Rapid7 (RPD) stock plummeted 5.95% in after-hours trading on Wednesday, following the company's fourth-quarter earnings report and disappointing 2025 outlook.
The cybersecurity firm reported mixed results for the fourth quarter of 2024, with revenue of $216.3 million, up 5% year-over-year, beating analysts' expectations. However, non-GAAP earnings per share of $0.48 missed the consensus estimate of $0.50, reflecting a 33% decline from the same period last year.
For the full year 2024, Rapid7 generated revenue of $844 million, up 9% year-over-year, and reported free cash flow of $154 million. However, the company's guidance for 2025 fell short of analysts' expectations, with projected revenue growth of just 2-3%, annual recurring revenue (ARR) growth of 4-6%, and free cash flow of $135 million.
According to analysts, the disappointing outlook for 2025 reflects the company's struggles to drive growth and profitability amid a challenging macroeconomic environment and increasing competition in the cybersecurity market. Investors appear to be concerned about Rapid7's ability to maintain its momentum and meet its long-term growth targets.