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Rapid7 Announces Second Quarter 2025 Financial Results
 
•Annualized recurring revenue (“ARR”) of $841 million, an increase of 3% year-over-year
•Total revenue of $214 million, up 3% year-over-year; Product subscriptions revenue of $208 million, up 4% year-over-year
•GAAP operating income of $3.5 million; Non-GAAP operating income of $36 million
•Net cash provided by operating activities of $48 million; Free cash flow of $42 million
Boston, MA – August 7, 2025 – Rapid7, Inc. (Nasdaq: RPD), a leader in threat detection and exposure management, today announced its financial results for the second quarter 2025.
 “Our Detection and Response business remains a consistent growth engine, and we are encouraged by growing customer interest in our Command Platform strategy,” said Corey Thomas, CEO of Rapid7. “As security teams face increasing complexity, they are turning to integrated solutions that provide unified visibility, expert-guided AI, and better security outcomes. We remain focused on delivering against these needs with urgency and discipline.”

Second Quarter 2025 Financial Results and Other Metrics
 As of June 30,
 20252024% Change
(dollars in thousands)
ARR$840,610 $815,630 3%
Number of customers11,643 11,484 1%
ARR per customer$72.2 $71.0 2%
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Three Months Ended June 30,
 20252024% Change
(in thousands, except per share data)
Product subscriptions revenue$208,097 $200,067 4%
Professional services revenue6,096 7,924 (23%)
Total revenue$214,193$207,9913%
North America revenue$160,622 $159,322 1%
Rest of world revenue53,571 48,669 10%
Total revenue$214,193$207,9913%
GAAP gross profit$151,134 $146,999 
GAAP gross margin71%71%
Non-GAAP gross profit$158,137 $154,281 
Non-GAAP gross margin74%74%
GAAP income from operations
$3,494 $5,223 
GAAP operating margin2%3%
Non-GAAP income from operations$36,348 $39,276 
Non-GAAP operating margin17%19%
GAAP net income$8,338 $6,538 
GAAP net income per share, basic$0.13 0.10
GAAP net income per share, diluted$0.13 $0.09 
Non-GAAP net income$42,191 $41,646 
Non-GAAP net income per share:
Basic$0.65 $0.67 
Diluted$0.58 $0.58 
Adjusted EBITDA$42,648 $45,438 
Net cash provided by operating activities$47,542 $32,858 
Free cash flow$42,280 $29,205 
For additional details on the reconciliation of non-GAAP measures and certain other business metrics to their nearest comparable GAAP measures, please refer to the accompanying financial data tables included in this press release. The prior year period reflects an immaterial correction. Refer to Note 16, Immaterial Correction of an Error, in the notes to our unaudited condensed consolidated financial statements for further information.
CFO Future Retirement
The company also announced that Tim Adams, who has served as Rapid7's Chief Financial Officer since January 2022, has informed the company of his intent to retire from his position. Rapid7 is initiating a search for a new Chief Financial Officer, and Adams will remain in his current position until a successor is named in order to facilitate a smooth transition.
Recent Business Highlights
 
•In July, Rapid7 launched Incident Command, an AI-native SIEM that delivers detection, automation, attack surface context, and threat intelligence in one SOC experience.
•In July, Rapid7 announced that its InsightGovCloud Platform had achieved Federal Risk and Authorization Management Program (FedRAMP®) Authorization, solidifying its position as a trusted Cloud Service Offering (CSO) for U.S. federal agencies.
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•In July, Rapid7 introduced Active Patching, powered by Automox, a fully automated patching and remediation solution integrated into Rapid7’s Exposure Command solution.
•In July, Rapid7 announced the availability of InsightCloudSec and InsightAppSec in the new AWS Marketplace AI Agents and Tools category, empowering organizations to scale generative AI securely and with a focus on compliance.
•In July, Rapid7 was named a Leader in the 2025 Frost Radar™ for Managed Detection and Response (MDR), recognized for its deep integration between MDR and Exposure Management, as well as leading innovation around AI-powered SOCs and third-party integrations.
•In June, Rapid7 announced that agentic AI workflows are now embedded within Rapid7’s next-gen SIEM and XDR platform, fundamentally changing how threats in MDR customer environments are investigated in the SOC.
Third Quarter and Full Year 2025 Guidance

Rapid7 anticipates ARR, revenue, non-GAAP income from operations, non-GAAP net income per share and free cash flow to be in the following ranges:
Third Quarter 2025
Full-Year 2025
(in millions, except per share data)
ARR$850to$865
Year-over-year growth1%to3%
Revenue$215to$217$853to$863
Year-over-year growth—%to1%1%to2%
Non-GAAP income from operations$29to$31$125to$135
Non-GAAP net income per share$0.44to$0.47$1.90to$2.03
Weighted average shares outstanding75.875.8
Free cash flow$125to$135
The guidance provided above is forward-looking in nature. Actual results may differ materially. See the cautionary note regarding “Forward-Looking Statements” below. Guidance for the third quarter 2025 does not include any potential impact of foreign exchange gains or losses. The guidance provided above is based on a number of assumptions, estimates and expectations as of the date of this press release and, while presented with numerical specificity, this guidance is inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond Rapid7's control and are based upon specific assumptions with respect to future business decisions or economic conditions, some of which may change. Rapid7 undertakes no obligation to update guidance after this date.
Non-GAAP guidance excludes estimates for stock-based compensation expense, amortization of acquired intangible assets, amortization of debt issuance costs, and certain other items such as acquisition-related expenses, impairment of long-lived assets, restructuring expense, induced conversion expense, change in the fair value of derivative assets, non-ordinary course litigation-related expenses and discrete tax items. Rapid7 has provided a reconciliation of each non-GAAP guidance measure to the most comparable GAAP measures in the financial statement tables included in this press release. The reconciliation does not reflect any items that are unknown at this time, including, but not limited to, non-ordinary course litigation-related expenses, which we are not able to predict without unreasonable effort due to their inherent uncertainty.
Conference Call and Webcast Information
Rapid7 will host a conference call today, August 7, 2025, to discuss its results at 4:30 p.m. Eastern Time. The call will be available live via webcast on Rapid7's website at https://investors.rapid7.com. A webcast replay of the conference call will be available at https://investors.rapid7.com.
About Rapid7
Rapid7, Inc. (NASDAQ: RPD) is on a mission to create a safer digital world by making cybersecurity simpler and more accessible. We empower security professionals to manage a modern attack surface through our best-in-class technology, leading-edge research, and broad, strategic expertise. Rapid7’s comprehensive security solutions help more than 11,000 global customers unite cloud risk management with threat detection and response to reduce attack surfaces and eliminate threats with speed and precision. For more information, visit our website, check out our blog, or follow us on LinkedIn or X.

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Non-GAAP Financial Measures and Other Metrics
To supplement our consolidated financial statements, which are prepared and presented in accordance with generally accepted accounting principles in the United States (“GAAP”), we provide investors with certain non-GAAP financial measures and other metrics, which we believe are helpful to our investors. We use these non-GAAP financial measures and other metrics for financial and operational decision-making purposes and as a means to evaluate period-to-period comparisons. We also use certain non-GAAP financial measures as performance measures under our executive bonus plan. We believe that these non-GAAP financial measures and other metrics provide useful information about our operating results, enhance the overall understanding of past financial performance and future prospects and allow for greater transparency with respect to metrics used by our management in its financial and operational decision-making.
While our non-GAAP financial measures are an important tool for financial and operational decision-making and for evaluating our own operating results over different periods of time, you should review the reconciliation of our non-GAAP financial measures to the comparable GAAP financial measures included below, and not rely on any single financial measure to evaluate our business.
Non-GAAP Financial Measures
We disclose the following non-GAAP financial measures: non-GAAP gross profit, non-GAAP income from operations, non-GAAP net income, non-GAAP net income per share, adjusted EBITDA and free cash flow. We also disclose non-GAAP gross margin and non-GAAP operating margin derived from these financial measures.
We define non-GAAP gross profit, non-GAAP income from operations, non-GAAP net income and non-GAAP net income per share as the respective GAAP balances excluding the effect of stock-based compensation expense, amortization of acquired intangible assets, amortization of debt issuance costs and certain other items such as acquisition-related expenses, impairment of long-lived assets, change in the fair value of derivative assets, restructuring expense, induced conversion expense and discrete tax items. Non-GAAP net income per basic and diluted share is calculated as non-GAAP net income divided by the weighted average shares used to compute net income per share, with the number of weighted average shares decreased, when applicable, to reflect the anti-dilutive impact of the capped call transactions entered into in connection with our convertible senior notes.
We believe these non-GAAP financial measures are useful to investors in assessing our operating performance due to the following factors:
Stock-based compensation expense. We exclude stock-based compensation expense because of varying available valuation methodologies, subjective assumptions and the variety of equity instruments that can impact our non-cash expense. We believe that providing non-GAAP financial measures that exclude stock-based compensation expense allows for more meaningful comparisons between our operating results from period to period.
Amortization of acquired intangible assets. We believe that excluding the impact of amortization of acquired intangible assets allows for more meaningful comparisons between operating results from period to period as the intangible assets are valued at the time of acquisition and are amortized over several years after the acquisition.
Amortization of debt issuance costs. The expense for the amortization of debt issuance costs related to our convertible senior notes and our former revolving credit facility is a non-cash item, and we believe the exclusion of this interest expense provides a more useful comparison of our operational performance in different periods.
Induced conversion expense. In conjunction with the third quarter of 2023 partial repurchase of our 2.25% convertible senior notes due 2025, we incurred a non-cash induced conversion expense of $53.9 million. We exclude induced conversion expense because this amount is not indicative of the performance of or trends in our business, and neither is comparable to the prior period nor predictive of future results.
Non-ordinary course litigation-related expenses. We exclude non-ordinary course litigation expense because we do not consider legal costs and settlement fees incurred in litigation and litigation-related matters of non-ordinary course lawsuits and other disputes to be indicative of our core operating performance. We do not adjust for ordinary course legal expenses, including legal costs and settlement fees resulting from maintaining and enforcing our intellectual property portfolio and license agreements.
Acquisition-related expenses. We exclude acquisition-related expenses, including accretion expense associated with contingent consideration, as costs that are unrelated to the current operations and are neither comparable to the prior period nor predictive of future results.
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Change in fair value of derivative assets. The expense for the change in fair value of derivative assets related to our 2023 capped calls settlement is a non-cash item and we believe the exclusion of this other income (expense) provides a more useful comparison of our operational performance in different periods.
Impairment of long-lived assets. Impairment of long-lived assets consists of impairment charges allocated to the carrying amount of certain operating right-of-use assets and the associated leasehold improvements when the carrying amounts exceed their respective fair values and we believe the exclusion of the impairment charges provides a more useful comparison of our operational performance in different periods.
Restructuring expense. We exclude non-ordinary course restructuring expenses related to our restructuring plan, that was completed during fiscal year 2024, because we do not believe these charges are indicative of our core operating performance and we believe the exclusion of the restructuring expenses provides a more useful comparison of our performance in different periods.
Discrete tax items. We exclude certain discrete tax items such as income tax expenses or benefits that are not related to ongoing business operations in the current year and adjustments to uncertain tax position reserves as these charges are not indicative of our ongoing operating results, and they are not considered when we are forecasting our future results.
Anti-dilutive impact of capped call transaction. Our capped call transactions are intended to offset potential dilution from the conversion features in our convertible senior notes. Although we cannot reflect the anti-dilutive impact of the capped call transactions under GAAP, we do reflect the anti-dilutive impact of the capped call transactions in non-GAAP net income (loss) per diluted share, when applicable, to provide investors with useful information in evaluating our financial performance on a per share basis.
Adjusted EBITDA. Adjusted EBITDA is a non-GAAP measure that we define as net income (loss) before (1) interest income, (2) interest expense, (3) other (income) expense, net, (4) provision for (benefit from) income taxes, (5) depreciation expense, (6) amortization of intangible assets, (7) stock-based compensation expense, (8) acquisition-related expenses, and (9) restructuring expense. We believe that the use of adjusted EBITDA is useful to investors and other users of our financial statements in evaluating our operating performance because it provides them with an additional tool to compare business performance across companies and across periods.
Free Cash Flow. Free cash flow is a non-GAAP measure that we define as cash provided by operating activities less purchases of property and equipment and capitalization of internal-use software costs. We consider free cash flow to be a liquidity measure that provides useful information to management and investors about the amount of cash generated by the business after necessary capital expenditures.
We include all non-GAAP financial measures in the current year or any comparative year that will be included in the non-GAAP reconciliation during the current fiscal year annual Form 10-K. As such, not all non-GAAP financial measures listed above may be included in the current reporting period non-GAAP reconciliation in the GAAP to Non-GAAP Reconciliation section below.
Our non-GAAP financial measures may not provide information that is directly comparable to that provided by other companies in our industry, as other companies in our industry may calculate non-GAAP financial results differently, particularly related to non-recurring, unusual items. In addition, there are limitations in using non-GAAP financial measures because the non-GAAP financial measures are not prepared in accordance with GAAP, may be different from non-GAAP financial measures used by other companies and exclude expenses that may have a material impact upon our reported financial results. Further, stock-based compensation expense has been and will continue to be for the foreseeable future a significant recurring expense in our business and an important part of the compensation provided to our employees.
Other Metrics
ARR. ARR is defined as the annual value of all recurring revenue related to contracts in place at the end of the period. ARR should be viewed independently of revenue and deferred revenue as ARR is an operating metric and is not intended to be combined with or replace these items. ARR is not a forecast of future revenue, which can be impacted by contract start and end dates and renewal rates, and does not include revenue reported as professional services revenue in our consolidated statement of operations.
Number of Customers. We define a customer as any entity that has an active Rapid7 recurring revenue contract as of the specified measurement date, excluding InsightOps and Logentries only customers with a contract value of less than $2,400 per year.
ARR per Customer. We define ARR per customer as ARR divided by the number of customers at the end of the period.
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Cautionary Language Concerning Forward-Looking Statements
This press release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, the statements regarding our financial guidance for the third quarter and full-year 2025, and the assumptions underlying such guidance. Our use of the words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “will” and similar expressions are intended to identify forward-looking statements. The events described in our forward-looking statements are subject to a number of risks and uncertainties, assumptions and other factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by the forward-looking statements. Risks that could cause or contribute to such differences include, but are not limited to, growing macroeconomic uncertainty, unstable market and economic conditions, fluctuations in our quarterly results, our ability to successfully grow our sales of our cloud-based solutions, including through the shift to a consolidated platform sales approach, effectiveness of our restructuring plan that was completed during fiscal year 2024, failure to meet our publicly announced guidance or other expectations about our business, our ability to sustain our revenue growth rate, the ability of our products and professional services to correctly detect vulnerabilities, renewal of our customer's subscriptions, competition in the markets in which we operate, market growth, our ability to innovate and manage our growth, our sales cycles, our ability to integrate acquired companies, exposure to greater than anticipated tax liabilities, and our ability to operate in compliance with applicable laws as well as other risks and uncertainties that could affect our business and results described in our filings with the Securities and Exchange Commission (the “SEC”), including our most recent Annual Report on Form 10-K filed with the SEC on February 28, 2025, particularly in the section entitled "Item 1.A Risk Factors," and in the subsequent reports that we file with the SEC. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those expressed in any forward-looking statements we may make. Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements. You should, therefore, not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this press release.

###
Investor contact:
Elizabeth Chwalk
Vice President, Investor Relations
investors@rapid7.com
(617) 865-4277

Press contact:
Alice Randall
Director, Global Corporate Communications
press@rapid7.com
(214) 693-4727






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RAPID7, INC.    
Consolidated Balance Sheets (Unaudited)     
(in thousands)    
 
June 30, 2025December 31, 2024
Assets
Current assets:
Cash and cash equivalents$261,327 $334,686 
Short-term investments250,410 187,025 
Accounts receivable, net150,683 168,242 
Deferred contract acquisition and fulfillment costs, current portion49,292 52,134 
Prepaid expenses and other current assets42,805 44,024 
Total current assets754,517 786,111 
Long-term investments88,012 37,274 
Property and equipment, net29,639 32,245 
Operating lease right-of-use assets43,654 48,877 
Deferred contract acquisition and fulfillment costs, non-current portion66,714 73,672 
Goodwill575,268 575,268 
Intangible assets, net74,981 85,719 
Other assets15,955 12,868 
Total assets$1,648,740 $1,652,034 
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable$15,943 $18,908 
Accrued expenses and other current liabilities78,125 88,802 
Convertible senior notes, current portion, net— 45,895 
Operating lease liabilities, current portion15,185 15,493 
Deferred revenue, current portion446,688 461,118 
Total current liabilities555,941 630,216 
Convertible senior notes, non-current portion, net890,277 888,356 
Operating lease liabilities, non-current portion62,187 68,430 
Deferred revenue, non-current portion29,183 27,078 
Other long-term liabilities20,705 20,243 
Total liabilities1,558,293 1,634,323 
Stockholders’ equity:
Common stock$646 $635 
Treasury stock(4,765)(4,765)
Additional paid-in-capital1,068,643 1,011,080 
Accumulated other comprehensive (loss) income3,514 (1,205)
Accumulated deficit(977,591)(988,034)
Total stockholders’ equity90,447 17,711 
Total liabilities and stockholders’ equity$1,648,740 $1,652,034 

Note: Certain prior periods reflect immaterial corrections. Refer to Note 16, Immaterial Correction of an Error, in the notes to our Consolidated Financial Statements for further information.


RAPID7, INC.
Consolidated Statements of Operations (Unaudited)
(in thousands, except share and per share data)
 
 Three Months Ended June 30,
Six Months Ended June 30,
 2025202420252024
Revenue:
Product subscriptions208,097 200,067 412,032 396,985 
Professional services6,096 7,924 12,414 16,107 
Total revenue214,193 207,991 424,446 413,092 
Cost of revenue:
Product subscriptions57,236 55,107 111,604 109,841 
Professional services5,823 5,885 10,935 12,145 
Total cost of revenue63,059 60,992 122,539 121,986 
Total gross profit151,134 146,999 301,907 291,106 
Operating expenses:
Research and development47,227 40,448 95,115 81,816 
Sales and marketing79,247 78,126 158,647 151,221 
General and administrative21,166 23,202 44,752 43,130 
Total operating expenses147,640 141,776 298,514 276,167 
Income from operations
3,494 5,223 3,393 14,939 
Other income (expense), net:
Interest income5,514 5,221 11,272 9,941 
Interest expense(2,627)(2,673)(5,281)(5,343)
Other income (expense), net3,957 (695)5,759 (2,130)
Income before income taxes10,338 7,076 15,143 17,407 
Provision for income taxes2,000 538 4,700 9,463 
Net income$8,338 $6,538 $10,443 $7,944 
Net income per share, basic$0.13 $0.10 $0.16 $0.13 
Net income per share, diluted (1)$0.13 $0.09 $0.16 $0.11 
Weighted-average common shares outstanding, basic64,441,000 62,496,289 64,140,087 62,201,182 
Weighted-average common shares outstanding, diluted64,696,992 74,250,360 64,462,318 74,135,121 

(1) We use the if-converted method to compute diluted earnings per share with respect to our convertible senior notes. There was no add-back of interest expense or additional dilutive shares related to the convertible senior notes where the effect was anti-dilutive. On an if-converted basis, for the three and six months ended June 30, 2025, the 2025, 2027 and 2029 Notes were anti-dilutive.

Note: Certain prior periods reflect immaterial corrections. Refer to Note 16, Immaterial Correction of an Error, in the notes to our Consolidated Financial Statements for further information.


RAPID7, INC.
Consolidated Statements of Cash Flows (Unaudited)
(in thousands)
 Three Months Ended June 30,
Six Months Ended June 30,
 2025202420252024
Cash flows from operating activities:
Net income$8,338 $6,538 $10,443 $7,944 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization11,390 10,871 23,055 22,219 
Amortization of debt issuance costs999 1,055 2,018 2,108 
Stock-based compensation expense27,581 29,066 54,732 54,811 
Deferred income taxes— — — 1,840 
Other(3,541)(1,149)(4,694)(1,352)
Changes in assets and liabilities:
Accounts receivable(10,176)(19,539)17,492 19,990 
Deferred contract acquisition and fulfillment costs4,505 (1,285)9,800 (1,964)
Prepaid expenses and other assets(3,803)1,653 (5,798)430 
Accounts payable3,596 1,169 (2,959)(3,021)
Accrued expenses7,089 6,499 (13,236)(18,391)
Deferred revenue549 (2,160)(12,325)(23,346)
Other liabilities1,015 140 (1,229)2,660 
Net cash provided by operating activities47,542 32,858 77,299 63,928 
Cash flows from investing activities:
Purchases of property and equipment(948)(280)(2,309)(900)
Capitalization of internal-use software(4,314)(3,373)(8,033)(6,289)
Purchases of investments(87,555)(64,808)(232,016)(157,967)
Sales and maturities of investments51,500 75,000 120,500 130,001 
Other investing activities— 360 1,328 360 
Net cash (used in) provided by investing activities
(41,317)6,899 (120,530)(34,795)
Cash flows from financing activities:
Payment of debt issuance costs(1,290)— (1,290)— 
Payments for maturity of convertible senior notes
(45,992)— (45,992)— 
Taxes paid related to net share settlement of equity awards(595)(1,325)(1,898)(3,089)
Proceeds from employee stock purchase plan— — 4,446 5,046 
Proceeds from stock option exercises— 324 1,589 1,404 
Issuance of common stock from acquisition
755 — 755 — 
Net cash (used in) provided by financing activities
(47,122)(1,001)(42,390)3,361 
Effect of exchange rate changes on cash ,cash equivalents and restricted cash3,513 (583)4,847 (2,076)
Net (decrease) increase in cash, cash equivalents and restricted cash
(37,384)38,173 (80,774)30,418 
Cash, cash equivalents and restricted cash, beginning of period$298,711 $206,375 $342,101 $214,130 
Cash, cash equivalents and restricted cash, end of period$261,327 $244,548 $261,327 $244,548 



Supplemental cash flow information:
Cash paid for interest on convertible senior notes1,399 517 2,970 3,215 
Cash paid for income taxes, net of refunds4,720 3,153 5,712 5,505 
Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents$261,327 $236,975 $261,327 $236,975 
Restricted cash included in other assets
— 7,573 — 7,573 
Total cash, cash equivalents and restricted cash$261,327 $244,548 $261,327 $244,548 

Note: Certain prior periods reflect immaterial corrections. Refer to Note 16, Immaterial Correction of an Error, in the notes to our Consolidated Financial Statements for further information.


RAPID7, INC.    
GAAP to Non-GAAP Reconciliation (Unaudited)    
(in thousands, except share and per share data)   
 
 Three Months Ended June 30,
Six Months Ended June 30,
 2025202420252024
GAAP gross profit$151,134 $146,999 $301,907 $291,106 
Add: Stock-based compensation expense1
2,580 3,270 4,844 5,941 
Add: Amortization of acquired intangible assets2
4,423 4,012 8,846 8,329 
Non-GAAP gross profit$158,137$154,281$315,597$305,376
Non-GAAP gross margin73.8 %74.2 %74.4 %73.9 %
GAAP gross profit - Product subscriptions$150,861 $144,960 $300,428 $287,144 
Add: Stock-based compensation expense2,054 2,802 3,785 5,100 
Add: Amortization of acquired intangible assets4,423 4,012 8,846 8,329 
Non-GAAP gross profit - Product subscriptions$157,338$151,774$313,059$300,573
Non-GAAP gross margin - Product subscriptions75.6 %75.9 %76.0 %75.7 %
GAAP gross profit - Professional services$273 $2,039 $1,479 $3,962 
Add: Stock-based compensation expense526 468 1,059 841 
Non-GAAP gross profit - Professional services$799$2,507$2,538$4,803
Non-GAAP gross margin - Professional services13.1 %31.6 %20.4 %29.8 %
GAAP income from operations
$3,494 $5,223 $3,393 $14,939 
Add: Stock-based compensation expense1
27,581 29,066 54,732 54,811 
Add: Amortization of acquired intangible assets2
5,090 4,709 10,210 9,723 
Add: Acquisition-related expenses3
183 278 366 278 
Add: Restructuring expense— — — (190)
Non-GAAP income from operations$36,34836348000$39,276$68,701$79,561
GAAP net income$8,338 $6,538 $10,443 $7,944 
Add: Stock-based compensation expense1
27,581 29,066 54,732 54,811 
Add: Amortization of acquired intangible assets2
5,090 4,709 10,210 9,723 
Add: Amortization of debt issuance costs999 1,055 2,018 2,108 
Add: Acquisition-related expenses3
183 278 366 278 
Add: Restructuring expense4
— — — (190)
Add: Discrete tax items5
— — — 6,360 
Non-GAAP net income$42,191$41,646$77,769$81,034
Add: Interest expense of convertible senior notes6
1,399 1,571 2,625 3,142 
Numerator for non-GAAP earnings per share, diluted calculation$43,590$43,217$80,394$84,176
Weighted average shares used in GAAP earnings per share calculation, basic64,441,000 62,496,289 64,140,087 62,201,182 
Dilutive effect of convertible senior notes6
10,686,653 11,183,611 10,429,891 11,183,611 
Dilutive effect of employee equity incentive plans7
255,992 570,460 322,231 750,328 
Weighted average shares used in non-GAAP earnings per share calculation, diluted75,383,64574,250,36074,892,20974,135,121


Non-GAAP net income per share:
Basic$0.65 $0.67 $1.21 $1.30 
Diluted$0.58 $0.58 $1.07 $1.14 
1 Includes stock-based compensation expense as follows:
Cost of revenue$2,580 $3,270 $4,844 $5,941 
Research and development10,250 8,989 20,636 16,933 
Sales and marketing7,451 7,843 14,692 14,980 
General and administrative7,300 8,964 14,560 16,957 
2 Includes amortization of acquired intangible assets as follows:
Cost of revenue$4,423 $4,012 $8,846 $8,329 
Sales and marketing652 652 1,304 1,304 
General and administrative15 45 60 90 
3 Includes acquisition-related expenses as follows:
General and administrative$183 $278 $366 $278 
4 For the six months ended June 30, 2024 restructuring expense was included within general and administrative expense in our consolidated statements of operations.
5 Includes discrete tax items as follows:
Provision for income taxes$—$—$—$6,360
6 We use the if-converted method to compute diluted earnings per share with respect to our convertible senior notes. There was no add-back of interest expense or additional dilutive shares related to the convertible senior notes where the effect was anti-dilutive.
7 We use the treasury method to compute the dilutive effect of employee equity incentive plan awards.
Note: Certain prior periods reflect immaterial corrections. Refer to Note 16, Immaterial Correction of an Error, in the notes to our Consolidated Financial Statements for further information.


RAPID7, INC.
Reconciliation of Net Income (Loss) to Adjusted EBITDA (Unaudited)
(in thousands)
 
 Three Months Ended June 30,Six Months Ended June 30,
 2025202420252024
GAAP net income$8,338 $6,538 $10,443 $7,944 
Interest income(5,514)(5,221)(11,272)(9,941)
Interest expense2,627 2,673 5,281 5,343 
Other (income) expense, net(3,957)695 (5,759)2,130 
Provision for income taxes
2,000 538 4,700 9,463 
Depreciation expense2,349 2,775 5,140 5,683 
Amortization of intangible assets9,041 8,096 17,915 16,536 
Stock-based compensation expense27,581 29,066 54,732 54,811 
Acquisition-related expenses183 278 366 278 
Restructuring expense— — — (190)
Adjusted EBITDA$42,648 $45,438 $81,546 $92,057 

Note: Certain prior period reflect immaterial corrections. Refer to Note 16, Immaterial Correction of an Error, in the notes to our Consolidated Financial Statements for further information.

RAPID7, INC.
Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow (Unaudited)
(in thousands)
 
 Three Months Ended June 30,Six Months Ended June 30,
 2025202420252024
Net cash provided by operating activities$47,542 $32,858 $77,299 $63,928 
Less: Purchases of property and equipment(948)(280)(2,309)(900)
Less: Capitalized internal-use software costs(4,314)(3,373)(8,033)(6,289)
Free cash flow$42,280 $29,205 $66,957 $56,739 









Third Quarter and Full-Year 2025 Guidance
GAAP to Non-GAAP Reconciliation    
(in millions, except per share data)

Third Quarter 2025
Full-Year 2025
Reconciliation of GAAP (loss) income from operations to non-GAAP income from operations:
Anticipated GAAP (loss) income from operations
$(4)to$(2)$(5)to$5 
Add: Anticipated stock-based compensation expense28 to28 110 to110 
Add: Anticipated amortization of acquired intangible assets5 to5 20 to20 
Anticipated non-GAAP income from operations$29 to$31 $125 to$135 
Reconciliation of GAAP net (loss) income to non-GAAP net income:
Anticipated GAAP net (loss) income
$(2)to$— $4 to$14 
Add: Anticipated stock-based compensation expense28 to28 110 to110 
Add: Anticipated amortization of acquired intangible assets5 to5 20 to20 
Add: Anticipated amortization of debt issuance costs1 to1 4 to4 
Anticipated non-GAAP net income$32 to$34 $138 to$148 
Add: Anticipated interest expense on convertible senior notes1 to1 6 to6 
Numerator for non-GAAP earnings per share calculation$33 to$35 $144 to$154 
Anticipated GAAP net (loss) income per share1
$(0.03)$— $0.06 $0.22 
Anticipated non-GAAP net income per share, diluted$0.44 $0.47 $1.90 $2.03 
Weighted average shares used in earnings per share calculation, diluted75.875.8
1 The anticipated GAAP net loss per share is calculated using basic weighted average shares for periods in which the Company anticipated a GAAP net loss. The anticipated GAAP net income per share is calculated using GAAP diluted weighted average shares for periods in which the Company anticipated GAAP net income.
The reconciliation does not reflect any items that are unknown at this time, including, but not limited to, non-ordinary course litigation-related expenses, which we are not able to predict without unreasonable effort due to their inherent uncertainty. As a result, the estimates shown for Anticipated GAAP loss from operations, Anticipated GAAP net loss and Anticipated GAAP net loss per share are expected to change.
Full-Year 2025
Reconciliation of net cash provided by operating activities to free cash flow:
Anticipated net cash provided by operating activities$148 to$158 
Less: Anticipated purchases of property and equipment(7)to(7)
Less: Anticipated capitalized internal-use software costs(16)to(16)
Anticipated free cash flow$125 $135