Rackspace reported financial results for the quarter ended September 30, 2013. Net revenue for the third quarter of 2013 was $389 million, up 3.4% from the previous quarter and 16% from the third quarter of 2012.  

Total server count increased to 101,967, up from 98,884 servers at the end of the previous quarter.

Adjusted EBITDA for the quarter was $125 million, a 1.9% increase compared to the second quarter of 2013 and a 3% increase compared to the third quarter of 2012. The Adjusted EBITDA margin for the quarter was 32.3% compared to 32.8% in the previous quarter and 36.2% in the third quarter of 2012.

Net income was $16 million for the quarter, down 27.1% from the previous quarter and 40% from the third quarter of 2012. Net income margin for the quarter was 4.2% compared to 6.0% for the previous quarter and 8.1% in the third quarter of 2012.

Cash flow from operating activities was $115 million for the third quarter of 2013. Capital expenditures were $118 million, including $74 million for purchases of customer gear, $12 million for data center build outs, $7 million for office build outs and $25 million for capitalized software and other projects.

At the end of the third quarter of 2013, cash and cash equivalents were $270 million, and debt including capital lease obligations totaled $73 million.

On a worldwide basis, Rackspace employed 5,450 people as of September 30, 2013, up from 5,272 in the previous quarter.