Rackspace's Q1 earnings disappoint

Summary:The company's hosting revenue was $236.6 million with public cloud sales of $64.75 million.

Rackspace's first quarter earnings fell short of Wall Street estimates as amid a mixed quarter.

Shares of Rackspace were hammered in afterhours trading on the news.

The company reported first quarter earnings of $23.18 million, or 17 cents a share, on revenue of $301.35 million, up 31 percent from a year ago.

Wall Street was looking for earnings of 18 cents a share on revenue of $300.5 million in the first quarter.

Rackspace said in a statement that its profit margins in the first quarter were 7.7 percent, down from 8.8 percent in the fourth quarter. Margins were up from 6 percent in the first quarter a year ago.

By the numbers:

  • Rackspace said its total server count was 82,438 in the first quarter, up from 79,805 at the end of the fourth quarter.
  • Total customers were 180,866 in the first quarter, up from 172.510 at the end of the fourth quarter.
  • Adjusted EBITDA was $101 million and was hurt by a non-cash charge related to data center leases.
  • The company's hosting revenue was $236.6 million with public cloud sales of $64.75 million.
  • Average revenue per server was $1,238 in the first quarter, up from $1,191 in the fourth quarter.

Topics: Banking, Enterprise Software

About

Larry Dignan is Editor in Chief of ZDNet and SmartPlanet as well as Editorial Director of ZDNet's sister site TechRepublic. He was most recently Executive Editor of News and Blogs at ZDNet. Prior to that he was executive news editor at eWeek and news editor at Baseline. He also served as the East Coast news editor and finance editor at CN... Full Bio

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