Segment Reporting (Tables)
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6 Months Ended |
Jun. 30, 2026 |
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| Segment Reporting [Abstract] |
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| Schedule of Reconciliation of Revenue from Segments to Consolidated |
The table below presents revenue and segment operating profit by reportable segment and a reconciliation of consolidated segment operating profit to consolidated loss before income taxes for the three and six months ended June 30, 2025 and 2026. | | | | | | | | | | | | | | | | | | | | | | | | | Three Months Ended June 30, | | Six Months Ended June 30, | | (In millions) | 2025 | | 2026 | | 2025 | | 2026 | Public Cloud | | | | | | | | Revenue | $ | 416.6 | | | $ | 406.8 | | | $ | 832.2 | | | $ | 850.2 | | Third party infrastructure (1) | (324.3) | | | (322.3) | | | (650.7) | | | (676.2) | | Other cost of revenue (2) | (52.4) | | | (45.2) | | | (102.1) | | | (95.4) | | Other segment items (3) | (23.7) | | | (20.3) | | | (45.9) | | | (38.9) | | | Segment operating profit | $ | 16.2 | | | $ | 19.0 | | | $ | 33.5 | | | $ | 39.7 | | | | | | | | | | Private Cloud | | | | | | | | Revenue | $ | 249.7 | | | $ | 263.3 | | | $ | 499.5 | | | $ | 498.0 | | Cost of revenue | (157.7) | | | (178.3) | | | (314.9) | | | (328.5) | | Other segment items (3) | (30.5) | | | (27.5) | | | (62.1) | | | (54.1) | | | Segment operating profit | $ | 61.5 | | | $ | 57.5 | | | $ | 122.5 | | | $ | 115.4 | | | | | | | | | | Total Consolidated | | | | | | | | Revenue | $ | 666.3 | | | $ | 670.1 | | | $ | 1,331.7 | | | $ | 1,348.2 | | | Segment operating profit | $ | 77.7 | | | $ | 76.5 | | | $ | 156.0 | | | $ | 155.1 | | | | | | | | | | | Corporate functions | (50.4) | | | (49.1) | | | (103.1) | | | (97.0) | | | Share-based compensation expense | (10.0) | | | (10.4) | | | (22.0) | | | (17.0) | | Transaction-related adjustments, net (4) | (0.4) | | | (0.5) | | | (1.9) | | | (2.1) | | Restructuring and transformation expenses (5) | (4.4) | | | (18.4) | | | (17.5) | | | (27.4) | | | | | | | | | | Amortization of intangible assets (6) | (37.6) | | | (31.3) | | | (75.0) | | | (62.6) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Interest expense | (21.3) | | | (34.2) | | | (40.7) | | | (60.4) | | | Gain on investments, net | 0.3 | | | 0.1 | | | 0.2 | | | — | | | Gain on debt extinguishment | — | | | 6.7 | | | — | | | 62.5 | | | Other expense, net | (3.8) | | | (5.1) | | | (9.2) | | | (8.6) | | | Total consolidated loss before income taxes | $ | (49.9) | | | $ | (65.7) | | | $ | (113.2) | | | $ | (57.5) | |
| | | | | | | (1) | Represents usage charges from public cloud infrastructure providers. | | (2) | Other cost of revenue excludes third party infrastructure expenses and is comprised of certain license costs, labor, and other designated expenses. | (3) | Other segment items for each segment include directly allocable research and development expenses, sales and marketing expenses, and certain other general and administrative expenses. | (4) | Includes purchase accounting adjustments, exploratory acquisition and divestiture costs, and expenses related to financing activities. | (5) | Includes consulting and advisory fees related to business transformation and optimization activities, as well as associated severance, certain facility closure costs, and lease termination expenses. Also includes payroll taxes associated with the exercise of stock options and vesting of restricted stock. The three and six months ended June 30, 2026 also includes $12.1 million of severance and related expenses associated with the workforce realignment plan announced in June 2026. The workforce realignment plan is intended to accelerate our Enterprise AI strategy and is expected to result in the termination of approximately 15% of our global workforce, with estimated one-time expenses of approximately $14.0 million to $19.0 million to be incurred in 2026. | (6) | All of our intangible assets are attributable to acquisitions, including the Rackspace Acquisition in 2016. |
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| Schedule of Reconciliation of Gross Profit from Segments to Consolidated |
The table below presents revenue and segment operating profit by reportable segment and a reconciliation of consolidated segment operating profit to consolidated loss before income taxes for the three and six months ended June 30, 2025 and 2026. | | | | | | | | | | | | | | | | | | | | | | | | | Three Months Ended June 30, | | Six Months Ended June 30, | | (In millions) | 2025 | | 2026 | | 2025 | | 2026 | Public Cloud | | | | | | | | Revenue | $ | 416.6 | | | $ | 406.8 | | | $ | 832.2 | | | $ | 850.2 | | Third party infrastructure (1) | (324.3) | | | (322.3) | | | (650.7) | | | (676.2) | | Other cost of revenue (2) | (52.4) | | | (45.2) | | | (102.1) | | | (95.4) | | Other segment items (3) | (23.7) | | | (20.3) | | | (45.9) | | | (38.9) | | | Segment operating profit | $ | 16.2 | | | $ | 19.0 | | | $ | 33.5 | | | $ | 39.7 | | | | | | | | | | Private Cloud | | | | | | | | Revenue | $ | 249.7 | | | $ | 263.3 | | | $ | 499.5 | | | $ | 498.0 | | Cost of revenue | (157.7) | | | (178.3) | | | (314.9) | | | (328.5) | | Other segment items (3) | (30.5) | | | (27.5) | | | (62.1) | | | (54.1) | | | Segment operating profit | $ | 61.5 | | | $ | 57.5 | | | $ | 122.5 | | | $ | 115.4 | | | | | | | | | | Total Consolidated | | | | | | | | Revenue | $ | 666.3 | | | $ | 670.1 | | | $ | 1,331.7 | | | $ | 1,348.2 | | | Segment operating profit | $ | 77.7 | | | $ | 76.5 | | | $ | 156.0 | | | $ | 155.1 | | | | | | | | | | | Corporate functions | (50.4) | | | (49.1) | | | (103.1) | | | (97.0) | | | Share-based compensation expense | (10.0) | | | (10.4) | | | (22.0) | | | (17.0) | | Transaction-related adjustments, net (4) | (0.4) | | | (0.5) | | | (1.9) | | | (2.1) | | Restructuring and transformation expenses (5) | (4.4) | | | (18.4) | | | (17.5) | | | (27.4) | | | | | | | | | | Amortization of intangible assets (6) | (37.6) | | | (31.3) | | | (75.0) | | | (62.6) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Interest expense | (21.3) | | | (34.2) | | | (40.7) | | | (60.4) | | | Gain on investments, net | 0.3 | | | 0.1 | | | 0.2 | | | — | | | Gain on debt extinguishment | — | | | 6.7 | | | — | | | 62.5 | | | Other expense, net | (3.8) | | | (5.1) | | | (9.2) | | | (8.6) | | | Total consolidated loss before income taxes | $ | (49.9) | | | $ | (65.7) | | | $ | (113.2) | | | $ | (57.5) | |
| | | | | | | (1) | Represents usage charges from public cloud infrastructure providers. | | (2) | Other cost of revenue excludes third party infrastructure expenses and is comprised of certain license costs, labor, and other designated expenses. | (3) | Other segment items for each segment include directly allocable research and development expenses, sales and marketing expenses, and certain other general and administrative expenses. | (4) | Includes purchase accounting adjustments, exploratory acquisition and divestiture costs, and expenses related to financing activities. | (5) | Includes consulting and advisory fees related to business transformation and optimization activities, as well as associated severance, certain facility closure costs, and lease termination expenses. Also includes payroll taxes associated with the exercise of stock options and vesting of restricted stock. The three and six months ended June 30, 2026 also includes $12.1 million of severance and related expenses associated with the workforce realignment plan announced in June 2026. The workforce realignment plan is intended to accelerate our Enterprise AI strategy and is expected to result in the termination of approximately 15% of our global workforce, with estimated one-time expenses of approximately $14.0 million to $19.0 million to be incurred in 2026. | (6) | All of our intangible assets are attributable to acquisitions, including the Rackspace Acquisition in 2016. |
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| Schedule of Property, Equipment, and Software, Net |
Property, equipment and software, net, consisted of the following: | | | | | | | | | | | | | (In millions) | December 31,
2025 | | June 30,
2026 | | Computers and equipment | $ | 1,114.5 | | | $ | 1,102.9 | | | Software | 428.6 | | | 434.3 | | | Furniture and fixtures | 7.3 | | | 6.2 | | | Buildings and leasehold improvements | 416.6 | | | 411.7 | | | Property, equipment and software, at cost | 1,967.0 | | | 1,955.1 | | | Less: Accumulated depreciation | (1,377.7) | | | (1,387.6) | | | Work in process | 7.0 | | | 7.1 | | | Property, equipment and software, net | $ | 596.3 | | | $ | 574.6 | |
The table below presents depreciation expense included in segment operating profit above for the three and six months ended June 30, 2025 and 2026.
| | | | | | | | | | | | | | | | | | | | | | | | | Three Months Ended June 30, | | Six Months Ended June 30, | | (In millions) | 2025 | | 2026 | | 2025 | | 2026 | | Public Cloud | $ | 1.7 | | | $ | 1.8 | | | $ | 3.4 | | | $ | 3.6 | | | Private Cloud | 30.6 | | | 32.1 | | | 60.3 | | | 65.9 | | | | | | | | | | | Corporate functions | 5.1 | | | 4.6 | | | 10.2 | | | 9.6 | | | Total depreciation expense | $ | 37.4 | | | $ | 38.5 | | | $ | 73.9 | | | $ | 79.1 | |
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