Rapid7 (RPD) investor relations material

Executive summary

• Q3 ARR was $819.7M, down 2.2% YoY; core ARR was flat QoQ, an early stability signal but not yet a return to growth.

• Q3 exceeded guided metrics despite restructuring; management described durable growth as a multi-quarter effort.

• Strategy is shifting investment toward detection and response, exposure management, AI-first services and an Autonomous SOC.

Financial highlights

• Revenue was $212.4M, down 2.5% YoY; product subscription revenue was $206.1M, down 1.9%.

• Non-GAAP operating income was $46.2M, up from $36.9M; non-GAAP diluted EPS was $0.60 versus $0.57.

• GAAP operating income was $9.0M and GAAP net income was $3.5M, or $0.05 diluted EPS.

• Non-GAAP gross margin was 72.2%; GAAP gross margin was 69.6%.

• Q3 free cash flow was $26.5M versus $30.1M a year earlier; nine-month free cash flow was $91.8M.

Outlook and guidance

• Q4 ending ARR is expected at ~$812M, down 3% YoY; core platform ARR is expected to be flat QoQ as non-core offerings continue to decline.

• Q4 revenue guidance is $208M–$210M; FY26 revenue guidance is $841M–$843M.

• Non-GAAP operating income guidance is $40M–$42M for Q4 and $140M–$142M for FY26; Q4 non-GAAP EPS guidance is $0.53–$0.55 and FY26 is $1.94–$1.96.

• FY26 free cash flow guidance remains ~$130M; management expects to exit 2026 at ~20% non-GAAP operating margin.

• Gross margins are expected to moderate as AWS and AI costs rise; guidance excludes potential foreign-exchange gains or losses.