{"id":10457,"date":"2026-08-12T18:15:02","date_gmt":"2026-08-12T22:15:02","guid":{"rendered":"https:\/\/hostingdiscussion.com\/news\/?p=10457"},"modified":"2026-08-12T18:15:02","modified_gmt":"2026-08-12T22:15:02","slug":"private-cloud-growth-masks-a-shrinking-public-cloud-business-at-rackspace","status":"publish","type":"post","link":"https:\/\/hostingdiscussion.com\/news\/private-cloud-growth-masks-a-shrinking-public-cloud-business-at-rackspace\/","title":{"rendered":"Private cloud growth masks a shrinking public cloud business at Rackspace"},"content":{"rendered":"

Rackspace Technology<\/a> reported second-quarter revenue of $670 million, technically up from $666 million a year ago. Call it growth if you want, but 0.6% barely qualifies, and the number underneath it tells a more complicated story than the headline figure suggests.<\/p>\n

Private Cloud<\/a> revenue climbed 5.5% to $263 million. Public Cloud<\/a>, still the larger of the two segments, slid 2.3% to $407 million. So while the top line barely moved, the business underneath it is shifting in two opposite directions at once, and Rackspace’s losses grew right along with it. The company’s operating loss widened to $33 million, up from $25 million a year earlier, and net loss expanded to $68 million from $55 million.<\/p>\n

Private Cloud is clearly where Rackspace wants the conversation to go. The company expects that segment to bring in between $1 billion and $1.05 billion for the full year, and CEO Gajen Kandiah has tied its growth to regulated industries moving AI workloads out of testing and into actual production. Rackspace launched a Managed Compute and Inference Platform with AMD and Palantir to support exactly that shift.<\/p>\n

Here’s the catch, though. Rackspace<\/a> didn’t break out how much of that Private Cloud growth is actually coming from AI work versus existing infrastructure business sold under a broader label. Without that number, it’s genuinely hard to tell whether AI is becoming a real financial driver or just a new way to describe business Rackspace was already doing.<\/p>\n

Public Cloud’s decline is the tougher problem. Managed public cloud services are supposed to thrive when enterprise environments get more complex, but Rackspace is squeezed between hyperscalers<\/a> building out their own tools and enterprise finance teams scrutinizing every dollar of cloud spend. That’s not an easy position for any managed services provider to sit in.<\/p>\n

Cash flow adds one more constraint. Rackspace used $32 million in operating activities this quarter, though trailing twelve-month operating cash flow stayed positive at $104 million. The company held $111 million in cash at quarter’s end, with total liquidity around $202 million.<\/p>\n

For full-year guidance, Rackspace expects revenue between $2.45 billion and $2.55 billion, alongside a projected non-GAAP loss per share of $0.25 to $0.30. It’s not a conventional growth story. It’s a company trying to stabilize its existing business long enough to finance a different one.<\/p>\n","protected":false},"excerpt":{"rendered":"

Rackspace Technology reported second-quarter revenue of $670 million, technically up from $666 million a year ago. Call it growth if you want, but 0.6% barely qualifies, and the number underneath it tells a more complicated story than the headline figure suggests. Private Cloud revenue climbed 5.5% to $263 million. Public Cloud, still the larger of […]<\/p>\n","protected":false},"author":20624,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[71],"tags":[7698,5459,1773,2937,508],"class_list":["post-10457","post","type-post","status-publish","format-standard","hentry","category-featured","tag-enterprise-ai-spending","tag-managed-cloud","tag-private-cloud","tag-public-cloud","tag-rackspace"],"acf":[],"yoast_head":"\nPrivate cloud growth masks a shrinking public cloud business at Rackspace - Web Hosting News<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/hostingdiscussion.com\/news\/private-cloud-growth-masks-a-shrinking-public-cloud-business-at-rackspace\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Private cloud growth masks a shrinking public cloud business at Rackspace - Web Hosting News\" \/>\n<meta property=\"og:description\" content=\"Rackspace Technology reported second-quarter revenue of $670 million, technically up from $666 million a year ago. 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