Rapid7(US:RPD)2021-05-07 13:07Financial Data and Key Metrics Changes - Total ARR ended the quarter at $455.8 million, representing a growth of 30% year-over-year driven by strong demand for security transformation solutions and sustained growth in vulnerability management offerings [27][28] - First quarter revenue was $117.5 million, exceeding guidance with a 24% year-over-year growth [34] - Non-GAAP operating profit for the first quarter was $1.9 million, ahead of guidance due to revenue overperformance [35] Business Line Data and Key Metrics Changes - Security transformation solutions accounted for over 40% of total ARR mix, growing over 40% [30] - ARR per customer grew 17% year-over-year, surpassing the $50,000 milestone for the first time [16][30] - The company added over 200 net new customers in the quarter, ending with over 8,900 customers globally, with high-value platform customers growing faster than total customers [17] Market Data and Key Metrics Changes - North America revenue grew 22% year-over-year, representing 82% of total revenue, while the rest of the world grew 35% year-over-year, increasing to 18% of revenue [31] - International ARR growth outpaced total ARR growth, indicating strong demand for security transformation solutions internationally [18] Company Strategy and Development Direction - The company is focused on delivering a unified SecOps experience in the cloud, which is resonating with customers and driving growth [24] - Investments are being made to enhance the Insight Platform, including the integration of Velociraptor for improved incident response capabilities [21][95] - The strategy includes lowering barriers to platform adoption and expanding product offerings to drive customer engagement [13][25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ongoing demand for security solutions, driven by increased awareness of cyber risks and digital transformation [39][102] - The company raised its full-year ARR guidance to approximately $530 million, reflecting strong momentum and confidence in the business [39] - Management noted that while there are uncertainties related to the global health challenges, the demand for security investments remains strong [40] Other Important Information - The company reported strong free cash flow generation of approximately $18 million for the first quarter, driven by strong billings and collections [37] - The acquisition of Velociraptor is expected to enhance the company's incident response capabilities and integrate well with existing products [21][95] Q&A Session Summary Question: Contribution of Alcide to ARR acceleration and new customer acquisition - Management indicated that Alcide had no material contribution to ARR in the quarter, with strong demand and execution across the overall portfolio driving performance [47][48] Question: Demand environment in vulnerability management market - Management noted healthy demand across the board, with improvements in vulnerability management and strong visibility into customer needs [63][64] Question: Confidence in guidance increase - The increase in guidance was attributed to a strong pipeline and improved customer clarity regarding budgeting processes [72] Question: Integration of Velociraptor acquisition - The acquisition is focused on enhancing incident response and automation capabilities, leveraging Velociraptor's open-source technology [94][95] Question: Competitive landscape and market dynamics - Management acknowledged that competitive dynamics in the vulnerability management market have not changed significantly, with ongoing demand for their platform [104]