Rackspace's Q1 earnings disappoint

Rackspace's Q1 earnings disappoint

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

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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

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