November 15, 2023 at 04:48PM
Rackspace Technology has incurred significant expenses and losses following a ransomware attack on one of its Microsoft Exchange servers. The incident costs have reached eight figures, with expenses for recovery totaling at least $6 million. Additionally, the company has already suffered losses of over $10.8 million and faces lawsuits. Despite this, Rackspace remains financially stable, with enough funds for stock buy-backs. Other companies may struggle more with the aftermath of ransomware attacks.
Key takeaways from the meeting notes:
1. Rackspace Technology has incurred significant expenses and losses following a ransomware attack on one of its hosted Microsoft Exchange servers.
2. The incident costs have exceeded eight figures.
3. Rackspace Technology is a Texas-based cloud computing services provider primarily serving small and midsize businesses.
4. The company has not commented on its financial statements in relation to the ransomware attack.
5. The ransomware attack occurred on December 2, 2022, and disrupted email services for thousands of SMB customers through the ProxyLogOn zero-day vulnerability.
6. By March of this year, Rackspace incurred ransomware-related expenses of $3.2 million, including remediation costs, legal fees, and other professional services.
7. First-quarter expenses related to the cybersecurity incident were reported as $1.7 million, and the second quarter’s expenses were $4.9 million, bringing the total expenses for recovery to $6.6 million.
8. In the company’s most recent 10-Q filing, an additional $5 million was added to the expenses tally, but a cyber insurance payout of $5.4 million is expected.
9. Even with the insurance payout, Rackspace is still projected to have at least $6 million in bills related to this single ransomware attack.
10. Rackspace has already incurred losses of over $10.8 million as a result of the ransomware incident and is facing multiple lawsuits.
11. Despite the impact of the cyberattack, Rackspace had enough funds to carry out $222 million in stock buy-backs using $77 million cash on hand.
12. Other companies affected by ransomware attacks may not have the same financial resources to handle the aftermath.