XML 42 R30.htm IDEA: XBRL DOCUMENT v3.25.3
Segment Reporting (Tables)
 9 Months Ended
Sep. 30, 2025
Segment Reporting [Abstract]  
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 nine months ended September 30, 2024 and 2025.
Three Months Ended September 30,Nine Months Ended September 30,
(In millions)2024202520242025
Public Cloud
Revenue
$418.3 $421.6 $1,265.6 $1,253.8 
Third party infrastructure (1)
(322.5)(329.0)(988.1)(979.7)
Other cost of revenue (2)
(52.6)(54.1)(156.7)(156.2)
Other segment items (3)
(27.8)(24.5)(86.5)(70.4)
Segment operating profit$15.4 $14.0 $34.3 $47.5 
Private Cloud
Revenue
$257.5 $249.6 $785.9 $749.1 
Cost of revenue
(158.2)(154.6)(485.3)(469.5)
Other segment items (3)
(25.4)(27.8)(86.8)(89.9)
Segment operating profit$73.9 $67.2 $213.8 $189.7 
Total Consolidated
Revenue
$675.8 $671.2 $2,051.5 $2,002.9 
Segment operating profit$89.3 $81.2 $248.1 $237.2 
Corporate functions(57.1)(49.2)(181.6)(152.3)
Share-based compensation expense(15.5)(18.2)(47.8)(40.2)
Transaction-related adjustments, net (4)
(1.8)(0.2)(4.4)(2.1)
Restructuring and transformation expenses (5)
(9.4)(10.0)(44.8)(27.5)
Hosted Exchange incident expenses, net of proceeds received or expected to be received under our insurance coverage1.2 — 1.1 — 
Amortization of intangible assets (6)
(38.7)(37.5)(116.0)(112.5)
Impairment of goodwill(141.7)— (714.9)— 
Impairment of assets, net— — (20.0)— 
Interest expense(18.0)(21.2)(80.1)(61.9)
Gain on investments, net0.1 0.1 0.2 0.3 
Gain on debt extinguishment, net of debt modification costs18.0 — 147.2 — 
Other expense, net(1.0)(4.0)(11.8)(13.2)
Total consolidated loss before income taxes$(174.6)$(59.0)$(824.8)$(172.2)
(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 nine months ended September 30, 2024 also includes a $9.0 million MEIA early termination fee associated with the sale of our corporate headquarters in March 2024.
(6)
All of our intangible assets are attributable to acquisitions, including the Rackspace Acquisition in 2016.
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 nine months ended September 30, 2024 and 2025.
Three Months Ended September 30,Nine Months Ended September 30,
(In millions)2024202520242025
Public Cloud
Revenue
$418.3 $421.6 $1,265.6 $1,253.8 
Third party infrastructure (1)
(322.5)(329.0)(988.1)(979.7)
Other cost of revenue (2)
(52.6)(54.1)(156.7)(156.2)
Other segment items (3)
(27.8)(24.5)(86.5)(70.4)
Segment operating profit$15.4 $14.0 $34.3 $47.5 
Private Cloud
Revenue
$257.5 $249.6 $785.9 $749.1 
Cost of revenue
(158.2)(154.6)(485.3)(469.5)
Other segment items (3)
(25.4)(27.8)(86.8)(89.9)
Segment operating profit$73.9 $67.2 $213.8 $189.7 
Total Consolidated
Revenue
$675.8 $671.2 $2,051.5 $2,002.9 
Segment operating profit$89.3 $81.2 $248.1 $237.2 
Corporate functions(57.1)(49.2)(181.6)(152.3)
Share-based compensation expense(15.5)(18.2)(47.8)(40.2)
Transaction-related adjustments, net (4)
(1.8)(0.2)(4.4)(2.1)
Restructuring and transformation expenses (5)
(9.4)(10.0)(44.8)(27.5)
Hosted Exchange incident expenses, net of proceeds received or expected to be received under our insurance coverage1.2 — 1.1 — 
Amortization of intangible assets (6)
(38.7)(37.5)(116.0)(112.5)
Impairment of goodwill(141.7)— (714.9)— 
Impairment of assets, net— — (20.0)— 
Interest expense(18.0)(21.2)(80.1)(61.9)
Gain on investments, net0.1 0.1 0.2 0.3 
Gain on debt extinguishment, net of debt modification costs18.0 — 147.2 — 
Other expense, net(1.0)(4.0)(11.8)(13.2)
Total consolidated loss before income taxes$(174.6)$(59.0)$(824.8)$(172.2)
(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 nine months ended September 30, 2024 also includes a $9.0 million MEIA early termination fee associated with the sale of our corporate headquarters in March 2024.
(6)
All of our intangible assets are attributable to acquisitions, including the Rackspace Acquisition in 2016.
Schedule of Property, Equipment, and Software, Net
Property, equipment and software, net, consisted of the following: 
(In millions)December 31,
2024		September 30,
2025
Computers and equipment$1,142.9 $1,118.7 
Software448.1 428.7 
Furniture and fixtures10.2 7.8 
Buildings and leasehold improvements 409.7 415.9 
Property, equipment and software, at cost2,010.9 1,971.1 
Less: Accumulated depreciation (1,420.7)(1,394.3)
Work in process10.8 12.2 
Property, equipment and software, net$601.0 $589.0 
The table below presents depreciation expense included in segment operating profit above for the three and nine months ended September 30, 2024 and 2025.

Three Months Ended September 30,Nine Months Ended September 30,
(In millions)2024202520242025
Public Cloud$1.8 $1.7 $5.3 $5.1 
Private Cloud28.6 30.6 85.6 90.9 
Corporate functions3.9 5.3 15.1 15.5 
    Total depreciation expense$34.3 $37.6 $106.0 $111.5