Rapid7, despite strong performance, plummeted 18% due to the 2026 earnings guidance... Investors are disappointed.
Although Rapid7 (RPD) reported revenue and profit that exceeded market expectations in Q4 2025, its stock plummeted after issuing a disappointing outlook. As of the 10th (local time), Rapid7’s stock price fell over 18% in after-hours trading.
According to the company’s data, adjusted earnings per share for the last quarter were $0.44, down 4 cents from the same period in 2024. Revenue for the quarter was $217 million (approximately 31.3 trillion KRW), up 1% year-over-year, surpassing the market expectation of $215.39 million.
Product revenue was $209 million (about 30.1 trillion KRW), also up 1% year-over-year. Annual recurring revenue (ARR) stood at $840 million (around 1.21 trillion KRW), unchanged from last year. Key business achievements include launching the new “Curated Intelligence Rules” feature for Amazon Web Services (AWS). This feature helps enterprises apply threat intelligence in a simplified manner within AWS environments, enhancing network-level security.
Additionally, in December last year, the company partnered with HITRUST to automate security certification for regulated industries. This collaboration aims to help companies reduce costs and complexity associated with increasingly strict data protection regulations and risk management requirements. In the same month, the company registered its 300th cybersecurity patent, further expanding its intellectual property portfolio. Currently, Rapid7 holds over 80 core patents focused on artificial intelligence and machine learning technologies.
For the full year 2025, adjusted earnings per share were $2.08, with total revenue of $860 million (about 1.2384 trillion KRW). Compared to last year, these figures show a decrease in earnings and an increase in revenue. CEO Corey Thomas emphasized, “Our differentiated approach to AI security operations is receiving positive feedback from customers and translating into increased market recognition.” He added, “In 2026, we will continue to address customer security challenges by strengthening technological innovation and execution capabilities.”
The issue lies with the 2026 guidance. First-quarter revenue is expected to be only $207 million to $209 million (about 298 billion to 301 billion KRW), with EPS projected between $0.29 and $0.32. This is below the market consensus of $213.3 million in revenue and $0.47 per share.
The annual guidance is also below expectations. Rapid7 projects adjusted EPS for 2026 to be between $1.50 and $1.60, with revenue between $835 million and $843 million (approximately 1.2024 trillion to 1.2139 trillion KRW), significantly lower than the market expectations of $1.98 and $869.9 million.
Although overall financial metrics are not poor, the low revenue growth forecast of only 2-3% for this year, in the context of other tech and cybersecurity companies showing faster growth, has caused investor concern. Despite demonstrating innovation efforts, this earnings report has once again raised questions about whether Rapid7 can deliver stronger growth momentum.