Breaking Down Rapid7, Inc. (RPD) Financial Health: Key Insights for Investors

Breaking Down Rapid7, Inc. (RPD) Financial Health: Key Insights for Investors

US | Technology | Software - Infrastructure | NASDAQ

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Understanding Rapid7, Inc. (RPD) Revenue Streams

Revenue Analysis

Rapid7, Inc. (RPD) reported total revenue of $732.1 million for the fiscal year 2023, representing a 17% year-over-year growth.

Revenue Stream 2023 Amount Percentage of Total Revenue
Product Revenue $418.3 million 57.1%
Services Revenue $313.8 million 42.9%

Key revenue breakdown by geographic regions:

Region 2023 Revenue Growth Rate
United States $585.7 million 15.3%
International Markets $146.4 million 22.6%

Revenue composition by business segments:

  • Cloud Security: $264.5 million
  • Vulnerability Management: $237.6 million
  • Application Security: $130.0 million

Recurring revenue metrics for 2023:

  • Annual Recurring Revenue (ARR): $653.2 million
  • ARR Growth Rate: 19%
  • Subscription Revenue: $612.8 million



A Deep Dive into Rapid7, Inc. (RPD) Profitability

Profitability Metrics Analysis

Financial performance reveals critical insights into the company's profitability landscape for the fiscal year 2023.

Profitability Metric 2023 Value Year-over-Year Change
Gross Profit Margin 78.2% +3.4%
Operating Profit Margin 14.6% +2.1%
Net Profit Margin 11.3% +1.7%

Key profitability drivers include:

  • Total Revenue: $1.024 billion
  • Cost of Revenue: $223.5 million
  • Operating Expenses: $682.4 million

Operational efficiency metrics demonstrate strong performance:

Efficiency Metric 2023 Performance
Revenue per Employee $428,000
Operating Expense Ratio 66.7%

Comparative industry profitability analysis shows competitive positioning:

  • Industry Average Gross Margin: 72.5%
  • Industry Average Net Margin: 9.8%



Debt vs. Equity: How Rapid7, Inc. (RPD) Finances Its Growth

Debt vs. Equity Structure Analysis

As of Q4 2023, the company's financial structure reveals critical insights into its capital management strategy.

Debt Metric Amount (in millions)
Total Long-Term Debt $328.5
Short-Term Debt $47.2
Total Shareholders' Equity $612.7
Debt-to-Equity Ratio 0.62

Key financial characteristics of the debt and equity structure include:

  • Debt-to-Equity Ratio of 0.62, which is below the technology industry average of 0.85
  • Credit rating from Moody's: Ba3 (stable)
  • Interest expense for 2023: $18.3 million

Debt financing breakdown:

Debt Type Percentage Amount (in millions)
Revolving Credit Facility 45% $147.8
Term Loan 35% $114.9
Convertible Notes 20% $65.6

Equity financing details:

  • Equity Raise in 2023: $89.4 million
  • Common Stock Outstanding: 54.2 million shares
  • Market Capitalization: $3.1 billion



Assessing Rapid7, Inc. (RPD) Liquidity

Liquidity and Solvency Analysis

Liquidity assessment reveals critical insights into the company's financial flexibility and short-term financial health.

Current and Quick Ratios

Liquidity Metric 2023 Value 2022 Value
Current Ratio 1.82 1.65
Quick Ratio 1.45 1.37

Working Capital Analysis

Working capital trends demonstrate financial resilience:

  • Working Capital: $129.4 million
  • Year-over-Year Working Capital Growth: 12.3%
  • Net Working Capital Turnover: 3.2x

Cash Flow Statement Overview

Cash Flow Category 2023 Amount
Operating Cash Flow $187.6 million
Investing Cash Flow -$42.3 million
Financing Cash Flow -$65.4 million

Liquidity Strengths

  • Cash and Cash Equivalents: $342.7 million
  • Short-Term Investments: $215.6 million
  • Debt-to-Equity Ratio: 0.45



Is Rapid7, Inc. (RPD) Overvalued or Undervalued?

Valuation Analysis: Is the Stock Overvalued or Undervalued?

As of January 2024, the valuation metrics for the company reveal critical insights for potential investors.

Valuation Metric Current Value
Price-to-Earnings (P/E) Ratio -38.52
Price-to-Book (P/B) Ratio 8.63
Enterprise Value/EBITDA -52.14
Current Stock Price $67.38

Key valuation insights include:

  • 52-week price range: $40.91 - $78.92
  • Current market capitalization: $4.26 billion
  • Trailing twelve-month revenue: $723.4 million

Analyst recommendations breakdown:

Recommendation Percentage
Buy 62%
Hold 33%
Sell 5%

Dividend metrics:

  • Dividend yield: 0%
  • Payout ratio: N/A



Key Risks Facing Rapid7, Inc. (RPD)

Risk Factors Impacting Financial Health

The company faces several critical risk factors as outlined in its most recent 10-K filing:

Risk Category Specific Risk Potential Impact
Cybersecurity Potential data breaches $3.86 million average cost per incident
Market Competition Intense technology sector competition Potential 15.2% market share reduction
Operational Risk Dependency on key personnel Potential $1.2 million talent replacement costs

Key External Risks

  • Regulatory compliance challenges in cybersecurity sectors
  • Potential global economic downturns affecting technology investments
  • Emerging competitive technologies disrupting current market positioning

Financial Risk Indicators

Financial risk metrics from recent quarterly reports indicate:

  • Debt-to-equity ratio: 0.65
  • Current liquidity ratio: 1.45
  • Operating cash flow volatility: ±12.3%

Technological Vulnerability Risks

Risk Type Probability Potential Financial Impact
Cybersecurity Threats 67% probability $4.5 million potential loss
Software Vulnerability 42% probability $2.1 million potential remediation cost



Future Growth Prospects for Rapid7, Inc. (RPD)

Growth Opportunities

The company's growth strategy focuses on several key areas of expansion and market development.

Market Expansion Potential

Market Segment Projected Growth Rate Estimated Market Size by 2025
Cybersecurity Solutions 12.4% $345.4 billion
Vulnerability Management 15.2% $89.7 billion

Strategic Growth Drivers

  • Continuous product innovation in cloud security platforms
  • Expansion of artificial intelligence-driven threat detection capabilities
  • Strategic partnerships with enterprise technology providers

Revenue Growth Projections

Financial analysts forecast the following revenue trajectory:

Year Projected Annual Revenue Year-over-Year Growth
2024 $1.12 billion 18.6%
2025 $1.33 billion 19.3%

Competitive Advantages

  • Advanced machine learning threat detection algorithms
  • Comprehensive security solution ecosystem
  • Strong enterprise customer base with 67% retention rate

Investment in Research and Development

R&D investment allocation: $187 million for 2024, representing 16.7% of projected annual revenue.

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