Rackspace's financial results for the third quarter in 2014 show a better-than-expected jump of 18.3 percent in revenue from the same time last year.
Revenue in the quarter was $460 million, up by 4.2 from the previous quarter. Net revenue was up by 4.4 percent from last quarter and 16.1 percent from last year.
"We are pleased with our operating performance this quarter and encouraged by the momentum we are seeing in the business," said Taylor Rhodes, president and CEO of Rackspace. "We are poised to capitalize on the massive opportunity ahead in the managed cloud market, where we see increasing demand for our managed services and expertise. And while we made strong progress this year, we're determined to continually improve our execution and seize our future."
The company also saw an increase in the number of servers, up to 110,453 from 107,657 servers at the end of the last quarter. Revenue per server also went up to $1,405 per month from $1,375 last quarter.
Rackspace announced it is a member of the Microsoft Cloud OS Network, offering its Fanatical Support service to Windows Server with Hyper-V, System Center and Azure Pack. Corporate customers will now be able choose to host apps on Microsoft clouds with hybrid connections to Azure and Rackspace's servers and public cloud.
"We had left our Microsoft-centric customers in the dark or forced them into more of a VMware-oriented approach," said Jeff DeVerter, general manager of Microsoft Private Cloud at Rackspace.
The third quarter was a busy one for Rackspace. At the start of September, Rackspace was set to be acquired by either a joint venture or by another company. Despite this, the company announced a few weeks later it was dedicated to remaining independent. At the same time the company announced Taylor Rhodes will be the new CEO, and that co-founder Graham Weston is chairman.
Rackspace has also been authorized by its board of directors to buy back up to $500 million of stock over the next two years.
The company expects to continue growing, with expected revenue in the fourth quarter hitting between $469 million and $476 million. On average, analysts are expecting $476.5 million, however. This forecast includes a $5 million impact from fluctuation of foreign currency.
Rackspace is facing increasing competition from companies like Amazon, Google and Microsoft. The cloud industry in general is facing increased competition, with companies likely soon offering unlimited free storage in the "race to zero."
