Rapid7 (RPD)

Attractive cash flow generation CFO/Rev LTM Cash Flow from Operations / Revenue (Sales), Last Twelve Months (LTM) is 19%, FCF/Rev LTM Free Cash Flow / Revenue (Sales), Last Twelve Months (LTM) is 16%

Valuation becoming less expensive P/S 6M Chg % Price/Sales change over 6 months. Declining P/S indicates valuation has become less expensive. is -38%

Attractive yield FCF Yield is 23%

Megatrend and thematic drivers Megatrends include Cybersecurity . Themes include Software Security, Cloud Security, and Endpoint Protection.

Weak multi-year price returns 2Y Excs Rtn is -115%, 3Y Excs Rtn is -150%

Meaningful short interest Short Interest % of Basic Shares Short Interest % of Basic Shares = (Short Interest Quantity) / (Basic Shares Outstanding). A high fraction of short interest can indicate potential risk of a short squeeze. is 11%

Weak revenue growth Rev Chg Q Quarterly Revenue Change % is -0.3%

Significant based compensation SBC/Rev LTM Based Compensation / Revenue (Sales), Last Twelve Months (LTM) is 11%

Key risks RPD key risks include [1] decelerating growth driven by a decline in its core Vulnerability Management business, Show more. RPD key risks include [1] decelerating growth driven by a decline in its core Vulnerability Management business, and [2] a substantial debt burden and a history of net losses challenging profitability. Show less.

Weight = RPD's of each fund

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2021 2022 2023 2024 2025 2026 Total [1] Returns RPD Return 31% -71% 68% -30% -62% -41% -90% Peers Return 43% -31% 74% 15% -5% 65% 211% S&P 500 Return 27% -19% 24% 23% 16% 9% 99% Monthly Win Rates [3] RPD Win Rate 50% 33% 67% 42% 8% 43% Peers Win Rate 70% 35% 68% 53% 45% 66% S&P 500 Win Rate 75% 42% 67% 75% 67% 43% Max Drawdowns [4] RPD Max Drawdown -21% -77% -26% -46% -67% -67% Peers Max Drawdown -29% -43% -24% -33% -33% -29% S&P 500 Max Drawdown -5% -25% -10% -8% -19% -9% [1] Cumulative total returns since the beginning of 2021 [2] Peers: PANW , CRWD , TENB , QLYS , FTNT . [3] Win Rate = % of calendar months in which monthly returns were positive [4] Max drawdown represents maximum peak-to-trough decline within a year [5] 2026 data is for the year up to 7/2/2026 (YTD)

Event RPD S&P 500 2024 Yen Carry Trade Unwind % Loss -15.7% -7.8% % Gain to Breakeven 18.7% 8.5% Time to Breakeven 55 days 18 days Summer-Fall 2023 Five Percent Yield Shock % Loss -13.1% -9.5% % Gain to Breakeven 15.1% 10.5% Time to Breakeven 1 days 24 days 2023 SVB Regional Banking Crisis % Loss -23.0% -6.7% % Gain to Breakeven 29.8% 7.1% Time to Breakeven 35 days 31 days 2020 COVID-19 Crash % Loss -39.4% -33.7% % Gain to Breakeven 65.1% 50.9% Time to Breakeven 114 days 140 days Q4 2018 Fed Policy Error / Growth Scare % Loss -27.7% -19.2% % Gain to Breakeven 38.4% 23.8% Time to Breakeven 70 days 105 days 2016-2017 Trump Reflation Bond Selloff % Loss -34.3% -3.7% % Gain to Breakeven 52.2% 3.9% Time to Breakeven 158 days 6 days

Rapid7's stock fell -15.7% during the 2024 Yen Carry Trade Unwind. Such a loss loss requires a 18.7% gain to breakeven.

Limiting losses and compounding gains is essential to preserving wealth.

Event RPD S&P 500 2023 SVB Regional Banking Crisis % Loss -23.0% -6.7% % Gain to Breakeven 29.8% 7.1% Time to Breakeven 35 days 31 days 2020 COVID-19 Crash % Loss -39.4% -33.7% % Gain to Breakeven 65.1% 50.9% Time to Breakeven 114 days 140 days Q4 2018 Fed Policy Error / Growth Scare % Loss -27.7% -19.2% % Gain to Breakeven 38.4% 23.8% Time to Breakeven 70 days 105 days 2016-2017 Trump Reflation Bond Selloff % Loss -34.3% -3.7% % Gain to Breakeven 52.2% 3.9% Time to Breakeven 158 days 6 days 2015-2016 China Devaluation / Global Growth Scare % Loss -58.7% -12.2% % Gain to Breakeven 142.2% 13.9% Time to Breakeven 717 days 62 days 2014-2016 Oil Price Collapse % Loss -62.6% -6.8% % Gain to Breakeven 167.2% 7.3% Time to Breakeven 749 days 15 days

Rapid7's stock fell -15.7% during the 2024 Yen Carry Trade Unwind. Such a loss loss requires a 18.7% gain to breakeven.

Limiting losses and compounding gains is essential to preserving wealth.

Rapid7, Inc. is a cybersecurity company that provides comprehensive solutions designed to help organizations manage and reduce their cyber risks. The company offers a cloud-native "insight platform" that enables customers to create and manage analytics-driven cybersecurity risk management programs. Essentially, Rapid7 helps businesses understand their security vulnerabilities, detect active threats, and efficiently respond to incidents across their IT environments, applications, and cloud infrastructure.

The company's core offerings are built around its Insight Platform, featuring solutions like InsightIDR for incident detection and response, InsightCloudSec for robust cloud security posture management and workload protection, and InsightVM for vulnerability risk management. Other key products include InsightAppSec for application security testing and InsightConnect for security orchestration and automation. Rapid7 also provides specialized tools such as Metasploit for penetration testing, along with professional and managed security services, delivered through software licenses or cloud-based subscriptions.

Rapid7 serves a diverse global customer base spanning numerous industries, including technology, financial services, healthcare, manufacturing, and government. The company reaches its customers through direct sales teams and indirect channel partners across the Americas, Europe, the Middle East, Africa, and the Asia Pacific regions, enabling organizations worldwide to enhance their cybersecurity posture and operational resilience.

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Rapid7, Inc. primarily sells its cybersecurity solutions to other companies and organizations.

The provided background information does not specify the names of individual major customer companies. Instead, it indicates that Rapid7 serves customers across a wide range of industries. These industries represent the categories of companies that utilize Rapid7's platform and products:

Rapid7 delivers its solutions through various methods, including term or perpetual software licenses, cloud-based subscriptions, and managed services. It reaches these customer organizations directly through its sales teams and indirectly through channel partner relationships across the Americas, Europe, the Middle East, Africa, and the Asia Pacific regions.

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Corey E. Thomas , Chief Executive Officer

Corey E. Thomas is the Chairman and Chief Executive Officer of Rapid7, joining the company in 2008, becoming CEO in 2012, and taking it public in 2015. His background includes roles as Vice President of Marketing at Parallels Inc., Group Product Manager at Microsoft, and consultant at Deloitte Consulting. He is also an active angel investor in technology companies and serves on the boards of directors for organizations such as LPL Financial, Blue Cross Blue Shield of Massachusetts, and Vanderbilt University.

Rafe Brown , Chief Financial Officer

Rafe Brown was appointed Chief Financial Officer of Rapid7, effective December 1, 2025. Prior to joining Rapid7, Mr. Brown served as President and Chief Operating Officer of Mimecast Limited, where he also held the position of Chief Financial Officer. His experience also includes serving as Chief Financial Officer for SevOne, Inc. and Pegasystems, Inc. Before Mimecast, he was an Operating Partner at Francisco Partners, a technology investment firm. He began his public accounting career at Arthur Andersen LLP and PricewaterhouseCoopers LLP.

Christina Luconi , Chief People Officer

Christina Luconi serves as the Chief People Officer at Rapid7, focusing on strategic people initiatives. Before joining Rapid7, she owned People Innovations, an independent consulting firm specializing in innovative people strategies for startups and high-growth companies in the high technology industry. She also served as Chief People Officer at @stake, a professional services security firm that was acquired by Symantec, and was Vice President of People Strategy at Sapient Corporation prior to its public offering.

Craig Adams , Chief Product Officer

Craig Adams is the Chief Product Officer at Rapid7, where he is recognized for his expertise in helping organizations manage their attack surface and defend against cyber threats. Before his role at Rapid7, Craig held leadership positions at Recorded Future. He also spent over two decades at Akamai Technologies, where he oversaw their Security and Performance portfolio.

Jeremiah Dewey , Senior Vice President, Managed Services & Consulting Services Delivery

Jeremiah Dewey is the Senior Vice President, Managed Services & Consulting Services Delivery at Rapid7, overseeing service delivery and client satisfaction. His prior experience includes significant roles at Stroz Friedberg, where he was Vice President of Incident Response. He also honed his skills in cybersecurity and technology management at FireEye and the U.S. Environmental Protection Agency.

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Here are the key risks to Rapid7's business:

Financial Health and Profitability Concerns: Rapid7 faces significant challenges with its financial health, including rising long-term debt, particularly senior convertible notes, which could lead to dilution and financial instability. Despite strong revenue growth, the company's profitability remains a concern, highlighted by net losses in fiscal years, shrinking operating margins, and an underperforming stock price compared to competitors. An Altman Z-Score in the distress zone further implies a potential bankruptcy risk.

Intense Competition in a Fragmented Cybersecurity Market: Rapid7 operates in a highly competitive and fragmented market for SecOps and cybersecurity solutions. The company faces significant competition from both established industry giants like Microsoft and Palo Alto Networks, as well as specialized vendors such as Qualys and Tenable in vulnerability management, and CrowdStrike and Splunk in SIEM and XDR. This intense competitive landscape impacts Rapid7's ability to acquire and retain customers, limits its pricing power, and puts pressure on its overall growth, billings, and operating margins.

Rapidly Evolving Threat Landscape and Technological Advancements: As a cybersecurity company, Rapid7 is inherently exposed to a constantly and rapidly evolving threat landscape. Emerging risks include the proliferation of AI-driven attacks, the looming threat of quantum computing rendering current encryption systems obsolete, and the increasing impact of geopolitical conflicts on cyber warfare. Staying ahead of these sophisticated and dynamic threats requires continuous and significant investment in research and development and product innovation, which can impact the company's financial performance if not managed effectively.

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Rapid7 (NASDAQ: RPD) operates in several significant cybersecurity markets, with its main products and services addressing various aspects of security operations.

The estimated addressable market sizes for Rapid7's core product categories, on a global scale, are as follows:

Rapid7 itself has also highlighted a substantial overall addressable market. The company's investor presentation indicated that the security operations market was estimated at over USD 54 billion in 2024 and is projected to grow to USD 85 billion by 2027.

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Here are 3-5 expected drivers of future revenue growth for Rapid7 (RPD) over the 2-3 years:

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Latest: Q1 2026 Earnings Reported 5/5/2026

Prior: Q4 2025 Earnings Reported 2/10/2026