Loading, Please Wait...

CST: 21/11/2019 21:30:55   

Rapid7 Announces Third Quarter 2019 Financial Results

16 Days ago

  • Annualized recurring revenue (ARR) of $310.2 million, an increase of 43% year-over-year

  • Revenue of $83.2 million, 33% year-over-year growth and customer growth of 17% year-over-year

  • Raising 2019 revenue growth guidance to 32% to 33%

  • Raising 2019 non-GAAP operating income guidance to $0 to $1 million

BOSTON, Nov. 05, 2019 (GLOBE NEWSWIRE) -- Rapid7, Inc. (Nasdaq: RPD), a leading provider of security analytics and automation, today announced its financial results for the third quarter of 2019.

"Rapid7 had a great third quarter. Our results reflect a good demand environment, great expense control and excellent execution across the board. With a strong focus on product innovation and a well-diversified product portfolio, we see a large opportunity in front of us and are well positioned for future growth. As a result, we are raising our total revenue and non-GAAP operating income guidance for the full-year 2019," said Corey Thomas, Chairman and CEO of Rapid7.

Third Quarter 2019 Financial Results and Other Metrics

  Three Months Ended
September 30,
  2019   2018   % Change
   
  (dollars in thousands)
Annualized recurring revenue  $ 310,184     $ 217,415     43 %
Number of customers  8,625     7,399     17 %
ARR per customer  $ 36.0     $ 29.4     22 %
Recurring revenue as a percentage of total revenue  88 %   82 %    
Renewal rate*  111 %   118 %    
               

*For the three months ended September 30, 2018, our renewal rate was adjusted from 120%, as previously disclosed, to 118% based on a reclassification of certain upsells and cross-sells.

   
  Three Months Ended
September 30,
  2019   2018   % Change
   
  (in thousands, except per share data)
Products revenue $ 67,298     $ 43,829     54 %
Maintenance and support revenue  9,178     10,614     (14 )%
Professional services revenue  6,679     7,922     (16 )%
Total revenue  $ 83,155     $ 62,365     33 %
           
North America revenue  $ 69,883     $ 53,232     31 %
Rest of world revenue  13,272     9,133     45 %
Total revenue  $ 83,155     $ 62,365      
           
GAAP gross profit  $ 59,525     $ 44,555      
GAAP gross margin  72 %   71 %    
Non-GAAP gross profit  $ 61,865     $ 45,934      
Non-GAAP gross margin  74 %   74 %    
           
GAAP loss from operations  $ (11,756 )   $ (11,301 )    
GAAP operating margin  (14 )%   (18 )%    
Non-GAAP income (loss) from operations  $ 542     $ (2,822 )    
Non-GAAP operating margin  1 %   (5 )%    
           
GAAP net loss  $ (14,406 )   $ (11,831 )    
GAAP net loss per share, basic and diluted  $ (0.29 )   $ (0.25 )    
Non-GAAP net income (loss)  $ 571     $ (2,056 )    
Non-GAAP net income (loss) per share, basic  $ 0.01     $ (0.04 )    
Non-GAAP net income (loss) per share, diluted  $ 0.01     $ (0.04 )    
           
Adjusted EBITDA  $ 3,446     $ (1,102 )    
           
Cash provided by (used in) operating activities  $ 1,839     $ (4,050 )    
                   

Recent Business Highlights

  • In October, Forrester Research recognized Rapid7 as a leader in The Forrester Wave™: Vulnerability Risk Management, Q4 2019 report.

  • Please see investors.rapid7.com for our Financial Metrics spreadsheet.

  • For additional details on the reconciliation of non-GAAP measures to their nearest comparable GAAP measures, please refer to the accompanying financial data tables contained in this press release.

Fourth Quarter and Full-Year 2019 Guidance

Rapid7 anticipates total revenue, non-GAAP income (loss) from operations, and non-GAAP net income (loss) per share to be in the following ranges:

Fourth Quarter and Full-Year 2019 Guidance (in millions, except per share data)
           
  Fourth Quarter 2019   Full-Year 2019
Revenue  $ 87.4   to $ 89.0     $ 322.7   to $ 324.3  
Year-over-year growth  27 % to 29 %   32 % to 33 %
Non-GAAP (loss) income from operations  $ (1.6 ) to $ (0.6 )   $   to $ 1.0  
Non-GAAP net (loss) income per share  $ (0.02 ) to $     $ 0.03   to $ 0.05  
Weighted average shares outstanding      49.6           52.1  
                     

Guidance for the fourth quarter and full-year 2019 does not include any potential impact of foreign exchange gains or losses. The weighted average shares outstanding for the fourth quarter of 2019 represent basic shares outstanding given our projected non-GAAP net loss. The weighted average shares outstanding for full-year 2019 represent diluted shares outstanding given our projected non-GAAP net income.

Non-GAAP guidance excludes estimates for stock-based compensation expense, amortization of acquired intangible assets, amortization of debt discount and issuance costs, and certain other items. Rapid7 has provided a reconciliation of historical non-GAAP financial measures to the most comparable GAAP measures in the financial statement tables included in this press release. A reconciliation of non-GAAP guidance measures to the most comparable GAAP measures is not available on a forward-looking basis without unreasonable efforts due to the high variability, complexity and low visibility with respect to the charges excluded from these non-GAAP measures.

Conference Call and Webcast Information

Rapid7 will host a conference call today, November 5, 2019, to discuss its results at 8:00 a.m. Eastern Time. The call will be accessible by telephone at 877-357-4230 (domestic) or 629-228-0721 (international). The call will also be available live via webcast on the Company’s website at https://investors.rapid7.com. A telephone replay of the conference call will be available at 855-859-2056 or 404-537-3406 (access code 9168155) until November 12, 2019. A webcast replay will be available at https://investors.rapid7.com.

About Rapid7

Rapid7 (Nasdaq: RPD) is advancing security with visibility, analytics, and automation delivered through our Insight cloud. Our solutions simplify the complex, allowing security teams to work more effectively with IT and development to reduce vulnerabilities, monitor for malicious behavior, investigate and shut down attacks, and automate routine tasks. Over 8,500 customers rely on Rapid7 technology, services, and research to improve security outcomes and securely advance their organizations. For more information, visit our website, check out our blog, or follow us on Twitter.

Non-GAAP Financial Measures and Other 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 certain non-GAAP financial measures and other metrics, which we believe are helpful to our investors. We use these non-GAAP financial measures and other metrics for financial and operational decision-making purposes and as a means to evaluate period-to-period comparisons. We also use certain non-GAAP financial measures as performance measures under our executive bonus plan. We believe that these non-GAAP financial measures and other 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.

While our non-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 our non-GAAP financial measures to the comparable GAAP financial measures included below, and not rely on any single financial measure to evaluate our business.

Non-GAAP Financial Measures
We disclose the following non-GAAP financial measures: non-GAAP gross profit, non-GAAP income (loss) from operations, non-GAAP net income (loss), non-GAAP net income (loss) per share and adjusted EBITDA.

We define non-GAAP gross profit, non-GAAP income (loss) from operations, non-GAAP net income (loss) and non-GAAP net income (loss) per share as the respective GAAP balances excluding the effect of stock-based compensation expense, amortization of acquired intangible assets, amortization of debt discount and issuance costs and certain other items such as acquisition-related expenses, follow-on public offering costs, and litigation-related expenses.  Non-GAAP net income (loss) per basic and dilutive share is calculated as non-GAAP net income (loss) divided by the weighted average shares used to compute net income (loss) per share, with the number of weighted average shares decreased to reflect the anti-dilutive impact of the capped call transactions entered into in connection with the 1.25% convertible senior note issued in August 2018.

We believe these non-GAAP financial measures are useful to investors in assessing our operating performance due to the following factors:

Stock-based compensation expense. We exclude stock-based compensation expense because of varying available valuation methodologies, subjective assumptions and the variety of equity instruments that can impact our non-cash expense. We believe that providing non-GAAP financial measures that exclude stock-based compensation expense allows for more meaningful comparisons between our operating results from period to period.

Amortization of acquired intangible assets. We believe that excluding the impact of amortization of acquired intangible assets allows for more meaningful comparisons between operating results from period to period as the intangible assets are valued at the time of acquisition and are amortized over several years after the acquisition.

Amortization of debt discount and issuance costs. In August 2018, we issued $230 million of convertible senior notes, which bear interest at an annual fixed rate of 1.25%. The imputed interest rate of the convertible senior notes was approximately 7.37%. This is a result of the debt discount recorded for the conversion feature that is required to be separately accounted for as equity, and debt issuance costs, which reduce the carrying value of the convertible debt instrument. The debt discount is amortized as interest expense together with the issuance costs of the debt. The expense for the amortization of debt discount and debt issuance costs is a non-cash item, and we believe the exclusion of this interest expense provides a more useful comparison of our operational performance in different periods.

Litigation-related expenses. We exclude certain litigation-related expenses consisting of professional fees and related costs incurred by us related to significant litigation outside the ordinary course of business. We believe it is useful to exclude such expenses because we do not consider such amounts to be part of our ongoing operations.

Acquisition-related expenses and follow-on public offering costs. We exclude acquisition-related expenses and follow-on public offering costs as costs that are unrelated to the current operations and neither are comparable to the prior period nor predictive of future results.

Anti-dilutive impact of capped call transaction. In connection with the issuance of our convertible senior notes, we entered into capped call transactions to offset potential dilution from the embedded conversion feature in the notes. Although we cannot reflect the anti-dilutive impact of the capped call transactions under GAAP, we do reflect the anti-dilutive impact of the capped call transactions in non-GAAP net income (loss) per basic and diluted share to provide investors with useful information in evaluating the financial performance of the company on a per share basis.

Adjusted EBITDA (non-GAAP). Adjusted EBITDA is a non-GAAP measure that we define as net loss before (1) interest income, (2) interest expense, (3) other income (expense), net, (4) provision for (benefit from) income taxes, (5) depreciation expense, (6) amortization of intangible assets, (7) stock-based compensation expense, and (8) certain other items.  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 this non-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.

Other Metrics
Annualized Recurring Revenue (ARR). ARR is defined as the annual value of all recurring revenue related contracts in place at the end of the period. ARR should be viewed independently of revenue and deferred revenue as ARR is an operating metric and is not intended to be combined with or replace these items. ARR is not a forecast of future revenue and can be impacted by contract start and end dates and renewal rates, and does not include revenue reported as perpetual license or professional services revenue in our consolidated statement of operations.

Number of Customers. We define a customer as any entity that has (1) an active Rapid7 contract or a contract that expired within 90 days or less of the applicable measurement date; and for Logentries products, those customers with a contract value equal to or greater than $2,400 per year, or (2) purchased Rapid7 professional services within the 12 months preceding the applicable measurement date.

ARR per Customer. We define ARR per customer as ARR divided by the number of customers at the end of the period.

Recurring Revenue. We define recurring revenue as revenue from term software licenses, content subscriptions, managed services, cloud-based subscriptions and maintenance and support.

Renewal Rate. We calculate our renewal rate by dividing the dollar value of renewed customer agreements, including upsells and cross-sells of additional products, but excluding professional services, in a trailing 12-month period by the dollar value of the corresponding customer agreements.

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 anticipated total revenue and our future financial and business performance for the fourth quarter and full-year 2019, market opportunities and future growth 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 Form 10-Q filed with the Securities and Exchange Commission for the quarter ended June 30, 2019 filed with the Securities and Exchange Commission on August 1, 2019, 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.

Neeraj Mahajan, CFA
Vice President, Investor Relations
investors@rapid7.com
(857) 990-4074

Press contact:

Caitlin Doherty
press@rapid7.com
(857) 990-4240


RAPID7, INC.
Consolidated Balance Sheets (Unaudited)
(in thousands)   

       
  September 30,
2019
  December 31,
2018
Assets      
Current assets:      
Cash and cash equivalents $ 114,925     $ 99,565  
Short-term investments  131,815     159,210  
Accounts receivable, net  62,422     74,935  
Deferred contract acquisition and fulfillment costs, current portion  14,905     12,321  
Prepaid expenses and other current assets  15,827     9,746  
Total current assets  339,894     355,777  
Long-term investments  10,997     44,892  
Property and equipment, net  51,519     17,523  
Operating lease right-of-use assets  61,217      
Deferred contract acquisition and fulfillment costs, non-current portion 30,452     27,634  
Goodwill  97,866     88,420  
Intangible assets, net  29,183     23,955  
Other assets  5,466     1,168  
Total assets  $ 626,594     $ 559,369  
Liabilities and Stockholders’ Equity      
Current liabilities:      
Accounts payable  $ 6,549     $ 7,048  
Accrued expenses  33,174     37,376  
Operating lease liabilities, current portion  6,460      
Deferred revenue, current portion  200,314     189,855  
Other current liabilities  285     707  
Total current liabilities  246,782     234,986  
Convertible senior notes, net  182,471     174,688  
Operating lease liabilities, non-current portion  73,266      
Deferred revenue, non-current portion  36,620     58,716  
Other long-term liabilities 1,280     3,660  
Total liabilities  540,419     472,050  
Stockholders’ equity:      
Common stock  493     476  
Treasury stock  (4,764 )   (4,764 )
Additional paid-in-capital 594,226     556,223  
Accumulated other comprehensive income (loss)  304     (31 )
Accumulated deficit  (504,084 )   (464,585 )
Total stockholders’ equity 86,175     87,319  
Total liabilities and stockholders’ equity  $ 626,594     $ 559,369  
               



RAPID7, INC.
Consolidated Statements of Operations (Unaudited)
(in thousands, except share and per share data)

       
       
  Three Months Ended
September 30,
  Nine Months Ended
September 30,
  2019   2018   2019   2018
Revenue:              
Products $ 67,298     $ 43,829     $ 186,793     $ 118,151  
Maintenance and support  9,178     10,614     28,107     31,977  
Professional services  6,679     7,922     20,399     25,193  
Total revenue  83,155     62,365     235,299     175,321  
Cost of revenue:              
Products 15,627     10,294     42,668     28,380  
Maintenance and support  2,076     1,901     6,041     5,757  
Professional services  5,927     5,615     17,075     17,660  
Total cost of revenue  23,630     17,810     65,784     51,797  
Total gross profit 59,525     44,555     169,515     123,524  
Operating expenses:              
Research and development  20,154     17,111     57,645     49,915  
Sales and marketing  39,904     30,570     113,214     90,779  
General and administrative  11,223     8,175     32,336     25,056  
Total operating expenses  71,281     55,856     203,195     165,750  
Loss from operations  (11,756 )   (11,301 )   (33,680 )   (42,226 )
Other income (expense), net:              
Interest income  1,448     813     4,761     1,520  
Interest expense  (3,399 )   (1,679 )   (9,940 )   (1,681 )
Other income (expense), net  (492 )   181     (727 )   (67 )
Loss before income taxes  (14,199 )   (11,986 )   (39,586 )   (42,454 )
Provision for (benefit from) income taxes  207     (155 )   (87 )   71  
Net loss  $ (14,406 )   $ (11,831 )   $ (39,499 )   $ (42,525 )
Net loss per share, basic and diluted  $ (0.29 )   $ (0.25 )   $ (0.82 )   $ (0.92 )
Weighted-average common shares outstanding, basic and diluted  49,020,449     46,914,077     48,437,686     46,139,978  
                       



RAPID7, INC.
Consolidated Statements of Cash Flows (Unaudited)
(in thousands)

       
  Three Months Ended
September 30,
  Nine Months Ended
September 30,
  2019   2018   2019   2018
Cash flows from operating activities:              
Net loss  $ (14,406 )   $ (11,831 )   $ (39,499 )   $ (42,525 )
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:               
Depreciation and amortization  4,598     2,660     11,969     7,737  
Amortization of debt discount and issuance costs  2,679     1,296     7,783     1,296  
Stock-based compensation expense  10,426     7,424     29,490     20,999  
Provision for doubtful accounts  429     24     1,782     480  
Deferred income taxes          (761 )    
Foreign currency re-measurement loss  379     95     570     566  
Other non-cash (income) expense  (345 )   (274 )   (1,635 )   (345 )
Changes in operating assets and liabilities:               
Accounts receivable  6,311     (5,299 )   10,860     19,287  
Deferred contract acquisition and fulfillment costs  (2,231 )   (1,854 )   (5,403 )   (6,385 )
Prepaid expenses and other assets  (544 )   1,168     (9,878 )   (2,434 )
Accounts payable  (1,052 )   (1,826 )   1,132     565  
Accrued expenses  2,490     5,632     (4,822 )   (2,174 )
Deferred revenue (7,058 )   (1,312 )   (12,124 )   (2,313 )
Other liabilities  163     47     1,292     (622 )
Net cash provided by (used in) operating activities  1,839     (4,050 )   (9,244 )   (5,868 )
Cash flows from investing activities:              
Business acquisition, net of cash acquired  14         (14,607 )    
Purchases of property and equipment  (9,341 )   (2,754 )   (27,053 )   (8,404 )
Capitalization of internal-use software costs (1,534 )   (1,092 )   (4,686 )   (2,505 )
Purchases of investments  (41,776 )   (168,290 )   (114,208 )   (178,945 )
Sales/maturities of investments  36,985     6,448     177,287     39,576  
Net cash (used in) provided by investing activities  (15,652 )   (165,688 )   16,733     (150,278 )
Cash flows from financing activities:              
Proceeds from issuance of convertible senior notes, net of issuance costs      223,529         223,529  
Purchase of capped calls related to convertible senior notes      (26,910 )       (26,910 )
Proceeds from follow-on public offering, net of offering costs              30,907  
Taxes paid related to net share settlement of equity awards  (2,087 )   (707 )   (4,926 )   (1,712 )
Proceeds from employee stock purchase plan  2,887     2,005     5,521     3,637  
Proceeds from stock option exercises  1,866     1,864     7,924     6,521  
Net cash provided by financing activities  2,666     199,781     8,519     235,972  
Effect of exchange rate changes on cash, cash equivalents and restricted cash  (497 )   (114 )   (648 )   (428 )
Net increase in cash, cash equivalents and restricted cash  (11,644 )   29,929     15,360     79,398  
Cash, cash equivalents and restricted cash, beginning of period  126,569     101,231     99,565     51,762  
Cash, cash equivalents and restricted cash, end of period  $ 114,925     $ 131,160     $ 114,925     $ 131,160  
                               



RAPID7, INC.
GAAP to Non-GAAP Reconciliation (Unaudited)
(in thousands, except share and per share data)

       
  Three Months Ended
September 30,
  Nine Months Ended
September 30,
  2019   2018   2019   2018
GAAP gross profit  $ 59,525     $ 44,555     $ 169,515     $ 123,524  
Add: Stock-based compensation expense1  679     478     1,970     1,321  
Add: Amortization of acquired intangible assets2  1,661     901     4,681     2,702  
Non-GAAP gross profit  $ 61,865     $ 45,934     $ 176,166     $ 127,547  
Non-GAAP gross margin  74.4 %   73.7 %   74.9 %   72.8 %
               
GAAP gross profit - Products  $ 51,671     $ 33,535     $ 144,125     $ 89,771  
Add: Stock-based compensation expense  216     142     580     424  
Add: Amortization of acquired intangible assets  1,661     901     4,681     2,702  
Non-GAAP gross profit - Products $ 53,548     $ 34,578     $ 149,386     $ 92,897  
Non-GAAP gross margin - Products 79.6 %   78.9 %   80.0 %   78.6 %
               
GAAP gross profit - Maintenance and support  $ 7,102     $ 8,713     $ 22,066     $ 26,220  
Add: Stock-based compensation expense  170     73     456     161  
Non-GAAP gross profit - Maintenance and support  $ 7,272     $ 8,786     $ 22,522     $ 26,381  
Non-GAAP gross margin - Maintenance and support  79.2 %   82.8 %   80.1 %   82.5 %
               
GAAP gross profit - Professional services  $ 752     $ 2,307     $ 3,324     $ 7,533  
Add: Stock-based compensation expense  293     263     934     736  
Non-GAAP gross profit - Professional services  $ 1,045     $ 2,570     $ 4,258     $ 8,269  
Non-GAAP gross margin - Professional services  15.6 %   32.4 %   20.9 %   32.8 %
               
GAAP Loss from operations  $ (11,756 )   $ (11,301 )   $ (33,680 )   $ (42,226 )
Add: Stock-based compensation expense1  10,426     7,424     29,490     20,999  
Add: Amortization of acquired intangible assets2  1,694     940     4,789     2,821  
Add: Acquisition-related expenses3     115     514     115  
Add: Follow-on public offering costs4              205  
Add: Litigation-related expenses5  178         506     400  
Non-GAAP Income (loss) from operations  $ 542     $ (2,822 )   $ 1,619     $ (17,686 )
               
GAAP Net loss  $ (14,406 )   $ (11,831 )   $ (39,499 )   $ (42,525 )
Add: Stock-based compensation expense1  10,426     7,424     29,490     20,999  
Add: Amortization of acquired intangible assets2  1,694     940     4,789     2,821  
Add: Acquisition-related expenses3      115     514     115  
Add: Follow-on public offering costs4              205  
Add: Litigation-related expenses5  178         506     400  
Add: Release of valuation allowance, acquisition-related          (761 )    
Add: Amortization of debt discount and issuance costs  2,679     1,296     7,783     1,296  
Non-GAAP Net income (loss)  $ 571     $ (2,056 )   $ 2,822     $ (16,689 )
               
Reconciliation of net income (loss) per share, basic              
GAAP net loss per share, basic  $ (0.29 )   $ (0.25 )   $ (0.82 )   $ (0.92 )
Non-GAAP adjustments to net loss  0.30     0.21     0.88     0.56  
Non-GAAP net income (loss) per share, basic  $ 0.01     $ (0.04 )   $ 0.06     $ (0.36 )
               
Reconciliation of net income (loss) per share, diluted               
GAAP net loss per share, diluted  $ (0.29 )   $ (0.25 )   $ (0.82 )   $ (0.92 )
Non-GAAP adjustments to net loss  0.30     0.21     0.87     0.56  
Non-GAAP net income (loss) per share, diluted  $ 0.01     $ (0.04 )   $ 0.05     $ (0.36 )
               
Weighted average shares used in GAAP per share calculation, basic and diluted  49,020,449     46,914,077     48,437,686     46,139,978  
               
Weighted average shares used in non-GAAP per share calculation:               
Basic  49,020,449     46,914,077     48,437,686     46,139,978  
Diluted  52,404,657     46,914,077     51,879,345     46,139,978  
               
1 Includes stock-based compensation expense as follows:              
Cost of revenue  $ 679     $ 478     $ 1,970     $ 1,321  
Research and development  3,996     2,984     11,224     8,400  
Sales and marketing  3,047     2,066     8,453     5,684  
General and administrative  2,704     1,896     7,843     5,594  
               
2 Includes amortization of acquired intangible assets as follows:              
Cost of revenue  $ 1,661     $ 901     $ 4,681     $ 2,702  
Sales and marketing  32     38     105     115  
General and administrative  1     1     3     4  
               
3 Includes acquisition-related expenses as follows:              
General and administrative  $     $ 115     $ 514     $ 115  
               
4 Includes follow-on public offering costs as follows:              
General and administrative  $     $     $     $ 205  
               
5 Includes litigation-related expenses as follows:              
General and administrative  $ 178     $     $ 506     $ 400  
                               



RAPID7, INC.
Reconciliation of Net Loss to Adjusted EBITDA (Unaudited)
(in thousands)

       
  Three Months Ended
September 30,
  Nine Months Ended
September 30,
  2019   2018   2019   2018
GAAP net loss  $ (14,406 )   $ (11,831 )   $ (39,499 )   $ (42,525 )
Interest income  (1,448 )   (813 )   (4,761 )   (1,520 )
Interest expense  3,399     1,679     9,940     1,681  
Other (income) expense, net  492     (181 )   727     67  
Provision for (benefit from) income taxes  207     (155 )   (87 )   71  
Depreciation expense  2,520     1,591     6,426     4,616  
Amortization of intangible assets  2,078     1,069     5,543     3,121  
Stock-based compensation expense  10,426     7,424     29,490     20,999  
Acquisition-related expenses      115     514     115  
Follow-on public offering costs              205  
Litigation-related expenses  178         506     400  
Adjusted EBITDA  $ 3,446     $ (1,102 )   $ 8,799     $ (12,770 )
                               

Is your business listed correctly on America’s largest city directory network of 1,000 portals?