According to a recent report, the global security and vulnerability market is estimated to grow 10% through the year 2023. Earlier this month, Rapid7 (Nasdaq: RPD), a leading player in the industry, recently announced its second quarter results that surpassed all market expectations.
Rapid7’s revenues for the quarter grew 35% over the year to $79 million, ahead of the market’s expectations of $75.1 million. For the quarter, it reported a loss of $0.13 per share compared with the Street’s forecast of $0.07 per share.
By segment, revenues from products grew 62% to $63.2 million, maintenance and support revenues fell 12% to $9.4 million and professional services revenues declined 27% to $6.4 million for the quarter.
For the third quarter, Rapid7 forecast revenues of $79.2-$80.8 million with a loss of $0.04-$0.02 per share. The Street was looking for revenues of $79.7 million and a loss of $0.02 per share. Rapid7 expects to end the current year with revenues of $318-$321 million and a net loss of $0.05 per share. The market had forecast revenues of $315.7 million with a loss of $0.05 per share.
Rapid7’s Product Upgrade
For the current year, Rapid7 has been focused on growth, simplification of platform, and driving leverage into its business. It continues to drive growth through product innovation. Earlier this summer, it announced an integration of its Insight tool with Amazon Web Services (AWS) Security Hub. The integration will bring together both InsightVM, its vulnerability management solution, and InsightConnect, its security automation and orchestration solution, on to the AWS platform. The integration will help security teams drive productivity with IT and DevOps to secure their AWS environments. It will centralize high priority security alerts and automate actions triggered by security alerts across the AWS environment.
Additionally, the company also announced the addition of Cloud Configuration Assessment to its Insight cloud. It gives customers additional visibility into configuration risk within AWS environments. InsightVM will be able to gather the configuration settings customers have and compare them to the industry-standard CIS AWS Foundations Benchmark as part of this initiative. It will also help secure hybrid environments without customers having to purchase and manage multiple solution.
According to Rapid7, most customers were hassled by the non-integrated approach that they had to deal with when working on hybrid environments. Its latest product gives customers the visibility into traditional and cloud environments for vulnerability risk and configuration risk and helps them automate the response and remediate.
As part of its second goal, the company is investing in systems and packaging to make it easier for customers to adopt, renew, and expand usage of Rapid7 product portfolio. Finally, for leverage improvement, Rapid7 has been driving profitability. For the last quarter, it reported a non-GAAP operating profit of nearly $0.5 million, and it believes that it is on the right path to profitability.
The market is pleased with Rapid7’s moves. Its stock is trading at $56.38 with a market capitalization of $2.8 billion. It had peaked to a record high of $66.01 last month near result announcement. The stock has been climbing from the year low of $26.27 that it had fallen to in November last year.