Rackspace posts strong quarterly, year-end results

Rackspace Hosting concluded the fourth quarter of 2008 and the full year with significant growth in both revenues and net income.

San Antonio-based Rackspace (NYSE: RAX), the world’s largest information technology hosting services company, reported net income of $6.8 million, or 6 cents per diluted share, on revenues of $143.1 million for the fourth quarter ended Dec. 31, 2008.

This compares to net income of $2.6 million, or 2 cents per diluted share, on revenues of $106.7 million for the fourth quarter ended Dec. 31, 2007.

Net income for the latest quarter rose 168 percent over the same period a year ago.

For the full year, Rackspace reported net income of $21.7 million, or 19 cents per diluted share, on revenues of $531.9 million. This compares to net income of $17.8 million, or 17 cents per diluted share, on revenues of $362 million for 2007.

Rackspace provides hosting services for 53,300 customers worldwide, including 18,480 managed hosting customers and 34,820 cloud computing customers.

“We are proud of what we have achieved worldwide during 2008,” says President and CEO Lanham Napier.

“A highlight was our expansion into the cloud. Two acquisitions and the cloud strategy launch late last year added significantly to our product and services set,” he says. “The combination of our traditional hosting offering together with cloud computing provides our customers with the broadest, most comprehensive set of technology solutions and further enhances our leadership position.”

Last fall, Rackspace purchased cloud-hosting providers Slicehost and Jungle Disk Inc. for a combined $11.5 million in cash and stock.

Cloud computing is an advanced technology that allows companies to load applications on remote, dedicated servers that can be accessed over the Internet. Rackspace integrated Slicehost and Jungle Disk into its Mosso cloud hosting service offerings.

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