Rackspace Hosting (NYSE: RAX ) reported earnings on Nov. 6. Here are the numbers you need to know.
The 10-second takeaway
For the quarter ended Sep. 30 (Q3), Rackspace Hosting met expectations on revenues and met expectations on earnings per share.
Compared to the prior-year quarter, revenue grew significantly and GAAP earnings per share expanded significantly.
Margins grew across the board.
Rackspace Hosting logged revenue of $336.0 million. The 17 analysts polled by S&P Capital IQ hoped for revenue of $335.2 million on the same basis. GAAP reported sales were 27% higher than the prior-year quarter's $264.6 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.19. The 18 earnings estimates compiled by S&P Capital IQ anticipated $0.19 per share. GAAP EPS of $0.19 for Q3 were 36% higher than the prior-year quarter's $0.14 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 71.8%, 200 basis points better than the prior-year quarter. Operating margin was 13.5%, 180 basis points better than the prior-year quarter. Net margin was 8.1%, 50 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $357.3 million. On the bottom line, the average EPS estimate is $0.22.
Next year's average estimate for revenue is $1.31 billion. The average EPS estimate is $0.76.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 891 members out of 962 rating the stock outperform, and 71 members rating it underperform. Among 214 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 189 give Rackspace Hosting a green thumbs-up, and 25 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 $59.48.
Internet software and services are being consumed in radically different ways, on new and increasingly mobile devices. Is Rackspace Hosting on the right side of the revolution? Check out the changing landscape and meet the company that Motley Fool analysts expect to lead "The Next Trillion-dollar Revolution." Click here for instant access to this free report.