Rackspace Technology cut its fiscal 2026 revenue forecast by $150 million（約240億円） and lowered profit outlooks, citing a strategic withdrawal from low-margin businesses and industry shifts as major cloud providers bypass resellers. The cloud operator's stock fell over 10% despite announcing a partnership with Palantir Technologies to deploy AI platforms, indicating that investor concern over shrinking margins outweighed the technical validation the deal provides.
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Rackspace Technology cut its fiscal 2026 revenue guidance to $2.45 billion（約3900億円）–$2.55 billion（約4100億円）, down from $2.6 billion（約4200億円）–$2.7 billion（約4300億円）, citing a retreat from low-margin businesses and supply chain pressures. The company also lowered adjusted EBITDA expectations to $285 million（約460億円）–$295 million（約470億円） from $305 million（約490億円）–$315 million（約500億円）. Shares fell over 10% on Thursday despite the company announcing a partnership with Palantir Technologies to deploy its Foundry and AIP platforms.
Why it matters
The steep $150 million（約240億円） top-line reduction reflects Rackspace's struggle to compete as major cloud providers (hyperscalers) increasingly bypass middlemen and migrate customers directly, eroding the resale business that Rackspace has relied on. The company is exiting low-margin colocation and hosting services, signaling that profitability now takes priority over growth—a shift that concerns investors even as the Palantir deal signals technical capability.
What to watch
For Q2 fiscal 2026, Rackspace expects revenue of $641 million（約1000億円）–$649 million（約1000億円）, below the $657 million（約1100億円） consensus estimate, and an adjusted loss per share of $0.08–$0.11. Rackspace has already secured roughly 400 Palantir certifications and closed its first joint deployment in under two months.
Rackspace's guidance cut exposes a structural challenge in the cloud infrastructure market: as major cloud providers grow larger and more capable, they are consolidating customer relationships and reducing the role of resellers and middlemen. The company's decision to exit low-margin resale operations and colocation services—which account for a combined $150 million（約240億円） of the guidance cut—reflects management's recognition that competing on volume in these segments is no longer viable. The public cloud segment alone absorbed a $125 million（約200億円） reduction, driven explicitly by hyperscaler bypass dynamics.
Yet Rackspace is attempting to reposition higher up the value chain. The Palantir partnership, which deploys advanced AI and data platforms into mid-market and regulated environments, suggests the company believes it can compete where customization, compliance, and integration matter more than commodity infrastructure pricing. The rapid pace of early execution—400 certifications and a first deployment in under two months—demonstrates technical readiness. However, the market's immediate 10% sell-off indicates that investors view the short-term revenue and margin headwinds as more material than the long-term strategic opportunity the partnership might unlock. The $0.08–$0.11 adjusted loss per share forecast for Q2 underscores that profitability recovery will take time.
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