Despite revenue beat, Rapid7's shares fall on weak guidance

Despite revenue beat, Rapid7’s shares fall on weak guidance

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Shares of the cybersecurity technology provider Rapid7 Inc. lost ground in after-hours trading today as the company delivered fiscal first-quarter earnings in-line with forecasts but guidance that was lower than expected.

The company reported a net loss of $44.9 million, with its loss per share coming to 16 cents. Revenue for the quarter rose 34%, to $157.4 million. Wall Street analysts had been looking for a 16-cent loss per share on slightly lower revenue of $154.5 million.

Investors reacted negatively to the report, with Rapid7’s stock falling almost 5% after-hours, erasing a slight gain made during the regular trading session.

Rapid7 is a provider of cybersecurity tools and services that companies use to detect, protect against and respond to security incidents. It offers a fairly comprehensive suite of tools that encompasses areas such as cloud security, application security, vulnerability risk management, threat detection and intelligence. It also sells tools for compliance, security management and consulting services.

Rapid7 Chairman and Chief Executive Corey Thomas (pictured) insisted that the company had gotten off to a strong start to the year, highlighting its 38% growth in annual recurring revenue. “Amid an escalating cyberthreat environment, we are seeing robust demand for our differentiated and best-in-suite security operations platform as customers work to secure their modern and traditional technology environments,” the CEO said.

Rapid7 breaks its sales down into two segments, namely product revenue and professional services revenue. The bulk of its money comes from the former, which delivered $149 million in sales during the quarter. Professional services added $8.3 million more.

The company had good news on the customer acquisition front. It reported having 10,407 total paying customers at the end of the quarter, up from 8,945 a year ago. It’s also managing to squeeze more money from those customers, with its average annual recurring revenue per customer rising by 18%, to $60,300, from $51,000 one year ago.

For the current quarter Rapid7 is looking at a loss of between 3 and 7 cents per share, with revenue of between $163 million and $165 million. Wall Street was looking for a profit of 3 cents per share on sales of $163.2 million.

Photo: Rapid7/YouTube

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