According to a ResearchAndMarkets report published recently, the global security and vulnerability management market is expected to grow 10% annually over the next five years. The BFSI segment is expected to continue to hold the largest market share in the sector. Within geographies, the North American market will be the biggest market. Recently, Billion Dollar Unicorn Rapid7 (Nasdaq: RPD) announced its third quarter results that continued to outpace market expectations.
Rapid7’s Financials
Rapid7’s revenues for the quarter came in at $62.4 million, significantly ahead of the market’s expectations of $59.7 million. For the quarter, the company adopted the accounting standard 606 for reporting, hence the comparatives for the previous year are not available. It ended the quarter with a loss of $11.8 million or 25 cents per share. On an adjusted basis, losses came in $0.04 per share compared with the market’s estimates of a loss of $0.13 per share.
By segment, revenues from products came in at $43.8 million, maintenance and support revenues at $10.6 million and professional services at $7.9 million for the quarter.
Among other metrics, Rapid7’s annualized recurring revenue for the quarter grew 46% to $217.4 million with 120% renewal rates. Renewal rates include upsells and cross-sells of additional products and services. It ended the third quarter with 7,400 customers, an increase of 10% over the year. Calculated billings were $61.1 million under ASC 606. The company is continuing to push to a subscription-based model and believes that the calculated billings will no longer be a meaningful metric for operations.
For the current quarter, Rapid7 forecast revenues of $65.8-$67.2 million with a loss of $0.10-$0.08 per share. It expects to end the year with revenues of $241.1-$242.5 million and a net loss of $0.46-$0.43 per share.
Rapid7’s Acquisition
According to a recent Frost & Sullivan report, Rapid7 accounts for 24% of the global vulnerability management market. To continue to build on this market share, Rapid7 recently announced the acquisition of tCell.io, Inc., a leading provider of web application threat defense and monitoring, for $14.4 million.
