In post-market trading, shares have taken off 8.8% to $36.82, after gaining 2.2% over Monday.
In the three months to December, the San Antonio-based company earned 14 cents a share on revenue 16% higher year-over-year to $408 million. Earnings came in as analysts surveyed by Thomson Reuters had expected, while sales beat by nearly $4 million.
Rackspace's total server count increased to 103,886, up 2% on a sequential basis.
Net income of $20.8 million took a hit, down 30% from the year-ago quarter. Adjusted EBITDA was negatively impacted by non-cash charges relating to data center operating leases.
Along with the earnings release, Rackspace announced CEO and board member Napier had retired. Co-founder and executive chairman Graham Weston will assume the position of CEO.
"My decision to step down as CEO was a difficult one, but it's the right choice for me and for the company. With the board and management team aligned around our 2014 strategy and financial plan, I believe now is a natural transition point to select a new leader for the next exciting phase of Rackspace's growth," said Napier in a statement.
To the year ahead, newly-appointed CEO Weston noted a focus on differentiation.
"In 2014, we will take the next step to carve out our differentiated position and help the next adoption wave of customers reach a hybrid cloud world. We will continue to invest in our portfolio of services and reinforce our differentiation in the market. We will win as we always have one delighted customer at a time," said Weston.