Rackspace Technology Q2 2023 Earnings Call Transcript

Quartr
Provided by Quartr
August 8, 2023

There are 7 speakers on the call.

Operator

Good day and thank you for standing by. Welcome to the Rackspace Second Fiscal Quarter 2023 Earnings Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer session. You will then hear an automated message advising your hand is raised.

Operator

Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Sagar Hebbar, Head of Investor Relations. Please go ahead.

Speaker 1

Thank you, And welcome to Rackspace Technologies Second Quarter 2023 Earnings Conference Call. I am Sagar Hebar, Head of Investor Relations. Joining me on today's call are Amar Malatera, our Chief Executive Officer and Bobby Moulub, our Chief Financial Officer. As a reminder, certain comments we make on this call will be forward looking. These statements involve risks and uncertainties, which could cause actual results to differ.

Speaker 1

A discussion of these risks and uncertainties is included in our SEC filings. BlackSpace Technology assumes no obligation to update the information presented on the call except as required by law. Our presentation includes certain non GAAP financial measures and adjustments to these measures, which we believe provide useful information to our investors. In accordance with SEC rules, we have provided a reconciliation of these measures to their most directly comparable GAAP measures in the earnings press release and presentation, both of which are available on our Investor Relations website. Please note that unless stated otherwise, All results are presented as non GAAP except revenues.

Speaker 1

I will now turn the call over to Omar for an update on the business.

Speaker 2

Thank you, Sagar, and welcome to Rackspace. Fiscal Q2 2023 exceeded our guidance for both revenue and EPS. This is the 4th consecutive quarter in which we exceeded our expectations. As we updated last quarter, we have reorganized The company and are focusing on our 2 business unit operating model and strategy, shifting to a more profitable business mix, Right sizing our cost structure and building our product offerings to position Rackspace for long term success. We are already seeing the benefits of organizing into 2 separate business units.

Speaker 2

Our increased focus in the Private Cloud business Has resulted in solid pipeline expansion and bookings growth. In public cloud, we are starting to see some early positive signs In improved bookings mix, although it will take some time to work through this transition. The reorganization has also helped Drive productivity improvements and optimize our expenses. I'm confident we have the right operating structure, people and capabilities To achieve this turnaround, the progress achieved to date has been meaningful as our focus is on long term sustained profitable growth. While we are making progress internally, overall market conditions are consistent with the first half of the year With companies continuing to prioritize cost optimization, however, recently, generative AI has emerged as a top priority for As they're looking to understand how to leverage and benefit from this technology.

Speaker 2

The AI marketplace has propelled Sibyl took out computing has unleashed innovation. At the same time, the volume and variety of data explosion Have provided the foundation for cutting edge machine learning and deep learning techniques to thrive, driving unprecedented and exciting opportunities for businesses across All industries. As a pure play global multi cloud solutions company, Rackspace unique proposition It is our expertise and experience in building and operating an AI aware multi cloud infrastructure And infrastructure aware AI solutions, combined with our commitment to open source and the Racker DNA of open innovation, We are the right company at the right time to accelerate the adoption of AI to commercial, mid market and enterprise customers. In June, we launched Foundry for AI by Rackspace called FAIR, a global spin up dedicated to accelerating the adoption of responsible AI solutions across all industries. With FAIR, we have tapped into open innovation with our vast partner ecosystem.

Speaker 2

For instance, we are combining forces with Google's AI Cloud Center of Excellence and expanding our partnership with AWS to help our customers realize AI's full potential. We also recently announced the launch of our hosted AI reference architecture powered by NVIDIA and Dell Technologies. This partnership gives Rackspace customers a simplified path to build, deploy and operate enterprise AI solutions across public clouds And the Rackspace Private Cloud. In less than 2 months since the launch, we are already seeing significant early interest from existing We currently have nearly 250 leads or 50 opportunities in the pipeline and executing on 3 global generative AI projects. We're also using FAIR and its capabilities to transform Rackspace Internal operations using AI.

Speaker 2

As an example, we launched Rackspace intelligent co pilot for the enterprise, And engine design to streamline and enhance the workflow of our knowledge workers. As we move into this rapidly evolving world of AI, We want to ensure we have an AI ready workforce at Rackspace. We launched Fairlearn, an innovative AI literacy program It combines the power of massive open online courses or mocks and digital credentialing To ensure that our actors across our entire company have the skills and knowledge to capitalize on AI, we launched Fairlearn in late July To get our entire workforce AI ready in 6 months, in the 1st 2 weeks since the launch, we have 12% of our global workforce certified as AI ready. This demonstrates a key element of the Racker culture, the relentless commitment to continuous learning and the desire to deliver the best outcomes for our customers. Now turning to 2nd quarter updates on our business units.

Speaker 2

In public cloud, we continue to implement our strategy of transitioning from low value infrastructure resale towards higher value added services. In Q2, we launched several new capabilities. For example, we initiated a tri partner collaboration with AWS Entering Micro to ensure a secure and streamlined AWS cloud migration delivered by Rackspace's plastic engineering offering. We also expanded our advisory offerings to help customers jump start their 0 Trust strategy, streamline migrations to Google Cloud and expanded our investment in Azure Landing Zones. In addition, we released several new features supporting our modern cloud operations Offerings for multi cloud that range from architectural reviews to customer self-service options.

Speaker 2

We continue to evolve our go to market strategy, particularly in Americas with a sharper focus on our market segmentation and product offerings. We also recently hired Vivek Patra as our Public Cloud Chief Revenue Officer, an experienced go to market leader with a Strong track record of driving growth in digital and cloud services. While the public cloud services market remains challenging, We are seeing early signs of stabilization. We recently won a cloud strategy and implementation program with a leading international insurance company, As well as a cloud transformation project with a multinational beverage and retail company. We also extended our relationship for another 5 years with a large Canadian Government Financial Services Agency.

Speaker 2

Now turning to private cloud. Demand for private cloud solution remains robust, especially around workloads that may not operate efficiently in public cloud and applications requiring data sovereignty, Especially in verticals such as healthcare, driving strong growth in both pipeline and bookings. We significantly expanded our private cloud new product releases this quarter. We enriched our VMware based software defined data center platform with enhanced management, Security, data protection and ransomware prevention. We scaled our private cloud storage and data freedom offerings to include block, File and most recently, Object Storage, rolling it out to an additional 6 data centers in the U.

Speaker 2

S. And Europe. We also published a reference architecture for AI Cloud as part of our partnership with NVIDIA and Dell Technologies. Demand in healthcare has been strong and we won businesses with 2 leading healthcare providers, 1 to host their core electronic medical record application and the other to build and operate their high performance compute environment for genomic research. We expect the healthcare vertical to show solid growth in the second half of the year and into 2024.

Speaker 2

I'm pleased with the renewed focus on both innovation and go to market execution in our Private Cloud business. As I mentioned last quarter, we also hired 2 seasoned technology leaders who have hit the ground running: Lance Weaver, As a Private Cloud Chief Product and Technology Officer and Maureen Srini, as the Private Cloud Chief Revenue Officer. Now let me wrap up by reiterating our top four priorities, which we are focused on to turn around our company's financial performance. 1st, grow our public cloud services business atorabovemarketrate. 2nd, reverse the decline In private cloud and position this business to capitalize on growth opportunities in an attractive market.

Speaker 2

3rd, build a highly efficient cost structure and ultimately drive sustained growth in operating profit and free cash flow. With that, I will turn it over to Bobby.

Speaker 3

Thank you, Amar. I will cover the total company results for the Q2, then share some details on our segment performance, followed by our Q3 guidance. In addition to the benefits Amar described in our shift to the 2 BU model, as mentioned in the last earnings call, we have uncovered opportunities for further efficiencies in both businesses. We've also been able to more tightly manage working capital, specifically driving a more granular focus on collections. We continue to pursue other cost reduction opportunities, while balancing that with investment in the market opportunity ahead of us.

Speaker 3

Total company GAAP revenue of $746,000,000 was above the high end of our guidance, down 3% year over year. Total net revenue was $447,000,000 down 10% year over year with declines in both public and private cloud. Gross profit of $163,000,000 was 22% of GAAP revenue and 37% of net revenue. On our last call, we indicated that operating profit this year will trough in the 2nd quarter with sequential quarterly profit improvements anticipated for the remainder of 2023, driven primarily by cost reduction and some improvement in mix. We are on track.

Speaker 3

We reduced overhead with SG and A down 7% year over year and 3% sequentially. Given this, operating profit was $39,000,000 also above the high end of our guidance. This was down 60% year over year, primarily due to revenue declines in our Private Cloud business unit. Operating margin was 5% of GAAP revenue and 9% of net revenue. Loss per share was $0.06 which was better than our guided range of $0.07 to $0.09 loss per share.

Speaker 3

Cash flow from operations was $38,000,000 and free cash flow was $14,000,000 in the 2nd quarter. These results were in line with expectations due to our strong working capital management. In second quarter, we deployed $47,000,000 of cash Sourced from our revolving credit facility to opportunistically repurchase another $142,000,000 of our senior unsecured notes in the marketplace. Through July year to date, we have repurchased a total of $222,000,000 of senior unsecured notes using $77,000,000 of cash. We continue to monitor and assess further opportunities to deploy capital in accretive downside protected ways for shareholders.

Speaker 3

Total CapEx for the 2nd quarter was $45,000,000 with a CapEx intensity of 6%. We continue to expect CapEx to be lower for the next couple of quarters and end up in our typical 5% to 7% CapEx intensity range for the full year. Turning to our segment results. For public cloud, GAAP revenue of $435,000,000 was up 3% year over year, driven by our infrastructure resale business, partially offset by declines in services. Public cloud net revenue, which includes our public cloud services revenue and infrastructure resale profit was $135,000,000 down 7% year over year.

Speaker 3

Services revenue was down 5% year over year given the tightening of discretionary spending and customer optimizations. We expect our pivot to a stronger services led focus to pay dividends as the macro environment improves and we mature our go to market. Gross margin for our public cloud segment was 11% of JAP revs, down 5 percentage points year over year and 35% of net rev. Margin compression was driven by lower volumes across both services and infrastructure resale. Segment operating profit in Public Cloud was $17,000,000 which was 4% of total segment revenue and 13% of net revenue.

Speaker 3

In Private Cloud, GAAP revenue for Q2 was $11,000,000 which includes legacy OpenStack revenue of $32,000,000 Year over year, total private cloud revenue was down 11%. The Private Cloud segment revenue decrease resulted from customers rolling off full generation private cloud offerings, expected decline in legacy OpenStack offerings, as well as the impact from the December hosted exchange ransomware incident. Private cloud gross margin was 37%, down 10 percentage points year over year And segment operating profit was $87,000,000 at an operating margin of 28%, down 10 percentage points. The margin compression reflects the fixed costs associated with revenue run off in this business, partially offset by cost efficiencies. Overall, the quarter was in line with our expectations and consistent with our plan to improve our cost structure and transform our business mix to higher margin revenues over time.

Speaker 3

During this transformation, we will continue to invest in innovative technologies in key market verticals, as well as focus on cash management and continue to drive efficiencies. Now, on to our Q3 guidance. We expect the 3rd quarter GAAP revenue to be approximately $722,000,000 to $732,000,000 Total operating profit is expected to be $43,000,000 to $47,000,000 and loss per share of $0.04 to $0.06 From a segment perspective, we expect public cloud revenue of $428,000,000 to $433,000,000 And private cloud revenue of $294,000,000 to $299,000,000 Our tax rate is expected to be 20 percent and other income and expense of approximately $58,000,000 to $60,000,000 in expenses. The share count is expected to be around 2 To 217,000,000 shares. As we noted last quarter, we expect Q3 cash flow from operations and free cash flow to be positive.

Speaker 1

Sagar, over to you. Thank you, Bobby. Let us begin the question and answer session. We ask everyone to limit discussion to one question and one follow-up. Please go ahead.

Operator

Our first question comes from the line of Kevin McVeigh with Credit Suisse. Kevin, your line is now open.

Speaker 4

Great. Thanks so much and really congratulations on the results given the transformation. Hey, I don't know where best to start. Amar, you talked about the generative AI and it seems like that's a massive opportunity. Is there any way to frame what that could mean to the enterprise overall?

Speaker 4

And did that contribute To the beat, I mean, I know there was a series of product introductions intra quarter, but just a really, really strong beat and maybe I'll frame the puts and takes on the beat and if again, if the generative AI impacted that or if there's a way to think about what that can mean to the enterprise longer term.

Speaker 2

Okay. Thanks, Kevin, and thanks for the question. And Bobby will cover the BEAT in the quarter. I would say generative AI did not And Bobby will go through the details there for you, Kevin. Generative AI can be a massive opportunity for us, Kevin.

Speaker 2

When you take a look at generative AI and AI in general, it is all workload. We are a multi cloud solutions company And we are very workload centric. So what generative AI does, it gives us an opportunity to go after this Massive workloads. Generative AI is going to be very pervasive. It's going to impact all Businesses, all functions and the amount of workloads that will get created will be absolutely massive.

Speaker 2

Now think about generative AI, the way we think about it is in 3 layers, right? One is the infrastructure layer. The second is application of data and third is application. So when you think about the infrastructure layer, it has compute, it has storage and it has networking. And when you look at compute, it has both the GPUs as well as CPUs.

Speaker 2

For example, we believe that all the training models will run on GPUs, When it comes to inferences where most of the monetization will happen, it will be a combination of both CPUs as well as GPUs. Storage is also very important because data has to be stored and then and networking component also is critically important because there'll be ultra low latency and you have to improve the performance And we as we have about 2 decades of experience in optimizing infrastructure for any workload. So we are very well positioned to build an AI aware infrastructure, both on the private cloud side and also partner with the public cloud Hyperscale are partners on the public cloud side. Data is another big opportunity for us as well as for the industry. Now, you can do all the plumbing you with the infrastructure, but if you do not have water flowing through the plumbing, in this case data, it's useless.

Speaker 2

So, We have a sizable data practice. We can help customers to basically migrate data, create the right data architecture. We can also help them in data reclassification, so good opportunity there. And 3rd, of course, Kevin, is application. It's picking those right models, On the issue models to train and those since we have good experience in building AI Workload aware infrastructures, we can we also have experience in building an infrastructure aware TI applications.

Speaker 2

So it is really helps us From that perspective, we have a lot of experience in multi cloud and we believe that this is a net new workload That will not run-in on prem and most of it will run-in a multi cloud infrastructure, which is public or private. And that's where we are

Speaker 5

going to capture it.

Speaker 2

When you look at our strengths, we have 20,000 customers in commercial mid market and enterprise that we can tap into. We have 6,500 employees, 6,000 of them are technologists with 10,000 plus certification. As I've mentioned in my prepared remarks, we have launched AI Learn. About 12% of our workforce is AI ready in the last 2 weeks or so. And we have an ambitious goal in getting everyone AI ready in the next 6 months.

Speaker 2

And more importantly, I think we also have the partner ecosystem And we continue to add to that partner ecosystem with the announcements that we have made. So we feel very, very confident that if this Takes off and which we believe will, it will definitely be a positive for Rackspace. Now, we are not counting on this To turn around the business, I want to be very clear. Our turnaround plans are based on the market opportunity we have in public and private cloud Excluding AI, we have a very good plan that we are executing on and I'm very pleased with Where we landed in Q2. So talking about the beat, let me turn it over to Bobby, so he can go over where we outperformed.

Speaker 2

Yes.

Speaker 3

Thanks, Amar. So Kevin, the defeat was primarily in our private cloud business. We're essentially we were able to push out run offs from customers on old generation private cloud offerings. And then we also had a bit of conservatism built into the model as well. The public cloud business came in line with our estimates, Even though as the macro environment was pretty much constant from Q1.

Speaker 3

So overall, I'd say we are pleased with our execution in the quarter and the beat that we had.

Speaker 4

That's great. And then just one quick follow-up because you've just done a really, really opportunistic job of retiring some of that debt. But if I look at the cadence, if my math's right, it looks like you committed about $10,000,000 in the first quarter Retired $10,000,000 you committed $23,000,000 of capital in the Q1, dollars 142,000,000 in the second and then $57,000,000 After the Q2, I guess, Bobby, is there any way to think about what the potential capacity is to take down even more of those senior unsecured? Just again, it's a really, really nice use of capital, particularly given where and it looks like your average is somewhere around $0.35 to $0.30 to $0.43 Is where you've been taking that debt down?

Speaker 3

Correct, correct. Look, we're optimistic with that, right? So our priorities, Our capital allocation priorities remain unchanged. As Martin mentioned, right, our party is around investing in the business organically and that's what we're focused on. We were opportunistic in what we did this quarter.

Speaker 3

We saw the debt trading at very attractive rates. And so we executed on exactly what you just talked about. Could we be doing that again in the future? Possibly. But we're more focused on the operations.

Speaker 3

If the debt continues to trade at those levels It's attractive. We'll look at it. But we also want to maintain our liquidity, right? It's a tough macro. So we want to be conscious of that.

Speaker 3

I want to make sure we have dollars to invest back in the business and turn around the business. So that's really our focus and that's kind of what we're looking we're out looking for the rest of the year here.

Speaker 5

Congrats again.

Speaker 3

Thank you, Ken.

Operator

Our next question comes from the line of Bradley Clark With BMO.

Speaker 5

Hi. Yes. Thanks for taking my question. I know you That Generative AI didn't contribute to the revenue beat in the quarter. But is there anything you can talk about related to bookings or customer The conversation related to generative AI and specifically, what are you thinking in terms of timing or obstacles that organizations have to go through, particularly on the data side before they can really start implementing large scale GenAI projects.

Speaker 5

Thank you.

Speaker 2

Sure. Thank you very much, Ali. I think, listen, as I said, I mentioned to Kevin, we are very optimistic about the opportunity ahead For us with generative AI, now the deals that we have been closing are modest in size From both revenue and bookings perspective, but that's what we expect, right? Generally, AI is at its infancy. It's evolving very rapidly.

Speaker 2

We are at a very early phase, which we call as the discovery and the incubation phase, Paddy. Discovery It's ideation phase where we basically have consulting services and workshop with our customers, identifying the use cases. We have identified in all about 512, 113 use cases in the last 2 months across multiple Functions and across multiple industries, roughly around 12 domains. So that's the early phase. Once we identify the use cases for the customers, the second phase we call as the incubation phase, where we help the customers Look at different foundational models, look at whether they have the right data architecture and help them also I'll work out the integration with their current processes.

Speaker 2

So that's the incubation phase. So most of the projects that we are seeing Are in those early phases of discovery or ideation and incubation. I think when this moves into what we call utilization, which is moving into the production phase, that's where we will start seeing the scaling in terms of the deal sizes, etcetera. And that's the area where there's a lot of monetization. That's why we are so excited about it, because ultimately these workloads So it's workloads and workloads have to

Speaker 5

run on infrastructure. And there will be

Speaker 2

a massive requirement of infrastructure plus compute storage and networking. And that's what we are very good at doing. So, listen, I think we have in less than 2 months, Just to give you a little bit of more color here, as I mentioned in my prepared remarks, we have roughly about 250 leads in the pipeline. We have qualified opportunities that are over 50 and we have closed 3 deals across multiple industries. And in fact, we are closing 2 more deals by the end of this week.

Speaker 2

So very good traction. I think the key hurdle for any customer It's identifying those use cases. And GenAI, as foundation as it is, it is going to impact Every single function. So there will be massive number of use cases. So identifying those use cases, Then the biggest challenge is do they have the data ready?

Speaker 2

And the 3rd challenge is where are they going to run both their training models as well as inferences. And that's where we believe it's going to be on multi cloud infrastructure, both public cloud as well as private cloud.

Speaker 5

Appreciate all the insights. Thank you.

Operator

That is star one one. Our next question comes from the line of Frank Louthan with Raymond James.

Speaker 6

Great. Thank you very much. I just wanted to check, was there anything sort of one time in the quarter that helped the revenue? Just curious about that relative to the sequential guide. And then separately, can you give us

Speaker 1

an idea of what sort of book

Speaker 6

number of bookings or the percentage of bookings from new logos? And where are you as far as bookings coming in that are More AI centric these days, is that a material part of your bookings these days? Thank you.

Speaker 3

Frank, let me take the one time question. No, there were Material one timers. This was really around what I just said around private cloud business, where we were essentially be able to push out the runoff from customers They're on some of our old generation private cloud offerings. And then we did have a little bit of conservatism built in that I mentioned. So that's essentially what drove that beat.

Speaker 3

There's nothing material in terms of a one timer.

Speaker 2

Yes. So in terms of bookings, Frank, I'm quite pleased with how the quarter panned out. We had a good quarter given the macro backdrop as well as with all the changes we are making internally from a reorg perspective. If you look at our 2nd quarter bookings, we were up sequentially in both the businesses, private cloud as well as public cloud. In private cloud, our increased focus for this 2 BU structure has also resulted in a strong sequential growth in bookings and it's Conveniently coming in from international, but we do expect that trend to continue even in Q3.

Speaker 2

We also saw strong growth in private cloud pipeline. In fact, it was significant growth. In particular, we are experiencing solid interest in one of our key verticals such as healthcare. Now in public cloud, we did improve bookings sequentially. So we did see a double digit growth also in bookings in the second quarter With an uptick in services bookings, as you know, we are moving towards the higher margin services business and shifting away from infrastructure.

Speaker 2

Now, this all takes time, but we remain focused on making that shift. And our customers many of our Customers in the public cloud side are also focused on cost optimization. So, we as you think about Q3, we expect another quarter, Next quarter to be a sequentially growth quarter for us in bookings across the company.

Speaker 6

Does that sound fine? Yes. And with that on the cost optimization, are you seeing anything going the other direction where are Any segments of your business looking to cost optimize to pull back on some services or are they or is it more coming to you to try And save money that way.

Speaker 2

Yes. I think cost optimization also plays to a strength. We have cost optimization Offerings that are helping public cloud customers in their cost optimization. We have 2,000 plus public cloud customers. We have good view of their usage.

Speaker 2

We can't predict the usage, but we know where they are using their infrastructure. So we do help in cost optimization. And so that is also helping. Let me give you an overall color on the demand environment. I think when we look at the demand environment across, it's not gotten worse.

Speaker 2

It's consistent with the first half of the year. Different dynamics in public versus private cloud, Frank. In public cloud, as we talked about, customers continue to optimize their cloud infrastructure spend. Cloud services spend typically lag infrastructure, so we continue to see softness in services demand. And we are not only companies seeing that, every company And the services ecosystem is seeing the same challenge.

Speaker 2

However, we have started seeing better engagement from our customers. We believe that demand will recover in the next 2 to 3 quarters. And when it does, we will be there to capture it As we are continuing to see an increase in engagement, we also fine tune our go to market, specifically in Americas. Now in private cloud, the dynamic is a little bit different, Frank. Customers are looking to move out of their data centers, reduce their CapEx and OpEx investments And also looking at moving workloads that are not operating efficiently in public cloud.

Speaker 2

And this has created A little bit of sort of a momentum for us and it's a tailwind. And given our focus, we are showing up in many opportunities That we never had before. So this is overall good for a private cloud business. So 2 different dynamics. I can also give you some color on verticals, because we are focused on 3 verticals as we reorganize the business and we'll expand it in the future.

Speaker 2

Those three verticals, healthcare specifically, as I mentioned, solid momentum in healthcare as customers are grappling with Reduction in the revenue per patient and the cost per patient going up, so they are trying to do more with less. And these are mainly regulated workloads, which are moving out of the data centers and we're capturing it in a private hosted environment. We also have a vertical in private equity. We basically serve about 18 funds, about 150 portfolio companies. And we are seeing good traction and momentum in the private equity vertical too, where most of the private equity firms are driving value acceleration.

Speaker 2

And the 3rd vertical, which has been a positive surprise for us is our public sector vertical in the U. S. That's a vertical that beat their bookings target for first half. They grew their bookings year on year and we Expect the bookings actually to actually sequentially grow from Q2 to Q3.

Speaker 6

Great. That's good color. I really appreciate it. Thank you.

Operator

Our next question comes from the line of Rayid Alfaoumi with Bank of Hope.

Speaker 5

Hi, good afternoon. Congratulations on a good quarter. I have two questions. One relates to The overall amount of debt, just wanted to get some color on your finance leases And on your operating leases, if that exposure is still about the same, as of Q1, it was about $534,000,000 for both of those projects and I was just if that was reduced at all?

Speaker 3

That is about the same. Those are the right estimates, not materially reduced from Q1

Speaker 2

with respect to that.

Speaker 5

Thank you. My other question is a little hypothetical, but I was wondering if you ever expect Further equity support from some of the lead owners, say, Apollo, Did you ever factor that in as far as your ongoing planning?

Speaker 2

So, listen, I think I cannot disclose that. But listen, at the end of the day, we are a publicly traded company. So your question is whether we will get any further equity support from our sponsors. Is that the question?

Speaker 3

I think we lost them there.

Speaker 2

Yes. Okay. Let's go to the next question.

Speaker 5

We can take the next question, if there are any other questions.

Operator

We have no further questions in queue at this time.

Speaker 1

Thank you, Liz. If you did not get to your question or if you have a follow-up, please email us at irracpay.com. Thank you everyone for joining us and have a great evening.

Operator

This concludes today's conference call. Thank you for participating. You may now disconnect.

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Rackspace Technology Q2 2023
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