Rapid7 Q2 2025 Earnings: EPS Beats Estimates, Revenue Hits $214 Million

Rapid7 Inc reported Q2 2025 revenue of $214 million, beating estimates. Product subscriptions revenue increased 4% YoY, while professional services revenue declined 23% YoY. The company's GAAP operating income was $3.5 million, with non-GAAP operating income at $36 million. Net cash provided by operating activities was $48 million, and free cash flow was $42 million.

Rapid7 Inc (NASDAQ: RPD), a leading cybersecurity analytics and threat detection company, reported its second-quarter 2025 financial results, revealing mixed performance relative to analyst expectations. The company reported revenue of $214.2 million, slightly above the consensus estimate of $214.1 million, reflecting a 3% year-over-year increase. Earnings per share (EPS) came in at $0.58 (non-GAAP), surpassing the estimated $0.45, driven by disciplined cost management and operational efficiency.

Key Financial Highlights
- Revenue Growth: Total revenue rose 3% YoY, with product subscription revenue increasing 4% to $208.1 million, while professional services revenue declined 23% to $6.1 million.
- Profitability: Non-GAAP operating income stood at $36.3 million, down from $39.3 million in Q2 2024, reflecting ongoing investments in platform integration.
- Cash Flow: The company generated $47.5 million in net cash from operations, with free cash flow reaching $42.3 million, up significantly from $29.2 million in the prior-year period.
- Customer Metrics: Annual recurring revenue (ARR) grew 3% YoY to $840.6 million, while the customer base expanded modestly to 11,643, up 1%.

Market Reaction
Following the earnings release, Rapid7’s stock saw an after-hours gain of ~0.66%, suggesting cautious optimism among investors. The stock had declined 6.2% over the past month and 12% over the last two weeks, likely due to broader market volatility and concerns over growth deceleration. The better-than-expected EPS appears to have provided some relief, though the modest revenue beat and flat guidance may temper enthusiasm.

Outlook vs. Analyst Estimates
Rapid7 provided guidance for Q3 and full-year 2025, projecting:
- Q3 Revenue: $215M–$217M, roughly in line with analyst expectations of $219.1M.
- Full-Year Revenue: $853M–$863M, slightly below the consensus estimate of $867.8M.
- Non-GAAP EPS: $0.44–$0.47 for Q3 and $1.90–$2.03 for the full year, compared to analyst projections of $0.46 and $1.96, respectively.

The outlook suggests low single-digit growth, reinforcing the company’s transition toward platform-based security solutions rather than aggressive top-line expansion.

Strategic Developments
CEO Corey Thomas emphasized the company’s focus on AI-driven security solutions, including the recent launch of Incident Command, an AI-native SIEM platform. Additionally, Rapid7 secured FedRAMP authorization for its InsightGovCloud, positioning it as a trusted provider for U.S. federal agencies.

CFO Transition
The company announced that CFO Tim Adams plans to retire, with a successor search underway. While leadership changes can introduce uncertainty, Adams will remain until a replacement is named to ensure a smooth transition.

Conclusion
Rapid7’s Q2 results demonstrate steady but slowing growth, with profitability holding up better than expected. The market’s muted reaction reflects a balance between relief over earnings outperformance and caution around the company’s conservative outlook. Investors will be watching for execution on its platform strategy and whether AI-driven offerings can accelerate growth in future quarters.

For more detailed earnings estimates and historical performance, visit Rapid7’s earnings page.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Readers should conduct their own research or consult a financial advisor before making investment decisions.

References:
[1] https://www.chartmill.com/news/RPD/Chartmill-32777-RAPID7-INC-NASDAQRPD-Reports-Mixed-Q2-2025-Earnings-Amid-Steady-Growth-and-AI-Focus
[2] https://www.stocktitan.net/news/RPD/rapid7-announces-second-quarter-2025-financial-gjxpzs7rltn3.html