Rackspace Technology, Inc.

Previous wording

We are a leading end-to-end, hybrid, multicloud, and AI solutions company. We design, build and operate our customers' cloud environments across all major technology platforms, irrespective of technology stack or deployment model. We partner with our customers at every stage of their cloud journey, enabling them to modernize applications, build new products, and adopt innovative technologies.

Current wording

We are a leading end-to-end, hybrid cloud and AI solutions company. We design, build and operate our customers' cloud environments across all major technology platforms, irrespective of technology stack or deployment model. We partner with our customers at every stage of their cloud journey, enabling them to modernize applications, build new products, and adopt innovative technologies.

Previous wording

We believe our combination of proprietary technology, automation capabilities and technical expertise creates a value proposition for our customers that is hard to replicate for both competitors and in-house IT departments. Our continued success depends to a significant extent on our ability to meet the challenges presented by our highly competitive and dynamic market, including the following key factors:

Current wording

We believe our combination of proprietary technology, automation capabilities and technical expertise creates a value proposition for our customers that is hard to replicate for both competitors and in-house IT departments. We and our customers face a variety of challenges, including evolving technologies (including AI and GenAI) and an uncertain regulatory landscape, including international trade policies and tariffs, as well as other macroeconomic and geopolitical factors. These factors have and will continue to affect demand for our products and services. Our continued success depends to a significant extent on our ability to respond to these and other challenges presented by our highly competitive and dynamic market, including the following key factors:

Previous wording

Revenue decreased $57 million, or 7.7%, to $676 million in the three months ended September 30, 2024 from $732 million in the three months ended September 30, 2023. Revenue declined due to decreases in both Private Cloud and Public Cloud revenue, as discussed below.

Current wording

Revenue decreased $25 million, or 3.7%, to $665 million in the three months ended March 31, 2025 from $691 million in the three months ended March 31, 2024. 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 7.9% 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 3.4% year-over-year. The following table presents revenue growth by segment:

Previous wording

Public Cloud revenue in the three months ended September 30, 2024 decreased 3.1% on an actual and constant currency basis, from the three months ended September 30, 2023. The decline was due to continued cyclical headwinds in IT services.

Current wording

Public Cloud revenue in the three months ended March 31, 2025 decreased 1.6% on an actual basis and 1.3% on a constant currency basis, from the three months ended March 31, 2024. The decline was due to lower infrastructure volumes and a reduction in services revenue.

Previous wording

Private Cloud revenue in the three months ended September 30, 2024 decreased 14.4% on an actual basis and 14.7% on a constant currency basis, from the three months ended September 30, 2023, due to customers rolling off old generation private cloud offerings and decline in legacy OpenStack offerings.

Current wording

Private Cloud revenue in the three months ended March 31, 2025 decreased 6.9% on an actual basis and 6.6% on a constant currency basis, from the three months ended March 31, 2024, due to customers rolling off legacy private cloud offerings.

Previous wording

Cost of revenue decreased $42 million, or 7%, to $538 million in the three months ended September 30, 2024 from $580 million in the three months ended September 30, 2023. The decrease in cost of revenue was primarily due to an increasein 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. In addition, we experienced a reduction in usage charges for third-party infrastructure; consistent with the decrease in revenue, and a reduction in license expense due to decreased usage between periods. A decline in personnel costs, driven by a decrease in headcount between periods, and lower severance expense further contributed to the overall reduction in cost of revenue.

Current wording

Cost of revenue decreased $20 million, or 3%, to $539 million in the three months ended March 31, 2025 from $558 million in the three months ended March 31, 2024. The largest driver of the decrease was a reduction in license expense due to decreased usage between periods. Usage charges for third-party infrastructure also declined, consistent with the decrease in revenue. Also contributing to the overall reduction in cost of revenue was a decline in personnel costs, driven by a decrease in headcount between periods, and data center expense as a result of continued optimization initiatives.

Previous wording

As a percentage of revenue, cost of revenue increased 40 basis points in the three months ended September 30, 2024 to 79.6% from 79.2% in the three months ended September 30, 2023 as the decline in revenue growth outpaced the decrease in cost of revenue.

Current wording

As a percentage of revenue, cost of revenue increased 10 basis points in the three months ended March 31, 2025 to 80.9% from 80.8% in the three months ended March 31, 2024.

Previous wording

Our gross profit was $138 million in the three months ended September 30, 2024, a decrease of $15 million from $152 million in the three months ended September 30, 2023. Our gross margin was 20.4% in the three months ended September 30, 2024, a decrease of 40 basis points from 20.8% in the three months ended September 30, 2023.

Current wording

Our gross profit was $127 million in the three months ended March 31, 2025, a decrease of $6 million from $133 million in the three months ended March 31, 2024. Our gross margin was 19.1% in the three months ended March 31, 2025, a decrease of 10 basis points from 19.2% in the three months ended March 31, 2024.

Previous wording

As a percentage of revenue, selling, general and administrative expenses decreased 20 basis points, to 26.7% in the nine months ended September 30, 2024 from 26.9% in the nine months ended September 30, 2023.

Current wording

As a percentage of revenue, selling, general and administrative expenses decreased 310 basis points, to 24.8% in the three months ended March 31, 2025 from 27.9% in the three months ended March 31, 2024 for the reasons discussed above.

Previous wording

Our loss from operations was $174 million in the three months ended September 30, 2024 compared to $239 million in the three months ended September 30, 2023. Our Non-GAAP Operating Profit was $34 million in the three months ended September 30, 2024, a decrease of $11 million from $46 million in the three months ended September 30, 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 $38 million in the three months ended March 31, 2025 compared to $653 million in the three months ended March 31, 2024. Our Non-GAAP Operating Profit was $26 million in the three months ended March 31, 2025, an increase of $12 million from $14 million in the three months ended March 31, 2024. 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 19% in the three months ended September 30, 2024 from the three months ended September 30, 2023. Segment operating profit as a percentage of segment revenue decreased by 80 basis points, reflecting a 3% decrease in segment revenue, partially offset by a 2% decrease in segment operating expenses.

Current wording

Public Cloud operating profit increased 111% in the three months ended March 31, 2025 from the three months ended March 31, 2024. Segment operating profit as a percentage of segment revenue increased by 230 basis points, reflecting a 4% decrease in segment operating expenses, partially offset by a 2% decrease in segment revenue. The decrease in expenses was mainly driven by operational improvements and cost optimization initiatives executed during 2024.

Previous wording

Private Cloud operating profit decreased 14% in the three months ended September 30, 2024 from the three months ended September 30, 2023. Segment operating profit as a percentage of segment revenue increased by 30 basis points due to a 15% decrease in segment operating expenses, partially offset by a 14% decrease in segment revenue. The decrease in expenses was mainly driven by a reduction in personnel costs.

Current wording

Private Cloud operating profit decreased 14% in the three months ended March 31, 2025 from the three months ended March 31, 2024. Segment operating profit as a percentage of segment revenue decreased by 210 basis points due to a 7% decrease in segment revenue, partially offset by a 4% decrease in segment operating expenses. The decrease in expenses was mainly driven by cost optimization activities executed throughout 2024.

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 7% in the three months ended September 30, 2024 from the three months ended September 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.

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 19% in the three months ended March 31, 2025 from the three months ended March 31, 2024 due to our continued focus on cost management.

Previous wording

In connection with the debt refinancing transactions that were completed in March and April 2024, as further described in Item 1 of Part I, Financial Statements - Note 7, "Debt", we updated our internal forecasts. As of February 29, 2024, we assessed our Board approved 2024 internal budget along with several events and circumstances that could affect the significant inputs used to determine the fair value of our reporting units, including the significance of the amount, if any, of excess carrying value over fair value, consistency of our current and forecasted operating margins and cash flows, budgeted-to-actual performance, timing of the expected effects of our strategic initiatives, overall change in economic climate, changes in the industry and competitive environment, changes to our risk-adjusted discount rates and earnings quality and sustainability. After considering all available evidence in our evaluation of goodwill impairment indicators, we determined it appropriate to perform an interim quantitative assessment of our reporting units as of February 29, 2024. The results of this goodwill impairment analysis indicated an impairment of goodwill within our Public Cloud and Private Cloud reporting units of $385 million and $188 million, respectively, recorded in the first quarter of 2024.

Current wording

In connection with the March 2024 Refinancing Transactions that were completed in March and April 2024, as further described in Item 1 of Part I, Financial Statements - Note 7, “Debt", we updated our internal forecasts. As of February 29, 2024, we assessed our Board of Directors approved 2024 internal budget along with several events and circumstances that could affect the significant inputs used to determine the fair value of our reporting units, including the significance of the amount, if any, of excess carrying value over fair value, consistency of our current and forecasted operating margins and cash flows, budgeted-to-actual performance, timing of the expected effects of our strategic initiatives, overall change in economic climate, changes in the industry and competitive environment, changes to our risk-adjusted discount rates and earnings quality and sustainability. After considering all available evidence in our evaluation of goodwill impairment indicators, we determined it appropriate to perform an interim quantitative assessment of our reporting units as of February 29, 2024. The results of this goodwill impairment analysis indicated an impairment of goodwill within our Public Cloud and Private Cloud reporting units of $385 million and $188 million, respectively, recorded in the first quarter of 2024.

Previous wording

Interest expense decreased $39 million, or 68%, to $18 million in the three months ended September 30, 2024 from $57 million in the three months ended September 30, 2023, primarily due to the accounting for contractual interest payments on debt instruments entered into as part of the March 2024 Refinancing Transactions, portions of which are recorded as a reduction of related premiums and not as interest expense, which reduces interest expense relative to contractual interest cost.

Current wording

Interest expense decreased $24 million, or 56%, to $19 million in the three months ended March 31, 2025 from $44 million in the three months ended March 31, 2024, primarily due to the accounting for contractual interest payments on debt instruments entered into as part of the March 2024 Refinancing Transactions, portions of which are recorded as a reduction of related premiums and not as interest expense, which reduces interest expense relative to contractual interest cost.

Previous wording

For more information, see Item 1 of Part I, Financial Statements - Note 7, "Debt."

Current wording

For more information, see Item 1 of Part I, Financial Statements - Note 3, "Sale of Receivables."

Previous wording

Our income tax expense was$12 million in the three months ended September 30, 2024 compared to$17 million income tax benefit in the three months ended September 30, 2023. Our effective tax rate decreased to (6.8)% in the three months ended September 30, 2024 from 6.8% in the three months ended September 30, 2023. The decrease in the effective tax rate year-over-year and the difference between the effective tax rate and the statutory rate for the three months ended September 30, 2024 is primarily due to the tax impact associated with changes in the valuation allowance, the tax impact of the March 2024 Refinancing Transactions, and the tax impact associated with the goodwill impairment recorded in September 2024, the majority of which was nondeductible for income tax purposes.

Current wording

Our income tax expense was$8 million in the three months ended March 31, 2025 compared to$5 million income tax benefit in the three months ended March 31, 2024. Our effective tax rate decreased to (12.9)% in the three months ended March 31, 2025 from 0.7% in the three months ended March 31, 2024. The decrease in the effective tax rate year-over-year is primarily due to the tax impact associated with changes in valuation allowance, executive compensation that is nondeductible under Internal Revenue Code (“IRC”) Section 162(m), the net impact of the geographic distribution of our earnings, tax effects from nondeductible share-based compensation, and the tax impact of the March 2024 Refinancing Transactions. The difference between the effective tax rate and the statutory rate for the three months ended March 31, 2025 is primarily due to the tax impact associated with changes in valuation allowance, executive compensation that is nondeductible under IRC Section 162(m), the net impact of the geographic distribution of our earnings, and tax effects from nondeductible share-based compensation.

Previous wording

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

Current wording

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

Previous wording

We present Non-GAAP Gross Profit in this MD&A because we believe the measure is useful in analyzing trends in our underlying, recurring gross margins. We define Non-GAAP Gross Profit as gross profit, adjusted to exclude the impact of share-based compensation expense and other non-recurring or unusual compensation items, purchase accounting-related effects, certain business transformation-related costs, and costs related to the Hosted Exchange incident.

Current wording

We present Non-GAAP Gross Profit in this MD&A because we believe the measure is useful in analyzing trends in our underlying, recurring gross margins. We define Non-GAAP Gross Profit as gross profit, adjusted to exclude the impact of share-based compensation expense, purchase accounting-related effects, and certain business transformation-related costs.

Previous wording

The Rackspace Acquisition was structured as a leveraged buyout of Rackspace Technology Global, our predecessor, and resulted in several accounting and capital structure impacts. For example, the revaluation of our assets and liabilities resulted in a significant increase in our amortizable intangible assets and goodwill, the incurrence of a significant amount ofdebt to partially finance the Rackspace Acquisition resulted in interest payments that reflect our high leverage and cost of debt capital, and the conversion of Rackspace Technology Global’s unvested equity compensation into a cash-settled bonus plan and obliga tion to pay management fees to our equityholders resulted in new cash commitments. In addition, the change in ownership and management resulting from the Rackspace Acquisition led to a strategic realignment in our operations that had a significant impact on our financial results. Following the Rackspace Acquisition, we acquired several businesses, sold businesses and investments that we deemed to be non-core and launched multiple integration and business transformation initiatives intended to improve the efficiency of people and operations and identify recurring cost savings and new revenue growth opportunities. We believe that these transactions and activities resulted in costs, which have historically been substantial, and that may not be indicative of, or are not related to, our core operating results, including interest related to the incurrence of additional debt to finance acquisitions and third party legal, advisory and consulting fees and severance, retention bonus and other internal costs that we believe would not have been incurred in the absence of these transactions and activities and also may not be indicative of, or related to, our core operating results.

Current wording

The Rackspace Acquisition was structured as a leveraged buyout of Rackspace Technology Global, our predecessor, and resulted in several accounting and capital structure impacts. For example, the revaluation of our assets and liabilities resulted in a significant increase in our amortizable intangible assets and goodwill, the incurrence of a significant amount ofdebt to partially finance the Rackspace Acquisition resulted in interest payments that reflect our high leverage and cost of debt capital, and the conversion of Rackspace Technology Global’s unvested equity compensation into a cash-settled bonus plan and obliga tion to pay management fees to our equity holders resulted in new cash commitments. In addition, the change in ownership and management resulting from the Rackspace Acquisition led to a strategic realignment in our operations that had a significant impact on our financial results. Following the Rackspace Acquisition, we acquired several businesses, sold businesses and investments that we deemed to be non-core and launched multiple integration and business transformation initiatives intended to improve the efficiency of people and operations and identify recurring cost savings and new revenue growth opportunities. We believe that these transactions and activities resulted in costs, which have historically been substantial, and that may not be indicative of, or are not related to, our core operating results, including interest related to the incurrence of additional debt to finance acquisitions and third party legal, advisory and consulting fees and severance, retention bonus and other internal costs that we believe would not have been incurred in the absence of these transactions and activities and also may not be indicative of, or related to, our core operating results.

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, 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.

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, 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, the interest expense impact from the March 2024 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, costs related to the closure of a UK office, 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, 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.

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, 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.

Current wording

We define Adjusted EBITDA as net income (loss) adjusted to exclude the impact of non-cash charges for share-based compensation, 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.

Previous wording

The following tables present a reconciliation of Non-GAAP Net Income (Loss) and Adjusted EBITDA to the most directly comparable GAAP financial measures. For a reconciliation of income (loss) from operations to Non-GAAP Operating Profit, see "Loss from Operations, Segment Operating Profit, and Non-GAAP Operating Profit" in the year-over-year comparison under "Results of Operations" above.

Current wording

The following tables present a reconciliation of Non-GAAP Net Loss and Adjusted EBITDA to the most directly comparable GAAP financial measures. For a reconciliation of income (loss) from operations to Non-GAAP Operating Profit, see "Loss from Operations, Segment Operating Profit, and Non-GAAP Operating Profit" in the year-over-year comparison under "Results of Operations" above.

Previous wording

We primarily finance our operations and capital expenditures with internally-generated cash from operations and hardware leases, and if necessary, borrowings under the New Revolving Credit Facility. As of September 30, 2024, the New Revolving Credit Facility provided for up to $375 million of borrowings, none of which was drawn and outstanding as of September 30, 2024. Our primary uses of cash are working capital requirements, debt service requirements and capital expenditures. Based on our current level of operations and available cash, we believe our sources will provide sufficient liquidity over at least the next twelve months. We cannot provide assurance, however, that our business will generate sufficient cash flows from operations or that future borrowings will be available to us under the New Revolving Credit Facility or from other sources in an amount sufficient to enable us to pay our indebtedness or to fund our other liquidity needs. Our ability to do so depends on prevailing economic conditions and other factors, many of which are beyond our control. In addition, upon the occurrence of certain events, such as a change of control, we could be required to repay or refinance our indebtedness. We cannot assure that we will be able to refinance any of our indebtedness on commercially reasonable terms or at all. Any future acquisitions, joint ventures or other similar transactions will likely require additional capital, and there can be no assurance that any such capital will be available to us on acceptable terms or at all.

Current wording

We primarily finance our operations and capital expenditures with internally-generated cash from operations and hardware leases, and if necessary, borrowings under the New Revolving Credit Facility. As of March 31, 2025, the New Revolving Credit Facility provided for up to $375 million of borrowings, $30 million of which was drawn and outstanding as of March 31, 2025. Our primary uses of cash are working capital requirements, debt service requirements and capital expenditures. Based on our current level of operations and available cash, we believe our sources will provide sufficient liquidity over at least the next twelve months. We cannot provide assurance, however, that our business will generate sufficient cash flows from operations or that future borrowings will be available to us under the New Revolving Credit Facility or from other sources in an amount sufficient to enable us to pay our indebtedness or to fund our other liquidity needs. Our ability to do so depends on prevailing economic conditions and other factors, many of which are beyond our control. In addition, upon the occurrence of certain events, such as a change of control, we could be required to repay or refinance our indebtedness. We cannot assure that we will be able to refinance any of our indebtedness on commercially reasonable terms or at all. Any future acquisitions, joint ventures or other similar transactions will likely require additional capital, and there can be no assurance that any such capital will be available to us on acceptable terms or at all.

Previous wording

At September 30, 2024, we held $157 million in cash and cash equivalents (not including $3 million in restricted cash, which is included in "Other non-current assets"), of which $125 million was held by foreign entities.

Current wording

At March 31, 2025, we held $128 million in cash and cash equivalents (not including $3 million in restricted cash, which is included in "Other non-current assets"), of which $102 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 $56 million outstanding with respect to these arrangements as of September 30, 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 $49 million outstanding with respect to these arrangements as of March 31, 2025. 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 $487 million outstanding with respect to operating and finance lease agreements as of September 30, 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 $492 million outstanding with respect to operating and finance lease agreements as of March 31, 2025. We may choose to utilize such leasing arrangements in future periods.

Previous wording

As of September 30, 2024, we had $2,455 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 March 31, 2025, we had $2,444 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. The New Revolving Credit Facility provides for up to $375 million of borrowings, $30 million of which was drawn and outstanding as of March 31, 2025. Our liquidity requirements are significant, primarily due to debt service requirements.

Previous wording

As of September 30, 2024, the contractual interest rate on the FLSO Term Loan Facility was 7.98%. We are required to make quarterly principal payments of $4 million, which began on March 31, 2024.

Current wording

As of March 31, 2025, the contractual interest rate on the FLSO Term Loan Facility was 7.19%. We are required to make quarterly principal payments of $4 million, which began on March 31, 2024.

Previous wording

As of September 30, 2024, $1,631 million in aggregate principal amount of the FLSO Term Loan Facility remained outstanding.

Current wording

As of March 31, 2025, $1,623 million in aggregate principal amount of the FLSO Term Loan Facility remained outstanding.

Previous wording

As of September 30, 2024, the contractual interest rate on the FLFO Term Loan Facility was 11.48%. We are required to make quarterly principal payments of $0.7 million, which began on June 30, 2024.

Current wording

As of March 31, 2025, the contractual interest rate on the FLFO Term Loan Facility was 10.69%. We are required to make quarterly principal payments of $0.7 million, which began on June 30, 2024.

Previous wording

Rackspace Finance established the New Revolving Credit Facility in an aggregate principal amount of $375 million of commitments. All revolving lenders under the prior Revolving Credit Facility exchanged their revolving loan commitments for commitments in respect of the New Revolving Credit Facility, which replaces in full the prior Revolving Credit Facility. The New Revolving Credit Facility matures on May 15, 2028.

Current wording

Rackspace Finance established the New Revolving Credit Facility in an aggregate principal amount of $375 million of commitments. All revolving lenders under the prior Revolving Credit Facility exchanged their revolving loan commitments for commitments in respect of the New Revolving Credit Facility, which replaced in full the prior Revolving Credit Facility. The New Revolving Credit Facility matures on May 15, 2028.

Previous wording

As of September 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 September 30, 2024, we had $375 million of available commitments remaining.

Current wording

As of March 31, 2025, we had total commitments of $375 million, $30 million of outstanding borrowings under the New Revolving Credit Facility, and $24 million of letters of credit issued thereunder. As such, as of March 31, 2025, we had $345 million of available commitments remaining.

Previous wording

On March 12, 2024, Rackspace Finance issued $267 million initial aggregate principal amount of 3.50% FLSO Senior Secured Notes. The 3.50% FLSO Senior Secured Notes will mature on May 15, 2028 and bear interest at an annual fixed rate of 3.50%. Interest is payable semiannually on each February 15 and August 15, commencing on August 15, 2024.

Current wording

On March 12, 2024, Rackspace Finance issued $267 million initial aggregate principal amount of 3.50% FLSO Senior Secured Notes. The 3.50% FLSO Senior Secured Notes will mature on May 15, 2028 and bear interest at an annual fixed rate of 3.50%. Interest is payable semiannually on February 15 and August 15, commencing on August 15, 2024.

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 September 30, 2024, the contractual interest rate on the Term Loan Facility was 7.98%. 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 March 31, 2025, the contractual interest rate on the Term Loan Facility was 7.19%. 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

On February 9, 2021, Rackspace Technology Global issued $550 million aggregate principal amount of 3.50% Senior Secured Notes. The 3.50% Senior Secured Notes will mature on February 15, 2028 and bear interest at an annual fixed rate of 3.50%. Interest is payable semiannually on each February 15 and August 15, commencing on August 15, 2021.

Current wording

On February 9, 2021, Rackspace Technology Global issued $550 million aggregate principal amount of 3.50% Senior Secured Notes. The 3.50% Senior Secured Notes will mature on February 15, 2028 and bear interest at an annual fixed rate of 3.50%. Interest is payable semiannually on February 15 and August 15, commencing on August 15, 2021.

Previous wording

Rackspace Technology Global issued $550 million aggregate principal amount of the 5.375% Senior Notes on December 1, 2020. The 5.375% Senior Notes will mature on December 1, 2028 and bear interest at a fixed rate of 5.375% per year, payable semi-annually on each June 1 and December 1, commencing on June 1, 2021. The 5.375% Senior Notes are guaranteed on a senior unsecured basis by all of Rackspace Technology Global's wholly-owned domestic restricted subsidiaries that guarantee the Senior Facilities.

Current wording

Rackspace Technology Global issued $550 million aggregate principal amount of the 5.375% Senior Notes on December 1, 2020. The 5.375% Senior Notes will mature on December 1, 2028 and bear interest at a fixed rate of 5.375% per year, payable semi-annually on June 1 and December 1, commencing on June 1, 2021. The 5.375% Senior Notes are guaranteed on a senior unsecured basis by all of Rackspace Technology Global's wholly-owned domestic restricted subsidiaries that guarantee the Senior Facilities.

Previous wording

As of September 30, 2024, the New Credit Group had total assets of $3,098 million and total liabilities of $3,841 million, which included total debt of $2,580 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 $229 million as of September 30, 2024, and (ii) Rackspace Technology Global is the party to the interest rate swap which had a net asset value of $23 million as of September 30, 2024.

Current wording

As of March 31, 2025, the New Credit Group had total assets of $2,931 million and total liabilities of $3,794 million, which included total debt of $2,558 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 $229 million as of March 31, 2025, and (ii) Rackspace Technology Global is the party to the interest rate swap which had a net asset value of $19 million as of March 31, 2025.