Liquidity remains constrained as cash reserves dropped to $93.6 million in 2026Q1, while erratic working capital movements resulted in a $40.0 million cash outflow during the same period.
| Cash from Operations | 143.9M | 151.4M | 39.9M | 374.9M | 259.3M | 370.8M | 116.7M | 292.9M | 429.8M |
| Operating CF Margin % | - | 5.64% | 1.46% | 12.68% | 8.3% | 12.32% | 4.31% | 12.01% | 17.52% |
| Operating CF Growth % | -78.24% | 279.45% | -89.36% | 44.58% | -30.07% | 217.74% | -60.16% | -31.85% | - |
| Net Income | -146M | -225.8M | -858.2M | -837.8M | -804.8M | -218.3M | -245.8M | -102.3M | -470.6M |
| Depreciation & Amortization | 332.2M | 336M | 363M | 442.9M | 447.6M | 490.7M | 536.9M | 566.5M | 611M |
| Stock-Based Compensation | 33.1M | 45.1M | 63.4M | 65.4M | 69.5M | 75.4M | 74.5M | 30.2M | 20M |
| Deferred Taxes | 15.1M | 16.8M | -35M | -41.9M | -108.8M | -41.5M | -73.6M | -40.7M | -24.6M |
| Other Non-Cash Items | -25.5M | -27.6M | 568.9M | 521.2M | 722.7M | 94.5M | 109.8M | -21.7M | 316.2M |
| Working Capital Changes | -65M | 6.9M | -62.2M | 225.1M | -66.9M | -30M | -285.1M | -139.1M | -22.2M |
| Change in Receivables | -2.9M | 27.6M | 20.5M | 275.1M | -82.4M | -69.5M | -156M | -42.2M | -32.3M |
| Change in Inventory | 0 | 0 | 0 | 0 | 0 | -51.9M | -116M | 0 | 0 |
| Change in Payables | -79.3M | -26.4M | -22.2M | -44.2M | 82.4M | 88.1M | -7.4M | -32.7M | 51.2M |
| Cash from Investing | -61.1M | -58.4M | -86.6M | -96M | -97.9M | -69M | -128.4M | -386.5M | -348.3M |
| Capital Expenditures | -67M | -60.8M | -111.1M | -96.9M | -80.4M | -108.4M | -116.5M | -198M | -294.3M |
| CapEx % of Revenue | 2.48% | 2.26% | 4.06% | 3.28% | 2.57% | 3.6% | 4.3% | 8.12% | 12% |
| Acquisitions | 0 | 0 | 16.9M | 0 | -7.7M | 31.3M | -9.5M | -299.3M | -65.2M |
| Investments | - | - | - | - | - | - | - | - | - |
| Other Investing | 5.9M | 2.4M | 7.6M | 900K | 5.2M | 8.1M | -3.3M | 1.3M | 2.4M |
| Cash from Financing | -118.1M | -134.6M | -3M | -312.8M | -187M | -132.2M | 29.9M | -79.2M | -53.7M |
| Debt Issued (Net) | -169.3M | -69.9M | 55.1M | -271.6M | -139.2M | -180.4M | -648.1M | -32.4M | -56.9M |
| Equity Issued (Net) | -700K | 500K | -4.3M | -1M | -31M | 61.1M | 655.7M | -3.3M | 0 |
| Dividends Paid | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Share Repurchases | -1.2M | 0 | -4.3M | -1M | -31M | 0 | -2.1M | -3.3M | 0 |
| Other Financing | 51.9M | -65.2M | -53.8M | -40.2M | -16.8M | -12.9M | 22.3M | -43.5M | 3.2M |
| Net Change in Cash | -35.7M | -39.1M | -52.7M | -31.7M | -31.4M | 167.3M | 21M | -171.1M | 23.3M |
| Free Cash Flow | 76.9M | 90.6M | -71.2M | 278M | 178.9M | 262.4M | 200K | 94.9M | 135.5M |
| FCF Margin % | 2.85% | 3.37% | -2.6% | 9.4% | 5.73% | 8.72% | 0.01% | 3.89% | 5.52% |
| FCF Growth % | 49.32% | 227.25% | -125.61% | 55.39% | -31.82% | 131100% | -99.79% | -29.96% | - |
| FCF per Share | 0.31 | 0.38 | -0.32 | 1.29 | 0.85 | 1.26 | 0.00 | 5.79 | 8.26 |
| FCF Conversion (FCF/Net Income) | -0.53x | -0.67x | -0.05x | -0.45x | -0.32x | -1.70x | -0.47x | -2.86x | -0.91x |
| Interest Paid | 40.5M | 62.7M | 103.6M | 213.9M | 177.9M | 178.5M | 262.8M | 265.3M | 262.5M |
| Taxes Paid | -1.5M | 1.3M | 10.8M | 11.9M | 10.5M | 5.5M | 15.6M | 7.2M | 13.9M |
Liquidity and debt constraints
As reported in recent financial statements, Rackspace Technology exhibits a persistent disconnect between net income and operating cash flow, with the OCF/NI ratio frequently oscillating between negative values and extreme outliers, such as the 0.61 ratio observed in 2026Q1, indicating significant non-cash accounting distortions.
The wide variance between net income and operating cash flow suggests that reported earnings are heavily influenced by non-cash charges, likely including substantial depreciation and amortization from legacy infrastructure. Investors should monitor this divergence, as it implies that net income may not be a reliable proxy for the company's actual ability to generate cash from its core service operations.
Based on the company's quarterly filings, free cash flow margins have demonstrated extreme instability, swinging from a -17.1% deficit in 2024Q1 to a positive 8.2% peak in 2025Q4, which underscores the difficulty in maintaining consistent cash generation amidst a shifting and declining revenue base.
The erratic nature of free cash flow suggests that the company's operational cash generation is highly sensitive to working capital fluctuations and project-based service cycles. This lack of predictability complicates long-term capital planning and may necessitate further reliance on external financing to cover operational gaps.
According to recent SEC filings, Rackspace Technology's working capital movements have been highly erratic, with a notable $40.0 million cash outflow in 2026Q1 following a $42.7 million inflow in 2025Q4, reflecting significant volatility in the timing of customer collections and vendor payment obligations.
These sharp swings in working capital suggest that the company lacks a stable cash conversion cycle, potentially due to the mismatch between payment terms for hyperscaler cloud services and the collection of professional service fees. Such volatility warrants further investigation into the company's credit management and vendor payment policies.
As indicated by the provided financial data, Rackspace Technology continues to deploy capital into infrastructure, with CapEx/Revenue ratios reaching as high as 5.6% in 2024Q2, which appears to be a significant drag on cash flow given the company's ongoing transition toward an asset-light service model.
The persistent level of capital expenditure suggests that the company is still burdened by the maintenance requirements of its legacy private cloud assets. Investors should monitor whether these investments are truly growth-oriented or merely necessary to prevent further service degradation in the legacy business.
Based on the historical data provided, the cumulative gap between net income and operating cash flow remains substantial, suggesting that the company's reported profitability has consistently failed to translate into meaningful cash accumulation over the observed multi-quarter period, raising questions about long-term business sustainability.
This persistent divergence implies that the company's accounting earnings may be masking a more challenging cash reality, potentially driven by high stock-based compensation and recurring impairment charges. The inability to bridge this gap suggests that the business model may be structurally incapable of generating organic cash growth without significant operational restructuring.
Quick answers to the most common questions about buying RXT stock.
Rackspace Technology, Inc. (RXT) generated $151.4M in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
Rackspace Technology, Inc. (RXT) generated $90.6M in free cash flow in 2025. Free cash flow is the cash left over after capital expenditures, which can be used to pay dividends, repurchase shares, or pay down debt.
Rackspace Technology, Inc. (RXT) spent $60.8M on capital expenditures in 2025. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.