Summary
Rapid7's fiscal 2024 third quarter showed steady growth and much better profitability. Total revenue for the quarter ended September 30, 2024 was $214.7 million, up 8.0% year over year. Annualized recurring revenue was $823 million, up 6% year over year. The customer count reached 11,619, up 2%, and ARR per customer was $70.8, up 4%. Recurring revenue was 96% of total revenue, compared with 95% in the prior-year quarter. Product subscriptions revenue rose 8% year over year, while professional services revenue rose 1%.
Profitability improved sharply. GAAP operating income was $14.0 million, compared with a loss a year earlier. GAAP net income was $16.6 million, compared with a loss a year earlier. Diluted GAAP earnings per share was $0.22, compared with a loss a year earlier. Non-GAAP operating income was $44 million, and non-GAAP diluted earnings per share was $0.66. Adjusted EBITDA was $50.1 million. The gap between GAAP and non-GAAP results remains wide because of stock-based compensation and other adjustments.
Margins and cash flow told a mixed story. GAAP gross margin was 70.6%, down 0.3 percentage points year over year. GAAP operating margin was 6.5%, up 14.6 percentage points. Gross profit was $151.6 million, up 7.5%. Net cash provided by operating activities was $44.0 million, up $40.3 million. Capital expenditures were $1.3 million, up $1.05 million. Free cash flow, a non-GAAP measure, was $39 million. Deferred revenue, current portion, was $423.6 million, roughly flat with a 0.4% increase. For the first nine months of fiscal 2024, revenue was $627.7 million, up 9.7%; operating income was $31.4 million, compared with a loss a year earlier; net income was $27.0 million, compared with a loss a year earlier; and diluted EPS was $0.36, compared with a loss a year earlier.
Operationally, Rapid7 launched its Command Platform in August and added Vector Command in September. It also expanded Managed Threat Complete with third-party detections for CrowdStrike Falcon, SentinelOne Singularity Endpoint, and Microsoft Defender for Endpoint. The company was named a leader in two IDC MarketScape assessments for SIEM. In July 2024, it acquired Noetic Cyber for a purchase price with an aggregate fair value of $51.0 million, including $38.6 million in cash paid at closing and $12.1 million of contingent consideration. The deal includes up to $20.0 million in earnout consideration. Management says the sales pipeline is stronger and the new Command platform is seeing early positive traction.
Guidance points to slower near-term growth and steady profitability. For the fourth quarter of 2024, Rapid7 guides revenue to $211 million to $213 million, ARR to $835 million to $845 million, non-GAAP income from operations to $33 million to $35 million, and non-GAAP net income per share to $0.48 to $0.51. The fourth-quarter revenue range implies 3% to 4% year-over-year growth, and the ARR range implies 4% to 5% growth. For the full fiscal year 2024, the company guides revenue to $839 million to $841 million, or 8% growth; non-GAAP income from operations to $157 million to $159 million; non-GAAP net income per share to $2.28 to $2.31; and free cash flow to $145 million to $155 million.
Risks remain familiar for a cybersecurity vendor. Management cites growing macroeconomic uncertainty, unstable market and economic conditions, and quarterly fluctuations. The shift to a consolidated platform sales approach must succeed, and the restructuring plan must deliver its intended benefits. Rapid7 also faces the risk that it fails to meet its publicly announced guidance, cannot sustain its revenue growth rate, or sees slower renewal of customer subscriptions. Competition, market growth, product performance, innovation, sales cycles, acquisition integration, activist stockholders, tax liabilities, and legal compliance are all listed concerns. The flat deferred revenue and 2% customer growth suggest that expansion is not uniform. Gross margin also slipped 0.3 percentage points year over year. The company's improving profit and cash flow are real, but the fourth-quarter revenue growth outlook is slower than the third quarter's 8.0% pace.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q3 FY2024 | Q2 FY2024 | QoQ | Q3 FY2023 | YoY |
|---|---|---|---|---|---|
| Revenue | $214.7M | $208.0M | +3.2% | $198.8M | +8.0% |
| Gross profit | $151.6M | $147.1M | +3.1% | $141.0M | +7.5% |
| Gross margin | 70.6% | 70.7% | -0.1 pp | 70.9% | -0.3 pp |
| Research & development | $44.6M | $40.1M | +11.3% | $39.9M | +11.6% |
| Sales & marketing | $74.5M | $77.8M | -4.2% | $75.7M | -1.6% |
| General & administrative | $18.6M | $22.4M | -17.1% | $17.9M | +4.1% |
| Total operating expenses | $137.7M | $140.3M | -1.8% | $157.1M | -12.3% |
| Operating income (loss) | $14.0M | $6.9M | +102.9% | -$16.0M | +187.0% |
| Operating margin | 6.5% | 3.3% | +3.2 pp | -8.1% | +14.6 pp |
| Net income (loss) | $16.6M | $8.2M | +102.0% | -$76.6M | +121.6% |
| Net margin | 7.7% | 3.9% | +3.8 pp | -38.5% | +46.2 pp |
| Diluted EPS | $0.22 | $0.11 | +$0.11 | -$1.25 | +$1.47 |
Risks
JANA Partners Management, LP reported an approximate 5.8% beneficial ownership interest in Rapid7 common stock as of September 2024. Responding to activist actions could be costly and time-consuming, disrupt operations, divert management and board attention, and create uncertainty about strategic direction, including a possible proxy contest.
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
Non-GAAP gross margin
Adjusted EBITDA
Recurring revenue as % of total revenue
Total revenue
Summary, forecast, risks and KPIs are extracted from Rapid7, Inc.'s SEC filings for Q3 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 6, 2026.