Summary
Rapid7 reported total revenue of $214.19 million for the quarter ended June 30, 2025, up 3.0% from $207.99 million in the prior-year quarter. Product subscriptions revenue of $208.1 million rose 4%, while professional services revenue of $6.1 million fell 23%. Management attributed the top-line gain to a $9.1 million increase in revenue from existing customers, partly offset by a $2.9 million decrease in revenue from new customers. Annualized recurring revenue was $840.6 million, up 3.1% year over year. The customer count reached 11,643, up 1.4%, and ARR per customer was $72.2, up 1.7%.
Gross profit was $151.13 million for the quarter, up 2.8%, and GAAP gross margin was 70.6%, down from 70.7%. Operating income fell 33.1% to $3.49 million, and operating margin was 1.6%, down from 2.5%. Net income rose 27.5% to $8.34 million, and diluted EPS was $0.13, up from $0.09. Non-GAAP income from operations was $36.3 million, down from $39.3 million, and adjusted EBITDA was $42.6 million. Non-GAAP operating margin was 17.0%, down from 18.9%. Research and development expense rose $6.8 million, or 16.8%, on higher personnel costs and third-party cloud infrastructure spending for new product development. Sales and marketing expense rose 1.4%, while general and administrative expense fell $2.0 million, helped by lower charitable contributions and taxes.
Cash generation strengthened. Net cash provided by operating activities was $47.54 million for the quarter, up 44.7% from $32.86 million a year earlier. Free cash flow, a separate non-GAAP measure, was $42.28 million, compared with $29.21 million. Capital expenditures, meaning purchases of property and equipment, were $0.95 million, up 238.6%. Deferred revenue, current portion only, was $446.69 million at June 30, 2025, up 2.2%. The balance sheet held $261.3 million in cash and cash equivalents and $338.4 million in investments, alongside an accumulated deficit of $1.0 billion. In June 2025 the company entered a $200.0 million revolving credit facility and disclosed a $660.0 million total commitment under a cloud services agreement.
For the first six months of 2025, revenue was $424.45 million, up 2.7%, and gross profit was $301.91 million, up 3.7%. Year-to-date gross margin was 71.1%, up 0.7 percentage points. Operating income fell 77.3% to $3.39 million, and the year-to-date operating margin was 0.8%, down 2.8 percentage points. Net income rose 31.5% to $10.44 million, and diluted EPS was $0.16 versus $0.11. Operating cash flow for the six months was $77.30 million, up 20.9%.
Guidance for the third quarter of 2025 calls for ARR of $850 million to $865 million, non-GAAP income from operations of $29 million to $31 million, and non-GAAP net income per share of $0.44 to $0.47. For the full year 2025, the company targets non-GAAP income from operations of $125 million to $135 million, non-GAAP net income per share of $1.90 to $2.03, and free cash flow of $125 million to $135 million. Management flagged macroeconomic uncertainty, competition, the ability to sustain revenue growth, and customer subscription renewals among the risks. Two other items stood out. CFO Tim Adams, in the role since January 2022, plans to retire, and a search for a successor is under way. On the product side, July brought the launch of Incident Command, an AI-native SIEM, FedRAMP authorization for the InsightGovCloud platform, and Active Patching powered by Automox. Rapid7 was also named a Leader in the 2025 Frost Radar for Managed Detection and Response. The company noted an immaterial correction of an error tied to prior-year stock-based compensation.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q2 FY2025 | Q1 FY2025 | QoQ | Q2 FY2024 | YoY |
|---|---|---|---|---|---|
| Revenue | $214.2M | $210.3M | +1.9% | $208.0M | +3.0% |
| Gross profit | $151.1M | $150.8M | +0.2% | $147.1M | +2.7% |
| Gross margin | 70.6% | 71.7% | -1.1 pp | 70.7% | -0.2 pp |
| Research & development | $47.2M | $47.9M | -1.4% | $40.1M | +17.9% |
| Sales & marketing | $79.2M | $79.4M | -0.2% | $77.8M | +1.9% |
| General & administrative | $21.2M | $23.6M | -10.3% | $22.4M | -5.6% |
| Total operating expenses | $147.6M | $150.9M | -2.1% | $140.3M | +5.3% |
| Operating income (loss) | $3.5M | -$101.0K | +3559.4% | $6.9M | -49.2% |
| Operating margin | 1.6% | -0.1% | +1.7 pp | 3.3% | -1.7 pp |
| Net income (loss) | $8.3M | $2.1M | +296.1% | $8.2M | +1.7% |
| Net margin | 3.9% | 1.0% | +2.9 pp | 3.9% | -0.0 pp |
| Diluted EPS | $0.13 | $0.03 | +$0.10 | $0.11 | +$0.02 |
Risks
Total revenue year-over-year growth was 3.0% for the three months ended June 30, 2025 compared with 9.2% for the prior-year quarter, and ARR year-over-year growth was 3.1% as of June 30, 2025 compared with 8.6% as of June 30, 2024. Revenue from new customers decreased by $2.9 million in the quarter, offsetting existing-customer growth.
GAAP operating income was down 33.1% in the quarter and down 77.3% for the six months ended June 30, 2025, and GAAP operating margin was down to 1.6% from 2.5% in the quarter and to 0.8% from 3.6% year to date. Non-GAAP operating margin was 17.0% in the quarter compared with 18.9% in the prior-year quarter.
Professional services revenue decreased 23.1% in the three months ended June 30, 2025 and 22.9% in the six months ended June 30, 2025, while professional services gross margin was 4.5% in the quarter compared with 25.7% in the prior-year quarter.
In January 2025 the company entered a cloud-services agreement with minimum annual commitments of $125.0 million per year over the next five years, plus an additional $35.0 million obligation, for an aggregate total commitment of $660.0 million, creating fixed cash obligations.
The new $200.0 million revolving credit facility contains affirmative and negative covenants, including a minimum interest coverage ratio and a maximum net leverage ratio, and matures on its fifth anniversary or 91 days prior to certain note maturities if specified liquidity conditions are not satisfied.
The One Big Beautiful Bill Act, signed July 4, 2025, changes corporate income tax and deferred tax accounting under ASC 740, and the company is still evaluating the impact on its business, financial condition, and results of operations.
SaaS KPIs
All quarters →Free Cash Flow
ARR per Customer
Number of Customers
Annualized Recurring Revenue (ARR)
Non-GAAP Operating Margin
Summary, forecast, risks and KPIs are extracted from Rapid7, Inc.'s SEC filings for Q2 FY2025 (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 6, 2026.