Financial Data and Key Metrics Changes - Rapid7 ended Q2 2025 with $841 million in ARR, growing 3% year over year, and revenue of $214 million, also up 3% year over year, exceeding guidance [6][22] - Free cash flow for the quarter was $42 million, bringing year-to-date free cash flow to $67 million [25] - Product subscription revenue grew 4% year over year to $208 million, while professional services revenue declined due to a focus on higher-margin services [22][24] Business Line Data and Key Metrics Changes - Detection and response (D&R) business continues to be a core growth driver, representing over half of ARR and growing in the mid-teens year over year [6][22] - The exposure management business is transitioning customers from traditional vulnerability management to a unified risk and exposure management solution, which is integrated into the command platform [17][18] Market Data and Key Metrics Changes - International revenue accounted for 25% of total revenue and grew 10% year over year [23] - The customer base expanded to 11,643 globally, with an average ARR per customer of $72,000 [22] Company Strategy and Development Direction - The company is focused on enhancing go-to-market capabilities and accelerating revenue growth, particularly through the command platform strategy [7][31] - Investments in AI tools and capabilities are aimed at capitalizing on increasing customer demand for integrated security operations [6][12] - The long-term strategy emphasizes scaling the AI-driven security operations platform, integrating various data sources into a single system for risk and response [13][14] Management's Comments on Operating Environment and Future Outlook - Management acknowledged ongoing customer spending scrutiny but expressed optimism about the strategic deals being pursued [10][19] - The updated ARR guidance for the full year is narrowed to $850 million to $865 million, reflecting a prudent approach given macroeconomic uncertainties [26][27] - Management remains confident in the ability to achieve revenue growth and maintain a strong pipeline for Q4 [41][42] Other Important Information - Tim Adams, the CFO, intends to retire, and Alan Peters has been appointed as the new Chief Commercial Officer to drive go-to-market efforts [29][30] - The company is ramping up its India SOC to enhance operational capabilities and support larger enterprise use cases [16][73] Q&A Session Summary Question: Update on MDR demand trends - Management confirmed strong demand trends in the MDR space, emphasizing ongoing investments in AI technology to manage complex security operations [35][39] Question: Confidence in Q4 performance - Management expressed confidence in achieving the guided range for Q4, citing a healthy pipeline and strategic deal momentum [40][41] Question: Progress on Exposure Command platform - Management reported positive feedback from partners and noted that the Exposure Command platform is leading to larger deals than initially expected [48][50] Question: Near-term and medium-term priorities for growth - Focus on product and service investments, operationalizing the expansion engine, and educating the market about the company's capabilities [56][58] Question: Federal opportunity post-FedRAMP achievement - Management sees robust demand in the federal sector and expects to start seeing benefits from this market in 2026 [93][95] Question: Impact of Zscaler's acquisition of Red Canary - Management believes the acquisition does not significantly change the competitive landscape, as the MDR market remains highly fragmented [100][102] Question: Pricing and packaging strategy for the command platform - Management acknowledged the need to improve pricing and packaging strategies to facilitate easier customer adoption and drive revenue growth [108][111]