Rackspace yesterday announced that net revenue for Q3 (to end September) was up 3.4% (guidance was 2% to 3.5%) to $389m. That represents 16% growth over Q3 in 2012. The Adjusted EBITDA margin for the quarter was 32.3% (32.8% in Q2 2013), down from 36.2% in the comparable period last year. With Rackspace, Amazon Web Services and Microsoft Azure (and many other besides) all competing heavily on price, we can’t help wonder just how this might impact the bottom line going forward. Profits in this quarter have also been impacted by Rackspace’s move to “invest aggressively” in R&D and to hire technical talent. Last quarter we offered a comparison between Rackspace and UK-headquartered, Telecity (see Rackspace back on track), with the latter notably outperforming the former.
For Q4, Rackspace is expecting sequential revenue growth to range between 3% and 5%.
Rackspace is a Top 20 ranking player in the UK infrastructure services market. But just where does it rank? Subscribers to the ever-popular InfrastructureViews can read our latest on the supplier landscape here.