Rapid7 Announces Third Quarter 2025 Financial Results

Core Insights - Rapid7, Inc. reported a third quarter 2025 Annual Recurring Revenue (ARR) of $838 million, reflecting a 2% year-over-year increase, driven by the success of its AI-driven Command Platform [2][4] - The company appointed Rafe Brown as Chief Financial Officer, effective December 1, 2025, succeeding Tim Adams, who announced his retirement [2][3] - Rapid7's total revenue for Q3 2025 was $218 million, also up 2% year-over-year, with product subscriptions revenue contributing $210 million [4][5] Financial Performance - ARR increased to $838 million from $823 million in Q3 2024, marking a 2% growth [3][4] - The number of customers remained stable at 11,618, with ARR per customer rising to $72.1 from $70.8, a 2% increase [3][4] - Total revenue for Q3 2025 was $218 million, compared to $215 million in Q3 2024, reflecting a 2% increase [4][5] - Product subscriptions revenue was $210 million, up from $206 million, while professional services revenue decreased by 14% to $7.8 million [4][5] - GAAP gross profit was $153 million, with a gross margin of 70%, while non-GAAP gross profit was $160 million, with a gross margin of 73% [4][5] Operational Highlights - The company reported a GAAP operating income of $5.9 million and a non-GAAP operating income of $37 million for Q3 2025 [4][5] - Net cash provided by operating activities was $38 million, with free cash flow of $30 million [4][5] - Rapid7's GAAP net income for Q3 2025 was $9.8 million, translating to a net income per share of $0.15 [5][6] Strategic Initiatives - Rapid7 announced an expanded partnership with Microsoft to enhance modern detection and response capabilities [7] - The company introduced new AI-generated risk intelligence features in its Command Platform to improve remediation processes [7] - Rapid7 was recognized in the Gartner Magic Quadrant for Security Information and Event Management (SIEM) for the seventh consecutive year [7] Guidance - For Q4 2025, Rapid7 anticipates ARR to remain approximately flat compared to Q3 2025, with revenue projected between $214 million and $216 million [8] - Non-GAAP income from operations is expected to range from $25 million to $30 million, with non-GAAP net income per share projected between $0.37 and $0.44 [8]