Rapid7(US:RPD)2024-05-08 12:47Financial Performance - Total revenue for the three months ended March 31, 2024, was $205.1 million, representing a year-over-year growth of 12.0% compared to $183.2 million in 2023[96]. - Non-GAAP income from operations increased to $40.3 million with a non-GAAP operating margin of 19.6%, up from $11.0 million and 6.0% in the previous year[96]. - Free cash flow for the quarter was $27.5 million, a significant improvement from a negative $1.2 million in the same period last year[96]. - Annualized recurring revenue (ARR) reached $807.2 million, reflecting a year-over-year growth of 10.9% from $727.9 million[96]. - GAAP total gross profit for Q1 2024 was $144,198, compared to $127,175 in Q1 2023, representing a year-over-year increase of 13.4%[108]. - Non-GAAP total gross profit for Q1 2024 was $151,095, up from $134,387 in Q1 2023, indicating a growth of 12.4%[108]. - GAAP net income for Q1 2024 was $2,258, a significant improvement from a net loss of $25,915 in Q1 2023[111]. - Non-GAAP net income for Q1 2024 reached $39,388, compared to $10,037 in Q1 2023, reflecting a substantial increase of 292.5%[111]. - Adjusted EBITDA for Q1 2024 was $46,619, compared to $16,821 in Q1 2023, marking a growth of 177.5%[114]. - The net income for the three months ended March 31, 2024, was $2.3 million, contrasting with a net loss of $25.9 million in the same period of 2023[155][156]. Customer Metrics - The number of customers increased to 11,462, marking a 3.9% growth from 11,034 in the previous year[96]. - ARR per customer rose to $70.4, up 6.8% from $66.0 in the prior year[96]. - Recurring revenue constituted 96% of total revenue for the quarter, compared to 95% in the same period last year[95]. - The company has over 11,000 customers in 148 countries, including 47% of the Fortune 100, indicating a diverse and stable customer base[92]. Revenue Breakdown - Revenue from product subscriptions increased to $196.9 million, up by $23.1 million or 13.3% from $173.8 million in the prior year[136]. - Total cost of revenue rose to $60.9 million, an increase of $4.9 million or 8.8% from $56.0 million in the same period last year[139]. - Gross margin percentage improved to 70.3% for the three months ended March 31, 2024, compared to 69.4% in the same period in 2023[139]. Expenses - Research and development expenses decreased to $41.0 million, down by $5.4 million or 11.6% from $46.3 million in the prior year[141]. - Sales and marketing expenses decreased to $72.8 million, a reduction of $7.8 million or 9.7% from $80.6 million in the same period last year[142]. - General and administrative expenses decreased to $19.8 million, down by $4.4 million or 18.1% from $24.2 million in the prior year[144]. - The company expects research and development expenses to decrease as a percentage of total revenue in the near term[124]. - The company anticipates that sales and marketing expenses will also decrease as a percentage of total revenue in the near term[126]. Cash Flow and Liquidity - As of March 31, 2024, the company had $198.7 million in cash and cash equivalents and $265.5 million in investments, indicating a strong liquidity position[150]. - Net cash provided by operating activities for the three months ended March 31, 2024, was $31.1 million, significantly up from $5.8 million in the same period of 2023[155][156]. - Cash used in investing activities was $41.7 million for the three months ended March 31, 2024, compared to $10.2 million in the same period of 2023[158][159]. - Financing activities provided $4.4 million in cash for the three months ended March 31, 2024, an increase from $2.8 million in the same period of 2023[160][161]. - Cash and cash equivalents as of March 31, 2024, totaled $198.7 million, with investments amounting to $265.5 million[167]. Tax and Interest - Interest income increased significantly to $4.7 million, up by $3.1 million or 183.0% from $1.7 million in the same period in 2023[145]. - Provision for income taxes increased to $8.9 million, a rise of $8.3 million or 1,402.5% compared to $594,000 in the prior year, primarily due to tax expenses related to an intercompany sale of intellectual property[148]. Strategic Focus - The company aims to drive continued revenue growth through increased sales of products and professional services to both new and existing customers[96]. - The strategic focus is on SecOps consolidation, with an emphasis on innovation across core products to enhance customer value[90]. - The company does not engage in off-balance sheet financing arrangements, minimizing exposure to financing, liquidity, market, or credit risk[163]. - The company anticipates that future capital requirements will depend on growth rate, R&D spending, and potential acquisitions[152]. - A hypothetical 10% adverse change in foreign currency exchange rates would not have been material to the company's financial condition as of March 31, 2024[166].