Rapid7 (RPD) Morgan Stanley Technology, Media & Telecom Conference summary

Platform evolution and strategic investments

• Transitioned from traditional vulnerability management to an integrated security operations platform, expanding from mid-market to larger enterprises and focusing on risk assessment, compliance, and monitoring across cloud, endpoint, and on-prem environments.

• Significant investments in automation, AI, and managed detection and response (MDR) to deliver scalable, efficient, and high-quality 24x7 security operations, with a product-led approach and proprietary technology stack.

• MDR now represents nearly half of the business, with over $400 million in ARR and 75% of that from managed services, driving higher retention and customer expansion rates.

• AI and automation are central to scaling MDR, reducing alert noise, and improving detection speed and relevance, leveraging a unique multidimensional data advantage from a large customer base.

• Ongoing investments in AI, attack surface management, and process data integration are expected to further differentiate offerings and drive future growth.

Market dynamics and growth outlook

• Detection and response (D&R) business is growing in the teens and approaching an inflection point, while vulnerability management remains flat but is entering a new upgrade cycle with the Exposure Command offering.

• Competitive landscape is fragmented, especially in D&R, with opportunities to monetize new services such as customized monitoring and red teaming as a service, leveraging AI to commoditize traditionally high-cost offerings.

• Focused on upgrading a significant portion of the install base, aiming for 10-20% uplift, and expanding into enterprise segments with more customized solutions.

• Recent organizational changes include a shift to customer-pod teams for better accountability and scalability, and increased emphasis on partnerships and distribution.

• Margin expansion in recent years is expected to pause temporarily due to one-time investments in AI, technology, and cost structure optimization, including establishing an India development center, with a return to growth and margin expansion anticipated.

Customer impact and operational highlights

• Customers adopting the platform experience broader monitoring, fewer but more relevant alerts, and rapid detection, with a recent example of a red team test detected within minutes.

• Larger enterprises, including Fortune 500 manufacturers, benefit from scalable security operations without the need for large in-house SOC teams.

• High retention rates and customer satisfaction are reported for MDR services, surpassing traditional vulnerability management.

• Product-led approach and integrated stack provide economic and operational advantages for both customers and the company.

• Continued focus on delivering value through technology-driven services and expanding the platform’s capabilities to address evolving security needs.