Rackspace beats expectations but its losses pile up amid aggressive AI pivot
Shares of Rackspace Technology Inc. were trading lower after-hours today, despite an encouraging earnings and revenue beat in its second-quarter financial results.
The San Antonio-based company reported earnings before certain costs such as stock compensation of eight cents per share, just ahead of Wall Street’s target of nine cents per share. Revenue for the period came to $670.1 million, up 1% from a year earlier. That was basically flat from a year ago but still better than expected, as Wall Street had expected revenue to decline compared to the year-ago period, with analysts targeting sales of just $646 million.
All told, Rackspace delivered a net loss of $67.5 million in the quarter, compared to a loss of $55 million in the same period one year earlier.
Chief Executive Gajen Kandiah (pictured) told investors that the prospects for the company’s emerging artificial intelligence business are looking bright. “Enterprises in regulated industries are moving AI from experimentation into production, and they are choosing partners who can be accountable for it,” he said in a statement.
