Rackspace Guides to Fiscal 2026 EPS Loss and $2.6–2.7B Revenue
Rackspace posted Q4 adjusted EPS loss of $0.01 versus consensus loss of $0.03, generating $683M revenue, a 0.4% drop year-over-year and 10% decline in Private Cloud sales. For fiscal 2026 it guides for an adjusted EPS loss of $0.20–0.15 and $2.6–2.7B revenue, below forecasts.
1. Q4 Earnings Beat Estimates
Rackspace reported an adjusted EPS loss of $0.01 in the fourth quarter, outperforming the consensus loss of $0.03. Total revenue reached $683 million, topping analyst projections, but declined 0.4% year-over-year as the Private Cloud segment fell 10%.
2. Fiscal 2026 Guidance Falls Short
The company forecasted a fiscal 2026 adjusted EPS loss between $0.20 and $0.15, versus a Street-profit estimate of $0.01. It expects revenue of $2.6–2.7 billion, below the consensus view of $2.719 billion, marking a conservative outlook.
3. Stock Reaction and Technical Indicators
Shares fell over 6% in premarket trading following the guidance miss. While the stock trades 144% above its 20-day SMA and 86.7% above its 100-day SMA, a recent death cross and an RSI of 77 suggest potential for a short-term pullback despite a bullish MACD signal.
4. Palantir Partnership for Enterprise AI
Rackspace entered a strategic alliance with Palantir to deploy enterprise AI solutions in production environments. The partnership aims to accelerate AI adoption across customer deployments and support Rackspace’s pivot toward higher-margin technology services.