Managed Hosting Specialist Delivers Positive Net Income Results for 12 Consecutive Quarters

Rackspace® Managed Hosting announced its fourth quarter and year-end results for 2006. The company’s revenue was a record $67 million in the fourth quarter of 2006 and $224 million for the year, representing a 63 percent increase over the fourth quarter of 2005 and a 61 percent increase over 2005 annual revenues. Additionally, Rackspace has experienced 32 consecutive quarters of revenue growth since the company’s inception and has been net income positive for 12 consecutive quarters.

Rackspace added more than 900 new customers in the fourth quarter of 2006 and more than 3,000 new customers for the year. The success of Rackspace’s Channel Partner efforts brought significant new revenue into the company, with such revenue doubling in 2006 compared to the previous year. Additionally, Rackspace launched Managed Microsoft Exchange from Rackspace in October 2006 and applies the company’s award-winning Fanatical Support™ to the delivery of one of the world’s most widely-deployed email and collaboration solutions.

"In 2006, Rackspace delivered a strong performance globally and continues to outpace our competitors and increase market share in the managed hosting industry,” said Major Horton, chief financial officer, Rackspace Managed Hosting. "Rackspace’s results are attributable to both strong customer retention and our ability to attract new enterprise customers with our reputation for delivering Fanatical Support™.”

About Rackspace Managed Hosting
A recognized leader in the global managed hosting market, Rackspace Managed Hosting delivers enterprise-level managed services to businesses of all sizes. Serving more than 12,000 customers in eight 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, Rackspace serves as an extension of its customers’ IT departments, enabling them to focus on their core business. Since its inception in 1998, Rackspace has grown more than 50 percent a year. For more information, please visit www.rackspace.com, or call 800-961-2888.