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Rackspace IPO Plan: 10 Financial Details From Multi-Cloud MSP’s S-1 SEC Filing

Rackspace Technology has confirmed plans for a potential IPO (initial public offering), according to an S-1 form filing with the SEC. A potential Rackspace IPO -- especially amid the coronavirus pandemic -- could provide some key clues for how MSPs, IT consulting firms and private equity owners can navigate the turbulent economic climate.

Private equity firm Apollo Global Management acquired Rackspace and took the hosting provider private in 2016. Rackspace since that time has transformed into a Top 200 Public Cloud MSP that supports applications and customers across Amazon Web Services (AWS), Microsoft Azure, Google Cloud Platform (GCP) and plenty more.

Rumors about a Rackspace IPO have swirled for the past year, and started again amid a recent company name change.

Rackspace IPO Plan 2020, Form S-1 SEC Filing: Details to Know

Here are 10 things to know about Rackspace's financial performance and business evolution, based on the company's SEC filing:

1. Rackspace Annual Revenue: $2.438 billion in 2019, compared to $2.452B in 2018 and $2.144B in 2017.

2. Quarterly Revenue: $652.7 million for the quarter ended March 31, 2020, compared to $606.9 million in the corresponding quarter for 2019.

3. Annual Adjusted EBITDA: $742.8 million in 2019 compared to $815.8 million in 2018 and $773.5 million in 2017.

4. Quarterly EBITDA: $185.6 million for the quarter ended March 31,2020, essentially flat vs. the corresponding quarter the previous year.

5. Revenue Per Employee: $375,000 in 2019, up from $372,000 in 2018.

6. Revenue Mix: In 2019, over 85% of Rackspace revenues came from Multicloud Services and Apps & Cross Platform segments -- known as Core Segments. In contrast, in the 12 months ended September 30, 2016, less than 10% of revenue came from Cloud Office and Managed Cloud Services service offerings.

7. Core Revenue - Latest Quarter For the three months ended March 31, 2020, revenue from Core Segments was $589.4 million, representing a 6% increase, on a constant currency basis, and a 5% increase, on an actual basis.

8. Recurring Revenue: 95 percent of Rackspace's revenue is recurring.

9. Research and Development: Over the past eight years, Rackspace has "invested over $1 billion and 12 million hours to develop a robust and proprietary suite of over 200 technology tools, branded solutions and accelerators for our customers."

10. Cloud Certified Experts: Rackspace's team carries more than 2,700 Amazon Web Services (AWS) certifications, over 1,000 Google Cloud certifications, over 700 Microsoft Azure (Azure) certifications and over 400 VMware certifications worldwide as of May 31, 2020.

Rackspace IPO Plan 2020: More Things to Know

OK, so we're offering more than 10 takeaways from the S-1 filing. Here are some more.

11. Sales Team: Rackspace has more than 900 quota-bearing representatives and customer success managers. An ecosystem of over 3,000 partners serves as an extension to the direct sales force.

12. Employees: Rackspace has roughly 6,800 employees overall.

13. Customers: Rackspace has 120,000 customers in 120 countries.

14. Stock Symbol: The company's proposed ticker symbol is RXT.

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Joe Panettieri

Joe Panettieri is co-founder & editorial director of MSSP Alert and ChannelE2E, the two leading news & analysis sites for managed service providers in the cybersecurity market.