Rackspace Hosting (Rackspace Hosting) EBIT : $277 Mil (TTM As of Sep. 2016)

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What is Rackspace Hosting EBIT?

Rackspace Hosting's earnings before interest and taxes (EBIT) for the three months ended in Sep. 2016 was $70 Mil. Its earnings before interest and taxes (EBIT) for the trailing twelve months (TTM) ended in Sep. 2016 was $277 Mil.

EBIT or Operating Income is linked to Return on Capital for both regular definition and Joel Greenblatt's definition. Rackspace Hosting's annualized ROC % for the quarter that ended in Sep. 2016 was 14.52%. Rackspace Hosting's annualized ROC (Joel Greenblatt) % for the quarter that ended in Sep. 2016 was 26.60%.

EBIT is also linked to Joel Greenblatt's definition of earnings yield. Rackspace Hosting's Earnings Yield (Joel Greenblatt) % for the quarter that ended in Sep. 2016 was 6.90%.

Rackspace Hosting EBIT Historical Data

The historical data trend for Rackspace Hosting's EBIT can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Rackspace Hosting EBIT Chart

Rackspace Hosting Annual Data

Trend

Dec06

Dec07

Dec08

Dec09

Dec10

Dec11

Dec12

Dec13

Dec14

Dec15

EBIT

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122.28

172.76

133.88

163.53

200.00

Rackspace Hosting Quarterly Data
	Dec11	Mar12	Jun12	Sep12	Dec12	Mar13	Jun13	Sep13	Dec13	Mar14	Jun14	Sep14	Dec14	Mar15	Jun15	Sep15	Dec15	Mar16	Jun16	Sep16
EBIT	Get a 7-Day Free Trial															55.00	59.90	82.30	64.70	70.20

Competitive Comparison of Rackspace Hosting's EBIT

For the Information Technology Services subindustry, Rackspace Hosting's EV-to-EBIT, along with its competitors' market caps and EV-to-EBIT data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

Rackspace Hosting's EV-to-EBIT Distribution in the Software Industry

For the Software industry and Technology sector, Rackspace Hosting's EV-to-EBIT distribution charts can be found below:

* The bar in red indicates where Rackspace Hosting's EV-to-EBIT falls into.

Rackspace Hosting EBIT Calculation

EBIT, sometimes also called Earnings Before Interest and Taxes, is a measure of a firm's profit that includes all expenses except interest and income tax expenses. It is the difference between operating revenues and operating expenses. When a firm does not have non-operating income, then Operating Income is sometimes used as a synonym for EBIT and operating profit.

EBIT for the trailing twelve months (TTM) ended in Sep. 2016 adds up the quarterly data reported by the company within the most recent 12 months, which was $277 Mil.

Rackspace Hosting (NYSE:RAX) EBIT Explanation

1. EBIT or Operating Income is linked to Return on Capital for both regular definition and Joel Greenblatt's definition.

Rackspace Hosting's annualized ROC % for the quarter that ended in Sep. 2016 is calculated as:

	ROC % (Q: Sep. 2016 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Jun. 2016 )	+	Invested Capital (Q: Sep. 2016 ))	/ count )
=	280.8 * ( 1 - 35.67% )	/	( (1253.3	+	1234.8)	/ 2 )
=	180.63864	/	1244.05
=	14.52 %

where

	Invested Capital		(Q: Jun. 2016 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	1996.8	-	219.1	-	( 544.3	-	max(0, 248.2	-	772.6	+	544.3	))
=	1253.3

	Invested Capital		(Q: Sep. 2016 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	2048.1	-	181.2	-	( 632.1	-	max(0, 224.7	-	864.3	+	632.1	))
=	1234.8

Note: The Operating Income data used here is four times the quarterly (Sep. 2016) data.

2. Joel Greenblatt's definition of Return on Capital:

Rackspace Hosting's annualized ROC (Joel Greenblatt) % for the quarter that ended in Sep. 2016 is calculated as:

	ROC (Joel Greenblatt) %		(Q: Sep. 2016 )
=	EBIT	/	Average of (Net fixed Assets	+	Net Working Capital)
=	EBIT	/	Average of (Property, Plant and Equipment	+	Net Working Capital)
			Q: Jun. 2016		Q: Sep. 2016
=	EBIT	/	( ( (Property, Plant and Equipment + Net Working Capital)	+	(Property, Plant and Equipment + Net Working Capital) )	/	count )
=	280.8	/	( ( (1071.6 + max(-19.4, 0))	+	(1031.7 + max(7.7999999999999, 0)) )	/	2 )
=	280.8	/	( ( 1071.6	+	1039.5 )	/	2 )
=	280.8	/	1055.55
=	26.60 %

where Working Capital is:

	Working Capital		(Q: Jun. 2016 )
=	(Accounts Receivable	+	Total Inventories	+	Other Current Assets)	-	(Accounts Payable & Accrued Expense	+	Defer. Rev.	+	Other Current Liabilities)
=	(168.6	+	0	+	59.7)	-	(219.1	+	28.6	+	0)
=	-19.4

	Working Capital		(Q: Sep. 2016 )
=	(Accounts Receivable	+	Total Inventories	+	Other Current Assets)	-	(Accounts Payable & Accrued Expense	+	Defer. Rev.	+	Other Current Liabilities)
=	(166	+	0	+	66.2)	-	(181.2	+	43.2	+	0)
=	7.7999999999999

When net working capital is negative, 0 is used.

Note: The EBIT data used here is four times the quarterly (Sep. 2016) EBIT data.

3. It is also linked to Joel Greenblatt's definition of Earnings Yield:

Rackspace Hosting's Earnings Yield (Joel Greenblatt) % for today is calculated as:

Earnings Yield (Joel Greenblatt) %	=	EBIT (TTM)	/	Enterprise Value (Q: Sep. 2016 )
	=	277.1	/	4018.220
	=	6.90 %

Rackspace Hosting EBIT Related Terms

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Rackspace Hosting (Rackspace Hosting) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Technology » Software » Rackspace Hosting Inc (NYSE:RAX) » Definitions » EBIT

Comparable Companies

Traded in Other Exchanges

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Address

Website

http://www.rackspace.com

Rackspace Hosting Inc was incorporated in Delaware in March 2000. The Company, through its operating subsidiaries, is a provider of cloud computing services, managing web-based IT systems for small and medium-sized businesses as well as large enterprises. It offers a portfolio of integrated IT solutions for common business needs, including for ecommerce, web content management, website hosting, data services, office mail and collaboration, and private clouds. It also offers advisory services for technology strategy, security and compliance, application assessment and migration, and DevOps automation. It offers its solutions across a variety of IT form factors, including multi-tenant public cloud, dedicated single-tenant servers, private cloud, and hybrid cloud - all delivered with a commitment to open and standard technologies. Its marketing activities include web-based paid and natural search, participation in technology trade shows, conferences and customer events, advertisements in traditional and electronic (web and email-based) media, and targeted regional public relations activities. Its trademark includes Rackspace, Fanatical Support, and RackConnect. The Company is subject to U.S. federal income tax and various state, local, and international income taxes in numerous jurisdictions.

Executives

Alex Pinchev	officer: EVP, Global Sales & Marketing	BMC SOFTWARE INC, 2101 CITYWEST BLVD, HOUSTON TX 77042
Lila Tretikov	director	149 NEW MONTGOMERY STREET, FLOOR 6, SAN FRANCISCO CA 94105
John E Harper	director	2300 WEST PLANO PARKWAY, PLANO TX 75075
Joseph Saporito	officer: Chief Accounting Officer
Kevin Costello	director	C/O ARIBA INC, 807 11TH AVENUE, SUNNYVALE CA 94089
Graham M Weston	director, 10 percent owner	425 SOLEDAD SUITE 500, SAN ANTONIO TX 78205
Eugene V Defelice	officer: SVP, General Counsel	1506 COVENTRY LANE SOUTHLAKE TX 76092
Michael S Gilliland	director	3720 BEVERLY DRIVE, DALLAS TX 75205
Still George J Jr	director	NORWEST VENTURE PARTNERS, 525 UNIVERSITY AVENUE, SUITE 800, PALO ALTO CA 94301
A Lanham Napier	director, officer: CEO	701 W. CASTANO, SAN ANTONIO TX 78209
Palmer L Moe	director	5000 WALZEM SAN ANTONIO TX 78218
Wells Fargo & Company/mn	10 percent owner	420 MONTGOMERY STREET, SAN FRANCISCO CA 94163
Promod Haque	10 percent owner	C/O NORWEST VENTURE PARTNERS, 525 UNIVERSITY AVENUE, SUITE 800, PALO ALTO CA 94301
Norwest Venture Partners Viii Lp	10 percent owner	C/O NORWEST VENTURE PARTNERS 525 UNIVERSITY AVENUE, SUITE 800 PALO ALTO CA 94301
James J Goetz	10 percent owner	C/O SEQUOIA CAPITAL, 2800 SAND HILL RD, SUITE 101, MENLO PARK CA 94025