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					Safe Harbor Statement
This presentation contains "forward-looking" statements that involve risks, uncertainties and assumptions. If the risks or uncertainties
ever materialize or the assumptions prove incorrect, our results may differ materially from those expressed or implied by such
forward-looking statements. All statements other than statements of historical fact could be deemed forward-looking, including, but
not limited to, any projections of financial information; any statements about historical results that may suggest trends for our
business; any statements of the plans, strategies, and objectives of management for future operations; any statements of expectation
or belief regarding future events, potential markets or market size, technology developments, or enforceability of our intellectual
property rights; and any statements of assumptions underlying any of the items mentioned.

These statements are based on estimates and information available to us at the time of this presentation and are not guarantees of
future performance. Actual results could differ materially from our current expectations as a result of many factors, including but not
limited to: the unpredictable nature of our rapidly evolving market and quarterly fluctuations in our business; the effects of
competition; and any adverse changes in our indirect channel relationships. These and other risks and uncertainties associated with
our business are described in our quarterly report on Form 10-Q for the quarter ended June 30, 2010 and in Rackspace Hosting’s
Form 10-K for the year ended December 31, 2009. We assume no obligation and do not intend to update these forward-looking
statements.



Non-GAAP Financial Measures
Please note that certain financial measures used in this presentation, such as adjusted EBITDA , are expressed on a non-GAAP
basis. Adjusted EBITDA has been adjusted to exclude charges relating to stock-based compensation. Our GAAP results and GAAP
to non-GAAP reconciliation can be found in this presentation, and have been posted on the Investors page of our website, which is
found at www.rackspace.com.




Trademarks and Service Marks
Rackspace® and Fanatical Support® are our registered service marks. Other trademarks and tradenames appearing in this
presentation are the property of their respective holders. We do not intend our use or display of other companies’ tradenames,
trademarks, or service marks to imply a relationship with, or endorsement or sponsorship of us by, these other companies.


                                                                   2
NYSE: RAX

• Founded: 1998 / IPO 2008                                        REVENUE

                                                                  2Q 2010
• Headquarters: San Antonio, TX                                    $187M
                                                                  23% y/y      12%
       Offices: Austin, TX
                                                                               Cloud
                Blacksburg, VA
                London, UK
                Amsterdam, NL
                Hong Kong, China

                                                                                88%
• Data Centers: San Antonio, Dallas, Chicago, Virginia, London,                Managed
  Hong Kong                                                                    Hosting


                                                                  2Q 2009
• 3,002 Rackers                                                    $152M
                                                                  16% y/y
                                                                              9%
                                                                             Cloud
• 108,023 customers

                                                                             91%
• 61,874 servers online                                                     Managed
                                                                            Hosting



                                               3
Summary
Four Key Takeaways

 Huge Market Opportunity With Two Segments

      Billions of dollars in size and global in nature
      Service Intensive Segment vs. Infrastructure Segment


 Leadership Position Advantage

      Recognized Leader in the Hosting and Cloud Computing market
      Leadership position based on differentiated level of support


 Sustainable Competitive Advantage Extends Leadership Position

      Maintain #1 service leader position in the service intensive segment of the market
      Serve our customers with a growing and diverse portfolio of products and services


 Strong Financial Profile and Track Record of Growing Profits

      We will grow our business with a disciplined focus on driving profits and returns for
      our shareholders



                                               4
Market Opportunity is Huge and Growing
Cloud Technologies Radically Increase an Already Attractive Opportunity

                       Computing-as-a-Service– Market opportunity is               Dedicated & Managed
                       very large and growing                                      Hosting Market:
                                                                                    $10.9B            $22.9B
                                                                                     2008                 2012
                                                                                             20.4% CAGR
                       Paradigm Shift – Companies will consume IT over
                       the web from service providers: radically less expensive;   Cloud Hosting Market:
                       automated; non-core/strategic                               $16.2B             $42.3B
                                                                                     2008              2012
                                                                                            27.1% CAGR
                       Cloud Computing– New set of technologies that make
                       existing market opportunity larger and rapidly
                       accelerate this paradigm shift



                       Full Suite of Services–Cloud + Dedicated Hosting = Hybrid Hosting

                             • Cloud computing is a natural extension of hosting


Source: Tier1Research, IDC

                                                         5
Leader in Hosting & Cloud Computing Market
Business Model Advantage Drives Strong Financial Performance
       Annual Revenue ($M)
                                                      $629.0
                                                                    Support Differentiation Delivers Growth
                                             $531.9
                                                                    • Recurring Revenue model + Low Churn = High
                                                                      Growth and Visibility
                                    $362.0


                           $224.0
                                                                    “Loyalty Model” Drives Profitability Returns
                  $138.8
          $86.8                                                     • Disciplined focus on profitable growth using unit
  $56.6                                                               based economics
                                                                    • Lean services delivery model
   2003 2004 2005 2006 2007 2008 2009

       Adjusted EBITDA* ($M)
                                                      $200.6        General Purpose Technology
                                                                    • Serving 100,000 customers in >120 countries
                                             $145.3
                                                                    • SMBs and 40 of Fortune 100 and no customer >2%
                                                                      of sales
                                    $91.3
                           $64.7
                  $37.2
          $20.5
  $11.3


   2003 2004 2005 2006 2007 2008 2009

*See reconciliation of our Non-GAAP financial measures to the most comparable GAAP measures at the end of the presentation

                                                                6
The Market Is Divided Into Two Segments
Service Intensive Segment vs. Infrastructure Segment


                                  Consulting (IBM, EDS, CSC)   • IT Consultants



                                                               • Database Engineers
                                  Productized                  • Operating System Technicians
                                  Services                     • Systems Security Professionals
                                                               • Network Experts


                                                               • Servers, Firewalls, Load Balancers
            Microsoft             Hardware &                   • Operating Systems

                                  Software                     • Management Tools
                                                               • Virtualization
            Amazon




             Google

                        Equinix
                                   Space &                     • Data Center
                                                               • Bandwidth
           Go Daddy
                                   Connectivity                • Power




                                                   7
Strategy Purpose Built to Deliver Best IT Outcome


 #1 service leader position in the service intensive
 segment of the market




 Serving Customers of all Sizes with an
 Integrated Portfolio of Products and Services

     Fortune 100 Customers

                        40




          32




       1 Year Ago      Today



                                          8
Rackspace Portfolio: Hybrid Hosting
Full Suite of Hosting and Cloud Computing Services

      $600MM+            50K+                  200K+       1.8MM+ paying
       revenue           Slices                 Apps       business users

                                                           #1/#2
                                                              revenue
       #1                #2                    #1
  Dedicated &         Infrastructure-        Platform-      Software-
  Private Cloud        as-a-Service         as-a-Service   as-a-Service




                         EC2
                                        9
 Unit Based Economics– RAX Consolidated
 Based on One Square Foot of Datacenter Space
 Summary                                            Assumptions
 NPV                                 $1,974         DC Build (per sqft)                 $1,400
 Annual IRR                           37.7%          Life (in months)                      120
 Payback on DC                     11 months        Customer Gear (per sqft)            $1,625
                                                     Life (in months)                       36
 Payback on total capex            24 months
                                                    Replacement Capex                   $1,625
                                                     Life (in months)                       36
 Financials                                         Capex multiple                        3.25x
 Revenue (per sqft)                    $500
                                                    Revenue (per sqft utilized)           $500
 Adj. EBITDA                           $166
                                                    Defection churn rate                 0.90%
 Cash Flow                             $128
                                                    Adj. EBITDA margin                   33.2%
 Cash Flow margin                     25.6%
                                                    Tax rate                             35.0%
 Avg. Customer Life                56 months
                                                    Discount rate (annual)                12%

 Cash Flows                           Month 0      Month 1    Month 2          …    Month 36       …    Month 55 Month 56
 Cash outlay (DC capex)                 ($1,400)         -            -                       -                 -          -
 Cash outlay (customer capex)           ($1,625)         -            -                 ($1,625)                -          -
 Cash Inflow (MRR)                            -       $128         $128                    $128              $128       $128
 Cash Inflow (Unused cust capex)              -          -            -                       -                 -       $433
 Cash Inflow (Unused DC Capex )               -          -            -                       -                 -       $747
 Net Cash Flow                          ($3,025)      $128         $128                 ($1,497)             $128     $1,308

 PV of Net Cash Flow                    ($3,025)      $127         $125                 ($1,046)              $74       $749

Note: Analysis contains certain assumptions including but not limited to, assumptions used to derive metrics such as the capex metrics and average
      customer life. Average customer life calculated as 1 / churn % / 2. Cash inflow from unused customer capex and unused DC capex assumes
      60% and 100% of book value, respectively

                                                                          10
       Value-added Support and Portfolio Drive Returns
       Illustrative Scenario

                  50%                                                                         45.0%
                                                             41.4%
                  40%          37.7%
    Incremental
       Returns




                  30%

                  20%

                  10%

                        RAX Consolidated                    Dedicated +                     Dedicated                          Hybrid
                             Today                         Private Cloud                  + Public Cloud                       Hosting
                                                                                                                              Similar margins
Adj. EDITDA                     33.2%                           33.2%                           33.2%
                                                                                                                              for each product
Margin
                                                                                                                              Better fit drives
Defection Churn/                0.9%/56 months                  0.8%/63 months                  0.7%/71 months                customer loyalty
Customer Life
                                                                                                                              Capital efficiencies
Customer Gear                   3.25x                           3.00x                           2.75x                         drive higher returns
Capex Multiple
Note: Analysis contains certain assumptions including but not limited to, assumptions used to derive metrics such as the capex metrics and average
      customer life. Average customer life calculated as 1 / churn % / 2. Cash inflow from unused customer capex and unused DC capex assumes
      60% and 100% of book value, respectively

                                                                            11
Introducing OpenStack


1   Accelerate pace of innovation through collaboration


2   Drive standards through ubiquity; accelerate adoption


3   Unite an ecosystem around an open API and platform


4   Create opportunities for new conversations




                 Customers will use MORE
                 New APPS will be CREATED
                 New USERS will EMERGE
                 New BUSINESS MODELS will be CREATED

                                  12
Financial Model Attributes
Significant Potential for Margin Expansion


                                 2009A           3-Year CAGR - Scenarios        Steady State

Revenue Growth                   18.4%     20 - 25%     25 - 30%   30 - 35%       5 - 10%

Cost of Revenue                  31.5%     31 - 32%     30 - 31%   29 - 30%        28%

Sales and Marketing              12.2%     10 - 12%     12 - 14%   14 - 16%         7%

General and Administrative       24.4%     21 - 24%     21 - 24%   20 - 23%        18%

Adjusted EBITDA                  31.9%     33 - 36%     32 - 35%   31 - 34%        47%+

Depreciation and Amortization    19.9%      20%           20%         20%          10%

                                                                   Positive /
Fully Taxed Free Cash Flow      Positive   Positive     Positive   B/E @ 40-     Positive
                                                                      45%


                                            13
      Positioned for The Next Cycle of Growth
                                 Net Revenue
$210M                                                                                         2Q 2010 net revenue of $187.3M (grew 23.2% y/y
                                                                            $187.3M
                                                              $178.8M
$180M                   $162.4M
                                           $169.5M                                            and 4.8% sequentially)
            $152.0M
$150M
                                                                                                 • Cloud revenue grew 77.9% y/y and 20.5%
$120M                                                                                              sequentially
 $90M

 $60M
                                                                                              On a sequential basis, 2Q 2010 net revenue was
 $30M                                                                                         negatively impacted by currency fluctuations of
                                                                                              $2.0M
      $-
             Q2 '09      Q3 '09             Q4 '09            Q1 '10         Q2 '10

                               Cloud    Managed Hosting


                                Adjusted EBITDA
$70M                                                                                  34.0%
                                                                        $62.2M                2Q 2010 Adjusted EBITDA of $62.2M (grew 29.2%
                                                         $59.4M
$60M                                    $56.0M
                      $51.4M                                                                  y/y and 4.7% sequentially)
           $48.1M                                        33.2%          33.2%         33.0%
$50M
                                         33.0%
$40M
                                                                                      32.0%
$30M                                                                                          2Q 2010 adjusted EBITDA margins of 33.2%, up
$20M
           31.7%      31.7%                                                                   from 31.7% in 2Q 2009
                                                                                      31.0%
$10M
                                                                                                 • Includes 2Q 2010 non-cash rent expense of
 $-                                                                                   30.0%        $1.3M
           Q2 '09     Q3 '09            Q4 '09           Q1 '10         Q2 '10

                                Adjusted EBITDA      Margin




                                                                                  14
   Installed Base Growth
   Highly Levered to Economic Rebound
                                            IB Growth                                                        Monthly installed base growth has historically
2.0%                                                                                                         grown at ~1.5%, or almost 20% annually before
               1.8% 1.8%

                            1.5%
                                                                                                             adding any new customers
1.5%
        1.2%
                                           1.0%
                                                                                                             Growth from existing customers is significantly
1.0%                                0.8%                                                                     more profitable than growth from acquiring new
                                                  0.6%                                                       customers
                                                                                        0.4%          0.5%
0.5%
                                                                         0.2%
                                                          0.1%                   0.1%
                                                                                               0.2%          Our strategy has been to combat churn – highly
0.0%                                                                                                         levered to benefit from a rebound in growth
                                                                 -0.2%
-0.5%
        Q1 '07 Q2 '07 Q3 '07 Q4 '07 Q1 '08 Q2 '08 Q3 '08 Q4 '08 Q1 '09 Q2 '09 Q3'09 Q4'09 Q1'10 Q2 '10

                                     IB Growth & Churn
3.5%                                                                                                         2Q 2010 churn was 0.9%, remaining at a very
                                                                                                             healthy level
2.5%
                                                                                                             RAX is highly levered to benefit from an economic
1.5%                                                                                                         rebound given installed base growth engine
                                                                                                  1.4%
                                                         1.3%
                1.2%                                                            1.1%
                                   1.2%
0.5%
                                                         0.4%                                     0.5%
                0.2%               0.1%                                         0.2%

-0.5%          -1.0%               -1.1%                 -0.8%               -0.9%                -0.9%


-1.5%
               Q2 '09              Q3'09             Q4'09                  Q1'10                Q2 '10

                                 IB Growth        Net Upgrades           Churn

                                                                                                 15
 Strong Balance Sheet and Fully Funded

Capitalization and Leverage ($M)                          Liquidity Highlights

                                                          • Raised $145M of IPO proceeds in 2008


Cash and Cash Equivalents                   $148.5        • 2010 capex estimates remain at $185M – $235M


Capital Lease Obligations                   $115.5        • Additional $194M available for future borrowings on
                                                            the company's line of credit
Debt                                         $54.3
                                                          • Expect to be FCF positive in 2010 at growth rates
                                                            below 40-45%
Total Interest-Bearing Debt                 $169.8

Total Stockholder’s Equity                  $398.0

Total Capitalization                        $567.8

Total Debt/LTM Adj. EBITDA                   0.74x
Net Debt/LTM Adj. EBITDA                     0.09x




 Note: Capitalization as of June 30, 2010


                                                     16
Key Metrics
Key Metrics
                                                                                                         Three Months Ended
(Dollar amounts in thousands, except annualized                   June 30,              September 30,       December 31,        March 31,          June 30,
net revenue per average technical square foot)                      2009                    2009                2009             2010                2010
Growth
 Managed hosting customers at period end                                19,363                  19,328             19,304             19,366            19,433
 Cloud customers at period end**                                        51,440                  61,616             71,621             80,080            88,590
 Number of customers at period end                                      70,803                  80,944             90,925             99,446           108,023

 Managed hosting, net revenue                                $         138,943 $               147,065 $          152,394 $          159,536 $         164,094
 Cloud, net revenue                                          $          13,052 $                15,334 $           17,122 $           19,269 $          23,220
 Net revenue                                                 $         151,995 $               162,399 $          169,516 $          178,805 $         187,314
 Revenue growth (year over year)                                         16.2%                   17.4%              18.4%              23.2%             23.2%
 Net upgrades (monthly average)                                            1.2%                   1.2%               1.3%               1.1%               1.4%
 Churn (monthly average)                                                  -1.0%                  -1.1%              -0.8%              -0.9%              -0.9%
 Growth in installed base (monthly average) *                              0.2%                   0.1%               0.4%               0.2%               0.5%

 Number of employees (Rackers) at period end                             2,648                   2,730              2,774              2,905             3,002
 Number of servers deployed at period end                               52,269                  54,655             56,671             59,876            61,874
Profitability
  Income from operations                                     $          13,403 $                13,128 $           15,689 $           16,728 $          17,831
  Depreciation and amortization                              $          29,711 $                32,696 $           35,018 $           36,698 $          37,991
  Share-based compensation expense
    Cost of revenue                                          $             675      $              778     $          768   $            969   $         1,163
    Sales and marketing                                      $             721      $              826     $          639   $            880   $         1,100
    General and administrative                               $           3,621      $            4,008     $        3,851   $          4,129   $         4,113
      Total share-based compensation expense                 $           5,017      $            5,612     $        5,258   $          5,978   $         6,376
  Adjusted EBITDA (1)                                        $          48,131      $           51,436     $       55,965   $         59,404   $        62,198
 Adjusted EBITDA margin (1)                                              31.7%                   31.7%              33.0%              33.2%             33.2%
 Operating income margin                                                     8.8%                   8.1%             9.3%               9.4%                  9.5%
 Income from operations                                      $          13,403 $                13,128 $           15,689 $           16,728 $          17,831
 Effective tax rate                                                      36.2%                   33.9%              34.0%              33.6%             33.2%
 Net operating profit after tax (NOPAT) (1)                  $           8,551 $                 8,678 $           10,355 $           11,107 $          11,911
 NOPAT margin                                                             5.6%                    5.3%               6.1%               6.2%              6.4%
* Due to rounding, totals may not equal the sum of the line items in the table above.
** Amounts include SaaS customers for Jungle Disk using a Rackspace storage solution. Jungle Disk customers using a third
   party storage solution are excluded.

                                                                                               18
Key Metrics (cont’d)
                                                                                                          Three Months Ended
(Dollar amounts in thousands, except annualized                   June 30,               September 30,       December 31,         March 31,           June 30,
net revenue per average technical square foot)                      2009                     2009                2009              2010                 2010
Capital efficiency and returns
  Interest bearing debt                                      $         210,284       $          167,976    $       167,386    $        169,517    $       169,847
  Stockholders' equity                                       $         308,823       $          330,392    $       349,427    $        370,425    $       397,994
  Less: Excess cash                                          $        (129,638)      $          (83,462)   $      (105,083)   $       (109,840)   $      (126,018)
  Capital base                                               $         389,469       $          414,906    $       411,730    $        430,102    $       441,823
  Average capital base                                       $         378,123       $          402,188    $       413,318    $        420,916    $       435,963
 Capital turnover (annualized)                                               1.61                  1.62               1.64                1.70                   1.72
 Return on capital (annualized) (1)                                          9.0%                  8.6%              10.0%               10.6%              10.9%
Capital expenditures
 Purchases of property and equipment, net                    $          31,027 $                 26,024 $           34,652 $            39,622 $           29,050
 Vendor financed equipment purchases                         $          23,637 $                 20,664 $           12,398 $            15,766 $           15,793
   Total capital expenditures                                $          54,664 $                 46,688 $           47,050 $            55,388 $           44,843
 Customer gear                                               $          32,448       $           28,705    $        28,421    $         32,488    $        29,589
 Data center build outs                                      $          13,914       $            4,028    $         7,880    $         16,644    $         5,955
 Office build outs                                           $           1,651       $            5,432    $         5,350    $          1,220    $         1,306
 Capitalized software and other projects                     $           6,651       $            8,523    $         5,399    $          5,036    $         7,993
  Total capital expenditures                                 $          54,664       $           46,688    $        47,050    $         55,388    $        44,843
Infrastructure capacity and utilization
  Technical square feet of data center space
    at period end ***                                                  177,371                  167,821            162,848             169,998            169,998
  Annualized net revenue per average
    technical square foot ***                                           $3,631                   $3,764             $4,101              $4,298             $4,407
  Utilization rate at period end                                         59.8%                    62.3%              65.3%               66.5%              69.1%
*** Technical square footage excludes 30,250 square feet and 4,400 square feet for unused portions of the Chicago and
    Northern Virginia facilities, respectively.
(1) See discussion and reconciliation of our Non-GAAP financial measures to the most comparable GAAP measures.




                                                                                    19
Non-GAAP Reconciliations (unaudited)
Adjusted EBITDA                                                                              Three Months Ended                                                             Three Months Ended June 30,
                                                          June 30,           September 30,         December 31,        March 31,                 June 30,
(Dollars in thousands)                                      2009                 2009                  2009             2010                       2010                       2009             2010


Net revenues                                          $   151,995        $      162,399        $       169,516     $       178,805        $       187,314               $    151,995      $   187,314


Income from operations                                $    13,403        $       13,128        $        15,689     $         16,728       $         17,831              $     13,403      $    17,831


Net income                                            $     6,991        $        7,604        $         9,035     $          9,812       $         11,198              $      6,991      $    11,198
  Plus: Income taxes                                  $     3,973        $        3,900        $         4,648     $          4,957       $          5,572              $      3,973      $     5,572
  Plus: Total other (income) expense                  $     2,439        $        1,624        $         2,006     $          1,959       $          1,061              $      2,439      $     1,061
  Plus: Depreciation and amortization                 $    29,711        $       32,696        $        35,018     $         36,698       $         37,991              $     29,711      $    37,991
  Plus: Share-based compensation expense              $     5,017        $        5,612        $         5,258     $          5,978       $          6,376              $      5,017      $     6,376
    Adjusted EBITDA                                   $    48,131        $       51,436        $        55,965     $         59,404       $         62,198              $     48,131      $    62,198


  Operating income margin                                  8.8%                  8.1%                   9.3%                 9.4%                  9.5%                        8.8%             9.5%


  Adjusted EBITDA margin                                   31.7%                 31.7%                 33.0%               33.2%                   33.2%                      31.7%            33.2%

Return on Capital                                                        Three Months Ended                                           Adjusted Free Cash Flow (in thousands)

                                             June 30,      September 30,      December 31,     March 31,          June 30,
(Dollars in thousands)                         2009            2009               2009          2010                2010              (Three months ended June 30, 2010)
                                                                                                                                      Adjusted EBITDA                                             $62,198
Income from operations                       $13,403          $13,128           $15,689            $16,728        $17,831                Non-cash deferred rent                                    1,316
    Effective tax rate                        36.2%            33.9%             34.0%              33.6%          33.2%                 Total capital expenditures                               (44,843)
    Net operating profit after tax (NOPAT)    $8,551          $8,678            $10,355            $11,107        $11,911                Cash payments for interest, net                           (1,831)
                                                                                                                                         Cash refunds (payments) for income taxes, net             (1,450)
Net income                                    $6,991           $7,604            $9,035             $9,812        $11,198                     Adjusted free cash flow                             $15,390

Total assets at period end                   $656,793        $625,330           $668,645           $691,729       $720,457            Net Leverage (Dollars in thousands)

  Less: Excess cash                          (129,638)        (83,462)           (105,083)         (109,840)      (126,018)           (As of June 30, 2010)
  Less: Accounts payable and
    accrued expenses                         (87,316)         (77,108)           (89,773)          (92,828)       (97,711)            Capital Lease Obligations                                   $115,508

  Less: Deferred revenue (current
   and non-current)                          (20,011)         (18,222)           (19,444)          (18,044)       (16,640)            Debt                                                         54,339
                                                                                                                                         Total Interest-bearing Debt                              $169,847
  Less: Other non-current liabilities and
   deferred income taxes                     (30,359)        (31,632)            (42,615)          (40,915)       (38,265)
    Capital base                             $389,469        $414,906           $411,730           $430,102       $441,823               Less: Cash and cash equivalents                         (148,496)

 Average total assets                        $629,114        $641,062           $646,988           $680,187       $706,093                    Net Debt                                            $21,351
 Average capital base                        $378,123         $402,188          $413,318           $420,916       $435,963
                                                                                                                                         Adjusted EBITDA (trailing twelve months)                 $229,003
 Return on assets (Annualized)                 4.4%            4.7%               5.6%               5.8%           6.3%

 Return on Capital (Annualized)                9.0%            8.6%              10.0%              10.6%          10.9%                        Net Leverage                                       0.09x


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