Rackspace Technology Inc

Previous wording

Revenue decreased $68 million, or 8.9%, to $691 million in the three months ended March 31, 2024 from $759 million in the three months ended March 31, 2023. Revenue declined due to decreases in both Private Cloud and Public Cloud revenue, as discussed below.

Current wording

Revenue decreased $61 million, or 8.2%, to $685 million in the three months ended June 30, 2024 from $746 million in the three months ended June 30, 2023. Revenue declined due to decreases in both Private Cloud and Public Cloud revenue, as discussed below.

Previous wording

After removing the impact of foreign currency fluctuations, on a constant currency basis, revenue decreased 9.3% year-over-year. The following table presents revenue growth by segment:

Current wording

After removing the impact of foreign currency fluctuations, on a constant currency basis, revenue decreased 8.3% year-over-year. The following table presents revenue growth by segment:

Previous wording

Public Cloud revenue in the three months ended March 31, 2024 decreased 5% on an actual and constant currency basis, from the three months ended March 31, 2023. The decline was due to macro-economic pressures which caused a tightening of customer discretionary spend and optimizations, along with continued cyclical headwinds in IT services.

Current wording

Public Cloud revenue in the three months ended June 30, 2024 decreased 2.0% on an actual and constant currency basis, from the three months ended June 30, 2023. The decline was due to macro-economic pressures, which caused a tightening of customer discretionary spend and optimizations, along with continued cyclical headwinds in IT services.

Previous wording

Private Cloud revenue in the three months ended March 31, 2024 decreased 15% on an actual basis and 16% on a constant currency basis, from the three months ended March 31, 2023, due to customers rolling off old generation private cloud offerings and expected decline in legacy OpenStack offerings.

Current wording

Private Cloud revenue in the three months ended June 30, 2024 decreased 16.8% on an actual basis and 17.0% on a constant currency basis, from the three months ended June 30, 2023, due to customers rolling off old generation private cloud offerings and expected decline in legacy OpenStack offerings.

Previous wording

Cost of revenue decreased $31 million, or 5%, to $558 million in the three months ended March 31, 2024 from $589 million in the three months ended March 31, 2023. The decrease in cost of revenue was primarily due to a decline in personnel costs associated with a reduction in headcount between periods and lower severance expense. Also contributing to the reduction in cost of revenue was an increase in the useful life of certain customer gear assets, as discussed in Item 1 of Part I, Financial Statements - Note 1, "Company Overview, Basis of Presentation, and Summary of Significant Accounting Policies", which resulted in a decline in depreciation expense between periods. Increased usage charges for third-party infrastructure partially offset these reductions.

Current wording

Cost of revenue decreased $40 million, or 7%, to $554 million in the three months ended June 30, 2024 from $593 million in the three months ended June 30, 2023. The decrease in cost of revenue was primarily due to a decline in personnel costs associated with a reduction in headcount between periods and lower severance expense. Also contributing to the reduction in cost of revenue was an increase in the useful life of certain customer gear assets, as discussed in Item 1 of Part I, Financial Statements - Note 1, "Company Overview, Basis of Presentation, and Summary of Significant Accounting Policies", which resulted in a decline in depreciation expense between periods. A reduction in license expense due to decreased usage further contributed to the decrease in cost of revenue between periods. Increased usage charges for third-party infrastructure partially offset these reductions.

Previous wording

As a percentage of revenue, selling, general and administrative expenses increased 50 basis points, to 27.9% in the three months ended March 31, 2024 from 27.4% in the three months ended March 31, 2023 as the decline in revenue growth outpaced the decrease in selling, general and administrative expenses.

Current wording

As a percentage of revenue, cost of revenue increased 130 basis points in the three months ended June 30, 2024 to 80.8% from 79.5% in the three months ended June 30, 2023 as the decline in revenue growth outpaced the decrease in cost of revenue.

Previous wording

Our gross profit was $133 million in the three months ended March 31, 2024, a decrease of $37 million from $170 million in the three months ended March 31, 2023. Our gross margin was 19.2% in the three months ended March 31, 2024, a decrease of 320 basis points from 22.4% in the three months ended March 31, 2023.

Current wording

Our gross profit was $131 million in the three months ended June 30, 2024, a decrease of $22 million from $153 million in the three months ended June 30, 2023. Our gross margin was 19.2% in the three months ended June 30, 2024, a decrease of 130 basis points from 20.5% in the three months ended June 30, 2023.

Previous wording

Our loss from operations was $653 million in the three months ended March 31, 2024 compared to $581 million in the three months ended March 31, 2023. Our Non-GAAP Operating Profit was $16 million in the three months ended March 31, 2024, a decrease of $34 million from $51 million in the three months ended March 31, 2023. Non-GAAP Operating Profit is a non-GAAP financial measure. See "Non-GAAP Financial Measures" below for more information.

Current wording

Our loss from operations was $54 million in the three months ended June 30, 2024 compared to $64 million in the three months ended June 30, 2023. Our Non-GAAP Operating Profit was $23 million in the three months ended June 30, 2024, a decrease of $16 million from $39 million in the three months ended June 30, 2023. Non-GAAP Operating Profit is a non-GAAP financial measure. See "Non-GAAP Financial Measures" below for more information.

Previous wording

Public Cloud operating profit decreased 60% in the three months ended March 31, 2024 from the three months ended March 31, 2023. Segment operating profit as a percentage of segment revenue decreased by 310 basis points, reflecting a 5% decrease in segment revenue, partially offset by a 2% decrease in segment operating expenses primarily due to lower personnel costs.

Current wording

Public Cloud operating profit decreased 25% in the three months ended June 30, 2024 from the three months ended June 30, 2023. Segment operating profit as a percentage of segment revenue decreased by 80 basis points, reflecting a 2% decrease in segment revenue, partially offset by a 1% decrease in segment operating expenses.

Previous wording

Private Cloud operating profit decreased 24% in the three months ended March 31, 2024 from the three months ended March 31, 2023. Segment operating profit as a percentage of segment revenue decreased by 310 basis points, due to a 15% decrease in segment revenue, partially offset by an 11% decrease in segment operating expenses. The decrease in costs was mainly driven by a reduction in personnel costs.

Current wording

Private Cloud operating profit decreased 21% in the three months ended June 30, 2024 from the three months ended June 30, 2023. Segment operating profit as a percentage of segment revenue decreased by 140 basis points due to a 17% decrease in segment revenue, partially offset by a 15% decrease in segment operating expenses. The decrease in costs was mainly driven by a reduction in personnel costs from cost savings as a result of shifting roles to lower-cost locations as part of our continued focus on business optimization initiatives.

Previous wording

Centralized corporate functions that provide services to the segments in areas such as accounting, information technology, marketing, legal and human resources are not allocated to the segments and are included in "corporate functions" in the table above. This expense decreased 3% in the three months ended March 31, 2024 from the three months ended March 31, 2023 primarily due to a reduction in depreciation and amortization expense between periods.

Current wording

Centralized corporate functions that provide services to the segments in areas such as accounting, information technology, marketing, legal and human resources are not allocated to the segments and are included in "corporate functions" in the table above. This expense decreased 9% in the three months ended June 30, 2024 from the three months ended June 30, 2023 due to a reduction in depreciation and amortization expense driven by certain assets reaching the end of their useful life. Additionally, our continued focus on cost management further contributed to the cost reduction.

Previous wording

We had $6 million of other expense and $2 million of other income inthe three months ended March 31, 2024 and March 31, 2023, respectively, primarily due to costs incurred inthe three months ended March 31, 2024 related to the accounts receivable purchase agreement entered into in September 2023 and the impact of foreign currency losses.

Current wording

We had $5 million of other expense and $0.2 million of other income inthe three months ended June 30, 2024 and June 30, 2023, respectively, primarily due to costs incurred inthe three months ended June 30, 2024 related to the accounts receivable purchase agreement entered into in September 2023 and the impact of foreign currency losses.

Previous wording

As a percentage of revenue, cost of revenue increased 320 basis points in the three months ended March 31, 2024 to 80.8% from 77.6% in the three months ended March 31, 2023 as the decline in revenue growth outpaced the decrease in cost of revenue. Usage charges for third-party infrastructure drove a 510 basis point increase. Higher data center and license expense also contributed to the increase between periods. The decrease in personnel costs and depreciation expense, discussed above, partially offset the increase.

Current wording

As a percentage of revenue, cost of revenue increased 220 basis points in the six months ended June 30, 2024 to 80.8% from 78.6% in the six months ended June 30, 2023, as the decline in revenue growth outpaced the decrease in cost of revenue. Usage charges for third-party infrastructure drove a 470 basis point increase. The decrease in personnel costs and depreciation expense, discussed above, partially offset the increase.

Previous wording

Selling, general and administrative expenses decreased $15 million, or 7%, to $192 million in the three months ended March 31, 2024 from $208 million in the three months ended March 31, 2023. The decrease was due to a decline in personnel costs associated with a reduction in salaries driven by lower headcount and decreases in severance and commissions expense. Other non-personnel costs fluctuations included lower professional fees and a reduction in depreciation and amortization expense between periods. The first quarter of 2024 includes a $9 million early termination fee associated with the sale of our corporate headquarters, which partially offset the previously mentioned expense reductions.

Current wording

Selling, general and administrative expenses decreased$47 million, or 11%, to $378 million in the six months ended June 30, 2024 from $424 million in the six months ended June 30, 2023. The six months ended June 30, 2023 includes $12 million of expense recognized for a UK office that we exited in the second quarter of 2023, prior to the lease end date. In addition, personnel costs decreased due to a reduction in salaries driven by lower headcount and decreases in severance and commissions expense, partially offset by an increase in non-equity incentive compensation. Other non-personnel cost fluctuations included lower professional fees, a reduction in depreciation and amortization expense, and business optimization related expenses between periods.

Previous wording

We recorded a total of $543 million and $573 million in non-cash goodwill impairment charges in the three months ended March 31, 2023 and 2024, respec tively.

Current wording

We recorded a total of$543 million and$573 million in non-cash goodwill impairment charges in the six months ended June 30, 2023 and June 30, 2024, respectively.

Previous wording

We evaluated our indefinite-lived intangible asset for impairment as of February 29, 2024. As a result of this evaluation, we recorded a$20 million impairment of our indefinite-lived intangible asset in the three months ended March 31, 2024. There was no such impairment in the three months ended March 31, 2023.

Current wording

We evaluated our indefinite-lived intangible asset for impairment as of February 29, 2024. As a result of this evaluation, we recorded a$20 million impairment of our indefinite-lived intangible asset in thesix months ended June 30, 2024. There was no such impairment in the six months ended June 30, 2023.

Previous wording

Our income tax benefit decreased to $5 million in the three months ended March 31, 2024 from $11 million in the three months ended March 31, 2023. Our effective tax rate decreased to 0.7% in the three months ended March 31, 2024 from 1.7% in the three months ended March 31, 2023. The decrease in the effective tax rate year-over-year is primarily due to the tax impact associated with changes in the valuation allowance, geographic distribution of profits, the tax impact associated with goodwill impairments recorded in both the first quarter of 2024 and the first quarter of 2023, the majority of which were nondeductible for income tax purposes, and the income tax benefit of $51 million related to the March 2024 Refinancing Transactions discussed above. The difference between the effective tax rate and the statutory rate for the three months ended March 31, 2024 is primarily due to the tax impact associated with changes in the valuation allowance, the tax impact associated with the goodwill impairment recorded in the first quarter of 2024, and the impact of the March 2024 Refinancing Transactions.

Current wording

Our income tax benefit increased to $35 million in the six months ended June 30, 2024 from $10 million in the six months ended June 30, 2023. Our effective tax rate increased to 5.3% in the six months ended June 30, 2024 from 1.5% in the six months ended June 30, 2023. The increase in the effective tax rate year-over-year is primarily due to the tax impact associated with changes in the valuation allowance, geographic distribution of profits, the tax impact associated with goodwill impairments recorded in both the first quarter of 2024 and the first quarter of 2023, the majority of which were nondeductible for income tax purposes, and the income tax benefit of $88 million related to the March 2024 Refinancing Transactions discussed above. The difference between the effective tax rate and the statutory rate for the six months ended June 30, 2024 is primarily due to the tax impact associated with changes in the valuation allowance, the tax impact associated with the goodwill impairment recorded in the first quarter of 2024, and the impact of the March 2024 Refinancing Transactions.

Previous wording

The following table presents, by segment, actual and constant currency revenue and constant currency revenue growth rates, for and between the periods indicated:

Current wording

The following tables present, by segment, actual and constant currency revenue and constant currency revenue growth rates, for and between the periods indicated:

Previous wording

We define Non-GAAP Net Income (Loss) as net income (loss) adjusted to exclude the impact of non-cash charges for share-based compensation, special bonuses and other compensation expense, transaction-related costs and adjustments, restructuring and transformation charges, costs related to the Hosted Exchange incident, the amortization of acquired intangible assets, goodwill and asset impairment charges, and certain other non-operating, non-recurring or non-core gains and losses, as well as the tax effects of these non-GAAP adjustments.

Current wording

We define Non-GAAP Net Income (Loss) as net income (loss) adjusted to exclude the impact of non-cash charges for share-based compensation, special bonuses and other compensation expense, transaction-related costs and adjustments, restructuring and transformation charges, costs related to the Hosted Exchange incident, the amortization of acquired intangible assets, goodwill and asset impairment charges, costs related to the closure of a UK office, the interest expense impact from the debt Refinancing Transactions, and certain other non-operating, non-recurring or non-core gains and losses, as well as the tax effects of these non-GAAP adjustments.

Previous wording

We define Non-GAAP Operating Profit as income (loss) from operations adjusted to exclude the impact of non-cash charges for share-based compensation, special bonuses and other compensation expense, transaction-related costs and adjustments, restructuring and transformation charges, costs related to the Hosted Exchange incident, the amortization of acquired intangible assets, goodwill and asset impairment charges, and certain other non-operating, non-recurring or non-core gains and losses.

Current wording

We define Non-GAAP Operating Profit as income (loss) from operations adjusted to exclude the impact of non-cash charges for share-based compensation, special bonuses and other compensation expense, transaction-related costs and adjustments, restructuring and transformation charges, costs related to the Hosted Exchange incident, the amortization of acquired intangible assets, goodwill and asset impairment charges, costs related to the closure of a UK office, and certain other non-operating, non-recurring or non-core gains and losses.

Previous wording

We define Adjusted EBITDA as net income (loss) adjusted to exclude the impact of non-cash charges for share-based compensation, special bonuses and other compensation expense, transaction-related costs and adjustments, restructuring and transformation charges, costs related to the Hosted Exchange incident, certain other non-operating, non-recurring or non-core gains and losses, interest expense, expenses for our accounts receivable purchase agreement, income taxes, depreciation and amortization, and goodwill and asset impairment charges.

Current wording

We define Adjusted EBITDA as net income (loss) adjusted to exclude the impact of non-cash charges for share-based compensation, special bonuses and other compensation expense, transaction-related costs and adjustments, restructuring and transformation charges, costs related to the Hosted Exchange incident, costs related to the closure of a UK office, certain other non-operating, non-recurring or non-core gains and losses, interest expense, expenses for our accounts receivable purchase agreement, income taxes, depreciation and amortization, and goodwill and asset impairment charges.

Previous wording

Net loss reconciliation to Non-GAAP Net Loss

Current wording

Net income (loss) reconciliation to Non-GAAP Net Loss

Previous wording

Net loss reconciliation to Adjusted EBITDA

Current wording

Net income (loss) reconciliation to Adjusted EBITDA

Previous wording

We define Non-GAAP Earnings (Loss) Per Share as Non-GAAP Net Income (Loss) divided by our GAAP weighted average number of shares outstanding for the period on a diluted basis and further adjusted for the weighted average number of shares associated with securities which are anti-dilutive to GAAP loss per share but dilutive to Non-GAAP Earnings (Loss) Per Share. Management uses Non-GAAP Earnings (Loss) Per Share to evaluate the performance of our business on a comparable basis from period to period, including by adjusting for the impact of the issuance of shares that would be dilutive to Non-GAAP Earnings (Loss) Per Share. The following table reconciles Non-GAAP Loss Per Share to our GAAP net loss per share on a diluted basis:

Current wording

We define Non-GAAP Earnings (Loss) Per Share as Non-GAAP Net Income (Loss) divided by our GAAP weighted average number of shares outstanding for the period on a diluted basis and further adjusted for the weighted average number of shares associated with securities which are anti-dilutive to GAAP loss per share but dilutive to Non-GAAP Earnings (Loss) Per Share. Management uses Non-GAAP Earnings (Loss) Per Share to evaluate the performance of our business on a comparable basis from period to period, including by adjusting for the impact of the issuance of shares that would be dilutive to Non-GAAP Earnings (Loss) Per Share. The following table reconciles Non-GAAP Earnings (Loss) Per Share to our GAAP net earnings (loss) per share on a diluted basis:

Previous wording

At March 31, 2024, we held $283 million in cash and cash equivalents (not including $3 million in restricted cash, which is included in "Other non-current assets"), of which $111 million was held by foreign entities.

Current wording

At June 30, 2024, we held $190 million in cash and cash equivalents (not including $3 million in restricted cash, which is included in "Other non-current assets"), of which $124 million was held by foreign entities.

Previous wording

We have entered into installment payment arrangements with certain equipment and software vendors, along with sale-leaseback arrangements for equipment and certain property leases that are considered financing obligations. We had $63 million outstanding with respect to these arrangements as of March 31, 2024. We may choose to utilize these various sources of funding in future periods.

Current wording

We have entered into installment payment arrangements with certain equipment and software vendors, along with sale-leaseback arrangements for equipment and certain property leases that are considered financing obligations. We had $58 million outstanding with respect to these arrangements as of June 30, 2024. We may choose to utilize these various sources of funding in future periods.

Previous wording

We also lease certain equipment and real estate under operating and finance lease agreements. We had $474 million outstanding with respect to operating and finance lease agreements as of March 31, 2024. We may choose to utilize such leasing arrangements in future periods.

Current wording

We also lease certain equipment and real estate under operating and finance lease agreements. We had $495 million outstanding with respect to operating and finance lease agreements as of June 30, 2024. We may choose to utilize such leasing arrangements in future periods.

Previous wording

As of March 31, 2024, we had $2,598 million aggregate principal amount outstanding under the FLSO Term Loan Facility, the FLFO Term Loan Facility, the Term Loan Facility, 3.50% FLSO Senior Secured Notes,5.375% Senior Notes, and 3.50% Senior Secured Notes, with $375 million of borrowing capacity available under the New Revolving Credit Facility. Our liquidity requirements are significant, primarily due to debt service requirements.

Current wording

As of June 30, 2024, we had $2,484 million aggregate principal amount outstanding under the FLSO Term Loan Facility, the FLFO Term Loan Facility, the Term Loan Facility, 3.50% FLSO Senior Secured Notes,5.375% Senior Notes, and 3.50% Senior Secured Notes, with $375 million of borrowing capacity available under the New Revolving Credit Facility. Our liquidity requirements are significant, primarily due to debt service requirements.

Previous wording

As of March 31, 2024, the contractual interest rate on the FLSO Term Loan Facility was 8.18%. We are required to make quarterly principal payments of $4 million, which began on March 31, 2024.

Current wording

As of June 30, 2024, the contractual interest rate on the FLSO Term Loan Facility was 8.19%. We are required to make quarterly principal payments of $4 million, which began on March 31, 2024.

Previous wording

As of March 31, 2024, $1,683 million in aggregate principal amount of the FLSO Term Loan Facility remained outstanding.

Current wording

As of June 30, 2024, $1,659 million in aggregate principal amount of the FLSO Term Loan Facility remained outstanding.

Previous wording

As of March 31, 2024, the contractual interest rate on the FLFO Term Loan Facility was 11.68%. We are required to make quarterly principal payments of $0.7 million, beginning on June 30, 2024.

Current wording

As of June 30, 2024, the contractual interest rate on the FLFO Term Loan Facility was 11.69%. We are required to make quarterly principal payments of $0.7 million, which began on June 30, 2024.

Previous wording

As of March 31, 2024, we had total commitments of $375 million, no outstanding borrowings under the New Revolving Credit Facility, and $3.5 million of letters of credit issued thereunder. As such, as of March 31, 2024, we had $375 million of available commitments remaining.

Current wording

As of June 30, 2024, we had total commitments of $375 million, no outstanding borrowings under the New Revolving Credit Facility, and $24 million of letters of credit issued thereunder. As such, as of June 30, 2024, we had $375 million of available commitments remaining.

Previous wording

As of March 31, 2024, $267 million aggregate principal amount of the 3.50% FLSO Senior Secured Notes were outstanding.

Current wording

As of June 30, 2024, $319 million aggregate principal amount of the 3.50% FLSO Senior Secured Notes were outstanding.

Previous wording

Interest on the Term Loan Facility is due at the end of each interest period elected, not exceeding 90 days, for SOFR loans and at the end of every calendar quarter for base rate loans. As of March 31, 2024, the contractual interest rate on the Term Loan Facility was 8.18%. We are required to make quarterly amortization payments of $0.2 million. The Revolving Credit Facility included a commitment fee equal to 0.50% per annum in respect of the unused commitments that was due quarterly. This fee was subject to one step-down based on the net first lien leverage ratio. The Senior Facilities require us to make certain mandatory prepayments under certain conditions defined in the First Lien Credit Agreement.

Current wording

Interest on the Term Loan Facility is due at the end of each interest period elected, not exceeding 90 days, for SOFR loans and at the end of every calendar quarter for base rate loans. As of June 30, 2024, the contractual interest rate on the Term Loan Facility was 8.19%. We are required to make quarterly amortization payments of $0.2 million. The Revolving Credit Facility included a commitment fee equal to 0.50% per annum in respect of the unused commitments that was due quarterly. This fee was subject to one step-down based on the net first lien leverage ratio. The Senior Facilities require us to make certain mandatory prepayments under certain conditions defined in the First Lien Credit Agreement.

Previous wording

As of March 31, 2024, $182 million aggregate principal amount of the 3.50% Senior Secured Notes remained outstanding.

Current wording

As of June 30, 2024, $44 million aggregate principal amount of the 3.50% Senior Secured Notes remained outstanding.

Previous wording

As of March 31, 2024, $128 million aggregate principal amount of the 5.375% Senior Notes remained outstanding.

Current wording

As of June 30, 2024, $125 million aggregate principal amount of the 5.375% Senior Notes remained outstanding.

Previous wording

As of March 31, 2024, the New Credit Group had total assets of $3,429 million and total liabilities of $3,900 million, which included total debt of $2,625 million. The financial information for the New Credit Group differs from the financial information for the company and its consolidated subsidiaries primarily because Rackspace Technology Global has (i) debt that is not guaranteed by the New Credit Group, which debt was $370 million as of March 31, 2024, and (ii) Rackspace Technology Global is the party to the interest rate swap which had a net asset value of $53 million as of March 31, 2024.

Current wording

As of June 30, 2024, the New Credit Group had total assets of $3,316 million and total liabilities of $3,891 million, which included total debt of $2,640 million. The financial information for the New Credit Group differs from the financial information for the company and its consolidated subsidiaries primarily because Rackspace Technology Global has (i) debt that is not guaranteed by the New Credit Group, which debt was $230 million as of June 30, 2024, and (ii) Rackspace Technology Global is the party to the interest rate swap which had a net asset value of $49 million as of June 30, 2024.

Previous wording

Capital expenditures were $46 million in the three months ended March 31, 2024, compared to $72 million in the three months ended March 31, 2023, a decrease of $26 million. The decrease in capital expenditures was driven by purchases of customer gear originally intended to support a specific new customer during the first quarter of 2023. This new customer did not materialize as expected; however, the gear is fungible and has been redeployed to support other business requirements. This gear was acquired through a finance lease.

Current wording

Capital expenditures were $79 million in the six months ended June 30, 2024, compared to $116 million in the six months ended June 30, 2023, a decrease of $38 million. The decrease in capital expenditures was driven by purchases of customer gear originally intended to support a specific new customer during the first quarter of 2023. This new customer did not materialize as expected; however, the gear is fungible and has been redeployed to support other business requirements. This gear was acquired through a finance lease.

Previous wording

Net cash used in operating activities results primarily from cash received from customers, offset by cash payments made for employee and consultant compensation (less amounts capitalized related to internal-use software that are reflected as cash used in investing activities), data center costs, license costs, third-party infrastructure costs, marketing programs, interest, taxes, and other general corporate expenditures.

Current wording

Net cash provided by (used in) operating activities results primarily from cash received from customers, offset by cash payments made for employee and consultant compensation (less amounts capitalized related to internal-use software that are reflected as cash used in investing activities), data center costs, license costs, third-party infrastructure costs, marketing programs, interest, taxes, and other general corporate expenditures.

Previous wording

Net cash used in operating activities was $90 million in the three months ended March 31, 2024 compared to$2 million in the three months ended March 31, 2023. The reduction in operating cash was primarily driven by payments in the first quarter of 2024 including a $45 million vendor prepayment, $28 million in third party fees paid in connection with the March 2024 Refinancing Transactions, and a $9 million early termination fee associated with the sale of our corporate headquarters.

Current wording

Net cash used in operating activities was $66 million in the six months ended June 30, 2024 compared to cash provided by operating activities of$36 million in the six months ended June 30, 2023. The reduction in operating cash between periods was primarily driven by decreased customer receipts, $32 million in third party fees paid in connection with the March 2024 Refinancing Transactions, a $9 million early termination fee associated with the sale of our corporate headquarters, and lower cash interest payments, including the impact of the March 2024 Refinancing Transactions for which a portion of our contractual cash interest payments are now presented as repayments of debt in financing activities.