Key Highlights

  • Revenue was USD 212.4 million against a USD 209.05 million estimate, with non-GAAP EPS of USD 0.60 against USD 0.46.
  • GAAP Net Income was USD 3.5 million, or USD 0.05 per diluted share, against USD 9.8 million, or USD 0.15.
  • A restructuring plan approved August 7 covers a workforce reduction of approximately 12%, with USD 10.0 million charged.
  • Cash was USD 335.7 million, investments were USD 395.9 million, and the revolving Facility had no borrowings.

Rapid7 (NASDAQ:RPD) built its third quarter around a restructuring plan that the board approved on August 7, 2026, covering a workforce reduction of approximately 12%. The quarter also included board changes and followed the March Acquisition of Kenzo Security. Revenue was USD 212.4 million against an estimate of USD 209.05 million, and non-GAAP diluted EPS was USD 0.60 against an estimate of USD 0.46.

How the Restructuring and Board Changes Fit the Quarter

The company described the plan as designed to simplify operations and align resources with its core platform. Restructuring charges were USD 9.99 million in the quarter and USD 11.66 million for the nine months.

The unpaid restructuring Liability was USD 4.3 million at September 30, with about USD 0.7 million of charges still to be incurred in the fourth quarter. The plan is scheduled to be substantially complete by the end of that quarter, though local consultation requirements may extend the process in some countries.

On the board, four directors resigned effective August 27, with the company stating no disagreement was involved. Two new directors were appointed effective September 1, and the board was fixed at nine members.

Results Around the Plan

Total revenue was USD 212.4 million against USD 218.0 million in the third quarter of 2025, down 2.5% as stated. Product subscriptions revenue was USD 206.1 million against USD 210.1 million, and professional services revenue was USD 6.3 million against USD 7.8 million. The company said nine-month revenue was lower mainly in exposure management, offset by higher detection and response revenue.

Operating expenses were USD 138.9 million against USD 147.1 million, with sales and Marketing at USD 65.6 million against USD 79.3 million. Income from operations was USD 8.95 million, against USD 5.90 million.

Net income was USD 3.5 million against USD 9.8 million, with a USD 5.5 million Impairment of a strategic Equity Investment recorded in other expense. Adjusted EBITDA was USD 52.6 million, against USD 43.5 million. Annualized Recurring Revenue was USD 819.7 million, down 2.2% as stated, while the customer count was 11,854 against 11,618.

Cash, Debt and Capital Position

Free Cash Flow was USD 26.5 million against USD 30.1 million. Cash and cash equivalents were USD 335.7 million against USD 246.7 million at year end 2025.

Debt consists of convertible senior notes: USD 600 million at 0.25% due March 15, 2027 and USD 300 million at 1.25% due March 15, 2029. The 2027 notes now appear as a current liability. The USD 200 million revolving facility had no outstanding borrowings.

Signposts for the Next Quarter

Revenue of USD 212.4 million sits alongside adjusted EBITDA of USD 52.6 million, ARR of USD 819.7 million and cash of USD 335.7 million. The company has stated no numerical guidance in its quarterly report.

The dated items it did name are the completion of the restructuring by the end of the fourth quarter of 2026, with a further USD 0.7 million of charges, and the March 15, 2027 Maturity of the 2027 notes. The company said its cash, investments, Operating Cash Flow and revolving facility are sufficient for at least the next 12 months.