Rapid7 (NASDAQ:RPD) Announces Quarterly Earnings Results, Beats Estimates By $0.14 EPS

Rapid7 (NASDAQ:RPD) announced its earnings results on Wednesday. The technology company reported $0.60 earnings per share for the quarter, beating the consensus estimate of $0.46 by $0.14, FiscalAI reports. The business had revenue of $212.40 million during the quarter, compared to analysts’ expectations of $209.05 million. Rapid7 had a return on equity of 27.89% and a net margin of 2.35%. The company’s quarterly revenue was down 2.5% on a year-over-year basis. During the same quarter last year, the business posted $0.57 earnings per share.

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 Performance

Shares of NASDAQ:RPD traded up $0.90 during trading on Thursday, reaching $15.94. The stock had a trading volume of 1,612,098 shares, compared to its average volume of 2,097,407. The stock has a fifty day simple moving average of $13.07 and a two-hundred day simple moving average of $9.55. The company has a quick ratio of 0.80, a current ratio of 0.80 and a debt-to-equity ratio of 1.50. Rapid7 has a 52 week low of $4.97 and a 52 week high of $18.56. The firm has a market capitalization of $1.07 billion, a price-to-earnings ratio of 51.39 and a beta of 0.90.

Wall Street Analysts Forecast Growth

RPD has been the subject of a number of recent analyst reports. Scotiabank raised their price objective on shares of Rapid7 from $7.00 to $10.15 and gave the stock a “sector perform” rating in a research note on Tuesday, August 11th. Raymond James Financial reissued an “outperform” rating and set a $15.00 target price on shares of Rapid7 in a research note on Tuesday, August 11th. DA Davidson increased their target price on Rapid7 from $5.25 to $9.00 and gave the company an “underperform” rating in a report on Tuesday, August 11th. UBS Group increased their target price on Rapid7 from $7.00 to $12.00 and gave the company a “neutral” rating in a report on Tuesday, August 11th. Finally, Stephens reaffirmed a “positive” rating on shares of Rapid7 in a research report on Tuesday, August 11th. One investment analyst has rated the stock with a Buy rating, seventeen have assigned a Hold rating and five have given a Sell rating to the company’s stock. Based on data from MarketBeat.com, the stock has a consensus rating of “Reduce” and an average target price of $12.77.

Key Stories Impacting Rapid7

Here are the key news stories impacting Rapid7 this week:

• Positive Sentiment: Rapid7 earned $0.60 per share, ahead of estimates of $0.45–$0.46 and up from $0.57 a year earlier. Revenue of $212.4 million also topped the $209.1 million consensus. The results prompted favorable investor reaction. Rapid7 Q3 earnings and revenues top estimates
• Neutral Sentiment: The company expects fourth-quarter adjusted EPS of $0.53–$0.55; the provided report does not include enough analyst-consensus context to assess how that outlook compares with expectations. Rapid7 Q4 adjusted EPS outlook
• Neutral Sentiment: An article raises the question of whether the shares remain overvalued, but the supplied information does not provide its valuation analysis or conclusion. Rapid7 beat third-quarter forecasts—is the stock still overvalued?
• Negative Sentiment: Despite the quarterly revenue beat, sales were down 2.5% year over year, indicating continued pressure on growth. Rapid7 third-quarter earnings results

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.