Rackspace Managed Hosting Announces Third Quarter Financial Results

Rackspace Managed Hosting Announces Third Quarter Financial Results

Managed Hosting Leader Continues to Deliver Strong Quarterly Results

SAN ANTONIO — Dec. 26, 2006 — Rackspace Managed Hosting today announced its third quarter results for 2006. The company’s revenue was $59.0 million in the third quarter of 2006, representing a 64.5 percent increase over the third quarter of 2005. Rackspace also reported positive net income for the third quarter of 2006 and has experienced 31 consecutive quarters of revenue growth since the company’s inception.

Rackspace signed 1,092 new customers in the third quarter of 2006, including Dartmouth College, the Sundance Channel, Amtrak, The University of Florida, Applebee’s Restaurant, Tufts University Center for Engineering Educational Outreach and the Geek Squad 24-Hour Computer Support Task Force®. Rackspace’s continued penetration of the enterprise hosting market was recognized recently as the company was positioned in the “Leader’s” Quadrant in Gartner Inc.’s annual North American Web Hosting Magic Quadrant.

“Rackspace continues to deliver strong financial results quarter over quarter through our ability to not only attract new enterprise customers, but to continue to grow with our current customer base by providing our Fanatical Support™,” said Major Horton, chief financial officer, Rackspace Managed Hosting. “More and more customers are coming to us for help in managing the infrastructure for many of their IT needs. Our ability to offload the burden from our customers’ IT staffs will enable Rackspace to sustain our leadership position in the market.”

About Rackspace Managed Hosting
A recognized leader in the global managed hosting market, Rackspace Managed Hosting is a world-class service organization delivering enterprise-level Web infrastructure and managed services to businesses of all sizes. Serving more than 10,000 customers across seven data centers worldwide, Rackspace integrates the industry’s best technologies for each customer need and delivers it as a service via the company’s award-winning Fanatical Support™. Through trusted relationships with its customers, Rackspace serves as an extension of their IT department, enabling customers to focus on their core business. Founded in 1998, Rackspace has grown more than 50 percent a year since the company’s inception. For more information, please visit www.rackspace.com, or call 800-961-2888.