Rackspace Technology, Inc.

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. 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:

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. We believe enterprise demand for AI is shifting from experimentation toward production deployment, with growing emphasis on inference workloads and on governance, security and data control requirements, particularly among customers in regulated industries and the public sector. 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

Our success depends to a significant extent on our ability to continue to differentiate, expand and upgrade our service offerings in line with developing customer needs, while deepening our relationships with leading public cloud service providers and establishing new relationships, including with sales partners. We are a certified premier consulting and managed services partner to some of the largest cloud computing platforms, including AWS, Microsoft Azure, Google Cloud, Oracle, SAP and VMware by Broadcom. We believe we are unique in our ability to serve customers across major technology stacks and deployment options, all while delivering Fanatical Experience. Our existing and prospective customers are also under increasing pressure to move from on-premise or self-managed IT to the cloud to compete effectively in a digital economy and maximize the value of their cloud investments, which we believe presents an opportunity for professional services projects as well as new recurring business.

Current wording

Our success depends to a significant extent on our ability to continue to differentiate, expand and upgrade our service offerings in line with developing customer needs. We believe our curated, best-of-breed partners across every layer of the AI stack, combined with data center capacity and over 25 years of technical expertise, represents a unique positional advantage for us. We are the operator of the full enterprise AI stack and have strategic partnership agreements with AMD, VMware by Broadcom, Palantir, Uniphore, Rubrik, and Dell Technologies, with Rackspace remaining fully accountable from silicon through business outcomes. We are also a certified premier consulting and managed services partner to some of the largest cloud computing platforms, including AWS, Microsoft Azure, Google Cloud, Oracle, SAP and VMware by Broadcom. We believe we are unique in our ability to serve customers across major technology stacks and deployment options, while helping customers move AI from experimentation to real-world production. Our existing and prospective customers are also under increasing pressure to move from on-premise or self-managed IT to the cloud to compete effectively in a digital economy and maximize the value of their cloud investments, which we believe presents an opportunity for professional services projects as well as new recurring business.

Previous wording

The mix of revenue has shifted in recent years, from our Private Cloud offerings to infrastructure resale and services within Public Cloud. Private Cloud offerings are generally hosted on our own infrastructure and deliver higher segment operating margins, but also require a higher level of capital expenditures. Conversely, Public Cloud segment operating margins are lower, driven by high volumes of infrastructure resale revenue which come at significantly lower margins. However, Public Cloud requires significantly less capital expenditures. Going forward, we will continue to take a workload-centric approach and both Public and Private Cloud will be the net recipients of the workloads. The focus in Private Cloud will be to defend and expand our revenue with new solutions. The focus in Public Cloud is on expanding segment operating margins by driving cost efficiencies and growing higher-margin services revenue.

Current wording

Private Cloud offerings are generally hosted on our own infrastructure and deliver higher segment operating margins, but also require a higher level of capital expenditures. Historical Private Cloud offerings have also included colocation and basic hosting contracts, which typically generate lower margins relative to other Private Cloud offerings, including managed services and Enterprise AI. Public Cloud segment operating margins have historically been lower than Private Cloud segment operating margins, driven by high volumes of infrastructure resale revenue which come at significantly lower margins. However, Public Cloud requires significantly less capital expenditures.

Previous wording

After removing the impact of foreign currency fluctuations, on a constant currency basis, revenue increased 1.0% year-over-year. The following table presents revenue by segment:

Current wording

After removing the impact of foreign currency fluctuations, on a constant currency basis, revenue increased 0.4% year-over-year. The following table presents revenue by segment:

Previous wording

As a percentage of revenue, cost of revenue increased 150 basis points in the three months ended March 31, 2026 to 82.4% from 80.9% in the three months ended March 31, 2025 for the reasons discussed above.

Current wording

As a percentage of revenue, cost of revenue increased 230 basis points in the three months ended June 30, 2026 to 82.9% from 80.6% in the three months ended June 30, 2025 for the reasons discussed above.

Previous wording

Our gross profit was $119 million in the three months ended March 31, 2026, a decrease of $8 million from $127 million in the three months ended March 31, 2025. Our gross margin was 17.6% in the three months ended March 31, 2026, a decrease of 150 basis points from 19.1% in the three months ended March 31, 2025.

Current wording

Our gross profit was $115 million in the three months ended June 30, 2026, a decrease of $14 million from $129 million in the three months ended June 30, 2025. Our gross margin was 17.1% in the three months ended June 30, 2026, a decrease of 230 basis points from 19.4% in the three months ended June 30, 2025.

Previous wording

As a percentage of revenue, selling, general and administrative expenses decreased 460 basis points, to 20.2% in the three months ended March 31, 2026 from 24.8% in the three months ended March 31, 2025 primarily due to personnel costs, as discussed above.

Current wording

As a percentage of revenue, selling, general and administrative expenses decreased 110 basis points, to 22.1% in the three months ended June 30, 2026 from 23.2% in the three months ended June 30, 2025 primarily due to amortization expense, as discussed above.

Previous wording

Private Cloud operating profit decreased 5% in the three months ended March 31, 2026 from the three months ended March 31, 2025. Segment operating profit as a percentage of segment revenue increased by 30 basis points due to a 6% decrease in segment operating expenses, offset by a 6% decrease in segment revenue. The decrease in expenses was mainly driven by lower cost of revenue, inline with revenue decline, and gains on disposal of non-core assets in the current period.

Current wording

Public Cloud operating profit increased 17% in the three months ended June 30, 2026 from the three months ended June 30, 2025. Segment operating profit as a percentage of segment revenue increased by 80 basis points, reflecting a 3% decrease in segment operating expenses, partially offset by a 2% decrease in segment revenue. The decrease in expenses was mainly driven by lower cost of revenue, in-line with revenue decline between periods.

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 9% in the three months ended March 31, 2026 from the three months ended March 31, 2025 due to our continued focus on cost management.

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 3% in the three months ended June 30, 2026 from the three months ended June 30, 2025 due to our continued focus on cost management.

Previous wording

Interest expense increased $7 million, or 35%, to $26 million in the three months ended March 31, 2026 from $19 million in the three months ended March 31, 2025 driven by the impact of our interest rate swap maturing in February 2026. Borrowings on the Revolving Credit Facility also contributed to the increase in interest expense between periods.

Current wording

Interest expense increased $13 million, or 61%, to $34 million in the three months ended June 30, 2026 from $21 million in the three months ended June 30, 2025 driven by the impact of our interest rate swap maturing in February 2026. Borrowings on the Revolving Credit Facility also contributed to the increase in interest expense between periods.

Previous wording

We recorded 56 million total gain on debt extinguishment in the three months ended March 31, 2026 related to repurchases of an aggregate$96 million principal amount of the 3.50% FLSO Senior Secured Notes, 3.50% Senior Secured Notes, and 5.375% Senior Notes.

Current wording

We recorded $7 million total gain on debt extinguishment in the three months ended June 30, 2026 related to repurchases of an aggregate $11 million principal amount of the 3.50% FLSO Senior Secured Notes and 5.375% Senior Notes.

Previous wording

The decrease in other expense, net to $4 million in the three months ended March 31, 2026 from $5 million in the three months ended March 31, 2025 is primarily due to foreign currency transaction gains.

Current wording

The increase in other expense, net to $5 million in the three months ended June 30, 2026 from $4 million in the three months ended June 30, 2025 is primarily due to foreign currency transaction losses.

Previous wording

Our income tax benefit was $0.1 million in the three months ended March 31, 2026 compared to $8 million income tax expense in the three months ended March 31, 2025. Our effective tax rate increased to (1.5)% in the three months ended March 31, 2026 from (12.9)% in the three months ended March 31, 2025. The increase in the effective tax rate year-over-year is primarily due to the tax impact associated with changes in valuation allowance, the net impact of the geographic distribution of our earnings, the tax effects from non-deductible share-based compensation, and executive compensation that is non-deductible under Internal Revenue Code (“IRC”) Section 162(m). The difference between the effective tax rate and the statutory rate for the three months ended March 31, 2026 is primarily due to the tax impact associated with changes in valuation allowance, executive compensation that is non-deductible under IRC Section 162(m), and the net impact of the geographic distribution of our earnings.

Current wording

Our income tax expense was $2 million in the three months ended June 30, 2026 compared to $5 million in the three months ended June 30, 2025. Our effective tax rate increased to (2.8)% in the three months ended June 30, 2026 from (9.3)% in the three months ended June 30, 2025. The increase in the effective tax rate year-over-year is primarily due to the tax impact associated with changes in valuation allowance, the net impact of the geographic distribution of our earnings, and the tax effects from non-deductible share-based compensation. The difference between the effective tax rate and the statutory rate for the three months ended June 30, 2026 is primarily due to the tax impact associated with changes in valuation allowance, executive compensation that is non-deductible under Internal Revenue Code ("IRC") Section 162(m), and the net impact of the geographic distribution of our earnings.

Previous wording

Public Cloud revenue in the three months ended March 31, 2026 increased 6.7% on an actual basis and 6.1% on a constant currency basis, from the three months ended March 31, 2025. The increase was driven by both higher services revenue and increased infrastructure volumes.

Current wording

Public Cloud revenue in the six months ended June 30, 2026 increased 2.2% on an actual basis and 1.8% on a constant currency basis, from the six months ended June 30, 2025. The revenue growth was driven primarily by increased infrastructure volumes.

Previous wording

Private Cloud revenue in the three months ended March 31, 2026 decreased 6.0% on an actual basis and 7.5% on a constant currency basis, from the three months ended March 31, 2025, reflecting customer transitions off legacy platforms, partially offset by revenue from new bookings.

Current wording

Private Cloud revenue in the six months ended June 30, 2026 decreased 0.3% on an actual basis and 1.2% on a constant currency basis, from the six months ended June 30, 2025, reflecting customer transitions off legacy platforms, partially offset by revenue from new bookings, including revenue related to certain customer contracts that include embedded sales-type lease arrangements for hardware.

Previous wording

Cost of revenue increased $21 million, or 4%, to $559 million in the three months ended March 31, 2026 from $539 million in the three months ended March 31, 2025. The primary drivers of the increase include higher usage charges for third-party infrastructure, consistent with revenue growth, and higher depreciation expense. These increases were partially offset by lower license expense, due to a reduction in usage between periods, and a decrease in personnel costs driven by a reduction in non-equity incentive compensation and share-based compensation.

Current wording

Cost of revenue increased $39 million, or 4%, to $1,114 million in the six months ended June 30, 2026 from $1,076 million in the six months ended June 30, 2025. The primary drivers of the increase include higher usage charges for third-party infrastructure and higher depreciation expense. In addition, we had higher expense for hardware mainly related to certain customer contracts that include embedded sales-type lease arrangements. These increases were partially offset by lower license expense, due to a reduction in usage between periods, and a decrease in personnel costs. The decrease in personnel costs was largely due to a decline in headcount between periods and a reduction in non-equity incentive compensation, partially offset by an increase in severance expense driven by the workforce realignment plan announced in June 2026.

Previous wording

Selling, general and administrative expenses decreased $28 million, or 17%, to $137 million in the three months ended March 31, 2026 from $165 million in the three months ended March 31, 2025. Declining personnel costs had the largest impact due to a reduction in headcount between periods and a decrease in severance and share-based compensation expense. Also driving the overall reduction in selling, general and administrative expenses was a gain on disposal of non-core assets in the current period and a decrease in amortization expense as certain customer relationship intangible assets reached the end of their useful lives between periods.

Current wording

Selling, general and administrative expenses decreased $35 million, or 11%, to $285 million in the six months ended June 30, 2026 from $320 million in the six months ended June 30, 2025. Declining personnel costs had the largest impact due to a reduction in headcount between periods and a decrease in share-based compensation and non-equity incentive compensation expense, partially offset by an increase in severance expense. Also driving the overall reduction in selling, general and administrative expenses was a gain on disposal of non-core assets in the current period and a decrease in amortization expense as certain customer relationship intangible assets reached the end of their useful lives between periods. An increase in professional fees between periods partially offset these expense reductions.

Previous wording

Our loss from operations was $18 million in the three months ended March 31, 2026 compared to $38 million in the three months ended March 31, 2025. Our Non-GAAP Operating Profit was $31 million in the three months ended March 31, 2026, an increase of $5 million from $26 million in the three months ended March 31, 2025. 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 $51 million in the six months ended June 30, 2026 compared to $64 million in the six months ended June 30, 2025. Our Non-GAAP Operating Profit was $58 million in the six months ended June 30, 2026, an increase of $5 million from $53 million in the six months ended June 30, 2025. 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 increased 20% in the three months ended March 31, 2026 from the three months ended March 31, 2025. Segment operating profit as a percentage of segment revenue increased by 50 basis points, reflecting a 7% increase in segment revenue, partially offset by a 6% increase in segment operating expenses. The increase in expenses was mainly driven by higher cost of revenue, which increased inline with revenue growth between periods.

Current wording

Public Cloud operating profit increased 19% in the six months ended June 30, 2026 from the six months ended June 30, 2025. Segment operating profit as a percentage of segment revenue increased by 70 basis points, reflecting a 2% increase in segment revenue, partially offset by a 1% increase in segment operating expenses. The increase in expenses was mainly driven by higher cost of revenue, which increased in-line with revenue growth between periods.

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 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, 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, certain other non-operating, non-recurring or non-core gains and losses, interest expense, expenses for our Receivables Purchase Agreement, income taxes, depreciation and amortization, and goodwill and asset impairment charges.

Previous wording

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

Current wording

Net loss reconciliation to Non-GAAP Net Loss

Previous wording

Net income (loss) reconciliation to Adjusted EBITDA

Current wording

Net 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. 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. The following table reconciles Non-GAAP Loss Per Share to our GAAP net earnings (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. 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. The following table reconciles Non-GAAP Loss Per Share to our GAAP net loss per share on a diluted basis:

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 Revolving Credit Facility. As of March 31, 2026, the Revolving Credit Facility provided for up to $375 million of borrowings, $150 million of which was drawn and outstanding as of March 31, 2026. 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 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 Revolving Credit Facility. As of June 30, 2026, the Revolving Credit Facility provided for up to $375 million of borrowings, $260 million of which was drawn and outstanding as of June 30, 2026. 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 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 indebte dness. 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 March 31, 2026, we held $94 million in cash and cash equivalents (not including $2 million in restricted cash, which is included in "Other non-current assets"), of which $77 million was held by foreign entities.

Current wording

At June 30, 2026, we held $111 million in cash and cash equivalents (not including $3 million in restricted cash, which is included in "Other non-current assets"), of which $72 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 $49 million outstanding with respect to these arrangements as of March 31, 2026. 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 $47 million outstanding with respect to these arrangements as of June 30, 2026. 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 $470 million outstanding with respect to operating and finance lease agreements as of March 31, 2026. 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 $474 million outstanding with respect to operating and finance lease agreements as of June 30, 2026. We may choose to utilize such leasing arrangements in future periods.

Previous wording

As of March 31, 2026, we had $2,328 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 Revolving Credit Facility provides for up to $375 million of borrowings, $150 million of which was drawn and outstanding as of March 31, 2026. Our liquidity requirements are significant, primarily due to debt service requirements.

Current wording

As of June 30, 2026, we had $2,311 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 Revolving Credit Facility provides for up to $375 million of borrowings, $260 million of which was drawn and outstanding as of June 30, 2026. Our liquidity requirements are significant, primarily due to debt service requirements.

Previous wording

As of March 31, 2026, the contractual interest rate on the FLSO Term Loan Facility was 6.54%. We are required to make quarterly principal payments of $4 million.

Current wording

As of June 30, 2026, the contractual interest rate on the FLSO Term Loan Facility was 6.50%. We are required to make quarterly principal payments of $4 million.

Previous wording

As of March 31, 2026, $1,606 million in aggregate principal amount of the FLSO Term Loan Facility remained outstanding.

Current wording

As of June 30, 2026, $1,602 million in aggregate principal amount of the FLSO Term Loan Facility remained outstanding.

Previous wording

As of March 31, 2026, the contractual interest rate on the FLFO Term Loan Facility was 10.04%. We are required to make quarterly principal payments of $0.7 million.

Current wording

As of June 30, 2026, the contractual interest rate on the FLFO Term Loan Facility was 10.00%. We are required to make quarterly principal payments of $0.7 million.

Previous wording

As of March 31, 2026, we had total commitments of $375 million, $150 million of outstanding borrowings under the Revolving Credit Facility, and $24 million of letters of credit issued thereunder. As such, as of March 31, 2026, we had $202 million of available commitments remaining.

Current wording

As of June 30, 2026, we had total commitments of $375 million, $260 million of outstanding borrowings under the Revolving Credit Facility, and $24 million of letters of credit issued thereunder. As such, as of June 30, 2026, we had $92 million of available commitments remaining.

Previous wording

During the three months ended March 31, 2026, we repurchased and surrendered for cancellation $68 million aggregate principal amount of the 3.50% FLSO Senior Secured Notes for $35 million, including accrued interest and fees of $0.4 million.

Current wording

During the six months ended June 30, 2026, we repurchased and surrendered for cancellation $70 million aggregate principal amount of the 3.50% FLSO Senior Secured Notes for $36 million, including accrued interest and fees of $0.4 million.

Previous wording

As of March 31, 2026, $250 million aggregate principal amount of the 3.50% FLSO Senior Secured Notes were outstanding.

Current wording

As of June 30, 2026, $248 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, 2026, the contractual interest rate on the Term Loan Facility was 6.54%. We are required to make quarterly amortization payments of $0.2 million. We are required to make certain mandatory prepayments under certain conditions defined in the credit agreement governing the Term Loan Facility.

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, 2026, the contractual interest rate on the Term Loan Facility was 6.50%. We are required to make quarterly amortization payments of $0.2 million. We are required to make certain mandatory prepayments under certain conditions defined in the credit agreement governing the Term Loan Facility.

Previous wording

During the three months ended March 31, 2026, we repurchased and surrendered for cancellation $1.3 million aggregate principal amount of the 3.50% Senior Secured Notes for $0.6 million.

Current wording

During the six months ended June 30, 2026, we repurchased and surrendered for cancellation $1.3 million aggregate principal amount of the 3.50% Senior Secured Notes for $0.6 million.

Previous wording

As of March 31, 2026, $99 million aggregate principal amount of the 5.375% Senior Notes remained outstanding.

Current wording

As of June 30, 2026, $89 million aggregate principal amount of the 5.375% Senior Notes remained outstanding.

Previous wording

As of March 31, 2026, the New Credit Group had total assets of $2,765 million and total liabilities of $3,781 million, which included total debt of $2,507 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 debt that is not guaranteed by the New Credit Group, which debt was $201 million as of March 31, 2026.

Current wording

As of June 30, 2026, the New Credit Group had total assets of $2,745 million and total liabilities of $3,834 million, which included total debt of $2,595 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 debt that is not guaranteed by the New Credit Group, which debt was $192 million as of June 30, 2026.

Previous wording

Capital expenditures were $35 million in the three months ended March 31, 2026, compared to $27 million in the three months ended March 31, 2025, an increase of $8 million. The increase in capital expenditures was driven by customer gear purchases related to new contract deployments and higher software license spend between periods.

Current wording

Capital expenditures were $63 million in the six months ended June 30, 2026, compared to $58 million in the six months ended June 30, 2025, an increase of $5 million. The increase in capital expenditures was driven by customer gear purchases related to new contract deployments and higher software license spend between periods.