Rackspace Hosting (NYSE: RAX) reported earnings on May 7. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended March 31 (Q1), Rackspace Hosting met expectations on revenues and missed estimates on earnings per share.

Compared to the prior-year quarter, revenue expanded significantly and GAAP earnings per share improved significantly.

Margins expanded across the board.

Revenue details
Rackspace Hosting reported revenue of $301.4 million. The 17 analysts polled by S&P Capital IQ wanted to see a top line of $300.0 million on the same basis. GAAP reported sales were 31% higher than the prior-year quarter's $230.0 million.

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Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.17. The 18 earnings estimates compiled by S&P Capital IQ predicted $0.18 per share. GAAP EPS of $0.17 for Q1 were 70% higher than the prior-year quarter's $0.10 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 71.1%, 140 basis points better than the prior-year quarter. Operating margin was 12.3%, 190 basis points better than the prior-year quarter. Net margin was 7.7%, 170 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $319.3 million. On the bottom line, the average EPS estimate is $0.19.

Next year's average estimate for revenue is $1.32 billion. The average EPS estimate is $0.82.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 866 members out of 928 rating the stock outperform, and 62 members rating it underperform. Among 210 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 194 give Rackspace Hosting a green thumbs-up, and 16 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Rackspace Hosting is outperform, with an average price target of $56.95.

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