Rackspace Technology Shares Drop 15% on Mixed Q2 Results & Disappointing Guidance

Rackspace Technology, Inc. (NASDAQ:RXT) shares plunged more than 15% on Wednesday following the company’s reported mixed Q2 results and disappointing guidance.

Q2 EPS came in at $0.17, better than the Street estimate of $0.16. Revenue was $772 million, missing the Street estimate of $784.73 million.

The company provided its Q3 guidance, expecting EPS in the range of $0.08-$0.10. Q3 revenue is expected to be in the range of $769-779 million, worse than the Street estimate of $818.2 million.

Following the results, RBC Capital analysts lowered their 2022/2023 revenue/adjusted EBITDA estimates to $3.1 billion/$592 million and $3.2 billion/$626 million from $3.2 billion/$648 million and $3.5 billion/$707 million, respectively. Their price target moved to $9 from $16, while the outperform rating was reiterated.