Rapid7 (RPD) Q4 2024 earnings summary

Executive summary

• Ended 2024 with $840M in ARR (up 4% year-over-year) and $844M in revenue (up 9% year-over-year), both in line with or exceeding guidance.

• Free cash flow surpassed $150M in 2024, supporting ongoing investments and platform expansion.

• Detection & response (D&R) business delivered double-digit growth, now over $400M in ARR; risk and exposure management showed early momentum, especially with Exposure Command.

• Strategic focus on innovation, scaling partner ecosystem, and cloud security adoption, with 80-90% of new ARR booked through channel partners.

• Over 11,700 global customers and more than 500 platform integrations, highlighting broad market reach.

Financial highlights

• Full-year revenue reached $844M, up 9% year-over-year; recurring product revenue grew 9% to $809M.

• Operating income for 2024 was $164M (non-GAAP), above guidance, with a 19% operating margin, expanding over 600 basis points year-over-year.

• Free cash flow for 2024 was $154M, with an 18% margin, expanding over 800 basis points year-over-year.

• Q4 revenue was $216M, up 5% year-over-year; recurring product revenue grew 6% to $206M; international revenue grew 14% and now represents 25% of total revenue.

• Adjusted EBITDA for 2024 was $188.5M, up from $126.7M in 2023; non-GAAP net income per share for Q4 was $0.54 (diluted).

Outlook and guidance

• 2025 ARR expected to reach $870M-$890M, representing 4%-6% growth; majority of growth to come from D&R, with modest contribution from risk and exposure management.

• 2025 revenue guidance is $860M-$870M (2%-3% growth); recurring product revenue to outpace total revenue, offset by a $10M decline in professional services.

• Operating income for 2025 expected at $125M-$135M (non-GAAP); free cash flow guidance at ~$135M; net income per share $1.72-$1.85.

• Q1 2025 revenue expected at $207M-$209M (1%-2% growth); Q1 operating income $23M-$25M; net income per share $0.33-$0.36.

• Investments of up to $30M in 2025 to support MDR growth, Exposure Command roadmap, and a new innovation center in India, with benefits expected in 2026 and beyond.