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  4. [8-K] Rapid7, Inc. Reports Material Event

Rapid7 (RPD) trims workforce 12% as Q2 2026 profit, cash flow stay solid

Filing Impact
(High)
Filing Sentiment
(Neutral)
Form Type
8-K

Rhea-AI Filing Summary

Rapid7, Inc. reported results for the quarter ended June 30, 2026 and outlined a major restructuring. Total revenue was $210.9 million, down 1.5% year-over-year, with product subscriptions revenue of $205.1 million. Annualized recurring revenue (ARR) was $824.0 million, a 2.0% year-over-year decline. The company generated GAAP income from operations of $3.0 million, GAAP net income of $6.1 million, and non-GAAP income from operations of $28.9 million. Non-GAAP net income was $33.0 million, or $0.44 per diluted share. Net cash provided by operating activities was $37.0 million, with free cash flow of $31.9 million. Cash, cash equivalents and government securities totaled $702.6 million as of June 30, 2026.

The board approved a 2026 Restructuring Plan, including a workforce reduction of approximately 12%, intended to simplify operations and focus investment on core platform and AI capabilities. Rapid7 expects $10–$11 million in restructuring charges, primarily severance and related costs, largely incurred in the third and fourth quarters of 2026. For the third quarter 2026, the company guides to revenue of $208–$210 million, non-GAAP income from operations of $34–$36 million, and non-GAAP diluted EPS of $0.44–$0.47. Full-year 2026 guidance includes revenue of $837–$841 million, non-GAAP income from operations of $129–$133 million, non-GAAP diluted EPS of $1.78–$1.83, ARR of approximately $812 million with (3)% growth, and free cash flow of about $130 million.

Positive

  • Returned to GAAP profitability with strong non-GAAP margins, posting GAAP net income of $6.1 million and non-GAAP income from operations of $28.9 million in Q2 2026.
  • Solid cash generation and liquidity, with Q2 free cash flow of $31.9 million and total cash, cash equivalents and government securities of $702.6 million as of June 30, 2026.
  • Robust non-GAAP earnings outlook, guiding 2026 non-GAAP income from operations to $129–$133 million and non-GAAP diluted EPS to $1.78–$1.83, plus approximately $130 million of free cash flow.

Negative

  • Top-line contraction, with Q2 2026 revenue of $210.9 million down 1.5% year-over-year and ARR of $824.0 million down 2.0%.
  • Guided for continued revenue and ARR decline, forecasting Q3 2026 ARR of approximately $812 million with (3)% growth and full-year revenue down 2–3% year-over-year.
  • Material workforce reduction and restructuring, eliminating about 12% of staff and incurring $10–$11 million of restructuring charges primarily in the second half of 2026.

Filing Explained

Restructuring is underway; most of the estimated $10–$11 million charges are expected in Q3–Q4 2026, with completion targeted by year-end.

This Form 8-K reports a specified material event. The 2026 Restructuring Plan is underway: about 12% of the workforce was notified that positions would be affected, creating estimated cash obligations while changing the company’s workforce structure.

The company estimates $10–$11 million of charges, primarily for severance and related employee costs; substantially all are expected to be paid in the third and fourth quarters of 2026. Non-cash charges, including accelerated vesting of share-based awards, are not expected to be significant.

For the quarter ended June 30, 2026, the statements record $1,675 thousand of restructuring expense.

The balance sheet shows convertible senior notes of $598,206 thousand in current liabilities and $296,020 thousand in non-current liabilities at June 30, 2026, compared with $0 current and $892,284 thousand non-current at December 31, 2025.

Execution, including cash payments, is targeted to be substantially complete by the end of the fourth quarter, but local-law and consultation requirements may extend position eliminations beyond that milestone, and actual charges may differ from the estimate.

Item 2.02 Results of Operations and Financial Condition Financial
Disclosure of earnings results, typically an earnings press release or preliminary financials.
Item 2.05 Costs Associated with Exit or Disposal Activities Financial
The company committed to an exit plan involving layoffs, facility closures, or restructuring charges.
Item 9.01 Financial Statements and Exhibits Exhibits
Financial statements, pro forma financial information, and exhibit attachments filed with this report.
Q2 2026 Total Revenue $210.9 million Quarter ended June 30, 2026; down 1.5% year-over-year
Q2 2026 ARR $824.0 million Annualized recurring revenue; 2.0% year-over-year decline
Q2 2026 GAAP Net Income $6.1 million Net income for the quarter ended June 30, 2026
Q2 2026 Non-GAAP Net Income $33.0 million Non-GAAP net income; $0.44 per diluted share
Q2 2026 Free Cash Flow $31.9 million Free cash flow for the quarter ended June 30, 2026
Cash and Investments $702.6 million Cash, cash equivalents and government securities as of June 30, 2026
Workforce Reduction Approximately 12% Reduction under the 2026 Restructuring Plan
Expected Restructuring Charges $10–$11 million Primarily severance and related costs in 2026
Annualized recurring revenue financial
"Annualized recurring revenue of $824.0 million, a decrease of 2.0% year-over-year."
Annualized recurring revenue is the predictable income a business expects to earn over a year from ongoing customer subscriptions or contracts. It’s similar to estimating how much money you would make in a year if your current monthly income stayed the same. Investors use this figure to assess the stability and growth potential of a company's revenue stream.
free cash flow financial
"Net cash provided by operating activities of $37.0 million and free cash flow of $31.9 million."
Free cash flow is the amount of money a company has left over after paying all its expenses and investing in its business, like buying equipment or updating facilities. It shows how much cash is available to reward shareholders, pay down debt, or save for future growth. This helps investors understand if a company is financially healthy and able to grow.
convertible senior notes financial
"We use the if-converted method to compute diluted earnings per share with respect to our convertible senior notes."
Convertible senior notes are a type of loan that a company issues to investors, which can be turned into company shares later on. They are called "senior" because they are paid back before other debts if the company runs into trouble. This allows investors to earn interest like a loan but also have the chance to own part of the company if its value rises.
Adjusted EBITDA financial
"Adjusted EBITDA is a non-GAAP measure that we define as net income (loss) before (1) interest income..."
Adjusted EBITDA is a way companies measure how much money they make from their core operations, like running a business, by removing certain costs or income that aren’t part of regular business activities. It helps investors see how well a company is doing without distractions from unusual expenses or gains, making it easier to compare companies or track performance over time.
restructuring expense financial
"We exclude non-ordinary course restructuring expenses related to the restructuring activities..."
Restructuring expense are one-time costs a company incurs when it reorganizes its operations, such as layoffs, closing facilities, contract termination fees, or moving equipment—think of it like paying to remodel a house to change its layout. Investors care because these charges reduce reported profits in the short term but can signal efforts to cut future costs or, conversely, deeper business problems if they happen repeatedly.
Total Revenue $210.9 million Decrease of 1.5% year-over-year
GAAP Net Income $6.1 million Down from $8.3 million in prior-year quarter
Non-GAAP Diluted EPS $0.44 Compared to $0.58 in prior-year quarter
ARR $824.0 million Decrease of 2.0% year-over-year
Free Cash Flow $31.9 million Down from $42.3 million in prior-year quarter
Guidance

For Q3 2026, revenue $208–$210 million, non-GAAP income from operations $34–$36 million, non-GAAP diluted EPS $0.44–$0.47. For full-year 2026, revenue $837–$841 million, non-GAAP income from operations $129–$133 million, non-GAAP diluted EPS $1.78–$1.83, free cash flow about $130 million, ARR approximately $812 million with (3)% growth.

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FAQ

How did Rapid7 (RPD) perform financially in the second quarter of 2026?
Rapid7 reported Q2 2026 revenue of $210.9 million, down 1.5% year-over-year, with ARR of $824.0 million down 2.0%. It generated GAAP net income of $6.1 million and non-GAAP net income of $33.0 million.

What restructuring actions did Rapid7 (RPD) announce in 2026?
Rapid7 approved a 2026 Restructuring Plan that includes reducing its workforce by approximately 12%. The company expects $10–$11 million of primarily cash restructuring charges, largely in Q3 and Q4 2026, mainly for severance and related employee costs.

What guidance did Rapid7 (RPD) give for third quarter 2026?
For Q3 2026, Rapid7 anticipates revenue of $208–$210 million, non-GAAP income from operations of $34–$36 million, and non-GAAP diluted EPS of $0.44–$0.47. It also guides to ARR of approximately $812 million with (3)% year-over-year growth.

What is Rapid7’s (RPD) full-year 2026 outlook?
For 2026, Rapid7 guides to revenue of $837–$841 million, non-GAAP income from operations of $129–$133 million, and non-GAAP diluted EPS of $1.78–$1.83. It also expects approximately $130 million in free cash flow.

How strong is Rapid7’s (RPD) cash position after Q2 2026?
As of June 30, 2026, Rapid7 held $702.6 million in cash, cash equivalents and government securities. During Q2 it generated $37.0 million in operating cash flow and $31.9 million in free cash flow, supporting liquidity and investment capacity.

What profitability metrics did Rapid7 (RPD) report for Q2 2026?
Rapid7 posted GAAP income from operations of $3.0 million and GAAP net income of $6.1 million in Q2 2026. On a non-GAAP basis, income from operations was $28.9 million and net income was $33.0 million, or $0.44 per diluted share.
0001560327false00015603272026-05-052026-05-05

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 8-K
 
CURRENT REPORT

Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 7, 2026
Rapid7, Inc.
(Exact name of registrant as specified in its charter)
 
Delaware001-3749635-2423994
(State or other jurisdiction
of incorporation)		(Commission
File Number)		(IRS Employer
Identification No.)
120 Causeway Street,
Boston,Massachusetts02114
(Address of principal executive offices), including zip code
(617) 247-1717
(Registrant’s telephone number, including area code)
Not Applicable
(Former name, or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:
Title of each classTrading symbol(s)Name of each exchange on which registered
Common Stock, $0.01 par value per shareRPDThe Nasdaq Global Market
Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company  ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐




Item 2.02Results of Operations and Financial Condition.
On August 10, 2026, Rapid7, Inc. (the “Company”) issued a press release announcing its financial results for the fiscal quarter ended June 30, 2026. The Company’s press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
The information included in this Item 2.02 and in the accompanying Exhibit 99.1 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing.
Item 2.05Costs Associated with Exit or Disposal Activities.
On August 7, 2026, the board of directors of the Company approved a restructuring plan that is designed to simplify the Company's operations, align resources and investments with its core platform, and create capacity to reinvest in capabilities and solutions that improve the customer experience and strengthen the Company's competitive position (collectively, the “2026 Restructuring Plan”). The 2026 Restructuring Plan includes a reduction of the Company’s workforce by approximately 12%.

The Company estimates that it will incur approximately $10-$11 million in charges in connection with the 2026 Restructuring Plan, consisting primarily of cash charges for employee transition, notice period and severance payments, employee benefits and related facilitation costs. The Company also expects to incur certain non-cash charges, including in connection with the accelerated vesting of share-based awards, which it does not expect to be significant. The Company expects that the majority of the restructuring charges will be incurred in the third and fourth quarters of 2026 and that the execution of the 2026 Restructuring Plan, including cash payments, will be substantially complete by the end of the fourth quarter of 2026.

Potential position eliminations in each country are subject to local law and consultation requirements, which may extend this process beyond the fourth quarter of 2026 in certain countries. The charges that we expect to incur are subject to a number of assumptions, including local law requirements in various jurisdictions, and actual expenses may differ materially from the estimates disclosed above.

Cautionary Language Concerning Forward-Looking Statements

This Current Report on Form 8-K 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, statements regarding the 2026 Restructuring Plan, including the expected timing of its completion, the amount and timing of expected charges, the expected benefits of the 2026 Restructuring Plan, and our strategy, business plans and focus. 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, macroeconomic uncertainty, unstable market and economic conditions, fluctuations in our quarterly results, the possibility that the 2026 Restructuring Plan may not achieve its intended benefits or may take longer than anticipated to complete or result in charges greater than currently estimated, our ability to successfully grow our sales of our cloud-based solutions, including through the shift to a consolidated platform sales approach, failure to meet our publicly announced guidance or other expectations about our business, our ability to grow our revenue, the ability of our products and professional services to correctly detect vulnerabilities, renewal of our customers’ subscriptions, competition in the markets in which we operate, market growth, our ability to innovate, our sales cycles, our ability to successfully develop, deploy and realize the expected benefits of our artificial intelligence and automation capabilities, including risks related to performance, reliability, security and customer adoption of such technologies, our ability to successfully integrate acquired companies, including Kenzo Security, and achieve the expected synergies and benefits of such acquisitions in a timely manner or at all, exposure to greater than anticipated tax liabilities, our ability to operate in compliance with applicable laws, fluctuations in foreign currency exchange rates and their impact on our results, risks related to the accuracy, efficacy and perceived reliability of our threat intelligence, detection and response capabilities, including the potential for undetected vulnerabilities, false positives or failures in our systems, 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 Quarterly Report on Form 10-Q filed with the SEC on May 5, 2026, particularly in the section entitled “Item 1A. 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


and uncertainties 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 Current Report on Form 8-K.
Item 9.01Financial Statements and Exhibits.
 
(d)Exhibits
Exhibit No.  Description
99.1  
Press Release, dated as of August 10, 2026
104Cover Page Interactive Data File (embedded within the inline XBRL document)


SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
Rapid7, Inc.
Dated: August 10, 2026
By:/s/ Rafeal E. Brown
Rafeal E. Brown
Chief Financial Officer


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Exhibit 99.1
Rapid7 Announces Second Quarter 2026 Financial Results
•Annualized recurring revenue (“ARR”) of $824 million
•Total revenue of $211 million; Product subscriptions revenue of $205 million
•GAAP income from operations of $3.0 million; Non-GAAP income from operations of $28.9 million
•Net cash provided by operating activities of $37 million; Free cash flow of $31.9 million

Boston, MA – August 10, 2026 – Rapid7, Inc. (Nasdaq: RPD), a global leader in AI-powered managed cybersecurity operations, today announced its financial results for the second quarter 2026.

“Rapid7 is a good company ready to be great, but getting there requires clear choices, strong execution, and the discipline to focus on what matters most," said Wael Mohamed, CEO of Rapid7. "Since stepping into this role, I've been listening closely to our customers, our people, and our partners, and the message is consistent: they want us to go deeper in Detection and Response and Exposure Management, not wider. The steps we're taking align our resources and investment behind our core platform and the AI foundation that connects it, giving us more capacity to invest, innovate, and serve our customers well.

Over the past year, we've been building the leadership team to take Rapid7 into its next chapter, adding Rafe as Chief Financial Officer to strengthen our operating discipline, Allan as Chief Commercial Officer to help us scale and win with customers, and Dejan as Chief Product and Technology Officer to build an AI-first platform. Now, we have taken decisive action to align our operating model and our future product investments in a direction that supports the future of the company and our industry.”
Second Quarter 2026 Financial Highlights

•Revenue: Total revenue of $210.9 million, a decrease of 1.5% year-over-year. Product revenue of $205.1 million, a decrease of 1.5% year-over-year.
•ARR: Annualized recurring revenue of $824.0 million, a decrease of 2.0% year-over-year.
•Operating Income: GAAP income from operations of $3.0 million; Non-GAAP income from operations of $28.9 million.
•Net Income: GAAP net income of $6.1 million or $0.09 per diluted share and non-GAAP net income of $33.0 million or $0.44 per diluted share.
•Cash Flow: Net cash provided by operating activities of $37.0 million and free cash flow of $31.9 million.
•Total cash, cash equivalents, and government securities of $702.6 million as of June 30, 2026.
Recent Business Highlights
 
•In July, Rapid7 announced general availability of Rapid7 Cyber Governance Risk and Compliance, becoming the first major security operations platform to connect GRC workflows with live Security Operations data in one platform.
•In July, Rapid7 announced a strategic distribution agreement with Mindware to scale regional availability of its managed detection and response (MDR) services and AI-powered platform.
•In July, Rapid7 unveiled key Command Platform updates, introducing "Detection as Code" capabilities via Terraform, bidirectional alert synchronization with Microsoft Defender, and intent-based Ransomware Prevention features.
•In June, Rapid7 achieved GovRAMP Authorization, expanding the availability of its AI-powered cybersecurity operations and MDR services to state, local, and educational (SLED) organizations.
•In June, Rapid7 announced its participation in Anthropic’s Project Glasswing, obtaining early access to Claude Mythos Preview to support practitioner-led defensive engineering, deep code reviews, and automated vulnerability patching.
•In May, Rapid7 announced access to OpenAI's Trusted Access for Cyber (TAC) program, integrating frontier models such as GPT-5.5 into its Agentic SOC workflows to accelerate telemetry triage and reduce false-positive queue times by 25%.
•In May, Rapid7 released its Q1 Threat Landscape Report, identifying vulnerability exploitation (38%) as having officially overtaken social engineering (24%) as the leading initial access vector.

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Restructuring

During the second quarter of 2026, the Company initiated a restructuring plan to streamline its organizational structure and better align resources and investments with its Core Platform Solutions, under which approximately 12% of the Company's workforce was notified that their positions would be affected. In connection with this plan, the Company expects to incur restructuring charges of approximately $10 million to $11 million, consisting primarily of severance and related employee costs, substantially all of which are expected to be paid during the third and fourth quarters of 2026 and excluded from the Company's non-GAAP results.

Third Quarter and Full Year 2026 Guidance
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. A reconciliation of non-GAAP guidance measures to the most comparable GAAP measures is not available on a forward-looking basis without unreasonable efforts due to the high variability, complexity and low visibility with respect to the charges excluded from these non-GAAP measures.
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 2026Full-Year 2026
(in millions, except per share data)
ARRApproximately $812 millionNot provided
Year-over-year growth(3)%Not provided
Revenue$208to$210$837to$841
Year-over-year growth(5)%to(4)%(3)%to(2)%
Non-GAAP income from operations$34to$36$129to$133
Non-GAAP net income per share, diluted$0.44to$0.47$1.78to$1.83
Weighted average shares used in non-GAAP earnings per share calculation, diluted80.179.4
Free cash flowNot providedApproximately $130 million
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 2026 and full-year 2026 does not include any potential impact of foreign exchange gains or losses.
Conference Call and Webcast Information
Rapid7 will host a conference call today, August 10, 2026, 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 a global leader in AI-powered managed cybersecurity operations, trusted to advance organizations’ cyber resilience. Open and extensible, the Rapid7 Command Platform integrates security data, enriching it with AI, threat intelligence, and 25 years of expertise and innovation to reduce risk and disrupt attackers. As a recognized leader in preemptive managed detection and response (MDR), Rapid7 unifies exposure and detection to transform the cybersecurity operations of more than 11,500 customers worldwide. For more information, visit our website, check out our blog, or follow us on LinkedIn or X.
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-
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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, free cash flow and unlevered 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 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.
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.
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.
Restructuring expense. We exclude non-ordinary course restructuring expenses related to the restructuring activities because we do not believe these charges are indicative of our core operating performance and we believe the exclusion of restructuring expense provides a more useful comparison of our performance in different periods.
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 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 and Unlevered 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 define unlevered free cash flow as free cash flow adjusted for the after-tax cash flow impact of interest income and interest expense. We believe unlevered free cash flow provides
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investors with useful supplemental information regarding our liquidity because it provides insight into the cash generated by our business before cash interest payments on financing obligations and excluding interest received on cash and investments. Management uses unlevered free cash flow to assess our ability to invest in the business and satisfy future contractual obligations. However, given our debt obligations, non-cancelable commitments and other contractual obligations, unlevered free cash flow does not represent residual cash flow available for discretionary expenses.
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. Annualized Recurring Revenue and Growth. ARR is defined as the annual value of all recurring revenue related to active contracts as of the last day of the period. ARR is measured at a specific point in time and does not incorporate consideration of any anticipated contract terminations or other prospective events, regardless of whether such events may exert a favorable or adverse influence on the metric. 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. We use ARR and believe it is useful to investors as a measure of the overall success of our business.
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 only InsightOps and Logentries customers with a contract value 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.
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, statements regarding our financial guidance for the third quarter and full-year 2026, and the assumptions underlying such guidance, and statements regarding our restructuring plan, including the expected timing of its completion, the amount and timing of expected charges, the expected benefits of the restructuring plan, and our strategy, business plans and focus. 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. Such forward-looking statements are based on our current assumptions, expectations and estimates and involve a number of judgments and risks, many of which are outside of our control. Risks that could cause or contribute to such differences include, but are not limited to, macroeconomic uncertainty, unstable market and economic conditions, fluctuations in our quarterly results, the possibility that our restructuring plan may not achieve its intended benefits or may take longer than anticipated to complete or result in charges greater than currently estimated, our ability to successfully grow our sales of our cloud-based solutions, including through the shift to a consolidated platform sales approach, failure to meet our publicly announced guidance or other expectations about our business, our ability to grow our revenue, the ability of our products and professional services to correctly detect vulnerabilities, renewal of our customers' subscriptions, competition in the markets in which we operate, market growth, our ability to innovate, our sales cycles, our ability to successfully develop, deploy and realize the expected benefits of our artificial intelligence and automation capabilities, including risks related to performance, reliability, security and customer adoption of such technologies, our ability to successfully integrate acquired companies, including Kenzo Security, and achieve the expected synergies and benefits of such acquisitions in a timely manner or at all, exposure to greater than anticipated tax liabilities, our ability to operate in compliance with applicable laws, fluctuations in foreign currency exchange rates and their impact on our results, risks related to the accuracy, efficacy and perceived reliability of our threat intelligence, detection and response capabilities, including the potential for undetected vulnerabilities, false positives or failures in our systems, as well as other risks and uncertainties that could affect our business
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and results described in our filings with the Securities and Exchange Commission (the “SEC”), including our most recent Quarterly Report on Form 10-Q filed with the SEC on May 5,, 2026, particularly in the section entitled "Item 1A 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 and uncertainties 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:Press contact:
Ryan Flanagan and Ryan GardellaChristine Nurnberger
ICR for Rapid7SVP Global Marketing and Growth
investors@rapid7.compress@rapid7.com
(617) 865-4277(857) 216-7804

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RAPID7, INC.    
Condensed Consolidated Balance Sheets (Unaudited)     
(in thousands)    
June 30, 2026December 31, 2025
Assets
Current assets
Cash and cash equivalents$425,607 $246,664 
Short-term investments276,972 228,006 
Accounts receivable, net141,253 167,017 
Deferred contract acquisition and fulfillment costs, current portion46,302 48,370 
Prepaid expenses and other current assets41,045 47,230 
Total current assets931,179 737,287 
Long-term investments— 184,119 
Property and equipment, net29,179 31,990 
Operating lease right-of-use assets41,500 45,485 
Deferred contract acquisition and fulfillment costs, non-current portion66,048 66,978 
Goodwill593,334 575,268 
Intangible assets, net63,340 65,105 
Other assets18,983 20,232 
Total assets$1,743,563 $1,726,464 
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable$14,058 $11,041 
Accrued expenses93,431 96,998 
Convertible senior notes, current portion, net598,206 — 
Operating lease liabilities, current portion17,946 16,176 
Deferred revenue, current portion436,710 451,155 
Total current liabilities1,160,351 575,370 
Convertible senior notes, non-current portion, net296,020 892,284 
Operating lease liabilities, non-current portion49,475 59,908 
Deferred revenue, non-current portion25,715 29,971 
Other long-term liabilities15,298 14,201 
Total liabilities1,546,859 1,571,734 
Stockholders' equity:
Common stock$672 $658 
Treasury stock(4,765)(4,765)
Additional paid-in capital1,158,619 1,120,963 
Accumulated other comprehensive (loss) income(372)2,527 
Accumulated deficit(957,450)(964,653)
Total stockholders equity196,704 154,730 
Total liabilities and stockholders’ equity$1,743,563 $1,726,464 

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RAPID7, INC.
Condensed Consolidated Statements of Operations (Unaudited)
(in thousands, except share and per share data)
Three Months Ended June 30,Six Months Ended June 30,
2026202520262025
Revenue:
Product subscriptions$205,051 $208,097 $409,100 $412,032 
Professional services5,832 6,096 11,474 12,414 
Total revenue210,883 214,193 420,574 424,446 
Cost of revenue:
Product subscriptions59,925 57,236 119,079 111,604 
Professional services5,620 5,823 11,215 10,935 
Total cost of revenue65,545 63,059 130,294 122,539 
Total gross profit145,338 151,134 290,280 301,907 
Operating expenses:
Research and development47,073 47,227 95,427 95,115 
Sales and marketing76,186 79,247 155,120 158,647 
General and administrative17,385 21,166 35,597 44,752 
Restructuring1,675 — 1,675 — 
Total operating expenses142,319 147,640 287,819 298,514 
Income from operations3,019 3,494 2,461 3,393 
Other income (expense), net:
Interest income5,539 5,514 11,151 11,272 
Interest expense(2,533)(2,627)(5,031)(5,281)
Other (expense) income, net(162)3,957 (888)5,759 
Income before income taxes5,863 10,338 7,693 15,143 
(Benefit) provision for income taxes(210)2,000 490 4,700 
Net income$6,073 $8,338 $7,203 $10,443 
Net income per share, basic$0.09 $0.13 $0.11 $0.16 
Net income per share, diluted(1)
$0.09 $0.13 $0.11 $0.16 
Weighted average common shares outstanding, basic67,024,154 64,441,000 66,601,615 64,140,087 
Weighted average common shares outstanding, diluted67,919,961 64,696,992 67,415,140 64,462,318 
(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 months ended June 30, 2026, the 2027 and 2029 Notes were anti-dilutive; for the three months ended June 30, 2025, the 2029 Notes, 2027 Notes and 2025 Notes were anti-dilutive.

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RAPID7, INC.
Condensed Consolidated Statements of Cash Flows (Unaudited)
(in thousands)
Three Months Ended June 30,Six Months Ended June 30,
2026202520262025
Cash flows from operating activities:
Net income$6,073 $8,338 $7,203 $10,443 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization11,231 11,390 22,441 23,055 
Amortization of debt issuance costs1,077 999 2,122 2,018 
Stock-based compensation expense19,825 27,581 39,715 54,732 
Deferred income taxes(1,770)— (2,990)— 
Other(354)(3,541)1,135 (4,694)
Changes in assets and liabilities:
Accounts receivable(6,250)(10,176)25,155 17,492 
Deferred contract acquisition and fulfillment costs545 4,505 2,998 9,800 
Prepaid expenses and other assets10,690 (3,803)12,322 (5,798)
Accounts payable1,691 3,596 4,033 (2,959)
Accrued expenses6,483 7,089 (8,270)(13,236)
Deferred revenue(8,483)549 (19,597)(12,325)
Other liabilities(3,770)1,015 (9,462)(1,229)
Net cash provided by operating activities36,988 47,542 76,805 77,299 
Cash flows from investing activities:
Business acquisitions, net of cash acquired— — (23,345)— 
Purchases of property and equipment(1,154)(948)(3,235)(2,309)
Capitalization of internal-use software(3,909)(4,314)(8,228)(8,033)
Purchases of investments— (87,555)— (232,016)
Sales and maturities of investments50,000 51,500 135,000 120,500 
Other investing activities(100)— (100)1,328 
Net cash provided by (used in) investing activities44,837 (41,317)100,092 (120,530)
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(47)(595)(302)(1,898)
Proceeds from employee stock purchase plan— — 2,889 4,446 
Proceeds from stock option exercises— — — 1,589 
Issuance of common stock from acquisition— 755 — 755 
Net cash provided by (used in) financing activities(47)(47,122)2,587 (42,390)
Effect of exchange rate changes on cash, cash equivalents and restricted cash538 3,513 (541)4,847 
Net increase (decrease) in cash, cash equivalents and restricted cash82,316 (37,384)178,943 (80,774)
Cash, cash equivalents and restricted cash, beginning of period$343,291 $298,711 $246,664 $342,101 
Cash, cash equivalents and restricted cash, end of period$425,607 $261,327 $425,607 $261,327 
Supplemental cash flow information:
Cash paid for interest on convertible senior notes$— $1,399 $2,625 $2,970 
Cash paid for income taxes, net of refunds received3,8374,7204,6195,712

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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,
2026202520262025
GAAP total gross profit$145,338 $151,134 $290,280 $301,907 
Add: Stock-based compensation expense(1)
1,586 2,580 3,302 4,844 
Add: Amortization of acquired intangible assets(2)
4,245 4,423 8,668 8,846 
Non-GAAP total gross profit$151,169 $158,137 $302,250 $315,597 
Non-GAAP gross margin72 %74 %72 %74 %
GAAP gross profit – product subscriptions$145,126 $150,861 $290,021 $300,428 
Add: Stock-based compensation expense1,282 2,054 2,651 3,785 
Add: Amortization of acquired intangible assets4,245 4,423 8,668 8,846 
Non-GAAP gross profit – product subscriptions$150,653 $157,338 $301,340 $313,059 
Non-GAAP gross margin - product subscriptions73 %76 %74 %76 %
GAAP gross profit – professional services$212 $273 $259 $1,479 
Add: Stock-based compensation expense304 526 651 1,059 
Non-GAAP gross profit – professional services$516 $799 $910 $2,538 
Non-GAAP gross margin - professional services9 %13 %8 %20 %
GAAP income from operations$3,019 $3,494 $2,461 $3,393 
Add: Stock-based compensation expense(1)
19,825 27,581 39,715 54,732 
Add: Amortization of acquired intangible assets(2)
4,268 5,090 8,762 10,210 
Add: Acquisition-related expenses(3)
98 183 704 366 
Add: Restructuring expense1,675 $— 1,675 — 
Non-GAAP income from operations$28,885 $36,348 $53,317 $68,701 
GAAP net income$6,073 $8,338 $7,203 $10,443 
Add: Stock-based compensation expense(1)
19,825 27,581 39,715 54,732 
Add: Amortization of acquired intangible assets(2)
4,268 5,090 8,762 10,210 
Add: Amortization of debt issuance costs1,077 999 2,122 2,018 
Add: Acquisition-related expenses(3)
98 183 704 366 
Add: Discrete tax items(4)
— — (600)— 
Add: Restructuring expense1,675 $— 1,675 — 
Non-GAAP net income$33,016 $42,191 $59,581 $77,769 
Add: Interest expense of convertible senior notes(5)
1,312 1,399 2,625 2,625 
Numerator for non-GAAP earnings per share calculation$34,328 $43,590 $62,206 $80,394 
Weighted average shares used in GAAP earnings per share calculation, basic67,024,154 64,441,000 66,601,615 64,140,087 
Dilutive effect of convertible senior notes(5)
10,429,891 10,686,653 10,429,891 10,429,891 
Dilutive effect of employee equity incentive plans(6)
895,807 255,992 842,964 322,231 
Weighted average shares used in non-GAAP earnings per share calculation, diluted78,349,852 75,383,645 77,874,470 74,892,209 
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Non-GAAP net income per share:
Basic$0.49 $0.65 $0.89 $1.21 
Diluted$0.44 $0.58 $0.80 $1.07 
(1) Includes stock-based compensation expense as follows:
Cost of revenue$1,586 $2,580 $3,302 $4,844 
Research and development9,242 10,250 17,648 20,636 
Sales and marketing4,443 7,451 9,514 14,692 
General and administrative$4,554 $7,300 $9,251 $14,560 
(2) Includes amortization of acquired intangible assets as follows:
Cost of revenue$4,245 $4,423 $8,668 $8,846 
Sales and marketing23 652 $94 1,304 
General and administrative$— $15 $— 60 
(3) Includes acquisition-related expenses as follows:
General and administrative$98 $183 $704 $366 
(4) Includes discrete tax items as follows:
(Benefit) Provision for income taxes$— $— $(600)$— 
(5) 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.
(6) We use the treasury method to compute the dilutive effect of employee equity incentive awards.

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RAPID7, INC.
Reconciliation of Net Income to Adjusted EBITDA (Unaudited)
(in thousands)
 
Three Months Ended June 30,Six Months Ended June 30,
2026202520262025
GAAP net income
$6,073 $8,338 $7,203 $10,443 
Interest income(5,539)(5,514)(11,151)(11,272)
Interest expense2,533 2,627 5,031 5,281 
Other expense (income), net162 (3,957)888 (5,759)
Provision for income taxes
(210)2,000 490 4,700 
Depreciation expense2,651 2,349 5,025 5,140 
Amortization of intangible assets8,580 9,041 17,416 17,915 
Stock-based compensation expense19,825 27,581 39,715 54,732 
Acquisition-related expenses98 183 704 366 
Restructuring expense1,675 — 1,675 — 
Adjusted EBITDA$35,848 $42,648 $66,996 $81,546 


RAPID7, INC.
Reconciliation of Net Cash Provided by Operating Activities to Unlevered Free Cash Flow (Unaudited)
(in thousands)
 
Three Months Ended June 30,Six Months Ended June 30,
2026202520262025
Net cash provided by operating activities$36,988 $47,542 $76,805 $77,299 
Less: Purchases of property and equipment(1,154)(948)(3,235)(2,309)
Less: Capitalized internal-use software costs(3,909)(4,314)(8,228)(8,033)
Free cash flow$31,925 $42,280 $65,342 $66,957 
Cash received from interest, net of tax(2,887)(3,883)(6,289)(9,531)
Cash paid for interest, net of tax— 401 2,343 2,435 
Unlevered free cash flow$29,038 $38,397 $59,053 $57,426 



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