Web hosting company Rackspace Hosting Inc. (RAX) posted a 45% jump in third quarter profit, as it added new customers amid an improving environment for its cloud computing services.
Net income for the quarter rose to $7.6 million or 6 cents per share from $5.2 million or 4 cents per share last year, but missed the consensus estimate by a penny.
The company is an early bird in the emerging market of cloud computing that allows storage of data online instead of storing on servers, eliminating the need for expensive IT infrastructure. The technology is seen as a major trend for the future and the company has grown its cloud customers to 61,616 at the end of the third-quarter, a more than three-fold increase from 18,173 last year.
The cloud business represented 10% of the company's total revenues in the quarter, up from a 5% contribution last year. Cloud revenue increased to $15.3 million from $13.1 million in the previous quarter and from $6.4 million in the year-ago period.
Managed hosting revenue, which still represents the major chunk of the top line, grew to $147.1 million from $131.9 million last year.
Total revenues for the quarter rose to $162.4 million, up 17.4% from year-ago $138.4 million and up 6.8% from $152 million in the preceding quarter. In the last three years, revenues have more than doubled to $531.9 million in 2008 from $224 million in 2006.
For the full year, the company forecast capital expenditures of about $185 million.
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