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Rackspace Hosting Conference Call Highlights

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Rackspace Hosting (NYSE: RAX) reported its second quarter earnings on Tuesday. Shares of the company are down seven percent.

Below are some key highlights from its conference call:

• For the first time in Rackspace's history, we added more than $20 million of new revenue in a single quarter.
• Revenue for the second quarter grew 4.8 percent sequentially to $441 million.
• The sequential increase in revenue growth was largely driven by strong and consistent sales performance.
• This record was driven by exceptionally strong sales performance in each month of the second quarter.
• Another outstanding highlight is the performance of our cloud products in the second quarter.
• We went live with a new version of our website with better descriptions.
• Next, we unbundled our pricing to highlight the value of Fanatical Support and allow a more accurate comparison of our offerings to the total cost of an unmanaged cloud.
• Third, we strengthened our service-level agreements and guarantees to further emphasize the differences between Rackspace and the unmanaged cloud.

Guidance:

• Year-over-year revenue growth would range between 15 percent and 18 percent
• EBITDA margins would range between 32 percent and 35 percent for the full year.
• We are forecasting sequential revenue growth of 3 percent to 4.5 percent, resulting in total revenue in the range of $454 million $461 million.
• From a profitability standpoint, we expect adjusted EBITDA margins to be in the range of 31 percent to 33 percent.
• We also believe that our historical reporting of the business broken into cloud and dedicated revenue component is becoming less relevant.

Posted-In: Earnings News Guidance

 

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