RPDHIGH SIGNALFINANCIAL10-K

Rapid7 shows strong revenue growth of 28% but concerning profitability deterioration with operating income plunging 67% and interest expense surging 489%.

The dramatic increase in interest expense from $11M to $65M suggests significant new debt financing or refinancing at much higher rates, which is pressuring profitability despite solid top-line growth. The combination of declining operating cash flow and operating income indicates the company is facing margin compression and efficiency challenges even as it scales revenue.

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

Revenue grew a healthy 28% to $685M while R&D spending increased moderately at 10%, but profitability metrics deteriorated sharply with operating income falling 67% and interest expense exploding 489% to $65M. The massive 774% increase in stockholders' equity alongside declining cash suggests a major equity raise or debt conversion, while operating cash flow declined 10% despite revenue growth. This financial profile indicates a company investing heavily for growth but facing significant leverage challenges and margin pressures that are eroding profitability faster than revenue is expanding.

FINANCIAL STATEMENT CHANGES
Stockholders Equity
Balance Sheet
+773.6%
$17.7M→$154.7M

Equity base grew 773.6% — retained earnings accumulation or equity issuance strengthening the balance sheet.

Interest Expense
P&L
+489.1%
$11.0M→$64.7M

Interest expense surged 489.1% — significant debt increase or rising rates materially impacting earnings.

Capital Expenditure
Cash Flow
+121.9%
$3.4M→$7.6M

Capital expenditure jumped 121.9% — major investment cycle underway; assess returns on deployment.

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.
+7 more — sign up free →
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