[PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20%28Unaudited%29) The unaudited consolidated financial statements for the three months ended March 31, 2021, show a **24.5%** year-over-year increase in total revenue to **$117.5 million**, while net loss widened to **$29.8 million** from **$22.9 million** in the prior-year period, driven by increased operating expenses, and the balance sheet reflects a substantial increase in cash and total assets due to new convertible senior notes [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2021 | December 31, 2020 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $503,804 | $173,617 | | Goodwill | $253,324 | $213,601 | | Total assets | $1,222,693 | $913,122 | | **Liabilities & Equity** | | | | Deferred revenue, current portion | $282,245 | $278,585 | | Convertible senior notes, net | $855,709 | $378,586 | | Total liabilities | $1,303,918 | $841,586 | | Total stockholders' equity (deficit) | ($81,225) | $71,536 | - The significant increase in cash and convertible senior notes is primarily due to the issuance of **$600.0 million** in **0.25%** Convertible Senior Notes due 2027 in March 2021[10](index=10&type=chunk)[72](index=72&type=chunk) - Goodwill increased by approximately **$39.7 million**, mainly from the acquisition of Alcide.IO Ltd. in January 2021[10](index=10&type=chunk)[46](index=46&type=chunk)[66](index=66&type=chunk) [Consolidated Statements of Operations](index=5&type=section&id=Consolidated%20Statements%20of%20Operations) Consolidated Statement of Operations Highlights (in thousands, except per share data) | Account | Three Months Ended Mar 31, 2021 | Three Months Ended Mar 31, 2020 | | :--- | :--- | :--- | | Total revenue | $117,451 | $94,340 | | Total gross profit | $81,162 | $66,626 | | Total operating expenses | $104,278 | $86,446 | | Loss from operations | ($23,116) | ($19,820) | | Net loss | ($29,845) | ($22,924) | | Net loss per share, basic and diluted | ($0.56) | ($0.46) | - Total revenue grew **24.5%** year-over-year, driven by a **24.8%** increase in Products revenue[12](index=12&type=chunk)[162](index=162&type=chunk) - The net loss widened by **30.2%** year-over-year, primarily due to a **20.6%** increase in total operating expenses, which outpaced revenue growth[12](index=12&type=chunk) [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Consolidated Statement of Cash Flows Highlights (in thousands) | Activity | Three Months Ended Mar 31, 2021 | Three Months Ended Mar 31, 2020 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $20,595 | ($7,215) | | Net cash (used in) provided by investing activities | ($18,444) | $85,422 | | Net cash provided by financing activities | $328,572 | $3,374 | - Cash from financing activities was primarily driven by **$587.1 million** in net proceeds from the issuance of convertible senior notes, offset by a **$182.6 million** repurchase of other notes and a **$76.0 million** purchase of capped calls[21](index=21&type=chunk) - Cash used in investing activities included **$49.7 million** for a business acquisition (Alcide), net of cash acquired[21](index=21&type=chunk) [Notes to Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) - On January 1, 2021, the company early adopted ASU 2020-06, which simplifies the accounting for convertible instruments, resulting in a cumulative-effect adjustment that reclassified the equity component of existing convertible notes to debt and adjusted additional paid-in capital and accumulated deficit[29](index=29&type=chunk)[83](index=83&type=chunk)[84](index=84&type=chunk) Revenue by Type (in thousands) | Revenue Type | Q1 2021 | Q1 2020 | | :--- | :--- | :--- | | Subscriptions | $107,167 | $84,548 | | Perpetual software licenses | $2,114 | $2,770 | | Professional services | $8,166 | $6,791 | | **Total revenue** | **$117,451** | **$94,340** | - On January 28, 2021, the company acquired Alcide.IO Ltd. for a purchase consideration of **$50.5 million** in cash, resulting in **$39.7 million** of goodwill and **$10.4 million** of intangible assets[46](index=46&type=chunk) - In March 2021, the company issued **$600.0 million** of **0.25%** Convertible Senior Notes due 2027, using a portion of the proceeds to repurchase **$182.6 million** of the **1.25%** Convertible Senior Notes due 2023[72](index=72&type=chunk)[79](index=79&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the **24.5%** year-over-year revenue growth to increased sales to both new and existing customers, with recurring revenue making up **91%** of total revenue, and despite widening GAAP loss from operations due to increased personnel costs, the company significantly strengthened its liquidity by issuing **$600 million** in new convertible notes, ending the quarter with **$503.8 million** in cash and cash equivalents [Recent Developments](index=26&type=section&id=Recent%20Developments) - Acquired Alcide.IO Ltd., a Kubernetes security provider, for **$50.5 million** on January 28, 2021[120](index=120&type=chunk) - Issued **$600.0 million** of **0.25%** convertible senior notes due 2027 on March 16, 2021, with net proceeds of approximately **$585.0 million**[121](index=121&type=chunk) - Used **$182.6 million** of the proceeds from the new notes, along with **2.2 million** shares, to repurchase an equivalent principal amount of its **1.25%** convertible senior notes due 2023[123](index=123&type=chunk) - The company continues to monitor the impact of the COVID-19 pandemic, having modified business operations like restricting travel and enabling remote work, but has not experienced significant disruptions in Q1 2021[125](index=125&type=chunk)[126](index=126&type=chunk) [Key Metrics](index=28&type=section&id=Key%20Metrics) Key Performance Metrics | Metric | As of/For Three Months Ended March 31, 2021 | As of/For Three Months Ended March 31, 2020 | | :--- | :--- | :--- | | Total revenue | $117,451 thousand | $94,340 thousand | | Year-over-year revenue growth | 24.5% | 28.9% | | Number of customers | 8,945 | 8,075 | | Annualized recurring revenue (ARR) | $455,797 thousand | $350,884 thousand | | Year-over-year ARR growth | 29.9% | 30.8% | - Recurring revenue, defined as revenue from term software licenses, content subscriptions, managed services, cloud-based subscriptions and maintenance and support, was **91%** of total revenue for Q1 2021[128](index=128&type=chunk) [Results of Operations](index=34&type=section&id=Results%20of%20Operations) - Total revenue increased by **$23.1 million** (**24.5%**) YoY, driven by a **$21.9 million** increase from existing customers (renewals, upsells, cross-sells) and a **$1.2 million** increase from new customers[162](index=162&type=chunk) - Total cost of revenue increased by **$8.6 million** (**30.9%**) YoY, primarily due to a **$4.1 million** increase in cloud computing costs and a **$3.9 million** increase in personnel costs[165](index=165&type=chunk) - Research and development expense rose by **$8.9 million** (**36.7%**) YoY, mainly from an **$8.3 million** increase in personnel costs, including costs from the DivvyCloud and Alcide acquisitions[167](index=167&type=chunk) - Sales and marketing expense increased by **$6.8 million** (**14.2%**) YoY, driven by higher personnel and commission costs, partially offset by a **$1.3 million** decrease in travel expenses due to COVID-19[168](index=168&type=chunk)[169](index=169&type=chunk) [Liquidity and Capital Resources](index=38&type=section&id=Liquidity%20and%20Capital%20Resources) - As of March 31, 2021, the company had **$503.8 million** in cash and cash equivalents and **$113.1 million** in investments[175](index=175&type=chunk) - Net cash provided by operating activities was **$20.6 million** for Q1 2021, a significant improvement from the **$7.2 million** used in Q1 2020, reflecting revenue growth and timing of working capital[177](index=177&type=chunk)[181](index=181&type=chunk)[182](index=182&type=chunk) - Net cash provided by financing activities was **$328.6 million**, primarily from the net proceeds of the 2027 Notes issuance after accounting for repurchases of the 2023 Notes and the purchase of capped calls[185](index=185&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=41&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to market risks, primarily from foreign currency exchange rates, interest rate fluctuations, and inflation, managing foreign currency risk with forward contracts and noting that interest rate changes affect income from its cash and investment portfolio and the fair value of its fixed-rate convertible notes, while inflation has not had a material effect on operations - The company's primary market risks are foreign currency exchange risk, interest rate risk, and inflation risk[193](index=193&type=chunk)[194](index=194&type=chunk)[198](index=198&type=chunk) - A majority of revenue is in U.S. dollars, but expenses are incurred in foreign currencies, and the company uses forward contracts designated as cash flow hedges to mitigate foreign currency exposure[193](index=193&type=chunk) - Interest rate changes affect interest income on cash and investments and the fair value of its fixed-rate convertible senior notes, but do not impact the company's financial position or cash flows due to the fixed nature of the debt[195](index=195&type=chunk)[196](index=196&type=chunk) [Controls and Procedures](index=41&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures as of March 31, 2021, concluding that these controls were effective at a reasonable assurance level, with no material changes in internal control over financial reporting during the quarter - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of March 31, 2021[201](index=201&type=chunk) - No changes to the internal control over financial reporting occurred during the quarter that materially affected or are reasonably likely to materially affect these controls[203](index=203&type=chunk) [PART II. OTHER INFORMATION](index=43&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Legal Proceedings](index=43&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in a patent infringement lawsuit filed by Finjan, Inc. in October 2018, alleging infringement of seven patents and seeking unspecified damages, attorneys' fees, and injunctive relief, which Rapid7 intends to vigorously contest despite the uncertain outcome - In October 2018, Finjan, Inc. filed a patent infringement complaint against Rapid7 and its subsidiary, alleging infringement of seven patents[206](index=206&type=chunk) - Rapid7 intends to vigorously contest Finjan's claims, but notes that the outcome is uncertain and litigation can be costly and divert management resources[206](index=206&type=chunk) [Risk Factors](index=43&type=section&id=Item%201A.%20Risk%20Factors) The company identifies numerous risk factors, with the ongoing COVID-19 pandemic highlighted as a significant uncertainty, alongside business risks like variations in quarterly results, challenges of rapid growth, dependency on customer renewals, and intense market competition, operational risks such as security breaches and reliance on third-party infrastructure, and financial risks associated with a history of losses and significant debt from convertible notes - The COVID-19 pandemic is a primary risk, with potential impacts on sales cycles, customer renewals, and overall economic conditions that could adversely affect business and financial results[212](index=212&type=chunk)[214](index=214&type=chunk) - The business is highly dependent on customers renewing their subscriptions, and a decline in renewal rates due to factors like customer satisfaction, pricing, or economic conditions could harm future operating results[228](index=228&type=chunk) - The company faces intense competition from established and emerging vendors, some of whom have greater resources and broader product offerings, which could lead to pricing pressure[235](index=235&type=chunk)[236](index=236&type=chunk)[237](index=237&type=chunk) - A significant amount of debt from convertible notes may decrease business flexibility, and the conditional conversion feature of the 2023 Notes has been triggered, which could affect liquidity if holders choose to convert[327](index=327&type=chunk)[332](index=332&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=70&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities during the period - There were no unregistered sales of equity securities in the quarter[351](index=351&type=chunk) [Exhibits](index=71&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including the company's amended and restated certificate of incorporation and bylaws, the indenture for the **0.25%** Convertible Senior Notes due 2027, and various officer certifications as required by the Sarbanes-Oxley Act - Key exhibits filed include the Indenture for the new **0.25%** Convertible Senior Notes due 2027 and related purchase agreements and capped call confirmations[358](index=358&type=chunk) - Certifications from the Principal Executive Officer and Principal Financial Officer pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 are included[358](index=358&type=chunk)

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ____________________________________________________ FORM 10-K ____________________________________________________ (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO Commission File Number 001-37496 ___ ...

Rapid7, Inc. (NASDAQ:RPD) Q4 2020 Earnings Conference Call February 9, 2021 4:30 PM ET Company Participants Sunil Shah - VP, IR Corey Thomas - CEO Jeff Kalowski - CFO Conference Call Participants Saket Kalia - Barclays Matt Hedberg - RBC Capital Markets Brian Essex - Goldman Sachs Jonathan Ho - William Blair Adam Tindle - Raymond James Rob Owens - Piper Sandler Gregg Moskowitz - Mizuho Hamza Fodderwala - Morgan Stanley Alex Henderson - Needham Joshua Tilton - Berenberg Operator Ladies and gentlemen, thank y ...

Rapid7, Inc. (NASDAQ:RPD) Q3 2020 Earnings Conference Call November 4, 2020 4:30 PM ET Company Participants | --- | --- | |--------------------------------------------------------------------------------------------------------------------|-------| | | | | Sunil Shah - VP, Investor Relations Corey Thomas - Chief Executive Officer Jeff Kalowski - Chief Financial Officer | | | Conference Call Participants | | | Rob Owens - Piper Sandler | | | Saket Kalia - Barclays | | Operator Ladies and gentlemen, thank you ...

Financial Data and Key Metrics Changes - Total ARR ended the second quarter at $379.9 million, growing 31% year-over-year, reflecting strong demand for the Insight platform [11][42] - Total revenue for Q2 was $98.9 million, exceeding guidance and growing 25% year-over-year, driven by a 27% increase in product revenue [42] - Recurring revenue represented 91% of total revenue, up from 87% in the prior year [42] - Operating profit for Q2 was $4.3 million, ahead of guidance, with adjusted EBITDA at $7.6 million [48] Business Line Data and Key Metrics Changes - Security transformation solutions, including IDR and InsightAppSec, showed strong momentum, representing over 50% of new business in the quarter [21] - ARR per customer grew by 20% year-over-year to approximately $41,600, indicating successful expansion in customer relationships [24][45] - Vulnerability management continued to grow, with solid year-to-date ARR and revenue growth exceeding 20% [22] Market Data and Key Metrics Changes - North America revenue grew by 25% year-over-year, comprising 83% of total revenue, while the rest of the world grew by 29% [43] - The company served over 9,100 customers globally, a 9% increase from the prior year [44] Company Strategy and Development Direction - The company aims to lead in enabling customers to transform their security operations around the cloud, focusing on security analytics, automation, and cloud enablement [31] - Rapid7's platform strategy allows customers to expand their security capabilities over time, addressing immediate priorities while facilitating long-term growth [20] - The company plans to pilot various Insight product bundles to maximize customer adoption and drive sales leverage [36] Management's Comments on Operating Environment and Future Outlook - Management noted that organizations are increasingly prioritizing security enablement as they navigate digital transformation and cloud migration [12][51] - The company raised its full-year guidance for ARR to a range of $404 million to $420 million, reflecting confidence in long-term growth despite economic uncertainties [56] - Management acknowledged the ongoing economic uncertainty but expressed optimism about the demand for security solutions [52][55] Other Important Information - The company welcomed a new Board member, Reeny Sondhi, who brings expertise in cloud and security [38] - The company reported a cash balance of $321 million at the end of Q2, up from $253.6 million in Q1, primarily due to proceeds from a convertible notes offering [49] Q&A Session Summary Question: Insights on SIEM demand post-COVID - Management observed that demand for cloud-based SIEM has increased significantly as organizations recognize the need for modern security solutions in a remote work environment [66][67] Question: Net revenue retention and upsell trends - Gross retention remained strong, with net revenue retention slightly declining from 106% to 105%, which was anticipated [70][71] Question: Urgency of cloud migration among CIOs - CIOs are accelerating their digital transformation efforts, with security becoming a critical part of the conversation as they move operations to the cloud [77][79] Question: Trends in security spending - Management noted that security spending has not slowed as much as expected, with many organizations continuing to invest in cybersecurity initiatives [86] Question: Impact of customer layoffs on business - Management indicated that the growth of technology assets typically outpaces any decline in employee numbers, minimizing the impact of layoffs on revenue [118]

Rapid7, Inc. (NASDAQ:RPD) Q1 2020 Earnings Conference Call May 7, 2020 4:30 PM ET Corporate Participants Sunil Shah - VP of investor relations Corey Thomas - Chairman & Chief Executive Officer Jeff Kalowski - Chief Financial Officer Conference Call Participants Michael Turits - Raymond James Matt Hedberg - RBC Capital Saket Kalia - Barclays Rob Owens - Piper Sandler Gur Talpaz - Stifel Brian Essex - Goldman Sachs Calvin Patel - Macquarie John Weidemoyer - William Blair Operator Ladies and gentlemen, thank y ...

Rapid7 Overview - Rapid7's Annual Recurring Revenue (ARR) grew by 31% year-over-year as of Q1 2020[5] - Recurring revenue accounted for 90% of Rapid7's total revenue[7] - Rapid7 projects ARR growth of 17% and revenue growth of 20% in 2020[9] Customer Base - Enterprise-level customers make up over 50% of Rapid7's customer base ARR[21] - As of March 31, 2020, customer ARR was $350.9 million[22] - ARR per customer was approximately $38900 in Q1 2020[67] Financial Performance - Q1 2020 revenue growth was 29% year-over-year[55] - Rapid7 achieved a 90% mix of recurring revenue in Q1 2020[62] - ARR grew by 31% year-over-year in Q1 2020, reaching $351 million[65] Guidance - Rapid7 anticipates ARR between $387 million and $407 million for full-year 2020, representing 14% to 20% growth[83] - The company projects revenue between $388 million and $395 million for full-year 2020, a 19% to 21% increase[83]

Rapid7, Inc. (NASDAQ:RPD) Q4 2019 Earnings Conference Call February 10, 2020 4:30 PM ET Company Representatives Corey Thomas - Chairman & Chief Executive Officer Jeff Kalowski - Chief Financial Officer Neeraj Mahajan - Vice President of Investor Relations Conference Call Participants Rob Owens - Piper Sandler Matthew Hedberg - RBC Michael Turits - Raymond James Gur Talpaz - Stifel Jonathan Ho - William Blair Gregg Moskowitz - Mizuho Melissa Franchi - Morgan Stanley Nick Yako - Cowen & Company Operator Ladie ...

Rapid7, Inc. (NASDAQ:RPD) Q3 2019 Earnings Conference Call November 5, 2019 8:00 AM ET Company Participants Neeraj Mahajan - VP, IR Corey Thomas - CEO Jeff Kalowski - CFO Conference Call Participants Saket Kalia - Barclays Capital Matthew Hedberg - RBC Capital Markets Gur Talpaz - Stifel Rob Owens - KeyBanc Capital Markets Michael Turits - Raymond James Gregg Moskowitz - Mizuho Jonathan Ho - William Blair Nick Yako - Cowen & Company Chris Speros - Stifel Operator Good day, ladies and gentlemen. Thank you fo ...

Rapid7 (NASDAQ:RPD) Q2 2019 Earnings Conference Call August 1, 2019 8:00 AM ET Company Participants Neeraj Mahajan - Vice President, Investor Relations Corey Thomas - Chief Executive Officer Jeff Kalowski - Chief Financial Officer Conference Call Participants Rob Owens - KeyBanc Capital Markets Saket Kalia - Barclays Capital Matt Hedberg - RBC Capital Markets Chris Speros - Stifel Michael Turits - Raymond James Jonathan Ho - William Blair Gregg Moskowitz - Mizuho Alex Henderson - Needham Keith Weiss - Morga ...