Is the business good?
How good a business is RXT?
Rackspace Technology, Inc. earns −4.5% on the capital it employs against a 9.0% cost of capital, so growth costs more than it returns.
−4.5%
Return on invested capital · cost of capital 9.0% · 14 points below what the capital costs: growth destroys value
- Operating margin
- −3.0%
Operating margin · Software - Infrastructure median 6.1% · 12 months to Q1 2026
- Share count, year on year
- +7.7%
Share count, year on year · shareholders own a smaller slice than a year ago
- Gross margin
- 18%
Gross margin
| Year | Operating margin |
|---|---|
| FY2020 | 0.91% |
| FY2021 | −0.08% |
| FY2022 | −22% |
| FY2023 | −30% |
| FY2024 | −33% |
| FY2025 | −3.8% |
Details›
- Gross margin12 months to Q1 2026
- 18%
- Operating margin12 months to Q1 2026
- −3.0%
- Net margin12 months to Q1 2026
- −5.4%
- Free cash flow margin
- 2.9%
- Revenue, trailing twelve months
- $2.70B
- Free cash flow, trailing twelve months
- $77M
- Net income, trailing twelve months
- −$146M
- Return on invested capitaloperating profit after tax ÷ debt + equity − cash
- −4.5%
Margins, capital and share counts from the statements as filed with the SEC; cash conversion from the cash flow statement.
Software - Infrastructure
Ranks #7 of 78 by Smart Score