Exhibit 99.1
Rapid7 Announces Second Quarter 2017 Financial Results
| | • | | Total revenue was $47.4 million, an increase of 27% year-over-year |
| | • | | GAAP loss from operations was ($11.9) million,non-GAAP loss from operations was ($6.2) million |
| | • | | Calculated billings were $60.2 million, an increase of 20% year-over-year |
Boston, MA – August 7, 2017 –Rapid7, Inc. (NASDAQ: RPD), a leading provider of analytics solutions for security and IT operations, today announced its financial results for the second quarter of 2017.
“Our second quarter results are a great validation that Rapid7 has the right strategy across our markets” said Corey Thomas, president and chief executive officer of Rapid7. “Our approach of providing multiple, high-impact analytics solutions based on the Rapid7 Insight platform is resonating with customers and driving consolidation of spending with Rapid7, as lean security and IT teams strive to leverage their scarce resources and improve their effectiveness. Our customers are also responding with higher usage and broader adoption of our platform-based products. We also further expanded our market opportunity with the addition of Komand’s orchestration and automation products in July.”
Second Quarter 2017 Financial Results
| • | | Total revenue was $47.4 million, an increase of 27% year-over-year. |
| • | | Calculated billings were $60.2 million, an increase of 20% year-over-year. |
| • | | GAAP loss from operations was ($11.9) million, an improvement compared to GAAP loss from operations of ($13.3) million in the second quarter of 2016. For the second quarter of 2017,non-GAAP loss from operations was ($6.2) million, an improvement compared tonon-GAAP loss from operations of ($9.1) million in the second quarter of 2016. |
| • | | Adjusted EBITDA was ($5.0) million, an improvement compared to an adjusted EBITDA of ($7.9) million in the second quarter of 2016. |
| • | | GAAP net loss was ($11.6) million or a GAAP loss per share of ($0.27), an improvement compared with GAAP net loss of ($13.5) million or a GAAP loss per share of ($0.33) for the second quarter of 2016.Non-GAAP net loss was ($5.9) million or anon-GAAP net loss per share of ($0.14), an improvement compared withnon-GAAP net loss of ($9.2) million or anon-GAAP net loss per share of ($0.22) for the second quarter of 2016. |
| • | | Cash provided in operating activities was $(0.7) million in the first six months of 2017, compared to $0.3 million in the first six months of 2016. |
Recent Business Metrics and Highlights
| • | | Our renewal rate for the second quarter of 2017, which includes upsells and cross-sells of additional products and services, was 119%. The expiring renewal rate, which excludes upsells and cross-sells of additional products and services, was 88% in the second quarter of 2017. |
| • | | 70% of total revenue in the second quarter of 2017 was recurring revenue, which is comprised of content subscriptions, maintenance and support, cloud-based subscriptions, managed services subscriptions, and term licenses. |
| • | | 88% of total revenue for the second quarter of 2017 came from deferred revenue on the balance sheet at the beginning of the quarter. |
rapid7.com
| • | | For the second quarter of 2017, total revenue from North America increased 25% year-over-year to $40.2 million and comprised 85% of total revenue. Total revenue from international increased 45% year-over-year to $7.2 million and comprised 15% of total revenue for the second quarter of 2017. |
| • | | Ended the second quarter of 2017 with over 6,500 customers, an increase of 17% year-over-year. |
| • | | Acquired Komand in July 2017, a security orchestration and automation company, to help its customers reduce time to resolution, maximize resources, and overcome ecosystem complexity. This acquisition enables Rapid7 to address the critical need for orchestration and automation to fill resource gaps that cannot be met by humans alone. Rapid7 is the first organization to unite IT and security analytics and business context with the ability to automate action. |
| • | | Announced the next generation partner program: Rapid7 PACT, Partnering with Accountability, Consistency, and Transparency. Built to inspire Rapid7 partners to grow with the Company, the new program was created to enhance Rapid7’s expanding portfolio of products and services, while better defining parameters for ongoing mutual success. |
| • | | Announced the evolution of the Rapid7 Insight platform with the availability of three new cloud-based solutions: InsightVM, for vulnerability management, and InsightAppSec, for application security testing, and InsightOps for infrastructure monitoring and troubleshooting. Processing more than 54 billion events and monitoring millions of assets daily, we believe the Insight platform is the first to unify solutions for vulnerability management, user behavior analytics (UBA), SIEM, IT log analytics, and application security. In July, the Rapid7 Insight platform was extended to Japan. |
| • | | For additional details, please refer to the financial data tables posted on our website athttp://investors.rapid7.com. |
Third Quarter and Full-Year 2017 Guidance
Rapid7 anticipates total revenue,non-GAAP loss from operations, andnon-GAAP net loss per share to be in the following ranges:
Third Quarter 2017:
| | |
| Total revenue | | $48.9 to $50.3 million |
| Non-GAAP Loss from Operations | | $(7.8) to $(7.0) million |
| Net loss per share(non-GAAP) | | $(0.18) to $(0.16) |
The third quarter 2017 net loss per share calculation assumes 43.3 million basic and diluted weighted average common shares outstanding.
Updated Full-Year 2017:
| | |
| Total revenue | | $195 to $198 million |
| Non-GAAP Loss from Operations | | $(27.5) to $(25.9) million |
| Net loss per share(non-GAAP) | | $(0.64) to $(0.61) |
| Calculated Billings | | $231 to $237 million |
The full-year net loss per share calculation assumes 43.0 million basic and diluted weighted average common shares outstanding. Guidance for the third quarter and full-year 2017 does not include any potential impact of foreign exchange gains or losses.
Non-GAAP guidance excludes estimates for stock-based compensation expense, amortization of acquired intangible assets, acquisition-related expenses and certainnon-recurring items. Rapid7 has provided a reconciliation of historicalnon-GAAP financial measures to the most comparable GAAP measures in the financial statement tables included in this press release. A reconciliation ofnon-GAAP guidance measures to the most comparable GAAP measures is not available on a forward-looking basis.
rapid7.com
Conference Call and Webcast Information
Rapid7 will host a conference call today, August 7, 2017, to discuss its results at 4:30 p.m. Eastern Time. The call will be accessible by telephone at888-223-6744 (domestic) or303-223-4397 (international). The call will also be available live via webcast on the Company’s website athttp://investors.rapid7.com. A telephone replay of the conference call will be available at800-633-8284 or402-977-9140 (access code 21854800) until August 10, 2017. A webcast replay will be available athttp://investors.rapid7.com.
About Rapid7
Rapid7 (NASDAQ: RPD) is trusted by IT and security professionals around the world to manage risk, simplify modern IT complexity, and drive innovation. Rapid7 analytics transform today’s vast amounts of security and IT data into the answers needed to securely develop and operate sophisticated IT networks and applications. Rapid7 research, technology, and services drive vulnerability management, penetration testing, application security, incident detection and response, and log management for more than 6,500 organizations across more than 120 countries, including 39% of the Fortune 1000. To learn more about Rapid7 or join our threat research, visit www.rapid7.com.
Non-GAAP Financial Measures and Other Business Metrics
To supplement our consolidated financial statements, which are prepared and presented in accordance with generally accepted accounting principles in the United States, or GAAP, we provide investors with certainnon-GAAP financial measures and other business metrics, which we believe are helpful to our investors. We use thesenon-GAAP financial measures and other business metrics for financial and operational decision-making purposes and as a means to evaluateperiod-to-period comparisons. We also use certainnon-GAAP financial measures as performance measures under our executive bonus plan. We believe that thesenon-GAAP financial measures and other business metrics provide useful information about our operating results, enhance the overall understanding of past financial performance and future prospects and allow for greater transparency with respect to metrics used by our management in its financial and operational decision-making.
The presentation ofnon-GAAP financial information and other business metrics is not meant to be considered in isolation or as a substitute for the directly comparable financial measures prepared in accordance with GAAP. While ournon-GAAP financial measures and other business metrics are an important tool for financial and operational decision-making and for evaluating our own operating results over different periods of time, we urge investors to review the reconciliation of these financial measures to the comparable GAAP financial measures included below, and not to rely on any single financial measure to evaluate our business.
Adjusted EBITDA. We define adjusted EBITDA as net loss before (1) interest income (expense), net, (2) other income (expense), net, (3) provision for income taxes, (4) depreciation expense, (5) amortization of intangible assets, (6) stock-based compensation expense, and (7) certain acquisition-related expenses. We believe that the use of adjusted EBITDA is useful to investors and other users of our financial statements in evaluating our operating performance because it provides them with an additional tool to compare business performance across companies and across periods. Adjusted EBITDA should not be considered as a substitute for other measures of financial performance reported in accordance with GAAP. There are limitations to using thisnon-GAAP financial measure, including that other companies may calculate this measure differently than we do, that it does not reflect our capital expenditures or future requirements for capital expenditures and that it does not reflect changes in, or cash requirements for, our working capital and excludes some items that are cash based.
We also monitor operating measures ofnon-GAAP gross profit,non-GAAP operating loss,non-GAAP net loss andnon-GAAP net loss per share. Thesenon-GAAP financial measures exclude the effect of stock-based compensation expense, amortization of acquired intangible assets, certain acquisition-related expenses, and certainnon-recurring items. We believe that thesenon-GAAP financial measures provide useful information about our operating results, enhance the overall understanding of past financial performance and future prospects and allow for greater transparency with respect to metrics used by our management in its financial and operational decision-making. While ournon-GAAP financial measures are an important tool for financial and operational decision-making and for evaluating our own operating results over different periods of time, you should review the reconciliation of ournon-GAAP financial measures to the comparable GAAP financial measures included below, and not rely on any single financial measure to evaluate our business.
rapid7.com
Calculated Billings. Calculated billings is a key performance measure that we define as total revenue recognized in accordance with GAAP plus the change in deferred revenue from the beginning to the end of the period. We consider calculated billings to be a useful metric for management and investors, as a supplement to the corresponding GAAP measure of total revenue, because billings drive deferred revenue, which is an important indicator of the health and visibility of trends in our business, and represents a significant percentage of future revenue. We regularly monitor calculated billings because we believe the measure offers valuable information regarding the performance of our business and will help investors better understand the sales activity and performance of our business for a particular period. With the expansion of our subscription, cloud-based product offerings (InsightVM, IDR, InsightAppSec, and InsightOps) on the Insight platform, we may realize a shortening of our average contract duration, which should be taken into consideration when evaluating calculated billings. Our use of calculated billings has limitations as an analytical tool and should not be considered in isolation or as a substitute for revenue recognition or revenue measurement, or an analysis of our results as reported under GAAP. Also, it is important to note that other companies, including companies in our industry, may not use calculated billings as a measure of the business, may calculate billings differently, may have different billing frequencies, or may use other financial measures to evaluate their performance, all of which could reduce the usefulness of calculated billings as a comparative measure.
While a reconciliation ofnon-GAAP guidance measures to corresponding GAAP measures is not available on a forward-looking basis as a result of the uncertainty regarding, and the potential variability of, many of these costs and expenses that we may incur in the future, we have provided a reconciliation ofnon-GAAP financial measures and other business metrics to the nearest comparable GAAP measures in the accompanying financial statement tables included in this press release.
Cautionary Language Concerning Forward-Looking Statements
This press release includes forward-looking statements. All statements contained in this press release other than statements of historical facts, including, without limitation, statements regarding our future financial and business performance for the third quarter and full-year 2017, expected benefits and market opportunity of the acquisition of Komand and the solutions that Rapid7 will develop with the Komand technology, anticipated future growth of the partner program, attractiveness of our product offerings and platform and the value proposition of our products, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “estimate,” “expect,” “intend,” “may,” “will” and similar expressions are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives and financial needs. These forward-looking statements are subject to a number of risks and uncertainties, including, without limitation, risks related to our rapid growth and ability to sustain our revenue growth rate, the ability of our products and professional services to correctly detect vulnerabilities, competition in the markets in which we operate, market growth, our ability to innovate and manage our growth, our ability to integrate acquired operations, our ability to operate in compliance with applicable laws as well as other risks and uncertainties set forth in the “Risk Factors” section of our Quarterly Report on Form10-Q filed with the Securities and Exchange Commission for the quarterly period ended March 31, 2017 filed with the Securities and Exchange Commission on May 10, 2017, and subsequent reports that we file with the Securities and Exchange Commission. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, we cannot guarantee future results, levels of activity, performance, achievements or events and circumstances reflected in the forward-looking statements will occur. We are under no duty to update any of these forward-looking statements after the date of this press release to conform these statements to actual results or revised expectations, except as required by law. You should, therefore, not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this press release.
###
Investor contact:
Jeff Bray, CFA
Vice President, Investor Relations
investors@rapid7.com
(857)990-4074
Press contact:
Rachel E. Adam
Rapid7, Senior PR Manager
press@rapid7.com
(857)990-4136
rapid7.com
Rapid7, Inc.
Consolidated Balance Sheets
(Unaudited, in thousands)
| | | | | | | | |
| | | June 30, 2017 | | | December 31, 2016 | |
Assets | | | | | | | | |
Current assets: | | | | | | | | |
Cash and cash equivalents | | $ | 53,068 | | | $ | 53,148 | |
Short-term investments | | | 31,213 | | | | 18,779 | |
Accounts receivable, net | | | 47,560 | | | | 49,154 | |
Prepaid expenses and other current assets | | | 8,892 | | | | 9,152 | |
| | | | | | | | |
Total current assets | | | 140,733 | | | | 130,233 | |
| | |
Long-term investments | | | 8,799 | | | | 20,162 | |
Property and equipment, net | | | 8,287 | | | | 8,088 | |
Goodwill | | | 75,110 | | | | 75,110 | |
Intangible assets, net | | | 8,294 | | | | 8,946 | |
Other assets | | | 630 | | | | 764 | |
| | | | | | | | |
Total assets | | $ | 241,853 | | | $ | 243,303 | |
| | | | | | | | |
Liabilities and Stockholders’ Equity | | | | | | | | |
Current liabilities: | | | | | | | | |
Accounts payable | | $ | 2,257 | | | $ | 4,012 | |
Accrued expenses | | | 20,667 | | | | 23,499 | |
Deferred revenue, current portion | | | 126,085 | | | | 116,903 | |
Other current liabilities | | | 1,334 | | | | 1,195 | |
| | | | | | | | |
Total current liabilities | | | 150,343 | | | | 145,609 | |
| | |
Deferred revenue,non-current portion | | | 54,344 | | | | 52,160 | |
Other long-term liabilities | | | 2,539 | | | | 3,496 | |
| | | | | | | | |
Total liabilities | | | 207,226 | | | | 201,265 | |
Stockholders’ equity: | | | | | | | | |
Common stock | | | 435 | | | | 426 | |
Treasury stock | | | (4,531 | ) | | | (4,391 | ) |
Additionalpaid-in-capital | | | 450,394 | | | | 435,360 | |
Accumulated other comprehensive loss | | | (46 | ) | | | (19 | ) |
Accumulated deficit | | | (411,625 | ) | | | (389,338 | ) |
| | | | | | | | |
Total stockholders’ equity | | | 34,627 | | | | 42,038 | |
| | | | | | | | |
Total liabilities and stockholders’ equity | | $ | 241,853 | | | $ | 243,303 | |
| | | | | | | | |
Rapid7, Inc.
Consolidated Statements of Operations
(Unaudited, in thousands, except share and per share data)
| | | | | | | | | | | | | | | | |
| | | Three Months Ended | | | Six Months Ended | |
| | | June 30, 2017 | | | June 30, 2016 | | | June 30, 2017 | | | June 30, 2016 | |
Revenue: | | | | | | | | | | | | | | | | |
Products | | $ | 27,168 | | | $ | 21,456 | | | $ | 53,110 | | | $ | 41,601 | |
Maintenance and support | | | 11,338 | | | | 8,962 | | | | 22,140 | | | | 17,343 | |
Professional services | | | 8,937 | | | | 6,850 | | | | 17,438 | | | | 13,120 | |
| | | | | | | | | | | | | | | | |
Total revenue | | | 47,443 | | | | 37,268 | | | | 92,688 | | | | 72,064 | |
Cost of revenue: | | | | | | | | | | | | | | | | |
Products | | | 5,557 | | | | 2,687 | | | | 10,267 | | | | 5,285 | |
Maintenance and support | | | 1,850 | | | | 1,758 | | | | 3,728 | | | | 3,439 | |
Professional services | | | 5,672 | | | | 4,848 | | | | 11,348 | | | | 9,281 | |
| | | | | | | | | | | | | | | | |
Total cost of revenue | | | 13,079 | | | | 9,293 | | | | 25,343 | | | | 18,005 | |
| | | | | | | | | | | | | | | | |
Total gross profit | | | 34,364 | | | | 27,975 | | | | 67,345 | | | | 54,059 | |
| | | | | | | | | | | | | | | | |
Operating expenses: | | | | | | | | | | | | | | | | |
Research and development | | | 11,873 | | | | 12,932 | | | | 23,266 | | | | 25,274 | |
Sales and marketing | | | 27,132 | | | | 21,680 | | | | 51,942 | | | | 44,448 | |
General and administrative | | | 7,256 | | | | 6,644 | | | | 14,504 | | | | 13,237 | |
| | | | | | | | | | | | | | | | |
Total operating expenses | | | 46,261 | | | | 41,256 | | | | 89,712 | | | | 82,959 | |
| | | | | | | | | | | | | | | | |
Loss from operations | | | (11,897 | ) | | | (13,281 | ) | | | (22,367 | ) | | | (28,900 | ) |
Other income (expense), net: | | | | | | | | | | | | | | | | |
Interest income (expense), net | | | 218 | | | | 26 | | | | 387 | | | | 11 | |
Other income (expense), net | | | 229 | | | | (48 | ) | | | 114 | | | | 148 | |
| | | | | | | | | | | | | | | | |
Loss before income taxes | | | (11,450 | ) | | | (13,303 | ) | | | (21,866 | ) | | | (28,741 | ) |
Provision for income taxes | | | 187 | | | | 149 | | | | 316 | | | | 291 | |
| | | | | | | | | | | | | | | | |
Net loss | | $ | (11,637 | ) | | $ | (13,452 | ) | | $ | (22,182 | ) | | $ | (29,032 | ) |
| | | | | | | | | | | | | | | | |
Net loss per share, basic and diluted | | $ | (0.27 | ) | | $ | (0.33 | ) | | $ | (0.52 | ) | | $ | (0.71 | ) |
| | | | | | | | | | | | | | | | |
Weighted-average common shares outstanding, basic and diluted | | | 42,681,287 | | | | 41,063,613 | | | | 42,395,450 | | | | 40,805,641 | |
| | | | | | | | | | | | | | | | |
Rapid7, Inc.
Consolidated Statements of Cash Flows
(Unaudited, in thousands)
| | | | | | | | | | | | | | | | |
| | | Three Months Ended | | | Six Months Ended | |
| | | June 30, 2017 | | | June 30, 2016 | | | June 30, 2017 | | | June 30, 2016 | |
Cash flows from operating activities: | | | | | | | | | | | | | | | | |
Net loss | | $ | (11,637 | ) | | $ | (13,452 | ) | | $ | (22,182 | ) | | $ | (29,032 | ) |
Adjustments to reconcile net loss to cash (used in) provided by operating activities: | | | | | | | | | | | | | | | | |
Depreciation and amortization | | | 1,613 | | | | 1,708 | | | | 3,237 | | | | 3,419 | |
Stock-based compensation expense | | | 5,171 | | | | 3,641 | | | | 9,450 | | | | 9,160 | |
Provision for doubtful accounts | | | 162 | | | | 270 | | | | 478 | | | | 394 | |
Foreign currencyre-measurement (gain) loss | | | (282 | ) | | | 104 | | | | (238 | ) | | | (119 | ) |
Othernon-cash expenses | | | 78 | | | | 52 | | | | 175 | | | | 130 | |
Change in operating assets and liabilities: | | | | | | | | | | | | | | | | |
Accounts receivable | | | (13,942 | ) | | | (9,103 | ) | | | 1,240 | | | | 4,945 | |
Prepaid expenses and other assets | | | (1,054 | ) | | | (685 | ) | | | 412 | | | | (1,401 | ) |
Accounts payable | | | (1,413 | ) | | | 2,404 | | | | (1,657 | ) | | | 1,904 | |
Accrued expenses | | | 5,094 | | | | 3,965 | | | | (2,122 | ) | | | (3,462 | ) |
Deferred revenue | | | 12,782 | | | | 12,865 | | | | 11,366 | | | | 14,405 | |
Other liabilities | | | (553 | ) | | | 94 | | | | (819 | ) | | | (72 | ) |
| | | | | | | | | | | | | | | | |
Net cash (used in) provided by operating activities | | | (3,981 | ) | | | 1,863 | | | | (660 | ) | | | 271 | |
| | | | | | | | | | | | | | | | |
Cash flows from investing activities: | | | | | | | | | | | | | | | | |
Purchases of property and equipment | | | (1,243 | ) | | | (750 | ) | | | (2,578 | ) | | | (1,842 | ) |
Capitalization ofinternal-use software costs | | | (316 | ) | | | — | | | | (316 | ) | | | — | |
Purchases of investments | | | (8,427 | ) | | | — | | | | (15,828 | ) | | | — | |
Sale and maturities of investments | | | 13,705 | | | | — | | | | 14,605 | | | | — | |
| | | | | | | | | | | | | | | | |
Net cash provided by (used in) investing activities | | | 3,719 | | | | (750 | ) | | | (4,117 | ) | | | (1,842 | ) |
| | | | | | | | | | | | | | | | |
Cash flows from financing activities: | | | | | | | | | | | | | | | | |
Deferred business acquisition payment | | | (796 | ) | | | — | | | | (796 | ) | | | — | |
Payments of capital lease obligations | | | — | | | | — | | | | — | | | | (68 | ) |
Taxes paid related to net share settlement of equity awards | | | (92 | ) | | | (673 | ) | | | (261 | ) | | | (3,760 | ) |
Proceeds from employee stock purchase plan | | | — | | | | — | | | | 1,499 | | | | 2,096 | |
Proceeds from stock option exercises | | | 3,336 | | | | 884 | | | | 4,111 | | | | 1,431 | |
| | | | | | | | | | | | | | | | |
Net cash provided by (used in) financing activities | | | 2,448 | | | | 211 | | | | 4,553 | | | | (301 | ) |
| | | | | | | | | | | | | | | | |
Effects of exchange rates on cash and cash equivalents | | | 220 | | | | (77 | ) | | | 144 | | | | 74 | |
| | | | | | | | | | | | | | | | |
Net increase (decrease) in cash and cash equivalents | | | 2,406 | | | | 1,247 | | | | (80 | ) | | | (1,798 | ) |
Cash and cash equivalents, beginning of period | | | 50,662 | | | | 83,508 | | | | 53,148 | | | | 86,553 | |
| | | | | | | | | | | | | | | | |
Cash and cash equivalents, end of period | | $ | 53,068 | | | $ | 84,755 | | | $ | 53,068 | | | $ | 84,755 | |
| | | | | | | | | | | | | | | | |
Rapid7, Inc.
GAAP toNon-GAAP Reconciliation
(Unaudited, in thousands, except share and per share data)
| | | | | | | | | | | | | | | | |
| | | Three Months Ended | | | Six Months Ended | |
| | | June 30, 2017 | | | June 30, 2016 | | | June 30, 2017 | | | June 30, 2016 | |
Total gross profit (GAAP) | | $ | 34,364 | | | $ | 27,975 | | | $ | 67,345 | | | $ | 54,059 | |
Add: Stock-based compensation expense1 | | | 308 | | | | 142 | | | | 510 | | | | 279 | |
Add: Amortization of acquired intangible assets2 | | | 439 | | | | 445 | | | | 878 | | | | 891 | |
| | | | | | | | | | | | | | | | |
Total gross profit(non-GAAP) | | $ | 35,111 | | | $ | 28,562 | | | $ | 68,733 | | | $ | 55,229 | |
| | | | | | | | | | | | | | | | |
Gross margin(non-GAAP) | | | 74 | % | | | 77 | % | | | 74 | % | | | 77 | % |
| | | | |
Gross profit (GAAP) - Products | | $ | 21,611 | | | $ | 18,769 | | | $ | 42,843 | | | $ | 36,316 | |
Add: Stock-based compensation expense | | | 90 | | | | 13 | | | | 150 | | | | 31 | |
Add: Amortization of acquired intangible assets | | | 439 | | | | 445 | | | | 878 | | | | 891 | |
| | | | | | | | | | | | | | | | |
Total gross profit(non-GAAP) - Products | | $ | 22,140 | | | $ | 19,227 | | | $ | 43,871 | | | $ | 37,238 | |
| | | | | | | | | | | | | | | | |
Gross margin(non-GAAP) - Products | | | 81 | % | | | 90 | % | | | 83 | % | | | 90 | % |
| | | | |
Gross profit (GAAP) - Maintenance and support | | $ | 9,488 | | | $ | 7,204 | | | $ | 18,412 | | | $ | 13,904 | |
Add: Stock-based compensation expense | | | 81 | | | | 54 | | | | 141 | | | | 113 | |
| | | | | | | | | | | | | | | | |
Total gross profit(non-GAAP) - Maintenance and support | | $ | 9,569 | | | $ | 7,258 | | | $ | 18,553 | | | $ | 14,017 | |
| | | | | | | | | | | | | | | | |
Gross margin(non-GAAP) - Maintenance and support | | | 84 | % | | | 81 | % | | | 84 | % | | | 81 | % |
| | | | |
Gross profit (GAAP) - Professional services | | $ | 3,265 | | | $ | 2,002 | | | $ | 6,090 | | | $ | 3,839 | |
Add: Stock-based compensation expense | | | 137 | | | | 75 | | | | 219 | | | | 135 | |
| | | | | | | | | | | | | | | | |
Total gross profit(non-GAAP) - Professional services | | $ | 3,402 | | | $ | 2,077 | | | $ | 6,309 | | | $ | 3,974 | |
| | | | | | | | | | | | | | | | |
Gross margin(non-GAAP) - Professional services | | | 38 | % | | | 30 | % | | | 36 | % | | | 30 | % |
| | | | |
Loss from operations (GAAP) | | $ | (11,897 | ) | | $ | (13,281 | ) | | $ | (22,367 | ) | | $ | (28,900 | ) |
Add: Stock-based compensation expense1 | | | 5,171 | | | | 3,641 | | | | 9,450 | | | | 9,160 | |
Add: Amortization of acquired intangible assets2 | | | 483 | | | | 583 | | | | 968 | | | | 1,166 | |
Add: Acquisition-related expenses3 | | | 80 | | | | — | | | | 80 | | | | — | |
| | | | | | | | | | | | | | | | |
Loss from operations(non-GAAP) | | $ | (6,163 | ) | | $ | (9,057 | ) | | $ | (11,869 | ) | | $ | (18,574 | ) |
| | | | | | | | | | | | | | | | |
| | | | |
Net loss (GAAP) | | $ | (11,637 | ) | | $ | (13,452 | ) | | $ | (22,182 | ) | | $ | (29,032 | ) |
Add: Stock-based compensation expense1 | | | 5,171 | | | | 3,641 | | | | 9,450 | | | | 9,160 | |
Add: Amortization of acquired intangible assets2 | | | 483 | | | | 583 | | | | 968 | | | | 1,166 | |
Add: Acquisition-related expenses3 | | | 80 | | | | — | | | | 80 | | | | — | |
| | | | | | | | | | | | | | | | |
Net loss(non-GAAP) | | $ | (5,903 | ) | | $ | (9,228 | ) | | $ | (11,684 | ) | | $ | (18,706 | ) |
| | | | | | | | | | | | | | | | |
Net loss per share, basic and diluted(non-GAAP) | | $ | (0.14 | ) | | $ | (0.22 | ) | | $ | (0.28 | ) | | $ | (0.46 | ) |
| | | | |
Weighted-average common shares outstanding, basic and diluted | | | 42,681,287 | | | | 41,063,613 | | | | 42,395,450 | | | | 40,805,641 | |
| | | | |
1 Includes stock-based compensation expense as follows: | | | | | | | | | | | | | | | | |
| | | | |
Cost of revenue | | $ | 308 | | | $ | 142 | | | $ | 510 | | | $ | 279 | |
Research and development | | | 1,689 | | | | 1,524 | | | | 3,202 | | | | 3,017 | |
Sales and marketing | | | 1,779 | | | | 1,224 | | | | 3,182 | | | | 4,125 | |
General and administrative | | | 1,395 | | | | 751 | | | | 2,556 | | | | 1,739 | |
| | | | |
2 Includes amortization of acquired intangible assets as follows: | | | | | | | | | | | | | | | | |
| | | | |
Cost of revenue | | $ | 439 | | | $ | 445 | | | $ | 878 | | | $ | 891 | |
Sales and marketing | | | 39 | | | | 39 | | | | 76 | | | | 77 | |
General and administrative | | | 5 | | | | 99 | | | | 14 | | | | 198 | |
| | | | |
3 Includes acquisition-related expenses as follows: | | | | | | | | | | | | | | | | |
| | | | |
General and administrative | | $ | 80 | | | $ | — | | | $ | 80 | | | $ | — | |
Rapid7, Inc.
Reconciliation of Total Revenue to Calculated Billings
(Unaudited, in thousands)
| | | | | | | | | | | | | | | | |
| | | Three Months Ended June 30, | | | Six Months Ended June 30, | |
| | | 2017 | | | 2016 | | | 2017 | | | 2016 | |
Total revenue | | $ | 47,443 | | | $ | 37,268 | | | $ | 92,688 | | | $ | 72,064 | |
Add: Deferred revenue, end of period | | | 180,429 | | | | 144,722 | | | | 180,429 | | | | 144,722 | |
Less: Deferred revenue, beginning of period | | | 167,647 | | | | 131,857 | | | | 169,063 | | | | 130,317 | |
| | | | | | | | | | | | | | | | |
Calculated billings | | $ | 60,225 | | | $ | 50,133 | | | $ | 104,054 | | | $ | 86,469 | |
| | | | | | | | | | | | | | | | |
Reconciliation of Net Loss to Adjusted EBITDA
(Unaudited, in thousands)
| | | | | | | | | | | | | | | | |
| | | Three Months Ended June 30, | | | Six Months Ended June 30, | |
| | | 2017 | | | 2016 | | | 2017 | | | 2016 | |
Net loss | | $ | (11,637 | ) | | $ | (13,452 | ) | | $ | (22,182 | ) | | $ | (29,032 | ) |
Interest (income) expense, net | | | (218 | ) | | | (26 | ) | | | (387 | ) | | | (11 | ) |
Other (income) expense, net | | | (229 | ) | | | 48 | | | | (114 | ) | | | (148 | ) |
Provision for income taxes | | | 187 | | | | 149 | | | | 316 | | | | 291 | |
Depreciation expense | | | 1,130 | | | | 1,125 | | | | 2,268 | | | | 2,253 | |
Amortization of intangible assets | | | 483 | | | | 583 | | | | 968 | | | | 1,166 | |
Acquisition-related expenses | | | 80 | | | | — | | | | 80 | | | | — | |
Stock-based compensation expense | | | 5,171 | | | | 3,641 | | | | 9,450 | | | | 9,160 | |
| | | | | | | | | | | | | | | | |
Adjusted EBITDA | | $ | (5,033 | ) | | $ | (7,932 | ) | | $ | (9,601 | ) | | $ | (16,321 | ) |
| | | | | | | | | | | | | | | | |
