Rackspace's Q4: Customer base grew but revenue misses expectations

Rackspace grew significantly in net income, revenue, and customers -- but the cloud company still slipped under Wall Street expectations.
Written by Rachel King, Contributor

Rackspace's revenue continued to climb during the fourth quarter -- but it wasn't enough to meet analyst demands.

The open cloud company reported a fourth quarter net income of $30 million, or 21 cents a share (statement). Non-GAAP earnings were 22 cents a share on a revenue of $353 million -- up 25 percent annually.

But Wall Street was expecting Rackspace to report fourth quarter earnings of 21 cents a share on revenue of $355 million.

Following the earnings release, Rackspace shares were initially down by 8.8 percent in after hours trading.


CEO Lanham Napier briefly reflected on the year overall in prepared remarks:

During 2012 we made significant investments across the business to bolster our systems, products, and service delivery capabilities. One of the most important projects we completed in 2012 was the launch of our Open Cloud platform

More highlights from Rackspace's Q4:

  • Total customer base grew to 205,538 -- up from 197,635 at the end of Q3 2012.
  • Total server count increased to 90,524 -- up from 89,051 servers at the end of the previous quarter.
  • Employed 4,852 people worldwide as of December 31 -- up from 4,596 at the end of the previous quarter.
  • Inked a strategic deal with Hortonworks to jointly develop an OpenStack-based Hadoop solution for the public and private cloud that could be deployed within in minutes.
  • Expanded OpenStack training by launching the "industry’s first" certification program for open source cloud computing software.

Screenshot via MarketWatch

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