Rapid7 (RPD) Q2 2026 earnings summary

Executive summary

• Leadership transition completed with new CEO and executive team to drive transformation, operational discipline, and focus on core offerings and AI-first platform.

• Q2 2026 annualized recurring revenue (ARR) was $824 million, with a 6% CAGR from Q2 2022 to Q2 2026 and over 11,500 global customers.

• Major restructuring announced, impacting approximately 12% of workforce, to streamline operations and enable targeted investments.

• Acquired Kenzo Security for $25.5 million to enhance AI-driven security operations and platform integration.

• Transformation is multi-quarter, aiming for durable growth, improved execution, and increased cash generation.

Financial highlights

• Q2 2026 total ARR was $824 million, down 2% year-over-year; core platform solutions (over 80% of ARR) grew ~1% YoY, led by Detection & Response at ~5% growth.

• Q2 2026 total revenue was $210.9 million, down 1.5% year-over-year, with recurring revenue representing 97% of total.

• Non-GAAP operating income was $28.9 million (13.7% margin), exceeding guidance; non-GAAP net income was $33.0 million ($0.44 per diluted share).

• Free cash flow reached $31.9 million in Q2; cash, equivalents, and short-term investments totaled $702.6 million at quarter end.

• Non-core products (<20% of ARR) declined, driving sequential ARR decrease.

Outlook and guidance

• Q3 2026 guidance: ARR of ~$812 million, total revenue $208–$210 million (down 4–5% YoY), non-GAAP operating income $34–$36 million, EPS $0.44–$0.47.

• Full-year 2026 guidance: revenue $837–$841 million (down 2–3% YoY), non-GAAP operating income $129–$133 million, EPS $1.78–$1.83, free cash flow ~$130 million.

• Targeting 20% non-GAAP operating margin in Q4 2026.

• Restructuring charges of $10–$11 million expected, mostly in Q3 and Q4 2026.

• Existing liquidity, including $425.6 million in cash and $277.0 million in investments, is expected to be sufficient for at least the next 12 months.