Summary
Rapid7 ended fiscal 2024 with fourth quarter revenue of $216.26 million, up 5.4% from the prior-year quarter. Full-year revenue reached $844.01 million, up 8.5%. The growth came alongside ARR of $840 million, up 4% year over year. Customer count was 11,727, up 2%, and ARR per customer was $71.6, up 2%. Profitability at the GAAP level moved in the opposite direction in the quarter. Gross profit was $149.99 million, up 3.3%, but gross margin slipped to 69.4%, down 1.4 percentage points. Operating income fell to $3.63 million, down 50.8%. Operating margin was 1.7%, down 1.9 percentage points. Net income was $2.17 million, down 88.6%.
The full-year GAAP picture improved sharply. Gross profit for fiscal 2024 was $592.97 million, up 8.7%, and gross margin was 70.3%, flat versus the prior year. Operating income was $35.04 million, up 141.6% and a swing to a profit. Full-year operating margin was 4.2%, up 15.0 percentage points. Net income was $25.53 million, up 116.7% and a swing to a profit. Diluted earnings per share for the year were $0.40, up $2.92 and a swing to a profit. Cash generation also expanded. Full-year net cash provided by operating activities was $171.67 million, up 64.6%. Fourth quarter net cash provided by operating activities was $63.77 million, flat with 0.5% growth. Capital expenditures were $1.18 million in the quarter, up 222.3%, and $3.42 million for the year, down 21.6%. Free cash flow, a non-GAAP measure, was $154 million for the full year and $58.8 million in the fourth quarter. Current deferred revenue was $461.12 million at December 31, 2024, up 1.2%. Non-GAAP operating income for the full year was $164 million, non-GAAP diluted earnings per share was $2.28, and adjusted EBITDA was $188.5 million.
Management's guidance points to slower growth in 2025. First quarter revenue is expected between $207 million and $209 million, with year-over-year growth of 1% to 2%. Full-year 2025 revenue is guided to $860 million to $870 million, with growth of 2% to 3%. ARR guidance for the first quarter is $870 million to $890 million, up 4% to 6% year over year. The company expects first quarter non-GAAP income from operations of $23 million to $25 million and full-year non-GAAP income from operations of $125 million to $135 million. Non-GAAP diluted earnings per share guidance is $0.33 to $0.36 for the first quarter and $1.72 to $1.85 for the full year. Full-year free cash flow is guided to approximately $135 million. The non-GAAP guidance excludes stock-based compensation, amortization of acquired intangible assets, amortization of debt issuance costs, and certain other items.
Several risks and commitments sit alongside the results. Rapid7 lists macroeconomic uncertainty, unstable market and economic conditions, quarterly fluctuations, the ability to grow cloud-based solutions, the shift to a consolidated platform sales approach, the effectiveness of the restructuring plan completed in fiscal 2024, failure to meet publicly announced guidance, sustaining revenue growth, product detection accuracy, subscription renewals, competition, market growth, innovation, sales cycles, acquisition integration, tax liabilities, and compliance with laws. In January 2025, Rapid7 entered a cloud services agreement with a minimum annual commitment 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. The company's credit facility matured on December 22, 2024, and it intends to execute a new credit facility. Its 2025 Notes mature on May 1, 2025. Rapid7 also corrected an immaterial error tied to stock-based compensation for certain RSUs and PSUs granted in fiscal 2023 and 2024. The correction increased additional paid-in capital and accumulated deficit by approximately $3.6 million as of December 31, 2023 and by $7.2 million as of September 30, 2024. The company said the correction did not change net cash provided by operating activities, ARR, revenue, non-GAAP results, or free cash flow. Operational highlights in the quarter included Managed Extended Detection and Response coverage for Microsoft security telemetry and AWS environments, Exposure Command support for AWS Resource Control Policies, a FedRAMP In Process designation for the InsightGovCloud platform, and a Security Vendor of the Year award from the CRN Channel Awards 2024.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q4 FY2024 | Q3 FY2024 | QoQ | Q4 FY2023 | YoY |
|---|---|---|---|---|---|
| Revenue | $216.3M | $214.7M | +0.7% | $205.3M | +5.4% |
| Gross profit | $150.0M | $151.6M | -1.1% | $145.5M | +3.1% |
| Gross margin | 69.4% | 70.6% | -1.3 pp | 70.9% | -1.5 pp |
| Research & development | $47.5M | $44.6M | +6.6% | $39.7M | +19.6% |
| Sales & marketing | $73.7M | $74.5M | -1.1% | $73.3M | +0.5% |
| General & administrative | $25.2M | $18.6M | +35.4% | $19.3M | +30.3% |
| Total operating expenses | $146.4M | $137.7M | +6.3% | $134.6M | +8.8% |
| Operating income (loss) | $3.6M | $14.0M | -74.0% | $10.9M | -66.8% |
| Operating margin | 1.7% | 6.5% | -4.8 pp | 5.3% | -3.7 pp |
| Net income (loss) | -$1.5M | $16.6M | -108.9% | $20.0M | -107.4% |
| Net margin | -0.7% | 7.7% | -8.4 pp | 9.8% | -10.4 pp |
| Diluted EPS | $0.40 | $0.22 | +$0.18 | $0.33 | +$0.07 |
Risks
Prolonged economic uncertainty and inflation have caused sales-cycle delays, customers failing to renew at anticipated scope, requests for payment term deferrals, and pricing or bundling concessions. MD&A shows total revenue growth slowed to 8.5% in FY2024 from 13.5% in FY2023 and ARR growth slowed to 4.2% from 12.8%.
The business depends on customers renewing and expanding subscriptions, and renewal rates may decline or fluctuate due to satisfaction, pricing, economic conditions, or competitive offerings. MD&A shows ARR growth slowed to 4.2% in FY2024 from 12.8% in FY2023 and ARR per customer growth slowed to 2.5% from 7.0%.
Market acceptance of the Command Platform and the shift to a consolidated platform sales approach is critical; if consolidation offerings such as Threat Complete and Cloud Risk Complete do not gain widespread adoption, financial results and competitive position could suffer. MD&A highlights the customer-driven shift to consolidated security platforms and Rapid7's strategic focus on SecOps consolidation.
Revenue derived through channel partners increased to approximately 68% in FY2024 from 62% in FY2023 and 57% in FY2022, and partner agreements are non-exclusive. If partners emphasize their own or competitors' products, Rapid7's growth and international sales could be harmed.
The 2025 Notes became convertible on November 1, 2024 and mature May 1, 2025, while the credit facility matured December 22, 2024. In January 2025, Rapid7 entered a cloud-services agreement with a $125.0 million annual minimum commitment over five years plus $35.0 million, an aggregate $660.0 million commitment, increasing liquidity and refinancing risk.
Competitors may more successfully incorporate AI into their products, gain or leverage superior access to AI technologies, and achieve higher market acceptance of AI solutions. MD&A notes cyberattacks leveraging AI and describes Rapid7's technology as AI infused, making competitive AI execution important.
The length and unpredictability of the sales cycle, particularly with large enterprises and complex IT requirements, makes timing difficult to forecast and can cause lost opportunities or unbudgeted expenses. MD&A attributes only $6.1 million of the $66.3 million FY2024 revenue increase to new customers, versus $60.2 million from existing customers.
JANA Partners reported approximately 5.8% beneficial ownership as of December 17, 2024, and activist actions could be costly, divert management attention, and create perceived uncertainties about strategy that affect hiring and customer relationships.
The August 2023 Restructuring Plan reduced the workforce by approximately 16% and was completed as of March 31, 2024, but may not achieve intended benefits. Risks include employee attrition beyond the planned reduction, damage to corporate culture and morale, and loss of institutional knowledge.
SaaS KPIs
All quarters →Free Cash Flow
ARR per Customer
Number of Customers
Non-GAAP Operating Margin
Non-GAAP gross margin
Summary, forecast, risks and KPIs are extracted from Rapid7, Inc.'s SEC filings for Q4 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.