Rackspace Technology, Inc.

Good afternoon, and thank you for standing by. Welcome to Rackspace Technologies' first quarter 2023 earnings conference call. At this time, all participants are in a listen-only mode. After the presentation, there will be a question and answer session. To ask a question during the session, you will need to press star, followed by the one on your telephone. Please be advised that today's call is being recorded. I would now like to turn the call over to Robert Watson, Vice President of Corporate Finance. Please go ahead, sir.

Thank you and good afternoon. I am joined today by Amar Malatira, our chief executive officer, and Bobby Maloo, our chief financial officer. This quarter, we will begin reporting in our new operating segments, public cloud and private cloud. As we previously communicated, our prior multi-cloud segment has been separated into its public and private cloud components, and our prior apps and cross-platform segment has been merged into public and private cloud based on the underlying nature of the products and offerings. Our prior OpenStack segment has been collapsed into private cloud. However, we will continue to provide visibility into OpenStack revenue. Please refer to our investor relations website for historical financials in the new segments, definitions of financial metrics, and other supplemental materials to today's earnings announcement. As a reminder, certain comments we make on this call will be forward-looking. These statements involve risks and uncertainties which could cause actual results to differ. A discussion of these risks and uncertainties is included in our SEC filings. RAC space technology assumes no obligation to update the information presented on the call, except as required by law. Our presentation includes certain non-GAAP financial measures and adjustments to these measures, which we believe provide useful information to our investors. In accordance with SEC rules, we have provided a reconciliation of these measures to their most directly comparable GAAP measures in the earnings release and presentation. both of which are available on our IR website. I will now turn the call over to Amar for an update on the business.

Thank you, Robert. Let me start by sharing some of our first quarter achievements. First, we delivered revenue and profit above the midpoint of our guidance for the first quarter. Meeting our commitments remains a priority, so I'm pleased we're able to achieve these results while navigating a challenging macroeconomic and industry environment. Second, we have now completed our first full quarter in our new two-business unit operating model. We are already seeing progress with increased focus in new offerings, demand generation, and targeted verticalization. We have also identified new opportunities for cost efficiencies. Third, with the creation of these new business units, today we have published two years of quarterly financials in our new segmentation. This also fulfills another one of my commitments to provide greater transparency. Fourth, I've completed the build-out of my leadership team with the appointment of two talented executives. Michael Bross has been named our chief legal officer, a Rackspace veteran of 16 years. Michael has most recently been serving as an interim chief legal officer, where he has clearly demonstrated the skills and leadership required to take on this role full-time. And Kelly Tilghuis has been named a Chief Human Resource Officer. Kelly brings over 30 years of experience in global human resources with a strong background in strategy and execution, talent management, organizational design, and change management. And finally, since the beginning of the year, we've added three highly accomplished technology executives, Anthony Roberts, Betsy Atkins, and Tony Scott to the Rackspace Board of Directors. I'm very pleased that they have chosen to join our board and look forward to working with them closely. So we continue to make progress on the objectives established upon becoming CEO, realigning the company's operating model to better serve the attractive markets we operate in, build a seasoned executive team to drive our strategy forward, and strengthening our board. We're still in the early days of these changes, so it'll take time for progress to be reflected in our financial results. Before I provide an update on the new operating segments, let me give my perspective on the market. There has been little improvement to the macro environment since we last spoke with you. Customers remain cautious, resulting in lengthening sales cycles and deferred decisions. Other companies in our industry are reporting the same trends. However, we still expect our market to enjoy strong growth over the long term as multi-cloud is a key enabler of digital transformation and improving business outcomes. So we're using this flattening of the market to better position our company to capitalize one's growth rebounds. Our customers know they need our help migrating and leveraging multi-cloud. So our focus is on building the tools and services to meet them wherever they are in their digital transformation journey. Now let me turn to our new segments. With the two business unit structure and the hiring of new leadership, we are prepared to better leverage the unique competitive advantages of each business. We're now engaging more closely with our customers and developing products and solutions that align to the specific market needs. We have a global footprint, flexible delivery model, and the depth and breadth of capabilities, all strong competitive advantages that enable us to deliver differentiated value for our customers. And since we address both public and private cloud, we can provide an unbiased point of view to ensure our customers achieve an optimal outcome. The public cloud business unit operates as a service-centric, capital-light model. We engage deeply with customers to manage cloud complexity and deliver value-added cloud solutions in infrastructure, application, data, and security through managed services, Rackspace Elastic Engineering, and professional services engagements. DK Sinha, leader of the Public Cloud Business Unit, joined us mid-last year and has been instrumental in shifting the organization from infrastructure resale to value-added services with an emphasis on customer partnership. DK and his team are driving a customer-first approach and developing strong relationships with both current and prospective customers. As an example, we recently helped a large North American university to containerize the PeopleSoft environment. And we also partnered with a large Asian customer to unify seven disparate data systems onto the Azure platform, enabling business insights for their stakeholders. We have built a services-oriented leadership team, and our focus is to continue to flawlessly execute our strategy to deliver industry-leading growth. Turning to the private cloud, this business is a technology-forward, capital-intensive model. We are one of the largest scale players in hosted private cloud and have a diverse set of offerings to address a broad set of customer segments and industries. Our strategy is to help customers efficiently and effectively move workloads from in-house data centers as well as workloads that may not operate efficiently in the public cloud. Rackspace private cloud solutions can help customers address these challenges. Brian Lilly joined us to lead the private cloud business unit last quarter and is improving our execution, management focus, and accountability. He has already made management changes and recently hired a new chief product officer and chief revenue officer. I'm also delighted to see us innovating again in a business we had taken for granted for far too long. As an example, Brian, in collaboration with our CTO, Srini Kaushik, has plans to launch a next generation private cloud offering later in the year. This will take advantage of modern open source and cloud native technologies like Kubernetes and containers. This will offer customers a full suite of private cloud offerings that span from bare metal to virtual machines to containers to serverless computing. Our strategy supports the secular trend of customers moving to a more capitalized model, migrating workloads out of the data centers to a managed solutions environment. Hence, this is just one of our initiatives to provide customers with a broader set of options in areas where they lack multi-cloud capabilities. It'll take time to show results, but Brian and his team are focused on growing the business and improving our execution. There is a bright future ahead for private cloud with an immense market opportunity. In summary, just four months into this new model, we are already seeing some of the benefits. First, each segment is more focused on identifying opportunities that they can leverage their unique competitive advantages to capitalize on their attractive growth market. Second, we have uncovered potential new operating efficiencies at both the business unit and corporate levels. And third, we have increased accountability across the company. As we have stated previously, our goal is to exit 2023 with a competitive cost structure and a strong pipeline backlog to drive profitable growth heading into 2024. I will now turn the call over to Bobby for an update on the financials before wrapping up with some closing thoughts. Bobby, over to you.