Rackspace Hosting Reports Growth

Continued industry-leading growth in revenues, with net revenues up 5.8% quarter-over-quarter and up 44.0% year-over-year

November 7, 2008

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SAN ANTONIO -- Rackspace Hosting, Inc. (NYSE:RAX), the world’s leading hosting services provider, today reported quarterly results for the quarter ended September 30, 2008. Rackspace continued to deliver on its growth strategy in the third quarter of 2008. Net revenues for the third quarter ended September 30, 2008 were $138.4 million, up 5.8% from the second quarter of 2008 and up 44.0% from the quarter ended September 30, 2007. Net revenues in the third quarter were negatively impacted by the recent depreciation of the Pound Sterling, relative to the USD. Net revenues for the first nine months of 2008 were $388.8 million, an increase of 52.3% relative to net revenues for the first nine months of 2007. The installed base continued to provide a significant portion of growth during the third quarter 2008, growing at an average rate of 0.6% per month. Customer count increased to more than 36,000 customers (including more than 15,000 mail customers) and server count increased to more than 45,200.

"By consistently delivering Fanatical Support® in this tough economic climate, Rackspace continues to outperform both the market and our competitors through the acquisition of new customers and the growth of our existing customer base," said Lanham Napier, president and chief executive officer, Rackspace Hosting. "The acquisitions of two key players in the cloud computing space, Slicehost and Jungle Disk, allow us to offer the most comprehensive suite of services in the industry. The combination of managed hosting and cloud offerings will provide a broad spectrum of hosting solutions to our customers, which creates increased flexibility at lower costs. The acquisitions closed on October 28, 2008.”

Rackspace Managed Hosting

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