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Rapid7(RPD) - 2024 Q4 - Annual Report
RPDRapid7(RPD)2025-02-28 21:09
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Financial Performance - For the year ended December 31, 2024, the company recorded total revenue of 844million,anincreaseof8.5844 million, an increase of 8.5% from 777.7 million in 2023[355]. - Product subscriptions revenue was 808.9million,upfrom808.9 million, up from 740.2 million in 2023, representing a growth of 9.3%[355]. - The company reported a net income of 25.5millionfor2024,asignificantrecoveryfromanetlossof25.5 million for 2024, a significant recovery from a net loss of 152.8 million in 2023[355]. - Total gross profit for 2024 was 593million,comparedto593 million, compared to 545.7 million in 2023, reflecting a gross margin improvement[355]. - Operating expenses decreased to 557.9millionin2024from557.9 million in 2024 from 629.9 million in 2023, primarily due to lower research and development costs[355]. - The company recognized a total comprehensive income of 23millionin2024,comparedtoacomprehensivelossof23 million in 2024, compared to a comprehensive loss of 150.1 million in 2023[359]. - Net income for the year ended December 31, 2024, was 25,526,000,asignificantimprovementfromanetlossof25,526,000, a significant improvement from a net loss of 152,815,000 in 2023 and 124,717,000in2022[364].−Thecompanyreportedalossbeforeincometaxesof124,717,000 in 2022[364]. - The company reported a loss before income taxes of 153,333,000 for the year ended December 31, 2024, compared to a profit of 41,455,000in2023[482].−Totalincometaxexpensefor2024was41,455,000 in 2023[482]. - Total income tax expense for 2024 was 15,929,000, a significant increase from a tax benefit of 518,000in2023[483].−Theeffectiveincometaxratefor2024was38.4518,000 in 2023[483]. - The effective income tax rate for 2024 was 38.4%, compared to 0.3% in 2023[483]. Cash and Investments - The company reported cash and cash equivalents of 334.7 million and investments of 224.3millionasofDecember31,2024[330].−Thecompany’scashandcashequivalentsincreasedto224.3 million as of December 31, 2024[330]. - The company’s cash and cash equivalents increased to 334.7 million as of December 31, 2024, up from 213.6millionin2023[353].−Totalcash,cashequivalents,andrestrictedcashattheendof2024was213.6 million in 2023[353]. - Total cash, cash equivalents, and restricted cash at the end of 2024 was 342,101,000, up from 214,127,000in2023[364].−Thecompanyhad214,127,000 in 2023[364]. - The company had 7.4 million of restricted cash recorded on its consolidated balance sheet as of December 31, 2024[384]. - As of December 31, 2024, Rapid7's available-for-sale investments totaled 224.3million,withmaturitiesrangingfrom1to17months[440].CompetitionandMarketConditions−Thecompanyanticipatesthatprolongedeconomicuncertaintiescouldadverselyaffectitsbusinessandoperatingresults[13].−Thecompanyfacesintensecompetitioninitsmarket,whichcouldnegativelyimpactitsfinancialconditionandresultsofoperations[13].−Thecompanyisdependentoncustomersrenewingandexpandingtheirsubscriptions,whichisvitalforfutureoperatingresults[13].−Thecompanyaimstomaintainanadequateannualizedrecurringrevenuegrowth,whichiscriticalforitsfutureoperatingresults[12].−Thecompanyisfocusedondiversifyingitssourcesofrevenueandeffectivelymanagingitsgrowthtosustainprofitability[12].ExpensesandCosts−Stock−basedcompensationexpensefor2024was224.3 million, with maturities ranging from 1 to 17 months[440]. Competition and Market Conditions - The company anticipates that prolonged economic uncertainties could adversely affect its business and operating results[13]. - The company faces intense competition in its market, which could negatively impact its financial condition and results of operations[13]. - The company is dependent on customers renewing and expanding their subscriptions, which is vital for future operating results[13]. - The company aims to maintain an adequate annualized recurring revenue growth, which is critical for its future operating results[12]. - The company is focused on diversifying its sources of revenue and effectively managing its growth to sustain profitability[12]. Expenses and Costs - Stock-based compensation expense for 2024 was 107,961,000, slightly down from 111,636,000in2023[364].−Thetotalamortizationexpenseforintangibleassetswas111,636,000 in 2023[364]. - The total amortization expense for intangible assets was 33.8 million in 2024, up from 31.9millionin2023,indicatingayear−over−yearincreaseof5.931.9 million in 2023, indicating a year-over-year increase of 5.9%[447]. - The adjusted total cost of revenue for 2024 was 221,664 thousand, up from 202,655thousandin2023[510].−TotalleasecostsfortheyearendedDecember31,2024,were202,655 thousand in 2023[510]. - Total lease costs for the year ended December 31, 2024, were 25.905 million, a decrease from 26.254millionin2023[467].−Thecompanyincurredfeesof26.254 million in 2023[467]. - The company incurred fees of 0.4 million related to the Credit Agreement, which are amortized over the contractual term[465]. Acquisitions and Goodwill - Rapid7 acquired Noetic Cyber, Inc. for an aggregate fair value of 51.2million,consistingof51.2 million, consisting of 38.6 million in cash, 12.1millionincontingentconsideration,and12.1 million in contingent consideration, and 0.5 million in deferred cash payments[429]. - Rapid7 acquired Minerva Labs Ltd. for an aggregate fair value of 34.6million,with34.6 million, with 35.0 million paid in cash at closing[438]. - The fair value of net assets acquired from Minerva was 13.9million,withgoodwillrecordedat13.9 million, with goodwill recorded at 20.7 million and intangible assets at 12.8million[439].−Goodwillincreasedfrom12.8 million[439]. - Goodwill increased from 536.4 million as of December 31, 2023, to 575.3millionasofDecember31,2024,reflectingagrowthofapproximately7.3575.3 million as of December 31, 2024, reflecting a growth of approximately 7.3%[447]. Tax and Regulatory Matters - The company had federal net operating loss carryforwards of 265.6 million and state NOLs of 306.0millionasofDecember31,2024[484].−Thecompanyrecordedadditionalresearchanddevelopmenttaxcreditsof306.0 million as of December 31, 2024[484]. - The company recorded additional research and development tax credits of 4.2 million during the fourth quarter of 2024[487]. - The company received an initial tax assessment from the Israel Tax Authority of approximately 324 million Israeli New Shekels (about 88million)forfiscalyear2021,buthasnotrecordedanyimpactinitsfinancialstatements[494].−Thecompanyrecorded88 million) for fiscal year 2021, but has not recorded any impact in its financial statements[494]. - The company recorded 4,520 thousand in additions based on tax positions related to the current year, increasing unrecognized tax benefits to 9,876thousandbyDecember31,2024[492].RestructuringandOperationalChanges−ThecompanycompleteditsRestructuringPlaninQ12024,incurring9,876 thousand by December 31, 2024[492]. Restructuring and Operational Changes - The company completed its Restructuring Plan in Q1 2024, incurring (0.2) million in restructuring charges[513]. - The company incurred 22.2millioninrestructuringchargesin2023,whichincludedaworkforcereductionofapproximately1622.2 million in restructuring charges in 2023, which included a workforce reduction of approximately 16%[511]. - The company recorded impairment losses of 30.8 million related to idle office spaces in 2023, consisting of 22.2millionforright−of−useassetsand22.2 million for right-of-use assets and 8.6 million for leasehold improvements[468]. Stock and Shareholder Matters - The number of shares available for grant under the Employee Stock Purchase Plan (ESPP) as of December 31, 2024, was 3,076,461[478]. - The expected volatility for the ESPP in 2024 was between 37% and 47%[481]. - As of December 31, 2024, the company had 582,638 stock options outstanding with a weighted average exercise price of 12.38andanintrinsicvalueof12.38 and an intrinsic value of 16,225,000[477]. - The company has not paid dividends on its common stock and does not expect to do so in the foreseeable future[480].