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Cloud Hosting Authors: Vaibhaw Pandey, Matt Brickey, Harry Trott, Yeshim Deniz, Liz McMillan

Related Topics: Cloud Computing, Virtualization Magazine, Rackspace Journal, Cloud Hosting & Service Providers Journal, OpenStack Journal

OpenStack: Article

Rackspace Cloud Revenues Up 69%

Cloud computing revenues were $72.6 million in Q2, up 69% year-over-year

Rackspace revenues were up 29% year-over-year in the June quarter to roughly $319 million, passing lowered expectations. Earnings soared 43.1% to $25.1 million, or 16 cents a share, despite substantial investments in servers, storage and software related to OpenStack.

The company is hopeful but not convinced that OpenStack will start contributing in Q4, its first full quarter, increasing next year after customers kick the tires and see some performance metrics.

Cloud computing revenues were $72.6 million in Q2, up 69% year-over-year, while managed hosting revenue rose 21% to $246 million.

The company said it saw demand from SMBs for cloud hosting and European business is hanging in there maybe because it's mostly in the UK.

Gross margin was 71.8%. Operating margin was 12.8%. Net margin was 7.9%.

Rackspace has $215 million in the bank and debt including capital lease obligations totaled $149 million. It currently has 58 megawatts of data center capacity.

Its payroll is now up to 4,528 people.

Rackspace is supposed to make some product announcements around OpenStack - like Cloud Block Storage, Cloud Archiving and Cloud Monitoring services - in the next few weeks. Cloud Networking, based on work done by VMware's new acquisition Nicira, will have to wait until Q4.

More Stories By Maureen O'Gara

Maureen O'Gara the most read technology reporter for the past 20 years, is the Cloud Computing and Virtualization News Desk editor of SYS-CON Media. She is the publisher of famous "Billygrams" and the editor-in-chief of "Client/Server News" for more than a decade. One of the most respected technology reporters in the business, Maureen can be reached by email at maureen(at)sys-con.com or paperboy(at)g2news.com, and by phone at 516 759-7025. Twitter: @MaureenOGara

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