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BOSTON - Rapid7, Inc. (NASDAQ: RPD), a cybersecurity firm with an $1.8 billion market capitalization and annual revenue of $844 million, announced today the appointment of three new directors to its Board as part of a cooperation agreement with investment firm JANA Partners Management, LP. The agreement also includes JANA Partners’ support for the company’s director nominees at the upcoming annual shareholder meeting. According to InvestingPro data, the company has maintained profitability over the last twelve months, with net income expected to grow this year.
The new board members, Wael Mohamed, Mike Burns, and Kevin Galligan, will expand Rapid7’s Board to 11 directors. Wael Mohamed brings over 30 years of experience in cybersecurity and digital transformation. Mike Burns has a background in senior financial and operational roles within technology companies, and Kevin Galligan offers 18 years of experience in investment and shareholder value enhancement. The appointments come as the company’s stock trades near its 52-week low of $26.77, despite maintaining a strong gross profit margin of 70% and revenue growth of 8.5% year-over-year.
Chairman and CEO Corey Thomas expressed confidence that the new appointments will "accelerate our ability to execute with greater speed, focus, and impact," contributing to the company’s strategy and shareholder value creation. Scott Ostfeld, Managing Partner of JANA Partners, also acknowledged the constructive dialogue with Rapid7 and the shared goal of capitalizing on opportunities to maximize shareholder value. InvestingPro analysis indicates the company is currently trading near its Fair Value, with 12 additional ProTips available to subscribers regarding Rapid7’s valuation and growth prospects.
Rapid7, known for its AI-driven threat detection and response, cloud security, and exposure management solutions, aims to drive sustainable, profitable growth with the strategic expansion of its Board. The company serves over 11,000 global customers, uniting cloud risk management and threat detection to reduce attack surfaces and eliminate threats efficiently.
Details of the cooperation agreement will be included in the company’s Current Report on Form 8-K to be filed with the Securities and Exchange Commission. J.P. Morgan is acting as the financial advisor, and Simpson Thacher & Bartlett LLP as the legal advisor to Rapid7 in connection with the agreement.
This announcement is based on a press release statement and contains forward-looking statements that involve risks and uncertainties. These include market conditions, the company’s ability to grow sales, integrate acquisitions, and comply with laws. The actual results may differ materially from those stated or implied. Investors are advised to read the proxy statement and other relevant documents filed with the SEC when they become available for more information on the company’s 2025 Annual Meeting of Stockholders.
In other recent news, Rapid7 reported its fourth-quarter financial results, revealing a 5% year-over-year revenue growth to $216.26 million, surpassing analyst expectations of $212.17 million. However, the company’s guidance for the first quarter and full year 2025 disappointed investors, with projected revenues falling short of Wall Street estimates. Rapid7 expects Q1 2025 revenue between $207-209 million, below the anticipated $214.35 million, and full-year 2025 revenue guidance of $860-870 million, compared to the $886.25 million projected by analysts.
Despite the mixed results, Rapid7’s annual recurring revenue (ARR) grew 4% year-over-year, with the Detection and Response segment expanding at a mid-teens rate. Analysts from DA Davidson, Mizuho, Citi, and Jefferies all adjusted their price targets for Rapid7, with DA Davidson lowering it to $35, Mizuho to $39, Citi to $44, and Jefferies to $45, each maintaining their respective ratings. DA Davidson and Mizuho retained a Neutral stance, while Citi and Jefferies reaffirmed a Buy rating.
The company’s strategic focus includes investments in Managed Detection and Response (MDR) capabilities, despite concerns over increased spending and lower-than-expected earnings guidance. Analysts expressed varied sentiments, with some highlighting potential growth opportunities and others noting challenges in Rapid7’s operational landscape.
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