SEC Form 10-Q filed by Rapid7 Inc.

8/8/25 7:17:28 AM ET

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2025


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-37496

RAPID7, INC.

(Exact Name of Registrant as Specified in its Charter)


Delaware						35-2423994
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)


120 Causeway Street
Boston,	MA	02114
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (617) 247-1717


Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:

Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value per share	RPD	The Nasdaq Global Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

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Large Accelerated Filer	☒	Accelerated Filer	☐
Non-accelerated Filer	☐	Small Reporting Company	☐
Emerging Growth Company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of August 1, 2025, there were 64,745,948 shares of the registrant’s common stock, $0.01 par value per share, outstanding.

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		Page
PART I.	FINANCIAL INFORMATION
Item 1.	Condensed Consolidated Financial Statements (Unaudited)	1
	Condensed Consolidated Balance Sheets	1
	Condensed Consolidated Statements of Operations	2
	Condensed Consolidated Statements of Comprehensive Income (Loss)	3
	Condensed Consolidated Statements of Changes in Stockholders' Equity (Deficit)	4
	Condensed Consolidated Statements of Cash Flows	6
	Notes to Unaudited Condensed Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	40
Item 4.	Controls and Procedures	41
PART II.	OTHER INFORMATION	43
Item 1.	Legal Proceedings	43
Item 1A.	Risk Factors	43
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	43
Item 3.	Defaults Upon Senior Securities	43
Item 4.	Mine Safety Disclosures	43
Item 5.	Other Information	43
Item 6.	Exhibits	45
	Signatures

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PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

RAPID7, INC.

Condensed Consolidated Balance Sheets (Unaudited)

(in thousands, except share and per share data)


	June 30, 2025		December 31, 2024
Assets
Current assets:
Cash and cash equivalents	$	261,327	$	334,686
Short-term investments	250,410		187,025
Accounts receivable, net of allowance for credit losses of $2,738 and $1,833 at June 30, 2025 and December 31, 2024, respectively	150,683		168,242
Deferred contract acquisition and fulfillment costs, current portion	49,292		52,134
Prepaid expenses and other current assets	42,805		44,024
Total current assets	754,517		786,111
Long-term investments	88,012		37,274
Property and equipment, net	29,639		32,245
Operating lease right-of-use assets	43,654		48,877
Deferred contract acquisition and fulfillment costs, non-current portion	66,714		73,672
Goodwill	575,268		575,268
Intangible assets, net	74,981		85,719
Other assets	15,955		12,868
Total assets	$	1,648,740	$	1,652,034
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	15,943	$	18,908
Accrued expenses and other current liabilities	78,125		88,802
Convertible senior notes, current portion, net	—		45,895
Operating lease liabilities, current portion	15,185		15,493
Deferred revenue, current portion	446,688		461,118
Total current liabilities	555,941		630,216
Convertible senior notes non-current portion, net	890,277		888,356
Operating lease liabilities, non-current portion	62,187		68,430
Deferred revenue, non-current portion	29,183		27,078
Other long-term liabilities	20,705		20,243
Total liabilities	$	1,558,293	$	1,634,323
Stockholders’ equity:
Preferred stock, $0.01 par value per share; 10,000,000 shares authorized at June 30, 2025 and December 31, 2024; 0 shares issued and outstanding at June 30, 2025 and December 31, 2024	$	—	$	—
Common stock, $0.01 par value per share; 100,000,000 shares authorized at June 30, 2025 and December 31, 2024; 65,277,744 and 64,067,220 shares issued at June 30, 2025 and December 31, 2024, respectively; 64,707,489 and 63,496,965 shares outstanding at June 30, 2025 and December 31, 2024, respectively	646		635
Treasury stock, at cost, 570,255 shares at June 30, 2025 and December 31, 2024	(4,765)		(4,765)
Additional paid-in-capital	1,068,643		1,011,080
Accumulated other comprehensive income (loss)	3,514		(1,205)
Accumulated deficit	(977,591)		(988,034)
Total stockholders’ equity	90,447		17,711
Total liabilities and stockholders’ equity	$	1,648,740	$	1,652,034

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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RAPID7, INC.

Condensed Consolidated Statements of Operations (Unaudited)

(in thousands, except share and per share data)


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
Revenue:
Product subscriptions	208,097		200,067		$	412,032	$	396,985
Professional services	6,096		7,924		12,414		16,107
Total revenue	214,193		207,991		424,446		413,092
Cost of revenue:
Product subscriptions	57,236		55,107		111,604		109,841
Professional services	5,823		5,885		10,935		12,145
Total cost of revenue	63,059		60,992		122,539		121,986
Total gross profit	151,134		146,999		301,907		291,106
Operating expenses:
Research and development	47,227		40,448		95,115		81,816
Sales and marketing	79,247		78,126		158,647		151,221
General and administrative	21,166		23,202		44,752		43,130


Total operating expenses	147,640		141,776		298,514		276,167
Income from operations	3,494		5,223		3,393		14,939
Other income (expense), net:
Interest income	5,514		5,221		11,272		9,941
Interest expense	(2,627)		(2,673)		(5,281)		(5,343)
Other income (expense), net	3,957		(695)		5,759		(2,130)
Income before income taxes	10,338		7,076		15,143		17,407
Provision for income taxes	2,000		538		4,700		9,463
Net income	$	8,338	$	6,538	$	10,443	$	7,944
Net income per share, basic	$	0.13	$	0.10	$	0.16	$	0.13
Net income per share, diluted	$	0.13	$	0.09	$	0.16	$	0.11
Weighted-average common shares outstanding, basic	64,441,000		62,496,289		64,140,087		62,201,182
Weighted-average common shares outstanding, diluted	64,696,992		74,250,360		64,462,318		74,135,121

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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RAPID7, INC.

Condensed Consolidated Statements of Comprehensive Income (Unaudited)

(in thousands)


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
Net income	$	8,338	$	6,538	$	10,443	$	7,944
Other comprehensive income (loss):
Change in fair value of cash flow hedges	2,800		(329)		4,615		(958)
Adjustment for net losses (gains) realized on cash flow hedges and included in net income, net of taxes	471		(92)		146		(473)
Total change in unrealized gains (losses) on cash flow hedges	3,271		(421)		4,761		(1,431)
Change in unrealized losses on investments	(176)		(209)		(42)		(764)


Total other comprehensive income (loss)	3,095		(630)		4,719		(2,195)
Comprehensive income	$	11,433	$	5,908	$	15,162	$	5,749

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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RAPID7, INC.

Condensed Consolidated Statements of Changes in Stockholders' Equity (Deficit) (Unaudited)

Three Months Ended June 30, 2025 and 2024

(in thousands)


	Common stock			Treasury stock			Additional paid-in-capital		Accumulated other comprehensive loss		Accumulated deficit		Total stockholders’ equity
	Shares	Amount		Shares	Amount
Balance, March 31, 2025	64,182	$	642	571	$	(4,765)	$	1,042,355	$	419	$	(985,929)	$	52,722
Stock-based compensation expense	—	—		—	—		26,134		—		—		26,134
Vesting of restricted stock units	518	5		—	—		(5)		—		—		—
Shares withheld for employee taxes	(25)	(1)		—	—		(596)		—		—		(597)
Issuance of common stock from aquisition	32	—		—	—		755		—		—		755
Other comprehensive gain	—	—		—	—		—		3,095		—		3,095
Net income	—	—		—	—		—		—		8,338		8,338
Balance, June 30, 2025	64,707	$	646	571	$	(4,765)	$	1,068,643	$	3,514	$	(977,591)	$	90,447


	Common stock			Treasury stock			Additional paid-in-capital		Accumulated other comprehensive loss		Accumulated deficit		Total stockholders’ deficit
	Shares	Amount		Shares	Amount
Balance, March 31, 2024	62,269	$	623	570	$	(4,765)	$	930,126	$	(221)	$	(1,012,154)	$	(86,391)
Stock-based compensation expense	—	—		—	—		29,066		—		—		29,066
Vesting of restricted stock units	457	5		—	—		(5)		—		—		—
Shares withheld for employee taxes	(33)	—		—	—		(1,326)		—		—		(1,326)
Issuance of common stock upon exercise of stock options	9	—		—	—		135		—		—		135
Other comprehensive loss	—	—		—	—		—		(630)		—		(630)
Net income	—	—		—	—		—		—		6,538		6,538
Balance, June 30, 2024	62,702	$	628	570	$	(4,765)	$	957,996	$	(851)	$	(1,005,616)	$	(52,608)

The accompanying notes are an integral part of these unaudited consolidated financial statements.

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RAPID7, INC.

Condensed Consolidated Statements of Changes in Stockholders' Equity (Deficit) (Unaudited)

Six Months Ended June 30, 2025 and 2024

(in thousands)


	Common stock			Treasury stock			Additional paid-in-capital		Accumulated other comprehensive loss		Accumulated deficit		Total stockholders’ equity
	Shares	Amount		Shares	Amount
Balance, December 31, 2024	63,497	$	635	571	$	(4,765)	$	1,011,080	$	(1,205)	$	(988,034)	$	17,711
Stock-based compensation expense	—	—		—	—		51,907		—		—		51,907
Issuance of common stock under employee stock purchase plan	187	2		—	—		4,444		—		—		4,446
Vesting of restricted stock units	874	9		—	—		(9)		—		—		—
Shares withheld for employee taxes	(62)	(1)		—	—		(1,899)		—		—		(1,900)
Vesting of equity awards previously classified as liabilities	22	—		—	—		777		—		—		777
Issuance of common stock upon exercise of stock options	157	1		—	—		1,588		—		—		1,589
Issuance of common stock from acquisition	32	—		—	—		755		—		—		755
Other comprehensive gain	—	—		—	—		—		4,719		—		4,719
Net income	—	—		—	—		—		—		10,443		10,443
Balance, June 30, 2025	64,707	$	646	571	$	(4,765)	$	1,068,643	$	3,514	$	(977,591)	$	90,447


	Common stock			Treasury stock			Additional paid-in-capital		Accumulated other comprehensive loss		Accumulated deficit		Total stockholders’ deficit
	Shares	Amount		Shares	Amount
Balance, December 31, 2023	61,714	$	617	570	$	(4,765)	$	898,185	$	1,344	$	(1,013,560)	$	(118,179)
Stock-based compensation expense	—	—		—	—		54,811		—		—		54,811
Issuance of common stock under employee stock purchase plan	121	2		—	—		5,044		—		—		5,046
Vesting of restricted stock units	782	8		—	—		(8)		—		—		—
Shares withheld for employee taxes	(62)	—		—	—		(3,090)		—		—		(3,090)
Vesting of equity awards previously classified as liabilities	27	—		—	—		1,652		—		—		1,652
Issuance of common stock upon exercise of stock options	120	1		—	—		1,402		—		—		1,403
Other comprehensive loss	—	—		—	—		—		(2,195)		—		(2,195)
Net income	—	—		—	—		—		—		7,944		7,944
Balance, June 30, 2024	62,702	$	628	570	$	(4,765)	$	957,996	$	(851)	$	(1,005,616)	$	(52,608)

The accompanying notes are an integral part of these unaudited consolidated financial statements.

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RAPID7, INC.

Condensed Consolidated Statements of Cash Flows (Unaudited)

(in thousands)


	Six Months Ended June 30,
	2025		2024
Cash flows from operating activities:
Net income	$	10,443	$	7,944
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	23,055		22,219
Amortization of debt issuance costs	2,018		2,108
Stock-based compensation expense	54,732		54,811


Deferred income taxes	—		1,840

Other	(4,694)		(1,352)
Changes in assets and liabilities:
Accounts receivable	17,492		19,990
Deferred contract acquisition and fulfillment costs	9,800		(1,964)
Prepaid expenses and other assets	(5,798)		430
Accounts payable	(2,959)		(3,021)
Accrued expenses	(13,236)		(18,391)
Deferred revenue	(12,325)		(23,346)
Other liabilities	(1,229)		2,660
Net cash provided by operating activities	77,299		63,928
Cash flows from investing activities:

Purchases of property and equipment	(2,309)		(900)
Capitalization of internal-use software	(8,033)		(6,289)
Purchases of investments	(232,016)		(157,967)
Sales and maturities of investments	120,500		130,001
Other investing activities	1,328		360
Net cash used in investing activities	(120,530)		(34,795)
Cash flows from financing activities:


Payment of debt issuance costs	(1,290)		—
Payments for maturity of convertible senior notes	(45,992)		—


Taxes paid related to net share settlement of equity awards	(1,898)		(3,089)
Proceeds from employee stock purchase plan	4,446		5,046
Proceeds from stock option exercises	1,589		1,404
Issuance of common stock from acquisition	755		—
Net cash (used in) provided by financing activities	(42,390)		3,361
Effect of exchange rate changes on cash ,cash equivalents and restricted cash	4,847		(2,076)
Net (decrease) increase in cash, cash equivalents and restricted cash	(80,774)		30,418
Cash, cash equivalents and restricted cash, beginning of period	342,101		214,130
Cash, cash equivalents and restricted cash, end of period	$	261,327	$	244,548
Supplemental cash flow information:
Cash paid for interest on convertible senior notes	$	2,970	$	3,215
Cash paid for income taxes, net of refund	5,712		5,505
Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents	$	261,327	$	236,975
Restricted cash included in other assets	—		7,573
Total cash, cash equivalents and restricted cash	$	261,327	$	244,548

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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RAPID7, INC.

Notes to Condensed Consolidated Financial Statements (Unaudited)

Note 1. Description of Business, Basis of Presentation and Consolidation and Significant Accounting Policies

Description of Business

Rapid7, Inc. and subsidiaries (“we,” “us” or “our”) are advancing security with visibility, analytics, and automation delivered through our platform solutions. Our solutions simplify the complex, allowing security teams to work more effectively with IT and development to reduce vulnerabilities, monitor for malicious behavior, investigate and shut down attacks, and automate routine tasks.

Immaterial Correction of an Error

During the fourth quarter of 2024, we identified an immaterial error related to stock-based compensation expense associated with certain restricted stock units (“RSUs”) and performance stock units (“PSUs”) granted during fiscal years 2023 and 2024 attributable to an improper valuation of the underlying awards, resulting in an understatement of stock-based compensation expense in 2023 and 2024. Based on an analysis of quantitative and qualitative factors in accordance with Staff Accounting Bulletin (“SAB”) No. 99, Materiality, and SAB No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements, and as described further in Note 16, Immaterial Correction of an Error, we evaluated the errors and determined the related impacts were not material to our consolidated financial statements for the prior periods when they occurred, but that correcting the cumulative errors in the period detected would have been material to our results of operations for that period. Accordingly, we revised previously reported comparative financial information presented herein for such immaterial errors.

Basis of Presentation and Consolidation

The accompanying unaudited condensed consolidated financial statements have been prepared by us in accordance with accounting principles generally accepted in the United States of America (“GAAP”), as well as pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”), regarding interim financial reporting. Accordingly, certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC on February 28, 2025.

The condensed consolidated financial statements include our results of operations and those of our wholly-owned subsidiaries and reflect all adjustments (consisting solely of normal, recurring adjustments) which are, in the opinion of management, necessary for a fair statement of results for the interim periods presented. All intercompany transactions and balances have been eliminated in consolidation. The results of operations for the three and six months ended June 30, 2025 are not necessarily indicative of the results to be expected for any future period or the entire fiscal year.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes.

The management estimates include, but are not limited to the determination of standalone selling prices in revenue transactions with multiple performance obligations, the estimated period of benefit for deferred contract acquisition costs, the useful lives and recoverability of long-lived assets, the valuation for credit losses, the valuation of stock-based compensation, the fair value of assets acquired and liabilities assumed in business combinations, the valuation of contingent consideration, the incremental borrowing rate for operating leases and the valuation for deferred tax assets. We base our estimates on historical experience and on various other assumptions that we believe are reasonable. Actual results could differ from those estimates.

Significant Accounting Policies

Our significant accounting policies are described in Note 2, Summary of Significant Accounting Policies, to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2024. There have been no changes to the significant accounting policies during the six-month period ended June 30, 2025.

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Recent Accounting Pronouncements

In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures ("ASU 2023-09"). This new guidance is designed to enhance the transparency and decision usefulness of income tax disclosures. The amendments of this update are related to the rate reconciliation and income taxes paid, requiring (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the effect of adopting this ASU.

Note 2. Revenue from Contracts with Customers

We generate revenue primarily from: (1) product subscriptions from the sale of cloud-based subscriptions, managed services, term software licenses, content subscriptions and maintenance and support associated with our software licenses and (2) professional services from the sale of our deployment and training services related to our solutions, incident response services, penetration testing and security advisory services.

Product Subscriptions

Product subscriptions consists primarily of revenue from our cloud-based subscription, managed services offerings, term software licenses, content subscriptions and maintenance and support associated with our software licenses.

•We generate cloud-based subscription revenue primarily from sales of subscriptions to access our cloud platform, together with related support services to our customers. These arrangements do not provide the customer with the right to take possession of our software operating on our cloud platform at any time. Instead, customers are granted continuous access to our cloud platform over the contractual period. Revenue is recognized over time on a ratable basis over the contract term beginning on the date that our service is made available to the customer. Our cloud-based subscription contracts generally have annual or multi-year contractual terms which are billed in advance of the annual subscription period and are non-cancellable.

•Managed services offerings consist of fees generated when we operate our software and provide our capabilities on behalf of our customers. Revenue is recognized on a ratable basis over the contract term beginning on the date that our service is made available to the customer. Our managed services offerings generally have annual or multi-year contractual terms which are billed in advance of the annual subscription period and are non-cancellable.

•For our term software licenses where the utility to the customer is dependent on the continued delivery of content subscriptions, we recognize the license revenue over the contractual term of the content subscription.

•Content subscriptions and our maintenance and support services are sold with our term software licenses. Revenue related to our content subscriptions associated with our software licenses is recognized ratably over the contractual period.

Professional Services

All of our professional services are considered distinct performance obligations when sold stand alone or with other products. These contracts generally have terms of one year or less. For the majority of these contracts, revenue is recognized over time based upon the proportion of work performed to date.

Contract Balances

Contract liabilities consist of deferred revenue and include payments received in advance of performance under the contract. Such amounts are recognized as revenue over the contractual period consistent with the above methodology. For the three months ended June 30, 2025 and 2024, we recognized revenue of $187.3 million and $179.0 million, respectively, and for the six months ended June 30, 2025 and 2024, we recognized $321.8 million and $310.8 million, respectively, that was included in the corresponding contract liability balance at the beginning of the periods presented. Deferred revenue that will be realized during the succeeding 12-month period is recorded as current, and the remaining deferred revenue is recorded as non-current.

We receive payments from customers based upon contractual billing schedules. Accounts receivable are recorded when the right to consideration becomes unconditional. Unbilled receivables include amounts related to our contractual right to consideration for both completed and partially completed performance obligations that have not been invoiced. If the right to consideration is based on satisfaction of another performance obligation in the contract other than the passage of time, we record a contract asset. As of June 30, 2025 and December 31, 2024, unbilled receivables of $2.2 million and $2.5 million,

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respectively, are included in prepaid expenses and other current assets in our consolidated balance sheet. As of June 30, 2025 and December 31, 2024, we had no contract assets recorded on our unaudited condensed consolidated balance sheet.

Transaction Price Allocated to the Remaining Performance Obligations

The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied or partially unsatisfied as of June 30, 2025. The estimated revenues do not include unexercised contract renewals.


	Next Twelve Months		Thereafter
	(in thousands)
Product subscriptions	$	578,500	$	279,032
Professional services	15,786		4,164
Total	$	594,286	$	283,196

Note 3. Business Combinations

Noetic Cyber, Inc.

On July 3, 2024, we acquired Noetic Cyber, Inc, (“Noetic”) a provider of cyber asset attack surface management, to extend Rapid7’s security operations platform by unlocking more accessible and accurate asset inventory in order to provide customers more comprehensive visibility to their attack surface, for a purchase price with an aggregate fair value of $51.2 million. The purchase consideration consisted of $38.6 million in cash paid at closing, $12.1 million of contingent consideration and $0.5 million of deferred cash payments. The deferred cash payments were held by Rapid7 to satisfy certain post-closing purchase price adjustments and payment was made during the fourth quarter of 2024.

Subject to the terms of the merger agreement, we are required to pay consideration of up to $20.0 million to Noetic shareholders based on the achievement of certain performance targets (the “Earnout Consideration”), measured annually upon the first, second and third anniversaries of the closing date of the transaction (the “Earnout Period”). If all performance targets are achieved, approximately $13.1 million of Earnout Consideration will be paid in cash, and the remaining $6.9 million of Earnout Consideration will be issued to certain employees in the form of shares of our common stock subject to continued employment requirements over the Earnout Period. The approximate $6.9 million of the Earnout Consideration that is subject to continued employment will be recognized as stock-based compensation expense over the required employment period. The fair value of the portion of the Earnout Consideration that is not subject to continued employment is included as part of purchase consideration at the date of the acquisition. As of July 3, 2024, we determined the fair value of the contingent purchase consideration to be $12.1 million. The fair value of the contingent purchase consideration will be reassessed each reporting period and any required adjustment will be recorded to general and administrative expense. As of June 30, 2025, the fair value of the contingent purchase consideration was $12.8 million of which $7.1 million was recorded within accrued expenses and other current liabilities and $5.7 million was recorded within other liabilities in our unaudited condensed consolidated balance sheet. For the three and six months ended June 30, 2025, we recorded approximately $0.2 million and $0.4 million of accretion expense related to the contingent purchase consideration to general and administrative expense.

In connection with the acquisition, we expect to issue an aggregate value of $2.3 million of our common stock to two key employees of Noetic in three installments over a 36-month period following the closing date of the transaction, subject to continued employment requirements (the “Key Employee Consideration”), which therefore will be recognized as stock-based compensation expense over the required employment period.

In June 2025, the Company issued 31,911 shares of common stock as the first installment of common stock issued to the two key Noetic employees.

The number of shares to be issued at each issuance date for both the Earnout Consideration and the Key Employee Consideration will be determined by dividing the aggregate value by the fair market value of our common stock on the issuance date, and therefore will be liability-classified until the final issuance dates. In the three and six months ended June 30, 2025, we recognized stock-based compensation expense related to such shares in the amount of $1.0 million and $2.1 million.

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The following table summarizes the preliminary allocation of purchase price to the estimated fair value of the assets acquired and liabilities assumed at the acquisition date (in thousands):


Consideration:
Cash	$	38,597
Deferred cash consideration	500
Contingent consideration	12,055
Fair value of total consideration transferred	$	51,152

Recognized amount of identifiable assets acquired and liabilities assumed:
Cash and cash equivalents	$	1,296
Accounts receivable	510
Prepaid and other current assets	102
Property and equipment, net	19
Accrued expenses and other current liabilities	(220)
Deferred revenue	(910)
Other long-term liabilities	(62)
Intangible asset	11,500
Total identifiable net assets assumed	$	12,235
Goodwill	38,917
Total purchase price allocation	$	51,152

We identified developed technology as the sole acquired intangible asset. The estimated fair value of the developed technology intangible asset was $11.5 million which was based on a valuation using a probability weighted expected return model (“PWERM”). The estimated useful life of the developed technology is 7 years.

The excess of the purchase price over the tangible assets acquired, identifiable intangible asset acquired and assumed liabilities was recorded as goodwill. We believe that the amount of goodwill reflects the expected synergistic benefits of being able to leverage the integration of the technology acquired with our existing product offerings and being able to successfully market and sell these new features to our customer base. The goodwill was allocated to our one reporting unit. The acquired goodwill and intangible asset were not deductible for tax purposes.

Our revenue and net loss attributable to the Noetic business for the six months ended June 30, 2025 were not material.

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Note 4. Investments

Our investments, which are all classified as available-for-sale, consisted of the following:


	June 30, 2025
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(in thousands)
Description:
U.S government agencies	$	338,351	$	205	$	(134)	$	338,422



Total assets	$	338,351	$	205	$	(134)	$	338,422


	As of December 31, 2024
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(in thousands)
Description:
U.S government agencies	$	224,187	$	328	$	(216)	$	224,299


Total	$	224,187	$	328	$	(216)	$	224,299

As of June 30, 2025 and December 31, 2024, our available-for-sale investments had maturities ranging from 1 to 18 and from 1 to 17 months, respectively.

For all of our investments for which the amortized cost basis was greater than the fair value at June 30, 2025 and December 31, 2024, we have concluded that there is no plan to sell the security nor is it more likely than not that we would be required to sell the security before its anticipated maturity. In making the determination as to whether the unrealized loss is other-than-temporary, we considered the length of time and extent the investment has been in an unrealized loss position, the financial condition and near-term prospects of the issuers, the issuers’ credit rating and the time to maturity.

Note 5. Fair Value Measurements

We measure certain financial assets and liabilities at fair value. Fair value is determined based upon the exit price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants, as determined by either the principal market or the most advantageous market. Inputs used in the valuation techniques to derive fair values are classified based on a three-level hierarchy, as follows:

•Level 1: Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.

•Level 2: Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities.

•Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the asset or liability.

We consider an active market to be one in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis, and consider an inactive market to be one in which there are infrequent or few transactions for the asset or liability, the prices are not current, or price quotations vary substantially either over time or among market makers.

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The following table presents our financial assets and liabilities measured and recorded at fair value on a recurring basis using the above input categories:


	As of June 30, 2025
	Level 1		Level 2		Level 3		Total
	(in thousands)
Description:
Assets:
U.S. government agencies	$	338,422	$	—	$	—	$	338,422
Foreign currency forward contracts designated as cash flow hedges (prepaid expenses and other current assets)	—		3,442		—		3,442
Total assets	$	338,422	$	3,442	$	—	$	341,864
Liabilities:
Contingent consideration (other current liabilities and other long-term liabilities)	—		—		12,789		12,789

Total liabilities	$	—	$	—	$	12,789	$	12,789


	As of December 31, 2024
	Level 1		Level 2		Level 3		Total
	(in thousands)
Description:
Assets:
U.S. government agencies	$	224,299	$	—	$	—	$	224,299


Foreign currency forward contracts designated as cash flow hedges (prepaid expenses and other current assets and other assets)	—		96		—		96
Total assets	$	224,299	$	96	$	—	$	224,395
Liabilities:
Contingent consideration (other current liabilities and other long-term liabilities)	$	—	$	—	$	12,422	$	12,422
Foreign currency forward contracts designated as cash flow hedges (other current liabilities)	—		1,415		—		1,415
Total liabilities	$	—	$	1,415	$	12,422	$	13,837

Cash and cash equivalents are excluded from the table above as carrying amounts reported in our unaudited condensed consolidated balance sheet equal or approximate fair value. As of June 30, 2025, the fair value of our 0.25% and 1.25% convertible senior notes due 2027 and 2029, as further described in Note 10, Debt, was $556.5 million and $265.1 million, respectively, based upon quoted market prices. We consider the fair value of the Notes (as defined in Note 10, Debt) to be a Level 2 measurement due to limited trading activity of the Notes. As of June 30, 2025, the fair value of our contingent consideration, as further described in Note 3, Business Combinations, was $12.8 million and is classified as a Level 3 measurement based on inputs not observable in the market.

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Note 6. Property and Equipment

Property and equipment are recorded at cost and consist of the following:


	June 30,		December 31,
	2025		2024
	(in thousands)
Computer equipment and software	$	29,733	$	28,789
Furniture and fixtures	11,168		10,960
Leasehold improvements	58,318		57,051
Total	99,219		96,800
Less accumulated depreciation	(69,580)		(64,555)
Property and equipment, net	$	29,639	$	32,245

We recorded depreciation expense of $2.3 million and $2.8 million for the three months ended June 30, 2025 and 2024, respectively, and $5.1 million and $5.7 million for the six months ended June 30, 2025 and 2024, respectively.

Note 7. Goodwill and Intangibles

Goodwill was $575.3 million as of June 30, 2025 and December 31, 2024.

The following table presents details of our intangible assets which include acquired identifiable intangible assets and capitalized internal-use software costs:


	Weighted- Average Estimated Useful Life (years)	As of June 30, 2025						As of December 31, 2024
		Gross Carrying Amount		Accumulated Amortization		Net Book Value		Gross Carrying Amount		Accumulated Amortization		Net Book Value
		(in thousands)
Intangible assets subject to amortization:
Developed technology	6.3	$	146,855	$	(103,039)	$	43,816	$	146,855	$	(94,193)	$	52,662
Customer relationships	4.3	12,000		(11,667)		333		12,000		(10,363)		1,637
Trade names	5.0	2,619		(2,619)		—		2,619		(2,559)		60
Total acquired intangible assets		$	161,474	$	(117,325)	$	44,149	$	161,474	$	(107,115)	$	54,359
Internal-use software	3.0	76,057		(45,225)		30,832		68,878		(37,518)		31,360
Total intangible assets		$	237,531	$	(162,550)	$	74,981	$	230,352	$	(144,633)	$	85,719

Intangible assets are expensed on a straight-line basis over the useful life of the asset. Amortization expense was $9.0 million and $8.1 million for the three months ended June 30, 2025 and 2024, respectively, and $17.9 million and $16.5 million for the six months ended June 30, 2025 and 2024, respectively.

Estimated future amortization expense of the acquired identifiable intangible assets and completed capitalized internal-use software costs as of June 30, 2025 was as follows (in thousands):


2025 (for the remaining six months)	$	16,369
2026	25,217
2027	12,826
2028	3,831
2029	3,243
2030 and thereafter	4,409
Total	$	65,895

The table above excludes the impact of $9.1 million of capitalized internal-use software costs for projects that have not been completed as of June 30, 2025, and therefore, all the costs associated with these projects have not been incurred.

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Note 8. Deferred Contract Acquisitions and Fulfillment Costs

The following table summarizes the activity of the deferred contract acquisition and fulfillment costs, which primarily consist of capitalized sales commissions, for the six months ended June 30, 2025 and 2024:


	Six Months Ended June 30,
	2025	2024
	(in thousands)
Beginning balance	125,806	121,609
Capitalization of contract acquisition and fulfillment costs	19,397	27,466
Amortization of deferred contract acquisition and fulfillment costs	(29,197)	(25,502)
Ending balance	116,006	123,573

Note 9. Derivative and Hedging Activities

To mitigate our exposure to foreign currency fluctuations resulting from certain expenses denominated in certain foreign currencies, we enter into forward contracts that are designated as cash flow hedging instruments. These forward contracts have contractual maturities of eighteen months or less, and as of June 30, 2025 and December 31, 2024, outstanding forward contracts had a total notional value of $57.8 million and $50.4 million, respectively. The notional value represents the gross amount of foreign currency that will be bought or sold upon maturity of the forward contract. During the three and six months ended June 30, 2025 and 2024, all cash flow hedges were considered effective. Refer to Note 5, Fair Value Measurements, for the fair values of our outstanding derivative instruments.

Note 10. Debt

Convertible Senior Notes

In May 2020, we issued $230.0 million aggregate principal amount of convertible senior notes due May 1, 2025 (the “2025 Notes”), in March 2021, we issued $600.0 million aggregate principal amount of convertible senior notes due March 15, 2027 (the “2027 Notes”), and in September 2023, we issued $300.0 million aggregate principal amount of convertible senior notes due March 15, 2029 (the “2029 Notes”) (collectively, the “Notes”). In September 2023, we used $201.0 million of the proceeds from the issuance of the 2029 Notes to repurchase and retire $184.0 million aggregate principal amount of the 2025 Notes and paid accrued and unpaid interest thereon. Further details of the Notes are as follows:


Issuance	Maturity Date	Interest Rate	First Interest Payment Date	Effective Interest Rate	Semi-Annual Interest Payment Dates	Initial Conversion Rate per $1,000 Principal	Initial Conversion Price		Number of Shares (in millions)
2025 Notes	May 1, 2025	2.25%	November 1, 2020	2.88%	May 1 and November 1	16.3875	$	61.02	0.8
2027 Notes	March 15, 2027	0.25%	September 15, 2021	0.67%	March 15 and September 15	9.6734	$	103.38	5.8
2029 Notes	March 15, 2029	1.25%	March 15, 2024	1.69%	March 15 and September 15	15.4213	$	64.85	4.6

On May 1, 2025, the Company paid $46.5 million to redeem the outstanding portion of the 2025 Notes, including the outstanding principal amount and accrued interest through the maturity date of the 2025 Notes.

The 2027 Notes and the 2029 Notes are senior unsecured obligations, do not contain any financial covenants and are governed by indentures between the Company, as issuer, and U.S. Trust Company, Bank National Association, as trustee (the “Indentures”). The total net proceeds from the 2025 Notes, the 2027 Notes and the 2029 Notes offerings, after deducting initial purchase discounts and debt issuance costs, were $222.8 million, $585.0 million and $292.0 million, respectively.

As of June 30, 2025, the 2027 Notes and the 2029 Notes were not convertible at the option of the holders.

The holders may convert the 2027 Notes and the 2029 Notes at any time on or after December 15, 2026 and December 15, 2028, respectively, until the close of business on the second scheduled trading day immediately preceding the maturity date, regardless of the circumstances set forth above. Upon conversion, we will pay or deliver, as the case may be, cash, shares of our common stock or a combination of cash and shares of our common stock, at our election, in the manner and subject to the terms and conditions provided in the Indentures.

If we undergo a fundamental change (as set forth in the Indentures) at any time prior to the maturity date, holders of the Notes will have the right, at their option, to require us to repurchase for cash all or any portion of their Notes at a repurchase price

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equal to 100% of the principal amount of the Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date. In addition, following certain corporate events that occur prior to the maturity date or following our issuance of a notice of redemption, in each case as described in the Indentures, we will increase the conversion rate for a holder of the Notes who elects to convert its Notes in connection with such a corporate event or during the related redemption period in certain circumstances.

For additional details on the terms of our Notes, see Note 11, Debt, to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2024.

Accounting for the Notes

In accounting for the issuance of the Notes, the principal less debt issuance costs are recorded as debt on our unaudited condensed consolidated balance sheet. The debt issuance costs are amortized to interest expense using the effective interest method over the contractual term of the Notes.

The net carrying amount of the Notes as of June 30, 2025 and December 31, 2024 was as follows (in thousands):


	2025 Notes						2027 Notes						2029 Notes
	Principal		Unamortized debt issuance costs		Total		Principal		Unamortized debt issuance costs		Total		Principal		Unamortized debt issuance costs		Total
Balance at December 31, 2024	$	45,992	$	(97)	$	45,895	$	600,000	$	(5,564)	$	594,436	$	300,000	$	(6,080)	$	293,920
Amortization of debt issuance costs	—		97		97		—		1,241		1,241		—		680		680
Principal payment upon maturity	(45,992)		—		(45,992)		—		—		—		—		—		—
Balance at June 30, 2025	$	—	$	—	$	—	$	600,000	$	(4,323)	$	595,677	$	300,000	$	(5,400)	$	294,600

Interest expense related to the Notes was as follows (in thousands):


	Three Months Ended June 30,
	2025								2024
	2025 Notes		2027 Notes		2029 Notes		Total		2025 Notes		2027 Notes		2029 Notes		Total
Contractual interest expense	$	86	$	375	$	938	$	1,399	$	259	$	375	$	937	$	1,571
Amortization of debt issuance costs	24		627		348		999		73		624		311		1,008
Total interest expense	$	110	$	1,002	$	1,286	$	2,398	$	332	$	999	$	1,248	$	2,579


	Six Months Ended June 30,
	2025								2024
	2025 Notes		2027 Notes		2029 Notes		Total		2025 Notes		2027 Notes		2029 Notes		Total
Contractual interest expense	$	345	$	750	$	1,875	$	2,970	$	518	$	750	$	1,874	$	3,142
Amortization of debt issuance costs	97		1,241		680		2,018		149		1,247		622		2,018
Total interest expense	$	442	$	1,991	$	2,555	$	4,988	$	667	$	1,997	$	2,496	$	5,160

Capped Calls

In connection with the offering of the 2025 Notes, the 2027 Notes and the 2029 Notes, we entered into privately negotiated capped call transactions with certain counterparties (the “2025 Capped Calls”, “2027 Capped Calls” and “2029 Capped Calls”) (collectively, the “Capped Calls”).

The Capped Calls are expected to reduce potential dilution to our common stock upon conversion of a given series of notes and/or offset any cash payments that we are required to make in excess of the principal amount of converted notes of such series, as the case may be, with such reduction and/or offset subject to a cap. The Capped Calls are subject to adjustment upon the occurrence of certain specified extraordinary events affecting us, including merger events, tender offers and announcement events. In addition, the Capped Calls are subject to certain specified additional disruption events that may give rise to a termination of the Capped Calls, including nationalization, insolvency or delisting, changes in law, failures to deliver, insolvency filings and hedging disruptions.

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The following table sets forth other key terms and premiums paid for the Capped Calls related to each series of Notes:


	Capped Calls Entered into in Connection with the Issuance of the 2025 Notes		Capped Calls Entered into in Connection with the Issuance of the 2027 Notes		Capped Calls Entered into in Connection with the Issuance of the 2029 Notes
Initial strike price, subject to certain adjustments	$	61.02	$	103.38	$	64.85
Cap price, subject to certain adjustments	$	93.88	$	159.04	$	97.88
Total premium paid (in thousands)	$	27,255	$	76,020	$	36,570
Expiration dates	March 4, 2025 - April 29, 2025		January 1, 2027 - March 11, 2027		February 13, 2029 - March 13, 2029

The 2025 Capped Calls expired in full on April 29, 2025. The Company did not elect to exercise any portion of the 2025 Capped Calls prior to expiration.

For additional details on the terms of our Capped Calls, see Note 11, Debt, to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2024.

For accounting purposes, the 2025 Capped Calls, the 2027 Capped Calls and the 2029 Capped Calls are separate transactions, and not part of the terms of the 2025 Notes, the 2027 Notes and the 2029 Notes. The 2025 Capped Calls, 2027 Capped Calls and 2029 Capped Calls are recorded in stockholders' equity and are not accounted for as derivatives.

Credit Agreement

On June 25, 2025 (the "Closing Date"), the Company entered into a credit agreement (the "Credit Agreement"), by and among the Company, Rapid7 LLC, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent, that provides for a $200.0 million revolving credit facility with a letter of credit sublimit of $20.0 million. The Credit Agreement allows for incremental facilities up to the greater of $141 million or 75% of Consolidated EBITDA (as defined in the Credit Agreement). Additional incremental facilities may be incurred, subject to certain conditions. We incurred fees of $1.6 million in connection with entering into the Credit Agreement. The fees are recorded in other current and non-current assets on the consolidated balance sheet and are amortized on a straight-line basis over the contractual term of the arrangement. Under the terms of the Credit Agreement, we are required to pay a commitment fee on the unused portion of the credit facility. The commitment fee rate is determined by the total net leverage ratio of the Company and its subsidiaries, ranging from 0.20% to 0.25% per annum on the unused portion of the credit facility. The commitment fee is expensed as incurred and included within interest expense on the condensed consolidated statement of operations. The Credit Agreement matures on the fifth anniversary of the Closing Date or, if certain specified liquidity conditions are not satisfied, 91 days prior to the earliest maturity date of either the 2027 or the 2029 Notes. The Credit Agreement also contains certain affirmative and negative covenants, including a requirement to maintain a minimum interest coverage ratio for the duration of the Credit Agreement and a maximum net leverage ratio.

The borrowings under the Credit Agreement bear interest at a variable annual rate based on either the Secured Overnight Financing Rate (SOFR) subject to a floor of zero or alternate base rate plus, in each case, a fixed margin, which varies depending on the Company’s net leverage ratio. As of June 30, 2025, we did not have any outstanding borrowings under the Credit Agreement.

As of June 30, 2025, we had a total of $6.0 million in letters of credit outstanding as collateral for certain office space leases which reduce the amount of borrowing availability under our Credit Agreement.

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Note 11. Stock-Based Compensation

(a) General

Stock-based compensation expense for restricted stock units (“RSUs”), performance-based restricted stock units (“PSUs”), stock options and purchase rights issued under our employee stock purchase plan was classified in the accompanying unaudited condensed consolidated statements of operations as follows:


	Three Months Ended June 30,			Six Months Ended June 30,
		2025		2024		2025		2024
		(in thousands)
Stock-based compensation expense:
Cost of revenue		$	2,580	$	3,270	$	4,844	$	5,941
Research and development		10,250		8,989		20,636		16,933
Sales and marketing		7,451		7,843		14,692		14,980
General and administrative		7,300		8,964		14,560		16,957
Total stock-based compensation expense		$	27,581	$	29,066	$	54,732	$	54,811

We recognize compensation cost of all awards on a straight-line basis over the applicable vesting period, which is generally three to four years.

Our Compensation Committee adopted and approved the performance goals, targets and payout formulas for our 2025 and 2024 bonus plans, including permitting our executive officers and certain other employees the opportunity to receive payment of their earned bonuses in the form of common stock (in lieu of cash). During each of the three months ended June 30, 2025 and 2024, we recognized stock-based compensation expense related to such bonuses in the amount of $0.4 million and $0.4 million, respectively, and during the six months ended June 30, 2025 and 2024, we recognized stock-based compensation expense in the amount of $0.7 million and $0.5 million, respectively, based on the probable expected performance against the pre-established corporate financial objectives as of June 30, 2025 and 2024. For employees, including executive officers, who elect to receive their bonuses in the form of common stock (in lieu of cash), the payouts are expected to be made in the form of fully vested stock awards in the first quarter of the following year pursuant to our 2015 Equity Incentive Plan, as amended. The number of shares underlying such awards is determined by dividing the dollar value of the actual bonus award payment by the closing price per share of our common stock on the date of grant.

(b) Restricted Stock, Restricted Stock Units and Performance-Based Restricted Stock Units

RSUs and PSUs activity during the six months ended June 30, 2025 was as follows:


	Shares	Weighted- Average Grant Date Fair Value












Unvested balance as of December 31, 2024	2,853,235	$	57.25
Granted	2,409,816	$	33.50
Vested	(897,008)	$	55.64
Forfeited	(404,603)	$	54.17
Unvested balance as of June 30, 2025	3,961,440	$	43.45

As of June 30, 2025, the unrecognized compensation expense related to our unvested RSUs and PSUs was $91.6 million. This unrecognized compensation expense will be recognized over an estimated weighted-average amortization period of 1.15 years.

In January 2025, our Compensation Committee awarded 181,067 PSUs that required the achievement of net annualized recurring revenue (“Net ARR”) and Adjusted EBITDA targets for the 2025 fiscal-year to earn any payout. Net ARR is defined as the change in the annual value of all recurring revenue related to contracts in place at year end. In addition, the portion of the PSUs that are earned would be capped at a maximum of 200% of the target level payout and if certain net ARR or Adjusted EBITDA goals were not met, no PSUs will be earned. The PSUs have a performance period of one year and the earned PSUs will vest in three equal installments following each of the first, second and third anniversary of the vesting commencement date, subject to the participant’s continuous service as of

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each such date. In the three and six months ended June 30, 2025, we recorded $0.6 million and $1.1 million, respectively, of stock-based compensation expense related to these PSUs based on estimated achievement of the performance criteria.

(c)Stock Options

The following tables summarizes information about stock option activity during the reporting periods:


	Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (in years)	Aggregate Intrinsic Value (in thousands)












Outstanding as of December 31, 2024	582,638	$	12.38		$	16,225
Granted	—
Exercised	(157,317)	$	10.10		$	4,541
Forfeited/cancelled	(200)	$	10.88		$	—
Outstanding as of June 30, 2025	425,121	$	13.23	1.1	$	4,215
Vested and exercisable as of June 30, 2025	425,121	$	13.23	1.1	$	4,215

(d)Employee Stock Purchase Plan

Under the Rapid7, Inc. 2015 Employee Stock Purchase Plan ("ESPP"), employees may set aside up to 15% of their gross earnings, on an after-tax basis, to purchase our common shares at a discounted price, which is calculated at 85% of the lesser of: (i) the market value of our common stock at the beginning of each offering period and (ii) the market value of our common stock on the applicable purchase date.

On March 14, 2025, we issued 186,793 shares of common stock to employees, with a purchase price of $23.79 per share, for aggregate proceeds of $4.4 million.

Note 12. Income Taxes

We provide for income taxes during interim periods based on our estimate of the effective tax rate for the year. Our effective tax rates for the three and six months ended June 30, 2025 and 2024 are as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024

Effective Tax Rate	19.3	%	7.6	%	31.0	%	54.4	%

The primary reconciling items between the Federal statutory tax rate of 21% and our overall effective rate for the three and six months ended June 30, 2025 were due to foreign taxes on our international operations, state income taxes, and the impact of valuation allowance on deferred tax assets.

The primary reconciling items between the Federal statutory tax rate of 21% and our overall effective rate for the three and six months ended June 30, 2024 were due to foreign taxes on our international operations, state income taxes, the impact of valuation allowance on deferred tax assets, and certain discrete items.

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Note 13. Net Income per Share

The following table summarizes the computation of basic and diluted net income per share of our common stock for the three months ended June 30, 2025 and 2024:


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
	(in thousands, except share and per share data)
Numerator:
Net income used to calculate net income, basic	$	8,338	$	6,538	$	10,443	$	7,944

Denominator:
Weighted-average common shares outstanding, basic	64,441,000		62,496,289		64,140,087		62,201,182
Weighted-average effect of dilutive shares:
Dilutive effect of equity incentive plans	255,992		570,460		322,231		750,328
Dilutive effect of convertible senior notes	—		11,183,611		—		11,183,611
Weighted-average common shares outstanding, diluted	64,696,992		74,250,360		64,462,318		74,135,121

Net income per share, basic	$	0.13	$	0.10	$	0.16	$	0.13
Net income per share, diluted	$	0.13	$	0.09	$	0.16	$	0.11

We intend to settle any conversion of our 2027 Notes and 2029 Notes in cash, shares, or a combination thereof. The dilutive impact of the Notes for our calculation of diluted net income per share is considered using the if-converted method. For the three and six months ended June 30, 2025 and 2024, the shares underlying the Notes were not considered in the calculation of diluted net income per share as the effect would have been anti-dilutive.

In connection with the issuance of the 2025 Notes, the 2027 Notes and the 2029 Notes, we entered into the 2025 Capped Calls, 2027 Capped Calls and 2029 Capped Calls, which were not included for the purpose of calculating the number of diluted shares outstanding, as their effect would have been anti-dilutive.

As of June 30, 2025, the 2027 Notes and the 2029 Notes were not convertible at the option of the holder. As of June 30, 2024, the 2025 Notes, the 2027 Notes and the 2029 Notes were not convertible at the option of the holder. We had not received any conversion notices through the issuance date of our unaudited condensed consolidated financial statements. For disclosure purposes, we have calculated the potentially dilutive effect of the conversion spread, which is included in the table below. The following potentially dilutive securities outstanding have been excluded from the computation of diluted weighted-average shares outstanding for the respective periods below because they would have been anti-dilutive:


	Three Months Ended June 30,		Six Months Ended June 30,
	2025	2024	2025	2024
Options to purchase common stock	—	595,498	—	595,498
Unvested restricted stock units	—	3,644,982	—	3,644,982
Common stock issued in conjunction to acquisitions	342,962	36,923	338,527	36,923
Shares to be issued under ESPP	129,195	85,855	129,195	85,855
Convertible senior notes	10,429,891	11,183,611	10,429,891	11,183,611
Total	10,902,048	15,546,869	10,897,613	15,546,869

Note 14. Commitments and Contingencies

(a) Purchase Obligations

In January 2025, we amended our contract with a cloud services provider which increased our total purchase obligation to $660 million, including a minimum purchase commitment of $125.0 million in 2025, 2026, 2027, 2028 and 2029, and an additional $35.0 million obligation over the five-year period.

(b) Warranty

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We provide limited product warranties. Historically, any payments made under these provisions have been immaterial.

(c)Litigation and Claims

From time to time, we may be a party to litigation or subject to claims incident to the ordinary course of business. Although the results of litigation and claims cannot be predicted with certainty, we currently believe that the final outcome of these ordinary course matters will not have a material adverse effect on our business. Regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.

(d)Indemnification Obligations

We agree to standard indemnification provisions in the ordinary course of business. Pursuant to these provisions, we agree to indemnify, hold harmless and reimburse the indemnified party for losses suffered or incurred by the indemnified party, generally our customers, in connection with any United States patent, copyright or other intellectual property infringement claim by any third party arising from the use of our products or services in accordance with the agreement or arising from our gross negligence, willful misconduct or violation of the law (provided that there is not gross or willful misconduct on the part of the other party) with respect to our products or services. The term of these indemnification provisions is generally perpetual from the time of execution of the agreement. We carry insurance that covers certain third-party claims relating to our services and limits our exposure. We have never incurred costs to defend lawsuits or settle claims related to these indemnification provisions.

As permitted under Delaware law, we have entered into indemnification agreements with our officers and directors, indemnifying them for certain events or occurrences while they serve as officers or directors of the company.

(d) Income Taxes

From time to time, we may receive income tax assessments from taxing authorities asserting additional tax liabilities owed by the Company. During the quarter ended June 30, 2024, we received an initial assessment from the Israel Tax Authority (“ITA”) of approximately 324 million Israeli New Shekels (approximately $88 million, based upon current exchange rates between the Israeli New Shekel and the US Dollar) related to fiscal year 2021. Based on our interpretation of the regulations and available case law, we believe that the tax positions we have taken on our filed tax return in Israel are sustainable and we intend to defend our position through all available means. As such, we have not recorded any impact of the ITA assessment in our unaudited condensed consolidated financial statements as of and for the three and six months ended June 30, 2025. We are continuing to monitor developments related to this matter and its impact on our existing income tax reserves for all open years. If we are unsuccessful in sustaining our tax position in this matter, our financial condition and results of operations would be adversely affected.

Note 15. Segment Information and Information about Geographic Areas

We operate in a single reportable operating segment, providing product subscriptions and professional services to our customers. The operating segment’s accounting policies are consistent with those described in Note 1, Summary of Significant Accounting Policies. Our chief operating decision maker (“CODM”) is our Chief Executive Officer. One of the measures of profit or loss that is used by our CODM to assess performance and allocate resources is consolidated net income, as reported in the condensed consolidated statements of operations. Consolidated net income is used by our CODM in monitoring actual versus budgeted results as well as in benchmarking against our competitors, which are used in assessing performance of the segment.

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The following table includes segment revenue, segment profit or loss, significant segment expenses and other segment expenses for the three and six months ended June 30, 2025 and 2024:


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
	(in thousands)
Total revenue	$	214,193	$	207,991	$	424,446	$	413,092
Adjusted total cost of revenue1	56,056		53,710		108,849		107,716
Adjusted research and development1	36,977		31,459		74,479		64,883
Adjusted sales and marketing1	71,144		69,631		142,651		134,937
Adjusted general and administrative1	13,668		13,915		29,766		25,805
Other segment expense, net2	28,010		32,738		58,258		71,807
Net income	$	8,338	$	6,538	$	10,443	$	7,944

1 Adjusted total cost of revenue excludes the impact of stock-based compensation expense and amortization of acquired intangible assets. Adjusted research and development excludes the impact of stock-based compensation expense. Adjusted sales and marketing excludes the impact of stock-based compensation and amortization of acquired intangible assets. Adjusted general and administrative excludes the impact of stock-based compensation, amortization of acquired intangible assets and acquisition-related expenses.

2 Other segment expenses include stock-based compensation expense, amortization of acquired intangible assets, acquisition-related expenses, restructuring expense, interest income, interest expense, other income (expense) and provision for income taxes. See the unaudited condensed consolidated financial statements for other financial information regarding our operating segment.

Net revenues by geographic area presented based upon the location of the customer are as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
	(in thousands)
United States	$	153,207	$	152,204	$	303,757	$	302,449
Rest of world	60,986		55,787		120,689		110,643
Total	$	214,193	$	207,991	$	424,446	$	413,092

Property and equipment, net by geographic area was as follows:


	As of June 30, 2025		As of December 31, 2024
	(in thousands)
United States	$	20,517	$	22,613
Rest of World	9,122		9,632
Total	$	29,639	$	32,245

Note 16. Immaterial Correction of an Error

During the fourth quarter of 2024, we identified an immaterial error related to stock-based compensation expense associated with certain RSUs and PSUs granted during fiscal years 2023 and 2024 attributable to an improper valuation of the underlying awards, resulting in an understatement of stock-based compensation expense in 2023 and 2024.

In accordance with Staff Accounting Bulletin (“SAB”) No. 99, Materiality, and SAB No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements, the Company evaluated the errors and determined that the related impact was not material to results of operations or financial position for any historical annual or interim period. As a result, we have corrected the errors by adjusting prior period financial statements

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as of and for the three and six months ended June 30, 2024. Refer to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2024 for detailed tables showing the effect of the immaterial error corrections to certain line items of our unaudited condensed consolidated statements of operations and unaudited condensed consolidated statements of cash flows for the interim period ended June 30, 2024.

Note 17. Subsequent Events

On July 4, 2025, President Donald Trump signed the One Big Beautiful Bill Act ("OBBBA"). The OBBBA changes the current tax law related to both corporate income taxes and deferred tax assets and liabilities, which the Company currently accounts for under ASC 740, Income taxes ("ASC 740"). The income tax effects of a change in tax law on current taxes related to current year ordinary income and changes to deferred taxes arising subsequent to the date of enactment are included in the annual effective tax rate, beginning in the period of enactment. The Company is currently evaluating the impact of the OBBBA on its business, financial condition, and results of operations under ASC 740.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with (1) our unaudited condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and (2) the audited consolidated financial statements and the related notes and Management’s Discussion and Analysis of Financial Condition and Results of Operations for the fiscal year ended December 31, 2024 included in our Annual Report on Form 10-K, filed with the SEC on February 28, 2025. Forward-looking statements in this review are qualified by the cautionary statement included under the next sub-heading, “Special Note Regarding Forward-Looking Statements”.

Special Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q, including the sections entitled “Risk Factors,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” contains forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they never materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements. Statements that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are often identified by the use of words such as, but not limited to, “anticipate,” “believe,” “can,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “project,” “seek,” “should,” “target,” “will,” “would” and similar expressions or variations intended to identify forward-looking statements. These forward-looking statements include, but are not limited to, statements concerning the following:

• our ability to continue to add new customers, maintain existing customers and sell new products and professional services to new and existing customers;

• uncertain impacts that prolonged economic uncertainty may have on our business, strategy, operating results, financial condition and cash flows, as well as changes in overall level of software spending and volatility in the global economy;

• the effects of increased competition as well as innovations by new and existing competitors in our market;

• our ability to effectively restructure our business in alignment with our strategic priorities;

• our ability to adapt to technological change and effectively enhance, innovate and scale our solutions, including our Command Platform;

• our ability to effectively manage or sustain our growth and to sustain profitability;

• our ability to diversify our sources of revenue;

• potential acquisitions and integration of complementary business and technologies;

• our expected use of proceeds from future issuances of equity or convertible debt securities;

• our ability to maintain, or strengthen awareness of, our brand;

• perceived or actual security, integrity, reliability, quality or compatibility problems with our solutions, including problems related to systems, unscheduled downtime, outages or security breaches in our customers;

• statements regarding future revenue, hiring plans, expenses, capital expenditures, capital requirements and stock performance;

• our ability to meet publicly announced guidance or other expectations about our business, key metrics and future operating results;

• our ability to maintain an adequate annualized recurring revenue growth;

• our ability to attract and retain qualified employees and key personnel and further expand our overall headcount;

• our ability to grow, both domestically and internationally;

• our ability to stay abreast of new or modified laws and regulations that currently apply or become applicable to our business both in the United States and internationally;

• our ability to maintain, protect and enhance our intellectual property;

• the outcomes of our initiatives that use artificial intelligence (“AI”);

• costs associated with defending intellectual property infringement and other claims; and

• the future trading prices of our common stock and the impact of securities analysts’ reports on these prices.

These statements represent the beliefs and assumptions of our management based on information currently available to us. Such forward-looking statements are subject to risks, uncertainties and other important factors that could cause actual results and the

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timing of certain events to differ materially from future results expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified below, and those discussed in the section titled “Risk Factors” included under Part I, Item 1A. Furthermore, such forward-looking statements speak only as of the date of this report. Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances that occur after the date of this report.

As used in this report, the terms “Rapid7,” the “company,” “we,” “us,” and “our” mean Rapid7, Inc. and its subsidiaries unless the context indicates otherwise.

Overview

Rapid7 is a global cybersecurity software and service provider on a mission to create a safer digital world by making cybersecurity simpler and more accessible. For more than twenty years, Rapid7 has partnered with enterprises across the globe representing a diverse range of industries to improve the efficacy and productivity of their security operations (“SecOps”). In today's rapidly evolving IT environment, customers are encountering escalating challenges due to the widening spectrum of attackers and techniques, including the proliferation of cyberattacks leveraging artificial intelligence (“AI”) and targeted automation. We empower security professionals to manage a modern attack surface through our trusted AI infused technology, leading-edge research, and broad, strategic expertise. Rapid7’s comprehensive security solutions help our global customers unite exposure management with threat detection and response to reduce attack surfaces and eliminate threats with speed and precision.

Our Command Platform is anchored on our cloud security, security information and event management (“SIEM”), advanced detection and response, and vulnerability management offerings. Rapid7 enables the Security Operations Center (“SOC”) to understand their fragmented attack surface with attacker perspective, allowing them to proactively secure their attack surface and better detect and respond to threats. Enriched by years of managed services expertise, our integrated security operations platform enables SecOps teams to move away from a reactive approach, reduce their attack surface, and enhance response efficiency with a deep contextual understanding of their environment.

In the past few years, we have observed the industry undergoing a customer-driven shift to consolidated security platforms. As part of this transition, customers are moving away from cloud security as a specialized function towards cloud security as an integrated capability for SecOps teams. We view this as a demand driver for integrated SecOps, and believe that we have an opportunity to be a leader in delivering integrated risk and threat management across on-premise, cloud, and external attack surfaces. As we have shifted our strategic focus to SecOps consolidation, we are focused on continuing to drive innovation across our core products and capabilities to accelerate customer value and provide a frictionless and integrated cloud security experience.

As the threat landscape continues to grow in complexity, customers are demonstrating demand for integrated expertise to support them in effectively managing their security technologies. The convergence of these key trends – security consolidation, integrated cloud security, and expertise driven outcomes – are the foundation of what our customers require for the modern SOC. Our focus is to be the leading provider of integrated security operations solutions by providing exposure and threat management that leverages our ability to give customers command of their attack surface.

We market and sell our products and professional services to organizations of all sizes globally, including mid-market businesses, enterprises, non-profits, educational institutions and government agencies. Our customers span a wide variety of industries such as technology, energy, financial services, healthcare and life sciences, manufacturing, media and entertainment, retail, education, real estate, transportation, government and professional services. As of June 30, 2025, we had over 11,000 customers in 151 countries, including 40% of the Fortune 100. Our revenue was not concentrated with any individual customer and no customer represented more than 1% of our revenue for the three and six months ended June 30, 2025 or 2024.

Recent Developments

Credit Agreement

On June 25, 2025 (the "Closing Date"), we entered into a credit agreement (the "Credit Agreement"), by and among the Company, Rapid7 LLC, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent, that provides for a $200.0 million revolving credit facility with a letter of credit sublimit of $20.0 million. The Credit Agreement allows for incremental facilities up to the greater of $141 million or 75% of Consolidated EBITDA (as defined in the Credit Agreement). Additional incremental facilities may be incurred, subject to certain conditions. We incurred fees of $1.6 million in connection with entering into the Credit Agreement. The fees are recorded as other current assets on the consolidated balance sheet and are amortized on a straight-line basis over the contractual term of the arrangement. Under the terms of the Credit Agreement, we are required to pay a commitment fee on the unused portion of the credit facility. The commitment fee rate is determined by the total net leverage ratio of the Company and its subsidiaries, ranging from 0.20% to 0.25% per annum on the unused portion of

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the credit facility. The commitment fee is expensed as incurred and included within interest expense on the consolidated statement of operations. The Credit Agreement matures on the fifth-anniversary of the Closing Date or, if certain specified liquidity conditions are note satisfied, 91 days prior to the earliest maturity date of either the 2027 or the 2029 Notes. The Credit Agreement also contains certain affirmative and negative covenants, including a requirement to maintain a minimum interest coverage ratio for the duration of the Credit Agreement and a maximum net leverage ratio.

As of June 30, 2025, we had a total of $6.0 million in letters of credit outstanding as collateral for certain office space leases and corporate credit card programs which reduce the amount of borrowing availability under our Credit Agreement.

New U.S. Federal Tax Legislation

On July 4, 2025, President Donald Trump signed the One Big Beautiful Bill Act ("OBBBA"). The OBBBA changes the current tax law related to both corporate income taxes and deferred tax assets and liabilities, which we currently accounts for under ASC 740, Income taxes ("ASC 740"). The income tax effects of a change in tax law on current taxes related to current year ordinary income and changes to deferred taxes arising subsequent to the date of enactment are included in the annual effective tax rate, beginning in the period of enactment. We are currently evaluating the impact of the OBBBA on its business, financial condition, and results of operations under ASC 740.

Our Business Model

We offer our products through a variety of delivery models to meet the needs of our diverse customer base, including:

•Cloud-based subscriptions, which provide our software capabilities to our customers through cloud access and on a subscription basis. Our InsightIDR, InsightCloudSec, InsightVM, InsightAppSec, InsightConnect and Threat Command products are offered as cloud-based subscriptions, with an option for a one or multi-year term.

•Managed services, through which we operate our products and provide our capabilities on behalf of our customers. Our Managed Vulnerability Management, Managed Detection and Response, and Managed Application Security products are offered on a managed service basis, pursuant to one or multi-year agreements.

•Licensed on-premise software consists of term licenses. When licensed on-premise software is purchased, maintenance and support and content subscriptions, as applicable, are bundled with the license for the term period. Our Nexpose and Metasploit products are offered through term software licenses with an option for one or multi-year terms. Our maintenance and support provides our customers with telephone and web-based support and ongoing bug fixes and repairs during the term of the maintenance and support agreement, and our customers who purchase our Nexpose and Metasploit products also purchase content subscriptions, which provide them with real-time access to the latest vulnerabilities and exploits.

Additionally, we offer our products through our consolidation offerings, which unify our products and services to our customers in a single package. Our Threat Complete and Cloud Risk Complete packages are offered as cloud based subscriptions, with an option for a one or multi-year term. Our Managed Threat Complete Offering is offered on a managed service basis, generally pursuant to one or multi-year agreements.

For the three and six months ended June 30, 2025 and 2024, recurring revenue, defined as revenue from term software licenses, content subscriptions, managed services, cloud-based subscriptions and maintenance and support, was 97%, and 96%, respectively, of total revenue.

Immaterial Correction of an Error

During the fourth quarter of 2024, we identified an immaterial error related to stock-based compensation expense associated with certain restricted stock units (“RSUs”) and performance stock units (“PSUs”) granted during fiscal years 2023 and 2024 attributable to an improper valuation of the underlying awards, resulting in an understatement of stock-based compensation expense in 2023 and 2024. In accordance with Staff Accounting Bulletin (“SAB”) No. 99, Materiality, and SAB No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements, we evaluated the errors and determined the related impacts were not material to our unaudited consolidated financial statements for the prior periods when they occurred, but that correcting the cumulative errors in the period detected would have been material to our results of operations for that period. Accordingly, we revised previously reported comparative financial information presented herein for such immaterial errors. Refer to Note 16, Immaterial Correction of an Error, in the notes to our unaudited condensed consolidated financial statements for further information.

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Components of Results of Operations

Revenue

We generate revenue primarily from selling products and professional services through a variety of delivery models to meet the needs of our diverse customer base.

Product Subscriptions

We generate product subscriptions revenue from the sale of (1) cloud-based subscriptions, (2) managed services offerings, which utilize our products and (3) software licenses with related maintenance and support and content subscription, as applicable. Software license revenue consists of revenues from term licenses. When software licenses are purchased, maintenance and support and content subscription, as applicable, are bundled with the license for the term period.

Professional Services

We generate professional service revenue from the sale of deployment and training services related to our products, incident response services and security advisory services.

Cost of Revenue

Our total cost of revenue consists of the costs of product subscriptions and professional services, as noted below. In addition, cost of revenue includes overhead costs for depreciation, facilities, IT, information security, and recruiting. Our IT overhead costs include IT personnel compensation costs and costs associated with our IT infrastructure. All overhead costs are allocated based on relative headcount.

Cost of Product Subscriptions

Cost of product subscriptions consists of personnel and related costs for our content, support, managed service and cloud operations teams, including salaries and other payroll related costs, bonuses, stock-based compensation and allocated overhead costs. Also included in cost of products are software license fees, cloud computing costs and internet connectivity expenses directly related to delivering our products, amortization of contract fulfillment costs, as well as amortization of certain intangible assets including internally developed software.

Cost of Professional Services

Cost of professional services consists of personnel and related costs for our professional services team, including salaries and other payroll related costs, bonuses, stock-based compensation, costs of contracted third-party vendors, travel and entertainment expenses and allocated overhead costs.

We expect our cost of revenue to increase on an absolute dollar basis as we continue to grow our revenue.

Gross Margin

Gross margin, or gross profit as a percentage of revenue, has been and will continue to be affected by a variety of factors, including the average sales price of our products and services, transaction volume growth, the mix of revenue between software licenses, cloud-based subscriptions, managed services and professional services and changes in cloud computing costs.

We expect our gross margins to fluctuate over time depending on the factors described above.

Operating Expenses

Operating expenses consist of research and development, sales and marketing, general and administrative expenses, and restructuring. Operating expenses include overhead costs for depreciation, facilities, IT, information security and recruiting. Our IT overhead costs include IT personnel compensation costs and costs associated with our IT infrastructure. All overhead costs are allocated based on relative headcount. In the near term, we expect our operating expenses to increase as a percentage of revenue as we prioritize investments to drive growth.

Research and Development Expense

Research and development expense consists of personnel costs for our research and development team, including salaries and other payroll related costs, bonuses and stock-based compensation. Additional expenses include third-party infrastructure costs,

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travel and entertainment, consulting and professional fees for third-party development resources as well as allocated overhead costs.

Sales and Marketing Expense

Sales and marketing expense consists of personnel costs for our sales and marketing team, including salaries and other payroll related costs, commissions, including amortization of deferred commissions, bonuses and stock-based compensation. Additional expenses include marketing activities and promotional events, travel and entertainment, training costs, amortization of certain intangible assets and allocated overhead costs.

General and Administrative Expense

General and administrative expense consists of personnel costs for our executive, legal, human resources, and finance and accounting departments, including salaries and other payroll related costs, bonuses and stock-based compensation. Additional expenses include travel and entertainment, professional fees, litigation-related expenses, insurance, acquisition-related expenses, amortization of certain intangible assets and allocated overhead costs.

Interest Income

Interest income consists primarily of interest income on our cash and cash equivalents and our short and long-term investments.

Interest Expense

Interest expense consists primarily of contractual interest expense, amortization of debt issuance costs related to our convertible senior notes and revolving credit facility and induced conversion expense. We expect interest expense in the near term to represent contractual interest expense and amortization of debt issuance costs related to our convertible senior notes.

Other Income (Expense), Net

Other income (expense), net consists primarily of the change in fair value of derivative assets and unrealized and realized gains and losses related to changes in foreign currency exchange rates.

Provision for Income Taxes

Provision for income taxes consists of domestic and foreign taxes on income and withholding taxes. We maintain a substantially full valuation allowance for domestic and certain foreign deferred tax assets, including net operating loss carryforwards and tax credits. We determined as of June 30, 2025 that it was more likely than not that these deferred tax assets will not be realized. However, we may release some of these valuation allowances in future periods if objective negative evidence of cumulative losses is no longer present and positive evidence, such as projection of future growth, supports the realization of such deferred tax assets. Release of all or a portion of these valuation allowances would result in a decrease in the provision for income taxes in the period of the release.

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Results of Operations


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
	(in thousands)
Consolidated Statement of Operations Data:
Revenue:
Product subscriptions	$	208,097	$	200,067	$	412,032	$	396,985
Professional services	6,096		7,924		12,414		16,107
Total revenue	214,193		207,991		424,446		413,092
Cost of revenue:(1)
Product subscriptions	57,236		55,107		111,604		109,841
Professional services	5,823		5,885		10,935		12,145
Total cost of revenue	63,059		60,992		122,539		121,986
Operating expenses:(1)
Research and development	47,227		40,448		95,115		81,816
Sales and marketing	79,247		78,126		158,647		151,221
General and administrative	21,166		23,202		44,752		43,130


Total operating expenses	147,640		141,776		298,514		276,167
Income from operations	3,494		5,223		3,393		14,939
Interest income	5,514		5,221		11,272		9,941
Interest expense	(2,627)		(2,673)		(5,281)		(5,343)
Other income (loss), net	3,957		(695)		5,759		(2,130)
Income before income taxes	10,338		7,076		15,143		17,407
Provision for income taxes	2,000		538		4,700		9,463
Net income	$	8,338	$	6,538	$	10,443	$	7,944

(1) Cost of revenue and operating expenses include stock-based compensation expense and depreciation and amortization expense as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
	(in thousands)
Stock-based compensation expense:
Cost of revenue	$	2,580	$	3,270	$	4,844	$	5,941
Research and development	10,250		8,989		20,636		16,933
Sales and marketing	7,451		7,843		14,692		14,980
General and administrative	7,300		8,964		14,560		16,957
Total stock-based compensation expense	$	27,581	$	29,066	$	54,732	$	54,811


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
	(in thousands)
Depreciation and amortization expense:
Cost of revenue	$	8,832	$	7,926	$	17,506	$	16,226
Research and development	648		839		1,558		1,698
Sales and marketing	1,557		1,669		3,223		3,402
General and administrative	353		437		768		893
Total depreciation and amortization expense	$	11,390	$	10,871	$	23,055	$	22,219

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The following table sets forth our consolidated statements of operations data expressed as a percentage of revenue:


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
Consolidated Statement of Operations Data:
Revenue:
Product subscriptions	97.2	%	96.2	%	97.1	%	96.1	%
Professional services	2.8		3.8		2.9		3.9
Total revenue	100.0		100.0		100.0		100.0
Cost of revenue:
Product subscriptions	26.7		26.5		26.3		26.6
Professional services	2.7		2.8		2.6		2.9
Total cost of revenue	29.4		29.3		28.9		29.5
Operating expenses:
Research and development	22.0		19.4		22.4		19.8
Sales and marketing	37.0		37.6		37.4		36.6
General and administrative	9.9		11.2		10.5		10.4
Total operating expenses	68.9		68.2		70.3		66.8
Income from operations	1.6		2.5		0.8		3.7
Interest income	2.6		2.5		2.7		2.4
Interest expense	(1.2)		(1.3)		(1.2)		(1.3)
Other income (loss), net	1.8		(0.3)		1.4		(0.5)
Income before income taxes	4.8		3.4		3.7		4.3
Provision for income taxes	0.9		0.3		1.1		2.3
Net income	3.9	%	3.1	%	2.6	%	2.0	%

Comparison of the Three and Six Months Ended June 30, 2025 and 2024

Revenue


	Three Months Ended June 30,				Change				Six Months Ended June 30,				Change
	2025		2024		$		%		2025		2024		$		%
	(dollars in thousands)
Revenue:
Product subscriptions	$	208,097	$	200,067	$	8,030	4.0	%	$	412,032	$	396,985	$	15,047	3.8	%
Professional services	6,096		7,924		(1,828)		(23.1)	%	12,414		16,107		(3,693)		(22.9)	%
Total revenue	214,193		$	207,991	$	6,202	3.0	%	$	424,446	$	413,092	$	11,354	2.7	%

Total revenue increased by $6.2 million in the three months ended June 30, 2025 compared to the same period in 2024, due to a $9.1 million increase in revenue from existing customers, partially offset by a $2.9 million decrease in revenue from new customers. Total revenue increased by $11.4 million in the six months ended June 30, 2025 compared to the same period in 2024, due to an $17.2 million increase in revenue from existing customers, partially offset by a $5.8 million decrease in revenue from new customers. The increase in revenue from existing customers was due to an increase in revenue from renewals, upsells and cross-sells as a result of the continued growth of our existing customer base. Revenue from new customers represents the revenue recognized from the customer's initial purchase.

The increase in total revenue in the three months ended June 30, 2025 compared to the same period in 2024 was comprised of $1.2 million generated from sales in North America and $4.9 million generated from sales from the rest of the world. The increase in total revenue in the six months ended June 30, 2025 compared to the same period in 2024 was comprised of $1.9 million generated from sales in North America and $9.4 million generated from sales from the rest of the world.

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Cost of Revenue


	Three Months Ended June 30,						Change				Six Months Ended June 30,						Change
	2025			2024			$		%		2025			2024			$		%
	(dollars in thousands)
Cost of revenue:
Product subscriptions	$	57,236		$	55,107		$	2,129	3.9	%	$	111,604		$	109,841		$	1,763	1.6	%
Professional services	5,823			5,885			(62)		(1.1)	%	10,935			12,145			(1,210)		(10.0)	%
Total cost of revenue	63,059			$	60,992		$	2,067	3.4	%	$	122,539		$	121,986		$	553	0.5	%
Gross margin %:
Products	72.5		%	72.5		%					72.9		%	72.3		%
Professional services	4.5		%	25.7		%					11.9		%	24.6		%
Total gross margin %	70.6		%	70.7		%					71.1		%	70.5		%

Total cost of revenue increased by $2.1 million in the three months ended June 30, 2025 compared to the same period in 2024, due to a $1.6 million increase in cloud computing costs, a $0.6 increase in amortization expense for capitalized internally-developed software, a $0.4 million increase in royalties and subscriptions and a $0.6 million increase in other expenses. These increases were partially offset by a $1.1 million decrease in personnel costs, inclusive of a $3.8 million decrease due to a shift in the nature of certain roles and responsibilities between product delivery and sales support functions which were partially offset by a $2.7 million increase due to an increase in headcount excluding the aforementioned shift in roles.

Total cost of revenue increased by $0.6 million in the six months ended June 30, 2025 compared to the same period in 2024, due to a $3.1 million increase in cloud computing costs, a $0.9 million increase in amortization expense for capitalized internally-developed software, a $0.9 million increase in royalties and subscriptions and a $0.8 million increase in other expenses. These increases were partially offset by a $3.2 million decrease in personnel costs, inclusive of a $6.0 million decrease due to a shift in the nature of certain roles and responsibilities between product delivery and sales support functions which were partially offset by a $2.8 million increase due to an increase in headcount excluding the aforementioned shift in roles, a $1.0 million decrease on third-party professional services consulting spend primarily driven by a related decrease in professional services revenue, and a $0.9 million decrease in allocated overhead costs.

Total gross margin percentage increased for the three and six months ended June 30, 2025 compared to the same period in 2024, primarily due to an increase in products gross margin due to the decrease in personnel costs described above.

Operating Expenses

Research and Development Expense


	Three Months Ended June 30,						Change				Six Months Ended June 30,						Change
	2025			2024			$		%		2025			2024			$		%
	(dollars in thousands)
Research and development	$	47,227		$	40,448		$	6,779	16.8	%	$	95,115		$	81,816		$	13,299	16.3	%
% of revenue	22.0		%	19.4		%					22.4		%	19.8		%

Research and development expense increased by $6.8 million in the three months ended June 30, 2025 compared to the same period in 2024, primarily due to a $4.7 million increase in personnel costs, inclusive of a $1.3 million increase in stock-based compensation expense resulting from an increase in headcount, a $1.3 million increase in third-party cloud infrastructure costs related to new product development and a $0.8 million increase in other expenses.

Research and development expense increased by $13.3 million in the six months ended June 30, 2025 compared to the same period in 2024, primarily due to a $9.0 million increase in personnel costs, inclusive of a $3.7 million increase in stock-based compensation expense resulting from an increase in headcount, a $2.2 million increase in third-party cloud infrastructure costs related to new product development, a $0.8 million increase in allocated overhead costs and a $1.3 million increase in other expenses.

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Sales and Marketing Expense


	Three Months Ended June 30,						Change				Six Months Ended June 30,						Change
	2025			2024			$		%		2025			2024			$		%
	(dollars in thousands)
Sales and marketing	$	79,247		$	78,126		$	1,121	1.4	%	$	158,647		$	151,221		$	7,426	4.9	%
% of revenue	37.0		%	37.6		%					37.4		%	36.6		%

Sales and marketing expense increased by $1.1 million in the three months ended June 30, 2025 compared to the same period in 2024, primarily due to a $0.7 million increase in personnel costs, inclusive of a $3.8 million increase driven by a shift in the nature of certain roles and responsibilities between product delivery and sales support functions partially offset by a $3.1 million decrease due to decreased headcount excluding the aforementioned shift in roles, a $0.7 million increase in allocated overhead expenses and a $0.4 million increase in commissions expense. These increases were partially offset by a $0.7 million decrease in other expenses.

Sales and marketing expense increased by $7.4 million in the six months ended June 30, 2025 compared to the same period in 2024, primarily due to a $2.1 million increase in personnel costs, inclusive of a $6.0 million increase driven by a shift in the nature of certain roles and responsibilities between product delivery and sales support functions partially offset by a $3.9 million decrease due to decreased headcount excluding the aforementioned shift in roles, a $2.7 million increase in commissions expense, a $1.1 million increase in office related expenses driven by higher costs related to corporate events and related activities, a $0.7 million increase in marketing and advertising expense and a $0.7 million increase in other expenses.

General and Administrative Expense


	Three Months Ended June 30,						Change				Six Months Ended June 30,						Change
	2025			2024			$		%		2025			2024			$		%
	(dollars in thousands)
General and administrative	$	21,166		$	23,202		$	(2,036)	(8.8)	%	$	44,752		$	43,130		$	1,622	3.8	%
% of revenue	9.9		%	11.2		%					10.5		%	10.4		%

General and administrative expense decreased by $2.0 million in the three months ended June 30, 2025 compared to the same period in 2024, primarily due to a $1.3 million decrease in charitable contributions and taxes, a $0.8 million decrease in personnel costs and a $0.5 million decrease in operating expenses largely related to bad debt expense. These decreases were partially offset by a $0.5 million increase in professional fees.

General and administrative expense increased by $1.6 million in the six months ended June 30, 2025 compared to the same period in 2024, primarily due to a $2.3 million increase in professional fees related to accounting, legal and corporate advisory services and a $0.7 million increase in operating expenses largely related to bad debt expense. These increases were partially offset by a $1.0 million decrease related to charitable contributions and taxes and a $0.7 million decrease in personnel cost.

Interest Income


	Three Months Ended June 30,						Change				Six Months Ended June 30,						Change
	2025			2024			$		%		2025			2024			$		%
	(dollars in thousands)
Interest income	$	5,514		$	5,221		$	293	5.6	%	$	11,272		$	9,941		$	1,331	13.4	%
% of revenue	2.6		%	2.5		%					2.7		%	2.4		%

Interest income increased by $0.3 million in the three months ended June 30, 2025 compared to the same period in 2024, primarily due to higher interest income as a result of an increase in cash and cash equivalents and investments as well as favorable market conditions.

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Interest income increased by $1.3 million in the six months ended June 30, 2025 compared to the same period in 2024, primarily due to higher interest income as a result of an increase in cash and cash equivalents and investments as well as favorable market conditions.

Interest Expense


	Three Months Ended June 30,						Change				Six Months Ended June 30,						Change
	2025			2024			$		%		2025			2024			$		%
	(dollars in thousands)
Interest expense	$	(2,627)		$	(2,673)		$	46	(1.7)	%	$	(5,281)		$	(5,343)		$	62	(1.2)	%
% of revenue	(1.2)		%	(1.3)		%					(1.2)		%	(1.3)		%

Interest expense remained consistent in the three and six months ended June 30, 2025 compared to the same period in 2024.

Other Income (Expense), Net


	Three Months Ended June 30,						Change				Six Months Ended June 30,						Change
	2025			2024			$		%		2025			2024			$		%
	(dollars in thousands)
Other income (expense), net	$	3,957		$	(695)		$	4,652	(669.4)	%	$	5,759		$	(2,130)		$	7,889	(370.4)	%
% of revenue	1.8		%	(0.3)		%					1.4		%	(0.5)		%

Other income (expense), net increased by $7.9 million in the six months ended June 30, 2025 compared to the same period in 2024, due to favorable market conditions resulting in an increase in unrealized gains primarily related to the British Pound Sterling and recognition of realized gains during the period.

Provision for Income Taxes


	Three Months Ended June 30,						Change				Six Months Ended June 30,						Change
	2025			2024			$		%		2025			2024			$		%
	(dollars in thousands)
Provision for income taxes	$	2,000		$	538		$	1,462	271.7	%	$	4,700		$	9,463		$	(4,763)	(50.3)	%
% of revenue	0.9		%	0.3		%					1.1		%	2.3		%

Provision for income taxes increased by $1.5 million in the three months ended June 30, 2025 compared to the same period in 2024 primarily due to increased pre-tax earnings in the current period, resulting in an increase in domestic and international taxes.

Provision for income taxes decreased by $4.8 million in the six months ended June 30, 2025 compared to the same period in 2024 primarily due to $6.4 million of tax expense recorded in the prior period for an intercompany sale of intellectual property as part of post-acquisition strategy related to the acquisition of Minerva Lab Ltd., partially offset by an increase in domestic and international taxes in the current period.

Key Metrics

We monitor the following key metrics to help us measure and evaluate the effectiveness of our operations and as a means to evaluate period-to-period comparisons. We believe that both management and investors benefit from referring to these key metrics as supplemental information in assessing our performance and when planning, forecasting, and analyzing future periods. These key metrics also facilitate management's internal comparisons to our historical performance as well as comparisons to certain competitors' operating results. We believe these key metrics are useful to investors both because they allow for greater transparency with respect to key metrics used by management in its financial and operational decision-making and also because they are used by institutional investors and the analyst community to help evaluate the health of our business:

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	Three Months Ended June 30,						Six Months Ended June 30,
	2025			2024			2025			2024
	(dollars in thousands)
Total revenue	$	214,193		$	207,991		$	424,446		$	413,092
Year-over-year growth	3.0		%	9.2		%	2.7		%	10.6		%
Non-GAAP income from operations	$	36,348		$	39,276		$	68,701		$	79,561
Non-GAAP operating margin	17.0		%	18.9		%	16.2		%	19.3		%
Free cash flow	$	42,280		$	29,205		$	66,957		$	56,739


	As of June 30,
	2025			2024
	(dollars in thousands)
Annualized recurring revenue (“ARR”)	$	840,610		$	815,630
Year-over-year growth	3.1		%	8.6		%
Number of customers	11,643			11,484
Year-over-year growth	1.4		%	1.7		%
ARR per customer	$	72.2		$	71.0
Year-over-year growth	1.7		%	6.8		%

Total Revenue and Growth. We are focused on driving continued revenue growth through increased sales of our products and professional services to new and existing customers. We monitor total revenue and believe it is useful to investors as a measure of the overall success of our business.

Non-GAAP Income from Operations and Non-GAAP Operating Margin. We monitor non-GAAP income from operations and non-GAAP operating margin, non-GAAP financial measures, to analyze our financial results. We believe non-GAAP income from operations and non-GAAP operating margin are useful to investors, as supplements to U.S. GAAP measures, in evaluating our ongoing operational performance and enhancing an overall understanding of our past financial performance and allowing for greater transparency with respect to metrics used by our management in its financial and operational decision-making. See "Non-GAAP Financial Results" below for further information on non-GAAP income from operations and a reconciliation of non-GAAP income from operations to the comparable GAAP financial measure.

Free Cash Flow. Free cash flow is a non-GAAP measure that we define as cash provided by operating activities less purchases of property and equipment and capitalization of internal-use software costs. We consider free cash flow to be a liquidity measure that provides useful information to management and investors about the amount of cash generated by the business after necessary capital expenditures. See "Non-GAAP Financial Results" below for a reconciliation of non-GAAP free cash flow to the comparable GAAP financial measure.

Annualized Recurring Revenue and Growth. ARR is defined as the annual value of all recurring revenue related to contracts in place at the end of the quarter. ARR should be viewed independently of revenue and deferred revenue, as ARR is an operating metric and is not intended to be combined with or replace these items. ARR is not a forecast of future revenue, which can be impacted by contract start and end dates and renewal rates and does not include revenue reported as professional services revenue in our consolidated statement of operations. We use ARR and believe it is useful to investors as a measure of the overall success of our business.

Number of Customers. We believe that the size of our customer base is an indicator of our global market penetration and that our net customer additions are an indicator of the growth of our business. We define a customer as any entity that has an active Rapid7 recurring revenue contract as of the specified measurement date, excluding only InsightOps and Logentries customers with a contract value less than $2,400 per year.

ARR per Customer. ARR per customer is defined as ARR divided by the number of customers at the end of the period.

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Non-GAAP Financial Results

To supplement our consolidated financial statements, which are prepared and presented in accordance with GAAP, we may provide investors with certain non-GAAP financial measures from time to time, including non-GAAP gross profit, non-GAAP income from operations, non-GAAP operating margin, non-GAAP net income, non-GAAP net income per share, adjusted EBITDA and free cash flow. The presentation of the non-GAAP financial measures is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. We use these non-GAAP financial measures for financial and operational decision-making purposes and as a means to evaluate period-to-period comparisons, and use certain non-GAAP financial measures as performance measures under our executive bonus plan. We believe that these non-GAAP financial measures provide useful information about our operating results, enhance the overall understanding of past financial performance and future prospects and allow for greater transparency with respect to metrics used by our management in its financial and operational decision-making. While our non-GAAP financial measures are an important tool for financial and operational decision-making and for evaluating our own operating results over different periods of time, you should review the reconciliation of our non-GAAP financial measures to the comparable GAAP financial measures included below, and not rely on any single financial measure to evaluate our business.

We define non-GAAP gross profit, non-GAAP income from operations, non-GAAP operating margin, non-GAAP net income and non-GAAP net income per share as the respective GAAP balances excluding the effect of stock-based compensation expense, amortization of acquired intangible assets, amortization of debt issuance costs and certain other items such as acquisition-related expenses, non-ordinary course litigation-related expenses, impairment of long-lived assets, change in the fair value of derivative assets, restructuring expense and discrete tax items. Non-GAAP net income per basic and diluted share is calculated as non-GAAP net income divided by the weighted average shares used to compute net income per share, with the number of weighted average shares decreased, when applicable, to reflect the anti-dilutive impact of the capped call transactions entered into in connection with our convertible senior notes.

We believe these non-GAAP financial measures are useful to investors in assessing our operating performance due to the following factors:

•Stock-based compensation expense. We exclude stock-based compensation expense because of varying available valuation methodologies, subjective assumptions and the variety of equity instruments that can impact our non-cash expense. We believe that providing non-GAAP financial measures that exclude stock-based compensation expense allows for more meaningful comparisons between our operating results from period to period.

•Amortization of acquired intangible assets. We believe that excluding the impact of amortization of acquired intangible assets allows for more meaningful comparisons between operating results from period to period as the intangible assets are valued at the time of acquisition and are amortized over several years after the acquisition.

•Amortization of debt issuance costs. The expense for the amortization of debt issuance costs related to our convertible senior notes and revolving credit facility is a non-cash item and we believe the exclusion of this interest expense provides a more useful comparison of our operational performance in different periods.

•Induced conversion expense. In conjunction with the third quarter of 2023 partial repurchase of our 2.25% convertible senior notes due 2025, we incurred a non-cash induced conversion expense of $53.9 million. We exclude induced conversion expense because this amount is not indicative of the performance of or trends in our business, and neither is comparable to the prior period nor predictive of future results.

•Non-ordinary course litigation-related expenses. We exclude non-ordinary course litigation expense because we do not consider legal costs and settlement fees incurred in litigation and litigation-related matters of non-ordinary course lawsuits and other disputes to be indicative of our core operating performance. We do not adjust for ordinary course legal expenses, including legal costs and settlement fees resulting from maintaining and enforcing our intellectual property portfolio and license agreements.

•Acquisition-related expenses. We exclude acquisition-related expenses that are unrelated to the current operations and neither are comparable to the prior period nor predictive of future results.

•Change in fair value of derivative assets. The change in fair value of derivative assets related to our capped calls settlement is a non-cash item and we believe the exclusion of this other income (expense) provides a more useful comparison of our operational performance in different periods.

•Impairment of long-lived assets. Impairment of long-lived assets consists of impairment charges allocated to the carrying amount of certain operating right-of-use assets and the associated leasehold improvements when the carrying

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amounts exceed their respective fair values and we believe the exclusion of the impairment charges provides a more useful comparison of our operational performance in different periods.

•Restructuring expense. We exclude non-ordinary course restructuring expenses related to the Restructuring Plan because we do not believe these charges are indicative of our core operating performance and we believe the exclusion of the restructuring expense provides a more useful comparison of our performance in different periods.

•Discrete tax items. We exclude certain discrete tax items such as income tax expenses or benefits that are not related to ongoing business operations in the current year and adjustments to uncertain tax position reserves as these charges are not indicative of our ongoing operating results, and they are not considered when we are forecasting our future results.

•Anti-dilutive impact of capped call transaction. Our capped calls transactions are intended to offset potential dilution from the conversion features in our convertible senior notes. Although we cannot reflect the anti-dilutive impact of the capped call transactions under GAAP, we do reflect the anti-dilutive impact of the capped call transactions in non-GAAP net income (loss) per diluted share, when applicable, to provide investors with useful information in evaluating our financial performance on a per share basis.

We include all non-GAAP financial measures in the current year or any comparative year that will be included in the non-GAAP reconciliation during the current fiscal year annual Form 10-K. As such, not all non-GAAP financial measures listed above may be included in the current reporting period non-GAAP financial metrics presented with this Form 10-Q.

We define adjusted EBITDA as net income before (1) interest income, (2) interest expense, (3) other (income) expense, net, (4) provision for income taxes, (5) depreciation expense, (6) amortization of intangible assets, (7) stock-based compensation expense, (8) acquisition-related expenses, and (9) restructuring expense. We believe that the use of adjusted EBITDA is useful to investors and other users of our financial statements in evaluating our operating performance because it provides them with an additional tool to compare business performance across companies and across periods.

Our non-GAAP financial measures may not provide information that is directly comparable to that provided by other companies in our industry, as other companies in our industry may calculate non-GAAP financial results differently, particularly related to non-recurring, unusual items. In addition, there are limitations in using non-GAAP financial measures because the non-GAAP financial measures are not prepared in accordance with GAAP, may be different from non-GAAP financial measures used by other companies and exclude expenses that may have a material impact upon our reported financial results. Further, stock-based compensation expense has been and will continue to be for the foreseeable future a significant recurring expense in our business and an important part of the compensation provided to our employees.

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The following tables reconcile GAAP gross profit to non-GAAP gross profit for the three and six months ended June 30, 2025 and 2024 :


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
	(in thousands)
GAAP total gross profit	$	151,134	$	146,999	$	301,907	$	291,106
Stock-based compensation expense	2,580		3,270		4,844		5,941
Amortization of acquired intangible assets	4,423		4,012		8,846		8,329
Non-GAAP total gross profit	$	158,137	$	154,281	$	315,597	$	305,376


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
	(in thousands)
GAAP gross profit – product subscriptions	$	150,861	$	144,960	$	300,428	$	287,144
Stock-based compensation expense	2,054		2,802		3,785		5,100
Amortization of acquired intangible assets	4,423		4,012		8,846		8,329
Non-GAAP gross profit – product subscriptions	$	157,338	$	151,774	$	313,059	$	300,573


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
	(in thousands)
GAAP gross profit – professional services	$	273	$	2,039	$	1,479	$	3,962
Stock-based compensation expense	526		468		1,059		841
Non-GAAP gross profit – professional services	$	799	$	2,507	$	2,538	$	4,803

The following table reconciles GAAP income from operations to non-GAAP income from operations for the three and six months ended June 30, 2025 and 2024:


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
	(in thousands)
GAAP income from operations	$	3,494	$	5,223	$	3,393	$	14,939
Stock-based compensation expense	27,581		29,066		54,732		54,811
Amortization of acquired intangible assets	5,090		4,709		10,210		9,723
Acquisition-related expenses(1)	183		278		366		278
Restructuring expense(2)	—		—		—		(190)
Non-GAAP income from operations	$	36,348	$	39,276	$	68,701	$	79,561

(1) For the three and six months ended June 30, 2025, acquisition-related expenses included $0.2 million and $0.4 million, respectively of accretion expense related to contingent consideration recorded in connection with our July 2024 acquisition of Noetic.

(2 For the three and six months ended June 30, 2024, restructuring expense was recorded within general and administrative expense in our consolidated statement of operations.

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The following table reconciles GAAP net income to non-GAAP net income for the three and six months ended June 30, 2025 and 2024:


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
	(in thousands, except share and per share data)
GAAP net income	$	8,338	$	6,538	$	10,443	$	7,944
Stock-based compensation expense	27,581		29,066		54,732		54,811
Amortization of acquired intangible assets	5,090		4,709		10,210		9,723
Acquisition-related expenses	183		278		366		278

Amortization of debt issuance costs	999		1,055		2,018		2,108



Restructuring expense	—		—		—		(190)
Discrete tax items	—		—		—		6,360
Non-GAAP net income	$	42,191	$	41,646	$	77,769	$	81,034
Interest expense of convertible senior notes (1)	1,399		1,571		2,625		3,142
Numerator for non-GAAP earnings per share calculation	$	43,590	$	43,217	$	80,394	$	84,176

Weighted average shares used in GAAP earnings per share calculation, basic	64,441,000		62,496,289		64,140,087		62,201,182
Dilutive effect of convertible senior notes (1)	10,686,653		11,183,611		10,429,891		11,183,611
Dilutive effect of employee equity incentive plans (2)	255,992		570,460		322,231		750,328
Weighted average shares used in non-GAAP earnings per share calculation, diluted	75,383,645		74,250,360		74,892,209		74,135,121

Non-GAAP net income per share:
Basic	$	0.65	$	0.67	$	1.21	$	1.30
Diluted	$	0.58	$	0.58	$	1.07	$	1.14

(1) We use the if-converted method to compute diluted earnings per share with respect to our Notes. There was no add-back of interest expense or additional dilutive shares related to the Notes where the effect was anti-dilutive. On an if converted basis, for the three and six months ended June 30, 2025 and 2024, the 2029 Notes, 2027 Notes and 2025 Notes were dilutive.

(2) We use the treasury method to compute the dilutive effect of employee equity incentive plan awards.

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The following table reconciles GAAP net income to adjusted EBITDA for the three and six months ended June 30, 2025 and 2024:


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
	(in thousands)
GAAP net income	$	8,338	$	6,538	$	10,443	$	7,944
Interest income	(5,514)		(5,221)		(11,272)		(9,941)
Interest expense	2,627		2,673		5,281		5,343
Other (income) expense, net	(3,957)		695		(5,759)		2,130
Provision for income taxes	2,000		538		4,700		9,463
Depreciation expense	2,349		2,775		5,140		5,683
Amortization of intangible assets	9,041		8,096		17,915		16,536
Stock-based compensation expense	27,581		29,066		54,732		54,811
Acquisition-related expenses	183		278		366		278
Restructuring expense	—		—		—		(190)
Adjusted EBITDA	$	42,648	$	45,438	$	81,546	$	92,057

The following table reconciles net cash provided by operating activities to free cash flow for the three and six months ended June 30, 2025 and 2024:


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
	(in thousands)
Net cash provided by operating activities	$	47,542	$	32,858	$	77,299	$	63,928
Less: Purchases of property and equipment	(948)		(280)		(2,309)		(900)
Less: Capitalized internal-use software costs	(4,314)		(3,373)		(8,033)		(6,289)
Free cash flow	$	42,280	$	29,205	$	66,957	$	56,739

Liquidity and Capital Resources

As of June 30, 2025, we had $261.3 million in cash and cash equivalents, $338.4 million in investments that have maturities ranging from one to eighteen months and an accumulated deficit of $1.0 billion. Our principal sources of liquidity are cash and cash equivalents, investments, cash flow provided by operating activities and our Credit Agreement. To date, we have financed our operations primarily through private and public equity financings, issuance of convertible senior notes and through cash generated by operating activities.

On June 25, 2025 we entered into a credit agreement (the "Credit Agreement") that establishes a senior secured revolving credit facility and provides for borrowings in an aggregate principal amount of up to $200 million (the “Revolving Facility”, the loans thereunder, the “Revolving Loans” and the commitments thereunder, the “Revolving Commitments”).The Credit Agreement allows for incremental facilities up to the greater of $141 million or 75% of Consolidated EBITDA (as defined in the Credit Agreement). Additional incremental facilities may be incurred, subject to certain conditions. The proceeds of the Revolving Facility can be used to finance working capital needs, capital expenditures, permitted acquisitions and other general corporate purposes. Refer to Note 10, Debt, for additional information related to the credit agreement.

We believe that our existing cash and cash equivalents, our investments, our cash generated by operating activities and our available borrowings under our Credit Agreement will be sufficient to meet our operating and capital requirements for at least the next 12 months. Our foreseeable cash needs, in addition to our recurring operating expenses, include our expected capital expenditures to support expansion of our infrastructure and workforce, office facilities lease obligations, purchase commitments, including our cloud infrastructure services, potential future acquisitions of technology businesses and any election we make to redeem our convertible senior notes. Further, in January 2025, we entered into a cloud-services agreement with a cloud services provider that contains minimum spend commitments. The agreement provides for an annual commitment of $125.0 million per year over the next five years, with an additional $35.0 million obligation over the five-year period of the agreement, for an aggregate total commitment of $660.0 million. See Note 14, Commitments and Contingencies, in the Notes to our unaudited condensed consolidated financial statements for more information regarding this commitment.

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Our future capital requirements will depend on many factors, including our growth rate, the timing and extent of spending to support research and development efforts, the expansion of sales and marketing activities, particularly internationally, the introduction of new and enhanced products and service offerings, the cost of any future acquisitions of technology or businesses and any election we make to redeem our convertible senior notes. In the event that additional financing is required from outside sources, we may be unable to raise the funds on acceptable terms, if at all. If we are unable to raise additional capital on terms satisfactory to us when we require it, our business, operating results and financial condition could be adversely affected.

Cash Flows

The following table shows a summary of our cash flows for the six months ended June 30, 2025 and 2024:


	Six Months Ended June 30,
	2025		2024
	(in thousands)
Cash, cash equivalents and restricted cash at beginning of period	$	342,101	$	214,130
Net cash provided by operating activities	77,299		63,928
Net cash used in investing activities	(120,530)		(34,795)
Net cash (used in) provided by financing activities	(42,390)		3,361
Effects of exchange rates on cash, cash equivalents and restricted cash	4,847		(2,076)
Cash, cash equivalents and restricted cash at end of period	$	261,327	$	244,548

Uses of Funds

Our historical uses of cash have primarily consisted of cash used for operating activities such as expansion of our sales and marketing operations, research and development activities and other working capital needs, as well as cash used for business acquisitions and purchases of property and equipment, including leasehold improvements for our facilities.

Operating Activities

Operating activities provided $77.3 million of cash and cash equivalents for the six months ended June 30, 2025, which reflects continued growth in revenue partially offset by our continued investments in our operations and the timing of working capital adjustments. Cash provided by operating activities reflected our net income of $10.4 million and a decrease in our net operating assets and liabilities of $8.3 million, offset by non-cash charges of $75.1 million related primarily to depreciation and amortization, stock-based compensation expense, amortization of debt issuance costs and other non-cash charges. The change in our net operating assets and liabilities was primarily due to a $13.2 million decrease in accrued expenses, a $12.3 million decrease in deferred revenue, a $5.8 million increase in prepaid expenses, a $1.2 million decrease in other liabilities and a $3.0 million decrease in accounts payable, which each had a negative impact on operating cash flow. These factors were offset by a $17.5 million decrease in accounts receivable and a $9.8 million decrease in deferred contract acquisition and fulfillment costs, which each had a positive impact on operating cash flow.

Operating activities provided $63.9 million of cash and cash equivalents in the six months ended June 30, 2024, which reflects continued growth in revenue partially offset by our continued investments in our operations and the timing of working capital adjustments. Cash provided by operating activities reflected our net income of $10.5 million and a decrease in our net operating assets and liabilities of $23.6 million, offset by non-cash charges of $77.1 million related primarily to depreciation and amortization, stock-based compensation expense, deferred income taxes, amortization of debt issuance costs and other non-cash charges. The change in our net operating assets and liabilities was primarily due to a decrease in deferred revenue and the timing of payments of operating expenses, including payout of annual bonuses and year-end commissions and other compensation costs and accounts payable, partially offset by a decrease in accounts receivable due to an increase in cash collections from our customers.

Investing Activities

Investing activities used $120.5 million of cash for the six months ended June 30, 2025, consisting of $111.5 million in purchases of investments, net of sales/maturities, $8.0 million for capitalization of internal-use software costs, and $2.3 million in capital expenditures to purchase computer equipment and leasehold improvements, partially offset by $1.3 million in proceeds from other investments.

Investing activities used $34.8 million of cash in the six months ended June 30, 2024, consisting of $28.0 million in purchases of investments, net of sales/maturities, $6.3 million for capitalization of internal-use software costs, and $0.9 million in capital expenditures to purchase computer equipment and leasehold improvements, partially offset by proceeds of $0.4 million from other investing activities.

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Financing Activities

Financing activities used $42.4 million for the six months ended June 30, 2025, which consisted primarily of $46.0 million in conversion of convertible senior notes, $1.9 million in withholding taxes paid for the net share settlement of equity awards, and $1.3 million in debt issuance costs, partially offset by $4.4 million in proceeds from the issuance of common stock purchased by employees under the Rapid7, Inc. 2015 Employee Stock Purchase Plan (“ESPP”) and $1.6 million in proceeds from the exercise of stock options.

Financing activities provided $3.4 million of cash in the six months ended June 30, 2024, which consisted primarily of $5.0 million in proceeds from the issuance of common stock purchased by employees under the Rapid7, Inc. 2015 Employee Stock Purchase Plan (“ESPP”) and $1.4 million in proceeds from the exercise of stock options, partially offset by $3.1 million in withholding taxes paid for the net share settlement of equity awards.

Contractual Obligations and Commitments

As of June 30, 2025, there were no additional material changes from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 28, 2025 (the “Annual Report”) other than the cloud services agreement discussed in Note 14, Commitments and Contingencies, in the notes to our unaudited condensed consolidated financial statements.

Off-Balance Sheet Arrangements

We do not have any relationships with unconsolidated entities or financial partnerships, including entities sometimes referred to as structured finance or special purpose entities that were established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. We do not engage in off-balance sheet financing arrangements. In addition, we do not engage in trading activities involving non-exchange traded contracts. We therefore believe that we are not materially exposed to any financing, liquidity, market or credit risk that could arise if we had engaged in these relationships.

Critical Accounting Estimates

Our unaudited condensed consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States (“GAAP”). The preparation of our unaudited condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses and disclosures. We base our estimates and assumptions on historical experience and other factors that we believe to be reasonable under the circumstances. We evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates. There have been no material changes in our critical accounting policies from those disclosed in our Annual Report.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Foreign Currency Exchange Risk

Our results of operations and cash flows are subject to fluctuations due to changes in foreign currency exchange rates. A majority of our customers enter into contracts that are denominated in U.S. dollars. Our expenses are generally denominated in the currencies of the countries where our operations are located, which is primarily in the United States and to a lesser extent in the United Kingdom, other Euro-zone countries within mainland Europe, Canada, Australia, Israel, Singapore and Japan. Our results of operations and cash flows are, therefore, subject to fluctuations due to changes in foreign currency exchange rates and may be adversely affected in the future due to changes in foreign currency exchange rates. The effect of a hypothetical 10% adverse change in foreign currency exchange rates on monetary assets and liabilities as of June 30, 2025 would not have been material to our financial condition or results of operations.

We enter into forward contracts designated as cash flow hedges to manage the foreign currency exchange rate risk associated with certain of our foreign currency denominated expenditures. The effectiveness of our existing hedging transactions and the availability and effectiveness of any hedging transactions we may decide to enter into in the future may be limited, and we may not be able to successfully hedge our exposure, which could adversely affect our financial condition and operating results. For further information, see Note 9, Derivatives and Hedging Activities, in the notes to our unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q. As our international operations grow, we will continue to reassess our approach to manage our risk relating to fluctuations in foreign currency rates.

Interest Rate Risk

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As of June 30, 2025, we had cash and cash equivalents of $261.3 million consisting of bank deposits and money market funds and investments of $338.4 million consisting of U.S. government agencies. Our investments are made for capital preservation purposes. We do not enter into investments for trading or speculative purposes.

Our cash and cash equivalents and investments are subject to market risk due to changes in interest rates, which may affect our interest income and the fair value of our investments. Due in part to these factors, our future investment income may fluctuate due to changes in interest rates or we may suffer losses in principal if we are forced to sell securities that decline in market value due to changes in interest rates. However, because we classify our investments as available-for-sale securities, no gains or losses are recognized due to the changes in interest rates unless securities are sold prior to maturity or declines in fair value are determined to be other-than-temporary.

The fair values of our convertible senior notes are subject to interest rate risk, market risk and other factors due to the conversion features of the notes. The fair values of the convertible senior notes may increase or decrease for various reasons, including fluctuations in the market price of our common stock, fluctuations in market interest rates and fluctuations in general economic conditions. The interest and market value changes affect the fair values of the convertible senior notes but do not impact our financial position, cash flows or results of operations due to the fixed nature of the debt obligation. Based upon the quoted market price as of June 30, 2025, the fair values of our 2027 Notes and 2029 Notes were $556.5 million and $265.1 million, respectively.

As of June 30, 2025, the effect of a hypothetical 10% increase or decrease in interest rates would not have had a material impact on our financial statements.

Inflation Risk

As of June 30, 2025, we do not believe that inflation had a material effect on our business, financial condition or results of operations. If our costs were to become subject to significant inflationary pressures, we may not be able to fully offset such higher costs through price increases. Our inability or failure to do so could harm our business, financial condition and results of operations.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

We maintain “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act of 1934, as amended (the “Exchange Act”), that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company's management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness of the design and operations of our disclosure controls and procedures as of June 30, 2025. Based on the evaluation of our disclosure controls and procedures as of June 30, 2025, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

Inherent Limitations of Internal Controls

Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

Changes in Internal Control over Financial Reporting

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There was no change in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the period covered by this Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II

OTHER INFORMATION

Item 1. Legal Proceedings.

From time to time, we are a party to litigation or subject to claims incident to the ordinary course of business. Although the results of litigation and claims cannot be predicted with certainty, we currently believe that the final outcome of these ordinary course matters will not have a material adverse effect on our business, financial condition or results of operations. Regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.

Item 1A. Risk Factors.

There have been no material changes to the risk factors disclosed in Part 1, Item 1A. “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the Securities and Exchange Commission (the “SEC”) on February 28, 2025 (the “Annual Report”). Our operations and financial results are subject to various risks and uncertainties that, if they materialize, could adversely affect our business, financial condition and results of operations. In that event, the trading price of our common stock could decline. In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the factors described in Part I, Item 1A. “Risk Factors” of our Annual Report. We may disclose additional changes to risk factors or disclose additional factors from time to time in our future filings with the SEC. Additional risks and uncertainties that we are unaware of, or that we currently believe are not material, may also become important factors that adversely affect our business.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

(a) Recent Sales of Unregistered Equity Securities

None.

(b) Use of Proceeds from Initial Public Offering of Common Stock

None.

Item 3. Defaults Upon Senior Securities.

Not applicable.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

Certain of our executive officers and directors may execute purchases and sales of our securities through Rule 10b5-1 equity trading plans and “non-Rule 10b5-1 equity trading arrangements” (as defined in Item 408(c) of Regulation S-K).

During the three months ended June 30, 2025, the executive officers or directors listed below terminated or modified a 10b5-1 equity trading plan, or adopted, terminated, or modified any “non-Rule 10b5-1 equity trading arrangement”.

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Name and Position

Action

Adoption or Transaction Date

Type of Trading Arrangement

Number of Shares of Common Stock to be Sold

Expiration Date

Scott Murphy, Chief Accounting Officer

Adoption

May 20, 2025

Rule 10b5-1*

17,644**

June 1, 2026***

Tim Adams, Chief Financial Officer

Adoption

June 18, 2025

Rule 10b5-1*

28,974**

September 30, 2026***

* Contract, instruction or written plan intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act.

** Represents the maximum number of shares that may be sold pursuant to the Rule 10b5-1 trading arrangement in amounts and prices determined in accordance with a formula set forth in the plan. The actual number of shares sold will depend on the satisfaction of certain conditions as set forth in the written plan.

*** The Rule 10b5-1 trading arrangement will terminate on the earlier of the date all the shares under the plan are sold and the expiration date indicated, subject to early termination for specified events set forth in the plan.

During the three months ended June 30, 2025, other than noted above, none of our executive officers or directors terminated or modified a 10b5-1 equity trading plan, or adopted, terminated, or modified any “non-Rule 10b5-1 equity trading arrangement”.

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Item 6. Exhibits.


Exhibit Number						Description

3.1						Amended and Restated Certificate of Incorporation of Rapid7, Inc., as of June 3, 2020 (incorporated by reference Exhibit 3.1 to the Registrant’s Quarterly Report on Form 10-Q (File No. 001-37496), filed on August 10, 2020).
3.2						Amended and Restated Bylaws of Rapid7, Inc., as of June 3, 2020 (incorporated by reference to Exhibit 3.2 to the Registrant’s Quarterly Report on Form 10-Q (File No. 001-37496), filed with the Securities and Exchange Commission on August 10, 2020).
10.1+						Amendment No. 1 to the Rapid7, Inc. 2015 Equity Incentive Plan, as amended. (incorporated by reference to Exhibit 10.6 to the Registrant’s Annual Report on Form 10-K (File No. 001-37496), filed on February 28, 2025).
10.2+						Letter Agreement, dated as of February 17, 2025, by and between Rapid7, Inc. and Christina Luconi. (incorporated by reference to Exhibit 10.10 to the Registrant’s Annual Report on Form 10-K (File No. 001-37496), filed on February 28, 2025).
10.3						Cooperation Agreement, by and between Rapid7, Inc. and JANA Partners Management, LP, dated March 21, 2025. (incorporated by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K (File No. 001-37496), filed on March 24, 2025).
10.4						Credit Agreement, dated June 25, 2025, by and among the Company, Rapid7 LLC, a Delaware limited liability company, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent.(incorporated by reference to Exhibit 10.1 to the Registrants's Current Report on Form 8-K (File No. 001-37496), filed on June 25, 2025
10.5*+						Rapid7, Inc. Non-Employee Director Compensation Policy
31.1*						Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*						Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**						Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2**						Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS						Inline XBRL Instance Document - the instance document does not appear in the Interactive Data file because its XBRL tags are embedded within the inline XBRL document.
101.SCH						Inline XBRL Taxonomy Extension Schema Document.
101.CAL						Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF						Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB						Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE						Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104						Cover Page Interactive Data file (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101)


*			Filed herewith.
**			This certification is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.
+			Indicates management contract of compensatory plan.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



	RAPID7, INC.

Date: August 8, 2025	By:	/s/ Corey E. Thomas
		Name: Corey E. Thomas
		Title: Chief Executive Officer

Date: August 8, 2025	By:	/s/ Tim Adams
		Name: Tim Adams
		Title: Chief Financial Officer

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