Rackspace Technology FY 2025 Loss Narrowing Challenges Bearish Narratives On Persistent Unprofitability

Rackspace Technology FY 2025 Earnings: Revenue Holds Steady As Losses Narrow

Rackspace Technology (RXT) just closed out FY 2025 with Q4 revenue of US$682.8 million and a basic EPS loss of US$0.13, alongside trailing 12 month revenue of US$2.69 billion and a full year net loss of US$225.8 million. The company has seen quarterly revenue move from US$665.4 million in Q1 2025 to US$682.8 million in Q4 2025, while quarterly EPS losses over the same period ranged from US$0.31 to US$0.13. This gives investors a clear read on how revenue scale and persistent losses are shaping margins.

See our full analysis for Rackspace Technology.

With the headline numbers on the table, the next step is to set these results against the most widely discussed narratives around Rackspace to see which stories hold up and which ones the latest margins start to call into question.

See what the community is saying about Rackspace Technology

LTM Losses Of US$225.8 Million Keep Profit Story On Hold

• Over the last 12 months, Rackspace recorded total revenue of US$2.69b and a net loss of US$225.8 million, with trailing basic EPS at a loss of US$0.95.
• Consensus narrative talks about higher margin managed services helping over time, but the current loss profile puts a clear hurdle in front of that idea.
  • Analysts expect revenue growth of about 2.2% per year and earnings to decline about 2.7% per year over the next three years, so the business is not projected to return to profit in that window.
  • Losses have grown at roughly 9.6% per year over the past five years, which contrasts with the bullish view that margin mix alone can meaningfully lift net earnings from here.

🐂 Rackspace Technology Bull Case

0.2x P/S Versus 2.1x Industry Sets A Low Sales Multiple

• Rackspace trades at about 0.2x P/S, far below the US IT industry at 2.1x and a peer group at 3.2x, even though the shares are at US$2.28.
• Bulls point to this discount as potential value, but the underlying trends give that idea mixed support.
  • The company is unprofitable on a trailing 12 month basis and is not forecast to become profitable over the next three years, so the low P/S sits alongside an ongoing loss making profile.
  • Consensus revenue growth of about 2.2% per year, compared with 10.4% for the broader US market, means the discount on sales is paired with slower expected growth than many IT names.

Negative Equity And High Volatility Keep Bears Focused On Risk

• Risk data flags negative shareholders’ equity and a highly volatile share price over the past three months as key balance sheet and market concerns.
• Bears argue these issues could limit how much that low P/S matters, and the current numbers support why they focus on downside risk.
  • With forecasts calling for earnings to decline about 2.7% per year and no move into profitability over the next three years, there is no earnings cushion against that negative equity position.
  • Persistent losses on roughly US$2.69b of trailing revenue, together with recent share price swings, give cautious investors clear, quantifiable risks to weigh alongside any turnaround hopes.

🐻 Rackspace Technology Bear Case

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Rackspace Technology on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

Mixed feelings about Rackspace after all that detail? Take a moment to review the numbers yourself and weigh 1 key reward and 4 important warning signs before you decide what the story really is.

See What Else Is Out There

Rackspace is working with losses of US$225.8 million, negative equity and no forecast move into profitability, which keeps risk firmly on the front burner for now.

If that mix of ongoing losses and balance sheet pressure feels a bit too intense, you might prefer a starting point built around 80 resilient stocks with low risk scores that aims to prioritise resilience over drama.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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