Rackspace Hosting Conference Call Highlights

Rackspace Hosting 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.