Core Insights - Rapid7 has been recognized as a Leader in the Frost Radar™ for Managed Detection and Response (MDR), highlighting its deep integration between MDR and exposure management, which enhances visibility and innovation in AI-powered Security Operations Centers (SOCs) [1][2][3] Group 1: MDR Service Features - Rapid7's MDR service includes 24/7 threat monitoring, unlimited incident response, proactive threat hunting, and active remediation, all delivered through a transparent platform [2][4] - The service is noted for its ability to provide deep visibility and third-party telemetry across various environments, including endpoint, network, cloud, and identities, tailored to each organization's needs [2][3] - AI automation is utilized for alert triage, achieving a market-leading accuracy of 99.93%, which saves over 200 SOC hours per week [2][3] Group 2: Strategic Focus and Innovation - Rapid7 emphasizes a unified platform approach that integrates managed services, automation, and visibility, evolving MDR in line with proactive and preventive strategies within Continuous Threat Exposure Management (CTEM) [3][4] - The company is committed to transparency, customer trust, and continuous innovation, which are key factors in its recognition as a leader in the MDR market [3][4] - Rapid7's global SOC enhances detection and response capabilities, enabling organizations to quickly identify and mitigate attacks [4] Group 3: Company Overview - Rapid7, Inc. aims to create a safer digital world by simplifying cybersecurity and making it more accessible, serving over 11,000 global customers [5] - The company provides comprehensive security solutions that integrate cloud risk management with threat detection and response, focusing on reducing attack surfaces and eliminating threats efficiently [5][6]

Core Viewpoint - Rapid7, Inc. will release its second quarter 2025 financial results on August 7, 2025, after market close, followed by a conference call to discuss the results and business outlook [1] Group 1: Financial Results Announcement - The financial results for Q2 2025 will be announced on August 7, 2025, after the financial markets close [1] - A conference call will be held on the same day at 4:30 p.m. Eastern Time to discuss the results and business outlook [1] Group 2: Access to Information - A live webcast of the conference call and the financial results press release will be available on the Rapid7 investor relations website [2] - A replay of the webcast will also be accessible on the investor relations website [2] Group 3: Company Overview - Rapid7, Inc. is focused on creating a safer digital world by simplifying and making cybersecurity more accessible [3] - The company provides comprehensive security solutions to over 11,000 global customers, helping them manage cloud risk and threat detection [3]

Core Insights - Rapid7 has integrated agentic AI workflows into its next-gen SIEM and XDR platform to enhance managed detection and response (MDR) capabilities, allowing SOC analysts to focus on higher-impact activities [1][2] - The new AI workflows improve alert triage accuracy to 99.93%, saving over 200 SOC hours per week, addressing the need for scalability and speed in the evolving threat landscape [2][3] Group 1: AI Integration and Impact - Agentic AI autonomously performs foundational investigative tasks, enabling faster and more efficient threat analysis, which shortens investigation cycles and enhances problem-solving capabilities [1][4] - The workflows are designed based on playbooks from Rapid7's SOC experts, ensuring that the AI is trained on real-world applications to deliver actionable insights [3][4] Group 2: Strategic Decision-Making - The implementation of agentic AI workflows is aimed at optimizing human decision-making by providing relevant information and context, which allows organizations to respond swiftly to AI-enabled threats [4][6] - Successful AI deployment in cybersecurity requires a thoughtful approach, including data classification and disciplined workflows, which Rapid7 has incorporated into its AI processes [4][6] Group 3: Company Overview and Mission - Rapid7 is committed to creating a safer digital world by simplifying cybersecurity and making it more accessible, serving over 11,000 global customers [6][7] - The company focuses on uniting cloud risk management with threat detection to enhance security postures against sophisticated AI attackers [6][7]

Rapid7 (RPD) FY Conference June 03, 2025 02:20 PM ET Speaker0 With that, I'll hand it over to Corey for a quick overview of the company, after which we'll have a fireside chat. Corey? Speaker1 Yep. A short overview of the company. But no, I want thank you all for coming today. Rapid7 is a cybersecurity company that's focused on helping organizations scale their security operations programs. Our observation on the market within it for a long time is that more and more companies are going be responsible for a ...

Core Insights - Rapid7, Inc. is a leader in extended risk and threat detection, focusing on creating a safer digital world through simplified cybersecurity solutions [2] Company Overview - Rapid7 empowers security professionals to manage modern attack surfaces with best-in-class technology and strategic expertise, serving over 11,000 global customers [2] - The company's comprehensive security solutions integrate cloud risk management and threat detection to effectively reduce attack surfaces and eliminate threats [2] Upcoming Events - Rapid7 will present at the William Blair 45th Annual Growth Stock Conference in Chicago, IL on June 3, 2025, at 1:20 p.m. Central Time [3] - The company will also participate in the Stifel 2025 Cross Sector 1x1 Conference in Boston, MA on June 4, 2025 [3] - Additionally, Rapid7 will attend the Mizuho 2025 Technology Conference in New York, NY on June 10, 2025 [3]

Core Insights - Rapid7 reported revenue of $210.25 million for the quarter ended March 2025, reflecting a 2.5% increase year-over-year and a surprise of +1.14% over the Zacks Consensus Estimate of $207.89 million [1] - The company's EPS was $0.49, down from $0.55 in the same quarter last year, but exceeded the consensus estimate of $0.35 by +40.00% [1] Financial Performance Metrics - Annualized recurring revenue (ARR) was reported at $837.22 million, slightly below the average estimate of $840.83 million [4] - The number of customers reached 11,685, surpassing the average estimate of 11,631 [4] - ARR per customer was $71,600, which is lower than the average estimate of $72,342.91 [4] - Revenue from professional services was $6.32 million, below the average estimate of $6.80 million, representing a year-over-year decline of -22.8% [4] - Product revenue was $203.94 million, exceeding the average estimate of $202.25 million, with a year-over-year increase of +3.6% [4] - Non-GAAP gross profit from professional services was $1.74 million, above the average estimate of $1.55 million [4] - Non-GAAP gross profit from products was $155.72 million, compared to the average estimate of $152.07 million [4] Stock Performance - Rapid7 shares have returned +6.7% over the past month, outperforming the Zacks S&P 500 composite's +3.8% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]

Company Performance - Rapid7 reported quarterly earnings of $0.49 per share, exceeding the Zacks Consensus Estimate of $0.35 per share, but down from $0.55 per share a year ago, representing an earnings surprise of 40% [1] - The company posted revenues of $210.25 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 1.14% and up from $205.1 million year-over-year [2] - Over the last four quarters, Rapid7 has surpassed consensus EPS estimates three times and topped consensus revenue estimates four times [2] Stock Performance and Outlook - Rapid7 shares have declined approximately 37.5% since the beginning of the year, compared to a decline of 3.8% for the S&P 500 [3] - The current consensus EPS estimate for the upcoming quarter is $0.42 on revenues of $214.54 million, and for the current fiscal year, it is $1.78 on revenues of $865.36 million [7] - The estimate revisions trend for Rapid7 is mixed, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Industry Context - The Internet - Software industry, to which Rapid7 belongs, is currently in the top 39% of over 250 Zacks industries, suggesting that companies in the top 50% outperform those in the bottom 50% by more than 2 to 1 [8]

Financial Data and Key Metrics Changes - Rapid7 ended Q1 2025 with an ARR of $837 million, reflecting a 4% year-over-year growth, which was below expectations [6][22][23] - Revenue for Q1 2025 was $210 million, growing 3% year-over-year and exceeding guided ranges [24][27] - Product revenue increased by 4% year-over-year, while professional services revenue declined due to a strategic shift away from lower-margin engagements [24][25] - Operating income for the quarter was $32 million, above the guided range, with an adjusted EBITDA of $39 million [25][26] Business Line Data and Key Metrics Changes - The detection and response (DNR) business continued to be the core growth driver, representing over half of total ARR and maintaining mid-teens growth [8][10] - The risk and exposure management business faced challenges, with growth deceleration and missed expectations, particularly in traditional vulnerability management offerings [8][9][15] - ARR per customer grew by 2% year-over-year to approximately $72,000, with a total customer base of 11,685, also reflecting a 2% year-over-year increase [22][24] Market Data and Key Metrics Changes - International revenue accounted for 25% of total revenue and grew by 10% year-over-year, indicating strong performance outside the U.S. [24] - The North American mid-market enterprise segment experienced slower deal cycles and tighter budget controls, impacting overall performance [9][10] Company Strategy and Development Direction - The company aims to reaccelerate long-term growth and expand free cash flow, focusing on three strategic pillars: enhancing detection and response capabilities, upgrading the vulnerability management customer base to the exposure management platform, and improving cost structure [7][18][19] - Rapid7 is transitioning from a traditional standalone vulnerability management business to a more integrated risk and exposure management approach, which is expected to stabilize performance [15][16] Management's Comments on Operating Environment and Future Outlook - Management noted a more challenging macro environment than anticipated, with customers becoming increasingly cautious about investments and extended deal cycles becoming common [9][10] - The company adjusted its ARR guidance for the full year 2025 to a range of $850 million to $880 million, reflecting slower growth expectations [27][28] - Despite the cautious environment, management remains confident in the DNR business and its ability to drive growth, while also focusing on stabilizing the risk and exposure management segment [18][19] Other Important Information - The company fully repaid the remaining balance of its 2025 convertible notes, simplifying its capital structure [26] - Free cash flow for the quarter was $25 million, indicating strong operational discipline [26] Q&A Session Summary Question: Why is the upgrade cycle on Exposure Command taking longer than expected? - Management indicated that complexity in customer environments and budget constraints are primary factors affecting the upgrade cycle [34][35] Question: What needs to happen to reaccelerate ARR growth? - Management highlighted strong demand for DNR and the need to successfully upgrade the installed base as key drivers for reacceleration [41][43] Question: What is the timeline for stabilization in the risk and exposure management business? - Management expects moderate stabilization over the course of the year, with reacceleration anticipated moving forward [48][49] Question: Are there resilient customer segments amidst macro pressures? - Management noted that highly regulated industries and larger customers tend to be more resilient, while sectors like healthcare and education are experiencing more pressure [55][59] Question: How is the company addressing competition in the vulnerability management space? - Management emphasized the importance of upgrading the install base to integrated solutions to maintain competitiveness and customer retention [75][76] Question: What is the outlook for the DNR business independent of the VM dynamics? - Management expressed confidence in the DNR business's growth potential, citing strong demand and opportunities for new customer acquisition [83][84]

Financial Data and Key Metrics Changes - Rapid7 ended Q1 2025 with an ARR of $837 million, reflecting a 4% year-over-year growth, which was below expectations [5][20][21] - Revenue for Q1 was $210 million, growing 3% year-over-year and exceeding guided ranges [22][24] - Operating income for the quarter was $32 million, above the guided range due to timing of certain expenses [23][24] - Free cash flow for the quarter was $25 million, indicating strong operational discipline [24] Business Line Data and Key Metrics Changes - Detection and Response (DNR) business continued to be the core growth driver, representing over half of total ARR and maintaining mid-teens growth [7][9][10] - Risk and Exposure Management business faced challenges, with growth deceleration and negative performance in traditional vulnerability management offerings [7][13][21] - ARR per customer grew 2% year-over-year to approximately $72,000, with a total customer base of 11,685, also reflecting a 2% year-over-year increase [21][22] Market Data and Key Metrics Changes - International revenue represented 25% of total revenue and grew 10% year-over-year, indicating strong performance outside the U.S. [22] - The North American mid-market enterprise segment experienced slower deal cycles and tighter budget controls, impacting overall performance [8][9] Company Strategy and Development Direction - The company is focused on three strategic pillars: enhancing detection and response capabilities, upgrading vulnerability management customers to the exposure management platform, and improving cost structure [6][16] - Investments in innovation and operational efficiency are expected to drive future growth, particularly through the new operations center in India [6][10][16] Management's Comments on Operating Environment and Future Outlook - Management noted a more challenging macro environment than anticipated, with customers becoming cautious about investments and extending deal cycles [8][9][16] - The company adjusted its ARR guidance for 2025 to a range of $850 million to $880 million, reflecting increased budgetary uncertainty [25][26] - Despite challenges, management remains confident in the long-term growth strategy and the resilience of the DNR business [16][26] Other Important Information - The company fully repaid the remaining balance of its 2025 convertible notes, simplifying its capital structure [24] - New board members were welcomed, bringing expertise to support growth and industry leadership [18] Q&A Session Summary Question: Why is the upgrade cycle on Exposure Command taking longer than expected? - Management indicated that complexity in customer environments and budget constraints are primary factors affecting the upgrade cycle [30][32][33] Question: What needs to happen to reaccelerate ARR growth? - Management highlighted strong demand for DNR and the need to successfully upgrade the installed base as key drivers for reacceleration [39][42][44] Question: What is the timeline for stabilization in the risk and exposure management business? - Management expects moderate stabilization over the course of the year, with reacceleration anticipated moving forward [48][50] Question: Are there resilient customer segments amidst macro pressures? - Management noted that highly regulated industries and larger customers tend to be more resilient, while sectors like healthcare and education are experiencing pressure [56][60] Question: How is the company addressing competition in the cloud security market? - Management emphasized a focus on upgrading the existing install base rather than aggressive spending to acquire new customers, aiming for efficient growth [108][110][112]

Company Overview - Rapid7 has a total addressable market exceeding $54 billion[7] - The company's 2024 free cash flow was over $150 million[7] - Rapid7's threat engine collects and analyzes over 300 trillion events[7] - The company has over 60 patents granted and pending related to AI[7] Market Opportunity - The total market opportunity for Security Operations is projected to reach $85 billion by 2027[20] - Exposure Management is valued at $25 billion in 2024 and is projected to reach $34 billion by 2027, representing a 13% CAGR[20] - Detection and Response is valued at $18 billion in 2024 and is projected to reach $21 billion by 2027, representing a 16% CAGR[20] Financial Performance & Guidance - Rapid7's 2024 revenue grew by 9% year-over-year[44] - The company's revenue CAGR from 2020 to 2024 was 20%[44] - Rapid7 anticipates full year 2025 Annualized Recurring Revenue between $850 million and $880 million, representing a 1% to 5% year-over-year growth[55] - The company anticipates full year 2025 revenue between $853 million and $863 million, representing a 1% to 2% year-over-year growth[55]