Rackspace Announces Second Quarter and Half-Year Financial Results; Rackspace Customer Base Expands as Software-as-a-Service Providers Rely on Managed Hosting Infrastructure to Deliver On-Demand Services

Business Wire, Sept 11, 2006

SAN ANTONIO -- Rackspace Managed Hosting today announced its second quarter and first half of the year results for 2006. The company's revenue was $52.0 million in the second quarter of 2006 and $97.8 million for the first half of the year. This represents a 59.5 percent increase over the second quarter of 2005 and a 58.8 percent increase over revenues in the first half of 2005. Rackspace also reported positive net income for both the second quarter of 2006 and the first half of the year. The company has experienced 30 consecutive quarters of revenue growth since its inception.

Rackspace signed more than 1,100 new customers in the second quarter of 2006, with much of the growth attributed to an increasing number of Software-as-a-Service providers who rely on Rackspace to deliver a secure, reliable and scaleable infrastructure on which to deliver on-demand software to end users.

"Rackspace continues to achieve strong financial performance, growing significantly faster than the industry and increasing its market share," said Major Horton, chief financial officer, Rackspace Managed Hosting. "More businesses are realizing the cost benefits and value provided by hosting their IT infrastructure and turn to Rackspace for enterprise-class managed services delivered with the company's award-winning Fanatical Support(TM)."

To support the company's rapid growth, Rackspace added 105 new employees in the second quarter of 2006 and plans to hire up to 200 more during the remainder of the year. The company was recently named among the top 50 Best Small & Medium Companies to Work for in America, ranking number 17 in the medium-sized company category. For more information on careers at Rackspace, please visit http://www.rackspacecareers.com.

About Rackspace Managed Hosting

A recognized leader in the global managed hosting market, Rackspace Managed Hosting is a world-class service organization delivering enterprise-level Web infrastructure and managed services to businesses of all sizes. Serving more than 10,000 customers across six data centers worldwide, Rackspace integrates the industry's best technologies for each customer need and delivers it as a service via the company's award-winning Fanatical Support(TM). Through trusted partnerships with its customers, Rackspace serves as an extension of their IT department, enabling customers to focus on their core business. Founded in 1998, Rackspace has grown more than 50 percent a year since the company's inception. For more information, please visit www.rackspace.com, or call 800-961-2888.