2 ms·
Notice how Rackspace's 2019 revenue hit a hard ceiling in 2019 (pre-COVID). Also, capital expenditures in 2017, 2018 and 2019 were 9%, 14%, and 9% of yearly re
by otoburb 6y ago
Notice how Rackspace's 2019 revenue hit a hard ceiling in 2019 (pre-COVID).
Also, capital expenditures in 2017, 2018 and 2019 were 9%, 14%, and 9% of yearly revenues, respectively. If they hadn't tamped down on their 2019 "capital intensity", and assuming a more normal capex spend of 11.5% (split the difference between 2018 and 2019 for incremental 3.5% capex spend or ~$70M+), their EOY2019 cash & cash equivalents would have been down to a mere $14M (instead of $84M) -- looks like a cash crunch, mainly due to the 2019 Onico acquisition for $316M.