Summary of Rapid7 FY Conference Call - September 10, 2025 Company Overview - **Company**: Rapid7 (NasdaqGM:RPD) - **Industry**: Cybersecurity, focusing on AI-driven security services and vulnerability management Key Points and Arguments Financial Performance and Growth Factors - Q2 results showed stability and improvement compared to Q1, with healthy growth in the Detection and Response (DNR) business, which is a key driver of revenue [6][7] - The DNR business is anchored by the Managed Detection and Response (MDR) services, which are experiencing healthy growth and expanded addressable market [6][7] - The exposure management business is new and has started well, but deal cycles are longer than expected, impacting sales velocity [7][9] - Average Selling Prices (ASPs) are increasing significantly, with some upgrades showing over 100% increases, which was unplanned [9][10] - The company is adjusting to larger, more strategic deal cycles, which are causing longer sales cycles but also leading to higher revenue potential [7][9] Competitive Landscape - The exposure management market is competitive, with traditional competitors and larger platform players entering the space [11][12] - Rapid7 is focused on maintaining disciplined pricing strategies despite market pressures and competition from private companies [16][18] - The company views the current market dynamics as an opportunity due to the rationalization of competitors and the exit of unsustainable businesses [18][41] Technology and Innovation - Rapid7 is leveraging AI to enhance its security operations, particularly through its agentic platform, which automates many SOC functions [23][30] - The company is investing in improving data management and alert processing to enhance operational efficiency [30][31] - The agentic SOC capabilities are expected to significantly reduce the mean time to detect and respond to security incidents [34] Strategic Focus and Future Outlook - The company is focusing on driving growth in the DNR segment and improving sales discipline under the new Chief Commercial Officer [37][39] - There is an expectation of mild acceleration in growth next year, driven by the DNR business and strategic upgrades in the exposure management segment [50] - Investments in R&D and sales are being ramped up to support future growth, with a focus on delivering innovative solutions to customers [44][46] Operational Insights - The company is seeing good engagement with customers regarding its holistic risk management vision, which is leading to larger, more strategic deals [45][46] - Rapid7 is scaling its global capabilities, particularly in R&D and SOC, to drive efficiency and innovation [47][48] Market Dynamics - The transition from traditional vulnerability management to exposure management is creating strategic discussions with customers, leading to longer deal cycles but higher value contracts [61][62] - There is significant overlap between exposure management and detection response, as both require understanding the attack surface and effective remediation strategies [62][63] Additional Important Insights - The company is cautious about overpromising on growth, focusing instead on managing expectations and ensuring consistent performance [49][50] - The competitive landscape is evolving, with many players facing challenges that could create opportunities for Rapid7 to capture market share [18][41]