Rapid7 Earnings: What To Look For From RPD

As Rapid7 (RPD) prepares to release its fourth quarter and full-year 2024 financial results on February 12, investors are eager to understand the key metrics and trends that could impact the company's stock price. Here's what to look for in Rapid7's upcoming earnings report.



1. Revenue Growth: Rapid7 has consistently delivered positive revenue growth over the past few quarters. In the fourth quarter of 2023, the company is expected to report revenue growth of 11% to 12% year-over-year. Investors should focus on the actual revenue growth rate and compare it to the guided range. A strong revenue growth rate could indicate a healthy customer base and expanding market share.
2. Annualized Recurring Revenue (ARR) Growth: ARR is a critical metric for Rapid7, as it represents the expected revenue from existing customers over the next 12 months. ARR growth is an important indicator of the company's ability to retain and expand its customer base. In the fourth quarter of 2023, Rapid7 is expected to report ARR growth of 10% to 11% year-over-year. Investors should pay close attention to the actual ARR growth rate and compare it to the guided range.
3. Operating Margin: Rapid7's non-GAAP operating margin has been improving, indicating better cost control and efficiency. In the fourth quarter of 2023, the company is expected to report a non-GAAP operating margin of 13%. Investors should focus on the actual operating margin and compare it to the guided range. An improvement in operating margin could indicate better cost control and increased profitability.
4. Free Cash Flow (FCF): FCF is a measure of the cash generated by the company's operations after accounting for capital expenditures. Rapid7's FCF has been growing, reflecting the company's ability to generate cash from its operations. In the fourth quarter of 2023, the company is expected to report FCF of at least $160 million for the full year. Investors should pay close attention to the actual FCF and compare it to the guided range. A strong FCF could indicate the company's ability to generate cash and invest in growth opportunities.
5. Product Mix Evolution: Rapid7's product mix has evolved over time, with a shift towards higher-margin products and services. In the fourth quarter of 2023, the company is expected to report products revenue of $740.17M, up 14% year-over-year, while professional services revenue is expected to be $37.54M, down 0.02% year-over-year. Investors should focus on the actual product mix and its impact on the company's financial performance. A shift towards higher-margin products could indicate improved profitability and cash flow generation.



In conclusion, Rapid7's upcoming earnings report will provide valuable insights into the company's financial performance and growth prospects. Investors should focus on the key metrics and trends discussed above, as well as any guidance provided by the company's management. By understanding these factors, investors can make more informed decisions about whether to buy, sell, or hold Rapid7's stock.