RPDMEDIUM SIGNALOPERATIONAL10-K

Rapid7 shows strong revenue growth but faces concerning profitability pressures as operating income declined substantially despite increased scale.

The company is successfully growing its top line with nearly 30% revenue expansion, suggesting strong demand for its cybersecurity solutions. However, the substantial decline in operating income signals margin compression and potential operational inefficiencies that investors should monitor closely as the company scales.

Comparing 2026-02-19 vs 2025-02-28View on EDGAR →
FINANCIAL ANALYSIS

Rapid7 delivered solid revenue growth of 28% to $685.1M, indicating healthy business momentum in the cybersecurity market. However, profitability deteriorated meaningfully with operating income declining substantially to $11.6M despite the higher revenue base, suggesting margin pressures from increased costs or investments. The company's cash position decreased moderately to $246.7M while operating cash flow declined slightly to $153.8M, reflecting the operational challenges but maintaining adequate liquidity.

FINANCIAL STATEMENT CHANGES
Operating Income
P&L
-67%
$35.0M→$11.6M

Operating income deteriorated sharply — investigate whether driven by one-time charges or structural cost issues.

Revenue
P&L
+28%
$535.4M→$685.1M

Revenue growing 28% — solid top-line momentum, watch margins for quality of growth.

Cash & Equivalents
Balance Sheet
-26.3%
$334.7M→$246.7M

Cash decreased 26.3% — monitor burn rate and upcoming capital needs.

Operating Cash Flow
Cash Flow
-10.4%
$171.7M→$153.8M

Operating cash flow softened — monitor whether temporary working capital timing or structural deterioration.

R&D Expense
P&L
+10.1%
$173.1M→$190.7M

R&D investment increased 10.1% — signals commitment to future product development, though near-term margin impact.

LANGUAGE CHANGES
NEW — 2026-02-19
PRIOR — 2025-02-28
ADDED
For twenty-five years, Rapid7 has partnered with customers across the globe representing a diverse range of industries and sizes 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 AI.
We empower security professionals to manage a modern attack surface through our best-in-class AI-driven technology, leading-edge research, and broad, strategic expertise.
Rapid7 s comprehensive security solutions, including our market-leading managed detection and response ("MDR") services, next-gen security information and event management ("SIEM"), and exposure management help our global customers unify exposure management with threat detection and response to prioritize and reduce material risk, and eliminate threats with greater speed, precision, and consistency.
We believe that Rapid7 is poised to expand the capabilities of today's SecOps teams through our integrated, open data security operations platform which is powered by our AI enabled detection and response, automation, and exposure management capabilities.
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REMOVED
Furthermore, such forward-looking statements speak only as of the date of this report.
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.
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