Rapid7 Raises Full-Year Profit Guidance Amid Revenue Decline
The cybersecurity firm raised its full-year non-GAAP net income per share guidance to a range of $1.78 to $1.83
Rapid7 (RPD), the cybersecurity company, reported a decline in total revenue for the second quarter, though it raised its full-year profitability outlook.
Total revenue decreased 1.5% year-over-year to $210.9 million. The decline accelerated from a 0.3% decrease in the first quarter.
Annualized recurring revenue fell 2.0% year-over-year to $824 million. This represents a steeper contraction than the 0.6% year-over-year decrease recorded in the prior quarter.
Margins faced pressure during the period. Non-GAAP gross margin compressed to 72% from 74% in the second quarter of the prior year. Specifically, non-GAAP gross margin for product subscriptions decreased to 73% from 76% in the same period last year.
Despite the revenue headwinds, the company improved its operational efficiency. Non-GAAP income from operations for the second quarter was $28.9 million, up from $24.4 million in the first quarter.
Rapid7 initiated a restructuring plan in the second quarter affecting approximately 12% of its workforce. The company expects charges related to the plan to range between $10 million and $11 million.
The company raised its full-year 2026 non-GAAP income from operations guidance to a range of $129 million to $133 million, up from the $112 million to $118 million range provided in the first quarter. Full-year non-GAAP net income per share guidance was also increased to $1.78 to $1.83, from a previous range of $1.52 to $1.60.
Short-term revenue projections remain negative. Rapid7 projected third-quarter revenue to be between $208 million and $210 million, which would represent a year-over-year decrease of 4% to 5%.