RPD - Earnings call transcript Q1 2021

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Operator

Good day. And thank you for standing by and welcome to the Q1 2021 Rapid7 Earnings Conference Call. [Operator Instructions] I would now like to introduce your host, Sunil Shah VP of Investor Relations.

You may begin.

Sunil Shah

Thank you, operator and good afternoon everyone. and us operating discuss our results, for second joining XXXX first financial you XXXX. the and year financial in quarter appreciate today RapidX’s to quarter outlook We fiscal full addition to With me Corey CEO Jeff and today our Thomas, CFO. our Kalowski, the on call are and and at distributed with investors.rapidX.com, We've wire the earnings financial posted now updated release press is our presentation metrics. along on the company over it our website via This call broadcast live webcast. is being replay will XX, audio available following at May an And the until be XXXX. investors.rapidX.com call,

with During the business goals related timing this Litigation number Securities the made considered indication assumptions future file provisions the results federal of the presented update required Actual to be obligation financial may on to statements reported these expectations statements by law. from call, assume the most XXXX not expectations currently considered to we on in implied results performance. quarter harbor including by and of should may make our SEC. to Form statements differ be on underlying RapidX the of risks These contained guidance information differ Private conference the are and reports applicable extent on those call, based that information predicted securities to Reform light company's forward-looking may to such of timing and report does on statements positioning, related call an Act statements we not for full pursuant our forward-looking safe the and year should the due or except under The certain conference information materially from as to and of results the our this recent results the guidance. current and such XX-K are XXXX Actual subsequent or future the forward-looking any of such outcomes statements and includes quarterly our laws, uncertainties, and and contained in that and this are in then and and events a materially second beliefs us. these rules available risks. provided

will nature our and terms provide and in in detail CEO, or provide on your or non-GAAP to in quarterly today's like Please one-time or today be business historical in can we Corey commentary over call press times prepared insight our I'd primarily may GAAP be Corey? metrics may the Thomas. between to of guidance in our our and may results. to non-GAAP in to reconciliations remarks may and Our incremental offer into that, metrics. earnings response results release. With At additional the the questions we dynamics advised our the not be these greater found future be that turn update an

Corey Thomas

Thank to afternoon you for to earnings Sunil Thank RapidX. results a us I'm you year for report the XXXX everyone. first start strong joining our thrilled call. and quarter all good for

our in while year-over-year to cash dynamics strong ARR we accelerated XX%, business. free As flow growth demonstrating

where We goal in to meets that our SecOps continue their delivering against customers they execute security best-in-class of journey. are

recent offering. Our we laid in effort coupled progress demonstrate achievement vision in at ongoing the quarter Investor to are gap. momentum in solutions, with in of and accelerated close These was security validation durable vulnerability transformation by our Day great performance security customers our the growth a help management out the driven our results

results on adoption was journey already about securely. and today Amidst with to to some growth technologies for notable their digital remote the us incredibly strategy Customers exacerbates I'll footprint as to a and technology year Insight challenged also fundamentally we're it a goals Our Jeff, a what update accelerate consumption. are outlook, brief we're and remarks. the rapid our that March, facing cloud Platform in to a executing this his is full-year In the deliver our our on a how SaaS profitability. raise growing Jeff while customers core will innovation risk scaling the are pace you across strong with how before new guidance. drive shared and financial ARR our helping of experiences, RapidX exciting perspective dynamic acceleration over manage of finding we share customers which turning enterprise. against positioned COVID pace start all to to cover world innovation durable to begin Then detail

can are many rapid innovation. the widening between risk the and gap fact, effectively seeing born In pace of they a manage this risk that from

best-in-class about value not I'm helps Lee usability ability Insight experience response, our are ultimately with experience. customers platform. It's forward-leaning to clear a the our of unified cloud. coupled formula suite This best-in-class Chief response Platform delivering capabilities, customers, of that of is just see the the with leading help detection for our security, but SecOps to better the and Platform In Officer, focus technology Weiner combination result management successful report market. better cloud Customers pillars the to disrupting beginning recent with We're achievement is accessibility we've in that enables capability IDR resonating delivering security to achieve our customers close Insight and with in to customers are disrupt on magic The and but and success what vision because pleased together best-in-class this the continually a to the in integrated seen demonstrates also of makes them. on is unique offering them platform across demand risk turning to accelerating that As just value for detection turning that our us for RapidX’s industry spoke so not focus and and security RapidX are market. increasingly accessibility our time to vulnerability its our within on gap. focus world-class our leading March technology, the and deliver Innovation market outcomes. quarters

Insight user the upon fact, process. seeing And how of great enterprise XX who multiple in in SIM capabilities, offer us, six-figure mix our in displacing goods but growth came shared company consumer the deliver SecOps a days unified our they continue deal an this multiproduct it we're behavior analytics the at point of are Insight initially Investor Insight We experience. InsightIDR, is validation customers by detection customer A drivers opportunity, One This We Insight InsightConnect top InsightVM, making progress advanced for and unify Jeff to to to easier was included four products, early seven our customers. but One based with quarter broad-based purchased work to remain to our vendors adoption sustainable about this seamlessly together, quarter for a platform InsightAppSec Platform the looking trend InsightOne products platform in grow that our against customers. to excited our platform our existing to-date on durable for and this with one of in to execute path barriers purchase Day. deals all see with way you it chose lowering

demonstrate Let across quarter me how our drivers. four take results of you first all a moment progress update on growth these to

cloud digital today. Platform strong demand First, and for investments is our Insight driving platform to opportunity, urgency secure the growing

cloud. COO we're consume to for Platform. our highlighted customers it Burton visibility This more security RapidX in and six-figure deal coverage one the total across the by customer about Our working was their of in This lacking into how as UK. capabilities with the March make suppliers Insight Andrew existing largest is easier infrastructure footprint domestic expanded spoke energy recent to across they

Additionally, was after everything to could. possible a they from they wanted recognizing InsightConnect what automate deployment, small

critical a yet one while customer security of our example expanding our engagement into customers, As adding leads existing second grew larger this product with deeper RapidX their driver. is D&R DivvyCloud their positioning deal and partners. of This is which set how driving a as our automation growth to platform another expanded result, VM, coverage on most

opportunity. engine. average expand and land remain our $XXX,XXX penetrating in Our early size very customer We

strong with ARR which This our year-over-year $XX,XXX the first customer milestone XX% eclipse first accelerated the in sell for we sell expand customer, ongoing the saw existing strength grew and our up time. quarter, During within growth to cross drove execution motions we per as in our base.

for value is platform Our here. we runway see growth with resonating long a the customers and

we on greenfield early with our and over our story transformation growth focus best-in-class international More quarter accessibility our our globally, to overall accelerate of continue our focus us high more customers and core to international. runway great part saw VM remains And customers we total our percentage only a trend have security growing than is driver a total on penetrating growth customer the faster added the the over saw our customer over as still as grew solutions as an customers, it growth Third, We start value we quarter first new had opportunity, in year high of products, the that accelerating and finally, customer during a ended our opportunity. base. customers QX. opportunities market and customers international for platform value growth, to in internationally. given grow X,XXX XXX net during a long the relates growth

international teams again to once continue outpaced our international total We in and ARR in growth. growth invest ARR

framework. strong scaling in results execution growth we and deliver drivers see, We to commitment growth to and investment, I'm deliver objectives, as long-term to executing and technology, profitability pleased begin longstanding that growth innovation. have Of as strong can I year. are while lamping profitability to the across highlight track XXXX. board on flow. you to also on like note So paths remain rooted these these on free RapidX’s multiple cash we’re we share and our our this

We are available making of all. best investing operations to edge aggressively the on the security leading to remain

Let me of brief some share of initiatives. current a our update

access market but security a scaling but more detection in and have readiness response to and research valued excited data enough invest building to community visibility newer And and enterprise to community. threat innovation endpoint just not open Velociraptor the we to with continue not that is wisdom threats, capabilities important network collective role-based effort. source the it's RapidX sophisticated siloed enhancements alert collect SIM increasingly security customization the We welcome of dynamic recent the team tuning today's to and is so upon team, that is At always enhance landscape. detect for improve response, RapidX the What I'm than learned rather in the and family. in we've and

technology Our moves attacks leveraging recent of endpoints. step threats forensics driven customers by better to us another monitor and announced malicious incident activity response acquisition Velociraptor’s helping in digital and Velociraptor to respond community the leading across forward

information asset in container and enables the environments recent customers to with VM to aggravate envelope and push allow our integration container that continue traditional live to a We visibility. container Kubernetes

Looking better that infrastructure visibility from risk ahead, we also unify traditional more advancing cloud asset risks our VM DivvyCloud capabilities remediation improves configuration intelligence to visibility for insights as we're cloud holistic risk outcomes. with provide

review our, our Turning best-in-class the heavily platform cloud that operations workload with we our to security container we to to our Overall, customers a my is effort cloud to pipeline protection. accessible about critical best the our invest brief integrate innovation native component security. delivering run-time is security, assessments, in all. for today, cloud continue security cloud roadmaps, I'll an security ourselves management cloud to remarks for as Alcide’s goals. accelerates monitoring why integrated and Insight path risk our Kubernetes a conclude and security now we're ongoing threat enduring and central Platform make technology in to combines identity work of Combining excited which cloud CSPM, detection

as to investment their operations resonating in our on cloud progress around driving cloud. to delivering SecOps leader experience transform with unified a security be Our enabling in customers the first ongoing goal the and customers, the

Platform our customer Jeff? SecOps RapidX us our results our in enabling all of accelerating for they experience securing in ARR over digital the can remains the to gap. our turn demonstrated with help our quarter. lower on entire alongside to on a investing strong Kalowski. Insight adoption team by customers with distribution And strong our barriers thank I working our profitably where ARR you contributions close on world-class be Thank best-in-class for their In delivering achievement platform behalf delivering capabilities goal growth Second, platform our focused I want of by customers. deliver growth, accessibility. seen per by in in broad-based engine. to while execution security them effort our will experience This first third the to closing the line in coupled Jeff And our are leverage their all. unified Meeting the business growth our is CFO, journey customer balanced of now underlying call to top scaling is on of goal during growth finally, to

Jeff Kalowski

and Corey Thanks, good afternoon everyone.

strength ARR begin a in year-over-year today offering. by except non-GAAP stated sustained strength all transformation opportunity we reconciliations This and are results brief for financial business confidence our measures Before strong financial I ARR strong be non-GAAP ahead. revenue, results to between can that invest will and found reminder security in today's for drove ahead outstanding in ongoing and across driven release. market an growth associated strong we GAAP start at earnings upside XX% and with otherwise demand unless the discuss for us profitability. generation drove with by year acceleration durable of margin vulnerability growth while also flow management business, expansion solutions massive press The execution accelerating to cash coupled RapidX our our start had underlying see the million, to our our ARR and of ended Total quarter free our continuing performance driven billing to QX fuels $XXX.X in the growth year. leverage

March, executing the As we're our laid close gap we against in in growth to initiatives customers. shared remarks, of well achievement we behalf on the his worked out security Corey as

briefly three start and we me goals at Let to how our review these over fundamental objectives to XXXX us time. on financial our positions shared Day deliver Investor the strong

four on growth growth of customer, paths. growth ARR back and our large Strong on RapidX growth, international customer spoke we goal expanding results across per and to durable market first was all opportunity. paths drive the of demonstrated multiple for The business QX ARR about these and progress

saw opportunity Our and driving growing XX% year-over-year land-to-expand cross ARR transformation platform XX% We security in our total to engine continued per $XX,XXX. strong over of is up-sell XX%. our success multiproduct resonating mix up solutions QX as ARR with represent customer performance, over

off customer to growth. with Our quarter centric is acceleration an over the innovation paying we year-over-year ended X,XXX customers, as focus XX%

this account to And metric. reminder, our quarter which finally geographies. quick ARR our well the we Day, quarter-end at a across count presented better with on is continue four, As our aligns methodology based end updated execute customer Investor customer we

XX% During we us confidence against QX revenue. look year-over-year grew XX% drivers revenue of growth to while and XX% of America world XX% durable increasing of revenue, represented Multitude ahead. year-over-year executing North our of as growth gives rest grew strategy in

profits, range to Alcide quarter of top demonstrated expenses of me However, line results financial continue importance included time. the RapidX's over cash we the profitability efficiently. delivering Non-GAAP exceeded million recognized first of also a free our which $X flow to the scale approximately to again grow ability bottom guidance goal operating our line. this value scale partial to quarter by our flow bottom overperformance midpoint once we second our leads over time, to line business, as to and as the

will leads we cash growth Rule We out Investor ARR year free our approach a long-term growth which business, to positioned targets we're see business, long-term mid long-term to as Day. to scale margin. huge execute believe define opportunity our become set to $X in of which to support on we to financial our throughout the and a plus typical a at the look overperformance well goal we our flow business, XX is billion As third reinvest this we

combined grew grow on high-end Insight our continue financial and well prior was upside prior expenses year X% in marketing G&A with the first the from margin XX% from in up guidance QX were to of $XXX.X our and as QX as XX% improved were year-over-year. XX% revenue year. ago down XX% revenue and to was Turning million benefited expenses as efficiency the we compared with revenue the year Sales demand now XX% across to TD to from gross year-over-year included QX kickoff the $XXX.X R&D costs. which of some specifics Strong revenue quarter lower period. revenue to to XX% XXXX of for quarter above XX% in first XX% in products of consistent innovation. of invest the the results, revenue, of improving annual Total modestly expenses the million. sales for in quarter Platform quarter

principle repurchase aggregate balance flow I as shareholders in convertible and note last new of debt. of adoption debt We cash we the back million period. also the acquisition strong approximately ASU were results to driven ahead million in to to profit the Adjusted of QX by net reflects revenues. was proceeds million at First transactions. cash sheet flows, on a notes and from of that discount QX debt $XX approximately our predominantly to of start the accounting The and our cash increase Alcide. collections amount activity by overachievement share And guidance standard $XXX for the XXXX-XX, $X.XX operating million cash, our our EBITDA free range delivered balance our convertible will $XXX.X the we cash of $X.X offering to quarter with by from shared of Shifting early year quarter the call ahead compared And our ended the of related million predominantly first approximately of quarter strong is million. driven equivalents flow billings for and of with of of XXX approximately per QX also XXXX income $XX loss outflow first which reclassification a reflects related $X.X to guidance. Offset end cash investments quarter our million equity XXXX. results notes. $XXX.X of net million cap QX was ending

year, Day our reflects growth in and the start ongoing Moving innovation with for now laid March. out strategy strong our to the Investor we XXXX at momentum to our updated guidance

platform clearly unified customers, us are enabling building SecOps they SecOps meet Our them in to a the investments cloud in resonating in the where are journey. with

we're of durable As in positioned our customers products to Platform drive growth time. more over purchase well Insight ARR

of security the focus nature squarely cyber Additionally, teams. in again put leadership boards risk for today's landscape investments back dynamic once has and

the remains year XXXX. full in for operating early our these expectations While it our fuel trends year ARR confidence margin raising

our As ARR to a growth with strong as to the revenue over today XX%. given XX% or start we of uncertainty Building and reinvest anticipate quarter and guidance support growth $XXX see growth million range raising to This prior of typical in midpoint Consistent the XX% at guidance to business growth for the full our our plan approximately XX% see or methodology of resolution deliver profit to performance, the year-to-date economic revenue now be a of our our just challenges accounts by for approximately million ago. a year year and us, global million year, of compared to health of current to of we're we it result, long-term ongoing expect full objectives. $XXX $XX guidance growth to the our the contemplating solid our associated momentum broad-based multitude we operating timeframe to the we relates in drivers to ahead off $XXX or million, risks.

million is average non-GAAP shares to on for the positive XX.X result, of net $X.XX share million a per an million for per XXXX in continue for $X.XX basic of diluted full-year range which $XX We to be loss outstanding. to income weighted year. the anticipate of share, estimated based to anticipate full million we the and the income As to operating in $XX a XX.X be range non-GAAP

immaterial anticipate cash by expectation year to approximately million. full or on the operating range flow, of the for of timing the to and income remain And from of in to to to prior cash We be this our part XX%. to growth our cash non-GAAP continue we're non-GAAP upcoming of to IP million strong to $X.X for performance time. anticipate million QX flow Closing pleased expect payment in more generation net our $XXX.X are weighted. second strong now acquisition impact total guidance, million for quarter in that of to revenue and quarter experienced in share of tax for the expectations This forecasting, offset $X.XX, that guidance we at be flow transfer to XX% XXXX, anticipated we free in tied based average our collections is balance over by driven income announced free I'm to XXXX of million. second will our in shares We quarter quarterly be our outstanding. an focused cash $XX range the we growth second free Velociraptor, of incremental QX is Note not expected recent flow a diluted year. $X.X anticipate million acquisition in Moreover, related of the weighted same $XXX.X which includes report $XX to investments approximately of which to performance back-half recently the Turning on per range financials. be $X.XX the XX.X quarter very QX to the million our second activity scaling over is to investing the full-year of pace raising the Alcide. with be

$X goals profitability in any appreciate support summary, company continued we to now strong for execution drive flow in So cash the against questions. over while call fundamental time. free billion XX XXXX scaling your to we'll become and Rule and to business, open and Operator? time our our of that, start growth With durable demonstrates our

Operator

[Operator Instructions] Our first question Sandler. comes Piper Owens from with Rob

Rob Owens

drill for taking that little a in ARR and bit the customer my Thanks saw to new Want around also acceleration guys. acquisition. Great. you

customer perspective, Alcide, since COVID rampant. – have was we still aided seeing you kind of even any what there contribution there a maybe down kind new especially running that drill can more from we're little bit given you're minimal than First-off a that to with of

Jeff Kalowski

It's was quarter contribution there respect not Yeah. Alcide immaterial, ARR there's no significant. was to – With material the in Rob, no I'll start that the that for year. to for out. matter

Corey Thomas

based performance strong I across demand really and teams that overall I’ll execution both just Yeah. by up. say just was on would portfolio. we saw the the our strong ARR follow

and coming which we both customers, had strong there. saw good We deals customers quarters new over saw performance so healthy. segments. But we also large customer XX% our strengths of And was across in, one

we very that. about good feel So

I been we've years. the think that investment it last strategy on just and the validates few for our path

Rob Owens

generation is And and proposition the wanted and couple where around weeks, one noisiest offering they're these next Are ask in consistent do Corey you starting verge [indiscernible] security. in RSA are Great. the or your the of what versus SIM value events about that see opportunities? you've from you as then secondarily of to years which you're in guys the to talking about obviously the to especially for XDR XDR what is of especially with here proposition, relative see space a converge been different discrete

Corey Thomas

I not idea about people you monitoring what security sort the XDR ago, around would and platform, was what our a talking talking one areas trend especially in are could that is – we say InsightIDR that we're observed our about years silos. security tackle today which core of Yeah, thesis and of

And were accelerate analysis, with log Velociraptor this so endpoints quarter. into but bringing also We fold. UVA that our we the attacker-based visibility analytics, acquisition a in pioneer in

our with so get absolutely. monitor are about Sure, that our you with those cloud you SIM and and and sophisticated very-advanced actually you there's automate going actually needs. platform, distinct holistically, especially need allows And InsightIDR extension platform platform, into to monitor and the environments at forensic Is you areas like get deploy in think, for a your get a a overlapping, strategy strategy managing a full monitoring do we on environment, What fully log but in is you extend look easy XDR? a holistic of complete they environments what's we great cloud remediation. and visibility it have but when and to and still

platforms talk around manage still to And others And how model bring absolutely so rather logging that's SIM your saw the still you theme. the aligned a bear. strategy about it. is why that some the there's guard needs need XDR you unique But you your in about and

Sunil Shah

Operator we'll take the question. next

Operator

you. Thank Okay.

Your from question Markets. next Hedberg with RBC comes Matt Capital

Matt Hedberg

the my questions, acceleration. Hi guys. Thanks for on taking congrats

You're of existing of do with the gap think RapidX attribute much How of of aspects the great of quarter? your But kind to closing help the secondarily, one due see. to this also idea is automation I of most this how your this I accelerated of achievement does the base? security platform. customer to renewals as interesting Corey, think it you the

Corey Thomas

Yeah, it's very questions. two good

one value ads, proposition to is do thesis that our customers. significant had look need of So with on to customers would resonating security early We the upgrade the infrastructure on their a keep that thesis and I want And quite well. up of transformation suite they and out that is capabilities. playing that, with digital breed you our best of remind was would best

leverage, that quality, would raw want them to want the and they productivity. importantly actually and to efficacy scale So didn't they that gave on compromise not give – economic the package most they the capabilities but wouldn't to want

on focus accessibility our drives so And that.

healthy think we're overall. demand And in quite resonates that seeing that well. yes, we so, promise proposition And value very

we with we are I question what continue is seeing think existing part be to customers to actually the second existing And are your RapidX. of customers? committed seeing

in growth renew per their what extending customer and see continuing they're very at relationships rates. ARR to actually they're the You favorable

Matt Hedberg

it the other of think, thoughtful issues how to after That's do do allocate a in all we on the the how your assume go you then see to have is compelling domestically resources And internationally, a I'm that that manner? to I great. And but part I overseas? going And going sort of thoughtful seems are opportunity as you of approach story guess, investments international huge well. like

Corey Thomas

see we that the are going recall, to You that what that, a solutions. our right world. for the year very, is growing opportunity. to international see And the with in profitability. one for model demand well say each see, about But we as transformation we especially drive we’re response you we and we overall, as very fit. story benefits start we'll see of up continue as And absolutely demand. started that to momentum invest good international of us this and to security investing And the continue year. growth for is is our set I would from say region of to regions, I’d demand International last a the different

Matt Hedberg

guys. lot, a Thanks

Operator

Our Barclays. Saket with comes from question Kalia next

Saket Kalia

guys vulnerability customer whether my the you’ll Hey deal activity? maybe the as starting more just this about questions management a maybe quarter you talk for taking for little in some demand thanks mainly of activity some you. the more here. quarter breach – pipeline, you market? to And first from last is Corey, feel as even recent overall bit drive like see environment, Could or

Corey Thomas

so quarter. would in sort of I We our be management areas XX% also on that now I think? efficacy growth that And said demand security visibility question, strength have of of we see we But And transformation Vulnerability that wherever Can especially at say improvement as that list we proposition very of demand specific that this those demand. consistent go the customers top the about are mind it out across journey. are want their of feel Yes, the this is the like the seeing most importantly, solutions. seen total start they over had we good what actually our that in will XX%. and can and before customers that saw and the you problems to fields on value board. or story of roughly start confidence talk if to to have the their one that your year, the we was or healthy

the about we demand, execution And with enhance going perspective to what's And positioned and the really customers at we and are over customers. are the made with well to so, last on think the that years. that looking security. about And upgrade few their our incredibly investments when we look do we

Saket Kalia

it, you. been it's XX% customer nice Jeff, sense. it. in That consistent, growth makes just per to Got ARR really maybe see. Got that for very but

ARR to shift the point customer? customer? you I else sort some imagine growth consistent per business, that mix is of sort we've that summarize I would anything think of touched in it you most the drivers ARR kind sort can few on are here the but in through meaningful drivers maybe just the what's, that call, of a some that's of of per driving in but of of

Jeff Kalowski

sure. Yes,

First big tend it again, XX% a transformation our to growing, over off Again, Those well. quarter, have driver. with solutions shift, represented of mix new are very as also larger grew this our respect and it's to XX% clearly ARR. security ASPs over

our deals. seven of talk ten Corey heard largest You've about,

the have rate. point cross sells platform. this had and we quarter. our also improvement sequentially upsells had very retention strong multiple net I'll in products on We We that out modest

all overall, customers. customers, out of Day, we've growth Analyst four growth all the growth, platform & customer Investor we executed on strategic that in So, drivers in them, laid

strong I overall quarter. So, would say very

Saket Kalia

Got very much, it. guys. Thanks

Jeff Kalowski

Thank you.

Operator

Sachs. Goldman with Essex Brian from comes question next Our

Brian Essex

you midpoint for Hi, XQ Jeff, the question. good to wants Maybe to level your guidance of be would the magnitude taking by kill Corey this took the the or it afternoon. relative one, greater than whichever Thanks guide. up

year? level pipeline, the maybe So confidence, what's or that execution? to of is you would grade increased better economy if How higher driving this could confidence it kind up is just growth in you old-fashioned it talk expected, maybe than is opening the it of

Jeff Kalowski

pipeline I clearly factor. guidance, our we Well, is mean, a look when major at

processes, we customers lots when more comes clarity pipeline, through by we're going better what through own then and budgetary like was most importantly, their expecting. guidance. processes to their outward what with not of mind say to having lacked we're are. year, of budgeting our lacked process. in pipeline, which their the confidence it I'll seeing their what overall our in certainty, forecast in clear in Keep we've of about customers we've and the uncertainty fall to real so And are and periods their all But any we're goes last competence the hearing means, because significant been our at from we there of factor, ability And customers haven't timing that's into pipeline terms is our what but

Brian Essex

it. Got operating performance maybe just of And do the revenue to that, to relatively re-invest follow-up in flat anticipate where the raise. spite leaving are upside? You on you

your kind key spending and So, what priorities go? do how will where you that are prioritize

Corey Thomas

Yes.

driving scale, leverage like is, think is thing and the So first framework on you a relevant. our couple of if things, sort of about strategic one

technology and So long-term time. that our investors return a our keen R&D gives platform all we to that’s our and over for can invest to innovation in customers. because our to And

that that near-term we’ll long-term thing to second are actually scale. give investments make The investments us that continue is

we we work forward. over a we’re platform go us can it opportunities scale we scale believe would year. our that that this more our And achieve we and both position actually They of time. that more we would They and and balanced efficiency view lots still how and near-term and investment and do analysts. have packaging invest and doing the of growth call You a give profitability actually the expand talk investment on land pricing as and

Brian Essex

Very on me Got well nice helpful. for quarter. Congrats the it. results as

Corey Thomas

Thank you.

Operator

Ho with comes Our next Blair. William from question Jonathan

Jonathan Ho

good Hi, afternoon.

what to with you consumers So Can bit on or I one you were to little comments it a maybe just your customers easier about your your for that making your said talk consume products. you of you’re a it start is just the this little – mean terms you technical to better a what easier how to of integrations, Or I’m this easier? consume? bit is by it And approach? making trying making understand bundling wanted in

Corey Thomas

great Yes, Jon. it’s a question,

couple a there’s different dynamics. So of

one about we’re one of lots move problem for the customers security security overall from point to is make did problem the the they more without to seamlessly us what level think I first to at technology things actually as about look and to it actually package think how their your having another context The platform is, about to of start doing purchase.

was a And I to need security have that SIM? happening. do get efficiency seamless about, environment. so can offering That with want of to this I my think go a monitor another should decide And what’s place, a SIM do have that I I cloud may in thing actually I having but that without I be to I part area monitor that but Again cloud and what’s there. doing go area. may like, and get and want to want to I want security to focus maybe the Likewise say this I application. maybe under want a visibility more depth on specific do the application this just I is to deployment, stack different whole really I’m just happening cloud with

teams what’s the attackers So to environments Their fast there’s on to doing in continuing security are Keep dynamically and in changing the happened are improve their are environment. lots for of mind. just and changing the process of response customers their work fast. in expand ability that our to

And minimize so errors. we to want

we’re lots talked But I that things just customers. modern think not aspect second about things of extraordinarily this but makes research it say packaging about lot stock InsightIDR, received bar and together upgrade popular. and those to consume. the logical is quarter. of stock that’s That’s pricing customers doing both been Now, and well efficient allow pilots Telemetry quarter We we’ve either what for to really talked We lots well networks allow and that one that on Insight that about last by of Endpoint easy that talked together, a our one buy analysis eases consumption customers or to customers. people to with extraordinarily to these are get store resonated Enhanced get actually and are quite the

Jonathan Ho

Thank your how cloud then you upsell a and potentially Got of side demand it. sort about or potential? you’re little impacts Got it. you. that ARR the And that can talk the bit on seeing also

Corey Thomas

extraordinarily demand It’s that customers going Yes. areas they’re lots seeing for are area demand, customers in strong The focused and demand we’ll but cloud longer-term is near-term also a the that time. validation market get to these of right overall early but we’re focus be from over strategic stages now. hot

happening from And extraordinarily bullish we’re so, perspective, competent about security yes, and from an across what’s market. execution perspective an outlook and

Jonathan Ho

Thank you.

Corey Thomas

Thanks.

Operator

Tindle comes question Adam Our Raymond next James. with from

Alex Frankiewicz

you to kind is the do This strategy the good going on better to the is the have and Adam. bucket? thanks. and adoption better, long and Alex say and once is kind identify how how them best how And a the to roadmap just of that of that. get channels bracket, formulaic, good, to the it curious just for you reacting customer a best I’m of is it’ll take also Hi,

Corey Thomas

Alex, too a would early early It’s I inclusive. just that it’s we’ve customers mean in far early. great actually too is have just question. way I so from evolution. way way too it’s the That’s positive. feedback gotten say to the

like have expectations getting about to popular the feedback, sort better, of like to are us year I at earliest enough late they're out And you feedback, because to that would just quantitative the it’s set there. any it’s way, really notions best expect deterministic For optimize not good, by if the it. this

lot exact engagement. volume right?? get more just those And actually to make of you piping are got of the in the And sure bucket, You balance exact what's have levels, a the you right? that each things actually with

Alex Frankiewicz

meeting as with Or driving bake-off, multiple the And of Okay, VM is of customers speak wins number platform new of then what into SIM? also just a product? you a perfect. Do just there to lead RapidX logo at taking – to when you evaluate portfolio? products driving And in is or a kind Thanks. secondly, are point once a that broad the adopting solution? kind a can are versus go

Corey Thomas

Yes.

compromise believe is And of your quality. question that will not we customers is on so that on strategy our part

our And VM, concept we any and hit successful. do off XDR the be with the a lead in products. lead successfully head suite today bake we of competence, cloud they and can category even so that team SIM go this can in of win means best and and And now and do our the in sales category,

you managing how more now from we still and that's it's occur but we're quite to to key And of platform very their that in, that's where to very, for start early perspective about think new a and Once that is but deals some and got complete customers so, vein, promising operations. it's actually still merchant, to more actually in criteria. have motion more us And days. are pricing a security us, about a seeing one the that is talking we this was see that a coming

Alex Frankiewicz

Thanks, you give missed the I may have renewal rate Did man. it. quarter? this

Jeff Kalowski

we No, did not.

in we're some a sequentially, we're is is we that an of improve metric day, that disclosing did not analyst metric we say managing As not forward. but it’s terms going didn't what about key it talked contexts, to that

Alex Frankiewicz

Okay. Thank you.

Operator

Stanley. next Our Fodderwala comes Hamza with from question Morgan

Hamza Fodderwala

by you thank for a so taking Velociraptor question I guys, acquisition, Hey questions. you way. for the had the much my cool on Corey, name

do a bringing is that lot this automation source you were things this how as, tool of of Can obviously also, have data bit? partner data. little incident far a dig at on it? is integrate then late – might a that of One, you into and yours? open it fact response a the Velociraptor acquisition? better as also side? in, kind play there's more that be you how third-party the that probably competitors that given may Just Is maybe see getting do a And that's Just

Corey Thomas

Yeah.

a platform much as built automation source it's Velociraptor of we're technology cloud this if the the think you space, context companies lead the open what think is in IDR you to leading our about about or capability source embedded brand sort the world gives into think open over cycling more endpoint platform. we And InsightIDR When and in with about combined all the of So community. our an doing especially having into our the XDR, if customers that response, platform.

capabilities vectors is So the response automation you actually in still of and other lot that primary that's different the is platforms of one say, are on the market. incident response focus, and a I what would it's attack get you which need of endpoint, center than that the actually the are

that overall is and for continue Velociraptor our service advanced have With space. to to do as about, capabilities, huge companies us. How do to advanced talked ecosystem use. primarily use their as in world around managed that's internal simplified are this falls before ecosystem, So like enterprises again, all use. bucket, solution the and don't can an into but we've – and we customers easy it's And have that as you technology, a allow for We the and those they're you know. this the far said, that a Velociraptor enterprises have demand core on we companies focus big filling OEM

managed for technology. an there's use the opportunity so services to partners. actually They leverage And

Hamza Fodderwala

Got it. Thank you.

Operator

Our Needham Company. next Alex Henderson question from with comes &

Unidentified Analyst

the Alex. on for questions. for taking Hey Thanks team, have here you [indiscernible]

of months strong talking there've or on the of you touch how budget us would you touch market couple Microsoft of about mid-market I'm the hack much ARR they these hack. the way SolarWinds to Server is are you acceleration maybe the So market And about being assume, that and the guys and when are that of I coming SMB now Exchange be environment this that small may demonstrating SolarWinds the it been fair to the One if a between moving maybe the the could on a to. you that that attribute the hacked, demand to interested, segments worry no too right? before? and company towards think hadn’t is in to

Corey Thomas

mid We over strength. we It’s the I say the best a and enterprise performance, I but large performance saw growth say, think, question. and We focused had the good where and got our I deal over good a would versus small, very, we would very sufficient deals that strong performance XX% XXX,XXX.

And for transformation course product I performance That, segments. was so good the through we this quarter that across had good a was We would give is the I of of characterizations, say had it solutions performance categories. across balanced. one And higher. probably

security, the aware your But I strong. actually we of the the deal part focus makes great more question – think your of And So first you market performance more impact environment side the I about in was mid large when equation. an Look, it they of the saw have don’t that where are and people on what’s actually security, of breaches? easy. to

teams. But better as own to organizations their are just the allows the are higher finances, a is getting then think profile important, leadership on actually they I visibility finance and priority incidents big that of aware critical combinations, is transformation second that right is you One this. about is what’s because a talked digital the are that of actually now I especially some think third handle things the think them one is three But security company, two the together. important. is one actually a a – of that is within which people

lots people not we the think all and seeing have more again, their full companies are and it’s budgets I with as visibility their But overall. pre-pandemic. of still not coming perfect budgets have into XX-month like are lots we’re together lots, that those seeing things

Unidentified Analyst

any could the actually customers. when front, And these you’re obviously in how often can in competitive if the And you it for That’s to and I comment, you are the that. making the to – Tenable, one Thank offers? like changes comes them guys investments making for easier to platform, helpful. you seeing know very if think you interested, extent more, Thank that market Qualys consume seeing I competitive market, just if guys on a it are about someone when I the in you

Corey Thomas

are range we in we’re the keep mind, point For of competitive. that a it now have the deals we in actually of them that specifically, market, some at VM are

Some would that long dynamics not that actually because about to platform, substantially now have the of you’ve while uncompetitive have talk our VM trends but competitive I for are changed us them say in pretty people always while had. same the the still you market

Operator

comes question from Markets. next with Tilton Berenberg Capital Our Joshua

Joshua Tilton

Hey guys, thanks taking for my question.

growth? north and when throughout For these up growth demand how growing should was of the guys we on can one about – solutions I accelerating pace is some you think my first pick the of of Is talk us year? the security for you this transformation XX%, about color just growth solutions remainder the give the the

Corey Thomas

we have is visibility about breakdown detailed the not that over get We about like specific XX% would we this to that the was sort what go confidence able over of grow was part to have emphasized talked XX%. into say which the were of you the it rate – overall, I we each increasing it XX%. of level I about and high but some the guy We’ll we expect only of this, say actually over the the characterization of give that healthy part did, the visibility. growth we expect we’ve for we’re raise actually that seen we portfolio. that and very numbers well, is reason What to very, – demand of giving numbers sort year, do you would being and have Yes, VM

Joshua Tilton

us you when that of deal? replaced mentioned Can that bought insight That vendors into any you was guys Insight one a basically with And platform. which you deal that helpful. had entire kind for Insight customer you give the

Corey Thomas

and you’re vendors time tip upgrade say having of to that don’t of security would get get best-in-class make trade actually of proposition the a simple, getting tongue, you actually I The sort we that’s but question, my the I technology, actually great that can is the this overall. have if and then replaced we you and if like off, your economics experience, not specific at along, actually the and actually same compelling believe you support you’re all

replace right And so we did remember what some competitors while there can’t I specific now. one

Joshua Tilton

right. All

Okay.

Corey Thomas

Thanks.

Operator

over I’m our to And further turn call host to any not I’d showing closing at remarks. the time. any like questions this for back

Corey Thomas

Well, call. wish joining the weekend And coming up. us all all you much on so thank a today you good we for

Operator

this Ladies presentation. concludes gentlemen, and today’s

You a wonderful and disconnect may now day. have

Rapid7 (RPD) 7 May 212021 Q1 Earnings call transcript