Share-Based Compensation

3 Months Ended

Mar. 31, 2026

Share-Based Payment Arrangement [Abstract]

2020 Incentive Plan

During the three months ended March 31, 2026, we granted 1.3 million restricted stock units (“RSUs”) under the Rackspace Technology, Inc. 2020 Equity Incentive Plan (the “2020 Incentive Plan”) with a weighted-average grant date fair value of $2.19. The majority of the RSUs were granted as part of our promotion and recruitment process and vest ratably over a three-year period, subject to continued service.

Share-Based Compensation Expense

Total share-based compensation expense is comprised of the following equity and liability classified award amounts:


	Three Months Ended March 31,
(In millions)	2025		2026
Equity classified awards	$	7.6	$	3.8
Liability classified awards	4.4		2.8
Total share-based compensation expense	$	12.0	$	6.6

Total share-based compensation expense recognized was as follows:


	Three Months Ended March 31,
(In millions)	2025		2026
Cost of revenue	$	1.8	$	0.9
Selling, general and administrative expenses	10.2		5.7
Pre-tax share-based compensation expense	12.0		6.6
Less: Income tax benefit	(2.5)		(1.4)
Total share-based compensation expense, net of tax	$	9.5	$	5.2

As of March 31, 2026, there was $22.2 million of total unrecognized compensation cost related to RSUs, performance stock units, stock options, and the ESPP, which will be recognized using the service period or over our best estimate of the period over which the performance condition will be met, as applicable. Additionally, as of March 31, 2026 there was $7.2 million of total unrecognized expense related to long-term incentive cash awards, which will be recognized over the remaining service period. The expense ultimately recognized is dependent on the fair value of the award as of the end of the performance periods.