Rackspace beats Q4 estimates with multi-cloud growth

Rackspace on Thursday published better-than-expected financial results for the fourth quarter and the full fiscal 2020 year. Revenue grew in Q4 thanks to growing customer spending in the Multicloud Services and Apps & Cross Platform segments. 

Fourth quarter non-GAAP earnings per share came to 26 cents on revenue of $716 million, up 14 percent year-over-year.
 
Analysts were expecting earnings of 23 cents per share on revenue of $701.79 million. 

Full 2020 non-GAAP earnings were 83 cents per share on revenue of $2.707 billion, up 11 percent year-over-year. 

“We believe Rackspace Technology is extremely well positioned to capitalize on the tectonic shift to the cloud,” CEO Kevin Jones said in a statement. “We have the people, partners, expertise and automation to help customers of all sizes optimize their multicloud journey, all wrapped in the fanatical customer experience for which we are known. In 2020 we made great progress towards becoming the leading pure play multicloud services and solutions company and set the stage for years of incremental revenue growth, earnings growth, and enhancement of shareholder value.”

Fourth quarter revenue from Rackspace’s Multicloud Services segment grew 19 percent to $572.5 million. Revenue from Apps & Cross Platform grew 12 percent to $91.3 million. Those two segments make up Rackspace’s “core segments.” The rest of its revenue comes from OpenStack Public Cloud, which declined nearly 21 percent to $52.4 million. 

Fourth quarter bookings came to $293 million, an increase of 27 percent year-over-year. Full-year 2020 bookings grew 61 percent to $1.126 billion. 

Rackspace’s outlook for the full fiscal 2021 is an EPS between 95 cents and $1.05 and revenue between $2.9 billion and $3.1 billion.

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