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November 10, 2015

Rackspace beats expectations with strong Q3

News: The company purchased $250m of its own equity in the quarter.

By CBR Staff Writer

Cloud-computing firm Rackspace has reported higher profit and revenue in the third quarter.

Revenue increased 10.7% to $509m, compared to $459.7m reported during last year’s corresponding quarter.

Net income increased 42% to $36.5m, or $0.26 diluted earnings per share, compared to $25.7m, or $0.18 diluted earnings per share, for the same period last year.

Rackspace expects its fourth-quarter revenue to increase between 2% to 3% on a constant currency basis.

The company said the new products and partnerships that it launched in recent months, with Amazon Web Services, Intel and Microsoft, will drive its growth for the future.

Rackspace purchased $250m of its own equity in Q3. The company plans to issue $350m in senior debt to repay all outstanding amounts under its senior revolving credit facility.

The remaining money will be used for general corporate purposes, which may include share repurchases pursuant to the company’s $1bn share buyback authorisation.

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