Rapid7 (RPD) Q4 2024 earnings summary

Executive summary

• Ended 2024 with $840M in ARR (up 4% YoY) and $844M in revenue (up 9% YoY), both exceeding guidance, with a 20% revenue CAGR since 2020 and 18% ARR CAGR since 2020.

• Detection & response (D&R) business delivered double-digit growth, surpassing $400M in ARR, with managed D&R growing in the mid-teens.

• Free cash flow for 2024 was $154M (18% margin), supporting ongoing investments and platform expansion.

• Customer base grew 2% to over 11,700, with ARR per customer up 2% to $72,000 and a 10% CAGR since Q4 2020.

• Strategic focus on innovation, partner ecosystem expansion, and cloud security adoption, notably with Exposure Command and new MDR offerings.

Financial highlights

• Full-year revenue: $844M (+9% YoY); recurring product revenue: $809M (+9% YoY); professional services revenue declined 5–6%.

• Q4 revenue: $216M (+5% YoY); recurring product revenue: $206M (+6% YoY); international revenue grew 14% YoY, now 25% of total.

• Operating income for 2024: $164M (19% margin, +600bps YoY); Q4 operating income: $40M (18% margin).

• Adjusted EBITDA for 2024: $188.5M; Q4 net income per share: $0.54 (non-GAAP), $0.48 (GAAP).

• Cash, equivalents, and investments at year-end: $559M, up from $439M in 2023.

Outlook and guidance

• 2025 ARR guidance: $870M–$890M (4%–6% growth), with most growth from D&R and modest contribution from risk/exposure management.

• 2025 revenue guidance: $860M–$870M (2%–3% growth); recurring product revenue to outpace total revenue.

• 2025 operating income: $125M–$135M; free cash flow: ~$135M; net income per share: $1.72–$1.85.

• Q1 2025 revenue: $207M–$209M (1%–2% YoY growth); Q1 operating income: $23M–$25M; Q1 net income per share: $0.33–$0.36.

• Expecting more pronounced seasonality, with ARR growth skewed to the second half of 2025.