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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 8-K
 
CURRENT REPORT

Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 6, 2024
Rapid7, Inc.
(Exact name of registrant as specified in its charter)
 
Delaware 001-37496 35-2423994
(State or other jurisdiction
of incorporation)		 (Commission
File Number)		 (IRS Employer
Identification No.)
120 Causeway Street,
Boston,Massachusetts02114
(Address of principal executive offices), including zip code
(617) 247-1717
(Registrant’s telephone number, including area code)
Not Applicable
(Former name, or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:
Title of each classTrading symbol(s)Name of each exchange on which registered
Common Stock, $0.01 par value per shareRPDThe Nasdaq Global Market
Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company  ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐


Item 2.02Results of Operations and Financial Condition.
On November 6, 2024, Rapid7, Inc. (the “Company”) issued a press release announcing its financial results for the fiscal quarter ended September 30, 2024. The Company’s press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
The information included in this Item 2.02 and in the accompanying Exhibit 99.1 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing.
Item 9.01Financial Statements and Exhibits.
 
(d)Exhibits
Exhibit
No.		  Description
99.1  
104Cover Page Interactive Data File (embedded within the inline XBRL document)



SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
  Rapid7, Inc.
Dated: November 6, 2024
  By: /s/ Tim Adams
   Tim Adams
   Chief Financial Officer
 


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Exhibit 99.1
Rapid7 Announces Third Quarter 2024 Financial Results
 
•Annualized recurring revenue (“ARR”) of $823 million, an increase of 6% year-over-year
•Total revenue of $215 million, up 8% year-over-year; Product subscriptions revenue of $206 million, up 8% year-over-year
•GAAP operating income of $14 million; non-GAAP operating income of $44 million
•Net cash provided by operating activities of $44 million; free cash flow of $39 million
Boston, MA – November 6, 2024 – Rapid7, Inc. (Nasdaq: RPD), a leader in extended risk and threat detection, today announced its financial results for the third quarter of 2024.
“Rapid7 continued to see positive momentum across key areas of our business in the third quarter, highlighted by growth in our threat detection and response business, and strong demand for our consolidated offerings, which resulted in revenue and operating income exceeding guided ranges. There are also a number of promising indicators on the horizon, including a stronger sales pipeline and early positive traction from our newly launched Command platform,” said Corey Thomas, Chairman and CEO of Rapid7.
“We continue to thoughtfully invest to bring our customers the most relevant security solutions, and I am confident that Rapid7 is well positioned to continue driving profitable growth over time.”
Third Quarter 2024 Financial Results and Other Metrics
 Three Months Ended September 30,
 20242023% Change
(dollars in thousands, except for customer data)
Annualized recurring revenue $823,104 $776,760 6 %
Number of customers11,619 11,412 2 %
ARR per customer$70.8 $68.1 4 %
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 Three Months Ended September 30,
 20242023% Change
(in thousands, except per share data)
Product subscriptions revenue$205,593 $189,876 8 %
Professional services revenue9,061 8,967 1 %
Total revenue$214,654$198,8438 %
North America revenue$163,730 $155,190 6 %
Rest of world revenue50,924 43,653 17 %
Total revenue$214,654$198,8438 %
GAAP gross profit$151,637 $141,013 
GAAP gross margin71%71%
Non-GAAP gross profit$159,048 $148,315 
Non-GAAP gross margin74%75 %
GAAP income (loss) from operations$13,961 $(16,041)
GAAP operating margin7%(8)%
Non-GAAP income from operations$43,952 $36,773 
Non-GAAP operating margin20%18%
GAAP net income (loss)$16,554 $(76,611)
GAAP net income (loss) per share, basic$0.26 $(1.25)
GAAP net income (loss) per share, diluted$0.22 $(1.25)
Non-GAAP net income$47,762 $33,984 
Non-GAAP net income per share:
Basic$0.76 $0.56 
Diluted$0.66 $0.50 
Adjusted EBITDA$50,083 $42,925 
Net cash provided by operating activities$43,969 $3,665 
Free cash flow$38,502 $(582)
For additional details on the reconciliation of non-GAAP measures and certain other business metrics to their nearest comparable GAAP measures, please refer to the accompanying financial data tables included in this press release.
Recent Business Highlights

•In September, Rapid7 announced the addition of third-party detections for defense in-depth with Managed Threat Complete (“MTC”), Rapid7's Managed Detection and Response (“MDR”) solution. Rapid7’s global service now includes coverage for CrowdStrike Falcon, SentinelOne Singularity Endpoint, and Microsoft Defender for Endpoint.
•In September, Rapid7 announced the availability of Vector Command, a fully-managed offensive security service. Vector Command combines the external attack surface assessment capabilities of Rapid7’s recently launched Command Platform with continuous Red Teaming services by its internal experts to help customers identify and validate IT security posture weaknesses from an attacker’s perspective.
•In September, Rapid7 was positioned as a leader in the IDC MarketScape: Worldwide SIEM for SMB as well as the IDC MarketScape: Worldwide SIEM for Enterprise 2024 Vendor Assessments. Rapid7’s next-generation SIEM solution is purpose-built for modern threat detection and incident response (“TDIR”) and provides a robust library of detections
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spanning multiple attack vectors, AI-charged behavioral detections, known attacker indicators, and emergent threat coverage.
•In August, Rapid7 released a new Ransomware Radar Report, providing a fresh perspective on the global ransomware threat by analyzing, comparing, and contrasting attacker activity and techniques over an 18-month period.
•In August, Rapid7 launched the Command Platform, a unified attack defense and response platform that provides better visibility across the attack surface. The first two solutions on the Command Platform are Exposure Command, which helps organizations detect and prioritize exposures from endpoint to cloud, and Surface Command, for discovery and deep visibility into the assets across customers’ internal and external attack surface.
Fourth Quarter and Full-Year 2024 Guidance

Rapid7 anticipates annualized recurring revenue, revenue, non-GAAP income from operations, non-GAAP net income per share and free cash flow to be in the following ranges:
Fourth Quarter 2024Full-Year 2024
(in millions, except per share data)
Annualized recurring revenue$835to$845
Year-over-year growth4%to5%
Revenue$211to$213$839to$841
Year-over-year growth3%to4%8%
Non-GAAP income from operations$33to$35$157to$159
Non-GAAP net income per share$0.48to$0.51$2.28to$2.31
Weighted average shares outstanding75.774.7
Free cash flow$145to$155
The guidance provided above is forward-looking in nature. Actual results may differ materially. See the cautionary note regarding “Forward-Looking Statements” below. Guidance for the fourth quarter and full-year 2024 does not include any potential impact of foreign exchange gains or losses. The guidance provided above is based on a number of assumptions, estimates and expectations as of the date of this press release and, while presented with numerical specificity, this guidance is inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond Rapid7's control and are based upon specific assumptions with respect to future business decisions or economic conditions, some of which may change. Rapid7 undertakes no obligation to update guidance after this date.
Non-GAAP guidance excludes estimates for stock-based compensation expense, amortization of acquired intangible assets, amortization of debt issuance costs, and certain other items. Rapid7 has provided a reconciliation of each non-GAAP guidance measure to the most comparable GAAP measures in the financial statement tables included in this press release. The reconciliation does not reflect any items that are unknown at this time, including, but not limited to, non-ordinary course litigation-related expenses, which we are not able to predict without unreasonable effort due to their inherent uncertainty.
Conference Call and Webcast Information
Rapid7 will host a conference call today, November 6, 2024, to discuss its results at 4:30 p.m. Eastern Time. The call will be accessible by telephone at 888-330-2384 (domestic) or +1 240-789-2701 (international) with the event code 8484206. The call will also be available live via webcast on Rapid7's website at https://investors.rapid7.com. A webcast replay of the conference call will be available at https://investors.rapid7.com.
About Rapid7
Rapid7 (Nasdaq: RPD) is on a mission to create a safer digital world by making cybersecurity simpler and more accessible. We empower security professionals to manage a modern attack surface through our best-in-class technology, leading-edge research, and broad, strategic expertise. Rapid7’s comprehensive security solutions help more than 11,000 global customers unite cloud risk management and threat detection to reduce attack surfaces and eliminate threats with speed and precision. For more information, visit our website, check out our blog, or follow us on LinkedIn or Twitter.
Non-GAAP Financial Measures and Other Metrics
To supplement our consolidated financial statements, which are prepared and presented in accordance with generally accepted accounting principles in the United States (“GAAP”), we provide investors with certain non-GAAP financial measures and
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other metrics, which we believe are helpful to our investors. We use these non-GAAP financial measures and other metrics for financial and operational decision-making purposes and as a means to evaluate period-to-period comparisons. We also use certain non-GAAP financial measures as performance measures under our executive bonus plan. We believe that these non-GAAP financial measures and other metrics provide useful information about our operating results, enhance the overall understanding of past financial performance and future prospects and allow for greater transparency with respect to metrics used by our management in its financial and operational decision-making.
While our non-GAAP financial measures are an important tool for financial and operational decision-making and for evaluating our own operating results over different periods of time, you should review the reconciliation of our non-GAAP financial measures to the comparable GAAP financial measures included below, and not rely on any single financial measure to evaluate our business.
Non-GAAP Financial Measures
We disclose the following non-GAAP financial measures: non-GAAP gross profit, non-GAAP income from operations, non-GAAP net income, non-GAAP net income per share, adjusted EBITDA and free cash flow. We also disclose non-GAAP gross margin and non-GAAP operating margin derived from these financial measures.
We define non-GAAP gross profit, non-GAAP income from operations, non-GAAP net income and non-GAAP net income per share as the respective GAAP balances excluding the effect of stock-based compensation expense, amortization of acquired intangible assets, amortization of debt issuance costs and certain other items such as acquisition-related expenses, impairment of long-lived assets, change in the fair value of derivative assets, restructuring expense and discrete tax items. Non-GAAP net income per basic and diluted share is calculated as non-GAAP net income divided by the weighted average shares used to compute net income per share, with the number of weighted average shares decreased, when applicable, to reflect the anti-dilutive impact of the capped call transactions entered into in connection with our convertible senior notes.
We believe these non-GAAP financial measures are useful to investors in assessing our operating performance due to the following factors:
Stock-based compensation expense. We exclude stock-based compensation expense because of varying available valuation methodologies, subjective assumptions and the variety of equity instruments that can impact our non-cash expense. We believe that providing non-GAAP financial measures that exclude stock-based compensation expense allows for more meaningful comparisons between our operating results from period to period.
Amortization of acquired intangible assets. We believe that excluding the impact of amortization of acquired intangible assets allows for more meaningful comparisons between operating results from period to period as the intangible assets are valued at the time of acquisition and are amortized over several years after the acquisition.
Acquisition-related expenses. We exclude acquisition-related expenses as costs that are unrelated to the current operations and are neither comparable to the prior period nor predictive of future results.
Amortization of debt issuance costs. The expense for the amortization of debt issuance costs related to our convertible senior notes and revolving credit facility is a non-cash item, and we believe the exclusion of this interest expense provides a more useful comparison of our operational performance in different periods.
Induced conversion expense. In conjunction with the third quarter of 2023 partial repurchase of our 2025 Notes, we incurred a non-cash induced conversion expense of $53.9 million. We exclude induced conversion expense because this amount is not indicative of the performance of, or trends in, our business and neither is comparable to the prior period nor predictive of future results.
Change in fair value of derivative assets. The change in fair value of derivative assets related to our capped calls settlement is a non-cash item and we believe the exclusion of this other income (expense) provides a more useful comparison of our operational performance in different periods.
Impairment of long-lived assets. Impairment of long-lived assets consists of impairment charges allocated to the carrying amount of certain operating right-of-use assets and the associated leasehold improvements when the carrying amounts exceed their respective fair values and we believe the exclusion of the impairment charges provides a more useful comparison of our operational performance in different periods.
Restructuring expense. We exclude non-ordinary course restructuring expenses related to our restructuring plan we announced in August 2023, which was concluded in the three months ended March 31, 2024, because we do not believe these charges are indicative of our core operating performance and we believe the exclusion of the restructuring expenses provides a more useful comparison of our performance in different periods.
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Discrete tax items. We exclude certain discrete tax items such as income tax expenses or benefits that are not related to ongoing business operations in the current year and adjustments to uncertain tax position reserves as these charges are not indicative of our ongoing operating results, and they are not considered when we are forecasting our future results.
Anti-dilutive impact of capped call transaction. Our capped calls transactions are intended to offset potential dilution from the conversion features in our convertible senior notes. Although we cannot reflect the anti-dilutive impact of the capped call transactions under GAAP, we do reflect the anti-dilutive impact of the capped call transactions in non-GAAP net income (loss) per diluted share, when applicable, to provide investors with useful information in evaluating our financial performance on a per share basis.
Adjusted EBITDA. Adjusted EBITDA is a non-GAAP measure that we define as net income (loss) before (1) interest income, (2) interest expense, (3) other (income) expense, net, (4) provision for income taxes, (5) depreciation expense, (6) amortization of intangible assets, (7) stock-based compensation expense, (8) acquisition-related expenses, (9) impairment of long-lived assets and (10) restructuring expense. We believe that the use of adjusted EBITDA is useful to investors and other users of our financial statements in evaluating our operating performance because it provides them with an additional tool to compare business performance across companies and across periods.
Free Cash Flow. Free cash flow is a non-GAAP measure that we define as cash provided by operating activities less purchases of property and equipment and capitalization of internal-use software costs. We consider free cash flow to be a liquidity measure that provides useful information to management and investors about the amount of cash generated by the business after necessary capital expenditures.
Our non-GAAP financial measures may not provide information that is directly comparable to that provided by other companies in our industry, as other companies in our industry may calculate non-GAAP financial results differently, particularly related to non-recurring, unusual items. In addition, there are limitations in using non-GAAP financial measures because the non-GAAP financial measures are not prepared in accordance with GAAP, may be different from non-GAAP financial measures used by other companies and exclude expenses that may have a material impact upon our reported financial results. Further, stock-based compensation expense has been and will continue to be for the foreseeable future a significant recurring expense in our business and an important part of the compensation provided to our employees.
Other Metrics
Annualized Recurring Revenue (“ARR”). ARR is defined as the annual value of all recurring revenue related contracts in place at the end of the period. ARR should be viewed independently of revenue and deferred revenue as ARR is an operating metric and is not intended to be combined with or replace these items. ARR is not a forecast of future revenue, which can be impacted by contract start and end dates and renewal rates, and does not include revenue reported as professional services revenue in our consolidated statement of operations.
Number of Customers. We define a customer as any entity that has an active Rapid7 recurring revenue contract as of the specified measurement date, excluding InsightOps and Logentries only customers with a contract value less than $2,400 per year.
ARR per Customer. We define ARR per customer as ARR divided by the number of customers at the end of the period.
Cautionary Language Concerning Forward-Looking Statements
This press release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, the statements regarding our financial guidance for the fourth quarter and full-year 2024 and the assumptions underlying such guidance. Our use of the words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “will” and similar expressions are intended to identify forward-looking statements. The events described in our forward-looking statements are subject to a number of risks and uncertainties, assumptions and other factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by the forward-looking statements. Risks that could cause or contribute to such differences include, but are not limited to, growing macroeconomic uncertainty, unstable market and economic conditions, fluctuations in our quarterly results, our ability to successfully grow our sales of our cloud-based solutions, including through the shift to a consolidated platform sales approach, effectiveness of our restructuring plan, failure to meet our publicly announced guidance or other expectations about our business, our ability to sustain our revenue growth rate, the ability of our products and professional services to correctly detect vulnerabilities, renewal of our customer's subscriptions, competition in the markets in which we operate, market growth, our ability to innovate and manage our growth, our sales cycles, our ability to integrate acquired companies, actions by activist stockholders, exposure to greater than anticipated tax liabilities, and our ability to operate in compliance with applicable laws as well as other risks and uncertainties that could affect our business and results described in our filings with the Securities and Exchange Commission (the “SEC”), including our most recent Annual Report on Form 10-K filed with the SEC on February 26, 2024, particularly in the section entitled "Item 1.A Risk Factors," and in the subsequent reports that we file with the SEC. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not
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possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those expressed in any forward-looking statements we may make. Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements. You should, therefore, not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this press release.

###
Investor contact:
Elizabeth Chwalk
Senior Director, Investor Relations
investors@rapid7.com
(617) 865-4277

Press contact:
Alice Randall
Director, Global Corporate Communications
press@rapid7.com
(214) 693-4727

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RAPID7, INC.    
Condensed Consolidated Balance Sheets (Unaudited)     
(in thousands)    
 
September 30, 2024December 31, 2023
Assets
Current assets:
Cash and cash equivalents$222,571 $213,629 
Short-term investments221,122 169,544 
Accounts receivable, net141,891 164,862 
Deferred contract acquisition and fulfillment costs, current portion49,710 45,008 
Prepaid expenses and other current assets37,328 41,407 
Total current assets672,622 634,450 
Long-term investments60,382 56,171 
Property and equipment, net33,936 39,642 
Operating lease right-of-use assets50,756 54,693 
Deferred contract acquisition and fulfillment costs, non-current portion72,392 76,601 
Goodwill575,165 536,351 
Intangible assets, net90,748 94,546 
Other assets18,530 12,894 
Total assets$1,574,531 $1,505,348 
Liabilities and Stockholders’ Deficit
Current liabilities:
Accounts payable$6,005 $15,812 
Accrued expenses and other current liabilities82,319 85,025 
Convertible senior notes, current portion, net45,816 — 
Operating lease liabilities, current portion15,849 13,452 
Deferred revenue, current portion423,640 455,503 
Total current liabilities573,629 569,792 
Convertible senior notes, non-current portion, net887,362 929,996 
Operating lease liabilities, non-current portion72,555 81,130 
Deferred revenue, non-current portion28,239 32,577 
Other long-term liabilities19,050 10,032 
Total liabilities1,580,835 1,623,527 
Stockholders’ deficit:
Common stock632 617 
Treasury stock(4,765)(4,765)
Additional paid-in-capital978,898 894,630 
Accumulated other comprehensive income1,929 1,344 
Accumulated deficit(982,998)(1,010,005)
Total stockholders’ deficit(6,304)(118,179)
Total liabilities and stockholders’ deficit$1,574,531 $1,505,348 



RAPID7, INC.
Condensed Consolidated Statements of Operations (Unaudited)
(in thousands, except share and per share data)
 
 Three Months Ended September 30,Nine Months Ended September 30,
 2024202320242023
Revenue:
Product subscriptions$205,593 $189,876 $602,578 $545,349 
Professional services9,061 8,967 25,168 27,090 
Total revenue214,654 198,843 627,746 572,439 
Cost of revenue:
Product subscriptions56,653 51,261 166,290 150,597 
Professional services6,364 6,569 18,478 21,396 
Total cost of revenue63,017 57,830 184,768 171,993 
Total gross profit151,637 141,013 442,978 400,446 
Operating expenses:
Research and development44,565 39,940 125,611 137,048 
Sales and marketing74,521 75,699 225,121 239,322 
General and administrative18,590 17,866 60,837 64,961 
Impairment of long-lived assets— 3,553 — 30,784 
Restructuring— 19,996 — 19,996 
Total operating expenses137,676 157,054 411,569 492,111 
Income (loss) from operations13,961 (16,041)31,409 (91,665)
Other income (expense), net:
Interest income5,571 2,545 15,512 6,000 
Interest expense(2,837)(56,515)(8,180)(62,005)
Other income (expense), net2,811 (4,518)681 (18,093)
Income (loss) before income taxes19,506 (74,529)39,422 (165,763)
Provision for income taxes2,952 2,082 12,415 3,545 
Net income (loss)$16,554 $(76,611)$27,007 $(169,308)
Net income (loss) per share, basic$0.26 $(1.25)$0.43 $(2.80)
Net income (loss) per share, diluted$0.22 $(1.25)$0.36 $(2.80)
Weighted-average common shares outstanding, basic62,898,078 61,065,157 62,389,482 60,506,082 
Weighted-average common shares outstanding, diluted74,537,085 61,065,157 74,225,110 60,506,082 



RAPID7, INC.
Condensed Consolidated Statements of Cash Flows (Unaudited)
(in thousands)
 Three Months Ended September 30,Nine Months Ended September 30,
 2024202320242023
Cash flows from operating activities:
Net income (loss)$16,554 $(76,611)$27,007 $(169,308)
Adjustments to reconcile net income (loss) to cash provided by operating activities:
Depreciation and amortization11,238 11,649 33,457 34,528 
Amortization of debt issuance costs1,217 1,041 3,325 3,061 
Stock-based compensation expense24,594 23,768 76,896 84,836 
Impairment of long-lived assets— 3,553 — 30,784 
Change in fair value of derivatives— 2,851 — 15,511 
Induced conversion expense— 53,889 — 53,889 
Deferred income taxes— — 1,840 — 
Other(3,182)1,203 (4,534)5,626 
Change in operating assets and liabilities:
Accounts receivable2,442 (2,682)22,432 12,428 
Deferred contract acquisition and fulfillment costs1,471 (3,525)(493)(9,488)
Prepaid expenses and other assets5,632 4,033 6,062 5,433 
Accounts payable(7,429)27 (10,450)(1,255)
Accrued expenses978 (6,000)(17,413)(17,968)
Deferred revenue(13,766)(8,150)(37,112)(6,367)
Other liabilities4,220 (1,381)6,880 (898)
Net cash provided by operating activities43,969 3,665 107,897 40,812 
Cash flows from investing activities:
Business acquisition, net of cash acquired(37,198)— (37,198)(34,841)
Purchases of property and equipment(1,342)(295)(2,242)(3,999)
Capitalization of internal-use software costs(4,125)(3,952)(10,414)(13,033)
Purchases of investments(84,528)(113,756)(242,494)(194,013)
Sales/maturities of investments62,500 35,000 192,500 100,700 
Other investing activities— — 360 — 
Net cash used in investing activities(64,693)(83,003)(99,488)(145,186)
Cash flows from financing activities:
Proceeds from issuance of convertible senior notes, net of issuance costs paid of $7,200— 292,800 — 292,800 
Purchase of capped calls related to convertible senior notes— (36,570)— (36,570)
Payments for repurchase of convertible senior notes— (199,998)— (199,998)
Payments related to business acquisitions— — — (2,250)
Proceeds from capped call settlement— 17,518 — 17,518 
Taxes paid related to net share settlement of equity awards(794)(1,421)(3,883)(4,012)
Proceeds from employee stock purchase plan4,200 5,149 9,246 11,323 
Proceeds from stock option exercises32 302 1,436 2,984 
Net cash provided by financing activities3,438 77,780 6,799 81,795 
Effects of exchange rates on cash, cash equivalents and restricted cash2,846 (1,673)770 (2,010)
Net (decrease) increase in cash, cash equivalents and restricted cash(14,440)(3,231)15,978 (24,589)
Cash, cash equivalents and restricted cash, beginning of period244,548 186,446 214,130 207,804 
Cash, cash equivalents and restricted cash, end of period$230,108 $183,215 $230,108 $183,215 


Supplemental cash flow information:
Cash paid for interest on convertible senior notes$2,625 $750 $5,840 $1,165 
Cash paid for income taxes, net of refunds$1,568 $(56)$7,073 $4,087 
Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents$222,571 $182,727 $222,571 $182,727 
Restricted cash included in other assets and prepaid expenses and other current assets7,537 488 7,537 488 
Total cash, cash equivalents and restricted cash$230,108 $183,215 $230,108 $183,215 


RAPID7, INC.    
GAAP to Non-GAAP Reconciliation (Unaudited)    
(in thousands, except share and per share data)   
 
 Three Months Ended September 30,Nine Months Ended September 30,
 2024202320242023
GAAP gross profit$151,637 $141,013 $442,978 $400,446 
Add: Stock-based compensation expense1
3,001 2,527 8,707 8,348 
Add: Amortization of acquired intangible assets2
4,410 4,775 12,739 13,993 
Non-GAAP gross profit$159,048$148,315$464,424$422,787
Non-GAAP gross margin74.1 %74.6 %74.0 %73.9 %
GAAP gross profit - Product subscriptions$148,940 $138,615 $436,288 $394,752 
Add: Stock-based compensation expense2,564 1,940 7,460 6,332 
Add: Amortization of acquired intangible assets4,410 4,775 12,739 13,993 
Non-GAAP gross profit - Product subscriptions$155,914$145,330$456,487$415,077
Non-GAAP gross margin - Product subscriptions75.8 %76.5 %75.8 %76.1 %
GAAP gross profit - Professional services$2,697 $2,398 $6,690 $5,694 
Add: Stock-based compensation expense437 587 1,247 2,016 
Non-GAAP gross profit - Professional services$3,134$2,985$7,937$7,710
Non-GAAP gross margin - Professional services34.6 %33.3 %31.5 %28.5 %
GAAP income (loss) from operations$13,961 $(16,041)$31,409 $(91,665)
Add: Stock-based compensation expense1
24,594 23,768 76,896 84,836 
Add: Amortization of acquired intangible assets2
5,107 5,497 14,830 16,409 
Add: Acquisition-related expenses3
290 — 568 363 
Add: Restructuring expense4
— 19,996 (190)19,996 
Add: Impairment of long-lived assets— 3,553 — 30,784 
Non-GAAP income from operations$43,952$36,773$123,513$60,723
GAAP net income (loss)$16,554 $(76,611)$27,007 $(169,308)
Add: Stock-based compensation expense1
24,594 23,768 76,896 84,836 
Add: Amortization of acquired intangible assets2
5,107 5,497 14,830 16,409 
Add: Acquisition-related expenses3
290 — 568 363 
Add: Amortization of debt issuance costs1,217 1,041 3,325 3,061 
Add: Induced conversion expense— 53,889 — 53,889 
Add: Restructuring expense4
— 19,996 (190)19,996 
Add: Discrete tax items5
— — 6,360 — 
Add: Change in fair value of derivative assets— 2,851 — 15,511 
Add: Impairment of long-lived assets— 3,553 — 30,784 
Non-GAAP net income$47,762$33,984$128,796$55,541
Add: Interest expense of convertible senior notes6
1,571 604 4,714 1,354 
Numerator for non-GAAP earnings per share calculation$49,333$34,588$133,510$56,895
Weighted average shares used in GAAP earnings per share calculation, basic62,898,078 61,065,157 62,389,482 60,506,082 
Dilutive effect of convertible senior notes6
11,183,611 6,960,346 11,183,611 6,960,346 


Dilutive effect of employee equity incentive plans7
455,396 873,718 652,017 1,919,771 
Weighted average shares used in non-GAAP earnings per share calculation, diluted74,537,08568,899,22174,225,11069,386,199
Non-GAAP net income per share:
Basic$0.76 $0.56 $2.06 $0.92 
Diluted$0.66 $0.50 $1.80 $0.82 
1 Includes stock-based compensation expense as follows:
Cost of revenue$3,001 $2,527 $8,707 $8,348 
Research and development9,535 8,436 25,698 30,575 
Sales and marketing6,823 7,106 21,182 23,087 
General and administrative5,235 5,699 21,309 22,826 
2 Includes amortization of acquired intangible assets as follows:
Cost of revenue$4,410 $4,775 $12,739 $13,993 
Sales and marketing652 652 1,956 1,956 
General and administrative45 70 135 460 
3 Includes acquisition-related expenses as follows:
General and administrative$290 $— $568 $363 
4 For the nine months ended September 30, 2024, restructuring expense was recorded within general and administrative expense in our condensed consolidated statement of operations.
5 Includes discrete tax items as follows:
Provision for income taxes$— $— $6,360 $— 
6 We use the if-converted method to compute diluted earnings per share with respect to our Notes. There was no add-back of interest expense or additional dilutive shares related to the Notes where the effect was anti-dilutive. On an if-converted basis, for the three and nine months ended September 30, 2024 and 2023, the 2025 Notes, the 2027 Notes and the 2029 Notes were dilutive.
7 We use the treasury method to compute the dilutive effect of employee equity incentive plan awards.



RAPID7, INC.
Reconciliation of Net Income (Loss) to Adjusted EBITDA (Unaudited)
(in thousands)
 
 Three Months Ended September 30,Nine Months Ended September 30,
 2024202320242023
GAAP net income (loss)$16,554 $(76,611)$27,007 $(169,308)
Interest income(5,571)(2,545)(15,512)(6,000)
Interest expense2,837 56,515 8,180 62,005 
Other (income) expense, net(2,811)4,518 (681)18,093 
Provision for income taxes2,952 2,082 12,415 3,545 
Depreciation expense2,718 3,343 8,401 10,929 
Amortization of intangible assets8,520 8,306 25,056 23,599 
Stock-based compensation expense24,594 23,768 76,896 84,836 
Acquisition-related expenses(1)
290 — 568 363 
Impairment of long-lived assets— 3,553 — 30,784 
Restructuring expense(2)
— 19,996 (190)19,996 
Adjusted EBITDA$50,083 $42,925 $142,140 $78,842 

(1) For the three and nine months ended September 30, 2024, acquisition-related expenses included $0.2 million of accretion expense related to contingent consideration recorded in connection with our July 2024 acquisition of Noetic.

(2) For the nine months ended September 30, 2024, restructuring expense was recorded within general and administrative expense in our condensed consolidated statement of operations.

RAPID7, INC.
Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow (Unaudited)
(in thousands)
 
 Three Months Ended September 30,Nine Months Ended September 30,
 2024202320242023
Net cash provided by operating activities$43,969 $3,665 $107,897 $40,812 
Less: Purchases of property and equipment(1,342)(295)(2,242)(3,999)
Less: Capitalized internal-use software costs(4,125)(3,952)(10,414)(13,033)
Free cash flow$38,502 $(582)$95,241 $23,780 









Fourth Quarter and Full-Year 2024 Guidance
GAAP to Non-GAAP Reconciliation    
(in millions, except per share data)

Fourth Quarter 2024Full-Year 2024
Reconciliation of GAAP income from operations to non-GAAP income from operations:
Anticipated GAAP income from operations$1.0 to$3.0 $32.1 to$34.1 
Add: Anticipated stock-based compensation expense27.0 to27.0 104.0 to104.0 
Add: Anticipated amortization of acquired intangible assets5.0 to5.0 20.0 to20.0 
Add: Anticipated acquisition-related expense— to— 0.6 to0.6 
Add: Anticipated restructuring expense— to— (0.2)to(0.2)
Anticipated non-GAAP income from operations$33.0 to$35.0 $156.5 to$158.5 
Reconciliation of GAAP net income to non-GAAP net income:
Anticipated GAAP net income$2.1 to$4.1 $29.1 to$31.1 
Add: Anticipated stock-based compensation expense27.0 to27.0 104.0 to104.0 
Add: Anticipated amortization of acquired intangible assets5.0 to5.0 20.0 to20.0 
Add: Anticipated acquisition-related expense— to— 0.6 to0.6 
Add: Anticipated amortization of debt issuance costs1.0 to1.0 4.0 to4.0 
Add: Anticipated restructuring expense— to— (0.2)to(0.2)
Add: Anticipated discrete tax items— to— 6.4 to6.4 
Anticipated non-GAAP net income$35.1 to$37.1 $163.9 to$165.9 
Add: Anticipated interest expense on convertible senior notes1.6 to1.6 6.4 to6.4 
Numerator for non-GAAP earnings per share calculation$36.7 to$38.7 $170.3 to$172.3 
Anticipated GAAP net income per share, diluted$0.03 $0.05 $0.39 $0.42 
Anticipated non-GAAP net income per share, diluted$0.48 $0.51 $2.28 $2.31 
Weighted average shares used in earnings per share calculation, diluted75.774.7
The reconciliation does not reflect any items that are unknown at this time, including, but not limited to, non-ordinary course litigation-related expenses, which we are not able to predict without unreasonable effort due to their inherent uncertainty. As a result, the estimates shown for Anticipated GAAP income from operations, Anticipated GAAP net income and Anticipated GAAP net income per share are expected to change.
Full-Year 2024
Reconciliation of net cash provided by operating activities to free cash flow:
Anticipated net cash provided by operating activities$164 to$174 
Less: Anticipated purchases of property and equipment(5)to(5)
Less: Anticipated capitalized internal-use software costs(14)to(14)
Anticipated free cash flow$145 to$155 

v3.24.3
Cover Page Document
Nov. 06, 2024
Cover [Abstract]  
Document Type 8-K
Document Period End Date Nov. 06, 2024
Entity Registrant Name Rapid7, Inc.
Entity Incorporation, State or Country Code DE
Entity File Number 001-37496
Entity Tax Identification Number 35-2423994
Entity Address, City or Town Boston,
Entity Address, State or Province MA
Entity Address, Postal Zip Code 02114
City Area Code 617
Local Phone Number 247-1717
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common Stock, $0.01 par value per share
Trading Symbol RPD
Security Exchange Name NASDAQ
Entity Emerging Growth Company false
Entity Central Index Key 0001560327
Amendment Flag false
Entity Address, Address Line One 120 Causeway Street,
Document Information [Line Items]  
Document Period End Date Nov. 06, 2024
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