Core Insights - Cybersecurity company Wiz has successfully passed a U.S. Justice Department antitrust review regarding its acquisition by Google-parent Alphabet [1] Company Summary - Wiz is a cybersecurity firm that is in the process of being acquired by Alphabet, the parent company of Google [1] - The CEO of Wiz announced the clearance of the antitrust review during a Wall Street Journal event [1] Industry Summary - The acquisition highlights ongoing consolidation trends within the cybersecurity industry, as larger tech companies seek to enhance their security offerings through strategic acquisitions [1]

Group 1: Technology Sector Developments - Google has successfully cleared a significant regulatory hurdle with the U.S. Department of Justice regarding its proposed $32 billion acquisition of Wiz Inc., which aims to enhance its cloud security offerings [2] - Hon Hai Precision Industry reported an 11.3% increase in October sales, indicating strong demand in the technology manufacturing sector, particularly for AI infrastructure components [5] Group 2: Pharmaceutical Sector Insights - Novo Nordisk's CEO has not commented on rumors of a potential deal with the White House to reduce prices for GLP-1 drugs, which could drop to $150 per month from over $1,000, reflecting ongoing political and public pressure on drug affordability [4] Group 3: Economic Indicators in Europe - France's industrial production rose by 0.8% month-over-month and 1.3% year-over-year in October, significantly exceeding forecasts and indicating a healthier start to the fourth quarter for the French industry [3] - Sweden's services sector experienced a decline in October, with the PMI Services index falling to 55.4 from 57.9, suggesting a moderation in growth despite remaining above the expansion threshold [6]

Google and cybersecurity company Wiz clear a key hurdle to closing their $32 billion deal https://t.co/ftvc52YETk ...

Financial Data and Key Metrics Changes - Revenues grew 10% to $169.9 million in Q3 2025, with channel partners contributing 50% of total revenues compared to 47% a year ago [20][21] - Adjusted EBITDA for Q3 was $82.6 million, representing a 49% margin, up from 45% a year ago [21] - EPS for Q3 grew 19% to $1.86, with quarterly free cash flow at $89.5 million, representing a 53% margin compared to 37% in the prior year [22] Business Line Data and Key Metrics Changes - Patch Management and Cybersecurity Asset Management combined accounted for 17% of total bookings and 28% of new bookings on an LTM basis [21] - TotalCloud CNAPP made up 5% of LTM bookings, reflecting the company's scalable and sustainable business model [21] Market Data and Key Metrics Changes - US revenue grew 7%, while international revenue grew 15%, with a revenue mix of 56% from the US and 44% from international markets [20] - Net dollar retention rate remained at 104%, indicating challenges in upselling despite improved gross retention [20] Company Strategy and Development Direction - The company is focusing on transitioning from traditional cybersecurity to risk surface management using AI-powered proactive risk management [5][6] - The Risk Operations Center (ROC) is being positioned as a central solution for organizations to manage cyber risks effectively, with a focus on consolidating security tools [6][9] - The company plans to shift reporting from cybersecurity asset management bookings to ETM customer penetration, indicating a strategic pivot towards ETM as a growth pillar [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate macroeconomic challenges, emphasizing the importance of aligning cybersecurity spend with business risk [23] - The company anticipates continued scrutiny of budgets in Q4, but expects to maintain growth momentum with a revenue guidance of $172 million to $174 million for Q4 2025 [23] Other Important Information - The company has repurchased 10.4 million shares since the program's inception, returning $1.2 billion in cash to shareholders, with $205 million remaining in the repurchase program [22] - The introduction of the QFlex pricing model has seen notable customer interest, with one Global 10 customer increasing their annual bookings by over 50% [17][18] Q&A Session Summary Question: Can you elaborate on the pricing around ETM and the 100% upsell metric? - Management clarified that ETM pricing includes cybersecurity asset management and focuses on optimizing cybersecurity spend through agentic AI capabilities [26][27] Question: What are the prospects in the federal market, especially with the recent shutdown? - Management noted early positive conversations in the federal space, emphasizing the need for efficiency and consolidation of security tools [32][36] Question: How is the competitive environment changing for Qualys? - Management highlighted that while competitors focus on discovering more CVEs, Qualys is concentrating on helping customers prioritize and remediate key vulnerabilities quickly [38][39] Question: Were there any one-time benefits to revenue this quarter? - Management confirmed that there were no specific one-time benefits, indicating solid growth from execution [42][43] Question: What needs to happen for net dollar retention to increase? - Management is focused on delivering value through ETM to existing customers, which could positively impact net dollar retention [44] Question: How is R&D spend prioritized across initiatives? - Management emphasized the focus on leveraging AI for efficiency gains in R&D, while continuing to invest in key areas [47][51]

Financial Data and Key Metrics Changes - Revenues grew 10% to $169.9 million in Q3 2025, with channel partners contributing 50% of total revenues compared to 47% a year ago [19][20] - Adjusted EBITDA for Q3 2025 was $82.6 million, representing a 49% margin compared to 45% margin a year ago [21] - EPS for Q3 2025 grew 19% to $1.86, with quarterly free cash flow at $89.5 million, representing a 53% margin compared to 37% in the prior year [22] Business Line Data and Key Metrics Changes - Patch Management and Cybersecurity Asset Management combined accounted for 17% of total bookings and 28% of new bookings on an LTM basis [21] - Cloud security solutions, specifically TotalCloud CNAPP, made up 5% of LTM bookings [21] Market Data and Key Metrics Changes - Revenue growth outside the US was 15%, outpacing domestic growth of 7%, with a revenue mix of 56% from the US and 44% from international markets [19] Company Strategy and Development Direction - The company is focusing on transitioning from attack surface management to risk surface management, utilizing AI-powered proactive risk management [4][5] - The Risk Operations Center (ROC) is being positioned as a new category in cybersecurity, centralizing threat response before business impacts occur [5][6] - The company plans to shift from reporting cybersecurity asset management LTM bookings to ETM customer penetration, indicating a strategic pivot towards ETM as a growth pillar [14][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the platform approach to cyber risk management, despite macroeconomic challenges affecting new business growth [23] - The company anticipates continued budget scrutiny in Q4 but expects to maintain a strong performance due to its innovative solutions [23] Other Important Information - The company has repurchased 10.4 million shares since the program's inception, returning $1.2 billion in cash to shareholders [22] - The introduction of the QFlex pricing model has seen notable customer interest, with one Global 10 customer increasing their annual bookings by over 50% [17] Q&A Session Summary Question: Can you elaborate on the pricing around ETM and the 100% upsell metric? - The ETM pricing includes cybersecurity asset management, and the upsell is expected to be significant as customers utilize ETM for inventory and exploit confirmation [24][25] Question: What are the developments in the federal market and the competitive environment? - The federal market is in early stages, with positive conversations about efficiency and consolidation. The competitive landscape includes players like CrowdStrike, but Qualys focuses on actionable risk management rather than just detection [26][29] Question: Were there any one-time benefits to revenue this quarter? - There were no specific one-time benefits; the quarter was solid in terms of execution [32] Question: What needs to happen for net dollar retention to increase? - The company is focused on demonstrating the value of ETM to existing customers, which could positively impact net dollar retention [33] Question: How is R&D spending prioritized across initiatives? - The company is leveraging AI to improve efficiency in R&D without significant increases in expenses, focusing on delivering capabilities across various initiatives [34][36] Question: How is the ROC solution being received by customers? - Customer feedback on the ROC solution has been positive, with a focus on business risk management rather than just technical scores [55][56]

Financial Data and Key Metrics Changes - Rapid7 ended Q3 2025 with $838 million in ARR, a 2% year-over-year growth, with revenue for the quarter at $218 million, also reflecting a 2% year-over-year increase [5][24] - Operating income was $37 million, exceeding guidance, and free cash flow generated in the quarter was $30 million, bringing year-to-date free cash flow to $98 million [5][25] - Product subscription revenue grew 2% year-over-year to $210 million, while professional services revenue continued to decline [24] Business Line Data and Key Metrics Changes - The Managed Detection and Response (MDR) business, which constitutes over half of ARR, continues to grow at double digits [6][19] - ARR per customer increased by 2%, with an average ARR per customer of over $72,000 [24] - International revenue represented 25% of total revenue and grew 8% year-over-year [24] Market Data and Key Metrics Changes - The customer spending environment remains challenged, particularly in large deals, but there are promising signs for future growth in detection and response [23] - The demand for integrated exposure and detection programs is growing, driven by regulatory pressures for compliance and reporting [15] Company Strategy and Development Direction - Rapid7 is focusing on enhancing its AI-powered security operations platform, integrating exposure management and threat detection to improve customer outcomes [9][18] - The company is making significant organizational changes, including new leadership appointments, to accelerate growth and improve operational alignment [6][20] - The strategy includes expanding partnerships, such as with Microsoft, to enhance managed detection and response capabilities [12][56] Management's Comments on Operating Environment and Future Outlook - Management acknowledges falling short of ARR guidance and is taking actions to rebuild confidence with the investment community [8] - The company is optimistic about its roadmap and strategy, despite longer deal cycles due to platform consolidation opportunities [10][18] - The outlook for Q4 includes a flat ARR quarter-over-quarter, with tightened full-year revenue guidance of $856-$858 million, representing 1%-2% growth [26][27] Other Important Information - The company is transitioning its traditional VM customer base to an integrated exposure management model through Exposure Command [19] - The new Chief Financial Officer, Rafe Brown, is expected to drive operational excellence and scale growth in SaaS businesses [20][48] Q&A Session Summary Question: Economic model of MDR and margin dynamics - Management indicated that MDR operates at higher gross margins than average MDR companies due to investments in automation and AI capabilities [31][32] Question: International vs. domestic growth rates - International revenue is growing faster than the overall business, with a focus on aligning sales processes across regions [33] Question: Pricing pressure in the MDR business - Despite flat ARR per customer growth, management believes they can continue to grow the MDR business profitably and effectively [35][36] Question: Large deal pipeline and Q4 outlook - Management is confident in the large deal pipeline but acknowledges variability in timing and conversion rates [41][42] Question: Leadership changes and priorities for Rafe Brown - Rafe Brown is expected to enhance operational acumen and drive growth through effective pricing and packaging strategies [47][48] Question: Value of traditional VM to SIEM MDR - Management is transitioning from traditional on-premise workloads to more strategic, value-added services, focusing on managed detection and response [51][53] Question: Expectations from Microsoft partnership - The partnership is expected to grow through technology integration and potential go-to-market collaboration [56] Question: Visibility around pipeline and close rates - Management is working on standardizing processes to improve visibility and accuracy in managing larger deal cycles [58] Question: Exposure Command's performance and customer engagement - Exposure Command is showing larger deal sizes and longer deal cycles, with a focus on upgrading existing customers [61][62]

Company Overview November 4, 2025 1 Disclaimers This presentation contains forward-looking statements. All statements contained in this presentation other than statements of historical facts, including, without limitation, statements regarding our market opportunity, demand for our product and service offerings, expectations regarding our annualized recurring revenue (ARR), free cash flow, and our other non-GAAP measures, our business strategy, plans and objectives for future operations and expectations reg ...

Group 1 - Bitcoin prices dropped to their lowest level since May, nearing the $100,000 mark, which is approximately 20% below its record high from early October [1] - The broader stock market experienced declines, with the Nasdaq down 2% and the S&P 500 showing a 1.2% decline [1] - Hut 8's IBD SmartSelect Composite Rating increased from 92 to 97, placing it among elite stocks with a rating above 95 [2] Group 2 - CoreWeave terminated its deal with Core Scientific after shareholders rejected the offer [4] - Cybersecurity leader Palo Alto Networks is leading 14 stocks onto best growth stock lists, including the IBD 50 and Big Cap 20 [4] - Bitcoin miners are experiencing volatility, with some stocks rising due to AI contract news while others are tumbling amid ongoing sell-offs [4]

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]

Group 1 - The article discusses the competitive positioning of CrowdStrike Holdings, Inc. (NASDAQ: CRWD) and its resilience against competitors like Palo Alto Networks (NASDAQ: PANW) [1] - The focus is on sustainable, growth-driven investment strategies that maximize shareholder equity [1] - The author emphasizes the importance of financial literacy and simplifying complex macroeconomic concepts for better understanding [1] Group 2 - The article highlights the author's background in high-growth supply-chain start-ups and experience with venture capital firms [1] - The newsletter, The Pragmatic Optimist, has gained recognition as a top finance newsletter, indicating a strong following and credibility in the investment community [1]