Executive Summary

Q4 revenue was $686 million (-4.7% YoY) with GAAP diluted EPS of $(0.26); management said revenue, operating profit, and EPS all exceeded guidance, and bookings hit the highest level since early 2023 .
Private Cloud revenue rose 4% sequentially to $269 million, above guidance, with non-GAAP segment operating margin at 30.0% (+130 bps seq) on healthcare strength; Public Cloud revenue was $417 million (above guide) but margin contracted on higher infrastructure resale mix .
Cash from operations was $54 million and free cash flow was $34 million in Q4; liquidity ended at $519 million (cash $144 million, undrawn revolver $375 million) .
Q1 2025 guidance: revenue $653–$665 million, non-GAAP operating profit $19–$21 million, non-GAAP loss per share $(0.07)–$(0.09); segment revenue guide Private $247–$253 million, Public $406–$412 million; seasonality cited .

Note on estimates: S&P Global consensus for Q4 2024 EPS and revenue was unavailable at request time (API limit). Management repeatedly noted beats vs internal guidance rather than Street estimates .

What Went Well and What Went Wrong

What Went Well

Record sales bookings: “highest level since early 2023,” with Q4 bookings (ACV) growing high double digits both sequentially and YoY; full-year bookings +14% YoY; H2 bookings +32% vs H1 .
Private Cloud execution: Q4 Private Cloud revenue $269 million (above guide), +4% seq; non-GAAP gross margin 39.8% (+120 bps seq), segment operating margin 30.0% (+130 bps seq) on healthcare onboarding; healthcare revenue +34% YoY, sovereign +59% YoY .
Public Cloud momentum: Q4 Public Cloud revenue $417 million (above guide) with high double-digit YoY bookings growth driven by services and infrastructure resale; data services bookings more than doubled, aided by AI projects .

What Went Wrong

YoY declines persisted: Q4 total revenue $686 million (–4.7% YoY); Private Cloud (–6.0% YoY) and Public Cloud (–3.9% YoY) remained down YoY; GAAP gross margin fell to 19.2% from 21.4% in 4Q23 .
Margin mix headwind in Public Cloud: non-GAAP gross margin fell to 8.2% (–210 bps seq) and segment operating margin to 2.4% (–130 bps seq) on higher infrastructure volumes at lower margins .
GAAP losses continue: Q4 net loss $(60.4) million (vs $28.0 million in 4Q23); full-year 2024 net loss $(862.6) million; shareholders’ deficit widened to $(1,008.6) million at year-end .

Financial Results

Headline metrics (GAAP and non-GAAP)

Metric	Q2 2024	Q3 2024	Q4 2024
Revenue ($USD Millions)	$684.9	$675.8	$685.6
GAAP Diluted EPS ($)	$0.11	$(0.82)	$(0.26)
Non-GAAP Loss Per Share ($)	$(0.08)	$(0.04)	$(0.02)
GAAP Gross Profit Margin %	19.2%	20.4%	19.2%
Non-GAAP Operating Profit ($MM)	$22.8	$34.3	$39.1
Non-GAAP Operating Margin % (of GAAP rev)	3.3%	5.1%	5.7%

Note: No Street estimate comparison shown; S&P Global consensus unavailable at time of analysis.

Segment revenues and operating margins

Metric	Q2 2024	Q3 2024	Q4 2024
Public Cloud Revenue ($MM)	$424.9	$418.3	$417.0
Private Cloud Revenue ($MM)	$260.0	$257.5	$268.6
Public Cloud Segment Operating Margin % (of segment rev)	2.8%	3.9%	2.4%
Private Cloud Segment Operating Margin % (of segment rev)	26.8%	28.9%	30.0%

Cash flow KPIs

KPI	Q2 2024	Q3 2024	Q4 2024
Cash from Operations ($MM)	$24	$52	$54
Free Cash Flow ($MM)	$(15)	$27	$34

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Total Revenue ($MM)	Q1 2025	N/A	$653–$665	New
Private Cloud Revenue ($MM)	Q1 2025	N/A	$247–$253	New
Public Cloud Revenue ($MM)	Q1 2025	N/A	$406–$412	New
Non-GAAP Operating Profit ($MM)	Q1 2025	N/A	$19–$21	New
Non-GAAP Loss Per Share ($)	Q1 2025	N/A	$(0.07)–$(0.09)	New
Non-GAAP Other Income (Expense) ($MM)	Q1 2025	N/A	$(46)–$(50)	New
Non-GAAP Tax Rate	Q1 2025	N/A	26%	New
Non-GAAP Weighted Avg Shares (MM)	Q1 2025	N/A	245	New

Management also framed Q1 guide as “consistent with normal seasonality” .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 2024, Q3 2024)	Current Period (Q4 2024)	Trend
AI/customer pipeline	Q2: 40+ AI engagements; planning “AI Anywhere” private AI; data services bookings >2x YoY in data engineering . Q3: nearly 50 customers; >250 opportunities; joined AWS Generative AI Partner Innovation Alliance .	>50 customers; ~200 opportunities; deployed multimodal GenAI/agentic AI solutions; <2% of revenue now, targeting 5%+ in a couple of years .	Steady progress; pipeline active, early revenue contribution.
Public Cloud services-led pivot	Q2: services bookings 70% of Public Cloud bookings; 85% attach on large resale deals . Q3: record bookings since early 2023; services stabilizing; margin improved .	Strong bookings continue; revenue above guide; margin down on infra mix (8.2% non-GAAP gross; 2.4% segment margin) .	Demand strong; mix headwinds near-term margins.
Private Cloud healthcare/sovereign	Q2: Seattle Children’s/Epic migration; pipeline +35% YoY . Q3: one of largest Epic cloud implementations; healthcare revenue +~30% projected; sovereign ramp .	Healthcare revenue +34% YoY; sovereign +59% YoY; record bookings; Private Cloud revenue +4% seq; 2025 modest YoY decline with stabilization by year-end .	Accelerating bookings; revenue stabilization in sight.
Capital structure/liquidity	Q2: debt repurchases; no maturities before 2028; cash $190m . Q3: liquidity $532m .	Liquidity $519m (cash $144m; undrawn revolver $375m) .	Adequate liquidity; focus on structure optimization.
Infrastructure resale seasonality	Q2: infra volumes contributed to beat . Q3: infra volumes lower; services stabilized .	Q4 infra volumes seasonally strong; 1Q typically lower; renewals will be assessed against profitability thresholds .	Seasonal and selective approach to renewals.

Management Commentary

“Our fourth quarter results exceeded guidance for revenue, profit and EPS… record-breaking quarterly sales bookings, reaching the highest level since early 2023” — CEO, Amar Maletira .
“Private cloud GAAP revenue was $269 million… rising 4% sequentially… healthcare revenue grew 34% year-over-year, while sovereign revenue surged by 59%” .
“Public cloud GAAP revenue was $417 million, surpassing our guided range due to an uptick in higher cloud consumption… data services bookings more than doubled, driven in part by AI-related projects” .
“More than 50 [AI] customers and close to 200 opportunities… Today it’s less than 2% of our revenue… in the next couple of years… probably 5%+ in a conservative estimate” .
CFO: “Non-GAAP operating profit was $39 million… non-GAAP operating margin… 5.7%… Cash flow from operations was $54 million and free cash flow was $34 million… ended the year with $144 million in cash and $519 million of total liquidity” .

Q&A Highlights

Private Cloud 2025 outlook: after years of double-digit declines, management expects a “modest” decline in FY2025 with flat YoY in 2H25 as large 2024 deals onboard; 2H24 saw improved demand and faster cycles .
Free cash flow: Management anticipates positive operating cash flow and free cash flow in 2025, supported by low double-digit operating profit growth from margin improvements and efficiencies .
Demand visibility: Visibility “has definitely improved” with strong Q3/Q4 bookings; customers resuming transformation projects in 2025; hybrid-cloud demand driving larger multi-year private deals .
Infrastructure resale: Q4 uptick driven by seasonality; 1Q is seasonally lower; renewals evaluated against profitability thresholds—expect flattish to slight decline in infra resale for RXT despite market growth .
New logos and conversion: >250 new private cloud logos; larger deal mix lengthens private deal cycles; public cloud cycles shorter given services focus .

Estimates Context

S&P Global consensus for Q4 2024 EPS and revenue was unavailable at time of analysis due to API request limits. As a result, we cannot quantify beats/misses vs consensus. Management stated Q4 revenue, operating profit, and EPS exceeded company guidance .
Where estimates may need to adjust: Models should incorporate Q1 2025 revenue guidance ($653–$665 million), non-GAAP other expense ($46–$50 million), tax rate (26%), and share count (245 million), as well as the sequential seasonality and margin mix commentary (Public Cloud infra resale) .

Key Takeaways for Investors

Bookings acceleration is the key narrative: record Q4 bookings and strong H2 vs H1 (+32%) set up 2025, with Private Cloud stabilization by 2H25 and continued Public Cloud services momentum .
Mix matters for margins: Public Cloud margins contracted on higher infrastructure resale; near-term margin trajectory will hinge on services attach rates and selective renewals .
Healthcare/sovereign verticals are durable growth vectors within Private Cloud; watch onboarding pace of large wins (e.g., Seattle Children’s multi-year agreement) .
Cash generation improving: CFO and FCF improved through 2H, and management targets positive operating and free cash flow in 2025—an important de-risking lever given negative GAAP earnings .
Q1 guide implies seasonal step-down; monitor execution against $653–$665 million revenue and $19–$21 million non-GAAP OP as an early read on 2025 profitability trajectory .
AI remains early (<2% of revenue) but pipelines and data services strength support medium-term optionality; track conversion from POCs to production/inferencing across hybrid architectures .
Capital structure: liquidity of $519 million provides operational flexibility; continued optimization remains a theme amid ongoing GAAP losses .

Additional Relevant Q4 Period Press Releases

AWS SMB competency recognition; ISG leader in AWS ecosystem partners; on-demand GPU-as-a-Service launch; strategic collaboration agreements with hyperscalers, and one of the largest Epic cloud implementations—supporting services-led and healthcare vectors .

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