RackSpace stock jumps 15% after earnings beat

Shares of RackSpace Technology Inc. (RXT) were in the spotlight Wednesday after the cloud-computing company reported better-than-expected fourth-quarter results. The stock rallied more than 15% in the extended session, as investors cheered the news.

RackSpace reported a net loss of $214 million, or $1.01 a share, in the fourth quarter of 2021, compared with a net loss of $83 million, or 39 cents a share, in the fourth quarter of 2020. On an adjusted basis, the company earned 6 cents a share. Revenue rose 1% to $787 million, as the company got more customers and customers spent more on some of Rackspace’s businesses.

Analysts polled by FactSet had expected adjusted earnings of 5 cents a share on sales of $776 million. The company’s results beat expectations on both fronts, which likely explains the stock’s positive reaction in the extended session.

Looking ahead, RackSpace guided for first-quarter revenue between $752 million and $762 million, which is in line with the FactSet consensus. The company also said it expects to continue to benefit from the acceleration in digital transformation that has been driven by the pandemic.

RackSpace is a leader in the cloud-computing space, providing infrastructure-as-a-service, platform-as-a-service, and software-as-a-service solutions to customers around the world. The company’s services are used by a variety of different industries, including healthcare, retail, media, and finance.

The company’s fourth-quarter results demonstrate that businesses continue to invest in digital transformation, even as the pandemic drags on. This bodes well for RackSpace’s growth prospects, as the company is well-positioned to benefit from the increased demand for cloud-computing services.

In addition, RackSpace has been investing heavily in its platform, which should help the company to better compete with larger rivals such as Amazon Web Services and Microsoft Azure. The company’s investments in artificial intelligence and machine learning, as well as its partnerships with leading technology companies, should also help it to gain market share.

Overall, RackSpace’s fourth-quarter results were encouraging, and the company’s outlook for the first quarter is in line with expectations. The stock’s rally in the extended session on Wednesday suggests that investors are optimistic about the company’s growth prospects.

As businesses continue to invest in digital transformation, RackSpace should benefit from the increased demand for cloud-computing services. The company’s investments in its platform, as well as its partnerships with leading technology companies, should also help it to gain market share. With its competitive advantages and strong growth prospects, RackSpace looks well-positioned to continue to outperform in the coming quarters.

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