Rackspace Announces Strong First Quarter Results

Rackspace Announces Strong First Quarter Results

Managed Hosting Specialist Continues Rapid 
Growth and New Customer Acquisition

SAN ANTONIO — May 22, 2006 — Rackspace Managed Hosting today announced in the
first quarter of 2006, the company's revenue grew 58 percent over the same
period in 2005 to $45.7 million. Net income in the first quarter of 2006 was
$4.2 million, a 121 percent increase over the same quarter the previous year.
Rackspace has experienced 29 consecutive quarters of revenue growth since the
company's inception. 
	
Rackspace significantly expanded its leadership team in the first quarter of
2006, filling two key roles. Major Horton was named Rackspace's chief
financial officer, and Alan Schoenbaum was named general counsel. Horton
joined Rackspace as the former vice president and general manager of Dell
Financial Services' commercial financial services group and Schoenbaum was a
partner with Akin Gump Strauss Hauer & Feld LLP.  

"Our first quarter performance and growth illustrate the company's
consistency and stability while reflecting additional market share gains in
the managed hosting industry," said 
Major Horton, chief financial officer, Rackspace Managed Hosting.
"Rackspace's continual focus on Fanatical Support™ drives the company's
success and solidifies our position as a leading enterprise hoster in the
industry."

Rackspace now manages nearly 20,000 servers in its data centers and signed
hundreds of new customers in the first quarter of 2006, including
organizations such as Roto-Rooter, the Chicago Convention and Tourism Bureau,
Navy JROTC, University of California Press and  Tvext™/Broadband Television
Network Corporation. Additionally, the company was ranked 16th in the Top 50
Best Places to Work in Texas published by Texas Monthly magazine. 

About Rackspace Managed Hosting
Rackspace Managed Hosting™ is a fast-growing managed hosting provider for
customers of all sizes – from start-ups to enterprise customers. Founded in
1998, Rackspace has built a 
world-class service organization based on its philosophy of Fanatical
Support™. For more information, visit www.rackspace.com, or call
800-961-2888.