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The following Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is intended to help readers understand our results of operations, financial condition and cash flows and should be read in conjunction with the condensed consolidated financial statements and the related notes included elsewhere in this Quarterly Report on Form 10-Q (this "Quarterly Report") and with the audited consolidated financial statements and the related notes included in our Annual Report. References to "Rackspace Technology," "we," "our company," "the company," "us," or "our" refer to Rackspace Technology, Inc. and its consolidated subsidiaries. The following discussion contains forward-looking statements that are subject to risks and uncertainties. Actual results may differ materially from those contained in any forward-looking statements. See "Special Note Regarding Forward-Looking Statements" contained elsewhere in this Quarterly Report. Overview We are the operator of the full enterprise AI stack from governed private cloud to AI inference and agents in production. With an Outcomes-as-a-Service model built on secure infrastructure, data foundations, and forward-deployed engineering, Rackspace delivers business results for regulated and mission-critical industries where governance, sovereignty, and uptime are non-negotiable. We operate our business and report our results through two reportable segments: Public Cloud and Private Cloud. Our Public Cloud segment is a services-centric, capital-light model providing value-added cloud solutions through managed services, Elastic Engineering and professional services offerings for customer environments hosted on the AWS, Microsoft Azure and Google Cloud public cloud platforms. Our Private Cloud segment is a technology-forward, capital-intensive model providing managed service offerings for customer environments hosted in one of our data centers as well as in those owned by customers or by third parties such as colocation providers. See Item 1 of Part I, Financial Statements - Note 13, "Segment Reporting," for additional information about our segments. Subsequent Events For a description of subsequent events, see "Subsequent Events" in Item 1 of Part I, Financial Statements - Note 1, "Company Overview, Basis of Presentation, and Summary of Significant Accounting Policies." - 27 - Table of Contents Key Factors Affecting Our Performance 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: Differentiating Our Service Offerings in a Competitive Market Environment 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. Customer Relationships and Retention Our success greatly depends on our ability to retain and develop opportunities with our existing customers and to attract new customers. We operate in a growing but competitive and evolving market environment, requiring innovation to differentiate us from our competitors. Enterprise AI offerings in the market today typically put the full operational burden on the customer, which is especially difficult in regulated industries where governance, data sovereignty and operational continuity are critical. We believe Rackspace is uniquely positioned to deliver the full governed enterprise AI stack from silicon through business outcomes under a single accountable operator, serving a demand now visible across the market. Enterprises, particularly in regulated industries, are seeking control over their compute, their models, and their data, and assurance that the proprietary knowledge embedded in that data is not transferred outside their environments. We are model-agnostic by design and operate the governed layer that allows enterprises to use the best available models, whether open, closed, or their own, on private cloud where control matters and public cloud where elasticity matters, while policy, identity, and data boundaries remain under the enterprise’s control. Business Mix Shift 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. As we continue to execute our Enterprise AI strategy, we may de-emphasize and/or exit certain colocation and basic hosting arrangements within our established Private Cloud base in order to reserve and optimize capacity for Enterprise AI, our new revenue growth vector within Private Cloud. We also expect to continue to de-emphasize and/or exit lower-margin infrastructure resale in Public Cloud over time, as hyperscalers continue to move customers to direct contracts and we prioritize resources for higher-margin opportunities. Following these transitions, we believe our business mix will shift from legacy lower-growth, lower-margin revenue opportunities toward higher-growth, higher margin revenue opportunities as our strategy matures. - 28 - Table of Contents Our Enterprise AI strategy will require significant upfront capital investment (including GPU-related costs). We expect near-term margin pressure as we fund this next phase of growth, as certain investments are anticipated to be incurred ahead of Enterprise AI revenue ramping. Key Components of Statement of Operations Revenue A substantial amount of our revenue, particularly within our Private Cloud segment, is generated pursuant to contracts that typically have a fixed term (typically from 12 to 36 months). Our customers generally have the right to cancel their contracts by providing us with written notice prior to the end of the fixed term, though most of our contracts provide for termination fees in the event of cancellation prior to the end of their term, typically amounting to the outstanding value of the contract. These contracts include a monthly recurring fee, which is determined based on the computing resources utilized and provided to the customer, the complexity of the underlying infrastructure and the level of support we provide. Most of our services within our Public Cloud segment generate usage-based revenue invoiced on a monthly basis and can be canceled at any time without penalty. We also generate revenue from usage-based fees and fees from professional services earned from customers using our hosting and other services. We typically recognize revenue on a daily basis, as services are provided, in an amount that reflects the consideration to which we expect to be entitled in exchange for our services. Our usage-based arrangements generally include a variable consideration component, consisting of monthly utility fees, with a defined price and undefined quantity. Our customer contracts also typically contain service level guarantees, including with respect to network uptime requirements, that provide discounts when we fail to meet specific obligations and, with respect to certain products, we may offer volume discounts based on usage. As these variable consideration components consist of a single distinct daily service provided on a single performance obligation, we account for all of them as services are provided and earned. Cost of revenue Cost of revenue consists primarily of usage charges for third-party infrastructure and personnel costs (including salaries, bonuses, benefits and share-based compensation) for engineers, developers and other employees involved in the delivery of services to our customers. Cost of revenue also includes depreciation of servers, software and other systems infrastructure, data center rent and other infrastructure maintenance and support costs, including software license costs and utilities. Cost of revenue is driven mainly by demand for our services, our service mix and the cost of labor in a given geography. Selling, general and administrative expenses (SG&A) Selling, general and administrative expenses consist primarily of personnel costs (including salaries, bonuses, commissions, benefits and share-based compensation) for our sales force, executive team and corporate administrative and support employees, including our human resources, finance, accounting and legal functions. SG&A also includes research and development costs, repair and maintenance of corporate infrastructure, facilities rent, third-party advisory fees (including audit, legal and management consulting costs), marketing and advertising costs and insurance, as well as the amortization of related intangible assets and certain depreciation of fixed assets. SG&A also includes transaction costs related to acquisitions and financings along with costs related to integration and business transformation initiatives which may impact the comparability of SG&A between periods. Income taxes Our income tax benefit (provision) and deferred tax assets and liabilities reflect management's best assessment of estimated current and future taxes to be paid. To date, we recorded consolidated tax expense, despite our net losses, due to the recording of valuation allowances against our deferred tax assets. Certain of our non-U.S. subsidiaries continue to incur corporate tax expense or benefit according to the relevant taxing jurisdictions. We are under certain domestic and foreign tax audits. Due to the complexity involved with certain tax matters, there is the possibility that the various taxing authorities may disagree with certain tax positions filed on our income tax returns. We believe we have made adequate provision for all uncertain tax positions. See Item 1 of Part I, Financial Statements - Note 10, "Taxes." - 29 - Table of Contents Results of Operations We discuss our historical results of operations, and the key components of those results, below. Past financial results are not necessarily indicative of future results. Three Months Ended June 30, 2025 Compared to Three Months Ended June 30, 2026 The following table sets forth our results of operations for the specified periods, as well as changes between periods and as a percentage of revenue for those same periods (totals in table may not foot due to rounding): Three Months Ended June 30, Year-Over-Year Comparison 2025 2026 (In millions, except %) Amount % Revenue Amount % Revenue Amount % Change Revenue $ 666.3 100.0 % $ 670.1 100.0 % $ 3.8 0.6 % Cost of revenue (537.1) (80.6) % (555.3) (82.9) % (18.2) 3.4 % Gross profit 129.2 19.4 % 114.8 17.1 % (14.4) (11.1) % Selling, general and administrative expenses (154.3) (23.2) % (148.0) (22.1) % 6.3 (4.1) % Loss from operations (25.1) (3.8) % (33.2) (4.9) % (8.1) 32.3 % Other income (expense): Interest expense (21.3) (3.2) % (34.2) (5.1) % (12.9) 60.6 % Gain on investments, net 0.3 0.0 % 0.1 0.0 % (0.2) (66.7) % Gain on debt extinguishment — — % 6.7 1.0 % 6.7 100.0 % Other expense, net (3.8) (0.6) % (5.1) (0.8) % (1.3) 34.2 % Total other expense (24.8) (3.7) % (32.5) (4.9) % (7.7) 31.0 % Loss before income taxes (49.9) (7.5) % (65.7) (9.8) % (15.8) 31.7 % Provision for income taxes (4.6) (0.7) % (1.8) (0.3) % 2.8 (60.9) % Net loss $ (54.5) (8.2) % $ (67.5) (10.1) % $ (13.0) 23.9 % Revenue Revenue increased $4 million, or 0.6%, to $670 million in the three months ended June 30, 2026 from $666 million in the three months ended June 30, 2025. Revenue increased due to Private Cloud growth, as discussed below. 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: Three Months Ended June 30, % Change (In millions, except %) 2025 2026 Actual Constant Currency (a) Public Cloud $ 416.6 $ 406.8 (2.3) % (2.5) % Private Cloud 249.7 263.3 5.5 % 5.2 % Total $ 666.3 $ 670.1 0.6 % 0.4 % (a) Refer to "Non-GAAP Financial Measures" in this section for further explanation and reconciliation. - 30 - Table of Contents Public Cloud revenue in the three months ended June 30, 2026 decreased 2.3% on an actual basis and 2.5% on a constant currency basis, from the three months ended June 30, 2025. The decline was driven by lower services revenue. Private Cloud revenue in the three months ended June 30, 2026 increased 5.5% on an actual basis and 5.2% on a constant currency basis, from the three months ended June 30, 2025, largely due to revenue related to certain customer contracts that include embedded sales-type lease arrangements for hardware. Cost of Revenue Cost of revenue increased $18 million, or 3%, to $555 million in the three months ended June 30, 2026 from $537 million in the three months ended June 30, 2025. The primary driver of the increase was higher expense for hardware mainly related to certain customer contracts that include embedded sales-type lease arrangements. Higher depreciation expense also contributed to the increase in cost of revenue. These increases were partially offset by a reduction in usage charges for third-party infrastructure 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. 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. Gross Profit 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. Selling, General and Administrative Expenses Selling, general and administrative expenses decreased $6 million, or 4%, to $148 million in the three months ended June 30, 2026 from $154 million in the three months ended June 30, 2025. Amortization expense had the largest impact on the overall reduction in selling, general and administrative expense as certain customer relationship intangible assets reached the end of their useful lives between periods. Personnel costs also contributed to the decline in expense due to a reduction in headcount between periods and a decrease in non-equity incentive compensation, partially offset by an increase in severance expense driven by the workforce realignment plan announced in June 2026. An increase in professional fees between periods partially offset these expense reductions. 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. Loss from Operations, Segment Operating Profit, and Non-GAAP Operating Profit Our loss from operations was $33 million in the three months ended June 30, 2026 compared to $25 million in the three months ended June 30, 2025. Our Non-GAAP Operating Profit was $27 million in both the three months ended June 30, 2026 and June 30, 2025. Non-GAAP Operating Profit is a non-GAAP financial measure. See "Non-GAAP Financial Measures" below for more information. - 31 - Table of Contents The table below presents a reconciliation of loss from operations to Non-GAAP Operating Profit. Three Months Ended June 30, (In millions) 2025 2026 Loss from operations $ (25.1) $ (33.2) Share-based compensation expense 10.0 10.4 Transaction-related adjustments, net (a) 0.4 0.5 Restructuring and transformation expenses (b) 4.4 18.4 Amortization of intangible assets (c) 37.6 31.3 Non-GAAP Operating Profit $ 27.3 $ 27.4 (a) Includes purchase accounting adjustments, exploratory acquisition and divestiture costs, and expenses related to financing activities. (b) Includes consulting and advisory fees related to business transformation and optimization activities, as well as associated severance, certain facility closure costs, and lease termination expenses. Also includes payroll taxes associated with the exercise of stock options and vesting of restricted stock. (c) All of our intangible assets are attributable to acquisitions, including the Rackspace Acquisition in 2016. Our segment operating profit and segment operating margin for the periods indicated, and the change between periods is shown in the table below: Three Months Ended June 30, Year-Over-Year Comparison (In millions, except %) 2025 2026 Segment operating profit: Amount % of Segment Revenue Amount % of Segment Revenue Amount % Change Public Cloud $ 16.2 3.9 % $ 19.0 4.7 % $ 2.8 17.3 % Private Cloud 61.5 24.6 % 57.5 21.8 % (4.0) (6.5) % Corporate functions (50.4) (49.1) 1.3 (2.6) % Non-GAAP Operating Profit $ 27.3 $ 27.4 $ 0.1 0.4 % 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. Private Cloud operating profit decreased 7% 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 decreased by 280 basis points due to a 9% increase in segment operating expenses, partially offset by a 5% increase in segment revenue. The increase in expenses was mainly due to higher cost of revenue, including higher expense for hardware mainly related to certain customer contracts that include embedded sales-type lease arrangements, customer license and data center costs, driven by margin compression between periods. 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. For more information about our segment operating profit, see Item 1 of Part I, Financial Statements - Note 13, "Segment Reporting." Interest Expense 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. - 32 - Table of Contents Gain on Debt Extinguishment 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. For more information, see Item 1 of Part I, Financial Statements - Note 7, "Debt." Other Expense, Net 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. Provision for Income Taxes 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. - 33 - Table of Contents Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2026 The following table sets forth our results of operations for the specified periods, as well as changes between periods and as a percentage of revenue for those same periods (totals in table may not foot due to rounding): Six Months Ended June 30, Year-Over-Year Comparison 2025 2026 (In millions, except %) Amount % Revenue Amount % Revenue Amount % Change Revenue $ 1,331.7 100.0 % $ 1,348.2 100.0 % $ 16.5 1.2 % Cost of revenue (1,075.6) (80.8) % (1,114.3) (82.7) % (38.7) 3.6 % Gross profit 256.1 19.2 % 233.9 17.3 % (22.2) (8.7) % Selling, general and administrative expenses (319.6) (24.0) % (284.9) (21.1) % 34.7 (10.9) % Loss from operations (63.5) (4.8) % (51.0) (3.8) % 12.5 (19.7) % Other income (expense): Interest expense (40.7) (3.1) % (60.4) (4.5) % (19.7) 48.4 % Gain on investments, net 0.2 0.0 % — — % (0.2) (100.0) % Gain on debt extinguishment — — % 62.5 4.6 % 62.5 100.0 % Other expense, net (9.2) (0.7) % (8.6) (0.6) % 0.6 (6.5) % Total other expense (49.7) (3.7) % (6.5) (0.5) % 43.2 (86.9) % Loss before income taxes (113.2) (8.5) % (57.5) (4.3) % 55.7 (49.2) % Provision for income taxes (12.8) (1.0) % (1.7) (0.1) % 11.1 (86.7) % Net loss $ (126.0) (9.5) % $ (59.2) (4.4) % $ 66.8 (53.0) % Revenue Revenue increased $17 million, or 1.2%, to $1,348 million in the six months ended June 30, 2026 from $1,332 million in the six months ended June 30, 2025. Revenue increased due to Public Cloud growth, as discussed below. After removing the impact from foreign currency fluctuations, on a constant currency basis, revenue increased 0.7% year-over-year. The following table presents revenue by segment: Six Months Ended June 30, % Change (In millions, except %) 2025 2026 Actual Constant Currency (a) Public Cloud $ 832.2 $ 850.2 2.2 % 1.8 % Private Cloud 499.5 498.0 (0.3) % (1.2) % Total $ 1,331.7 $ 1,348.2 1.2 % 0.7 % (a) Refer to "Non-GAAP Financial Measures" in this section for further explanation and reconciliation. 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. 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. - 34 - Table of Contents Cost of Revenue 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. As a percentage of revenue, cost of revenue increased 190 basis points in the six months ended June 30, 2026 to 82.7% from 80.8% in the six months ended June 30, 2025 for the reasons discussed above. Gross Profit Our gross profit was $234 million in the six months ended June 30, 2026, a decrease of $22 million from $256 million in the six months ended June 30, 2025. Our gross margin was 17.3% in the six months ended June 30, 2026, a decrease of 190 basis points from 19.2% in the six months ended June 30, 2025. Selling, General and Administrative Expenses 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. As a percentage of revenue, selling, general and administrative expenses decreased 290 basis points, to 21.1% in the six months ended June 30, 2026 from 24.0% in the six months ended June 30, 2025 primarily due to personnel costs and amortization expense, discussed above. Loss from Operations, Segment Operating Profit, and Non-GAAP Operating Profit 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. - 35 - Table of Contents The table below presents a reconciliation of loss from operations to Non-GAAP Operating Profit. Six Months Ended June 30, (In millions) 2025 2026 Loss from operations $ (63.5) $ (51.0) Share-based compensation expense 22.0 17.0 Transaction-related adjustments, net (a) 1.9 2.1 Restructuring and transformation expenses (b) 17.5 27.4 Amortization of intangible assets (c) 75.0 62.6 Non-GAAP Operating Profit $ 52.9 $ 58.1 (a) Includes purchase accounting adjustments, exploratory acquisition and divestiture costs, and expenses related to financing activities. (b) Includes consulting and advisory fees related to business transformation and optimization activities, as well as associated severance, certain facility closure costs, and lease termination expenses. Also includes payroll taxes associated with the exercise of stock options and vesting of restricted stock. (c) All of our intangible assets are attributable to acquisitions, including the Rackspace Acquisition in 2016. Our segment operating profit and segment operating margin for the periods indicated, and the change between periods is shown in the table below: Six Months Ended June 30, Year-Over-Year Comparison (In millions, except %) 2025 2026 Segment operating profit: Amount % of Segment Revenue Amount % of Segment Revenue Amount % Change Public Cloud $ 33.5 4.0 % $ 39.7 4.7 % $ 6.2 18.5 % Private Cloud 122.5 24.5 % 115.4 23.2 % (7.1) (5.8) % Corporate functions (103.1) (97.0) 6.1 (5.9) % Non-GAAP Operating Profit $ 52.9 $ 58.1 $ 5.2 9.8 % 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. Private Cloud operating profit decreased 6% 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 decreased by 130 basis points due to a 1% increase in segment operating expenses and a slight decrease in segment revenue. The increase in expenses was mainly driven by higher cost of revenue. 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 6% in the six months ended June 30, 2026 from the six months ended June 30, 2025 due to our continued focus on cost management. For more information about our segment operating profit, see Item 1 of Part I, Financial Statements - Note 13, "Segment Reporting." Interest Expense Interest expense increased $20 million, or 48%, to $60 million in the six months ended June 30, 2026 from $41 million in the six 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. These increases in interest expense were partially offset by repurchases of senior notes between periods, discussed below. - 36 - Table of Contents Gain on Debt Extinguishment We recorded a $63 million gain on debt extinguishment in the six months ended June 30, 2026 related to repurchases of $108 million principal amount of the 3.50% FLSO Senior Secured Notes, 3.50% Senior Secured Notes, and 5.375% Senior Notes. For more information, see Item 1 of Part I, Financial Statements - Note 7, "Debt." Other Expense, Net Other expense, net was $9 million in both the six months ended June 30, 2025 and June 30, 2026 and is primarily comprised of expense related to our Receivables Purchase Agreement and foreign currency transactions. Provision for Income Taxes Our income tax expense was $2 million in the six months ended June 30, 2026 compared to $13 million in the six months ended June 30, 2025. Our effective tax rate increased to (3.0)% in the six months ended June 30, 2026 from (11.3)% in the six 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 six 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 IRC Section 162(m), and the net impact of the geographic distribution of our earnings. - 37 - Table of Contents Non-GAAP Financial Measures We track several non-GAAP financial measures to monitor and manage our underlying financial performance. The following discussion includes the presentation of constant currency revenue, Non-GAAP Gross Profit, Non-GAAP Net Income (Loss), Non-GAAP Operating Profit, Adjusted EBITDA and Non-GAAP Earnings (Loss) Per Share, which are non-GAAP financial measures that exclude the impact of certain costs, losses and gains that are required to be included in our profit and loss measures under GAAP. Although we believe these measures are useful to investors and analysts for the same reasons they are useful to management, as discussed below, these measures are not a substitute for, or superior to, U.S. GAAP financial measures or disclosures. Other companies may calculate similarly-titled non-GAAP measures differently, limiting their usefulness as comparative measures. We have reconciled each of these non-GAAP measures to the applicable most comparable GAAP measure throughout this MD&A. Constant Currency Revenue We use constant currency revenue as an additional metric for understanding and assessing our growth excluding the effect of foreign currency rate fluctuations on our international business operations. Constant currency information compares results between periods as if exchange rates had remained constant period over period and is calculated by translating the non-U.S. dollar income statement balances for the most current period to U.S. dollars using the average exchange rate from the comparative period rather than the actual exchange rates in effect during the respective period. We also believe this is an important metric to help investors evaluate our performance in comparison to prior periods. The following tables present, by segment, actual and constant currency revenue and constant currency revenue growth rates, for and between the periods indicated: Three Months Ended June 30, 2025 Three Months Ended June 30, 2026 % Change (In millions, except %) Revenue Revenue Foreign Currency Translation (a) Revenue in Constant Currency Actual Constant Currency Public Cloud $ 416.6 $ 406.8 $ (0.8) $ 406.0 (2.3) % (2.5) % Private Cloud 249.7 263.3 (0.7) 262.6 5.5 % 5.2 % Total $ 666.3 $ 670.1 $ (1.5) $ 668.6 0.6 % 0.4 % (a) The effect of foreign currency is calculated by translating current period results using the average exchange rate from the prior comparative period. Six Months Ended June 30, 2025 Six Months Ended June 30, 2026 % Change (In millions, except %) Revenue Revenue Foreign Currency Translation (a) Revenue in Constant Currency Actual Constant Currency Public Cloud $ 832.2 $ 850.2 $ (3.1) $ 847.1 2.2 % 1.8 % Private Cloud 499.5 498.0 (4.4) 493.6 (0.3) % (1.2) % Total $ 1,331.7 $ 1,348.2 $ (7.5) $ 1,340.7 1.2 % 0.7 % (a) The effect of foreign currency is calculated by translating current period results using the average exchange rate from the prior comparative period. - 38 - Table of Contents Non-GAAP Gross Profit 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. The table below presents a reconciliation of gross profit to Non-GAAP Gross Profit: Three Months Ended June 30, Six Months Ended June 30, (In millions) 2025 2026 2025 2026 Gross profit $ 129.2 $ 114.8 $ 256.1 $ 233.9 Share-based compensation expense 1.3 1.2 3.1 2.1 Purchase accounting impact on expense (a) 0.2 0.2 0.4 0.4 Restructuring and transformation expenses (b) 1.2 8.2 4.4 11.8 Non-GAAP Gross Profit $ 131.9 $ 124.4 $ 264.0 $ 248.2 (a) Adjustment for the impact of purchase accounting from the Rackspace Acquisition on expenses. (b) Adjustment for the impact of business transformation and optimization activities, as well as associated severance, certain facility closure costs and lease termination expenses. Also includes payroll taxes associated with the exercise of stock options and vesting of restricted stock. Non-GAAP Net Income (Loss), Non-GAAP Operating Profit and Adjusted EBITDA We present Non-GAAP Net Income (Loss), Non-GAAP Operating Profit and Adjusted EBITDA because they are a basis upon which management assesses our performance and we believe they are useful to evaluating our financial performance. We believe that excluding items from net income that may not be indicative of, or are unrelated to, our core operating results, and that may vary in frequency or magnitude, enhances the comparability of our results and provides a better baseline for analyzing trends in our business. 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 of debt 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 obligation 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. 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, the amortization of acquired intangible assets, goodwill and asset impairment charges, the interest expense impact from the refinancing transactions announced in March 2024 (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. 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, the amortization of acquired intangible assets, goodwill and asset impairment charges, and certain other non-operating, non-recurring or non-core gains and losses. - 39 - Table of Contents 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. Non-GAAP Operating Profit and Adjusted EBITDA are management's principal metrics for measuring our underlying financial performance. Non-GAAP Operating Profit and Adjusted EBITDA, along with other quantitative and qualitative information, are also the principal financial measures used by management and our Board of Directors in determining performance-based compensation for our management and key employees. These non-GAAP measures are not intended to imply that we would have generated higher income or avoided net losses if the Rackspace Acquisition and the subsequent transactions and initiatives had not occurred. In the future we may incur expenses or charges such as those added back to calculate Non-GAAP Net Income (Loss), Non-GAAP Operating Profit or Adjusted EBITDA. Our presentation of Non-GAAP Net Income (Loss), Non-GAAP Operating Profit and Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by these items. Other companies, including our peer companies, may calculate similarly-titled measures in a different manner from us, and therefore, our non-GAAP measures may not be comparable to similarly-titled measures of other companies. Investors are cautioned against using these measures to the exclusion of our results in accordance with GAAP. 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 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. Net loss reconciliation to Non-GAAP Net Loss Three Months Ended June 30, Six Months Ended June 30, (In millions) 2025 2026 2025 2026 Net loss $ (54.5) $ (67.5) $ (126.0) $ (59.2) Share-based compensation expense 10.0 10.4 22.0 17.0 Transaction-related adjustments, net (a) 0.4 0.5 1.9 2.1 Restructuring and transformation expenses (b) 4.4 18.4 17.5 27.4 Net gain on divestiture and investments (c) (0.3) (0.1) (0.2) — Gain on debt extinguishment — (6.7) — (62.5) Interest expense impact from the March 2024 Refinancing Transactions (d) (21.1) (18.0) (42.1) (36.8) Other adjustments (e) (1.5) 1.0 (1.1) (0.1) Amortization of intangible assets (f) 37.6 31.3 75.0 62.6 Tax effect of non-GAAP adjustments (g) 10.0 9.2 23.3 14.1 Non-GAAP Net Loss $ (15.0) $ (21.5) $ (29.7) $ (35.4) - 40 - Table of Contents Net loss reconciliation to Adjusted EBITDA Three Months Ended June 30, Six Months Ended June 30, (In millions) 2025 2026 2025 2026 Net loss $ (54.5) $ (67.5) $ (126.0) $ (59.2) Share-based compensation expense 10.0 10.4 22.0 17.0 Transaction-related adjustments, net (a) 0.4 0.5 1.9 2.1 Restructuring and transformation expenses (b) 4.4 18.4 17.5 27.4 Net gain on divestiture and investments (c) (0.3) (0.1) (0.2) — Gain on debt extinguishment — (6.7) — (62.5) Other expense, net (h) 3.8 5.1 9.2 8.6 Interest expense 21.3 34.2 40.7 60.4 Provision for income taxes 4.6 1.8 12.8 1.7 Depreciation and amortization (i) 74.7 69.8 147.8 141.6 Adjusted EBITDA $ 64.4 $ 65.9 $ 125.7 $ 137.1 (a) Includes purchase accounting adjustments, exploratory acquisition and divestiture costs, and expenses related to financing activities. (b) Includes consulting and advisory fees related to business transformation and optimization activities, as well as associated severance, certain facility closure costs, and lease termination expenses. Also includes payroll taxes associated with the exercise of stock options and vesting of restricted stock. (c) Includes gains and losses on investment and from dispositions. (d) Interest expense impact due to the accounting for contractual interest payments on debt instruments entered into as part of the March 2024 Refinancing Transactions, which reduced interest expense relative to contractual interest cost. (e) Primarily consists of foreign currency gains and losses. (f) All of our intangible assets are attributable to acquisitions, including the Rackspace Acquisition in 2016. (g) We utilize an estimated structural long-term non-GAAP tax rate in order to provide consistency across reporting periods, removing the effect of non-recurring tax adjustments, which include but are not limited to tax rate changes, U.S. tax reform, share-based compensation, audit conclusions and changes to valuation allowances. When computing this long-term rate for the 2025 and 2026 interim periods, we based it on an average of the 2024 and estimated 2025 tax rates and 2025 and estimated 2026 tax rates, respectively, recomputed to remove the tax effect of non-GAAP pre-tax adjustments and non-recurring tax adjustments, resulting in a structural non-GAAP tax rate of 26% for all periods. The non-GAAP tax rate could be subject to change for a variety of reasons, including the rapidly evolving global tax environment, significant changes in our geographic earnings mix including due to acquisition activity, or other changes to our strategy or business operations. We will re-evaluate our long-term non-GAAP tax rate as appropriate. We believe that making these adjustments facilitates a better evaluation of our current operating performance and comparisons to prior periods. (h) Primarily consists of foreign currency gains and losses and expense related to our Receivables Purchase Agreement. (i) Excludes accelerated depreciation expense related to facility closures. - 41 - Table of Contents Non-GAAP Earnings (Loss) Per Share 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: Three Months Ended June 30, Six Months Ended June 30, (In millions, except per share amounts) 2025 2026 2025 2026 Net loss attributable to common stockholders $ (54.5) $ (67.5) $ (126.0) $ (59.2) Non-GAAP Net Loss $ (15.0) $ (21.5) $ (29.7) $ (35.4) Weighted average number of shares - Diluted 238.0 250.1 235.0 248.2 Effect of dilutive securities (a) 1.3 16.3 7.1 11.6 Non-GAAP weighted average number of shares - Diluted 239.3 266.4 242.1 259.8 Net loss per share - Diluted $ (0.23) $ (0.27) $ (0.54) $ (0.24) Per share impacts of adjustments to net loss (b) 0.17 0.18 0.41 0.10 Per share impacts of shares after adjustments to net loss (a) 0.00 0.01 0.01 (0.00) Non-GAAP Loss Per Share $ (0.06) $ (0.08) $ (0.12) $ (0.14) (a) Potential common share equivalents consist of shares issuable upon the exercise of stock options, vesting of restricted stock units (including performance-based restricted stock units) or purchases under the Employee Stock Purchase Plan (the "ESPP"), as well as contingent shares associated with our acquisition of Datapipe Parent, Inc. Certain of our potential common share equivalents are contingent on certain investment funds managed by affiliates of Apollo achieving pre-established performance targets based on a multiple of their invested capital ("MOIC"), which are included in the denominator for the entire period if such shares would be issuable as of the end of the reporting period assuming the end of the reporting period was the end of the contingency period. (b) Reflects the aggregate adjustments made to reconcile Non-GAAP Net Loss to our net loss, as noted in the above table, divided by the GAAP diluted number of shares outstanding for the relevant period. - 42 - Table of Contents Liquidity and Capital Resources Overview 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 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. From time to time, depending upon market and other conditions, as well as upon our cash balances and liquidity, we, our subsidiaries or our affiliates may acquire (and have acquired) our outstanding debt securities or our other indebtedness through open market purchases, privately negotiated transactions, tender offers, redemption or otherwise, upon such terms and at such prices as we, our subsidiaries or our affiliates may determine (or as may be provided for in the indenture governing the 3.50% FLSO Senior Secured Notes (the “3.50% FLSO Senior Secured Notes Indenture”), the indenture governing the 5.375% Senior Notes (the "5.375% Notes Indenture") or the indenture governing the 3.50% Senior Secured Notes (the "3.50% Notes Indenture" and, together with the 3.50% FLSO Senior Secured Notes Indenture and 5.375% Notes Indenture, the "Indentures"), if applicable), for cash or other consideration. On July 9, 2026, we entered into an equity distribution agreement with Goldman Sachs & Co. LLC under which we may offer and sell up to $250 million of shares of our common stock, par value $0.01 per share. We currently intend to use the net proceeds from this offering for general corporate purposes, including for working capital, capital expenditures and growth capital (including GPU-related costs) to enable us to expedite our Enterprise AI strategy. We also have third-party lease financing arrangements in place for the procurement of the initial deployment of GPUs under the previously announced definitive agreement with AMD. The first deployment is currently expected to be nearly 2 megawatts targeted for completion by the end of 2026, with approximately $75 million of associated capital expenditures. In addition, on July 2, 2026, our Receivables Purchase Agreement was amended to extend the termination date from September 29, 2026 to the earlier of July 2, 2029 or six months prior to the maturity date of our Revolving Credit Facility (or any revolving credit facility that refinances or replaces such revolving credit facility) and permits the aggregate maximum limit of accounts receivable the SPVs can sell to be increased from $300 million to $350 million. 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. 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. 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. 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. - 43 - Table of Contents Debt Senior Facilities On March 12, 2024, Rackspace Finance Holdings, LLC ("Rackspace Finance Holdings"), Rackspace Finance, LLC ("Rackspace Finance"), the lenders and issuing banks party thereto and Citibank, N.A., as the administrative agent and collateral agent, entered into the credit agreement governing the FLSO Term Loan Facility, FLFO Term Loan Facility and Revolving Credit Facility (together, the "Senior Facilities") (the "First Lien Credit Agreement"). FLSO Term Loan Facility Rackspace Finance issued the FLSO Term Loan Facility in an aggregate principal amount of $1,687 million. The FLSO Term Loan Facility matures on May 15, 2028. 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. As of June 30, 2026, $1,602 million in aggregate principal amount of the FLSO Term Loan Facility remained outstanding. FLFO Term Loan Facility Rackspace Finance issued the FLFO Term Loan Facility in an aggregate principal amount $275 million. The FLFO Term Loan Facility matures on May 15, 2028. 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. As of June 30, 2026, $269 million aggregate principal amount of the FLFO Term Loan Facility remained outstanding. Revolving Credit Facility Rackspace Finance established the Revolving Credit Facility in an aggregate principal amount of $375 million of commitments. The Revolving Credit Facility matures on May 15, 2028. The Revolving Credit Facility includes a commitment fee equal to 0.50% per annum in respect of the unused commitments that is due quarterly. This fee is subject to one step-down based on the net first lien leverage ratio. 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. 3.50% FLSO Senior Secured Notes due 2028 On March 12, 2024, Rackspace Finance issued $267 million initial aggregate principal amount of 3.50% FLSO Senior Secured Notes. On April 2, 2024 and April 16, 2024, Rackspace Finance issued additional 3.50% FLSO Senior Secured Notes in an aggregate principal amount of $93 million and $4 million, respectively 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. 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. As of June 30, 2026, $248 million aggregate principal amount of the 3.50% FLSO Senior Secured Notes were outstanding. - 44 - Table of Contents Term Loan Facility On February 9, 2021, we amended and restated the credit agreement governing the $2,300 million senior secured first lien term loan facility (the "Term Loan Facility"). The Term Loan Facility matures on February 15, 2028. 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. As of June 30, 2026, $61 million aggregate principal amount of the Term Loan Facility remained outstanding. 3.50% Senior Secured Notes due 2028 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. 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. As of June 30, 2026, $43 million aggregate principal amount of the 3.50% Senior Secured Notes remained outstanding. 5.375% Senior Notes due 2028 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. During the six months ended June 30, 2026, we repurchased and surrendered for cancellation $36 million aggregate principal amount of the 5.375% Senior Notes for $15 million, including accrued interest and fees of $0.7 million. As of June 30, 2026, $89 million aggregate principal amount of the 5.375% Senior Notes remained outstanding. Debt covenants The FLSO Term Loan Facility, FLFO Term Loan Facility, and Term Loan Facility are not subject to a financial maintenance covenant. The Revolving Credit Facility includes a financial maintenance covenant that limits the super-priority net senior secured leverage ratio to a maximum of 5.00 to 1.00. The super-priority net senior secured leverage ratio is calculated as the ratio of (x) the total amount of consolidated super-priority senior secured debt for borrowed money, less unrestricted cash and cash equivalents, to (y) consolidated EBITDA (as defined under the First Lien Credit Agreement governing the Senior Facilities). However, this financial maintenance covenant will only be applicable and tested if the aggregate amount of outstanding borrowings under the Revolving Credit Facility and letters of credit issued thereunder (excluding $25 million of undrawn letters of credit and cash collateralized letters of credit) as of the last day of a fiscal quarter is greater than 35% of the Revolving Credit Facility commitments as of the last day of such fiscal quarter. Additional covenants in the Senior Facilities and Term Loan Facility limit our subsidiaries' ability to, among other things, incur certain additional debt and liens, pay certain dividends or make other restricted payments, make certain investments, make certain asset sales and enter into certain transactions with affiliates. - 45 - Table of Contents The Indentures contain covenants that, among other things, limit our subsidiaries' ability to incur certain additional debt, incur certain liens securing debt, pay certain dividends or make other restricted payments, make certain investments, make certain asset sales and enter into certain transactions with affiliates. These covenants are subject to a number of exceptions, limitations, and qualifications as set forth in the Indentures. Additionally, upon the occurrence of a change of control (as defined in the Indentures), we will be required to make an offer to repurchase all of the outstanding 3.50% FLSO Senior Secured Notes, 5.375% Senior Notes and 3.50% Senior Secured Notes, respectively, at a price in cash equal to 101.000% of the aggregate principal amount, plus accrued and unpaid interest, if any, to, but not including the purchase date. Our "consolidated EBITDA," as defined under our debt instruments, is calculated in the same manner as our Adjusted EBITDA, presented elsewhere in this report, except that our debt instruments allow us to adjust for additional items, including certain start-up costs, and to give pro forma effect to acquisitions, including resulting synergies, and internal cost savings initiatives. In addition, under the Indentures, the calculation of consolidated EBITDA does not take into account any changes in GAAP subsequent to the date of issuance, whereas under the Senior Facilities and Term Loan Facility, the calculation of consolidated EBITDA takes into account the impact of certain changes in GAAP subsequent to December 1, 2020 other than with respect to capital leases. As of June 30, 2026, we were in compliance with all covenants under the Senior Facilities, the credit agreement governing the Term Loan Facility, and the Indentures. Supplemental Financial Information In accordance with the 3.50% FLSO Senior Secured Notes Indenture, Rackspace Finance Holdings, Rackspace Finance and certain subsidiaries of Rackspace Finance (together with their restricted subsidiaries, the “New Credit Group”) are obligors under the 3.50% FLSO Senior Secured Notes. The following presents summarized financial information for the New Credit Group after eliminating intercompany transactions and balances among the New Credit Group. 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. Capital Expenditures The following table sets forth a summary of our total capital expenditures for the periods indicated: Six Months Ended June 30, (In millions) 2025 2026 Customer gear $ 31.0 $ 34.6 Data center build outs 4.0 0.9 Capitalized software and other projects 22.6 27.4 Total capital expenditures $ 57.6 $ 62.9 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. - 46 - Table of Contents Cash Flows The following table sets forth a summary of certain cash flow information for the periods indicated: Six Months Ended June 30, (In millions) 2025 2026 Cash provided by (used in) operating activities $ 21.0 $ (26.4) Cash used in investing activities $ (29.9) $ (31.2) Cash provided by (used in) financing activities $ (35.7) $ 64.2 Cash Provided by (Used in) Operating Activities 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. Net cash used in operating activities was $26 million in the six months ended June 30, 2026 compared to $21 million of net cash provided by operating activities in the six months ended June 30, 2025. The decrease in operating cash between periods was primarily driven by a reduction in cash proceeds related to accounts receivable sold of $50 million in the six months ended June 30, 2026 compared to an increase of $28 million in the six months ended June 30, 2025. In addition, there was a $75 million increase in cash paid for operating expenses in the six months ended June 30, 2026 compared to the six months ended June 30, 2025. These decreases in cash from operating activities were partially offset by an increase in cash receipts from customers between periods. Cash Used in Investing Activities Net cash used in investing activities primarily consists of capital expenditures to meet the demands of our customer base and our strategic initiatives. The largest outlays of cash are for purchases of customer gear, data center and office build outs, and capitalized payroll costs related to internal-use software development. Net cash used in investing activities increased $1 million, or 4%, in the six months ended June 30, 2026 compared to the six months ended June 30, 2025 primarily due to a $2 million increase in cash purchases of property, equipment, and software between periods. Cash Provided by (Used in) Financing Activities Financing activities generally include cash activity related to debt and other long-term financing arrangements (for example, finance lease obligations and financing obligations), including proceeds from and repayments of borrowings, and cash activity related to the issuance and repurchase of equity. Net cash provided by financing activities was $64 million in the six months ended June 30, 2026 compared to $36 million of net cash used in financing activities in the six months ended June 30, 2025. The change was primarily driven by a $180 million increase in borrowings on the Revolving Credit Facility, partially offset by an increase in debt repayments of $90 million between periods. Critical Accounting Policies and Estimates Our critical accounting policies and estimates have not changed from those described in our Annual Report under "Management's Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies and Estimates." For a description of recent accounting pronouncements, see Item 1 of Part I, Financial Statements - Note 1, "Company Overview, Basis of Presentation, and Summary of Significant Accounting Policies." - 47 - Table of Contents