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February 16, 2010

Rackspace Q4 revenue up 18.4% to $169.5m

Net income up 32% on year ago quarter

By CBR Staff Writer

Rackspace Hosting has reported net revenue of $169.5m for the fourth quarter of 2009, an increase of 18.4% compared to $143.1m for the same period last year. Net revenue was up 4.4% sequentially.

The company posted an adjusted EBITDA of $56m for the quarter, a 31.4% increase compared to the fourth quarter of 2008, and 8.8% increase compared to the third quarter of 2009. Operating income was $13.13m, compared to an operating income of $12.12m for the same period last year.

For the quarter ended December 31, 2009, the company posted a net income of $9m, an increase of 32% compared to $6.8m a year-ago. Net income per share for the quarter remained flat at $0.6 from year ago quarter.

Managed hosting revenue of the company increased to $152.4m, up from $147.1m in the third quarter of 2009. Cloud revenue increased to $17.1m in the quarter, up from $15.3m in the third quarter of 2009.

Total server count increased to 56,671, up from 54,655 servers at the end of the third quarter of 2009, and total customers increased to 90,925, up from 80,944 at the end of the third quarter of 2009.

For the full year 2009, the company reported net revenue of $629m, an increase of 18.2%, compared to $532m in 2008. Operating income increased to $55.2m from $40.15m last year. Net income was $30.2m, an increase of 39.2% compared to $21.7m in 2008.

Lanham Napier, president and chief executive officer, said: “We have a strong position in the market today because of our specialised focus on hosted computing, our unique culture of customer service, known as Fanatical Support, and our powerful hybrid portfolio approach that combines dedicated hosting and cloud hosting.

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“In 2010, we plan to boost enterprise sales, continue to gain traction in the cloud, improve our SMB offering and mine our installed base for growth opportunities.”

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