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%.