Rapid7 (RPD) Q3 2024 earnings summary

Executive summary

• Ended Q3 2024 with $823M in ARR, up 6% year-over-year, and revenue of $215M, an 8% increase, with operating income and net income both showing significant improvement.

• Detection and response business remains the primary growth driver, with strong double-digit growth and robust customer demand, while consolidated offerings and new risk management solutions are gaining traction.

• Customer base grew to over 11,600, with ARR per customer rising 4% year-over-year to $70,800.

• Completed the acquisition of Noetic Cyber, Inc. in July 2024 for $51M to enhance the security operations platform.

• Strategic focus on product innovation, partner ecosystem expansion, and accelerating cloud security adoption.

Financial highlights

• Q3 2024 revenue was $214.7M–$215M, up 8% year-over-year, with recurring product subscription revenue at $206M and international revenue up 17%.

• Q3 non-GAAP operating income was $44M (20–21% margin); adjusted EBITDA was $50.1M; non-GAAP net income per diluted share was $0.66.

• Free cash flow for Q3 2024 was $38.5M–$39M, up from negative $0.6M a year ago.

• Ended Q3 with $223M in cash and cash equivalents and $281.5M in investments.

• Product gross margin was 76% (non-GAAP 74%), total gross margin 74%, both flat year-over-year.

Outlook and guidance

• Full-year 2024 ARR expected at $835–$845M (4–5% growth); revenue guidance raised to $839–$841M (3–8% growth); non-GAAP net income per share $2.28–$2.31.

• Free cash flow for 2024 guided to $145M–$155M.

• Q4 2024 revenue expected at $211–$213M; non-GAAP operating income $33–$35M; non-GAAP EPS $0.48–$0.51.

• Early 2025 outlook: ARR growth rate expected to be flat to mildly accelerate from 2024 exit rate, assuming continued elongated deal cycles and stable demand.

• Guidance excludes potential FX impacts and is subject to significant business and economic uncertainties.