Rackspace Technology Inc (RXT) 2023 Q1 法說會逐字稿

Good afternoon, and thank you for standing by. Welcome to Rackspace Technology's First Quarter 2023 Earnings Conference Call. (Operator Instructions) Please be advised that today's call is being recorded.

下午好，感謝您的耐心等待。歡迎參加 Rackspace Technology 2023 年第一季度收益電話會議。 （操作員說明）請注意，今天的通話正在錄音。

I would now like to turn the call over to Robert Watson, Vice President of Corporate Finance. Please go ahead, sir.

我現在想將電話轉給公司財務副總裁羅伯特·沃森 (Robert Watson)。請繼續，先生。

Thank you, and good afternoon. I'm joined today by Amar Maletira, our Chief Executive Officer; and Bobby Molu, 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 Multicloud segment has been separated into its Public and Private Cloud components, and our prior Apps & 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.

謝謝你，下午好。今天我們的首席執行官阿馬爾·馬萊蒂拉 (Amar Maletira) 也加入了我的行列。和我們的首席財務官 Bobby Molu。本季度，我們將開始報告新的運營部門：公共雲和私有云。正如我們之前所傳達的，我們之前的多雲部分已分為公共和私有云組件，而我們之前的應用程序和跨平台部分已根據產品和服務的基本性質合併為公共和私有云。我們之前的 OpenStack 部分已合併為私有云。不過，我們將繼續提供 OpenStack 收入的可見性。

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.

請參閱我們的投資者關係網站，了解新部門的歷史財務數據、財務指標的定義以及今天收益公告的其他補充材料。

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. Rackspace Technology assumes no obligation to update the information presented on the call, except as required by law.

提醒一下，我們在本次電話會議中發表的某些評論將具有前瞻性。這些陳述涉及風險和不確定性，可能導致實際結果有所不同。我們向 SEC 提交的文件中包含對這些風險和不確定性的討論。除法律要求外，Rackspace Technology 不承擔更新通話中提供的信息的義務。

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.

我們的演示文稿包括某些非公認會計準則財務指標以及對這些指標的調整，我們相信這些指標為我們的投資者提供了有用的信息。根據 SEC 規則，我們在收益發布和演示中提供了這些指標與其最直接可比的 GAAP 指標的調節表，這兩項指標均可在我們的 IR 網站上獲取。

I will now turn the call over to Amar for an update on the business.

我現在將把電話轉給阿馬爾，了解業務的最新情況。

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 of commitments remains a priority. So I'm pleased we're able to achieve these results while navigating a challenging macroeconomic and industry environment.

謝謝你，羅伯特。首先讓我分享我們第一季度的一些成就。首先，我們的收入和利潤高於第一季度指導值的中點。履行承諾仍然是一個優先事項。因此，我很高興我們能夠在充滿挑戰的宏觀經濟和行業環境中取得這些成果。

Second, we have now completed our first full quarter in our new two-business unit operating model. We're 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 2 years of quarterly financials in our new segmentation. This also fulfills another one of my commitments to provide greater transparency.

其次，我們現在已經完成了新的雙業務部門運營模式的第一個完整季度。我們已經看到了進展，更加關注新產品、需求生成和有針對性的垂直化。我們還發現了提高成本效率的新機會。第三，隨著這些新業務部門的創建，今天我們發布了新細分領域的 2 年季度財務報告。這也履行了我的另一項承諾，即提供更大的透明度。

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 Kellie Teal-Guess has been named our Chief Human Resource Officer. Kellie 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.

第四，我已經完成了領導團隊的組建，任命了兩名才華橫溢的高管。 Michael Bross 被任命為我們的首席法務官，他是 Rackspace 工作 16 年的資深人士。邁克爾最近擔任臨時首席法律官，他清楚地展示了全職擔任這一職位所需的技能和領導力。 Kellie Teal-Guess 被任命為我們的首席人力資源官。 Kellie 在全球人力資源領域擁有 30 多年的經驗，在戰略和執行、人才管理、組織設計和變革管理方面擁有深厚的背景。

And finally, since the beginning of the year, we have 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.

最後，自今年年初以來，我們在 Rackspace 董事會中增加了三位卓有成就的技術高管：安東尼·羅伯茨 (Anthony Roberts)、貝齊·阿特金斯 (Betsy Atkins) 和托尼·斯科特 (Tony Scott)。我很高興他們選擇加入我們的董事會，並期待與他們密切合作。

So we continue to make progress on the objectives I 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 will take time for progress to be reflected in our financial results.

因此，我們繼續在我擔任首席執行官時制定的目標上取得進展，重新調整公司的運營模式，以更好地服務於我們所在的有吸引力的市場，建立一支經驗豐富的管理團隊來推動我們的戰略向前發展，並加強我們的董事會。我們仍處於這些變革的早期階段，因此進展需要一段時間才能反映在我們的財務業績中。

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 Multicloud 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 once growth rebounds. Our customers know they need our help migrating and leveraging Multicloud. So our focus is on building the tools and services to meet them wherever they are in their digital transformation journey.

在介紹新運營部門的最新情況之前，讓我先談談我對市場的看法。自從我們上次與您交談以來，宏觀環境幾乎沒有改善。客戶仍然保持謹慎態度，導致銷售週期延長並推遲決策。我們行業的其他公司也報告了相同的趨勢。然而，我們仍然預計我們的市場將長期強勁增長，因為多雲是數字化轉型和改善業務成果的關鍵推動者。因此，我們正在利用市場的扁平化來更好地定位我們的公司，以便在增長反彈後充分利用。我們的客戶知道他們需要我們幫助遷移和利用多雲。因此，我們的重點是構建工具和服務來滿足他們在數字化轉型之旅中的任何階段的需求。

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.

現在讓我談談我們的新部分。通過兩個業務部門的結構和新領導層的聘用，我們準備更好地利用每個業務的獨特競爭優勢。我們現在與客戶更加密切地合作，開發符合特定市場需求的產品和解決方案。我們擁有全球足跡、靈活的交付模式以及能力的深度和廣度，所有這些強大的競爭優勢使我們能夠為客戶提供差異化的價值。由於我們同時解決公共雲和私有云問題，因此我們可以提供公正的觀點，以確保我們的客戶獲得最佳結果。

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. D.K. 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. D.K. and his team are driving our customer-first approach and developing strong relationships with both current and prospective customers.

公共雲業務部門以以服務為中心的輕資本模式運營。我們與客戶深入合作，通過託管服務、Rackspace Elastic Engineering 和專業服務合作來管理雲複雜性，並在基礎設施、應用程序、數據和安全方面提供增值雲解決方案。 D.K. Sinha 是公共雲業務部門的負責人，於去年年中加入我們，在將組織從基礎設施轉售轉向重視客戶合作夥伴關係的增值服務方面發揮了重要作用。 D.K.和他的團隊正在推動我們的客戶至上方法，並與當前和潛在客戶建立牢固的關係。

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 service-oriented leadership team, and our focus is to continue to flawlessly execute our strategy to deliver industry-leading growth.

例如，我們最近幫助一所大型北美大學對 PeopleSoft 環境進行容器化。我們還與一家大型亞洲客戶合作，將七個不同的數據系統統一到 Azure 平台上，為其利益相關者提供業務洞察。我們建立了一支以服務為導向的領導團隊，我們的重點是繼續完美地執行我們的戰略，以實現行業領先的增長。

Turning to the Private Cloud. This business is a technology followed 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.

轉向私有云。這項業務是一種技術跟隨資本密集型的​​模式。我們是託管私有云領域規模最大的參與者之一，擁有多樣化的產品來滿足廣泛的客戶群和行業的需求。我們的戰略是幫助客戶高效、有效地從內部數據中心轉移工作負載以及可能無法在公共雲中高效運行的工作負載。 Rackspace 私有云解決方案可以幫助客戶應對這些挑戰。

Brian Lillie 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 have taken for granted for far too long. As an example, Brian, in collaboration with the CTO, Srini Koushik, 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.

Brian Lillie 上季度加入我們，領導私有云業務部門，並正在改進我們的執行力、管理重點和問責制。他已經進行了管理層變動，並於最近聘請了新的首席產品官和首席營收官。我也很高興看到我們在一個我們長期以來認為理所當然的業務中再次創新。例如，Brian 與首席技術官 Srini Koushik 合作，計劃在今年晚些時候推出下一代私有云產品。這將利用現代開源和雲原生技術，例如 Kubernetes 和容器。這將為客戶提供一整套私有云產品，涵蓋從裸機到虛擬機、容器到無服務器計算。

Our strategy supports the secular trend of customers moving to a more capital-light 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 Multicloud capabilities. It will 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.

我們的戰略支持客戶轉向資本更輕的模式、將工作負載從數據中心遷移到託管解決方案環境的長期趨勢。因此，這只是我們為客戶在缺乏多雲功能的領域提供更廣泛選擇的舉措之一。顯示結果需要時間，但布萊恩和他的團隊專注於發展業務和提高我們的執行力。私有云前景光明，市場機遇巨大。

In summary, just 4 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 the 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.

總之，新模型推出僅 4 個月，我們就已經看到了一些好處。首先，每個細分市場都更注重識別機會，利用其獨特的競爭優勢來利用有吸引力的增長市場。其次，我們發現了業務部門和公司層面潛在的新運營效率。第三，我們增強了整個公司的責任感。正如我們之前所說，我們的目標是在 2023 年結束時擁有具有競爭力的成本結構和強大的儲備訂單，以推動 2024 年的盈利增長。

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.

現在，我將把電話轉給鮑比，詢問最新的財務狀況，然後再結束一些總結性的想法。鮑比，交給你了。

Thank you, Amar. I will cover the total company results for the first quarter, then share some details on our segment performance, followed by our Q2 guidance.

謝謝你，阿馬爾。我將介紹第一季度的公司總體業績，然後分享有關我們部門業績的一些詳細信息，然後是我們第二季度的指導。

Total company revenue of $759 million was down 2% year-over-year and slightly above the midpoint of our guidance. Non-GAAP net revenue is a metric we are introducing that applies net accounting to Public Cloud infrastructure resale revenue. For clarity, non-GAAP net revenue includes all revenue from our Private Cloud business unit, Public Cloud services revenues and only the profit component of Public Cloud infrastructure resale. We believe non-GAAP net revenue provides investors with the visibility to the true margin profile of our business. Please refer to our Investor Relations website for more details and definitions.

公司總收入為 7.59 億美元，同比下降 2%，略高於我們指導的中點。非 GAAP 淨收入是我們引入的一個指標，它將淨會計應用於公共雲基礎設施轉售收入。為清楚起見，非 GAAP 淨收入包括來自我們的私有云業務部門的所有收入、公共雲服務收入以及公共雲基礎設施轉售的利潤部分。我們相信，非公認會計原則淨收入可以讓投資者了解我們業務的真實利潤狀況。請參閱我們的投資者關係網站了解更多詳細信息和定義。

For the first quarter, total non-GAAP net revenue was $460 million, down 9% year-over-year, driven by continued declines in Private Cloud, which, as a reminder, now includes legacy OpenStack. Non-GAAP gross profit of $179 million was 24% of total revenue and 39% of non-GAAP net revenue. Non-GAAP operating profit was $51 million, slightly ahead of the midpoint of our guidance. This was down 55% year-over-year primarily due to revenue declines in our Private Cloud business unit. Non-GAAP operating margin was 7% of total revenue and 11% of non-GAAP net revenue. And non-GAAP loss per share was $0.02, within our guided loss per share range of $0.01 to $0.05.

第一季度，非 GAAP 淨收入總額為 4.6 億美元，同比下降 9%，這是由於私有云持續下降所致，提醒一下，私有云現在包括了傳統的 OpenStack。非 GAAP 毛利潤為 1.79 億美元，佔總收入的 24%，佔非 GAAP 淨收入的 39%。非 GAAP 營業利潤為 5100 萬美元，略高於我們指引的中值。同比下降 55%，主要是由於我們的私有云業務部門的收入下降。非 GAAP 營業利潤率為總收入的 7%，佔非 GAAP 淨收入的 11%。非 GAAP 每股虧損為 0.02 美元，在我們每股 0.01 美元至 0.05 美元指導虧損範圍內。

Cash flow from operations was negative $2 million and free cash flow was negative $14 million in the first quarter. These results were in line with expectations due to our strong working capital management, which largely offset the impacts of the company bonus payout and a large vendor prepayment. We ended the quarter with a cash balance of $174 million and remain laser-focused on cash flow generation. Total CapEx for the first quarter was $72 million, while cash CapEx was $12 million. CapEx intensity was 9% and 2%, respectively. CapEx for the quarter was higher than recent quarters, driven in part by capital requirements for a new customer we signed in Q3 2022.

第一季度運營現金流為負 200 萬美元，自由現金流為負 1400 萬美元。這些結果符合預期，因為我們強大的營運資金管理，很大程度上抵消了公司獎金支付和大量供應商預付款的影響。本季度結束時，我們的現金餘額為 1.74 億美元，並繼續專注於現金流生成。第一季度總資本支出為 7200 萬美元，現金資本支出為 1200 萬美元。資本支出強度分別為 9% 和 2%。本季度的資本支出高於最近幾個季度，部分原因是我們在 2022 年第三季度簽署的新客戶的資本要求。

With regards to this customer, as we began to execute in Q1, we became concerned about the viability of the arrangement and ultimately, it did not materialize as anticipated. The capital purchase is fungible and will be redeployed to other business requirements. As such, you should expect CapEx to be lower for the next few quarters and remain in our typical 5% to 7% total CapEx intensity range for the full year. Additionally, in the first quarter, we recorded $543 million of noncash goodwill impairment charges as a result of the January 1 reallocation of goodwill due to the business unit realignment and the decrease in our market capitalization.

對於該客戶，當我們在第一季度開始執行時，我們開始擔心該安排的可行性，最終，它沒有按預期實現。資本購買是可替代的，並將重新部署到其他業務需求。因此，您應該預計未來幾個季度的資本支出將會較低，並保持在我們全年典型的 5% 至 7% 總資本支出強度範圍內。此外，由於業務部門重組和市值下降，1 月 1 日商譽重新分配，我們在第一季度記錄了 5.43 億美元的非現金商譽減值費用。

On to our segment results. Now that we are operating in our new segments, Public Cloud and Private Cloud, we will no longer report the Multicloud, Apps & Cross Platform and OpenStack segments after this quarter. Please refer to our Investor Relations website for historical financial information in the new segment and our earnings presentation for an estimate of our Q1 2023 revenue in the prior segments.

關於我們的細分結果。現在我們正在運營新的細分市場：公共雲和私有云，本季度之後我們將不再報告多雲、應用程序和跨平台以及 OpenStack 細分市場。請參閱我們的投資者關係網站，了解新部門的歷史財務信息，並參閱我們的收益報告，了解之前部門 2023 年第一季度的收入估計。

For Public Cloud, revenue of $445 million was up 7% year-over-year, driven primarily by our infrastructure resale business. Public Cloud non-GAAP net revenue, again, this includes our Public Cloud services revenue and infrastructure resale profit, was $146 million, up 1% year-over-year. While revenue growth in services was 3% in Q1, it will take some time for the business to reach sustained growth in line with the market as we pivot to a services-led motion.

對於公共雲，收入為 4.45 億美元，同比增長 7%，這主要是由我們的基礎設施轉售業務推動的。公共云非 GAAP 淨收入同樣包括我們的公共雲服務收入和基礎設施轉售利潤，為 1.46 億美元，同比增長 1%。雖然第一季度服務收入增長了 3%，但隨著我們轉向以服務為主導的舉措，業務需要一段時間才能實現與市場同步的持續增長。

Gross margin for our Public Cloud segment was 12% of total revenue and 37% of non-GAAP net revenue. Segment operating profit in Public Cloud was $25 million, which was 6% of total segment revenue and 17% of non-GAAP net revenue. In Private Cloud, total revenue for Q1 was $314 million, which includes legacy OpenStack revenues of $34 million and was down 12% year-over-year. The Private Cloud segment revenue decrease resulted from declines in our Private Cloud offerings and legacy OpenStack as well as the impact from the December hosted exchange ransomware incident. As a reminder, the hosted exchange e-mail business represented less than 1% of the total company revenue and roughly 2% of Private Cloud revenue. Private Cloud gross margin was 40% and segment operating profit was $93 million at an operating margin of 30%.

我們的公共雲部門的毛利率佔總收入的 12%，佔非 GAAP 淨收入的 37%。公共雲部門營業利潤為 2500 萬美元，佔部門總收入的 6%，佔非 GAAP 淨收入的 17%。在私有云領域，第一季度總收入為 3.14 億美元，其中包括 3400 萬美元的傳統 OpenStack 收入，同比下降 12%。私有云部門收入下降是由於我們的私有云產品和傳統 OpenStack 的下降以及 12 月份託管交易所勒索軟件事件的影響。需要提醒的是，託管交換電子郵件業務僅占公司總收入的不到 1%，約佔私有云收入的 2%。私有云毛利率為 40%，部門營業利潤為 9,300 萬美元，營業利潤率為 30%。

Given the continued widespread attention in the macro environment and financial sector disruption, I would like to reiterate some important points regarding our balance sheet and capital structure. First, we have a solid debt structure with favorable terms, which was less impacted by the recent run-up in interest rates. Over 70% of the debt is either fixed or hedged and the average interest rate on our total debt was 5.5% for the first quarter. We have no funded debt maturities until 2028, and we have no maintenance covenants, which gives us significant flexibility and runway as we execute our transformation plan.

鑑於宏觀環境和金融業混亂的持續廣泛關注，我想重申有關我們資產負債表和資本結構的一些重要觀點。首先，我們擁有堅實的債務結構和優惠的條件，受近期利率上升的影響較小。超過 70% 的債務是固定債務或對沖債務，第一季度總債務的平均利率為 5.5%。在 2028 年之前，我們沒有融資債務到期，也沒有維護契約，這為我們執行轉型計劃提供了巨大的靈活性和跑道。

Second, Rackspace has nearly $550 million of liquidity comprised of $174 million of cash on the balance sheet and a $375 million undrawn revolver. It is worth noting that our revolver commitments are provided by some of the largest global financial institutions, and we have no exposure to the U.S. regional banks that have recently faced challenges.

其次，Rackspace 擁有近 5.5 億美元的流動資金，其中包括資產負債表上的 1.74 億美元現金和 3.75 億美元的未提取左輪手槍。值得注意的是，我們的左輪承諾是由一些全球最大的金融機構提供的，我們沒有接觸最近面臨挑戰的美國地區銀行。

And finally, in the first quarter, we opportunistically spent $10 million of cash to repurchase $23 million of our senior unsecured notes in the marketplace at a deep discount. These transactions were at an average price of approximately $0.43 on the dollar and will result in $1.2 million of annual interest expense savings. We will continue to monitor and assess further opportunities to deploy capital and drive shareholder value.

最後，在第一季度，我們機會主義地花費了 1000 萬美元現金，以大幅折扣在市場上回購了 2300 萬美元的高級無擔保票據。這些交易的平均價格約為 0.43 美元，每年將節省 120 萬美元的利息費用。我們將繼續監控和評估進一步部署資本和提高股東價值的機會。

As Amar noted in his prepared remarks, 2023 will be a transformational year, and we believe our performance will reflect that. We will continue to focus on preserving cash and optimizing our expenses. We know it will take time for the transformation to drive improved financial performance, but we expect to begin seeing sustained progress in 2024.

正如阿馬爾在他準備好的講話中指出的那樣，2023 年將是轉型的一年，我們相信我們的業績將反映這一點。我們將繼續專注於保留現金和優化我們的支出。我們知道轉型需要時間來推動財務業績的改善，但我們預計將在 2024 年開始看到持續進展。

And with that backdrop, here is the guidance for Q2. We expect total revenue in the range of $725 million to $735 million. From a segment perspective, we expect Public Cloud revenue of $430 million to $435 million and Private Cloud revenue of $295 million to $300 million. Non-GAAP operating profit of $33 million to $37 million. Non-GAAP loss per share of $0.07 to $0.09. Additionally, non-GAAP other expense of $57 million to $59 million. Non-GAAP tax rate of 26%. Non-GAAP share count of 214 million to 216 million. And as we noted last quarter, we expect Q2 cash flow from operations and free cash flow to be positive. Lastly, we expect Q2 operating profit to be the trough with sequential profit improvement anticipated for the remainder of 2023, driven primarily by cost reduction and some improvement in mix.

在此背景下，以下是第二季度的指導。我們預計總收入在 7.25 億美元至 7.35 億美元之間。從細分市場來看，我們預計公共雲收入為 4.3 億至 4.35 億美元，私有云收入為 2.95 億至 3 億美元。非 GAAP 營業利潤為 3300 萬美元至 3700 萬美元。非 GAAP 每股虧損 0.07 至 0.09 美元。此外，非公認會計準則其他費用為 5700 萬至 5900 萬美元。非公認會計準則稅率為 26%。非 GAAP 股票數量為 2.14 億股至 2.16 億股。正如我們上季度指出的那樣，我們預計第二季度的運營現金流和自由現金流將為正。最後，我們預計第二季度營業利潤將達到谷底，預計 2023 年剩餘時間利潤將連續改善，這主要是由於成本降低和產品組合有所改善。

I will now turn the call back over to Amar for some closing comments.

我現在將把電話轉回給阿馬爾，徵求一些結束語。

Thanks, Bobby. As I mentioned last quarter, 2023 is a transformation year, and we expect performance to be choppy. This is reflected in our guidance, but as Bobby noted, we do anticipate Q2 being the low point from an operating profit perspective. We are fortunate to operate in growing markets and are working hard to improve our execution across the board. We are focused on four priorities to turn around our company's financial performance. First grow our Public Cloud services business at or above market. Second, stem the decline in Private Cloud offerings, excluding OpenStack. Third, build a highly efficient cost structure. And lastly, drive sustained growth in profit and free cash flow. We are making progress, but we have a lot of hard work ahead. We have a good strategy, a solid plan and a strong team. So I'm confident we'll get this done.

謝謝，鮑比。正如我上季度提到的，2023 年是轉型年，我們預計業績將波動。這反映在我們的指導中，但正如鮑比指出的那樣，從營業利潤的角度來看，我們確實預計第二季度是最低點。我們很幸運能夠在不斷增長的市場中開展業務，並正在努力全面提高我們的執行力。我們重點關註四個優先事項來扭轉公司的財務業績。首先將我們的公共雲服務業務發展到或高於市場水平。其次，阻止私有云產品（不包括 OpenStack）的下降。第三，構建高效的成本結構。最後，推動利潤和自由現金流的持續增長。我們正在取得進展，但我們還有很多艱苦的工作要做。我們擁有良好的戰略、可靠的計劃和強大的團隊。所以我有信心我們會完成這件事。

And with that, we'll take your questions.

接下來，我們將回答您的問題。

(Operator Instructions) Your first question comes from the line of Frank Louthan from Raymond James.

（操作員說明）您的第一個問題來自 Raymond James 的 Frank Louthan。

Can you just give us a little more color on what's in the Public and the Private Cloud? I assume that OpenStack and Apps & Cross Platform are in Private Cloud. And the relative profitability there, how should we think about that? And how quickly you can sort of exit those businesses and then look for other opportunities for Private Cloud?

您能否為我們介紹一下公共雲和私有云中的內容？我假設 OpenStack 和 Apps & Cross Platform 位於私有云中。以及那裡的相對盈利能力，我們應該如何考慮？您可以多快退出這些業務，然後尋找其他私有云機會？

Yes. So Frank, thanks for the question. So in -- so your question is around what's in the Private Cloud segment, or both Private and Public Cloud?

是的。弗蘭克，謝謝你的提問。那麼，您的問題是私有云領域的內容，或者私有云和公共雲的內容？

Well, kind of how you divided them up and just what we should think about -- the difference in profitability.

嗯，就是你如何劃分它們以及我們應該考慮什麼——盈利能力的差異。

Yes, absolutely. So Frank, the Private Cloud segment includes both Private Cloud, which includes managed hosting, and we also included OpenStack, which shares the infrastructure with Private Cloud and is also managed by Brian Lillie. Some of the Apps & Cross Platform that pertains to Private Cloud is also included in the Private Cloud segment. So Private Cloud segment addresses the private cloud market and vice versa, Public Cloud segment has infrastructure resale that we do across all the three hyperscalers and the services for Public Cloud, that includes services for infrastructure, application, data and security, both in managed services, elastic engineering and professional services. So those are two segments.

是的，一點沒錯。 Frank，私有云部分既包括私有云（包括託管託管），也包括 OpenStack，它與私有云共享基礎設施，也由 Brian Lillie 管理。一些與私有云相關的應用程序和跨平台也包含在私有云部分中。因此，私有云部門專注於私有云市場，反之亦然，公共雲部門擁有我們在所有三個超大規模提供商和公共雲服務中進行的基礎設施轉售，其中包括基礎設施、應用程序、數據和安全服務，包括託管服務、彈性工程和專業服務。所以這是兩個部分。

Now from a profitability perspective, Public Cloud, when you look at gross margins, and we have provided the gross margins to you in the segment financials. So it's operating at around 36% gross margins in Public Cloud on a net basis, which is using gross profit as a percentage of net revenue. And Bobby defined what net revenue is in his prepared remarks. Overall, the gross margins on a gross basis was about close to 12%. So on a net basis, it was about 36%.

現在，從盈利能力的角度來看，公共雲，當您查看毛利率時，我們已經在細分財務中向您提供了毛利率。因此，它在公共雲領域的淨毛利率約為 36%，即毛利潤占淨收入的百分比。鮑比在他準備好的講話中定義了淨收入是什麼。總體而言，毛利率約為12%。因此，按淨值計算，約為 36%。

Now the reason why we provided that metric to you so that you can really understand the underlying gross margins of the business after excluding the impact of the infrastructure resale gross margins, which basically dilutes the gross margins. As you know, gross margins for infrastructure resale is very low. On the Private Cloud side, the gross margins that we posted in Q1 is about 40%. So as you can see here, we have given a lot of transparency in our financials now. This is how we are going to manage the business internally. So we have two leaders managing Public and Private Cloud, and this is, however, we're going to report externally to the Street.

現在我們向您提供該指標的原因是為了讓您在排除基礎設施轉售毛利率的影響後能夠真正了解業務的基本毛利率，這基本上會稀釋毛利率。如您所知，基礎設施轉售的毛利率非常低。在私有云方面，我們第一季度發布的毛利率約為 40%。正如您在這裡所看到的，我們現在的財務狀況已經非常透明。這就是我們內部管理業務的方式。因此，我們有兩位領導者管理公共雲和私有云，但是，我們將向華爾街外部報告。

All right. That's great. And just a follow-up on the trough in the Q2 profitability. So you said it's going to improve sequentially mostly from cost cutting. What else can you give us -- what gives you the confidence that this is the trough and we're going to be moving forward from there?

好的。那太棒了。這只是第二季度盈利能力低谷的後續行動。所以你說它將主要通過成本削減來逐步改善。你還能給我們什麼——是什麼讓你相信現在是低谷，我們將從那裡繼續前進？

Yes. Frank. So look, we provided guidance here in terms of Q2 being the low point. We're pretty confident about that because we've got some significant cost actions underway -- in its way. As we segmented the business into these two BUs, we talked about that, we've uncovered some significant opportunities to take cost out, which we're executing on. And we've kind of doubled down on that for the second half as we've seen kind of macroeconomic environment kind of stall. So we're pretty confident or very confident that we will see sequential improvement in Q3 and Q4 going forward. At the same time, we will see a little bit of mix improvement, too, that should help us. So that's what gives us confidence.

是的。坦率。所以看，我們在這裡提供了第二季度低點的指導。我們對此非常有信心，因為我們正在以某種方式採取一些重大的成本行動。當我們將業務劃分為這兩個業務單元時，我們談到了這一點，我們發現了一些降低成本的重要機會，我們正在執行這些機會。由於我們看到宏觀經濟環境陷入停滯，因此我們在下半年加倍了投入。因此，我們非常有信心或非常有信心，我們將看到第三季度和第四季度的連續改善。與此同時，我們也會看到一些混合改進，這應該對我們有幫助。這就是給我們信心的原因。

So if I can just build on that, Frank, if I may, right? I think the other question is, for us, what are the early indicators of progress, right? As we go segment, the two businesses -- our entire business into two business units. I'm focused on three indicators as a measure of a successful turnaround of this company. First, in Public Cloud, I'm keeping a close watch on our services growth and how the mix of the business is changing from low-margin infra to a high-margin services business. As you know, since building a services backlog typically, it takes around 6 to 9 months, and that's what process we already initiated. I expect fiscal '23 to be a very low growth year for services with growth acceleration in fiscal 2024. So that's the first indicator.

那麼，如果我可以在此基礎上繼續發展，弗蘭克，如果可以的話，對嗎？我認為另一個問題是，對我們來說，進展的早期指標是什麼，對吧？當我們進行細分時，這兩項業務——我們的整個業務分為兩個業務部門。我關註三個指標來衡量這家公司是否成功扭虧為盈。首先，在公共雲方面，我正在密切關注我們的服務增長以及業務組合如何從低利潤基礎設施轉變為高利潤服務業務。如您所知，由於構建服務積壓工作通常需要大約 6 到 9 個月的時間，而這正是我們已經啟動的流程。我預計 23 財年的服務業增長非常低，但到 2024 財年增長將加速。這是第一個指標。

The second, in Private Cloud, I'm very focused on making sure that we arrest the decline in revenue, excluding the impact of OpenStack. So we have initiatives in place to both grow the bookings and backlog, while also actively reducing the churn. And in Private Cloud, as you know, given the long sales cycle and time it takes to implement the solution, I do expect better performance starting in 2024. And just to give you a little bit additional color here, Frank, every percentage point of improvement in revenue growth adds roughly about $7 million to $8 million of incremental profit due to the high fixed costs and the positive operating leverage we have in the Private Cloud business.

第二，在私有云方面，我非常專注於確保我們阻止收入下降，排除 OpenStack 的影響。因此，我們採取了一些舉措來增加預訂和積壓，同時積極減少客戶流失。正如您所知，在私有云領域，考慮到銷售週期長、實施解決方案所需的時間長，我確實預計從 2024 年開始會有更好的業績。弗蘭克，為了給您提供一點額外的信息，收入增長每提高一個百分點，就會增加大約 700 萬至 800 萬美元的增量利潤，因為我們在私有云業務中擁有較高的固定成本和積極的運營槓桿。

And the final metric, both Bobby and I are very much focused on, is making sure that we go drive cost efficiencies. As you know, as we split the business into two business units, we have uncovered additional operating efficiencies that we can go drive and also on the cash flow side, focus on cash flow generation and preservation. These are things that Bobby and I will be keeping a close tab on.

鮑比和我都非常關注的最後一個指標是確保我們提高成本效率。如您所知，當我們將業務分為兩個業務部門時，我們發現了可以提高的額外運營效率，並且在現金流方面，重點關注現金流的生成和保存。這些是鮑比和我將密切關注的事情。

(Operator Instructions) Our next question comes from the line of Kevin McVeigh from Credit Suisse.

（操作員說明）我們的下一個問題來自瑞士信貸銀行的 Kevin McVeigh。

And appreciate the additional disclosures. Amar or Bobby, any way to think about what free cash flow should be for 2023 and EBITDA associated with that? And what type of macro environment? I mean, you're pretty comfortable with the current environment. Like what type of macro outlook are you assuming as you work your way through this transition?

並感謝額外的披露。 Amar 或 Bobby，有什麼辦法可以考慮 2023 年的自由現金流以及與之相關的 EBITDA 應該是多少？宏觀環境是什麼樣的？我的意思是，你對目前的環境相當滿意。就像您在經歷這一轉變時所設想的宏觀前景是什麼類型？

Yes. So Kevin, look, for free cash flow, like we said in our Q4 earnings call back in February, we did anticipate Q1 cash flow to be slightly negative. But we do expect positive cash flow from operations in the remaining quarters, and we do expect free cash flow to be margin positive for the full year.

是的。因此，凱文，對於自由現金流，就像我們在 2 月份的第四季度收益電話會議中所說的那樣，我們確實預計第一季度現金流將略有負值。但我們確實預計剩餘季度的運營現金流將為正，並且我們預計全年的自由現金流將為正利潤率。

From an EBITDA perspective?

從 EBITDA 角度來看？

So I think -- so on the EBITDA perspective, Kevin, we expect EBIT to trough this quarter in Q2 and then from there sequentially, improve. Now we don't want to provide the EBITDA forecast for the full year, both revenue and EBITDA forecast. I would like to give you an outlook one quarter at a time, given the uncertain macro environment and also given the transformation that we are driving. So we need some room here to go change the mix of the business, Kevin, to two more of services compared to infrastructure resale. So there are a lot of moving parts here. So we'll guide you one quarter at a time. But as Bobby mentioned, we expect free cash flow to be marginally positive. And we landed in a good place in Q1, given all the onetime cash expenses that we had in Q1.

所以我認為，從 EBITDA 的角度來看，Kevin，我們預計 EBIT 將在第二季度觸底，然後依次改善。現在我們不想提供全年的 EBITDA 預測，包括收入和 EBITDA 預測。考慮到不確定的宏觀環境以及我們正在推動的轉型，我想一次向您提供一個季度的展望。因此，凱文，我們需要一些空間來改變業務組合，與基礎設施轉售相比，增加兩項服務。所以這裡有很多活動部件。因此，我們將一次指導您一個季度。但正如鮑比提到的，我們預計自由現金流將略微為正。考慮到我們在第一季度的所有一次性現金支出，我們在第一季度的表現不錯。

And then from a macro perspective, just on that point there, Kevin. Look, we -- it's a tough macro right now, right? So our assumption is it remains tough and the market doesn't get -- the macro doesn't any better either. That's kind of our assumption going to these -- sorry, Q2 guidance and then as well into our full year cash flow and free cash flow guidance.

然後從宏觀角度來看，就這一點而言，凱文。聽著，我們——現在是一個艱難的宏觀，對吧？因此，我們的假設是，形勢依然嚴峻，市場也沒有好轉，宏觀經濟也沒有任何好轉。這是我們對這些的假設——抱歉，是第二季度的指導，然後是我們的全年現金流和自由現金流指導。

Great. And then it looked like you took the opportunity to acquire some senior notes, about $23 million. Should we expect more of that over the course of the year? Or just any thoughts around that?

偉大的。然後看起來你藉機收購了一些高級票據，大約 2300 萬美元。我們是否應該在這一年中期待更多這樣的事情？或者只是對此有任何想法？

Yes. So Kevin, look, our debt is trading at high discounts. So we do see that. But -- anyway we did purchase $23 million of unsecured bonds at the $10 million that you talked about. When it comes to repurchasing debt, I mean, we will consider it, but our priority is investing in the business so that we can pivot to profitable growth going forward. That's our priority. Our capital allocation priorities haven't changed, and our top priority remains investing in the business. So...

是的。凱文，看，我們的債務正在以高折扣交易。所以我們確實看到了這一點。但是——無論如何，我們確實以您所說的 1000 萬美元的價格購買了 2300 萬美元的無擔保債券。當談到回購債務時，我的意思是，我們會考慮它，但我們的首要任務是投資於業務，以便我們能夠轉向未來的盈利增長。這是我們的首要任務。我們的資本配置重點沒有改變，我們的首要任務仍然是投資業務。所以...

And if I can just add to that, Bobby, very well said, we also want to be prudent about maintaining liquidity, Kevin, given the uncertain macro environment and also our ongoing transformation. So we will balance all those things, investing organically, as Bobby mentioned, being opportunity if we have to, but also making sure that we maintain sufficient liquidity given the transformation and the macro outlook.

如果我可以補充一點，鮑比，說得很好，凱文，考慮到不確定的宏觀環境以及我們正在進行的轉型，我們也希望謹慎維持流動性。因此，我們將平衡所有這些事情，正如鮑比提到的那樣，進行有機投資，如果有必要的話，這就是機會，但也要確保考慮到轉型和宏觀前景，我們保持足夠的流動性。

The next question comes from the line of Ramsey El-Assal from Barclays.

下一個問題來自巴克萊銀行的拉姆齊·阿薩爾 (Ramsey El-Assal)。

This is Ryan Campbell, on for Ramsey. I was hoping you could provide a little additional color on the bookings pipeline. What dynamics are you seeing from current clients versus new logos? And then from a sales perspective, has your approach changed in order to accelerate the shift to higher-value services?

我是瑞安·坎貝爾，替補拉姆齊。我希望您能為預訂流程提供一些額外的色彩。與新徽標相比，您從當前客戶那裡看到了哪些動態？然後從銷售的角度來看，您的方法是否發生了變化，以加速向更高價值服務的轉變？

Yes. I'll take both. Let me just talk about the macro environment a little bit here and take the opportunity to do that, and then I will give you some color on bookings. And then what is changing within this go-to-market organization to drive higher margin mix of services. So when you take -- similar to what we said last quarter, many companies who we compete with in the cloud ecosystem remain cautious about the broader macro outlook and the impact that they're seeing to demand. We see different dynamics in our Public Cloud as well as the Private Cloud business. For example, in Public Cloud, when we talk to our customers, most of our customers are focused on optimizing their cloud spend and all the discretionary spend is under heavy scrutiny.

是的。我兩個都要。我在這裡簡單談談宏觀環境，並藉此機會做一下，然後我會給大家一些有關預訂的信息。然後，這個進入市場的組織內部正在發生什麼變化，以推動更高利潤的服務組合。因此，與我們上季度所說的類似，許多與我們在雲生態系統中競爭的公司對更廣泛的宏觀前景和他們所看到的需求影響保持謹慎。我們在公共雲和私有云業務中看到了不同的動態。例如，在公共雲中，當我們與客戶交談時，大多數客戶都專注於優化他們的雲支出，並且所有可自由支配的支出都受到嚴格審查。

Whereas in Private Cloud, customers are looking to move out of the data centers, they want to reduce their CapEx investments, and they're also looking at moving workloads that are not operating efficiently in Public Cloud. So again, as Bobby mentioned, we are prepared to navigate the slowdown while preparing for a rebound. So we'll continue to manage our expenses. We are also expanding our services and solutions offering across both Public and Private Cloud.

而在私有云中，客戶希望遷出數據中心，他們希望減少資本支出投資，並且他們還考慮將無法在公共雲中高效運行的工作負載轉移。因此，正如鮑比提到的那樣，我們準備好應對經濟放緩，同時為反彈做好準備。因此，我們將繼續管理我們的開支。我們還在公共雲和私有云上擴展我們的服務和解決方案。

And in summary, I'd say, we're trying to take advantage of the current macro conditions to complete our transformation and improve execution. So as the customer spending returns to normal, we'll be prepared to capture the demand and begin to grow at or above market. So that's the -- that's our strategy here and how we want to execute.

總而言之，我想說的是，我們正在努力利用當前的宏觀條件來完成我們的轉型並提高執行力。因此，隨著客戶支出恢復正常，我們將準備好抓住需求並開始以等於或高於市場的速度增長。這就是我們的戰略以及我們想要執行的方式。

Now coming to bookings. We did expect a bit of a slowdown in bookings volume, driven by both the impact of macro environment as well as our reorganization. We -- as I mentioned in my prepared remarks, we continue to see longer sales cycles as companies reevaluate their spending, shift focus to cost optimization, as I mentioned earlier. So in terms of performance specific to our first quarter, although we do not give specific bookings number, bookings were off to a slow start across all geographies. However, as the quarter progressed, our bookings showed typical sequential improvement within the quarter.

現在開始預訂。由於宏觀環境和我們的重組的影響，我們確實預計預訂量會有所放緩。正如我在準備好的發言中提到的，正如我之前提到的，隨著公司重新評估其支出，將重點轉向成本優化，我們將繼續看到更長的銷售週期。因此，就我們第一季度的具體業績而言，儘管我們沒有給出具體的預訂數量，但所有地區的預訂量都開始緩慢。然而，隨著本季度的進展，我們的預訂量顯示出本季度典型的環比改善。

And we continue to drive mix shift to services in our Public Cloud business. I'm glad where we landed from a mix perspective. But we still need to go make sure that we start growing our services bookings at or above market. So there's some work to be done there. We saw our funnel in certain verticals in Private Cloud, specifically in health care. It continues to improve, which is very encouraging, right?

我們繼續推動公共雲業務向服務的混合轉型。我很高興我們從混合的角度出發。但我們仍然需要確保我們的服務預訂量開始增長至市場水平或高於市場水平。因此，還有一些工作要做。我們在私有云的某些垂直領域看到了我們的渠道，特別是在醫療保健領域。它不斷改進，這非常令人鼓舞，對嗎？

Now from a sales perspective, there's definitely a shift in how we go to market today, right? So we used to have an infrastructure resale motion with services attached. We are flipping into a services-led motion with infrastructure resales attached wherever we can, right? We are not forcing that. We're also having the right level of discussion, whether it's with the CDOs or Chief Data Officers for our data services, or we go and talk with the business guys for application modernization services. So this is a different motion than what we had in the last couple of years.

現在從銷售的角度來看，我們今天進入市場的方式肯定發生了轉變，對嗎？因此，我們曾經提出過附帶服務的基礎設施轉售動議。我們正在轉向以服務為主導的動議，並儘可能附加基礎設施轉售，對嗎？我們不會強迫這樣做。我們還進行了適當程度的討論，無論是與 CDO 或首席數據官就我們的數據服務進行討論，還是與業務人員就應用程序現代化服務進行討論。因此，這與我們過去幾年的動議不同。

We're also focusing on enterprise accounts as well as mid-market. Enterprise account is -- we are focusing on the large 25, 30 accounts so that we can selectively penetrate those enterprise accounts using a client principle model. Whereas on the mid-market, which I believe is a sweet spot for the size we are, and the biggest opportunity for us to expand is in mid-market for Public Cloud services where we are using a different approach.

我們還關注企業客戶和中端市場。企業賬戶是——我們專注於 25、30 個大型賬戶，以便我們可以使用客戶原則模型有選擇地滲透這些企業賬戶。而在中端市場，我認為對於我們的規模而言這是一個最佳點，而我們擴展的最大機會是在公共雲服務的中端市場，我們正在使用不同的方法。

So we have a regional model, we have a model by service line, and we do have some sales specialists. So this is -- we are really transforming the way we go to market and have a discussion with the customer. But more importantly, we are keeping customers at the center of whatever we do and drive more affinity to the customer. That's how we believe that we can win more business.

因此，我們有一個區域模型，我們有一個按服務線劃分的模型，而且我們確實有一些銷售專家。所以這就是——我們正在真正改變我們進入市場並與客戶討論的方式。但更重要的是，我們將客戶置於我們所做的一切的中心，並提高與客戶的親和力。這就是我們相信我們能夠贏得更多業務的方式。

Any other question, John? Can you hear us?

還有其他問題嗎，約翰？你可以聽見我們嗎？

It would appear he was on mute. Let's move to the next question. Our next question comes from the line of Abdullah Khan from Evercore.

看來他處於靜音狀態。讓我們進入下一個問題。我們的下一個問題來自 Evercore 的 Abdullah Khan。

I'm Abdullah, speaking in for Amit Daryanani. And I wanted to ask about specifically Public Cloud gross margins in the quarter. And I noticed that they are at about 36%, as you mentioned, number, versus like 46% in Q1 of '22, and that's based on marginally higher net revenue. So I just wanted to ask what to the decline and how we can expect that to be or grow or stabilize going forward?

我是阿卜杜拉，代表阿米特·達里亞納尼發言。我想具體詢問本季度公共雲的毛利率。我注意到，正如您所提到的，他們的比例約為 36%，而 22 年第一季度的比例約為 46%，這是基於略高的淨收入。所以我只是想問，下降的原因是什麼？我們如何預期下降、增長或穩定？

Yes. Thanks, Abdullah. I hope you're doing well. Listen, I think you're absolutely right. Our gross margins were 36% on a net basis, and it was roughly 46% last year. Now what is happening here are two things, right? One is, as we go pivot to our services business, and also, we are seeing a slowdown in demand in services because of the macro environment, we are seeing underutilization of our services resources. And that is what is key in -- key driving this gross margin compression.

是的。謝謝，阿卜杜拉。我希望你一切都好。聽著，我認為你是完全正確的。我們的淨毛利率為 36%，去年約為 46%。現在這裡發生的是兩件事，對吧？一是，當我們轉向服務業務時，而且由於宏觀環境的原因，我們看到服務需求放緩，我們發現我們的服務資源沒有得到充分利用。這就是推動毛利率壓縮的關鍵。

Now Bobby mentioned about cost efficiency programs that we are running in this -- starting to run this quarter as well as in the second half. That will be -- partly will be to go improve our utilization there of our services resources as well as making sure that we have the right OpEx structure as we go align our services-led motion in the marketplace.

現在，鮑比提到了我們正在運行的成本效率計劃——本季度和下半年開始運行。這部分是為了提高我們對服務資源的利用率，並確保我們在市場上調整以服務為主導的行動時擁有正確的運營支出結構。

And I would just add that this is part of the efficiencies that we've uncovered as we've segmented the business. And as Amar said, one of the things that we are definitely looking at is we've seen a slowdown in our billable resources, and that's something that we're going to address as part of our second half cost actions.

我想補充一點，這是我們在對業務進行細分時發現的效率的一部分。正如阿馬爾所說，我們肯定會關注的一件事是我們的計費資源有所放緩，這是我們將在下半年成本行動中解決的問題。

Yes. Let me just give you an additional color because this is the first time we are reporting this segment information. For us, we consider fiscal '23 as a year to start pivoting the business to higher-margin services. So there are a lot of things -- there are a lot of dynamics going on between previous years or previous segment reporting and this segment reporting. For us, it starts from now, and this is how we are going to go manage.

是的。讓我給您一個額外的顏色，因為這是我們第一次報告此細分信息。對於我們來說，我們認為 23 財年是開始將業務轉向利潤率更高的服務的一年。因此，有很多事情——前幾年或之前的分部報告與本分部報告之間存在很多動態。對我們來說，從現在開始，這就是我們要如何去管理。

I do believe that when you take a look -- Abdullah, take a look at the Public Cloud or services companies, services companies typically operate between 30% to 35% gross margins. And that's the range that we should be operating in. So we are actually on the higher end of the range. But as we go drive more growth in our business will have a positive impact from the higher-margin services, but more importantly, we'll also be driving growth. So it's a competitive environment. So we believe that sort of low to mid 30% gross margins are the right gross margins for our services business on a net basis, Public Cloud services.

我確實相信，當你看看阿卜杜拉，看看公共雲或服務公司時，服務公司的毛利率通常在 30% 到 35% 之間。這就是我們應該經營的範圍。所以我們實際上處於該範圍的高端。但隨著我們推動業務進一步增長，利潤率更高的服務將會產生積極影響，但更重要的是，我們也將推動增長。所以這是一個競爭環境。因此，我們認為 30% 的中低毛利率對於我們的服務業務（公共雲服務）來說是合適的毛利率。

Okay. That's really helpful. And then just one additional follow-up really quickly. When you say you guys want to grow the Public Cloud at or above market, are you guys comfortable with giving your range, your number, but that would be really helpful, if possible.

好的。這真的很有幫助。然後很快就又進行了一項後續行動。當你們說你們希望將公共雲發展到市場水平或高於市場水平時，你們是否願意給出你們的範圍、你們的數字，但如果可能的話，這將非常有幫助。

Say that again, what's the last...

你再說一遍，最後是什麼……

Range or a number for the market growth that we...

我們...的市場增長范圍或數字

Yes. So listen, I think the market -- again, there are a lot of data out there. We believe that this business right now in the current macro environment is hard to predict, what the growth rate is. But long-term growth rate for this -- for the Public Cloud services should be low double digits, right? So that's what we are targeting, high single digit to low double digit. That's what we believe is a long-term sustainable growth rate for Public Cloud services.

是的。所以聽著，我認為市場上有很多數據。我們認為，這個業務在目前的宏觀環境下，很難預測其增長率是多少。但公共雲服務的長期增長率應該是低兩位數，對嗎？這就是我們的目標，從高個位數到低兩位數。這就是我們認為公共雲服務的長期可持續增長率。

(Operator Instructions) Our next question comes from the line of Puneet Jain from JPMorgan.

（操作員指令）我們的下一個問題來自摩根大通的 Puneet Jain。

I just wanted to follow up on the prior question. On Public Cloud, how large is reselling business within Public Cloud?

我只是想跟進之前的問題。在公有云上，公有云內的轉售業務有多大？

Well, I think -- listen, I think there are a couple of -- Puneet, good to hear your voice, and thanks for the question. So Puneet, we will not be able to disclose for various competitive reasons, and trade reasons, we are unable to disclose how big is an infrastructure resale compared to our overall. Having said that, I think the information you can extrapolate that information and further information based on the visibility we have given on -- for the net revenue, okay? So that's already there, but I'm not going to disclose what that number is for competitive reasons.

嗯，我想——聽著，我想有幾個——普尼特，很高興聽到你的聲音，謝謝你的提問。因此，普尼特，由於各種競爭原因和貿易原因，我們無法透露基礎設施轉售與我們整體相比有多大。話雖如此，我認為您可以根據我們給出的可見性來推斷該信息和進一步的信息 - 對於淨收入，好嗎？所以這個數字已經存在了，但出於競爭原因我不會透露這個數字。

That's fair. That's fair. And if you can also talk about like the visibility you have on the second half of this year, maybe from the bookings or backlog. Like how are bookings trending and how much visibility you have on second half at this point of the year?

這還算公平。這還算公平。如果您還可以談論今年下半年的可見度，也許來自預訂或積壓。比如預訂趨勢如何以及今年下半年的可見度如何？

So Puneet, to be honest with you, I think the visibility is limited. I think the macro environment remains to be very volatile. And our customers are also focused on making sure that they also drive and optimize their spend. So most of our projects are on cost optimization. And so I think, to be honest with you, the visibility is limited in terms of the demand environment. Having said that, our internal goal is to continuously drive bookings sequentially every quarter. As we start -- it takes about a couple of quarters for our sales organization to settle in into this new model that we have created. And we are hoping that as we roll through the year, our bookings should improve sequentially.

所以普尼特，老實說，我認為知名度是有限的。我認為宏觀環境仍然非常不穩定。我們的客戶也致力於確保他們也推動和優化他們的支出。所以我們的大部分項目都是在成本優化上。所以我認為，老實說，就需求環境而言，可見性是有限的。話雖如此，我們的內部目標是每個季度持續推動預訂量。當我們開始時，我們的銷售組織需要大約幾個季度的時間才能適應我們創建的這種新模式。我們希望，隨著這一年的推移，我們的預訂量應該會逐步改善。

Now I don't know where the demand environment is going to be, but I think we have put a conservative plan in place because we want to get into the rhythm of going and executing well on the go-to-market side.

現在我不知道需求環境會怎樣，但我認為我們已經制定了保守的計劃，因為我們希望在進入市場方面進入良好的節奏並執行良好。

I would just say that we have a lot more confidence in the operating profit performance during the rest of the year. That's why we're confident about saying that we will see sequential improvement in Q3 and Q4.

我只想說，我們對今年剩餘時間的營業利潤表現更有信心。這就是為什麼我們有信心說我們將在第三季度和第四季度看到連續改善。

And to add to the point, Puneet, there are, and we have been saying this for a couple of quarters, and I would like to repeat the same thing. We are walking away from infrastructure resale business that doesn't have the right return on invested capital or which on a fully loaded basis will be cash flow negative, right? So I want to make sure that we continue that discipline so that we can start building a services backlog in this business. And that's the reason I say, the transformation, the macro outlook makes it a little uncertain for us to start predicting what the outlook is going to be for the second half.

補充一點，普尼特，是的，我們已經這麼說了幾個季度了，我想重複同樣的事情。我們正在放棄基礎設施轉售業務，因為這些業務沒有適當的投資回報，或者在滿載的基礎上現金流為負，對吧？因此，我想確保我們繼續遵守這一紀律，以便我們可以開始在該業務中建立服務積壓。這就是我說的原因，轉型和宏觀前景使我們開始預測下半年的前景有點不確定。

Our final question of the day comes from the line of Brad Clark from Bank of Montreal.

我們今天的最後一個問題來自蒙特利爾銀行的 Brad Clark。

I want to ask a bigger picture question with all the buzz around AI and more specifically generative AI. I want to understand how Rackspace is looking at this space in terms of opportunities for the business, but also potential (inaudible) sort of with gen AI and AI more broadly to IT services?

我想針對人工智能（更具體地說是生成式人工智能）的所有討論提出一個更宏觀的問題。我想了解 Rackspace 如何看待這個領域的業務機會，以及 gen AI 和 AI 更廣泛的 IT 服務的潛力（聽不清）？

Yes. Thank you. That's a great question. And Listen, Brad, with ChatGPT going viral and each hyperscaler making significant investments in AI, customers continue to express excitement and also, we are seeing this willingness to leverage generative AI as we go talk to the customers. We have the capabilities, by the way, needed to achieve the business outcomes that are designed in the marketplace. And these capabilities range from, say, advisory services all the way to transformation and implementation in data as well as AI. So we have really a cool team of data analysts and AI specialists that are across the globe that have the capability today.

是的。謝謝。這是一個很好的問題。聽著，Brad，隨著 ChatGPT 的病毒式傳播以及每個超大規模企業對人工智能進行了大量投資，客戶繼續表達興奮，而且，當我們與客戶交談時，我們看到了利用生成式人工智能的意願。順便說一句，我們擁有實現市場設計的業務成果所需的能力。這些能力範圍從諮詢服務一直到數據和人工智能的轉型和實施。因此，我們確實擁有一支由數據分析師和人工智能專家組成的很酷的團隊，他們遍布全球，擁有當今的能力。

So we are seeing a lot of excitement and the hype in this area when talking with our customers or prospective customers. But to be honest, we don't expect to see that result in revenue or profit of any material value in 2023.

因此，在與我們的客戶或潛在客戶交談時，我們看到了這一領域的許多興奮和炒作。但說實話，我們預計 2023 年不會產生任何實質性價值的收入或利潤。

Thank you. We have no further questions at this time. I would now like to turn the call back to Mr. Robert Watson for any concluding remarks.

謝謝。目前我們沒有進一步的問題。我現在想將電話轉回羅伯特·沃森先生，請他發表結論性意見。

Thank you, everybody, for joining us. If you have any follow-up questions, please reach out to us at ir@rackspace.com, and we will speak with you all soon. Thanks so much.

謝謝大家加入我們。如果您有任何後續問題，請通過 ir@rackspace.com 與我們聯繫，我們將盡快與您聯繫。非常感謝。

Thank you. This concludes today's conference call. You may now disconnect.

謝謝。今天的電話會議到此結束。您現在可以斷開連接。