Company Overview November 4, 2025 1 Disclaimers This presentation contains forward-looking statements. All statements contained in this presentation other than statements of historical facts, including, without limitation, statements regarding our market opportunity, demand for our product and service offerings, expectations regarding our annualized recurring revenue (ARR), free cash flow, and our other non-GAAP measures, our business strategy, plans and objectives for future operations and expectations reg ...

Financial Performance - Annualized recurring revenue (ARR) reached $838 million, a 2% increase year-over-year[4] - Total revenue for Q3 2025 was $218 million, up 2% from $214.7 million in Q3 2024[4] - Product subscriptions revenue was $210 million, reflecting a 2% year-over-year growth[5] - Total revenue for Q3 2025 was $217.96 million, a slight increase from $214.65 million in Q3 2024, representing a year-over-year growth of 1.1%[40] - Product subscriptions revenue reached $210.15 million in Q3 2025, compared to $205.59 million in Q3 2024, indicating a growth of 2.5%[40] - Net income for Q3 2025 was $9.81 million, down from $15.41 million in Q3 2024, reflecting a decrease of 36.5%[40] - Non-GAAP income from operations for Q3 2025 was $36.9 million, compared to $44 million in Q3 2024[5] - GAAP operating income was $5.9 million, down from $12.8 million in the same quarter last year[5] - GAAP net income for Q3 2025 was $9,809,000, a decrease of 36.5% compared to $15,410,000 in Q3 2024[47] - Adjusted EBITDA for Q3 2025 was $43,514,000, down 13.1% from $50,083,000 in Q3 2024[47] - Non-GAAP total gross profit for Q3 2025 was $159,857,000, slightly up from $159,048,000 in Q3 2024, resulting in a non-GAAP gross margin of 73%[44] - Non-GAAP gross profit for product subscriptions in Q3 2025 was $158,238,000, compared to $155,914,000 in Q3 2024, with a non-GAAP gross margin of 75%[44] Cash Flow and Liquidity - Free cash flow for the quarter was $30 million, down from $38.5 million in Q3 2024[5] - Free cash flow for Q3 2025 was $30,111,000, a decline of 21.7% compared to $38,502,000 in Q3 2024[48] - Cash flows from operating activities for the nine months ended September 30, 2025, totaled $116,250,000, an increase of 7.5% from $107,897,000 in the same period of 2024[42] - The company’s cash, cash equivalents, and restricted cash at the end of Q3 2025 were $130,613,000, a decrease from $230,108,000 at the end of Q3 2024[42] - Anticipated net cash provided by operating activities for full-year 2025 is projected to be between $149,000 and $159,000[51] - Anticipated free cash flow for full-year 2025 is expected to be between $125,000 and $135,000[51] Strategic Developments - Rapid7 announced a strategic expansion into the UAE to support digital transformation and cyber resilience goals[10] - New AI-generated risk intelligence capabilities were introduced as part of the Command Platform, enhancing remediation efforts[10] Management Changes - Rafe Brown was appointed as the new CFO, effective December 1, 2025, bringing extensive industry experience[2] Balance Sheet - Total assets as of September 30, 2025, were $1.67 billion, a slight increase from $1.65 billion at the end of 2024[38] - Total liabilities decreased from $1.63 billion at the end of 2024 to $1.54 billion as of September 30, 2025[38] - The company’s total stockholders' equity increased significantly from $17.71 million at the end of 2024 to $127.22 million as of September 30, 2025[38] - The company reported a total of 64.97 million weighted-average common shares outstanding for Q3 2025, compared to 62.90 million in Q3 2024[40] Future Projections and Risks - The company anticipates Q4 2025 revenue between $214 million and $216 million, with year-over-year growth expected to be between (1)% and 0%[8] - The company anticipates potential risks including macroeconomic uncertainty and competition, which could impact future performance[35] - Anticipated GAAP net loss for Q4 2025 is projected between $9,000 and $4,000, with non-GAAP net income expected between $27,000 and $32,000[50] - Anticipated non-GAAP net income per share for full-year 2025 is estimated to be between $2.02 and $2.09[50] Expenses - Stock-based compensation expense for the nine months ended September 30, 2025, was $81,059,000, slightly up from $80,549,000 in the same period of 2024[44] - Stock-based compensation expense for Q3 2025 was $26,327,000, slightly up from $25,738,000 in Q3 2024[47] - Amortization of intangible assets for Q3 2025 was $8,861,000, compared to $8,520,000 in Q3 2024, reflecting ongoing investment in intangible assets[47] - Interest income for Q3 2025 was $(6,167,000), compared to $(5,571,000) in Q3 2024, indicating an increase in interest expenses[47] Accounts Receivable - The company reported a decrease in accounts receivable of $8,419,000 in Q3 2025 compared to an increase of $2,442,000 in Q3 2024[42]

Core Insights - Rapid7, Inc. reported a third quarter 2025 Annual Recurring Revenue (ARR) of $838 million, reflecting a 2% year-over-year increase, driven by the success of its AI-driven Command Platform [2][4] - The company appointed Rafe Brown as Chief Financial Officer, effective December 1, 2025, succeeding Tim Adams, who announced his retirement [2][3] - Rapid7's total revenue for Q3 2025 was $218 million, also up 2% year-over-year, with product subscriptions revenue contributing $210 million [4][5] Financial Performance - ARR increased to $838 million from $823 million in Q3 2024, marking a 2% growth [3][4] - The number of customers remained stable at 11,618, with ARR per customer rising to $72.1 from $70.8, a 2% increase [3][4] - Total revenue for Q3 2025 was $218 million, compared to $215 million in Q3 2024, reflecting a 2% increase [4][5] - Product subscriptions revenue was $210 million, up from $206 million, while professional services revenue decreased by 14% to $7.8 million [4][5] - GAAP gross profit was $153 million, with a gross margin of 70%, while non-GAAP gross profit was $160 million, with a gross margin of 73% [4][5] Operational Highlights - The company reported a GAAP operating income of $5.9 million and a non-GAAP operating income of $37 million for Q3 2025 [4][5] - Net cash provided by operating activities was $38 million, with free cash flow of $30 million [4][5] - Rapid7's GAAP net income for Q3 2025 was $9.8 million, translating to a net income per share of $0.15 [5][6] Strategic Initiatives - Rapid7 announced an expanded partnership with Microsoft to enhance modern detection and response capabilities [7] - The company introduced new AI-generated risk intelligence features in its Command Platform to improve remediation processes [7] - Rapid7 was recognized in the Gartner Magic Quadrant for Security Information and Event Management (SIEM) for the seventh consecutive year [7] Guidance - For Q4 2025, Rapid7 anticipates ARR to remain approximately flat compared to Q3 2025, with revenue projected between $214 million and $216 million [8] - Non-GAAP income from operations is expected to range from $25 million to $30 million, with non-GAAP net income per share projected between $0.37 and $0.44 [8]

Core Insights - Rapid7, Inc. has announced an expanded partnership with Microsoft to enhance threat detection and response capabilities within Microsoft environments [1][3] - The new Managed Detection and Response (MDR) for Microsoft solution integrates a dedicated service with Microsoft Defender, providing comprehensive coverage across various domains [1][2] Partnership Details - The collaboration aims to help organizations maximize their Microsoft security investments and address complex operational challenges [1][4] - The integrated approach offers 24x7 managed detection and response, combining AI-driven insights with human expertise for improved security outcomes [2][3] Technology and Innovation - The partnership leverages Microsoft's advanced telemetry and analytics alongside Rapid7's human-led threat expertise and AI-driven operations for faster and more precise threat detection [3][4] - The new service is expected to be introduced in early 2026, featuring integrated detection and response capabilities [4] Company Mission and Impact - Rapid7 is committed to creating a safer digital world by simplifying cybersecurity and making it more accessible [6] - The company serves over 11,000 global customers, helping them manage cloud risk and enhance threat detection and response [6]

Core Insights - Rapid7, Inc. has introduced AI-generated risk intelligence and vulnerability intelligence capabilities to enhance security teams' ability to prioritize, collaborate, and remediate vulnerabilities more effectively [1][2][3] Group 1: AI-Generated Risk Intelligence - The new AI-generated risk intelligence feature is part of the Rapid7 Command Platform and is delivered through the Remediation Hub, providing security teams with actionable insights to prioritize remediation efforts [1][3] - AI-generated risk summaries allow organizations to quickly identify affected systems, real-world activity related to risks, and recommended next steps, thereby facilitating faster decision-making [3][4] - The integration of AI-driven context into risk summaries aims to improve alignment between security and IT teams, reducing the time to remediate vulnerabilities [3][6] Group 2: Vulnerability Intelligence Capabilities - Rapid7's Intelligence Hub now includes enhanced vulnerability intelligence capabilities that provide curated, real-world threat context for exploited CVEs, enabling effective prioritization of remediation efforts [4][5] - The vulnerability intelligence features are designed to filter out irrelevant alerts, focusing on vulnerabilities that pose actual risks to organizations [4][5] - Curated CVE profiles leverage data from Rapid7 Labs and other sources to support adversary-aware prioritization and mitigation strategies for security teams [5] Group 3: Market Need and Response - The widening gap between detection and action in cybersecurity is a significant challenge, with 22% of enterprise security decision-makers citing a lack of comprehensive remediation prioritization strategies [2] - Rapid7's innovations are positioned to address the urgent need for faster and more intelligent decision-making in vulnerability remediation, helping organizations to focus on impactful actions [2][3] - The rollout of AI-generated risk summaries and vulnerability intelligence capabilities is scheduled for late November, indicating a timely response to market demands [6]

Core Insights - Rapid7 (RPD) has been upgraded to a Zacks Rank 1 (Strong Buy) due to an upward trend in earnings estimates, which is a significant factor influencing stock prices [1][3][5] - The Zacks rating system is based on the Zacks Consensus Estimate, which reflects EPS estimates from sell-side analysts for the current and following years [1][2] Earnings Estimates and Stock Price Movement - Changes in a company's future earnings potential, as indicated by earnings estimate revisions, are strongly correlated with near-term stock price movements [4][6] - Institutional investors often rely on earnings estimates to determine the fair value of a company's shares, leading to buying or selling actions that affect stock prices [4] Rapid7's Earnings Outlook - Rapid7 is projected to earn $1.97 per share for the fiscal year ending December 2025, with no year-over-year change expected [8] - Over the past three months, the Zacks Consensus Estimate for Rapid7 has increased by 39%, indicating a positive trend in earnings estimates [8] Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [7] - Rapid7's upgrade to Zacks Rank 1 places it in the top 5% of Zacks-covered stocks, suggesting potential for higher stock prices in the near term [10]

Core Insights - Rapid7, Inc. has been recognized in the 2025 Gartner® Magic Quadrant™ for Security Information and Event Management (SIEM) for the seventh consecutive year, highlighting its leadership in threat detection and exposure management [1] Company Overview - Rapid7's SIEM solution, InsightIDR, provides an integrated detection and response ecosystem, designed with a security-role interface and an analyst-first experience, continuously validated by Rapid7's own Security Operations Center (SOC) [2] - The company has received recognition from various industry analysts, including Forrester, Frost Radar™, and IDC, indicating strong market validation for its solutions [2] Product Development - The launch of Incident Command, an AI-native SIEM powered by Agentic AI workflows, aims to enhance security teams' capabilities by providing speed, clarity, and actionable insights through integrated workflows [3] - InsightIDR's extensible architecture allows integration with advanced analytics, automation tools, and data sources across cloud and endpoint environments, contributing to its strong market adoption [3] Features and Benefits - Rapid7's SIEM offering focuses on faster threat detection, reducing alert fatigue, and centralizing investigation workflows, with the latest evolution, Incident Command, providing a unified solution for visibility, collaboration, and rapid response [4] - Key features of Incident Command include enhanced visibility, collaboration tools, and rapid response capabilities across the attack surface [4] Market Position - Rapid7 serves over 11,000 global customers, emphasizing its mission to simplify and make cybersecurity more accessible, while integrating cloud risk management with threat detection [7]

Core Insights - Rapid7 has been recognized for the seventh consecutive year in the 2025 Gartner Magic Quadrant™ for Security Information and Event Management (SIEM) [1] - The company aims to enhance its SIEM capabilities with the launch of Incident Command, an AI-native solution designed to improve security operations [3][4] Company Overview - Rapid7, Inc. (NASDAQ: RPD) focuses on threat detection and exposure management, serving over 11,000 global customers [8] - The company is committed to simplifying cybersecurity and making it more accessible through integrated solutions [7] Product Development - Rapid7's SIEM solution, InsightIDR, is built on a security-role interface and an analyst-first experience, continuously validated by the company's own Security Operations Center (SOC) [2] - The recent launch of Incident Command aims to unify visibility, collaboration, and rapid response across the attack surface, enhancing the overall security posture [4] Market Recognition - In addition to the Gartner recognition, Rapid7 has received accolades from Forrester, Frost Radar™, and IDC for its vulnerability management and exposure management solutions [2] - The company's commitment to reducing alert fatigue and centralizing investigation workflows is reflected in its product offerings [3][4]

Core Insights - Rapid7, Inc. will release its third quarter 2025 financial results on November 4, 2025, after market close [1] - A conference call to discuss the results and business outlook will take place on the same day at 4:30 p.m. Eastern Time [1] Company Overview - Rapid7, Inc. is focused on creating a safer digital world by simplifying and making cybersecurity more accessible [3] - The company provides comprehensive security solutions to over 11,000 global customers, integrating cloud risk management and threat detection [3]

Core Thesis - Rapid7, Inc. is undergoing a strategic pivot towards an integrated Command Platform, enhancing its cybersecurity offerings and addressing customer demand for streamlined security solutions [2][5] - The company has shown significant financial growth, with revenue increasing from $411.5 million in 2020 to $844 million in 2024, reflecting a 20% compound annual growth rate (CAGR) [2] Financial Performance - Rapid7's trailing and forward price-to-earnings (P/E) ratios are 47.30 and 9.95 respectively, indicating a potential undervaluation [1] - Current guidance projects revenue of $858 million, EBITDA of $163 million, and free cash flow between $125 million and $135 million, resulting in an attractive ~10% free cash flow yield and ~9.8x EV/EBITDA valuation [3] Strategic Developments - The company has $600 million in cash and investments, generating interest income that exceeds debt costs, despite facing historical share dilution and ~$900 million in convertibles due in 2027 and 2029 [3] - Activist investor JANA Partners controls over 14% of shares and is advocating for governance changes and operational improvements, positioning Rapid7 as a credible acquisition candidate [3][4] Acquisition Speculation - There has been ongoing speculation regarding potential acquisitions, with interest from firms such as TPG, Alphabet, and Thoma Bravo, alongside insider incentives for pursuing a transaction [4] - Elevated professional fees suggest active corporate advisory efforts, indicating that Rapid7 is preparing for potential strategic alternatives, including a sale [4]