform to use very my differentiate So very Win. of experience that very in labor-intensive, automated not industry, this

Amar Maletira

-- do I'll our gross when labor other at not liver mix or from pricing the Ron, focused does who we this pricing mainly also margin. pricing In It's intensive competitors, some look opportunity on take gross in have margins. our very impact typically because the our we are case, impact So related.

are to For example, because in favorable do and expect right? center well seeing making QX with -- mix margins. impact that we as XX% side the was of the of investments margins impacting the we Nothing very about especially mix. on landed. to we we margin. business is the pricing, with as pleased gross as are manage is this gross a we our In gross onetime costs, we the QX, mix because XX% margins gross It data are that the So very our

mid-XX%. to though low -- We QX share gross expect the mix high-margin around expect gross and in making some be to even margins phase, in be transition 'XX, it XX% margin our we and in be margins we to to are fiscal this will a

for and maybe growth a core XX% percentage low margin gross crush So XXXX revenue was X single-digit point minus

Robert Watson

other very Any our joining no more call. much, everyone, questions? for you Thank There's question.

Rackspace Technology (RXT) 10 Aug 222022 Q2 Earnings call transcript