Rapid7 (NASDAQ:RPD – Get Free Report) issued its quarterly earnings data 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. Rapid7 had a net margin of 2.35% and a return on equity of 27.89%. The firm had revenue of $212.40 million during the quarter, compared to analysts’ expectations of $209.05 million.
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, reaching $15.04. 1,941,431 shares of the stock were exchanged, compared to its average volume of 2,099,894. The company has a quick ratio of 0.80, a current ratio of 0.80 and a debt-to-equity ratio of 1.50. The company has a market cap of $1.01 billion, a P/E ratio of 48.52 and a beta of 0.90. Rapid7 has a one year low of $4.97 and a one year high of $18.56. The stock’s 50 day simple moving average is $13.01 and its 200-day simple moving average is $9.54.
Wall Street Analysts Forecast Growth
Several research analysts have weighed in on the company. Weiss Ratings upgraded Rapid7 from a “sell (d)” rating to a “sell (d+)” rating in a report on Monday, September 14th. Barclays raised their price target on Rapid7 from $6.50 to $12.00 and gave the stock an “underweight” rating in a research report on Tuesday, August 11th. Raymond James Financial reaffirmed an “outperform” rating and set a $15.00 price target on shares of Rapid7 in a research report on Tuesday, August 11th. JPMorgan Chase & Co. cut Rapid7 from a “neutral” rating to an “underweight” rating and set a $12.00 price objective on the stock. in a report on Tuesday, September 15th. Finally, Piper Sandler boosted their price objective on Rapid7 from $8.00 to $12.00 and gave the company a “neutral” rating in a research report on Tuesday, August 11th. One analyst has rated the stock with a Buy rating, seventeen have given a Hold rating and five have assigned a Sell rating to the company’s stock. According to data from MarketBeat, Rapid7 has a consensus rating of “Reduce” and an average target price of $12.09.
About Rapid7
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.
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