Summary
Rapid7 posted a profitable second quarter of fiscal 2024. Revenue rose 9.2% year over year to $207.99 million. Gross profit increased 11.3% to $147.14 million, and gross margin was 70.7%, up 1.3 percentage points. Operating income was $6.88 million, a swing from an operating loss in the prior-year quarter. Operating margin was 3.3%, up 30.4 percentage points. Net income was $8.20 million, also a swing from a loss. Diluted earnings per share were $0.11, compared with a loss per share in the prior-year quarter. For the first six months of fiscal 2024, revenue rose 10.6% to $413.09 million. Year-to-date net income was $10.45 million, a swing from a year-to-date loss.
The profit improvement came with modest top-line momentum and a clear cost story. Non-GAAP income from operations was $39.3 million, and non-GAAP operating margin was 18.9%, compared with 6.8% in the prior-year quarter. Non-GAAP net income was $41.6 million in the quarter, and non-GAAP diluted earnings per share were $0.58. Adjusted EBITDA was $45.4 million. Operating cash flow was $32.86 million, up 5.0%. Year-to-date operating cash flow was $63.93 million, up 72.1%. Free cash flow, a non-GAAP measure, was $29.2 million in the quarter and $56.7 million year to date. Capital expenditures were $0.28 million, down 80.3%, and year-to-date capital expenditures were $0.90 million, down 75.7%. The company continued to reduce its cost base under the restructuring plan that concluded in the first quarter of fiscal 2024.
ARR and customer metrics showed steady but slower expansion. Annualized recurring revenue was $815.6 million as of June 30, 2024, up 8.6% year over year. Rapid7 had 11,484 customers, up 1.7%. ARR per customer was $71.0, up 6.8%. Deferred revenue, current portion, was $437.22 million, up 1.8%. Preliminary second quarter ARR was $814 million to $816 million, an increase of 8% to 9% year over year. The customer count grew more slowly than ARR, which lifted ARR per customer.
The quarter also brought organizational changes. Rapid7 promoted three long-tenured sales leaders to general manager roles. David Boffa will lead the Americas, David Howorth will lead EMEA, and Rob Dooley will lead APAC. Each will be responsible for retention, expansion, and new customer acquisition in their region, reporting to the chief executive officer. The chief customer officer stepped down effective July 12, 2024, and the company does not plan to replace the role. On July 3, 2024, Rapid7 acquired Noetic Cyber, a provider of cyber asset attack surface management, for approximately $39.2 million. The deal includes up to $20.0 million in contingent consideration, with a portion payable in stock subject to continued employment.
Risks remain visible. Rapid7 cited growing macroeconomic uncertainty, unstable market and economic conditions, and fluctuations in quarterly results. It also flagged the ability to grow cloud-based solutions, the shift to a consolidated platform sales approach, the effectiveness of its restructuring plan, renewals of customer subscriptions, competition, market growth, and integration of acquisitions. The company plans to report full second quarter 2024 results on August 6, 2024. The preliminary ARR figure remains subject to closing and review procedures.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q2 FY2024 | Q1 FY2024 | QoQ | Q2 FY2023 | YoY |
|---|---|---|---|---|---|
| Revenue | $208.0M | $205.1M | +1.4% | $190.4M | +9.2% |
| Gross profit | $147.1M | $144.2M | +2.0% | $132.3M | +11.3% |
| Gross margin | 70.7% | 70.3% | +0.4 pp | 69.5% | +1.3 pp |
| Research & development | $40.1M | $41.0M | -2.3% | $50.8M | -21.1% |
| Sales & marketing | $77.8M | $72.8M | +6.9% | $83.0M | -6.3% |
| General & administrative | $22.4M | $19.8M | +13.0% | $22.9M | -2.1% |
| Total operating expenses | $140.3M | $133.6M | +5.0% | $183.9M | -23.7% |
| Operating income (loss) | $6.9M | $10.6M | -34.9% | -$51.7M | +113.3% |
| Operating margin | 3.3% | 5.2% | -1.8 pp | -27.1% | +30.4 pp |
| Net income (loss) | $8.2M | $2.3M | +262.9% | -$66.8M | +112.3% |
| Net margin | 3.9% | 1.1% | +2.8 pp | -35.1% | +39.0 pp |
| Diluted EPS | $0.11 | $0.03 | +$0.08 | -$1.10 | +$1.21 |
Risks
The company disclosed an initial assessment from the Israel Tax Authority of approximately 324 million Israeli New Shekels related to fiscal year 2021 operations of one Israel subsidiary. If Rapid7 is unsuccessful in sustaining its tax position, its financial condition and results of operations would be adversely affected.
The company added a risk that actions or proposals from activist stockholders could disrupt business and operations, divert board and management attention, create perceived uncertainties about strategy, and trigger significant legal and proxy solicitation costs.
SaaS KPIs
All quarters →Free Cash Flow
ARR per Customer
Number of Customers
Annualized Recurring Revenue (ARR)
Non-GAAP Operating Margin
Non-GAAP Income from Operations
Total revenue
Summary, forecast, risks and KPIs are extracted from Rapid7, Inc.'s SEC filings for Q2 FY2024 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 2, 2026.