Rackspace delivers solid Q1, net income up 77 percent

Rackspace CEO and president Taylor Rhodes noted that the company's OpenStack private cloud, which is powered by Red Hat, is "scaling rapidly."

Rackspace reported first quarter financial results Monday that topped analyst EPS estimates.

The managed cloud company reported a net income of $49 million, or 26 cents per share (statement). All told, net income grew 77.5 percent compared to Q1 2015.

Non-GAAP earnings were 34 cents per share on a revenue of $518 million in revenue, up nearly eight percent over the same quarter a year ago.

Wall Street was looking for earnings of just 22 cents per share with $518.95 million in revenue.

Rackspace blamed the slight revenue miss on shifts in currency exchange rates and the sale of its Jungle Disk business.

In prepared remarks, Rackspace CEO and president Taylor Rhodes highlighted partnerships with other cloud providers, such as Amazon Web Services and Microsoft, as drivers for its long-term growth. Rhodes also said Rackspace's OpenStack private cloud, which is powered by Red Hat, is "scaling rapidly."

For the current quarter, Wall Street is looking for non-GAAP earnings of 22 cents per share with $523.57 million in revenue.

Rackspace responded by projecting revenue between $519 million and $524 million.

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