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NEW YORK - Rapid7, Inc. (NASDAQ:RPD) shares fell sharply in after-hours trading on Wednesday after the cybersecurity firm issued weaker-than-expected guidance for the first quarter and full year 2025, overshadowing better-than-anticipated fourth quarter results.
The soft guidance sparked an 8.5% drop in Rapid7’s stock price in post-market trading.
The company reported fourth quarter revenue of $216.26 million, surpassing analyst estimates of $212.17 million. Revenue grew 5% YoY. Adjusted earnings per share came in at $0.48, slightly below the $0.50 consensus forecast.
However, Rapid7’s outlook disappointed investors. For Q1 2025, the company expects revenue between $207-209 million, below Wall Street’s $214.35 million estimate. Full-year 2025 revenue guidance of $860-870 million also fell short of the $886.25 million analysts were projecting.
"As we move through 2025, our focus remains on accelerating growth, deepening customer engagement, and driving innovation to solidify Rapid7 as the security operations platform of choice for organizations worldwide," said Corey Thomas, Chairman and CEO of Rapid7.
For the fourth quarter, annualized recurring revenue (ARR) grew 4% YoY to $839.8 million. The company added 201 new customers compared to the prior year period, bringing its total customer count to 11,727.
Rapid7 generated free cash flow of $58.8 million in Q4, down slightly from $60.3 million a year ago. For the full year 2024, free cash flow was $154.1 million, up significantly from $84 million in 2023.
The company’s full-year 2025 adjusted EPS guidance of $1.72-$1.85 also came in below the $2.33 consensus estimate, likely contributing to the negative stock reaction.
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