We have replied you in the support ticket ID 1414007. I will summarize the answer here, so our community members can still benefit from the provided information.
We have experienced such an issue when Telerik Reporting REST Service was deployed on Azure. Check if you have set the rendering extensions correctly as described in the OutOfMemoryException on exporting or printing Telerik report from Azure WebSites
Restart the Azure-hosted Reporting REST Service, especially if you have switched Azure plans recently.
Note that the Reporting engine uses the GDI+ library, which is currently available only in Basic
and higher App Service plans
. You may find helpful also the Preview reports using REST Service deployed in Azure
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