Rapid7(RPD) - 2025 Q3 - Quarterly Results

Financial Performance - Annualized recurring revenue (ARR) reached $838 million, a 2% increase year-over-year[4] - Total revenue for Q3 2025 was $218 million, up 2% from $214.7 million in Q3 2024[4] - Product subscriptions revenue was $210 million, reflecting a 2% year-over-year growth[5] - Total revenue for Q3 2025 was $217.96 million, a slight increase from $214.65 million in Q3 2024, representing a year-over-year growth of 1.1%[40] - Product subscriptions revenue reached $210.15 million in Q3 2025, compared to $205.59 million in Q3 2024, indicating a growth of 2.5%[40] - Net income for Q3 2025 was $9.81 million, down from $15.41 million in Q3 2024, reflecting a decrease of 36.5%[40] - Non-GAAP income from operations for Q3 2025 was $36.9 million, compared to $44 million in Q3 2024[5] - GAAP operating income was $5.9 million, down from $12.8 million in the same quarter last year[5] - GAAP net income for Q3 2025 was $9,809,000, a decrease of 36.5% compared to $15,410,000 in Q3 2024[47] - Adjusted EBITDA for Q3 2025 was $43,514,000, down 13.1% from $50,083,000 in Q3 2024[47] - Non-GAAP total gross profit for Q3 2025 was $159,857,000, slightly up from $159,048,000 in Q3 2024, resulting in a non-GAAP gross margin of 73%[44] - Non-GAAP gross profit for product subscriptions in Q3 2025 was $158,238,000, compared to $155,914,000 in Q3 2024, with a non-GAAP gross margin of 75%[44] Cash Flow and Liquidity - Free cash flow for the quarter was $30 million, down from $38.5 million in Q3 2024[5] - Free cash flow for Q3 2025 was $30,111,000, a decline of 21.7% compared to $38,502,000 in Q3 2024[48] - Cash flows from operating activities for the nine months ended September 30, 2025, totaled $116,250,000, an increase of 7.5% from $107,897,000 in the same period of 2024[42] - The company’s cash, cash equivalents, and restricted cash at the end of Q3 2025 were $130,613,000, a decrease from $230,108,000 at the end of Q3 2024[42] - Anticipated net cash provided by operating activities for full-year 2025 is projected to be between $149,000 and $159,000[51] - Anticipated free cash flow for full-year 2025 is expected to be between $125,000 and $135,000[51] Strategic Developments - Rapid7 announced a strategic expansion into the UAE to support digital transformation and cyber resilience goals[10] - New AI-generated risk intelligence capabilities were introduced as part of the Command Platform, enhancing remediation efforts[10] Management Changes - Rafe Brown was appointed as the new CFO, effective December 1, 2025, bringing extensive industry experience[2] Balance Sheet - Total assets as of September 30, 2025, were $1.67 billion, a slight increase from $1.65 billion at the end of 2024[38] - Total liabilities decreased from $1.63 billion at the end of 2024 to $1.54 billion as of September 30, 2025[38] - The company’s total stockholders' equity increased significantly from $17.71 million at the end of 2024 to $127.22 million as of September 30, 2025[38] - The company reported a total of 64.97 million weighted-average common shares outstanding for Q3 2025, compared to 62.90 million in Q3 2024[40] Future Projections and Risks - The company anticipates Q4 2025 revenue between $214 million and $216 million, with year-over-year growth expected to be between (1)% and 0%[8] - The company anticipates potential risks including macroeconomic uncertainty and competition, which could impact future performance[35] - Anticipated GAAP net loss for Q4 2025 is projected between $9,000 and $4,000, with non-GAAP net income expected between $27,000 and $32,000[50] - Anticipated non-GAAP net income per share for full-year 2025 is estimated to be between $2.02 and $2.09[50] Expenses - Stock-based compensation expense for the nine months ended September 30, 2025, was $81,059,000, slightly up from $80,549,000 in the same period of 2024[44] - Stock-based compensation expense for Q3 2025 was $26,327,000, slightly up from $25,738,000 in Q3 2024[47] - Amortization of intangible assets for Q3 2025 was $8,861,000, compared to $8,520,000 in Q3 2024, reflecting ongoing investment in intangible assets[47] - Interest income for Q3 2025 was $(6,167,000), compared to $(5,571,000) in Q3 2024, indicating an increase in interest expenses[47] Accounts Receivable - The company reported a decrease in accounts receivable of $8,419,000 in Q3 2025 compared to an increase of $2,442,000 in Q3 2024[42]