Rackspace triples capex to $104 million with $92 million of fresh stock while AMD commits to buy nothing yet

Rackspace Technology▼−1.84% — Rackspace Technology, down 1.84 percent today (Nasdaq: RXT) released third-quarter results at 4:21 p.m ¹. Eastern on November 9, 21 minutes after the closing bell left the stock up 8.3% ¹. By late the next morning, with the earnings call underway, it traded at $2.55, down 6.4% ².

The raise is real; the AMD terms stay conditional

The release was a beat-and-raise: full-year 2026 revenue guidance up $35 million at the midpoint, to $2.51 billion to $2.56 billion, profit targets unchanged ¹. The arrangement underneath sits in the 10-Q, the quarterly report filed with the Securities and Exchange Commission↗: a GPU-as-a-Service framework with AMD▲+1.48% — AMD, up 1.48 percent today covering an initial 30 megawatts of Instinct GPU and EPYC processor capacity across Rackspace data centers, subject to "financing, operational and legal conditions" ³.

It sets no minimum AMD purchases, guarantees no deployments, and prices each deployment in a separately negotiated agreement ³. For an agreed deployment, AMD would buy only residual unsold capacity, capped for that deployment, and it holds a right of first refusal before Rackspace sells capacity below a price threshold ³.

Capex tripled, and the filing allocates none of it

Capital expenditures were $104 million↗, triple the $34 million of a year earlier and up from $28 million in the second quarter ¹⁴. The release assigns no dollar to any project, and nothing in the quarterly results connects the spending to the AMD rollout ⁴. Of nine-month purchases of property and software, $65.8 million was paid in cash; another $101.4 million ran through leases, accruals and stock ¹.

The build runs on $92 million of stock

The equity trail, four months deep: $66.0 million in cash from an investor group led by the investment firm Voss Capital for 24.0 million shares issued November 9, the day of the filing, about $2.75 each; 3.8 million shares to Palantir▼−0.14% — Palantir, down 0.14 percent today, the data-analytics software company, on October 1 as $14.7 million of non-cash consideration, with the filing not spelling out what the shares paid for; and $11.1 million net from at-the-market sales, stock issued piecemeal into the open market ⁵.

That paper stands behind $108 million of cash, $2,306.3 million of principal debt, a revolving credit line drawn to $290 million of its $375 million, and nine-month operating cash flow of $9.3 million, down from $91.7 million ⁵. A cut of roughly 15% of the global workforce carries $14 million to $19 million of one-time cost ⁵; the stockholders' deficit widened↗ to $1,307.3 million ⁶.

The engine that pays for it is shrinking

Public Cloud revenue fell 17.2%↗ to $349.1 million while Private Cloud rose 4.2% to $260.0 million, and interest expense climbed 67.5% to $35.5 million ¹. Insiders made ten open-market sales in six months and no purchases; Chief Executive Gajen Kandiah accounted for two of them, 506,986 shares for about $1.6 million ⁷.

Management's targets are real, and each hinges on financing

The improvement is genuine: net loss narrowed to $53.5 million from $67.1 million, and non-GAAP operating profit, which strips out restructuring charges, stock-based pay and acquired-intangible amortization, rose 12% to $36 million ¹. On the call, management targeted 20 to 22 cumulative megawatts↗ by the end of 2027 and $420 million to $460 million of annualized run-rate revenue at EBITDA margins above 60% once fully deployed, contingent on financing ². It also said it was too early to know whether demand would bring pricing power ².

The record behind those targets: $104 million spent, none of it assigned to the AMD build ¹⁴; $92 million of stock in four months ⁵; AMD committed to nothing until a deployment is signed ³. The tell is the first deployment agreement with separately negotiated pricing. That document, not the guidance, turns the framework into a business.