Rackspace Q3 revenue beats, raises year outlook citing multi-cloud activity

The data center hosting operator beat Wall Street’s revenue and profit expectations with its third quarterly report, and raised its year outlook, citing a promising multi-cloud market.
Written by Tiernan Ray, Senior Contributing Writer

Shares of datacenter hosting operator Rackspace Technology declined slightly in late trading, after the company this afternoon beat expectations for revenue and profit in the third quarter, and raised its outlook for year revenue growth, crediting activity in the market for multiple cloud-computing services.

Rackspace CEO Kevin Jones said the quarter showed "continued strong execution and performance … as we continue to capitalize on the $400 billion multicloud market opportunity."

"As multicloud adoption continues to accelerate all over the world, Rackspace Technology will be there to capitalize on the opportunity," said Jones.

For the three months ending in September, RingCentral's revenue rose 13%, year over year, to $682 million, yielding EPS of 19 cents, excluding some costs. 

That was better than the average Wall Street projection for $670 million and 18 cents per share. It was also in line with the company's own forecast for $681 million to $683 million in revenue and 17 cents to 18 cents non-GAAP EPS.

For the full year, the company sees revenue rising by 10% to 11%, which is higher than a prior forecast for 9% to 10% growth. 

The company is now projecting Ebitda for the year of $758 million to $762 million, up from a prior forecast for $756 million to $760 million. 

This quarter's upside surprise to results contrasts with a merely in-line quarter in Q2. 

Rackspace shares rose initially but then declined 2.7% in late trading to $17.15.  

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