Rackspace Technology, Inc. reported a decline in financial performance for the third quarter and the first nine months of 2024 compared to the same periods in 2023. For the three months ended September 30, 2024, total revenue was $675.8 million, a decrease of 7.7% from $732.4 million in Q3 2023. For the nine months ended September 30, 2024, revenue totaled $2,051.5 million, down 8.3% from $2,237.4 million in the prior year. The decrease in revenue was attributed to challenges in both the Public Cloud and Private Cloud segments, with Public Cloud revenue declining by 3.1% and Private Cloud revenue decreasing by 14.4% in Q3 2024.

Gross profit for Q3 2024 was $137.5 million, representing a gross margin of 20.4%, down from $152.0 million and a margin of 20.8% in Q3 2023. For the nine-month period, gross profit fell to $401.7 million (19.6% of revenue) from $474.7 million (21.2% of revenue) in 2023. The company reported a net loss of $186.6 million for Q3 2024, an improvement from a net loss of $226.6 million in Q3 2023. For the nine months ended September 30, 2024, the net loss was $802.2 million, compared to $865.8 million in the same period of 2023.

Significant goodwill impairment charges continued to impact profitability, with $141.7 million recorded in Q3 2024 and $714.9 million for the nine months, slightly higher than the $708.8 million recorded in the same period of 2023. The company also experienced a reduction in interest expenses, which fell to $18.0 million in Q3 2024 from $56.5 million in Q3 2023, primarily due to debt refinancing activities.

In terms of strategic developments, Rackspace completed a series of refinancing transactions in March 2024, which included the issuance of new debt instruments such as the FLSO Term Loan Facility and the FLFO Term Loan Facility. These transactions resulted in a gain of $56.7 million in Q1 2024. The company also established a New Revolving Credit Facility with a borrowing capacity of $375 million, which had no outstanding borrowings as of September 30, 2024.

As of September 30, 2024, total assets decreased to $3,145.8 million from $4,096.2 million at the end of 2023, while total liabilities also fell to $4,095.5 million from $4,250.7 million. The stockholders' deficit increased significantly to $(949.7) million, up from $(154.5) million at the end of 2023. The company reported cash and cash equivalents of $157.1 million, which it believes will provide sufficient liquidity for at least the next twelve months.