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

Rapid7 (NASDAQ:RPD) released 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. Rapid7 had a return on equity of 30.84% and a net margin of 1.63%. The business had revenue of $212.40 million for the quarter, compared to the consensus estimate of $209.05 million. During the same quarter last year, the business posted $0.57 earnings per share. The business’s quarterly revenue was down 2.5% compared to the same quarter last year.

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 Trading Down 2.3%

Shares of RPD stock traded down $0.36 on Friday, hitting $15.08. 657,085 shares of the stock traded hands, compared to its average volume of 2,096,828. The company has a debt-to-equity ratio of 1.50, a quick ratio of 0.80 and a current ratio of 0.80. Rapid7 has a twelve month low of $4.97 and a twelve month high of $18.56. The firm’s 50-day moving average price is $13.14 and its two-hundred day moving average price is $9.56. The stock has a market capitalization of $1.02 billion, a PE ratio of 72.12 and a beta of 0.90.

Rapid7 News Summary

Here are the key news stories impacting Rapid7 this week:

• Positive Sentiment: Rapid7 reported Q3 adjusted EPS of $0.60, beating the $0.46 consensus, and revenue of $212.4 million versus $209.1 million expected. The earnings beat helped spur a reported post-results stock jump. Rapid7 Q3 earnings and revenue beat
• Positive Sentiment: Analysts raised several targets after the results. UBS lifted its target to $19 and Piper Sandler to $20; both maintained neutral ratings, but their targets imply potential upside from the quoted $15.38 share price. UBS recommendations Piper Sandler price target
• Neutral Sentiment: Susquehanna, Citigroup and RBC also raised targets, generally to $16, while keeping neutral or sector-perform ratings—suggesting improved estimates but limited conviction in further gains. Susquehanna recommendations
• Negative Sentiment: Revenue still fell 2.5% year over year. Some firms remain cautious: Scotiabank’s $14.50 target and Barclays’ $14 target are below the quoted share price, with Barclays maintaining an underweight rating. Scotiabank recommendations Barclays recommendations

Analysts Set New Price Targets

Several brokerages have issued reports on RPD. Truist Financial reaffirmed a “hold” rating and set a $15.00 target price (up from $10.00) on shares of Rapid7 in a research note on Thursday. Raymond James Financial reaffirmed an “outperform” rating and set a $15.00 target price on shares of Rapid7 in a report on Tuesday, August 11th. Wall Street Zen upgraded shares of Rapid7 from a “hold” rating to a “buy” rating in a research report on Saturday, October 3rd. Piper Sandler raised their price target on shares of Rapid7 from $12.00 to $20.00 and gave the stock a “neutral” rating in a research note on Thursday. Finally, Jefferies Financial Group reissued a “hold” rating and issued a $12.00 price target on shares of Rapid7 in a research note on Tuesday, August 11th. One equities research analyst has rated the stock with a Buy rating, seventeen have given a Hold rating and five have issued a Sell rating to the company. According to MarketBeat.com, the company has an average rating of “Reduce” and a consensus price target of $13.97.

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.