Rackspace Inc. beat out analyst’s expectations in its fourth quarter earnings report yesterday, thanks to a number of early signups for its managed services on Amazon Web Services.

Rackspace said it hit earnings of $32 million in its fourth quarter, or $0.24 per share. Revenues hit $523 million for the quarter, an 11 percent rise from one year ago, while Non-GAAP earnings were $0.31 per share. Wall Street’s experts had previously said they were looking for earnings of $0.22 per share and revenues of $521.4 million.

For the full year, Rackspace said it had racked up $126.2 million in earnings, amounting to $0.90 per share, on $2 billion revenues.

It’s not all hunky-dory in the Rackspace camp though, because the company’s forecast for next quarter was less than what Wall Street was hoping for. Rackspace said it’s expecting first quarter revenues of between $527 million and $521 million, while Wall Street is somewhat optimistically shooting for $530.7 million. The company said its lowered outlook was partly due to currency fluctuations and a small divestiture. As for the full year, Rackspace is projecting revenues of between $2.08 billion and $2.16 billion in 2016.

Shareholders apparently didn’t like that forecast, and so Rackspace saw its shares fall by almost ten percent in after hours trading.

Looking ahead, Rackspace CEO Taylor Rhodes said on the call that he was expecting big things from the company’s managed services for AWS and also Microsoft Azure. Previously, Rackspace tried to compete directly with those cloud vendors, before throwing in the towel and instead partnering with them to offer “Fanatical Support”. Now, Rackspace is looking to branch out and play the cloud support game for other vendors too, but it remains to be seen how this strategy will play out.

Nonetheless, Rhodes seemed optimistic, saying that the company had already secured more than 100 customers for its AWS managed services offering.

“We intend to be the number one managed services provider for AWS, and we are well on our way toward that goal,” Rhodes said. “Second, we showed that our business is becoming less capital intensive, resulting in higher free cash flow.”

Rhodes added that managed services could well lead to renewed growth for the company.

“These moves open up huge and fast-growing new markets for us and strongly differentiate us as the only company with the tools and expertise to provide Fanatical Support for the world’s leading clouds.”

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