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Rackspace Hosting Updates on First Quarter 2013 Results [Professional Services Close - Up](Professional Services Close - Up Via Acquire Media NewsEdge) Rackspace Hosting, Inc., an open cloud company, announced financial results for the quarter ended March 31. In a release on May 8, the company noted that net revenue for the first quarter of 2013 was $362 million, up 2.6 percent from the previous quarter and 20 percent from the first quarter of 2012. Net revenue for the first quarter of 2013 was negatively impacted by currency exchange rates when compared to the previous quarter by $2.9 million and negatively impacted when compared to the first quarter of 2012 by $1.0 million. Total server count increased to 94,122, up from 90,524 servers at the end of the previous quarter. "We got off to a slow start for the year. Building a lasting, successful business is our number one priority. However, our immediate focus is on restoring our growth trajectory. We are excited to see the industry momentum behind OpenStack and we are determined to claim the service leadership position in the Open Cloud movement," said Karl Pichler, chief financial officer. Adjusted EBITDA for the quarter was $125 million, a 3.6 percent decrease compared to the fourth quarter of 2012 and a 24 percent increase compared to the first quarter of 2012. The adjusted EBITDA margin for the quarter was 34.5 percent compared to 36.8 percent in the previous quarter and 33.4 percent for the first quarter of 2012. Consistent with prior periods, adjusted EBITDA and adjusted EBITDA margin were negatively impacted by a non-cash charge relating to data center operating leases. During the first quarter of 2013, the non-cash data center lease charge was $4.0 million. Net income was $27 million for the quarter, down 8.8 percent from the previous quarter and up 18 percent from the first quarter of 2012. Net income margin for the quarter was 7.5 percent compared to 8.5 percent for the previous quarter and 7.7 percent in the first quarter of 2012. Cash flow from operating activities was $114 million for the first quarter of 2013. Capital expenditures were $125 million, including $86 million for purchases of customer gear, $13 million for data center build outs, $8 million for office build outs and $19 million for capitalized software and other projects. Adjusted free cash flow(1) for the quarter was $(1) million. Return on capital(1) was 15.1 percent in the first quarter, compared to 16.9 percent in the prior quarter and 15.0 percent in the first quarter of 2012. Average monthly revenue per server was $1,308, compared to $1,310 in the prior quarter and $1,238 in the first quarter of 2012. At the end of the first quarter of 2013, cash and cash equivalents were $279 million, and debt including capital lease obligations totaled $106 million. On a worldwide basis, Rackspace employed 5,043 Rackers as of March 31, up from 4,852 in the previous quarter. "We are optimistic about our long-term position in the market and our future opportunity as the world moves to a new model of computing," said Lanham Napier, chief executive officer. Rackspace Developments and Business Highlights -Rackspace acquired ObjectRocket, a MongoDB database as a service (DBaaS) provider. With ObjectRocket's open source-based MongoDB solution, Rackspace will broaden its OpenStack-based open cloud platform to offer customers a NoSQL DBaaS. The ObjectRocket offering also immediately expands Rackspace's capability to help customers shoulder big data in the cloud for today's most demanding applications. -Rackspace acquired Exceptional Cloud Services to enhance its tool set for developers deploying and managing applications in the open cloud. Through this deal, Rackspace will expand its portfolio of developer solutions to include error tracking and Redis-as-a- Service capabilities. These solutions from Exceptional Cloud Services are currently used by more than 50,000 application developers. The acquisition of Exceptional Cloud Services will also help advance Rackspace's recent push into the MongoDB market, as the company plans to integrate its newly acquired Redis To Go solution with the MongoDB database as a service from ObjectRocket. By aligning these two solutions, Rackspace will provide developers with a choice of open source-based data platforms delivered as managed services that increase the speed and reduce the complexity of building applications on the Rackspace Open Cloud. -Rackspace was named, along with one other vendor, a Top Performer by Forrester Research Inc. in its new report, "The Forrester Wave: Hosted Private Cloud Q1 2013." The report evaluated Rackspace's full Private Cloud portfolio including Managed Virtualization and Rackspace Private Cloud powered by OpenStack. As part of the research firm's analysis, Forrester evaluated the strengths and weaknesses of eight selected cloud computing companies against 25 criteria. Rackspace received among the highest scores of the eight cloud companies when evaluated in the subcategory for planned enhancements and the highest score among all vendors for third-party ecosystem. The Forrester report also noted that "Rackspace brings its experience from the hosting and public cloud space to this market, giving it significant geographic presence, a reputation for fantastic customer support, and a large existing customer base from which to draw." -Rackspace was positioned by Gartner, Inc. as a leader in the Leaders quadrant of the "Magic Quadrant for Managed Hosting in North America." The Gartner assessment, performed by the firm's IT industry experts, evaluates providers based on the completeness of their vision and their ability to execute. It categorizes providers in quadrants labeled Niche Players, Challengers, Visionaries, and Leaders. Rackspace was among the 15 providers assessed by Gartner. -Rackspace announced major new features in its free and open source Rackspace Private Cloud Software, powered by OpenStack and supported by its own Fanatical Support services. Key among the new functionality in this release is OpenCenter, a single interface for deploying, configuring and operating clouds at scale in an enterprise data center. Rackspace continues to introduce new open cloud capabilities that will enable customers to have a true 'cloud anywhere' experience through continuous integration and delivery, workload portability and network interoperability. -Rackspace received global security certifications and compliance verifications for Service Organization Controls SOC 2 Type II and SOC 3, in addition to complying with the ISO 27001 standard. These credentials demonstrate Rackspace's commitment to delivering a secure, open cloud experience for customers. Rackspace has a dedicated focus on ensuring that its IT infrastructure meets the most stringent security requirements by staying closely aligned with the latest industry standards and best practices. Rackspace Hosting is the open cloud company. More Information: http://www.rackspace.com ((Comments on this story may be sent to [email protected])) (c) 2013 ProQuest Information and Learning Company; All Rights Reserved. |