Rapid7 (NASDAQ:RPD) Posts Earnings Results

Rapid7 (NASDAQ:RPD) released its quarterly earnings results on Wednesday. The technology company reported $0.60 earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of $0.46 by $0.14, FiscalAI reports. The business had revenue of $212.40 million for the quarter, compared to the consensus estimate of $209.05 million. Rapid7 had a net margin of 2.35% and a return on equity of 27.89%.

Here are the key takeaways from Rapid7’s conference call:

• Rapid7 beat Q3 guidance, with ARR of $820 million, non-GAAP operating income of $46.2 million and free cash flow of $26.5 million. However, total ARR declined about 2% year over year as growth in detection and response was offset by declines in exposure management and non-core products.
• Core ARR was flat sequentially, and the company expects it to remain approximately flat in Q4; total ARR is forecast to fall to about $812 million, with continued declines in non-core offerings. Q4 revenue is projected to decline about 4% year over year at the midpoint.
• Rapid7 reaffirmed its full-year free cash flow outlook of approximately $130 million and expects to exit 2026 at roughly 20% non-GAAP operating margin. With $732 million in cash and investments, it plans to use cash on hand to repay its $600 million convertible notes due in March 2027.
• The company is directing investment toward its core platform and an AI-first services model, including development of its Autonomous SOC, with a first generally available release targeted around RSAC 2027. Management expects AI compute and product-development costs to increase near term, while efficiency benefits are expected to emerge over time.
• Rapid7 has ended sales of selected standalone non-core products and is evaluating the best long-term path for those businesses. Management said the non-core ARR drag is expected to continue in the near term, but did not provide a timeline for resolving the portfolio review.

Rapid7 Stock Up 1.3%

Shares of NASDAQ RPD traded up $0.20 during mid-day trading on Wednesday, hitting $15.04. The company had a trading volume of 1,941,431 shares, compared to its average volume of 2,099,894. The company has a debt-to-equity ratio of 1.50, a current ratio of 0.80 and a quick ratio of 0.80. The company has a market capitalization of $1.01 billion, a PE ratio of 48.52 and a beta of 0.90. The business’s 50-day simple moving average is $13.01 and its 200 day simple moving average is $9.54. Rapid7 has a 1-year low of $4.97 and a 1-year high of $18.56.

Analyst Ratings Changes

RPD has been the topic of a number of research analyst reports. Scotiabank boosted their target price on Rapid7 from $7.00 to $10.15 and gave the company a “sector perform” rating in a research report on Tuesday, August 11th. Robert W. Baird raised their price target on Rapid7 from $8.00 to $10.00 and gave the stock a “neutral” rating in a research report on Tuesday, August 11th. Truist Financial lifted their price objective on Rapid7 from $6.00 to $10.00 and gave the company a “hold” rating in a research note on Tuesday, July 21st. Citigroup reiterated a “neutral” rating on shares of Rapid7 in a report on Wednesday, August 12th. Finally, UBS Group increased their target price on Rapid7 from $7.00 to $12.00 and gave the stock a “neutral” rating in a research note on Tuesday, August 11th. One equities research analyst has rated the stock with a Buy rating, seventeen have issued a Hold rating and five have given a Sell rating to the company’s stock. Based on data from MarketBeat.com, the stock currently has a consensus rating of “Reduce” and an average price target of $12.09.

Rapid7 Company Profile

Rapid7, Inc (NASDAQ:RPD) is a cybersecurity company that provides technology and services to help organizations identify, assess and manage security risk across their IT environments. Its offerings are designed to support security operations, vulnerability management, cloud security, application security and incident response.

The company’s product portfolio includes the Insight platform and solutions such as InsightVM for vulnerability risk management, InsightIDR for security detection and response, InsightCloudSec for cloud security and compliance, and InsightAppSec for application security testing.