diff --git a/ci-fix-cloudstack-Use-parsed-lease-file-for-virtual-rou.patch b/ci-fix-cloudstack-Use-parsed-lease-file-for-virtual-rou.patch
new file mode 100644
index 0000000..0db5fa8
--- /dev/null
+++ b/ci-fix-cloudstack-Use-parsed-lease-file-for-virtual-rou.patch
@@ -0,0 +1,58 @@
+From 6e3c351b013dc2ac01035853229ffdfdafa3afa8 Mon Sep 17 00:00:00 2001
+From: Brett Holman <brett.holman@canonical.com>
+Date: Wed, 3 Jan 2024 09:11:40 -0700
+Subject: [PATCH] fix(cloudstack): Use parsed lease file for virtual router in
+ cloudstack
+
+RH-Author: Ani Sinha <anisinha@redhat.com>
+RH-MergeRequest: 137: fix(cloudstack): Use parsed lease file for virtual router in cloudstack
+RH-Jira: RHEL-40418
+RH-Acked-by: Cathy Avery <cavery@redhat.com>
+RH-Acked-by: Jon Maloy <jmaloy@redhat.com>
+RH-Commit: [1/1] 77f97c04432fffff125dc1725d66b33ae0ab4af8
+
+Fixes 5942f4023e2581a
+
+(cherry picked from commit cb36bf38b823f811a3e938ccffc03d7d13190095)
+Signed-off-by: Ani Sinha <anisinha@redhat.com>
+---
+ cloudinit/sources/DataSourceCloudStack.py | 22 +++++++++++-----------
+ 1 file changed, 11 insertions(+), 11 deletions(-)
+
+diff --git a/cloudinit/sources/DataSourceCloudStack.py b/cloudinit/sources/DataSourceCloudStack.py
+index fd2482a3..f752765d 100644
+--- a/cloudinit/sources/DataSourceCloudStack.py
++++ b/cloudinit/sources/DataSourceCloudStack.py
+@@ -229,18 +229,18 @@ def get_vr_address():
+         )
+         return latest_address
+ 
+-    # Try dhcp lease files next...
++    # Try dhcp lease files next
+     lease_file = dhcp.IscDhclient.get_latest_lease()
+-    if not lease_file:
+-        LOG.debug("No lease file found, using default gateway")
+-        return get_default_gateway()
+-
+-    lease_file = dhcp.IscDhclient.parse_dhcp_server_from_lease_file(lease_file)
+-    if not latest_address:
+-        # No virtual router found, fallback on default gateway
+-        LOG.debug("No DHCP found, using default gateway")
+-        return get_default_gateway()
+-    return latest_address
++    if lease_file:
++        latest_address = dhcp.IscDhclient.parse_dhcp_server_from_lease_file(
++            lease_file
++        )
++        if latest_address:
++            return latest_address
++
++    # No virtual router found, fallback to default gateway
++    LOG.debug("No DHCP found, using default gateway")
++    return get_default_gateway()
+ 
+ 
+ # Used to match classes to dependencies
+-- 
+2.39.3
+
diff --git a/cloud-init.spec b/cloud-init.spec
index 5cd4a40..b54ea18 100644
--- a/cloud-init.spec
+++ b/cloud-init.spec
@@ -6,7 +6,7 @@
 
 Name:           cloud-init
 Version:        23.4
-Release:        7%{?dist}.3
+Release:        7%{?dist}.4
 Summary:        Cloud instance init scripts
 
 Group:          System Environment/Base
@@ -49,6 +49,8 @@ Patch26: ci-fix-Undeprecate-network-in-schema-route-definition-5.patch
 Patch27: ci-fix-Fall-back-to-cached-local-ds-if-no-valid-ds-foun.patch
 # For RHEL-36701 - DataSourceNoCloudNet not configurable via config files [rhel-8.10.z]
 Patch28: ci-fix-Always-use-single-datasource-if-specified-5098.patch
+# For RHEL-40418 - [Cloud-init] CloudstackDataSource cannot work with NetworkManager [rhel-8.10.z]
+Patch29: ci-fix-cloudstack-Use-parsed-lease-file-for-virtual-rou.patch
 
 BuildArch:      noarch
 
@@ -264,6 +266,11 @@ fi
 %config(noreplace) %{_sysconfdir}/rsyslog.d/21-cloudinit.conf
 
 %changelog
+* Thu Jul 04 2024 Miroslav Rezanina <mrezanin@redhat.com> - 23.4-7.el8_10.4
+- ci-fix-cloudstack-Use-parsed-lease-file-for-virtual-rou.patch [RHEL-40418]
+- Resolves: RHEL-40418
+  ([Cloud-init] CloudstackDataSource cannot work with NetworkManager [rhel-8.10.z])
+
 * Wed May 29 2024 Jon Maloy <jmaloy@redhat.com> - 23.4-7.el8.3
 - ci-fix-Always-use-single-datasource-if-specified-5098.patch [RHEL-36701]
 - Resolves: RHEL-36701