Rapid7(US:RPD)2025-02-28 21:09Financial Performance - For the year ended December 31, 2024, the company recorded total revenue of $844 million, an increase of 8.5% from $777.7 million in 2023[355]. - Product subscriptions revenue was $808.9 million, up from $740.2 million in 2023, representing a growth of 9.3%[355]. - The company reported a net income of $25.5 million for 2024, a significant recovery from a net loss of $152.8 million in 2023[355]. - Total gross profit for 2024 was $593 million, compared to $545.7 million in 2023, reflecting a gross margin improvement[355]. - Operating expenses decreased to $557.9 million in 2024 from $629.9 million in 2023, primarily due to lower research and development costs[355]. - The company recognized a total comprehensive income of $23 million in 2024, compared to a comprehensive loss of $150.1 million in 2023[359]. - Net income for the year ended December 31, 2024, was $25,526,000, a significant improvement from a net loss of $152,815,000 in 2023 and $124,717,000 in 2022[364]. - The company reported a loss before income taxes of $153,333,000 for the year ended December 31, 2024, compared to a profit of $41,455,000 in 2023[482]. - Total income tax expense for 2024 was $15,929,000, a significant increase from a tax benefit of $518,000 in 2023[483]. - The effective income tax rate for 2024 was 38.4%, compared to 0.3% in 2023[483]. Cash and Investments - The company reported cash and cash equivalents of $334.7 million and investments of $224.3 million as of December 31, 2024[330]. - The company’s cash and cash equivalents increased to $334.7 million as of December 31, 2024, up from $213.6 million in 2023[353]. - Total cash, cash equivalents, and restricted cash at the end of 2024 was $342,101,000, up from $214,127,000 in 2023[364]. - The company had $7.4 million of restricted cash recorded on its consolidated balance sheet as of December 31, 2024[384]. - As of December 31, 2024, Rapid7's available-for-sale investments totaled $224.3 million, with maturities ranging from 1 to 17 months[440]. Competition and Market Conditions - The company anticipates that prolonged economic uncertainties could adversely affect its business and operating results[13]. - The company faces intense competition in its market, which could negatively impact its financial condition and results of operations[13]. - The company is dependent on customers renewing and expanding their subscriptions, which is vital for future operating results[13]. - The company aims to maintain an adequate annualized recurring revenue growth, which is critical for its future operating results[12]. - The company is focused on diversifying its sources of revenue and effectively managing its growth to sustain profitability[12]. Expenses and Costs - Stock-based compensation expense for 2024 was $107,961,000, slightly down from $111,636,000 in 2023[364]. - The total amortization expense for intangible assets was $33.8 million in 2024, up from $31.9 million in 2023, indicating a year-over-year increase of 5.9%[447]. - The adjusted total cost of revenue for 2024 was $221,664 thousand, up from $202,655 thousand in 2023[510]. - Total lease costs for the year ended December 31, 2024, were $25.905 million, a decrease from $26.254 million in 2023[467]. - The company incurred fees of $0.4 million related to the Credit Agreement, which are amortized over the contractual term[465]. Acquisitions and Goodwill - Rapid7 acquired Noetic Cyber, Inc. for an aggregate fair value of $51.2 million, consisting of $38.6 million in cash, $12.1 million in contingent consideration, and $0.5 million in deferred cash payments[429]. - Rapid7 acquired Minerva Labs Ltd. for an aggregate fair value of $34.6 million, with $35.0 million paid in cash at closing[438]. - The fair value of net assets acquired from Minerva was $13.9 million, with goodwill recorded at $20.7 million and intangible assets at $12.8 million[439]. - Goodwill increased from $536.4 million as of December 31, 2023, to $575.3 million as of December 31, 2024, reflecting a growth of approximately 7.3%[447]. Tax and Regulatory Matters - The company had federal net operating loss carryforwards of $265.6 million and state NOLs of $306.0 million as of December 31, 2024[484]. - The company recorded additional research and development tax credits of $4.2 million during the fourth quarter of 2024[487]. - The company received an initial tax assessment from the Israel Tax Authority of approximately 324 million Israeli New Shekels (about $88 million) for fiscal year 2021, but has not recorded any impact in its financial statements[494]. - The company recorded $4,520 thousand in additions based on tax positions related to the current year, increasing unrecognized tax benefits to $9,876 thousand by December 31, 2024[492]. Restructuring and Operational Changes - The company completed its Restructuring Plan in Q1 2024, incurring $(0.2) million in restructuring charges[513]. - The company incurred $22.2 million in restructuring charges in 2023, which included a workforce reduction of approximately 16%[511]. - The company recorded impairment losses of $30.8 million related to idle office spaces in 2023, consisting of $22.2 million for right-of-use assets and $8.6 million for leasehold improvements[468]. Stock and Shareholder Matters - The number of shares available for grant under the Employee Stock Purchase Plan (ESPP) as of December 31, 2024, was 3,076,461[478]. - The expected volatility for the ESPP in 2024 was between 37% and 47%[481]. - As of December 31, 2024, the company had 582,638 stock options outstanding with a weighted average exercise price of $12.38 and an intrinsic value of $16,225,000[477]. - The company has not paid dividends on its common stock and does not expect to do so in the foreseeable future[480].